Bloomberg « Wandering China

February 3, 2012 • 10:12 am 0

Premier Wen Says China Considers Contributing to European Stability Fund [Bloomberg]

In some ways, if the world hasn’t caught on to what seems the Chinese style to international engagement yet – it’s all about biding time and concealing intentions. As mentioned in an earlier post, the Chinese were always going to get involved, it’s just a question of when is the optimum moment and who does the asking; despite an earlier side-step claiming they had little interest getting further entrenched in the cycle of bad debts and poor management.

Two reasons are apparent. First, to keep its biggest consumer market afloat. Second, to extend its sphere of soft power over former colonial powers.

Spending time in Taiwan and visiting the National Palace Museum has given me access to the original unequal treaties of China’s century of humiliation. The endless books on the topic in Taiwanese bookshops indicate its not just the mainland Chinese but the Taiwanese too who still feel this underlying resentment. Apart from that, it also gives the Chinese additional leverage in a zero-sum game to provide a net plus in terms of the Chinese government’s freedom of action domestically and on the global stage.

So – watch this space and look beyond what seems an altruistic international relations charm offensive.

Further reading: EU funding bailout possible by China Daily, Feb 3 2011.

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Premier Wen Says China Considers Contributing to European Stability Fund
by Patrick Donahue in Berlin
Source – Bloomberg News, published Feb 3, 2012

Chinese Premier Wen Jiabao raised the prospect of contributing to the euro-area’s bailout programs, telling Chancellor Angela Merkel that China may be prepared to assist in resolving its debt crisis.

The Chinese government is considering funding options for the temporary European Financial Stability Facility and its permanent successor, the European Stability Mechanism, through the International Monetary Fund to help stabilize the monetary union, Wen said yesterday after meeting Merkel in Beijing. China has previously said that it needs more detail on any plan to contribute funds to the euro area.

China is “investigating and evaluating ways, through the IMF, to be more deeply involved using the ESM and EFSF channels in solving the European debt issue,” Wen said at a briefing alongside Merkel, who arrived in China early yesterday on her fifth visit to the world’s most populous country as chancellor. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Charm Offensive, Chinese Model, Economics, European Union, Finance, Foreign aid, Government & Policy, Greater China, Influence, International Relations, Mapping Feelings, Peaceful Development, Politics, Public Diplomacy, Soft Power, Strategy, Tao Guang Yang Hui (韬光养晦), The Chinese Identity, Trade

January 24, 2012 • 12:02 am 0

China No Match for Dutch Plants as Philips Shavers Come Home [Bloomberg]

Is China’s longer-term sustainability as the world’s factory seeing signs of a reversal; or is there more to this move by Philips to bring its top-priced shaver production back home? Is the Chinese model showing cracks or are other countries repositioning against the ‘over-bearing’ success of the Chinese model? Is this a case of simple economics or an embedded strategic move of self and regional-determinism?

This article presents a few likely scenarios.

“A product engineer in Shanghai now is just as expensive as in Drachten… in China, the headcount turnover is high. That is not sustainable.” Rob Karsmakers, factory manager for Philips Asia.

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China No Match for Dutch Plants as Philips Shavers Come Home
By Maaike Noordhuis
Source – Bloomberg, published Jan 19, 2012

Philips, which also lights the Eiffel tower and the Olympic Stadium in Beijing, employs a total of 14,000 people in the Netherlands. Photo: Ralph Orlowski, Bloomberg

Royal Philips Electronics NV (PHIA) workers in the Dutch town of Drachten who expected to be fired were astonished when the site manager said the company was bringing production of its top-priced electric shavers home from China.

Rob Karsmakers, the factory manager who returned from four years working for Philips in Asia, told the baffled crowd that the consumer-electronics company would boost investment in Drachten, where it employs 2,000 staff.

“A product engineer in Shanghai now is just as expensive as in Drachten,” said Karsmakers, who has overseen the plant since 2009, in an interview. “But in China, the headcount turnover is high. That is not sustainable.” Philips, which also lights the Eiffel tower and the Olympic Stadium in Beijing, employs a total of 14,000 people in the Netherlands. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Chinese Model, Domestic Growth, Economics, European Union, Influence, International Relations, Mapping Feelings, Soft Power, Strategy, Trade

January 19, 2012 • 12:01 am 0

China’s Urban Population Exceeds Rural Dwellers for First Time in History [Bloomberg]

2011 year end and China manages to bridge the great divide: China’s urban population is now at 51.27% after Deng started reforms in the late 70s.

The official report by the National Bureau of Statistics (in Chinese) is here. It is currently unavailable on its English site.

