Chinese Economics Thread

[AssassinsMace]

Love how this article starts with the belief in the most basic sterotypes of women in China to where's non-Chinese women's share of the gravy train that Chinese women have in China.

ForbesWoman

Why Women Entrepreneurs Should Go Global In China
Apr. 28 2011 - 11:33 am
Posted by Cheryl Isaac

It all started with a conversation I had over lunch with my African entrepreneur friend, just before his flight back to South Africa to conduct business. “I just worry that it’s easier for the Chinese government to do business in other countries than it is for individual entrepreneurs to do business in China.” This from a guy who has transacted business in Hong Kong.

He was referring to recent conversation amongst global entrepreneurs and the blogosphere regarding what has sometimes been referred to as the “Chinese Invasion.”

There have been talks surrounding China’s expansion into South America, and also allegations of unfair business ventures in Africa, where according to some economists, China “hoards African resources.”

I immediately thought of Internet mogul, Google. Google caught its fair share of misfortunes when it branched to China about five years ago. In a country where dot-coms had no successful track records, the Internet guru’s ambition to go global in China was met with setbacks; mostly due to government regulations.


My first question to him, “what about women entrepreneurs with plans to go global? What do you think about the local business climate there for female entrepreneurs stepping out into the global Chinese market?”

His response: a mere shrug.

Chinese entrepreneurial success is frequently highlighted in America: Entrepreneurs You Meet In China, Young Chinese Entrepreneurs To Watch, China’s Young Entrepreneurs Abroad. But what about the non-Chinese entrepreneurs wanting to partake in the success?

It’s estimated that by 2015, there will be 500 million people under 30 in China, and these young people are starting businesses. According to Fortune magazine, China has the highest number of the world’s richest people under age 40.

Last year it was reported by Credit Suisse that the income of their 20-somethings grew by 34% in three years. So I decided to learn more about women doing business in China.

I was immediately drawn to a statement made at the 2010 Business Mulan Annual Conference hosted by China Entrepreneur Magazine. Li Yifei, chairwoman of Vivaki (a part of the Publicis Groupe Greater China) was quoted suggesting that women entrepreneurs in China would be better off choosing the sectors in which they have a “natural advantage.” Media, advertising and fashion were a few mentioned.
What does this female natural advantage mean? If anything, the statement sounded condescending. I was a little distressed at this type of message being sent out, that in order to succeed at business in China, women should flock to a certain field.

While these industries are worthwhile, it is insulting to imply that women can only start or run a certain kind of business. I kept delving into the issue and ran across this: profiles of the richest self-made women in the world. And the article states that 11 of the top self-made women are from China! Bingo!

And no, these women are not targeting sectors where they have a “natural advantage.” They are running technology, manufacturing and professional services businesses. China also has micro-financing initiatives to help women-owned start-up companies.

The Tianjin Women’s Business Incubator is one provider of such financing. The Tianjin Initiative is backed by the city government, Australia (although I’m not sure how Australia was included) and the United Nations Development Program. Program officials state that the program has helped over 10,000 women start-up businesses.

Another astounding piece of statistical data: at the Global Summit of Women in Beijing, it was reported that there are more women entrepreneurs in China than the entire United States population at 300 million. Perhaps there is a reason to ponder the growth plans of China after all.

The country has an increasing rate of young entrepreneurs (who are studying American business giants like Bill Gates and Michael Dell), its women entrepreneur base is increasing at a fast pace, and they’re quickly developing initiatives to foster more entrepreneurship.
Women Doing Business in China: I was still pondering the question: what about non-Chinese women wanting to do business in China? Then I ran across an important initiative that showcases China’s plan for women in business. This U.S. and China collaboration: The US-China Women’s Leadership Exchange and Dialogue (Women-LEAD). Just recently announced by U.S. Secretary of State Clinton and China State Councilor Liu, the initiative will seek to expand the dialogue between Chinese and American programs that seek to empower women and foster cross-country women business development.

