Briefly…Top Ten Tweets (From Statistics, Strikes & Rising Wages, To Middle Classes, State Capitalism & Firewalls)

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Another week, another news review, and another GDP projection – this time 9-10%, courtesy of the World Bank, along with reports of continued, but slower, manufacturing growth. Where exactly the numbers will lead, nobody knows, but the National Bureau of Statistics is at least planning to try to improve GDP reporting from the provinces (unlikely to be the last attempt!).

We have often remarked at the cost of China’s growth to the economy in terms of the environment, and also at the need for a more “harmonious society” that addresses the growing wealth divide. That divide is one that has come into sharp focus in recent weeks. Following a spate of suicides, Apple contractor Foxconn has been under intense pressure to improve conditions for its workers. This pressure has resulted in significant pay rises. AP reports that:

“Taiwan-based Foxconn Technology Group said salaries would be raised in October to 2,000 yuan (US$293) for workers at its plant in the southern Chinese city of Shenzhen. Workers elsewhere in China will get raises in July adjusted for local conditions, the statement said.

Less than a week ago, the maker of iPads, iPhones and other electronic gadgets for international companies had raised workers’ pay by 30 percent at its plants across China.

The basic salary at Foxconn’s China plants was about 900 yuan ($130) per month before the 30 percent raise, and new recruits are paid 1,200 yuan ($176) per month”.

While Foxconn is at the eye of the storm, the pressure on pay and conditions extends much further, and another foreign investor – Honda – has also been in the news after suffering from a high-profile strike which also resulted in pay rises (but also in another strike at another plant). But it is not just an isolated issue for foreign investors, Beijing is just the latest city to raise the minimum wage, while (the official) unions are becoming more active worker advocates. The bottom line is that costs are increasing (but that rising wages may mean more consumption…and harmony).

KFC has also been on the end of union demands for higher wages, something that could have an impact for its 3,000 outlets in China (which are in recovery from a consumer marketing mess). But it seems at least that consumers are keen on it, and other, providers of fast food. And, as (JWT’s) Tom Doctoroff reports, China’s plumping middle classes are up for consuming an awful lot more than spiced chicken: from De Beers diamonds to Ford cards and P&G shampoo – as long as these luxuries are presented and packaged to allow for “inconspicuously conspicuous consumption”.

Domestic consumption, and all those middle class consumers, are on the rise. But the state, and its businesses are still in control. The Economist profiles two interesting books on China’s “state capitalism”. This state influence has been visible in other recent news, including the imposition of a 5% energy tax in Xinjiang, and special rights to rare earth mining for state-owned enterprises. Understand, and align with policy – ignore it at your peril!

While underground resources may be a natural focus for control, the Chinese government has also continued to control online activities, with the location-based service FourSquare being blocked by the “great firewall” of China after finding both success and sensitive timing. Yeeyan, a translation service, suffered a similar fate. Reminders both that business and political risk need consideration, alongside the opportunities offered by that aspirational middle-class market.

See news and links here:

1. RT @fonstuinstra: China to Grow 9-10% After ‘Overheated’ Quarter, World Bank Says – 2:15 PM Jun 4th

2. RT @niubi: RT @cmphku: Readings: China Says it Will Crack Down on False Reporting of Local GDP 7:27 AM Jun 3rd

3. RT @NCUSCR: China’s Manufacturing Sector Grew in May, but at a Slower Pace (#NYT) #china… 8:30 PM Jun 1st

4. Even 33 (%) will not bring harmony. CSR? RT @vfchina: Foxconn Gives Chinese Workers 33 Percent Pay Raise 2:55 PM Jun 2nd (this really needs a post all of its own but, for now, see also some links below*).

5. RT @modernleifeng: KFC’s opened its 3,000 restaurant in China…[& in unrelated news: Fat China… via @raykwong] 8:44 AM Jun 3rd (see also: QRT @china_csr: New: KFC Makes Public Apology For Fake Coupons 8:55 PM Jun 3rd;

6. RT @wolfgroupasia: Doctoroff does it again: “China’s New Middle Class: Constants and Variables”

7. RT @TheEconomist: Two books ask how far China’s model of “state capitalism” will spread #economist 8:56 AM Jun 4th

8. 5% share. Sign of things to come? RT @chinaeconreview: Xinjiang to launch energy tax 7:41 AM Jun 3rd

9. For SOEs only RT @chinaeconreview: Beijing imposes limits on rare earths mining 7:19 AM Jun 3rd

10. RT @raykwong: “Foreign” location services were bound to be blocked in China. (by @chadcat) #BuhByeFoursquare 8:20 PM Jun 5th (see also: RT @elliottng: How translation site found itself banned by Chinese authorities (@cdtimes Xiao Qiang quoted): 8:09 PM Jun 5th

For more news, hot off the press, check out our feed on ChinaBlogTweets.

* More on wages:

– Round 2 RT @CHINA_NEWS: Foxconn to give Chinese workers another pay raise… about 22 hours ago

– Another >20% pay rise RT @fonstuinstra: End of cheap labor era for China pits workers against manufacturers – AP 8:01 AM Jun 1st

– Sustainable supply chains RT @GreenerChina: RT @maxhenry: OEMs in China need to take responsibility… 11:14 AM Jun 5th

– Pay (to spend) RT @DanHarris: RT @BlawgTweets: China’s Rising Wages. Does It Matter? 7:59 AM Jun 4th

– More pay pressure RT @NiuB: China’s Grads expect pay raise this year: 7:49 AM Jun 3rd

– RT @chinahearsay: Beijing lifts minimum wage to 960 yuan 4:38 PM Jun 3rd

2 Responses to “Briefly…Top Ten Tweets (From Statistics, Strikes & Rising Wages, To Middle Classes, State Capitalism & Firewalls)”

  1. Tweets that mention Archive » Briefly…Top Ten Tweets (From Statistics, Strikes & Rising Wages, To Middle Classes, State Capitalism & Firewalls)| China Business Blog -- Says:

    […] This post was mentioned on Twitter by China Business Blog, William N.. William N. said: Briefly…Top Ten Tweets (From Statistics, Strikes & Rising Wages, To Middle Classes, State Capitalism & Firewalls):… […]

  2. Archive » Tracking: Rare Earth, Trade & Tensions | China Business Blog Says:

    […] policy and risk analysis reports can be expected!”. More recently, in June, we picked up more rare earth news in our weekly review : “…state influence has been visible in other recent news, […]

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