A Panel Discussion on China’s Economy – Part 2/2

October 5, 2010

The Al Jazeera commentator started by saying that relations between China and the West are complex not least by the way the West views China’s human rights record.

Among the major issues is the Tibetan struggle for independence, treatment of political dissidents and restrictions on the media and the Internet.

The commentator opened the second half with Andrew Leung in Hong Kong asking him to define the relationship between China and the U.S.

He replied that the relationship is mixed.  On one hand, many countries are awed by China’s economic rise.  He said that China was a reluctant world power because there are so many problems inside China that must be dealt with and that China cannot afford to be globally aggressive.

Then the commentator turns to Ze Xia, the Falun Gong reporter, who wastes no time mentioning that China controls the media and says the New Tang Dynasty TV signal has been cut off and censored in China.

She calls on the West to force China to change.

Note: What Ze Xia doesn’t say is that the Chinese media is part of the central government—the media in China is not independent as in the West, and what does the Falun Gong reporter want the West to do—start a war? Click here to discover more on global censorship.

Again, the commentator cuts the Falun Gong reporter off and turns to Bruce Reynolds at the University of Virginia, who says the worst thing the West could do in China was to apply pressure.  He says that will not play well with the Chinese leadership or the Chinese people, who are very proud and nationalistic.

Reynolds says he is confident that in the next thirty years, many of the problems Ze Xia, (of the Falun Gong) points out will be resolved. He calls for patience.

Andrew Leung concludes the panel with a positive outlook on how much China has changed in the last thirty years.

Discover more facts about the Falun Gong at Kaiwind.com and/or return to A Panel Discussion on China’s Economy – Part 1

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Fewer Workers and Rising Wages Equals More Spending

August 18, 2010

The Economist published an interesting piece about the changing economic landscape in China.   If you read between the lines, it appears that the Wall Street crash that shook the world in 2008 and is still generating pain may have been a catalyst for changes benefiting the Chinese worker.

In 2008, 670 thousand factories closed their doors in China putting 25 million migrant laborers out of work, but wages went up 17.3% by the end of 2009, which makes no sense.

When I was still teaching and California’s money was tight, schools saw funds cut, jobs lost and salaries frozen, which is still happening now because of the 2008 crash.

A shrinking workforce in China happened to coincide with the 2008 global economic meltdown.  The International Business Times reports that due to China’s longtime one-child, family planning policy, the population of 20 to 39 year-old workers, the backbone of China’s labor force, has dropped 22% in the last 10 years while older workers are staying in the villages.

These changes encouraged China’s central government to shift support from businesses to workers by encouraging the provinces to raise the minimum wage while keeping a low profile during labor unrest.

Some industries moved inland where wages are lower but ended up selling their products to local Chinese consumers, which caused other foreign companies to build factories inland—not for the cheap labor, but to get closer to those local consumers.

According to The Economist, “As pay goes up, the country’s domestic market will become more lucrative. Foreign firms that came for the workers will stay for the shoppers. China will become more of a workshop for itself and less of one for the world.” 

In today’s harsh global economy, China may have the only growing consumer market. In fact, this may generate jobs in America.  To understand, you’ll have to read both pieces yourself.

See Hitting Endless Home Runs

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Driving the Planet

July 1, 2010

CNNMoney’s Global Forum writes about China spreading money globally seeking resources. After all, China has cash reserves and is growing an economy with goals to lift hundreds of millions of Chinese into a middle-class American lifestyle. America, on the other hand, is in debt and spending money that it doesn’t have while its middle class is drowning in credit cards and sub-prime mortgages.

However, what benefits China, may also benefit the globe. Global Forum mentioned that Chinese solar companies are driving costs down so governments, like the US, may not have to offer subsidies as an incentive to get people to invest in renewable energy.

The CEO of China Mobile said people in China’s poorest, rural provinces were buying low priced mobile phones. If mobile phone are that low, why aren’t we seeing those prices in the US?  I priced phones for our daughter, who is on her way to college, and the model I liked was about $100 or 680 yuan—more than most China’s peasants earn in two months.

I wonder if we can buy mobile phones in China and slip our old chip into that new, lower-priced phone.

See China’s Cheap Price Structure

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Reading Barry Ritholtz

June 23, 2010

In “China The Black Box“, Barry Ritholtz demonstrates a better understanding of China than most I’ve read—at least in this piece.  If you are willing to sit for a long read, I suggest clicking on the link. He does a good job explaining how China’s economy works and why it may survive for some time without an economic collapse like the 2008 US meltdown.

Barry Ritholtz

In summary, Ritholtz mentions how several prominent hedge fund managers in the West have said China is making mistakes economically. Then Ritholtz says there is no way these managers know what’s going on in the Middle Kingdom since China is half capitalist and half socialist and doesn’t fit any Western economic norms.

He says China is a unique civilization state, which gives it a tremendous advantage at this stage of its economic development, because China’s citizens have a singular desire to work hard and improve their material lot. It helps that the Chinese prefer to pay cash for things instead of using credit cards as in the US.

Chinese civilization has periods of order followed by periods of disorder and since China recently emerged from two centuries of disorder, the Communist government has a long way to go before it is their turn to leave the leadership stage.

Read how others get it wrong in Belching About China

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Lloyd Lofthouse is the author of the award winning My Splendid Concubine and writes The Soulful Veteran and Crazy Normal.

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Posted by Lloyd Lofthouse

No Talking About White Elephants

June 12, 2010

Most Chinese do not like anarchy and chaos. They also do not like talking about the “white elephant” in the room. After suffering for more than a century starting with the Opium Wars in 1839, life in China improved after Deng Xiaoping opened a global market economy in China.

Deng Xiaoping Billboard in China

With that in mind, it should not surprise that when Google was complaining about being hacked by China’s government and refusing to censor their search engine in China, many Chinese turned to Baidu, which operates China’s most popular Internet search engine.

Chinese officials defended the government’s censorship and denied being involved in the cyber-attacks against Google. In fact, most Chinese don’t care what happened to Google.

On February 10, 2010, Simple Thoughts reported that Baidu’s 4th quarter earnings jumped 48%.  Then on June 4, Investor’s Daily Edge reported that Baidu’s stock price was up over 200% in the last year.

It would seem that Google became the “white elephant” in the room—a big mistake in China.

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Lloyd Lofthouse is the author of the award winning novels My Splendid Concubine and Our Hart. He also Blogs at The Soulful Veteran and Crazy Normal.

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