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China

Page history last edited by Brian D Butler 12 years ago

 

 

 

GeoPolitical Economy

see our page Rising importance of China

 

Regions of China - (understanding the map)

 

see our page:  regions of China

 

Culture

 

see our page: cross cultural understanding - China

 

 

China - Economy

China's economy has massive potential.  In this page, we will specifically look at China through the eyes of international investors...presenting both the opportunities and the challenges for investing in China, and the effects that China has on other markets.  Since this is a WIKI, any of our logged in members can edit this page.  If you would like to add anything / fix any content in this page, please be our guest...

 

see also:

 

 

 

Table of Contents:


 

 

 

 

China Economy

 

Population

see page: population

 

size of the Economy:

 

Keep in mind (rough "ball-park" approximation):  As of 2008, at market exchange rates, the US economy was about 3.3 times the size of China’s,

 

 

Exports:

In 2008 the total Chinese export value was 1.4 trillion dollar. Textile products export was 65 billion (4.5%). High tech products: 415 billion (29%). A large part of the latter is obviously products assembled (not manufactured) in China, nevertheless China is not just a textile exporter anymore.

 

 

Trade Surplus

 

China’s trade surplus is roughly equal to one-half to two-thirds of the US trade deficit

 

 

 

 

 

 

 

Trade

 

Deficits with SE Asia (until 2009):

 

Much like the US is with their supply base....China typically runs an import balance greater than exports, meaning they run a current account deficit with SE Asia.  But, surprisingly, the level of imports recently dropped off significantly as China cut back orders in response to the credit crisis of 2007

 

 

Sovereign Wealth Fund

 

A similar complaint was issued by Lou Jiwei, chairman of CIC, the government fund established in 2007 to seek higher returns on a $200 billion chunk of China's currency holdings

 

 

Consumption in China:

 

consumption accounting for less than 50 per cent of China’s income

 

 

 

China's role in the global economy:  similar to America in 1920's

 

The way Chinese production adjusts to the adjustment in US consumption will be the most important story of 2009. This is not the first time the world has required such a massive balance of payments adjustment. In the 1920s the US played the role that China  plays today.  The US economy had been plagued in the 1920s with overcapacity and, as a consequence, ran large trade surpluses equal to 0.4 per cent or more of global GDP (China, with an economy one-sixth the relative size, runs trade surpluses of roughly the same magnitude).

 

 

Challenge of Unemployment:

 

The official figure understates unemployment because it doesn’t include those who aren’t registered, including migrant workers. The state-backed Chinese Academy of Social Sciences said the rate including migrant workers may be higher than 9.4 percent in 2009.http://www.bloomberg.com/apps/news?pid=20601089&sid=aEfualBs_OUM&refer=china

 

JobFair

 

A tide of more than 30,000 students with polished résumés and high hopes surged into a job fair here so eager to meet with employers that they shattered four glass doors and splayed the side walls of an escalator in what became a near riot.

 

 

 

WTO & China

 

America claimed an “important step” had been taken towards opening market access for American goods in China after the World Trade Organisation published a ruling that Beijing must lift restrictions on imports of copyrighted films, DVDs and books. The distribution of entertainment products is limited to state enterprises, which America says increases the demand for pirated goods.   Source: The Economist, August 2009

 

 

 

CURRENCY:

The unit of Chinese currency is the Yuan (RMB).

http://www.chinatoday.com/fin/mon/

 

What is the current exchange rate?

Go to: http://www.x-rates.com/calculator.html#

 

 

Innovation in China

 

Two great articles from McKinsey on innovation in China:

 

1. STRATEGY
A CEO’s guide to innovation in China
Dynamic domestic players and focused multinationals are helping China churn out a growing number of innovative products and services. Intensifying competition lies ahead; here’s a road map for navigating it.

 

2. STRATEGY
Three snapshots of Chinese innovation
Chinese innovation is evolving in diverse ways and at an uneven pace across a range of different industries. Presented here are ground-level views from three of them: automobiles, semiconductors, and pharmaceuticals.

 

 

 

China: Macroeconomics: 

 

Read the World Bank’s latest China Quarterly. Thanks to David Dollar, Louis Kuijs and the rest of the staff of the Beijing office, it remains the best single source for analysis of macroeconomic trends in China.   See:  link here

 

see also:  data sources:  http://www.stats.gov.cn/enGliSH/

 

 

 

 

 

Challenges for China: rising labor costs (vs competitors in SE Asia)

 

Read more from the Economist.com

 

 

 

Trade, WTO and the US:

 

Washington still has a great deal of leverage over Beijing in the form of Section 421, a U.S. law that was incorporated into China's accession agreement with the World Trade Organization in 2001 and allows the United States to legally impose tariffs on nearly any Chinese export until 2013. Now that Obama has put Section 421 to use in restricting tire imports, the Chinese have to think twice before making any moves that could compel Washington to go even further in slapping trade restrictions on China.  Source:  Stratfor.com

 

Easing US-China Tensions:

 

Larry Downing/Courtesy Reuters

Easing U.S.-China Economic Tensions

 

Students Resources:

"Assign students this video of CFR’s Sebastian Mallaby and have them suggest additional steps the United States could take to decrease tensions with China over trade and currency issues.

 

 

 

 

GDP Growth:

 

 

 

Foreign Reserves:

 

China's foreign-exchange reserves stand at about $2 trillion (compared with America's at a relatively puny $73 billion).  

 

Despite recent reports, it doesnt appear as if China is slowing down US treasury purchases:

 

 

read more:  http://blogs.cfr.org/setser/

 

 

 

 

 

Response to the Economic Crisis 2008-09:

 

The spending initiatives that Beijing announced a few weeks ago would total almost $600 billion (some of which include existing projects), a staggering 15 percent of China's GDP.

