An interesting and funny read. Listen to the audio too !
http://www.npr.org/templates/story/story.php?storyId=121125739
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* Don’t forget to check out the cartoons and the videos !
http://unclemilton.wordpress.com/videos/
http://unclemilton.wordpress.com/cartoons/
Karthik
“China to Add Flexibility to Economic Policies, Pare Investment”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8BVAK4ws5aM&pos=7
Karthik
This is a very important move in resturcturing the Chinese economy. Even in the fiscal stimulus package, the Chinese government implemented incentives to increase rural demand. The rural population can take over the drop in demand due to fall in exports. Also, this will bring out the millions of Chinese out of poverty and give them access to modern age facilities.
The author feels that these measures are well intended, but the government should take care that efficiency(output) is not affected due to all the subsidies. Also, the subsidies might not be in the interest of world-wide free/fair trade.
http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&NewsID=29498
Karthik
In the last 1-2 years, there has been intense scrutiny of the quality of Chinese products. Remember the Chinese toys recall in China, poisoned pet food and Melamine tainted milk. How does this affect Chinese economy? As nations are developing more and more, there is an increased focus on product safety. Consumers are willing to pay a premium for product safety. As we all know, China is heavily dependent on exports. Such episodes cost it dearly, and give an opportunity to other countries to take over the market. Chinese companies and government should ensure strict quality controls and product checks to ensure such things do not happen in future.
Here is an article about a recent campaign that China is running to improve its product quality image worldwide.
http://www.latimes.com/business/la-fi-china-ad7-2009dec07,0,720778.story
Karthik
Part II
Citing a Chinese economist, Hong says that China’s “mega-stimulus programme is like ‘drinking poison to quench a thirst’.”
A link to another interesting article. Since this has already been discussed in class, I won’t go into details.
http://www.dnaindia.com/money/report_china-s-economy-on-steroids-may-be-a-global-risk_1321325
Karthik
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Part I
Please find the link to a very interesting article about overcapacity in China. As mentioned last week, China is operating well beyond its domestic demand (primarily in steel industry), and ends up “dumping” in markets around the world. This has caught the attention of the international community as China’s overcapacity in steel equals the total demand for steel in Korea and Japan combined! The swedish secretary of trade told us last week that this might be a significant problem for trade relations going forward. This report has been taken from the European Chamber of Commerce.
http://unclemilton.files.wordpress.com/2009/12/overcapacity-in-china-english.pdf
Lorena & Erik
The professor had asked for some data in the last class on the housing market. There has been a good debate on the issue in our blogs.
I have collected a lot of data which will help you get a better picture of the numbers. The statistics include a wealth of data on prices, rents, laws etc. To avoid clutter, I have uploaded them on a different page.
http://unclemilton.wordpress.com/china-housing-statistics/
Don’t be scared by the number of links! Each page is small and clear, and you can just glance at the graph. Since much has been discussed about the housing topic, we will not go into interpretations etc. at this moment.The links are for all of us to understand the situation better and get a better understanding of the concepts.
Karthik from UncleMilton
Lorena and I had an interesting encounter with the Swedish secretary of trade last night. We discussed the upcoming Copenhagen summitt and the challenges posed (yes, the US is possibly more difficult to deal with than China). Furtheremore, and perhaps more related to economics & China, the Secretary referred to a very interesting report, one which we have not yet read (will post it later) talking about the excess capacity of steel produced by Chinese plants. Total steel production in China amounts to 800 million tons, 150 million excess capacity. The overcapacity causes dumping and lower steel prices in other markets. Worth noting is that China’s excess capacity alone amounts to the total steel demand in Japan and Korea, combined.
We just wanted to share this reflection as discussed with the Swedish Secretary and point out the extensive influence and power that China has on market relations around the world. Will post this report next week and continue the discussion of Chiense overcapacity pushing down margins for steel producers globally.
/Lorena & Erik
Part II:
The Chinese economy is heavily dependent on coal for its energy needs. 70% of china’s energy comes from coal – and it also causes 400,000 extra deaths annually in China. Coal remains central to the regime’s growth strategy – it plans to increase coal production by a further 30 percent by 2015.
But it is in China’s interest that it cuts down rapidly on emissions. Rise in sea levels will affect millions in China. Changing climate will cause havoc. Rain patterns and hence agriculture will be affected. More and more people will die because of pollution related issues.
http://chinaworker.info/en/content/news/919/
http://news.bbc.co.uk/2/hi/8380106.stm
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Part I:
http://online.wsj.com/article/SB125957944561669451.html
Article in this morning’s WSJ discussing the stalemate between EU and China on the currency issue (i.e. appreciation of yuan) as well as EU’s push for China to cap its carbon emissions. Unclemilton is skeptical that a consensus regarding climate and carbon emissions will be reached in Copenhagen next week. What do you think??