It’s official! The “sisterhood of the traveling pantsuits” is coming together. And you know what that means. Watch out for China! My only hope is that the opportunities available for Chinese female entrepreneurs doing business in America or abroad will also be the same available for American or foreign female entrepreneurs going global in China.

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[ABC78]

Hey guys here are video conversations on the sino-us economies the good, the bad, the ugly and reality.

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[Martian]

China's Peaceful Development Is Good for America

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"China's Peaceful Development Is Good for America
By DAI BINGGUO
MAY 9, 2011, 9:32 P.M. ET

But first both sides need to build a relationship of equality and mutual trust.

Hillary Clinton (right) toasts Hu Jintao during his visit to Washington in January. (Reuters)

The past 40 years have seen a growth in China-United States relations that no one would have imagined when the rapprochement between the two nations began. The ubiquity of "Made in China" products in the U.S. bespeaks deep economic ties; 120,000 Chinese students study in America; and an increasing number of Americans learn the Chinese language. America is likewise present in China: Every day, hundreds of thousands of Chinese travel on Boeing airplanes; young people wait in long queues to buy the latest iPhone; and Americans are the second-largest population in China.

However, despite such closeness in our relations, many American friends still do not know the true China. The visit to America my colleagues and I make this week for the latest Strategic and Economic Dialogue is to implement the agreement reached between our respective leaders during President Hu Jintao's visit in January, so as to advance the China-U.S. cooperative partnership based on mutual respect and mutual benefit. It is another opportunity for both Chinese and Americans to improve our understanding of, and relationship with, each other.

A central message we would like to convey to our American friends is that China is committed to the path of peaceful development. Over the past 60 years since the founding of the People's Republic, and especially the past 30 years of reform and opening up, China has undergone a sweeping and profound social transformation. The Chinese people, talented and hard-working, with their determination for self-improvement and a readiness to learn from others, have found a new development path to modernization in a globalized world. We call it "the path of peaceful development." It is a path to promote peace and common development of the world with our own development.

China's economy has maintained an annual average growth of over 9%, its GDP growing 16-fold to become the second-largest in the world. Yet it remains a developing country. GDP per head, a mere $4,000, is not even one-tenth that of the U.S. and ranks around 100th place in the world. We have to create 25 million new jobs every year. In terms of development, China is at least decades, if not centuries, behind the United States.

China has never thought of vying for leading position in the world. We have had more than enough of tough days. The only thing we want is that, with our hard work and wisdom, plus the cooperation and exchanges with other countries, we can lift the Chinese people out of poverty.

That development will benefit not only China, but also the rest of the world—and especially America. For nine consecutive years, China has been the fastest-growing export market for the U.S. American exports to China grew by 32% last year and 33.3% in the first three months of this year. For 40 of the 50 American states, China ranks among their top five export markets.

A recent report by the American Chamber of Commerce in China reveals that 85% of the American companies in China reported good profits in 2010, 78% of them saw their profits grow by a big margin, and 83% of them intended to increase investment in China. For several years in a row, it has been the only growing market among America's top 10 auto export markets.

Large imports of inexpensive yet quality products from China have enabled the U.S. to keep inflation at bay and saved American consumers more than $600 billion in the last 10 years. In the same period, more than 3.25 million jobs have been created in the U.S. thanks to exports to China.

The growing inward investment by Chinese companies has also created a large number of jobs in the U.S. For instance, the Chicago-based Wanxiang America Corporation has created over 5,600 jobs. China has in recent years been the fastest-growing source of inbound tourists for the United States. Last year, as many as 490,000 Chinese tourists visited. They brought considerable business opportunity for the U.S. service sector.

A stronger and more influential China has cooperated with the U.S. in international affairs and played a positive and constructive role. China and the U.S. have conducted effective communication and coordination on such hotspot issues as the Korean and Iranian nuclear issues as well as global counterterrorism, nonproliferation and climate change. In dealing with the international financial crisis, China has helped the U.S. to get through the difficult times. China is a partner the United States can count on.

