Over the past several weeks, I have spoken to literally thousands of students, university professors and corporate executives about China and doing business here. Not surprisingly, interest in the country has never been higher.
China’s continued economic growth and the upcoming Olympics are two obvious reasons, but my sense is that China watchers have begun to realize that China is in transition, and they have a myriad of questions about how the country is evolving. China, the land of low labor costs and the world’s manufacturer of cheap, low technology products is giving way to a new China: that is rapidly moving up the value added chain and becoming a large producer of more sophisticated, higher margin products.
This upward movement in manufacturing is being driven by four factors: higher wages, higher raw material prices, an appreciating yuan, and government policies which have reduced tax rebates for exports. The effect has been to drive China’s manufacturers out of low-technology, highly labor intensive products where profits are already low and are being squeezed, and into higher technology, more sophisticated products with higher profit margins. Read the rest of this entry »
As the subprime woes continue to grab headline worldwide, the President’s Working Group on Financial Markets (Working Group) released its Policy Statement on Financial Market Developments in March 2008. In this 17-page document, the Working Group identifies and discusses the many causes of the subprime crisis, and it recommends specific measures to be taken by regulators and financial institutions in the wake of the subprime issue.
Reading through the document, I found it to be “hard” reading since the intended audience is people in the financial business. But, it is still worthwhile to find out more about what happened and what should be done, rather than solely focusing on the consequences of mistakes made in the financial markets.
China Environmental Law Blog, written by Charlie McElwee, an international environmental & energy lawyer based in Shanghai. I’m going to add it to my blogroll!
The environment gets a lot of attention these days, in America, in Europe, and even in China. Indeed, it is a global issue for us all. But, it is really personal matter as well.
Growing up in the countryside in Shaanxi Province, I never heard about pollution, water or air. Throughout my primary and secondary education, I always took clean air, water, blue skies, and wild life around me for granted. Never had to worry about pollution. All I needed to worry about was my grades, mean teachers, parents’ “look” and girls. All of that changed when I moved to Wuhan, an industrial city of about eight (8) million souls, many many smokestacks, countless suffocating buses, cars, and “Mamus” (loving name given by the Wuhanese for three-wheeled motorcycles). Blue skies and stars became a rarity in the city; the lovely East Lake snakes around my college campus, and is the largest lake situated inside a Chinese city. But it was (probably still is) so polluted that its greenish water kills just about anything, and its stench shortens any romantic walk along its sleepy, whispering shores. The drinking water was scary, now that I’m writing about it. The students were told that the sources of our drinking water were a combination of the Yangtze River and the life-killing East Lake, and mostly from the Yangtze River any way… Read the rest of this entry »
The China Daily mentioned in an article last week ( h/t to China Digital Times today) that some of China’s new ideas for a food safety system won’t just be suggestions: they are being drafted into a new law.
Well, I have many thoughts regarding this sort of a law. First, it is very encouraging that the government is stepping up to the plate regarding food safety regulation. Standards are fine, but laws are required if you want broader enforcement. Will this law have any real teeth? Only time will tell. (Charlie Mc Elwee and I had some discussion about enforcement of China’s new environmental laws, and the conclusion was the same: we can only hope that enforcement steps up) But it is a very positive step in terms of possible enforcement. Read the rest of this entry »
There were a pair of articles last week at the Financial Times that talked about how companies are investing in the Asian M&A market while the western markets (American and European) aren’t do so well. The West’s pain will ultimately be China’s gain it seems.
The first article is entitled, “Asia’s M&A market shows its mettle” and it reads:
The mergers and acquisition market in Asia is holding up better than in Europe and North America, underlining easier access to funds in the region and the global expansion drive by Chinese and Indian companies, according to bankers.
Since the start of January, M&A transactions in Asia-Pacific have amounted to $236.5bn, a fall of 5.8 per cent from a year earlier, according to data from Dealogic. By comparison, the M&A declines in Europe and North America are respectively 31.8 per cent and 37 per cent. Read the rest of this entry »
The International Monetary Fund has warned China about the dangers of over-investment in sectors such as construction and property and recommended further monetary tightening following the small rise in interest rates imposed by the central bank last week:
Wanda Tseng, deputy director of the IMF’s Asia and Pacific department, praised the Chinese authorities for reacting “relatively early” to the problem but described the rate increases – which included a rise of 27 basis points to 5.85 per cent for the one-year benchmark rate – as “very small” and “probably just symbolic”.
The IMF report forecasts Asia-Pacific economic growth of 7 per cent this year. That would be the same as in 2005 but higher than the 6 per cent predicted by the previous report in August last year, partly because of the recovery of Japan and a continuing surge in international demand for electronic products made in Asia. Read the rest of this entry »
China and India are set to begin joint military exercises in October, just another example of the two nations growing bilateral relations. The decision to begin military exchanges and cooperation has focused on two areas: counterterrorism and joint military exercises.
In June we reported on India Army Chief of Staff General Joginder Jaswant Sigh’s visit to China and the subsequent announcement that China and India would hold the first ever joint army exercises between the two nations. Both countries hope that the joint exercises will strengthen Sino-Indian defense ties and build up confidence within each another.
Jagannath Panda comments in a report for The Jamestown Foundation’s China Brief, that China has increasingly relied on its military diplomacy to advance its strategic ambitions overseas. Indeed, China’s military is a very active ambassador for the country abroad, supplying arms and training across the developing world. In India, the Chinese have looked to overcome a historical mistrust by increasing the breadth Read the rest of this entry »
The McKinsey Quarterly, has just reported a new China survey, based on responses from 253 C-level executives in Asia (around a third of them actually have operations in, just under a third trade with, and around half earn revenue from, China).One of the surprising messages is that “nearly 40 percent of executives in Asia say their companies do no business in China today”. Less surprising is that “90 percent of respondents expect their companies to be doing business of some kind in China within five years”. Read the rest of this entry »
HR issues are already among the most pressing faced by managers in China (see here on the talent squeeze and war for talent and retention), but the FT reports even tougher times ahead due to employment contract law and increasing unionization pressures.
The article, written by lawyers at Baker & McKenzie provides the following summary of key provisions of the draft Read the rest of this entry »
Following up on my post about the coverage of domestic environmental issues by the Chinese press, I draw your attention to a press release from Internews headed “China’s Top TV Journalists Learn to Report Green: Internews’ Earth Journalism Network [EJN] Trains CCTV in Environmental Reporting.”
The Inter news EJN team and US trainers “currently and formerly based at CNN” [would that be the same CNN of anti-CNN.com fame?] in conjunction with Environment News Trust (ENT) led a workshop in March in Beijing for 40 Chinese TV journalists, including “journalists from CCTV Channel 1, CCTV-2 (Economic Affairs), CCTV-9 (International Affairs, in English), CCTV-10 (Science and Education), CCTV-12 (Society and Law), from the TV news magazine World Insight and from GreenSpace, a half-hour primetime program on the environment.” Strangely, “some of the journalists produce news stories on the environment and other issues that are broadcast directly to the Communist Party leadership [CPL], and not made available to the public.” Read the rest of this entry »