 

 

 

 

China and "global imbalances":

 

 

 see our GloboTrends page global imbalances (finance)  

 

While the US is the largest economy in 2007, China is the fastest growing. These two countries have an increasingly interdependent and complicated relationship. In late 2006 and early 2007, the US congress has been venting increasing frustration with the growing trade deficit with China, estimated to exceed $232 billion in 2006.

 

Recent changes in Chinese regulations should help relations with the US. While the Chinese will maintain their currency peg to a basket of currencies, they will start to allow more financial competition in china from US banks who will be able to offer credit services denominated in chinese currency and thus compete against chinese banks.

 

For global warming discussion: it is interesting to note that China currently uses twice as much caol as the US, and could use four times by 2020.

 

 

Can the USA continue running such a large current account deficit?

 

see our GloboTrends page global imbalances (finance)  

 

There is a lot of debate in this area.  The key is "confidence". As long as the world continues to show confidence in the US, then it will continue to be desirable for foreign investment.  Foreigners will want to purchase US treasury bonds because they are seen as "risk free investments". 

 

As China and India continue to open up their economies, they will need to meet the pent-up demand of their citizens to invest money out of the countries.  Much of this investment will likely go to the USA (as long as confidence remains high).  With this happening, it is possible that the US could run a current account deficit for the next 30+ years (as they have done for the past 30 years) without much problem.  As it currently stands, Indian and Chinese consumers have very limited ability to invest overseas.  Some economists predict that as their economies open up, that we should see increased demand for US investments.   As long as the US is able to run a capital account surplus, then they should have no trouble maintaining the current account deficit.  This balance should be fed by India / China for many years to come. 

 

 

 

 

China’s consumption challenge

A panel of leading Chinese economists debates proposals to stoke private consumption in the world’s fastest-growing economy.

AUGUST 2009

 

Bolstered by a $586 billion government stimulus program and a surge in lending by state-owned banks, China may be the first major economy to bounce back from the global recession. But the composition of China’s growth remains unbalanced. Aggressive increases in government spending and investment by state-owned enterprises has cushioned the impact of weak exports. But those gains have not been matched by comparable increases in private consumption. Spending by Chinese households as a percentage of GDP is roughly half the US consumption ratio and remains significantly below private spending levels in Europe and Japan. And despite rising sales of items such as automobiles and household appliances, the ratio of private spending to GDP in China today has actually fallen relative to Chinese spending levels of a decade ago.

 

Why do Chinese consumers spend so little relative to counterparts in other nations? What can be done to change that? Is boosting private consumption in China’s national interest? How would that contribute to global growth? In this interview, conducted by McKinsey director Jonathan Woetzel in June 2009 in Shanghai, four distinguished members of the McKinsey China Council of Business Economists1 explore these questions. Watch the video,

 

 

 

source:  The McKinsey China Council of Business Economists is an organization of leading economists dedicated to promoting dialogue and understanding of the Chinese economy. The four panelists in this roundtable include Wang Xiaolu, deputy director at the China Reform Foundation’s National Economic Research Institute; Cao Yuanzheng, chief economist of Bank of China International Holdings; Bai Chong’en, professor and chair of the Department of Economics at Tsinghua University; and Li Xiaoxi, director of Beijing Normal University’s Institute of Economic and Resource Management. 

 

 

 

 

Investing in China:

 

What are the options for investing in China?  See our GloboTrends Guide to Investing in China

 

 

Entering the Chinese market

 

see our GloboTrends discussion on China market entry strategy

 

 

China as an export base

 

Florida companies perspective:

 

Lexis Nogueras' American Dream is being built in a Chinese factory. When the 35-year-old Cutler Ridge resident quit his job last year to launch Ergo-Tools, a line of lightweight, ergonomically-designed garden tools aimed at seniors with a green thumb, he hoped to have them made in the United States. Then came the estimates: It would cost more than $10,000 just to create the prototype for his G-Rake -- a tool forged from a plastic-nylon composite he hoped to sell for $24.99. "I couldn't afford it," said Nogueras, who works from home and is financing Ergo-Tools out of his own pocket. "It's unfortunate, but I was forced to look elsewhere.". Where he eventually looked was to a Chinese manufacturer. Three weeks after e-mailing his design to the company, Nogueras received a FedEx package containing the finished G-Rake prototype and a bill for about $850.

 

There's nothing new about outsourcing to China, but the growing ease of communication, the expanding legion of English-speaking professionals and a thriving business environment are making it easier than ever for small ventures to tread in an arena once reserved for large corporations.

 

"Twenty years ago it was only the biggest companies that were going to China, 10 years ago it was middle-sized companies, and now everyone is going to China," said Howard Ullman, chairman of China Direct Trading ( http://www.chdt.us ), a Cooper City company that imports Asian goods and helps local companies navigate the Chinese economy. It's hard to quantify the number of local small businesses that have a China strategy, but the Jay Malina International Trade Consortium ( http://www.miamidade.gov/itc ) , Miami-Dade County's international trade agency, says it has 1,336 Miami-area companies on file that either import or export to China.

 

What is far more clear is China's overall economic impact here. Over the last four years China has surpassed Brazil and Germany to become the state's second-largest source of imports. At the Port of Miami, where China was the 30th largest client five years ago, it is now No. 1, sending 832,886 tons worth of products in 2006. At Port Everglades, China is the second-largest client, sending 342,642 tons of products. Not all these Chinese goods stay in Florida, however. Many are trans-shipped to Latin America, the Caribbean and other U.S. destinations.