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China’s Urban Population Exceeds Rural Dwellers for First Time in History
by Feiwen Rong and Zheng Lifei in Beijing
Source – Bloomberg, Jan 17, 2012

China’s urban population surpassed that of rural areas for the first time in the country’s history after three decades of economic development encouraged farmers to seek better living standards in towns and cities.

The world’s most-populous nation had 690.79 million people living in urban areas at the end of 2011, compared with 656.56 million in the countryside, the National Bureau of Statistics said today in Beijing. That puts the number of people residing in China’s towns and cities at double the total U.S. population.

China’s urbanization has accelerated since Deng Xiaoping introduced capitalist reforms in the late 1970s, lifting more than 200 million people out of poverty and transforming the nation into the world’s second-largest economy and its biggest consumer of steel, copper and coal. That migration may have decades more to run, diluting an agrarian economy that was once the ruling Communist Party’s power base. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Chinese Model, Domestic Growth, Economics, Environment, Government & Policy, Infrastructure, Politics, Reform, Social

January 16, 2012 • 12:49 am 0

Ma Victory Seen Boosting Taiwan Markets as Baer Considers Upgrading Stocks [Bloomberg]

A case of a strengthening Beijing Consensus?

Bloomberg has Taiwan’s China factor in focus: Ma’s victory is claimed by China’s Taiwan Affairs Office (国务院台湾事务办公室, official site here in Chinese) to show that “peaceful development of cross-straits ties” in the last four years with KMT in power was “the correct path that has won the support of the majority of the Taiwanese compatriots.”

That said, can be it be argued that economy and not emotion was the key to moving Taiwan’s voters this time round?

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Ma Victory Seen Boosting Taiwan Markets as Baer Considers Upgrading Stocks
By Weiyi Lim and Andrea Wong
Source – Bloomberg, Jan 16, 2012

The re-election of Taiwanese President Ma Ying-jeou, a booster of closer ties with China, is bullish for the island’s financial markets, according to Bank Julius Baer & Co., Citigroup Inc. and Uni-President Assets Management Corp.

Julius Baer, which oversees about $205 billion in client assets, is re-evaluating its “underweight” rating on Taiwanese equities and may buy airlines and hotel companies, Lee Boon Keng, head of the firm’s investment solutions group in Singapore, said by phone yesterday. Two-year bonds may rally as overseas investors buy Taiwan dollar-denominated assets to profit from a stronger currency, said Samson Tu, who helps manage $1.6 billion of fixed-income securities at Uni-President in Taipei.

Ma, the 61-year-old leader of the ruling Kuomintang Party, won a second four-year term as president after defeating Tsai Ing-wen, chairwoman of the Democratic Progressive Party, in Jan. 14 elections. Ma’s first term was characterized by the pursuit of closer ties with China through trade agreements and the ending of a six-decade ban on direct air, sea and postal links. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Charm Offensive, Chinese Model, Democracy, Domestic Growth, Economics, Greater China, Influence, Li Ao, Mapping Feelings, Peaceful Development, Politics, Public Diplomacy, Social, Soft Power, Strategy, Taiwan, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Trade

December 27, 2011 • 11:33 pm 0

China Needs Butlers [Wall Street Journal]

The Chinese have been a source of cheap labour and domestic help worldwide since the eighteenth century. As the twenty-first moves into its second decade, it is intriguing to see how the tables have turned with British butlers a ‘must’ to ‘accessorise’ newly purchased mansions for the newly wealthy in China, India and the Middle East. Keeping with the times or is this a subtle cultural dig back at former colonial masters?

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China Needs Butlers
By Robert Frank
Source – Wall Street Journal, December 14, 2011

The butler economy may be slow to rebound in the U.S., but it’s booming in China.

According to Bloomberg, Britain’s Guild of Professional English Butlers has trained 20% more butlers in 2011 than 2010, and demand is outstripping supply. The Bespoke Bureau in London, which also trains butlers, said butler training is up 52%. Bespoke recently placed a butler with a salary of $158,390 for a rich family in the United Arab Emirates, the article said.

“There is a shortage of them,” Bespoke’s owner told Bloomberg.

One big reason: China. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Chinese Model, Culture, Domestic Growth, Economics, Influence, Social, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Trade, U.K., U.S., Wall Street Journal

December 13, 2011 • 1:47 am 0

Wen May Cut China Taxes to Spur Growth [Bloomberg]

High-ranking Chinese leaders meet Monday for the Central Economic Work Conference to map out economic plans for 2012. This gathering of China’s movers will involve a hard look at both the international and domestic economic landscape to inform its moves for the new year.