Our challenge, both this week and at other such summits in the future, is to work together so that growing prosperity on each side of the Pacific Ocean becomes mutually reinforcing.

America has a role to play in the transformation of China's economic growth pattern, as put forward in the recently unveiled 12th Five-Year plan (2011-2015), toward greater domestic consumption. China's market is expected to become one of the world's largest in the not too distant future. If American enterprises seize this opportunity, "Made in USA" products will have more chances to their competitiveness in the vast Chinese market.

China will further open sectors where investment and trade already are open, and will open new sectors to foreign involvement. It will create an environment favorable to the long-term development of foreign investors. China will increase imports and pursue a basically balanced trade instead of a trade surplus.

Washington has a role to play in allowing American companies to capitalize on these new opportunities. Relaxing controls on the export of high-tech products to China will improve the China-U.S. trade pattern, which will in turn boost President Obama's strategy to double American exports.

China will encourage its capable enterprises to move into overseas markets. As long as the U.S. adopts a more inclusive and open policy, many Chinese enterprises, including private ones, would increase investment in America, which will create more jobs locally and help the U.S. alleviate its debt and fiscal pressures by boosting growth.

China will make great efforts to build a resource-efficient and environment-friendly society, develop circular economy and promote low-carbon technologies. New energy, new materials, energy-efficient and environment-friendly technologies and products are precisely where U.S. strengths and its future priorities lie. Cooperation in green endeavors will make a major contribution to mitigating global climate change.

China and America have the capability and wisdom to build trust, address problems, expand common interests and achieve mutual benefit through dialogue, exchanges and greater cooperation.

Ours should be a relationship of equality and mutual trust in which we both take a rational and objective view of each other's strategic intentions. It should be a relationship of cooperation and mutual benefit. We should each respect the other's choice of social system and development path as well as the sovereignty, territorial integrity and development interest of the other side and appropriately manage our differences and problems.

As one of the most important bilateral relationships in the world today, the China-U.S. relationship affects not only the well-being of our people, but the future of our world. We have a responsibility to get along with each other. This way, the China-U.S. cooperative partnership will take deep roots, bear rich fruits and benefit our two peoples and the entire world.

Mr. Dai is a state councilor of the People's Republic of China."

 

[Hendrik_2000]

Amazing how you can transform the life of people by building roads, bridges, car factory

GM Bets Big on Rural China Markets

Success of Microvans Prompts Push to Manufacture Other No-Frills Vehicles for Emerging Consumers.

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By NORIHIKO SHIROUZU

HUANGZHONG VILLAGE, China—Farmer Zhang Zuoming and his extended family's growing fleet of microvans in this dusty village in China's far west explains why General Motors Co. is rushing to recalibrate its China strategy.

As a decade-long boom in car sales along the prosperous coast eases, inland villages like this one have become the new sales frontier for GM and other foreign auto makers.

Inexpensive microvans, on a Liuzhou, China, assembly line, have helped wheat farmer Zhang Zuoming become an entrepreneur.

Huangzhong villagers are part of a larger swath of people in less developed parts of China becoming rich enough to buy a no-frills car. Their growing demand for cheap yet sturdy vehicles is at the heart of GM's strategy to double its sales in China to around five million units by 2015 from about 2.35 million in 2010.

Roughly half of all the vehicles that GM sells in China are Wuling microvans, made by a company in which GM has a 44% stake. The other primary partner in the venture is SAIC Motor Corp., GM's main joint venture partner in China, which owns 50%. The rest is owned by a local company in southern China where SAIC GM Wuling Automobile Co. is based.