 

While apparel, machinery and industrial equipment top China's list of exports to the state, the range of goods arriving at South Florida ports offers a snapshot of local consumer habits. China Direct, for example, started off importing refrigerator magnets, key chains and other souvenirs. Now it is bringing in hardware, automotive parts and -- in preparation for hurricane season -- electrical generators and ceramic roofing tiles.

 

Hart Baur is co-owner of Nicamaka ( http://www.nicamaka.com/ )-- a Miami firm that got its start in the early 1990s importing hand-woven hammocks and other Central American handicrafts. Late last year he bought a ticket to China to find factories where Nicamaka might make branded goods, such as mosquito nets, umbrellas and corporate tents. What he found were manufacturers willing to churn out prototypes and designs at cut-rate prices in hopes of winning his business. They have a much longer-term vision there, Baur said. The attitude is if I do this right and make the client happy, we'll be in business for the next 20 years. Shortly after the trip he sent one of his new contacts a sketch of a four-point bed canopy made with blackout material. Nineteen days later he had the finished product in his hands, complete with the Nicamaka logo. Because he had an established relationship with the factory, the prototype was free. Before China, coming up with new products had been prohibitively expensive for Nicamaka, said Baur. I can be almost unlimitedly creative in my head now, he said. And I'm curious and excited about all the things we might come up with over the next 10 years. Chinese-made goods represented only about 20 percent of Nicamaka's sales two years ago, he said. Now they account for about 80 percent.

 

It's not just the prices that have smaller firms looking toward China; it's also the flexibility, said Christina Bracken, the head of business development and creative services at CFT True Source, a Miami company that helps U.S. ventures identify Chinese manufacturers. Phone Interview: http://www.miamiherald.com/103/story/97471-a96406-t4.html

 

Some of her smallest clients have approached her only after finding U.S. factories had minimum production requirements that were beyond their reach. In China if someone is interested enough in your business, they will make it happen, she said. It's very pioneerish that way . . . It's the Wild West of business. But like the Wild West, China's manufacturing industry has its share of stray bullets and unsavory characters. The nation is the world's leading producer of counterfeit goods, and human rights groups have warned of abysmal labor conditions in some Chinese factories.

 

It is easy to start business with China because there is an atmosphere of free flowing entrepreneurship, said Joe Chi, executive director of Miami's China-Latin America Trade Center ( http://www.chinalatam.com/ ) , which opened six months ago. At the same time you have the underside -- where unfettered capitalism engenders some bad characters that come out and take advantage of the situation. Tales abound of unscrupulous factory owners that run off with money, sell patented products to competitors, or simply promise one quality and deliver another, he said. Because of the competitive situation and rising material costs, a lot of manufacturers are trying to cut corners,'' said Chi. And the next corner they cut might be yours. Those problems have been exacerbated by the Internet, which has made it far easier to find a factory but also easier for scammers to prey on the unsuspecting. There is no lack of information on the Internet about who might be able to make a product for you, but there is a lack of information about who you can trust, said Bracken.

 

Organizations such as China Direct, the China-Latin America Trade Center and CFT rely on a network of personal relationships and referrals to help their clients steer clear of fraudsters.

 

But small businesses have other routes too. The Broward Alliance has led two trade delegations to China and Miami-Dade's Beacon Council plans to take business representatives there later this year. There are also trade fairs aimed at small businesses, said Chi.

 

Opportunities to meet factory owners first-hand are critical in China, where relationships are paramount, said John Diep, director of the Asia Pacific Region for Enterprise Florida, the state development agency, which has a trade office in Beijing. http://www.eflorida.com/globaladvantages/exporting.asp?level1=25&level2=122

 

You cannot do business with China one time, he said. They need to hear from you and see you every so often and measure your level of commitment. . . . The Internet might facilitate the first contact but it is always recommended to meet face-to-face to know more about your potential partner before you start business. The emphasis on personal relationships is just one of the cultural quirks that takes getting used to.

 

Margarita Gonzales first traveled to China from Miami in 1989 to find a manufacturer of machines to count bills and detect counterfeit money. At first her Chinese counterparts were reluctant to talk to her and kept asking to speak to her business partner and husband. Finally she had to explain that she was the president and CFO of AccuBANKER. I'm the one who authorizes the payments so if you want to do business with me, you will have to do business with me, she recalls saying. While working in China can still be quite challenging for women, attitudes are changing almost as fast as the Beijing skyline. I go to China twice a year and every time it's a new China, she said.

 

Ergo-Tools' Nogueras said he hopes to see China and meet his business partners for the first time soon. But for now he is focusing his time and money on getting Ergo-Tools off the ground. Next month he hopes to place his first order for about 4,000 tools -- an order that will essentially wipe out his life savings.

 

But starting a business is a lot like working with China, he said; it requires a sense of adventure and a high tolerance for risk. It has been a leap of faith, said Nogueras, but so far, it has been smooth sailing.

 

source: http://www.miamiherald.com/103/story/97471.html

 

 

Beyond Cheap Labor:

 

Macroeconomic interrelations shift periodically, and a competitive advantage in one location may become a disadvantage over time. This could happen if there are changes in exchange rates, if there are local inflationary pressures, if there are raw material shortages, or if there are changes in government policies. When a country develops, it will lose comparative advantage in wages, and needs to move up the value chain (as was described in “Beyond Cheap Labor”). There is a direct relationship between GDP per person and wages per hour, so even China will someday loose its comparative advantage as the worlds cheap labor market as its GDP per person rises over time. A country need to manage the transition from competing on low cost labor to more value added products and services. It was interesting that the book “Driving Growth” placed such high value on a country’s ability to develop a competitive local service market as a means for improving the standard of living. This focus on developing the market for local services is essential for unlocking productivity growth that will drive competitive advantage in many other areas.

