Posts Tagged ‘china’

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“Woooah There, Economy!”

Wednesday, March 2nd, 2011

apartment-buildings-china.jpeg
(photo credit: Jakob Montrasio)

China’s economy was on fire even as the rest of the world melted down into a financial puddle. But growth like that can’t last forever, and economic officials are starting to hose down the beast before it gets out of hand.

  • China’s Premier, Wen Jintao, is about to unveil the nation’s next 5-year economic plan, and it seems like there are some serious changes in store for the people of the People’s Republic.
  • Massive growth in the last 30 years brought heavy pollution, widespread corruption, and greater income inequality than ever before. And most of the growth relied on selling goods overseas, which left the local economy underdeveloped.
  • Premier Wen says that the government’s new economic goals are to avoid inflation and restructure the economy so that it doesn’t rely so much on exports. Policies will also try to address the inequality that resulted from billion-dollar industries springing up overnight.
  • Shifting resources to the local economy may mean slower growth, but it may also result in a lot more jobs, as the new service industry can employ more Chinese than factories can.

Facts & Figures

  • China is changing its annual GDP growth target from 7.5% to 7%
  • Over the past 30 years, the annual GDP growth rate has been around 9%
  • Between 2000 and 2009, employment grew by less than 1%

Best Quote

“We’ll never seek economic growth rate and big size at the price of environment. That would result in unsustainable growth featuring industrial overcapacity and intensive resource consumption.” – Premier Wen

What do you think?

If China devotes less of its economy to manufacturing and exporting cheap goods, do you think prices will rise here in the U.S.?

China Sells Off Part Of Its Piece Of The American Pie

Wednesday, February 16th, 2011

“WASHINGTON — China, the biggest buyer of U.S. Treasury securities, reduced its holdings in December for the second straight month.

Overseas demand for Treasurys helps lower the interest rate the U.S. government pays on its debt. If the United States had to finance its debt through U.S. investors alone, the government would have to pay higher rates. American companies and consumers would also pay higher rates.”

What do you think?

Remember when we asked about the U.S. back-up plan on the off chance our biggest foreign debt holder decided to sell off our Treasury bonds? Well.

Maybe they’re just rebalancing their national portfolio. Or following the age-old rule of “don’t put all your eggs in one basket?”

Bet You Didn’t Know: The U.S. Still Manufactures 40% More Stuff Than China

Friday, February 11th, 2011

“WASHINGTON — U.S. factories are closing. American manufacturing jobs are reappearing overseas. China’s industrial might is growing each year.

Yet America remains by far the No. 1 manufacturing country. It out-produces No. 2 China by more than 40 percent. U.S. manufacturers cranked out nearly $1.7 trillion in goods in 2009, according to the United Nations.

The story of American factories essentially boils down to this: They’ve managed to make more goods with fewer workers.”

What do you think?

What if higher production adds up to fewer jobs? Is efficiency always a good thing?

How often do you see “Made in U.S.A.” on the products you buy? How about “China?”

More Competitive Than Harvard! 1.6 Million Chinese Grads Consider Applying To McDonald’s Hamburger University

Wednesday, February 9th, 2011

“There’s a coffee machine in the corridor. There’s no cafeteria, although students and staff can order food delivered to the office pantry one floor down.

‘I’m thrilled and proud to attend Hamburger University,’ said Zhou, who in 2007 started as a management trainee in the central Chinese city of Changsha, a job for which she and seven others were among 1,000 applicants. That’s a selection rate of less than 1 percent, lower than Harvard University’s record low acceptance rate last year of about 7 percent, according to the school’s official newspaper.”

Best Quote

“Now my father has stopped trying to persuade me to work in banking.” – Sun Ying, McDonald’s Shanghai Store Manager

What do you think?

With college graduates fighting to get into Hamburger University, can a Chinese obesity crisis be far behind?

What If China Says “Sorry, Pay Up” to U.S.?

Friday, February 4th, 2011


credit: Lars Plougmann

Is there a “Plan B?”

  • Countries like the U.S. sell government bonds to raise money. Bonds are a form of debt – when the bond-holder cashes in their bond, the government has to pay them back with interest.
  • China is the biggest buyer of U.S. Treasury bonds, which means that if it suddenly sold off a lot of them, it could screw up the entire U.S. market.
  • A dramatic change like that would also hurt China’s economy, so there are probably only two situations in which China would consider selling off that much U.S. debt:
  1. China and the U.S. get into a serious fight. Like, a military-style fight, probably over resources in Asia
  2. China starts to think the American dollar is going to totally tank, and gets out while it still can
  • So what’s Plan B? There is no official plan, but the U.S. government would probably start asking its own citizens and its friends around the world to buy a whole lot of bonds. And the Fed would have a much bigger problem on its hands than the recession.

Facts & Figures

  • China is the United States’ biggest creditor in the world
  • If you include Hong Kong, China holds almost $1 trillion in U.S. debt

Best Quotes

“I worry that we could be at a tipping point.” – Eswar Prasad, economist at the Brookings Institution, former IMF official

“The U.S. government should have and maybe still could call on the people of the U.S. to invest in U.S. debt…. What we need to do is have a plan that’s reasoned, reasonable, can reassure our foreign lenders and also demonstrate to the American people that Washington can get something done” – David Walker, former U.S. Comptroller General

What do you think?

How has your life been affected by the rise of China?