Arguably unable to continue relying on infrastructure investments to spur its economy and seeing a weak manufacturing economy already on the horizon, China starts to look at other ways to spur growth. For instance, some estimates point to 64 million empty homes. (See China’s empty cities by the Unconventional Economist, Dec 15, 2010). A case surely for the leaders to ponder about – sustainable and grounded growth.

Europe’s sovereign debt crisis is also killing China’s biggest customer base.

We have also come to expect China’s double digit growth as a norm but as skeptics had pointed out, could not last forever.

Economic growth was down to 9.1% in the last quarter, the least in two years. Let’s see how the Chinese model reacts.

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Wen May Cut China Taxes to Spur Growth
Victor Ruan, Beijing
Source – Bloomberg, published December 13, 2011

China may use tax cuts to shore up expansion in the second-largest economy next year as export growth weakens and the threat of bad loans from stimulus spending narrows the government’s options.

The nation’s top officials are mapping out policies for 2012 at the annual Central Economic Work Conference in Beijing. The event started yesterday, according to the state-run Xinhua News Agency.

Banks from China International Capital Corp. and Goldman Sachs Group Inc. to Barclays Capital forecast Premier Wen Jiabao will cut taxes after fiscal revenue surged past the government’s target this year. Lower levies would spur consumption without the bad-debt risks triggered by a record 17.5 trillion yuan ($2.8 trillion) of lending in 2009 and 2010 that funded infrastructure projects and real-estate speculation. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Chinese Model, Domestic Growth, Economics, European Union, Finance, International Relations, Mapping Feelings, Politics, Strategy, Trade

December 1, 2011 • 3:07 am 1

Shanghaied Home Buyers Turn Protesters as Shattered Dreams Vex Government [Bloomberg]

From the chats I’ve had with the Chinese when I visited, I know first-hand that housing in the developed coastal cities is unaffordable to most. Housing prices in places such as Hangzhou and Shanghai are so high it is more affordable to rent over a lifetime, considering middle income earners struggle to even hit USD$1000 (about 5000 yuan) monthly. I have a friend who lectures at a university making 2000 yuan a month. The only way to enter the property market is to bite the bullet. So there is some level of risk.

Two key takeaways from this report:

1. China’s property reforms to stop its housing bubble really need to kick in while managing repeating incidents like this. Especially since the 30% deposit regulation which was meant to minimise speculators means a lot of cash has to be coughed up, at least for genuine buyers.

2. The urban Chinese youth in the middle class bracket are getting less likely to take things they do not agree with, lying down. At the least, they’re not afraid to air their views. Without the conditioning of the Cultural Revolution, and more worldly-wise, the ruling party needs to figure out how to keep them on their side.

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Shanghaied Home Buyers Turn Protesters as Shattered Dreams Vex Government
Fan Wenxin and Shai Oster
Source – Bloomberg, published November 30, 2011

Danny Deng and his bride-to-be dreamed of their lives together as they walked through the showroom for a Shanghai housing project almost three months ago. Pooling his own and his parents’ savings, a loan from his boss and a 1.1 million yuan ($172,000) mortgage, he bought an apartment and secured his fiancee’s hand.

On Nov. 19, Deng faced off a ring of security guards three rows deep wearing camouflage and carrying shields as he joined more than 100 homeowners rallying in front of the development’s sales office. His transformation from newlywed to street protester came after China Vanke Co. (000002) slashed prices for future buyers at the Qinglinjing complex, erasing about 20 percent of the value of his three-bedroom unit overnight.

“If I’d paid for it all myself, the price cut wouldn’t bother me as much, but there’s a lifetime of my parent’s blood and sweat in it,” said Deng, a 30-year-old electrical systems salesman. “Developers’ profits are outrageous. The price they set when the housing market kept going up was far more than the real value.” Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Chinese Model, Culture, Domestic Growth, Economics, Finance, Inflation, Lifestyle, Migrant Workers, Modernisation, Politics, Population, Property, Reform, Social

November 23, 2011 • 1:42 pm 0

U.S.-China Trade Talks End With Promise to Protect Intellectual Property [Bloomberg]

A step in the right direction or move to distract the Americans from yuan valuation and the South China Sea flashpoints? With Sino-US trade rising 17 percent thus far in 2011 to $363.1 billion, commerce is defined by Vice Premier Wang Qishan as an “important cornerstone in the China-U.S. relationship.”

So amidst the China-bashing of late as Obama toured to re-assert American pre-eminence in the Asia-pacific, China pledges to abide by international intellectual property rules. Quick Background: Understanding Chinese Attitudes Towards Intellectual Property (IP) Rights (CIO 2006).

This is a move the US expects of responsible international stakeholders - “With that extraordinary growth that China has enjoyed over the last decade comes a responsibility, particularly as it relates to trade and investment,” U.S. Trade Representative Ronald Kirk.