 

 

 

 

 

 

GeoPolitical

 

 

Geography and Economic Development:

 

Read more: economic development and geography

 

Source: The Geography of Recession | STRATFOR: " China also faces significant hurdles, albeit none as daunting as Russia’s challenges. China’s core is the farmland of the Yellow River basin in the north of the country, a river that is not readily navigable and is remarkably flood prone. Simply avoiding periodic starvation requires a high level of state planning and coordination. (Wrestling a large river is not the easiest thing one can do.) Additionally, the southern half of the country has a subtropical climate, riddling it with diseases that the southerners are resistant to but the northerners are not. This compromises the north’s political control of the south.

 

Central control is also threatened by China’s maritime geography. China boasts two other rivers, but they do not link to each other or the Yellow naturally. And China’s best ports are at the mouths of these two rivers: Shanghai at the mouth of the Yangtze and Hong Kong/Macau/Guangzhou at the mouth of the Pearl. The Yellow boasts no significant ocean port. The end result is that other regional centers can and do develop economic means independent of Beijing.

 

 

The Geography of Recession (click image to enlarge)

 

With geography complicating northern rule and supporting southern economic independence, Beijing’s age-old problem has been trying to keep China in one piece. Beijing has to underwrite massive (and expensive) development programs to stitch the country together with a common infrastructure, the most visible of which is the Grand Canal that links the Yellow and Yangtze rivers. The cost of such linkages instantly guarantees that while China may have a shot at being unified, it will always be capital-poor.

 

Beijing also has to provide its autonomy-minded regions with an economic incentive to remain part of Greater China, and “simple” infrastructure will not cut it. Modern China has turned to a state-centered finance model for this. Under the model, all of the scarce capital that is available is funneled to the state, which divvies it out via a handful of large state banks. These state banks then grant loans to various firms and local governments at below the cost of raising the capital. This provides a powerful economic stimulus that achieves maximum employment and growth — think of what you could do with a near-endless supply of loans at below 0 percent interest — but comes at the cost of encouraging projects that are loss-making, as no one is ever called to account for failures. (They can just get a new loan.) The resultant growth is rapid, but it is also unsustainable. It is no wonder, then, that the central government has chosen to keep its $2 trillion of currency reserves in dollar-based assets; the rate of return is greater, the value holds over a long period



Read more: The Geography of Recession | STRATFOR

 

The struggle between the populist and elitist factions is a subset of the deeper struggle in Chinese history between centralist and regionalist impulses. Because of China’s vast and diverse geography, China historically has required a strong central government, usually located on the North China Plain, to maintain political unity. But this cyclical unity tends to break down over time as different regions pursue their own interests and form relationships with the outside world that become more vital to them than unity with the rest of China. The tension between centralist and regionalist tendencies has given rise to the ancient struggle between the north (Beijing) and the south (Shanghai), the difficulties that successive Chinese regimes have had in subordinating the far south (i.e. Guangdong and the Pearl River Delta), and modern Beijing’s anxiety over the perceived threat of separatism from Taiwan, Xinjiang and Tibet. In this context, the struggle between the two dominant political factions appears as the 21st century political manifestation of the irresolvable struggle between the political center in Beijing and the other regions, whose economic vibrancy leads them to pursue their own ends. While Hu Jintao and his allies emphasize central control and redistributing regional wealth to create a more unified China, the followers of Jiang tend to emphasize the need to let China’s most competitive regions grow and prosper, often in cooperation with international partners, without being restrained by the center or weighed down by the less dynamic regions.

 

Beyond the apparent balance of forces in the central party and government organs, there remains the tug-of-war between the central government in Beijing and the 33 provincial governments (not to mention Taiwan) — a reflection of the timeless struggle in China between center and periphery. If China is to be struck by deep destabilization under the watch of the fifth generation leaders (which is by no means impossible, especially given the economic troubles facing them), the odds are this would occur along regional lines. Stark differences have emerged, as China’s coastal manufacturing provinces have surged ahead while provinces in the interior, west and northeast have lagged. The CPC’s solution to this problem generally has been to redistribute wealth from the booming coast to the interior in hopes that subsidizing the less developed regions eventually will nurture economic development. In some instances, such as in Shaanxi or Sichuan provinces, urbanization and development have indeed accelerated in recent years. But overall, the interior remains weak and dependent on subsidies from Beijing.

 

Read more: Looking to 2012: China's Next Generation of Leaders | STRATFOR

 

 

 

 

International perspectives; How Chinese view the rest of the world

 

One travelers perspective:

"Although it is difficult to get the Chinese to say anything directly negative about anyone, it is possible to tell indirectly what they think. It is clear that most Chinese think very little of the North Koreans, or of their leader Kim. While there, I heard quite a few negative comments about the place. The common response is that N Korea is very poor, and “like China was 50 years ago”. From a friend, I learned that the Chinese media typically paints the Koreans, Japanese and US Americans in a very negative light. His opinion was that the government propagates hate against these three groups. I'm not sure exactly why.

 

'Very similar to the US, most Chinese people have spent very little time traveling for pleasure abroad. I found that the Chinese were very knowledgeable of other places and of other people in the world. When I told them that I was born in Canada, most of the people that I met on the street knew 3 or 4 of the major cities in Canada (which might be more than most Americans can name). I found Chinese that could speak English in most places that I went, and even some that could speak Spanish, German, French and Portuguese. But then, I found it interesting that most of the Chinese people that I met had never actually been outside of China itself. In fact, I discovered that it is extremely difficult and expensive for most Chinese people to travel abroad. It can take up to a year and a half for them to get the necessary authorization (travel visa) to leave the country. I told my new Chinese friends that it only took me a week to get my visa to come to China and a $100 usd, and they were amazed. The Chinese that I met that had traveled abroad were either from Hong Kong, Taiwan, or else they were traveling abroad on a business visa. On the airplane leaving shanghai for the US, I saw mostly US citizens, most of whom looked Chinese, but many of which didn’t speak the language. Of the Chinese that I met on the plane, many of them were making their first trip abroad (mainly to set up sales operations for manufactured goods in the US).