As General Motors makes a push into China's automotive hinterland, SAIC-GM Wuling executive Scott Tien introduces WSJ's Norihiko Shirouzu to the little truck that's come to dominate the country's rural roadways.
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Wuling is now scouting for a location to build a third manufacturing complex to meet explosive demand. With GM's help, the Wuling joint venture also launched a second low-cost brand called Baojun (which means "treasured horse") last year. Its first product, a sedan called the Baojun 630, was recently unveiled at the Shanghai auto show.

GM estimates that the market for low-cost cars in China already amounts to six million vehicles a year—bigger than major auto markets such as France and Japan. It is dominated by local companies including Zhejiang Geely Holding Group and Chery Automobile Co.

"The decade of 2000 to 2010 was an era marked by very dramatic growth on the coast. But real growth is going to happen now more toward the interior of the country," says Wuling Executive Vice President Matthew Tsien, a 28-year GM veteran who has been sent into China to improve Wuling's performance.

Four years ago, Mr. Zhang lost his supplementary factory job as his employer for nearly two decades folded after failing to meet government environmental standards.

The 2,000-yuan-a-year job—about $310—wasn't high-paying, but the 41-year-old didn't want to go back to his 500-yuan-a-year life as a full-time wheat farmer. The decision he made in 2007, to buy a $4,500 Wuling microvan, with government subsidies, transformed his life.

View Full Image
Norihiko Shirouzu/The Wall Street Journal
Zhang Zuoming

Today he drives his workhorse van, and a second Wuling model he added in 2008, to haul goods. He brings home 50,000 yuan a year and has used the new wealth to remodel his house and take his father and other relatives to Beijing for sightseeing. Mr. Zhang, his brothers and nephews in Huangzhong, 15 miles outside Xining, capital of the far-Western province of Qinghai, have since bought four more Wuling vans. Other villagers have followed suit.

"My whole family needs to eat, and we totally count on these Wuling vans," Mr. Zhang says in his living room, gesturing toward one of the Wulings parked outside his house. "This has brought real happiness and joy around here." He was able to buy his second Wuling with a windfall profit he made when the government paid him compensation for some of his land it annexed to build a power plant.

According to an estimate by U.S. consulting firm Alix Partners, the number of households in China with annual income of more than 60,000 yuan—a level deemed sufficient for a family to buy a no-frills car—is estimated to nearly double over the next four years to 65.6 million.


.
Since 2002, GM has been working with Wuling, a relatively unknown producer of microvans in Liuzhou, an industrial hub in the poor southern province of Guangxi. The move has paid off handsomely. Wuling has seen its sales surge nearly eight fold since 2002 to 1.15 million microvans last year.

As sales growth slows in big cities on China's eastern seaboard—in part because of traffic-fighting restrictions on car sales and market saturation—GM and SAIC are making fresh moves to penetrate inland regions.

GM's Mr. Tsien says the site for the new Wuling plant the joint venture is thinking about building most likely would be sited in an inland province like Sichuan. He says Wuling has already been adding capacity since late last year to the existing plants, a move that will boost the company's overall capacity to 1.3 million vehicles a year this year.

GM and SAIC are so sure of the new Baojun brand's potential in inland Chinese cities, that they are ready to build an all-new factory dedicated to the vehicle in Liuzhou with capacity to produce 400,000 a year. The plant will start production by the end of 2012.

"There's a massive market for people who want affordable vehicles," said Kevin Wale, head of GM's China operations.

GM faces competition. A joint venture between Nissan Motor Co. and Dongfeng Motor Group Co., for example, has announced plans to launch a China-only brand, Qichen, which is due to start selling its own no-frills cars in 2012.

Wuling began building mini farm trucks in the 1960s and entered a segment that has come to be known as "mini commercial vehicles," or microvans, in the mid-1980s with technological assistance from Japan's Mitsubishi Motors Corp. and Daihatsu Motor Co. SAIC invested in Wuling in 2001, and GM did so the following year.

Since 2002, GM and SAIC helped Wuling improve what were spartan workhorse vehicles used primarily by farmers and small shop owners. They provided technology and made them more reliable and durable for the pot-holed roads they travel along.

