The news from China keeps on coming, and we have picked some of the key headlines and issues from last weeks tweets. See below for our commentary, and the links that follow.
China’s economic recovery may continue to contain a few fragile bubbles, but the OECD is now projecting GDP growth of over 11% in 2010 (and 10% in 2011). The real estate market (to be cooled) and RMB (to be appreciated) are picked out for special attention. Sadly, with some US$2.5 trillion in foreign currency reserves and a falling Euro, diversification, as well as appreciation against the dollar, is more difficult.
The RMB issue, along with the thorny topic of China’s “indigenous innovation” policy, was a key focus of the latest round of the annual US-China “Strategic and Economic Dialogue”. A policy of “patient diplomacy” continues, alongside a push on clean tech cooperation. The EU (China’s biggest trade partner) also had a dialogue, the “China-EU Joint Economic and Trade Committee Meeting”, which included more anti-protectionist positioning, and the launch of a the “China-EU high-tech trade panel”.
China’s continued growth has, of course, come at a cost to the environment (and workforce, more on which later), but it is clear – from policy directives as well as feedback from businesses on the ground – that the government is committed to improving its record and to developing a more efficient, less-polluting growth model. A recent report from the Lawrence Berkeley National Laboratory notes that “China has made substantial progress toward its goal of achieving 20% energy intensity reduction from 2006 to 2010”. Long may it continue.
Contradiction is no stranger to China, which retains some serious imbalances – including that between urban rich and rural poor. Alongside reports of a boom in luxury spending (the FT reports that“China is marching up the league table of luxury markets too, with some measures now putting it in second place”) come depressing reports of low pay, long hours, little social support – and a tragic spate of suicides at Foxconn’s massive manufacturing complex in Shenzhen.
And despite efforts to promote the “harmonious society” the problems are not limited to Foxconn – and are not (for the moment) being hidden. A strike at Honda’s plant in Foshan has also grabbed headlines, and current news includes much about significant pay rises for factory workers (of 20-30%) at Foxconn , KFC  and other businesses (which also have to address labour shortages ). And it is not just the workers – graduates, who have been suffering from lack of opportunity and low salary expectations – are also wanting more. http://bit.ly/bdQ9mt. Businesses will need to adapt more than their pay scales to make long-term progress. But at least the process is starting.
Related tweets and news links are below:
1. RT @chinaeconreview: OECD: China growth will top 11% in 2010 http://dlvr.it/1Dxw2 5:12 PM May 27th
2. FX dilemma RT @raykwong: Eyeballing: “China’s $2.5 trillion dilemma.” (Time) http://twurl.nl/d2wpex 7:17 AM May 30th
3. RMB RT @ftchina: Hu tells US he wants gradual currency reform http://bit.ly/ddZmCs 6:40 AM May 24th
4. Assertive Beijing… RT @WSJChina: U.S., China Hail Outcome of Summit http://on.wsj.com/biRs3i 1:57 AM May 26th
5. Another dialogue RT @ChinaBriefing: 24th China-EU Joint Economic and Trade Dialogue http://goo.gl/fb/gbmxw 2:31 PM May 26th
6. @greenlawchina: RT @ChinaUSAlliance: Assessment of China’s Energy-Saving Accomplishments and Opportunities During 11th Five Year Plan, http://bit.ly/8YFnW7 12:50 AM May 29th
7. Time to spend RT @BeyondBrics: China’s unscathed luxury sector set to boom http://bit.ly/drAZg3 2:38 PM May 26th (see also, for informative fun: A, B, C of luxury RT @reportfromchina: Brilliant post by @prchovanec about China’s love for (luxury) cars… http://tinyurl.com/3a4gogf 8:22 PM May 30th)
8. Out-of-control tragedy RT @fonstuinstra: More Foxconn Suicides: 14th, 15th, and 16th Suicide Jumpings – chinaSMACK http://ht.ly/1QxGG 5:04 PM May 27th
9. More factory disharmony RT @jarmiles: New York Times on significance of Honda plant strike in Foshan: http://nyti.ms/avzpyQ 8:44 AM May 29th
10. Graduate pay @lonniehodge: Salary expectations of CN grads w/ bachelor’s degrees, master’s degrees & doctorates: 2,000RMB ($295)-2,500, 3-3,500, & 4-5,000 respectively 8:08 AM May 30th
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