 

When talking about India, its very popular with the Chinese if you were to criticize the Indians for their “inability to make decisions” on the state level. Whether its true or not, the Chinese people have a strong belief the democracy in India is what keeps them from being able to organize public works projects, such as road construction, or necessary infrastructure projects. On Chinese joked with me that the Indians will stop a road construction because one tree is “holy”. There seems to be the belief in China that central planning of the government is extremely beneficial to them all, and that the confusion of a voting democracy would just slow them down. This may not be the true feelings of all Chinese, but it seems to represent the views expressed by most that I met on the trip.

 

 

 

 

 

 

 

 

 

 

 

 

Trends in China:

 

1. Population aging:

          see page: population

"China's population will reach an inflection point in 2011: The increase in retirees will start to outpace that in the labor pool. The relative price of labor will rise, the household savings rate will begin to decline and Chinese investment will decelerate. Over time, this should help to rebalance the economy toward private consumption while reducing China’s current account surplus and reliance on exports and investment for growth.   However, there is a risk that instead of the anticipated gradual reduction in the demographic dividend, China may be facing a more drastic labor force fallout. In "What Happens When China’s Demographic Dividend Stops Paying Out?," available exclusively to clients...

 

 

 

 

 

 

 

 

 

 

Economic Development

 

Comparing India vs China:

The Indian private sector is more efficient and entrepreneurial than its Chinese counterpart. But China has been very successful in creating infrastructure and delivering essential services, while the Indian state's effectiveness has deteriorated over the last four decades. Since it is easier to create markets than to improve state capacity, China's task—improving the private sector—is more likely to succeed than is India's task of arresting institutional decline.

 

 

Migration Issues:

 

"A reform of the household registration system, hukou, to which social services and land ownership are tied, could increase labor flexibility and unlock more of the surplus labor in China’s rural areas."  source:RGE.com

 

I asked one Chinese why there were no slums, or Latin-American style ghettos in Shanghai. I had expected to see many poor people that were attracted to the wealth of the city, but in Shanghai and Beijing, it was rare to see any poor people in the streets, or in nearby ghettos. Even when driving out of the city to the manufacturing areas of town, it was extremely rare to find any of the expected poor slums that should be surrounding such a rich city in the middle of a developing country. My Chinese friend explained it to me that the Chinese would consider it to be essential to “save face”, and that these cities are how the outside world views China. If they were to allow such a disgrace as to have slums in or around their cities, then they would lose face to the world.

 

But this still didn’t exactly explain how the Chinese government was able to keep the mass of poor people from flooding such a rich city. I thought that if cities such as Buenos Aires or Sao Paulo were to try something like this, they could remove the poor people one day, but they would be back the next. It would take a full army of full time people movers to keep those cities empty of poor people. So, how was it that the Chinese were able to do it seemingly so easily? The answer came to me during a conversation with another Chinese friend. He explained that the Chinese just did what they were told to do, that they were very accustomed to taking orders, and in fact expected to be told what to do, where to live. Up until very recently, there was literally no free movement of people in China. If you lived in one city, you were not allowed to migrate to another for work. While this has changed in recent years, there are still major controls in place. If you come from the countryside and want to move to Shanghai, you need to have documents in order to move to the city. These documents show that you have work permit, but you will have to return to the country side once your permit is expended. I'm just guessing, but I imagine that it must be very difficult to find a place to live without the proper paperwork that shows that you are a city resident.

 

 

 

 

 

 

 

 

 

Business Issues in China

 

Comapny iconChina's Aging Population - The Chinese population is rapidly aging, due to a lower mortality rate and the one child policy. This will lead to a pension problem for the Chinese government and... read more
Comapny iconChina's Coal Power Pollution - Through China's use of coal, it is the largest greenhouse gases emitter in the world. The negative pollution impacts from coal on China's farming could increase... read more
Comapny iconChina's Internet Crackdown - China's reputation for censorship extends to its restrictions on Internet access in that country. This will impact Chinese bloggers, who may have to register... read more
Comapny iconChina's Internet Growth - Chinese use of the Internet is skyrocketing. This creates opportunities for both foreign and home-grown search engine and Internet advertising companies. Online... read more
Comapny iconChina's Piracy & Counterfeiting Problems - China's inability to safeguard intellectual property rights limits the manufacturing of high-end technology goods in China and erodes the value of... read more
Comapny iconChina's Water Scarcity - China has both water shortages and water quality issues. This has significant implications for: China's ability to produce its own ethanol fuel The sustainability of... read more
Comapny iconChina Enters the World M&A Stage - As China increasingly becomes a player in the acquisitions of foreign companies, certain companies are poised to benefit. Investment banks with a strong... read more
Comapny iconLuxury Consumption in China - A rapidly expanding middle and upper class in China seeks to enhance its identity and quality of life with luxury goods. Top growth categories for luxury goods in... read more
Comapny iconMobile Phone Adoption in Developing Countries - Wireless Subscribers International Mobile phone adoption is a source of tremendous growth in wireless industry. Penetration rates for the U.S.... read more
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Trade Show Events

 

Furniture

 

 

Shenzhen, China

SIFE (Shenzhen International Furniture Exposition)