For a swelling tide of households in China who are now wealthy enough to buy cars, boxy Wuling vans come with bare-bone features. Some have one airbag as an option, and navigation systems are not offered at all. CD players, air-conditioning, power windows and power locks are all optional features.

When GM first bought its stake in Wuling, the brand sold 147,000 vehicles that year and "was struggling to be profitable," Mr. Tsien says. It was an important investment for GM, but within the company it was hardly noticed.

"If somebody were to mention [Wuling], I would not have known what it was, and I worked for GM," he says. "So clearly our significance has increased."

Wuling is fast evolving into a centerpiece of GM's global strategy, as demand for its thrifty vans takes off.

Another satisfied customer is Ba Peijun, who runs a small meat-delivery service in a rural village called Gongmazhuang outside the central Chinese city of Zhengzhou. The 48-year-old villager's business began taking off after he bought a Wuling van in 2004 for 36,500 yuan with loans from his sister and friends.

"Wuling van quality is really great. It is sturdy, seldom needs repair," Mr. Ba said. "It can haul more cargo—more or less double what I was able to carry on my old van. It's of great help to my business." By 2008, thanks in part to the new van, Mr. Ba was able to save enough money to start a second business—a pancake restaurant. He has since bought a second car, a VW Santana.

So many villagers in Gongmazhuang have purchased Wuling vans that people around the place often refer to it as Wuling Village.


[video]http://online.wsj.com/video/gm-china-minivan-joint-venture/15A938B2-C79E-4CA6-A773-169C3B19C100.html[/video]

 

[bd popeye]

All members please consider this!

Do you want to be a Moderator at SinoDefenceForum? This is REAL!!

bd popeye super moderator

 

[kroko]

hmm. Since the latest report of inflation indicating that china´s inflation problem remains unresolved, there have been some analysis about it. From bloomberg and WSJ:

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For me the most disturbing economic trend in china in the last 10 years is the creeping back of SOE dominance. They are inefficient, yet the CPC is betting the future of china on them. This is no good, at all.

I remember in the 90´s, SOE were such a burden on chinas economy (they where called white elephants) that the CPC (then under ziang zemin rule) privatized some and trimmed down others. Now they are the rage once again,breeding inefficiency on china´s economy, at the cost of private sector, which is stagating and even shrinking. That doesnt bode well for the economic future of china.

 

[Hendrik_2000]

hmm. Since the latest report of inflation indicating that china´s inflation problem remains unresolved, there have been some analysis about it. From bloomberg and WSJ:

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For me the most disturbing economic trend in china in the last 10 years is the creeping back of SOE dominance. They are inefficient, yet the CPC is betting the future of china on them. This is no good, at all.

I remember in the 90´s, SOE were such a burden on chinas economy (they where called white elephants) that the CPC (then under ziang zemin rule) privatized some and trimmed down others. Now they are the rage once again,breeding inefficiency on china´s economy, at the cost of private sector, which is stagating and even shrinking. That doesnt bode well for the economic future of china.

I don't believe it will be a problem. Let face it 5-6% inflation is manageable inflation rate. Comparable inflation in India is 8-9%, Vietnam 12%.

Don't forget that the average wage earner in urban China receive wage raises in the average of 12% over the last 3 years. Some even higher
Anyway inflation is abating mostly causes by food price increases

Chinese SOE are profitable just look at the banks they make money like bandit. SOE doesn't necessarily mean inefficiency. Just look at Singapore GLIC . They make money years after years.

Everybody know that China has to reorient their economy growth. Less dependent on Export and switch over to domestic consumption. But it will takes long time to effect the changes. In the mean time what are you going to do lay off people because of yuan appreciation. And precipitate unrest and political turmoil. CCP just cannot afford the risk so they play safe.