Hu’s on First? China’s Leader Hu Jintao and Barack Obama To Talk Money (and Power) At White House

Wednesday, January 19th, 2011

mcdonalds-shanghai.jpg
credit: Ivan Walsh

In important trade talks with China, the U.S. wants to make sure American companies can do business in the world’s second biggest economy…

  • The U.S. is still the biggest economy in the world, but China is #2 and growing. So of course American companies want to do business there.
  • The problem, according to many U.S. companies: China is shutting them out.
  • The Chinese government is creating loads of restrictions that make it really hard for foreign companies to thrive.
  • At Wednesday’s meeting, Obama is expected to take a tougher stance to get China to relax its foreign trade rules.

Facts and Figures

  • Obama and Hu will meet with 18 business leaders from China and the U.S. in the Eisenhower Executive Office Building in DC on Wednesday

Best Quote

“U.S. companies have issues with China in many different business sectors.” – John Frisbie, president of the U.S.-China Business Council in Washington, D.C.

What do you think?

Has any part of your life been touched by the rise of China?

Segregation Resurfaces In The South… TILE Two-Liners 1.10.11 >> 1.14.11

Monday, January 10th, 2011

MONDAY

  • Southern Sudan is likely to become Africa’s newest country, wrapping up a bloody 20-year civil war with the north. One of the Southern Sudanese citizens voting for independence said, “My vote is for my mother and father, and my brothers and sisters who were murdered in the war.” (BBC News)

TUESDAY

  • China gets into carbon trading – an approach to global warming that requires carbon-producing companies to basically buy the right to pollute from other companies. Huge news for one of the world’s biggest economies – largely powered by coal. (The New York Times)

WEDNESDAY

  • The commission investigating BP’s giant oil spill confirms that mistakes by BP and others led to the spill. Oil industry: Prepare to be regulated. (The Wall Street Journal)

THURSDAY

  • North Carolina school board restores policy of economic segregation in public schools. (The Washington Post)

FRIDAY

  • Health care coverage is becoming unaffordable for more and more Americans. Even nonprofit health insurance provider Blue Shield of California has raised rates 59% over 5 months. And another 15% increase is on the way. (The Los Angeles Times)

China Prevents Activist From Accepting Nobel Prize

Friday, December 10th, 2010

By cracking down harshly on government reformers, China is drawing international attention to the very activists it’s trying to silence.

  • Today’s Nobel Peace Prize award ceremony was missing one popular award-winner: Chinese political reformist Liu Xiaobo. He is being held in a Chinese prison for proposing changes to the communist government there.
  • China treats Liu as an enemy of the state, and accuses nations that support him of creating unnecessary conflict between China and the Western world. They have responded by ending trade talks with Norway, where the prize ceremony was held.
  • When prizes winners are unable to attend the ceremony, a family member is allowed to accept the prize on their behalf. But Liu’s wife, Liu Xia, has been under house arrest since October.

Facts & Figures

  • The last time a Nobel Peace Prize winner did not claim his award was when Hitler prevented Carl von Ozzietzky (a pacifist) from accepting the prize in 1936
  • Seventeen other nations joined China in boycotting the event – most of them non-democratic
  • Liu is currently serving his fourth term in prison – 11 years for the alleged crime of sedition (which is any act or speech that is intended to provoke rebellion in a country)

Best Quote

“[As a world power, China] should become used to being debated and criticized.” – Thorbjoern Jagland, Chairman of the Norwegian Nobel Committee

China Is The Biggest Buyer Of U.S. Treasury Bonds

Monday, October 18th, 2010

When you hear about the U.S. budget deficit, do you think about bond holders in China? Maybe you should…

  • For the second month in a row, the Chinese government is the biggest foreign holder of U.S. Treasury bonds – bonds issued and backed by the U.S. government.
  • A report called TIC (“Treasury International Capital”) tracks sales of American securities to foreign buyers. It’s one way of seeing how easily the U.S. government can attract foreign investors when it needs to raise cash.
  • In the rank of foreign holders of U.S. Treasury bonds, Japan comes in right behind China.

Facts & Figures

  • China’s Treasury bond holdings total $868.4 billion.
  • Japan’s holdings total $836.6 billion.
  • In August, private foreign investors bought $85.5 billion in Treasurys. In July they purchased $21.4 billion.

After Copenhagen, China Steps Back Into The Climate Change Spotlight

Tuesday, October 5th, 2010

The problem is the same, but getting the world to agree on a solution is proving to be a challenge.

  • China and the United States emit more greenhouse gases than any other nations in the world, but during the UN Climate Change Conference in Copenhagen last December, the two nations argued over who should carry more responsibility for tackling the problem.
  • After a week of similar rich-country/poor-country conflicts, Copenhagen ended without any agreement on how to address the global greenhouse gas problem. This time, China is hosting the conference and the goals are a little different: Instead of a global agreement, participants may seek smaller, more manageable deals such as corporate carbon-cutting programs.
  • The Copenhagen conference made it clear that China, though still a developing nation, is going to be front and center in the climate change debate. In addition to being the world’s biggest producer of greenhouse gases, China is also the world’s biggest investor in renewable energy sources.

Facts & Figures

  • China’s per-capita GDP is $3,700 per year; the per capita GDP in the U.S. is $46,000.
  • Coal accounts for 80% of China’s energy production.
  • Developed nations pledged $30 billion in Copenhagen to help developing countries reduce greenhouse gas emissions, nearly all of which has been fulfilled.

Best Quote

“China came to understand that given the scale of the country, there’s simply no way it can hide – you’re either the leader or you will be blamed. By hosting this meeting, it sends a strong signal that China is thinking about how to play a more proactive role on the international stage.” – Yang Ailun, Greenpeace China’s Head of Climate and Energy

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