August 19th -22th, 2007

http://www.chinafurnitureexpo.com/en/index.asp

Shenzhen International Furniture Expo (SIFE) has been a great success since 1996, with the exhibition venue developed from 8,000m2 Shenzhen International Exhibition Center to 42,000m2 China Hi-tech Fair Exhibition Center (Shenzhen), and was finally settled in the 160,000m2 Shenzhen Convention & Exhibition Center. SIFE opens twice a year and each lasts 4 days. The accumulative total quantity of visitors is about 1.6 million. The total of transaction volume has reached RMB27.6 billion, of which export orders have added up to USD1.5 billion. By virtue of these facts SIFE has distinguished itself one of the most influential furniture fairs in Asia

 

 

China International Furniture Expo

September 12-15, 2007

Shanghai - 1,600 exhibitors, 240,000 sqm

http://www.furniture-china.cn/

Event Profile: Furniture China 2006 is gearing up for business. Furniture professionals have bookmarked Furniture China in Shanghai, September 11-14, 2006 as the main event in Asia to source quality furniture. Furniture China 2006 presents itself on two main venues, the Venue West (Intex, Shanghai Mart & Jisheng Wellborn Hongqiao) solely dedicated to Home Furniture and the Venue East (Shanghai New Expo Center, SNIEC) display for home furniture, office furniture, furnishings, and furniture manufacturing.

Visitor's Profile: Architects, Interior Designers / Decorators, Wholesalers, Distributors, Furniture Manufacturers, Importers, Exporters of Furniture, Retailers, Agents, Representatives & General Public are the target visitors.

 

 

 

 

 

 

 

Other Products

List of all trade fairs in China: http://www.aboutchinafair.com/

 

Chinese Import and Export Commodities Fair(Canton Fair)

April.15th-30th (Spring Fair)

Oct.15th-30th (Autumn Fair)

http://www.cantonfair.org.cn

 

China (Shouguang) International Vegetable Sci-tech Fair

April 20-May20

Shouguang, Shandong

http://www.intvegetable-fair.com/English

 

The Expo Central China

May 18th-20th

Zhengzhou International Convention and Exhibition Centre, in Henan Province

http://expocentralchina.mofcom.gov.cn/pub/zbblh/EnglishHome/default.htm

 

China International Consumer Goods Fair

Jun 08, 2007--Jun 12, 2007

Ningbo

http://www.cicgf.com/

 

The 3rd China International Tunnel & Underground Space Exhibition & Conference

Jun 12, 2007--Jun 14, 2007

Shanghai

http://www.tunnel-china.com

 

GIMT+AMB China 2007

Jun 15, 2007--Jun 18, 2007

Guangzhou

http://www.gimt.com.cn/

 

Brew Drinks China 2007

Aug 16, 2007--Aug 18, 2007

Qingdao

http://www.bdcqd.com

 

The International Exhibition on Water & Wastewater Treatment Systems and Technology

Jul 11, 2007--Jul 14, 2007

Shanghai

http://www.watertech-china.com

 

China International Fair for Investment and Trade (CIFIT)

September 8-11

Xiamen

http://www.chinafair.org.cn

 

China (Taiyuan) International Coal & Energy New Industry Expo. (CICEN EXPO)

September 16-18

Taiyuan , Shanxin

http://www.cicenfair.com/

 

China Hi-Tech Fair (CHTF)

October 12-17

Shenzhen

http://www.chtf.com/english

 

China Yiwu International Commodities Fair

October 22-26

Yiwu, Zheijiang

http://www.chinafairs.org

 

 

 

 

 

Travel Guide - China

 

 

Health Matters

 

Health matters

 

Before leaving home make sure that you have adequate health insurance, as treatment at local hospitals and foreign-owned clinics can be expensive and China does not have reciprocal healthcare arrangements with other countries.

 

Be sure to get vaccinated against Hepatitis A and B, which are quite common in China. You should also check with your doctor about the need for vaccinations for tetanus, tetanus-diphtheria, polio, typhoid, flu, chickenpox, rabies and Japanese encephalitis (the last of these is only really necessary if you are planning to travel to rural areas). Don’t drink the tap water while in Beijing, although brushing your teeth with it is fine. All hotels will provide your room with mineral or boiled water.

 

In case of medical emergency, your hotel may have a doctor on call or be able to help you get to the nearest public hospital with English-speaking staff (or one of Beijing's international clinics). Take your passport with you and some cash, since some hospitals will not see you before you have paid 100-500 yuan. For international clinics, you'll probably need an international credit card.

 

 

Beijing

 

Emergencies

 

 

Ambulance: 120

Police: 110

Fire: 119

Foreigner Section, Beijing Public Security Bureau (English spoken): 8402 0101

International SOS (provides medical evacuation services for many expats): 6590 9100

 

 

 

Pharmacies

 

Watson’s

Open: daily, 9.30am-9.30pm

Branches of this western pharmacy can be found in major shopping centres around Beijing, including Oriental Plaza, Full Link Plaza, China World Trade Center and Lido Place. In addition to well-known over-the-counter medicines, Watson's also carries toiletries.

 

Prescription drugs can also be bought at any of the foreign-run clinics in Beijing (see Private clinics below).

 

 

 

 

Hospitals

The following hospitals have wards for foreigners, and English-speaking doctors and nurses:

 

Peking Union Medical Hospital

53 Dongdan Beidajie

Dongcheng District

Tel: +86 (10) 6529 5284

24-hour emergency service

 

Sino-Japanese Friendship Hospital

Heping Li

Heping Jie Dongkou

Chaoyang District

Tel: +86 (10) 6422 2952

 

 

 

Private clinics

 

Bayley & Jackson Medical Centre

7 Ritan Donglu

Chaoyang District

Tel: +86 (10) 8562 9990

Open: Mon-Fri 8am-8pm, Sat-Sun 8am-5pm

Medical personnel available after hours

Website

 

Beijing United Family Hospital and Clinic

2 Jiangtai Lu

Chaoyang District

Tel: +86 (10) 6433 3960

Tel: +86 (10) 6433 2345 (Emergencies)

24-hour emergency service

Website

 

 

Shanghai

 

Emergencies

 

Police: 110. Fire: 119. Ambulance: 120

 

 

 

Pharmacies

 

Watson’s

787 Middle Huaihai Rd (beneath the department store)

Open: daily, 9.30am-10pm.

