Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘china’

China Growth Beats Expectations Thanks to Humming Factories

Posted by hkarner - 18. April 2019

Date: 17-04-2019
Source: The Wall Street Journal

Many economists prepared for a weaker first-quarter performance

SHANGHAI—China’s economic growth held to a 6.4% rate in the first three months of the year as factory production picked up significantly amid signs authorities worked forcefully to stabilize business following months of weakness.

The 6.4% expansion in China’s economy during the first quarter was the second straight at that level but remained below 2018’s 6.6% full-year rate, according to official data released Wednesday. The pace was slightly higher than what many economists expected and appeared buoyed by a powerful rebound in some key drivers. Industrial production, after a lackluster start to the year, surged 8.5% in March from a year earlier. Retail sales for the quarter were stronger than expected along with property investment.

While China’s economy has been on a slow downtrend this past decade—weighed down by debt and excess capacity—a sharper-than-expected slowdown hit last year, exacerbated by severe trade tensions with the U.S. The government now appears to be stepping up work to arrest the slide. Many economists prepared for a weaker first-quarter performance, and the year’s nadir, on belief that stable activity in consumer and services sectors would be offset by sluggish investment in fixed assets, such as factories and bridges. Den Rest des Beitrags lesen »

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China’s Dangerous Monopoly on Metals

Posted by hkarner - 16. April 2019

Date: 15-04-2019
Source: The Wall Street Journal

Control of the rare-earth supply gives Beijing both economic and military advantages over the U.S.

As trade talks between the U.S. and China have focused on manufacturing, American negotiators seem to be ignoring China’s growing domination of raw materials that are crucial to both countries’ security and standard of living.

Rare-earth metals are essential for producing most technological equipment. It is impossible to build a car without cerium, a smartphone without europium, a guided missile without neodymium. China now controls the supply of all 16 strategically critical rare-earth metals. In fact, 96% of global mining output for rare-earth metals comes from within China’s borders, and the country gained control of the remaining 4% in 2017 by acquiring the Molycorp rare-earth mine in Mountain Pass, Calif., near the Nevada border. Den Rest des Beitrags lesen »

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Google and the ethics of business in China

Posted by hkarner - 6. April 2019

Date: 04-04-2019
Source: The Economist: Schumpeter

For American firms, it feels like a Chinese burn

Anyone who has suffered a Chinese burn as a child will remember the pain when two hands grip the forearm and twist the skin in opposite directions. Americans doing business in China know the feeling well. The growing strategic rivalry between the two superpowers is putting pressure on American businesses and investors in two ways. One grip on the forearm is that of the American government, which is increasing scrutiny of American firms operating in China on national-security and human-rights grounds. The other is that of China’s Communist regime, which is attempting to force companies in China, including foreign ones, to bend to its rules. At worst, this means pushing them to assist China’s armed forces and its police state. That presents firms with a big ethical quandary.

The predicament is unprecedented. During the cold war business was largely untroubled by superpower rivalry because the Soviet Union was an unwelcoming, closed economy. China, by contrast, is America’s biggest trading partner. Americans have invested more than $250bn in the country since 1990. The weight that Chinese firms listed on the mainland have in equity benchmarks such as the msci index is rising. Whatever the outcome of trade talks between President Donald Trump and his Chinese counterpart, Xi Jinping, heightened attention to security-related matters has made life uncomfortable for Chinese firms like Huawei. American companies are smarting, too. Den Rest des Beitrags lesen »

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Does China Have Feet of Clay?

Posted by hkarner - 5. April 2019

Joseph S. Nye, Jr., is a professor at Harvard University and author of Is the American Century Over? and the forthcoming Do Morals Matter? Presidents and Foreign Policy from FDR to Trump.

No one knows what China’s future holds, and there is a long history of faulty predictions of systemic collapse or stagnation. Neither outcome is likely, though the country is facing several challenges that are far more serious than many observers seem to think.

CAMBRIDGE – Chinese President Xi Jinping seems to be on a roll. He has sent a rocket to the dark side of the moon, built artificial islands on contested reefs in the South China Sea, and recently enticed Italy to break ranks with its European partners and sign on to China’s Belt and Road Initiative. Meanwhile, US President Donald Trump’s unilateralist posture has reduced America’s soft power and influence.

China’s economic performance over the past four decades has been truly impressive. It is now the main trading partner for more than a hundred countries compared to about half that number for the United States. Its economic growth has slowed, but its official 6% annual rate is more than twice the American rate. Conventional wisdom projects that China’s economy will surpass that of the US in size in the coming decade.

Perhaps. But it is also possible that Xi has feet of clay. Den Rest des Beitrags lesen »

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The New-Old Globalization

Posted by hkarner - 3. April 2019

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

The European Union is increasingly divided over how best to manage economic relations with an increasingly outward-looking China. On the whole, European governments are probably right to be wary of Chinese investment; but that doesn’t mean they should ignore China’s vision of cross-border development.

PRINCETON – Once upon a time, everyone assumed that there was a single phenomenon called globalization, whereby cross-border flows of financial capital drove innovation, industrialization, development, and trade. But Chinese President Xi Jinping’s Belt and Road Initiative (BRI) advances an alternative vision of globalization, based on an integrated system of physical infrastructure. The material world of ships and trains will replace the immaterial world of financialization.

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China’s Decade of Sweeping Economic Change

Posted by hkarner - 3. April 2019

Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based think-tank.