So, is China listening and participating or biding its time on something else?

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U.S.-China Trade Talks End With Promise to Protect Intellectual Property
Source – Bloomberg, published November 22, 2011

China pledged to improve its monitoring of intellectual property rights in trade talks with the U.S., as American officials called on the world’s second biggest economy to abide by international rules.

Chinese Vice Premier Wang Qishan’s promise to create and lead an office focused on protecting intellectual property rights was a “step in the right direction,” U.S. Secretary of Commerce John Bryson said in an interview yesterday with Bloomberg Television after the 22nd U.S.-China Joint Commission on Commerce and Trade meeting in Chengdu.

“There’s no question that intellectual property rights have not been respected for the most part here in China,” Bryson said. “We think this is a step in the right direction but there is a long ways to go in having intellectual property rights consistently and broadly recognized in China.” Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Charm Offensive, Chinese Model, Communications, Domestic Growth, Economics, Finance, Influence, Intellectual Property, International Relations, Piracy, Politics, Public Diplomacy, Soft Power, Strategy, Tao Guang Yang Hui (韬光养晦), Territorial Disputes, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Trade

November 14, 2011 • 8:00 am 0

Obama Puts Pressure on China as U.S. Asserts Asia Influence [Bloomberg]

Honolulu, Hawaii, United States, 13 Nov 2011: APEC’s economic leaders’ meeting is in session with Sino-US ties in the foreground.

President Obama reportedly uses strong language (with the US “increasingly impatient and frustrated” with the pace of progress in relations between the two nations) to remind the region of its continuing leadership while maintaining pressure on China on currency and IP issues.

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Obama Puts Pressure on China as U.S. Asserts Asia Influence
By Margaret Talev and Julianna Goldman
Source – Bloomberg, published November 13, 2011

Nov. 13 (Bloomberg) — President Barack Obama used his role as host of the Asia-Pacific Economic Cooperation summit to pressure China on currency and intellectual property rights while telling voters that nations in the region are counting on U.S. leadership.

Obama told Chinese President Hu Jintao yesterday that the American public and businesses are growing “increasingly impatient and frustrated” with the pace of progress in relations between the two nations, said Michael Froman, White House deputy national security adviser. Hu told Obama that a large appreciation of the yuan won’t solve U.S. problems, a statement on the Chinese Foreign Ministry’s website said.

Obama’s strong language came only hours after he announced the U.S. and eight other nations will join in forging an Asia- Pacific trade accord within the next year, a move he said demonstrates that “American leadership is still welcome.” Read the rest of this entry »

Filed under: APEC, Beijing Consensus, Bloomberg, Chinese Model, Domestic Growth, Economics, Finance, Influence, International Relations, Mapping Feelings, Media, Peaceful Development, Politics, Public Diplomacy, Reform, Soft Power, Strategy, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Trade, U.S., Yuan

November 3, 2011 • 1:24 am 0

‘Too Soon’ to Discuss China Buying More EFSF: Zhu [Bloomberg]

Soft power card to be played: In the midst of the Eurozone uncertainty, China appears to ponder its next move ahead of G20 talks.

A day ahead of the meetings, Hu Jintao meets up with IMF representatives to discuss global efforts to tackle economic woes (Xinhua, November 2, 2011).

Just a week ago in China Daily, this report (Emerging economies ‘to help bail out EU’ China Daily, October 27, 2011) revealed China’s intent to step in through the IMF (note President Hu’s meeting above) to advance voting leverage ahead of the G20 summit. On the surface, it also seems in China’s interests to help solve Europe’s sovereign-debt crisis to both avert disruptions to the global economy, and keep one of its biggest export markets in good shape. Read the rest of this entry »

Filed under: Beijing Consensus, Bloomberg, Charm Offensive, Chinese Model, Communications, Domestic Growth, Economics, European Union, Finance, Foreign aid, Government & Policy, Influence, International Relations, Mapping Feelings, Market Watch, Media, Peaceful Development, Politics, Public Diplomacy, Social, Soft Power, Strategy, Tao Guang Yang Hui (韬光养晦), The construction of Chinese and Non-Chinese identities, Trade

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Wandering China

Premier Wen Says China Considers Contributing to European Stability Fund [Bloomberg]

China No Match for Dutch Plants as Philips Shavers Come Home [Bloomberg]

Wen May Cut China Taxes to Spur Growth [Bloomberg]

U.S.-China Trade Talks End With Promise to Protect Intellectual Property [Bloomberg]

Obama Puts Pressure on China as U.S. Asserts Asia Influence [Bloomberg]

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