There is a recurring question on the nature of China’s economy — is it mostly planned or mostly market? This question has become more concrete this year as China’s partners are scheduled to decide on whether or not to grant China ‘market economy status’. If adopted, this would limit WTO-compatible trade remedies.
As advanced manufacturing is about to accelerate in China, the rules of economic development could change across the world. About a year ago, China’s State Council unveiled a national plan, “Made in China 2025,” which seeks to upgrade China’s manufacturing base. The ultimate objective is to transform China into the leading global manufacturing power by 2049.
Jackson Martinez, Alex Teixeira, and Ramires – formerly among Europe’s top footballers – are now the centrepiece of the Chinese Super League’s recent £200m acquisition of footballing talent. Out
State-owned enterprises (SOEs) are often thought to dominate the Chinese market, with profound implications for the global economy. The US–China Economic and Security Review Commission stated that ‘Soviet-style, top-down planning remains a hallmark of China’s economic and political system’.
Many travellers’ favourite game involves finding original ways of increasing the amount of duty-free goods they bring through customs. Here in Australia, for example, we appear so fascinated by customs procedures that the reality TV show Border Security is in its 15th season, and has been exported to nearly a dozen countries.
Recently, Beijing appears to have taken a similar interest in the world of import procedures. It has decided to crack down on Chinese nationals evading tax and customs duties in free trade zones, in airports and at duty free shops.
The steady state in the Asian region is growth and dynamism that requires continuous structural change and adjustment. The trajectory of China’s potential rate of growth is certainly 2 or 3 percentage points lower than it was a decade ago, but even at around 6 percent over the coming decade the massive Chinese economy can still grow at two to three times the rate of the world economy as a whole. India is on the way back towards its growth potential, upwards of 8 percent over the next decade in which the young will be pouring into its labour markets.
Yesterday, China announced one of the most important tax reforms of the past twenty years. It is replacing a business tax on gross revenue for non-manufacturing companies with a VAT. Manufacturing companies have been subject to a VAT approach for a few years.
The reform extends it from manufacturing and a few services in a pilot program to industry-wide application. It will now cover construction, real estate, finance and consumer services.
This year marks the 40th anniversary of the death of Chairman Mao and with it one of the lowest points in the political history of the People’s Republic of China. The nation that had stood up in 1949 was, at the time of Mao’s death, a much poorer and weaker society following decades of failed economic policies and constant social mobilisation. Out of this mess, a new generation of leaders embarked on a project to rebuild the country and make China an indispensable part of the international economy and global society.
Despite international skepticism, China’s first-quarter data suggests economic resilience amid global challenges, while structural transition prevails in the medium term.
According to new data, China’s economy grew by 6.7 percent year-on-year in the first quarter of 2016. While it reflected the slowest quarterly growth since the global financial crisis, some key indicators such as fixed-assets investment growth and retail sales suggest that the economy is stabilizing.
China’s slew of economic data lends credence to ideas that the world’s second-largest economy may be stabilizing. However, the data failed to have a wider impact on the global capital markets, including supporting Chinese equities.
In fact, the seven-day advance in the MSCI Asia-Pacific Index was snapped with a fractional loss today. European shares are also lower on profit taking, breaking a five-day advance. Commodities, including oil, copper, nickel and zinc are also trading off.