Beijing should not listen to foreign advisor. They are driven by ideologue and their own agenda. Yuan has apreciated 25% over the years. Does it change the competitiveness of US export?. Germany pile surplus after surplus over the years with no need of yuan reevaluation. We all know what happened to Japan after she was forced to reevaluate Yen over night

 

[kroko]

I don't believe it will be a problem. Let face it 5-6% inflation is manageable inflation rate. Comparable inflation in India is 8-9%, Vietnam 12%.

Don't forget that the average wage earner in urban China receive wage raises in the average of 12% over the last 3 years. Some even higher
Anyway inflation is abating mostly causes by food price increases

Chinese SOE are profitable just look at the banks they make money like bandit. SOE doesn't necessarily mean inefficiency. Just look at Singapore GLIC . They make money years after years.

Everybody know that China has to reorient their economy growth. Less dependent on Export and switch over to domestic consumption. But it will takes long time to effect the changes. In the mean time what are you going to do lay off people because of yuan appreciation. And precipitate unrest and political turmoil. CCP just cannot afford the risk so they play safe.

Beijing should not listen to foreign advisor. They are driven by ideologue and their own agenda. Yuan has apreciated 25% over the years. Does it change the competitiveness of US export?. Germany pile surplus after surplus over the years with no need of yuan reevaluation. We all know what happened to Japan after she was forced to reevaluate Yen over night

about the rate of inflation, lets see when inflation in china approaches those countriues inflation. thats what will happen if CPC doesnt wake up.

yeah, chinas banks are making big profits..thats because the property market bubble hasnt burst yet. When that happens, they will have a problem as big or bigger than the 90´s, when chinas banks came saddlened with huge debts that came from excessive state lending. Same story happening again. local governments are cheating the system. the central government will pick the bill.

you want to compare a city state of 5 million (singapure) to the 3rd largest country in the world, 2nd largest economy and the most populated one (china) ??? You have much much less control of SOE´s in a big country.

china doesnt have a long time to reorient their economy. their salaries are increasing, and there is a lot of talk of moving industries out of the country. Yeah, the country is modernizing, but majority of china´s workers are poorly qualified, unable to adapt to the new economy.

 

[bladerunner]

about the rate of inflation, lets see when inflation in china approaches those countriues inflation. thats what will happen if CPC doesnt wake up.

yeah, chinas banks are making big profits..thats because the property market bubble hasnt burst yet. When that happens, they will have a problem as big or bigger than the 90´s, when chinas banks came saddlened with huge debts that came from excessive state lending. Same story happening again. local governments are cheating the system. the central government will pick the bill.

you want to compare a city state of 5 million (singapure) to the 3rd largest country in the world, 2nd largest economy and the most populated one (china) ??? You have much much less control of SOE´s in a big country.

china doesnt have a long time to reorient their economy. their salaries are increasing, and there is a lot of talk of moving industries out of the country. Yeah, the country is modernizing, but majority of china´s workers are poorly qualified, unable to adapt to the new economy.

And thats when some will point to China's " Financial Reserves", currently the worlds largest at $3 trillon plus.... yada yada. But thats forgetting that China has still along way to go, with several hundred million of her people living under less than desirable conditions and with the money that is wasted, I doubt whether $eleventy trillion in reserves would be enough.

 

[montyp165]

And thats when some will point to China's " Financial Reserves", currently the worlds largest at $3 trillon plus.... yada yada. But thats forgetting that China has still along way to go, with several hundred million of her people living under less than desirable conditions and with the money that is wasted, I doubt whether $eleventy trillion in reserves would be enough.

Foreign exchange reserves aren't used like that to begin with, but the whole issue with the 'property bubble' et al is simply not the same sort of situation that occurred with western property bubbles, but people keep conflating the two. Also I would strongly question the conventional capitalist 'wisdom' that SOEs are always inherently inefficient, particulary since administrative quality controls are not something strictly reserved for profit generation alone, even taking into consideration the size of the Chinese economy and population.