This chain of pharmacies is your best option for minor ailments. There are branches throughout the city.

 

 

 

 

Hospitals

The following hospitals have wards for foreigners:

 

Huashan Hospital Foreigners' Clinic

Floor 19

12 Middle Urumqi Rd

Tel: +86 (0)21 6248-9999 x2500

Open: Mon-Fri 7am-5pm. In emergencies, call the 24-hour helpline on 6248-3986.

 

 

Ruijin Hospital

Building No.38

197 Ruijin No.2 Rd

Tel: +86 (0)21 6466-4483

Open: Mon-Fri 8am-11am, 1.30pm-5pm (phone for appointments)

 

 

 

Private clinics

 

International Medical Care Centre (IMCC)

People's Hospital

585 Jiulong Rd (just North of the Bund)

Tel: +86 (0)21 6306-9480

Open: 24 hours; for emergencies, call 6324-3852.

 

 

World Link

Shanghai Centre

1376 West Nanjing Rd

Tel: +86 (0)21 6279-7688

Website

 

 

This international clinic has various other locations around the city, all listed on the website. 24-hour emergency services for World Link members, including dental care, obstetrics and gynaecology. English, Chinese and Japanese are spoken. Be aware that if you need an operation, the clinic will refer you to a hospital and arrange an appointment.

 

Shanghai East International Medical Centre

551 South Pudong Rd

Pudong

Tel: +86 (0)21 5879-9999

Open: Mon-Fri 8am-9pm; Sat 9am-2pm; Sun 9am-1pm

A joint venture between a Californian medical group and Shanghai East Hospital, this clinic has expat doctors and English-speaking receptionists and nurses. It’s the best option on the Pudong side of the river.

 

Arriving in China

 

 

Beijing

 

Beijing Capital International Airport

 

Tel: +86 (10) 6546 3220/4247

Website

This modern airport, which opened in 1999, handles both domestic and international flights and is just 27km north-east of the city centre. It is still expanding and by the time the 2008 Olympics Games open, will have almost doubled its handling capacity to 60m passengers a year.

 

On arrival ignore the taxi touts who will rush towards you as you leave customs. They will seriously overcharge, even if they're waving “official” cards. Instead, head directly for one of the two taxi lines right outside the arrivals area. The ride to central Beijing normally takes about 35 minutes, depending on traffic, and will cost about 90 yuan ($11), which includes the highway toll.

 

When catching a flight, stay alert for self-appointed baggage handlers (the official ones wear red hats and provide a free service) and for people selling airport exit fees—this is now included in the price of your ticket.

 

 

 

Shanghai

 

 

Airports

 

 

Pudong International Airport

Tel: +86 (0)21 9608 1388

Website

Pudong International Airport, 30km (19 miles) from the city, handles international and some domestic flights. It is linked to central Shanghai via the world's first maglev (“magnetic levitation”) train. This whizzes along at up to 430kph (daily, 7am-9pm; 50 yuan for a single trip) but deposits you on the eastern fringes of the city (Longyang Road Station). That's a 25-minute taxi ride into downtown Shanghai.

 

It is faster, ironically, to arrange for your hotel to send a car, or to take a taxi straight from the airport. Ignore the touts and go to the furthest exit to the right hand side of the arrivals hall, where there is an official taxi stand; you rarely have to wait more than 5 minutes for a cab. Taxis to downtown Pudong (east of the river) will take 40 minutes and cost about 120 yuan. Taxis to the city centre, known as Puxi (west of the river), take an hour and cost 150 yuan. Pudong’s second terminal—an exact replica of the first—will be operational by the end of 2007—increasing the airport’s capacity threefold.

 

 

Hongqiao Airport

Tel: +86 (0)21 6268 8918, ext 2

Website

Just 13km west of the centre, Hongqiao is the older and more central of Shanghai’s two airports. It handles domestic flights only; you may land here if you’re coming via Beijing. In Arrival Hall B, there is a tourist information centre (open daily, 10am-9.30pm) providing maps and hotel bookings. An ATM that accepts foreign cards can be found in Arrival Hall A.

 

Taxis wait at the far left of the terminal exit, but be prepared to queue; it's a 30-minute ride into the city centre (allow at least 50 minutes to reach Pudong).

 

ATM - money

 

www.visa.com/pd/atm

www.mastercard.com/atmlocator/index.jsp

 

Getting Around

 

Beijing

 

Getting around

 

Beijing's public transport system is improving slowly as the city builds or repairs inner-city roads and highways, and new taxis, buses and trains are called into service for the 2008 Olympics.

 

Buses

 

The city is in the process of introducing a new fleet of buses, including some “green” machines, powered either by liquid natural gas or electricity. Most inner-city buses charge 1-2 yuan, with some charging incrementally higher for longer distances. However, public buses in China are often very crowded, and if you don't read or speak Chinese it can be difficult to get around as a tourist. Bus stop signs have the number of the bus route painted on them, and a listing in Chinese of all the stops along the route.

 

Metro

 

Beijing's metro is fast and reliable, and its reach has been extended several times in recent years. A ticket costs 2-3 yuan, and if you need to switch to the new light rail to complete your journey you'll be charged an additional 2 yuan. The metro runs from 5am-10.30pm and the light rail from 6am-11pm. Each station has signs in English, and the name of each stop is broadcast in both Chinese and English.