The changes China’s economy has undergone over the last decade are sweeping, unprecedented, and essential. The world would be far better served by an effort to understand them than by attempting to prove that the country’s achievements are less impressive than they are.

SHANGHAI – For the West, the year 2008 marked the beginning of a difficult period of crisis, recession, and uneven recovery. For China, 2008 was also an important turning point, but one followed by a decade of rapid progress that few could have foreseen.

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Global Growth Faces Fresh Threat as Industrial Downturn Spreads

Posted by hkarner - 2. April 2019

Date: 01-04-2019
Source: The Wall Street Journal

Downturn has gripped factories in the eurozone as well as major Asian exporters such as Japan and South Korea

Factory activity in much of the world shrank last month, stirring fears that a rebound in manufacturing in China won’t be enough to stave off a sharp slowdown in global economic growth this year.

Fresh figures Monday showed that an industrial downturn has gripped factories in the eurozone’s biggest countries, including Germany, the region’s economic powerhouse, as well as major Asian exporters such as Japan and South Korea. The new data added to expectations that central banks will continue to loosen monetary policy to combat the slowdown.

March surveys of purchasing managers at factories around the world showed a pickup in activity in China and other regional economies with which it has close links, including Indonesia, the Philippines and Thailand. Den Rest des Beitrags lesen »

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China’s “social credit” scheme involves cajolery and sanctions

Posted by hkarner - 1. April 2019

Date: 29-03-2019
Source: The Economist

Some people shrug it off, others worry

Just over a year ago, the eastern city of Suqian announced a plan to score the “trustworthiness” of every adult resident. Everyone would start with 1,000 points. They could get more for performing good deeds, such as voluntary work, giving blood, donating bone-marrow or being a model worker. Points would be deducted for bad behaviour such as defaulting on loans, late payment of utility bills, breaking the rules of the road or being convicted of a crime. Scores would be recalculated monthly and allow residents to be sorted into eight categories, from aaa (model citizen) to d (untrustworthy).

Suqian calls the system “Xichu Points”, after the ancient kingdom of Western Chu to which the area once belonged. It appears to be up and running. A government office in the city offers leaflets explaining how it works. Residents can look up their rating by entering their identity-card number into a mini-app running on WeChat, a popular instant-messaging programme. Their score is indicated by a virtual pointer on a dial that is coloured green at one extreme and red at the other. Scorers at the green end can receive rewards, such as a discount of up to 80 yuan ($12) a month on local-transport passes and admission to hospital without having to pay a deposit. Den Rest des Beitrags lesen »

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Europe Must Unite on China

Posted by hkarner - 28. März 2019

Guy Verhofstadt, a former Belgian prime minister, is President of the Alliance of Liberals and Democrats for Europe Group (ALDE) in the European Parliament and the author of Europe’s Last Chance: Why the European States Must Form a More Perfect Union.

The Italian government’s decision to endorse China’s „Belt and Road Initiative“ is antithetical to European and Italian interests alike, and plays directly into Chinese President Xi Jinping’s hands. While the European Union should pursue a closer relationship with China, it must do so as a single bloc – and thus on a co-equal footing.

BRUSSELS – When seeking investment capital and seemingly lucrative commercial deals, EU member-state governments do not always consider shared European interests. This has especially been the case with respect to China. Yet member states that pursue a relationship with China unilaterally endanger both themselves and the rest of Europe.

True, attempts to define a common EU position toward China have so far been limited. Distracted by the endless Brexit saga and the threats , EU leaders have found scant time to discuss many other important issues. Still, in anticipation of an upcoming EU-China summit on April 9, EU leaders did explore common approaches to China at a meeting this month in Brussels, where they highlighted the risks of the Italian government’s Chinese President Xi Jinping’s “Belt and Road Initiative” (BRI). Den Rest des Beitrags lesen »

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No Middle-Income Trap for China

Posted by hkarner - 28. März 2019

Stephen S. Roach, former Chairman of Morgan Stanley Asia and the firm’s chief economist, is a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management. He is the author of Unbalanced: The Codependency of America and China.

The days of 10% annual growth for the Chinese economy have ended, as was inevitable. But there is good reason to believe that the real story is not the slowdown, but the shift in Chinese output from quantity to quality.

BEIJING – There has always been a fixation on Chinese economic growth. And with good reason. For a large economy, sustaining annual growth rates of 10% over several decades is unprecedented. And yet that’s exactly what China did from 1980 to 2011. But now the miracle is over. Since 2012, annual growth has slowed to 7.2%, and Premier Li Keqiang’s recent annual “work report” set a growth target of just 6-6.5% for 2019.

For the vast legions of China doubters, this is a “gotcha” moment. After all, the lower bound of the premier’s target implies a 40% deceleration from the “miracle” trend. This seems to vindicate warnings of the dreaded “middle-income trap” – the tendency of fast-growing developing economies to revert to a much weaker growth trajectory just when they get their first whiff of prosperity. The early work on this phenomenon was precise in terms of what to expect: as per capita income moved into the $16,000-$17,000 range (in 2005 dollars at purchasing power parity), a sustained growth deceleration of around 2.5 percentage points can be expected. With China having hit that income threshold in 2017, according to International Monetary Fund estimates, its post-2011 slowdown looks all the more ominous. Den Rest des Beitrags lesen »

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