Now that the dust has settled, we once again take a look at the pick of last week’s news (taken from our ChinaBlogTweets Twitter feed). Our summary is followed by a list of the original tweets and links to the news sources.
While China’s economy looks pretty healthy from most foreign shores, it is of course not without problems. And the Chinese government is keen to remind people at home and abroad that, while growth is good, there are structural issues and risks that require continued attention – not least inflation (rising), rural development (imbalance), the environment (bad), real estate (bubbles), and effective legal enforcement (harmony).
Recent, tragic killings in Chinese schools, coupled with a spate of suicides at a massive industrial complex in Guangdong (Foxconn, supplier to Apple and many IT others) highlight social and mental illness issues, and the need for social harmony and balanced development. The fact that the Gini coefficient has now hit 0.47 “overtaking the recognized warning level of 0.4″ is a stark statistic in this context.
These domestic concerns should be on the radar for foreign visitors as well as investors. While US Treasury Secretary Geithner may be “confident” that China will appreciate the RMB, China will look after its own trade interests first and, given the recent fall for the Euro – and the fact that the EU (not the US) is China’s largest export market – that confidence may be a little early and / or over-stated. China
Foreign firms continue to “Chafe at China’s Restrictions”, and protectionist pressures remain a real concern. But that has not stopped a rise in foreign direct investment (FDI), which was up 25% year-on-year (the 9th monthly rise in a row). While some of those foreign funds may be round-tripping or chasing an RMB appreciation, there is clearly an appetite for building local business in the growing domestic market – especially if having “local” content gives more market access.
The Chinese government has also released new rules for FDI, as well as a plan for investment in the central regions (don’t ignore the message, or the opportunity), and an invitation for private, domestic enterprises to become more involved in state-controlled sectors (another interesting message).
Foreign is, of course, not the only sort of investment going on in (or with) China. Overseas direct investment (ODI) is equally active, and Africa especially so. Nigeria and South Africa both have both been in the news (and we are having some very interesting conversations about African business opportunities at the moment).
Wherever you might be dealing with Chinese companies (or ministries) it is important to avoid being what Andrew Hupert calls an “Elmer” – in the context of the “Tao of Bugs” (bunny). Two rules will help: “Have multiple counterparties” and “Be slow to sign and always ready to walk away”.
And, of course any plan, for investment or negotiation, needs to be supported by good information. Information is easy enough to get, but the sheer volume has become a problem (flashback to the early 1990s – the problems were different!). We can serve up a couple of reminders of the danger of (bad or undefined) research. Firstly from Stan Abrams at China Hearsay, who picked up on statistics for pirated software (would you tell a phone interviewer you were using illegal software?), and secondly a ChinaRealTime article about (of course) golf, and whether there are 3 million, or 300,000 golfers in China. Makes you think!
Now for the tweets and links:
1. Rural development, environment, real estate, enforcement… RT @NiuB: Wen Jiabao warns of economic difficulties: http://bit.ly/9O2FF4 7:04 AM May 16th
2. RT @shanghaidaily: China’s retail sales rose 18.5% year on year in April. 7:51 AM May 11th
3. RT @niubi: China Daily-“The Gini coefficient has reached 0.47 in China, overtaking the recognized warning level of 0.4” http://bit.ly/at9Ef5 7:42 AM May 12th (Also see: Mental health & (lack of) harmony RT @jarmiles: The Economist on China school attacks: http://tinyurl.com/2wc7gjo  8:18 AM May 14th & Inside insight RT @MalcolmMoore: Another employee fell…at Foxconn…What is causing this suicide cluster? My blog: http://twurl.nl/lxxoi6 11:18 AM May 16th)
4. RT @CHINA_NEWS: Geithner ‘Confident’ China to Allow Yuan Rise Against Dollar: May 15 (Bloomberg)… http://bit.ly/bFXEag 8:33 AM May 15th
5. RT @NiuB: Foreign Companies Chafe at China’s Restrictions: http://nyti.ms/atkHOr 4:45 PM May 16th
6. FDI update from China Law Blog – China Foreign Direct Investment. Meet The New Rules…. http://bit.ly/at22QF 8:09 PM May 15th (Also see: RT @ChinaBriefing: China Releases Foreign Investment Promotion Plan for Central Region http://goo.gl/fb/xAa5j 1:01 PM May 14th & RT @chinaeconreview: China’s FDI rises for ninth month to 25% http://dlvr.it/z6xr  8:30 AM May 14th)
7. RT @chinaeconreview: China to open state-controlled sectors to private firms http://dlvr.it/z7gC 1:02 PM May 14th
8. RT @fonstuinstra: China in Africa: The Real Story: China in Nigeria: Power Myths & Realities http://ht.ly/1KXvY 8:33 AM May 14th via Echofon (Also see: ODI & RSA RT @BeyondBrics: China cements its Africa link, sees South Africa as a springboard for African expansion http://bit.ly/cOyFos 7:10 PM May 13th)
9. You’re Elmer… RT @chinasolved: CER Post: Negotiating in China – The Tao of Bugs http://ht.ly/1Jpeu 7:35 AM May 11th
10. Hard research… RT @chinahearsay: Latest China Hearsay: Software Piracy Stats: Not Entitled to Their Own Facts http://bit.ly/ciw9Ei 5:58 AM May 12th (Also see: Definitions matter in research… RT @ChinaRealTime: Golf in China: Targeting 3 Million Players (Or Is It 300,000?) http://bit.ly/ajYDWf 8:19 AM May 13th)
And in other news…we can now be found on the China Business Network, as a Charter Member. See the profile here: Now a Charter Member on @TCBN, with thanks to @janetcarmosky. See the profile at http://ht.ly/1JXbS 7:57 AM May 12th