 

Taxis

 

Beijing began replacing its old fleet of taxis in 2005 in preparation for the 2008 Olympics, and the newer Hyundais and Volkswagens are generally roomier and more comfortable. The charge is 10 yuan for the first 3km, and then 2 yuan per km. Meters keep running while the car is standing. A higher rate is charged from 11pm until 5am. The only time you’ll have trouble finding a taxi is when it’s raining and during the evening rush hour. Few taxi drivers speak English, so have someone write down your destination in Chinese. And be sure to take a business card from your hotel with you so that you can find your way back. Taxi drivers do not expect tips unless it's for service beyond the call of duty.

 

 

 

 

 

Shanghai

 

Getting around

 

Public transport

 

If you plan to be in Shanghai for more than a few days, buy a Shanghai Public Transport Card (jiaotong ka), available in any metro station. You can put funds on it to use for taxis, the metro, light rail buses and the passenger ferry across the river.

 

 

Buses

 

Buses are crowded, smelly, hard to understand if you don't read Chinese characters, but extraordinarily cheap. Most inner-city buses charge 1-2 yuan, no matter how far you’re travelling within the city. Tickets on long-distance buses range between 1-6 yuan.

 

 

Taxis

 

Taxis in Shanghai are good value. You will pay 11 yuan for the first two km, and then 2 yuan per km. The city has about 50,000 taxis. The only time you’ll have trouble finding one is when it’s raining. Most taxi drivers do not speak English, so have someone jot down your destination in Chinese characters and take a business card from your hotel with you so that you can find your way back. It’s always worth asking the driver for a fapiao (receipt), as it has the taxi's number printed on it and so can help you to trace the cab if you leave something behind.

 

Tipping is not customary. Try to avoid hailing a cab at 9.30am or 4.30pm, when drivers change shifts.

 

 

Metro

 

Shanghai's metro is swift and cheap (2-6 yuan), but has only four main lines. The government has plans for seven more by 2010. Until then, you could end up having to walk some distance. The metro has some signs in English and is a good way to cross the river during rush hour, when traffic clogs the bridges and the tunnels.

 

When travelling you can just swipe your public transport card over the card-recognition key pads. Otherwise, you will need to tell the assistant at one of the ticketing counters what price zone you are travelling in or the name of the place you are travelling to and he will give you a one-trip ticket.

 

Crime and Safety

 

Beijing

 

Crimes against foreigners were almost unheard of just a few years ago, but these days visitors should take care. It particularly pays to be alert when going out after dark. Touts work the streets in the areas foreigners frequent and will invite male visitors to go to a “lady bar” or karaoke, citing cheap prices. The bars are invariably rip-offs—sometimes visits result in outrageous charges—and should be avoided. Stick to established bars and clubs in the hotels and to those promoted in the expat magazines (see our Reading section).

 

A large number of young people hang around tourist sites such as the Forbidden City and Wangfujing and present themselves as students. While some just want to practise their English, others are there to cheat foreigners. Talk with them if you like, but decline offers to visit art galleries or teashops, where you may be intimidated into expensive purchases.

 

 

Shanghai

 

Shanghai is remarkably safe and crime is usually limited to pickpocketing. Women travellers can walk around alone without fear of harassment. Male travellers should be alert when venturing out after dark: the prostitutes who patrol the environs of many business hotels can be persistent, though not dangerous.

 

Police wear navy uniforms and police stations usually have a red light and a sign saying “jingcha” (police). Traffic police with ear-piercingly shrill whistles will fine you 50 yuan for jaywalking.

 

 

Suggested Reading

Business

 

 

One Billion Customers: Lessons from the Front Lines of Doing Business in China

James McGregor

A well-written and sometimes humorous insider's guide on how— and how not—to do business in China, by a journalist and entrepreneur who spent 15 years in the country.

 

 

 

Mr China

Tim Clissold

How to set up a investment fund in China in the early 1990s—full of excellent details about the businessman's life on the Chinese road. Read The Economist's review.

 

 

 

 

Links

 

 

 

Links from GloboTrends wiki:  

 

 

 

Links to GloboTrends blog posts:

 

 

 

News & Media

 

 

 

 

 

More info about China

 

Business guide

 

http://resources.alibaba.com/book/guidestochina/home.htm

http://country.alibaba.com/profiles/CN/China/useful_links.htm

 

 

 

 

Beijing

Beijing guides

 

That’s Beijing

Website of the weekly, free magazine guide to what's on in Beijing.

http://www.thatsbj.com/

 

 

Beijing This Month

Basic portal with plentiful information about the city.

http://www.btmbeijing.com/

 

 

 

 

Beijing Review

A weekly news magazine.

http://www.bjreview.com.cn/

 

 

City Weekend

An online listings guide, also available as a free magazine.

http://www.cityweekend.com.cn/beijing/

 

 

Shanghai

 

 

China General

 

 

Travel info: http://youstravelers.pbwiki.com/China

 

Video – google - Comparing American and Chinese Negotiation Styles

http://video.google.com/videoplay?docid=4634363396909200237

 

Excellent website with tons of information:http://globaledge.msu.edu/ibrd/

 

Consular Information Sheet : http://travel.state.gov/travel/cis_pa_tw/cis/cis_1089.html

 

Wikipedia:China : http://travel.state.gov/travel/cis_pa_tw/cis/cis_1089.html

 

CIA World Factbook: China : https://www.cia.gov/cia/publications/factbook/geos/ch.html

 

Economist Country Briefings : China : http://www.economist.com/countries/China/

 

BBC Country Profiles: China : http://news.bbc.co.uk/1/hi/world/asia-pacific/country_profiles/1287798.stm

 

World Health Organization: China : http://www.who.int/countries/chn/en/

 

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