Category: China

Reasons Why Betting on a Collapse in China may be Unwise

George Orwell once observed ‘Whoever is winning at the moment will always seem to be invincible’. Not long ago, many in the West declared that China would soon be the number one economy in the world.

But in the past two years, many in the West have begun to see the writing on the wall. Labour unrest, the growing housing bubble, shadow banking, rising local government debt, and overcapacity all point to one thing: the coming collapse of the Chinese economy.

‘Middle China’s’ Informal, Private Economy is Thriving

‘Benghai’ was changing. Returning to my old office, my home for ten years of fieldwork in rural China, it was clear something was amiss. Gone was the grizzled caretaker, listlessly following his mop around the ground floor of the four-storey building. In his stead was a bank of impossibly cheerful uniformed women in their early twenties. Their smiles could signify only one thing: real estate.

Surprise Raids in China Part of an ‘Anti-Monopoly Campaign’

Surprise raids by Chinese government officials on the offices of major multinationals in China to catch out monopolistic business activity have created perceptions of bias against foreign firms in the enforcement of the anti-monopoly law.

How Long Can China’s ‘Catch-Up’ Growth Rate Persist?

Those in the business of long-run GDP projections expect Asia, and particularly China, to keep growing above world trend rates for some years. The most optimistic — such as former Chief Economist at the World Bank, Justin Lin — have China growing at 8 per cent for at least the next decade. The semi-official China 2030 report projects 7 per cent growth later this decade, falling to between 6–5 per cent by 2030. The Australia in the Asian Century White Paper projected Chinese economic growth of 7 per cent and Indian growth of 6.75 per cent until 2025.

Reasons for Adjustments to China’s Monetary Policy

Developments in the coming days will likely push the People’s Bank of China into easing monetary policy the near-term.  Many have been looking for a follow up move since the PBOC surprised the market on November 21 by cutting interest rates for the first time in two years.

China’s Ambition versus Reality in the Digital Age

In February 2014, Chinese President Xi Jinping was appointed Chair of the Central Cybersecurity and Informatization Leading Group, an agency which coordinates China’s cybersecurity and ‘informatisation’ policies. The move reflected deep dissatisfaction within the leadership of the pace of innovation in the country. Xi’s appointment reflects China’s willingness to change this — but only to an extent.

China’s State Owned Enterprises Face New Challenges

The relationship between the state and economic enterprise is a central choice that governments have to make in all economies. The role of the state and state-backed or state-owned enterprise in Asia’s economic modernisation is a question of special interest.

Misconceptions about China’s Economic Growth Sources

Virtually every dimension of China’s economic success over the past three-and-a-half decades can be attributed largely to the rise of markets and private businesses. Private firms account for almost all the growth in employment, most of the expansion of output and investment in manufacturing, and in recent years for over half of the growth in exports. Because they are more productive, private firms have largely displaced state firms in sectors that are open to entry.

Failing to Find Family Successors Could Threaten China’s Economy

China is facing a new economic crisis, and it is not about mounting local debt or even a rapidly slowing property market. The crisis in the making is about family business succession in the world’s second-largest economy. This issue may seem innocuous for many observers, but it is in fact one of the many pressing issues for the country’s economy, which is undergoing a painful process of rebalancing. Why is the family succession issue so important?