China's Greatest Challenge: Not America, But Itself

Anka Lee
Diplomat
As China’s international profile continues to rise in tandem with its economic and political significance, one might conclude that the Chinese public is likely to expect Xi Jinping to carry a higher profile on the international stage. As the leader...

Caixin Media

08.31.12

Tall Order in Ordos

A desert city infamously littered with new but vacant apartment buildings and idle construction sites is getting no relief in the parched climate for local government budgets.Ordos, where local leaders have been trying for years to build a thriving...

Assigning Blame for a Hard Landing

Eric Fish
Sinostand
Over the next few months we should start to see an answer to the “hard vs. soft landing” question. Since talk of a possible hard landing began, I’ve often wondered how China’s propaganda apparatus would respond if and when China’s economy takes a...

Reports

08.27.12

The China Toll

Robert E. Scott
Economic Policy Institute
Since China entered the World Trade Organization in 2001, the extraordinary growth of trade between China and the United States has had a dramatic effect on U.S. workers and the domestic economy, though in neither case has this effect been...

China Seeks to Increase Mutual Investments with India

Ananth Krishnan
Hindu
China has called for a move to boost mutual investments with India as a measure to strengthen trade ties and reshape what officials have acknowledged is an increasingly unbalanced and strained business relationship, as trade talks between both...

China Gets Creative as the Cultural Revolution Grows

Malcolm Moore
Telegraph
Costing a total of 50bn yuan (£5bn), this mammoth entertainment, retail and office hub, named the Han Street Cultural Centre, may be the most ambitious single project of its kind in the world. And it is being built not in Shanghai, Beijing or Hong...

Caixin Media

08.25.12

Revamping the Landscape of Forex Flow

Capital flows out of China may be accelerating, a phenomenon commonly associated with waning confidence in a nation’s economy. But the foreign exchange regulator says the change is a step in the right direction.In the first six months of the year,...

Collapse of New Bridge Underscores China’s Infrastructure Concerns

Keith Bradsher
New York Times
One of the longest bridges in northern China collapsed on Friday just nine months after it opened, triggering a storm of criticism from Chinese Internet users and underscoring questions about the quality of construction during China’s rapid...

Iron Rice Bowl Redux? Official Jobs No. 1, Says Survey

Lillian Lin
WSJ: China Real Time Report
Government jobs are now the top choice for many of China’s job seekers, according to a survey released this week, in a finding that illustrates an undercurrent of unease in the world’s No. 2 economy.

China Confronts Mounting Piles of Unsold Goods

Keith Bradsher
New York Times
After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.

Rising Soybean Oil Prices Threaten Social Fallout in China

David Pierson
Los Angeles Times
The worst U.S. drought in half a century is sending global grain prices soaring. The fallout is almost certain to be felt at dinner tables across China. The No. 1 foreign buyer of American soybeans, which are pressed into cooking oil and used for...

Caixin Media

08.18.12

Economist Lin Yifu on State-Sustained Growth

Standing up to a wave of pessimism about China’s prospects for continuing high-level economic growth is no easy task.But economist Lin Yifu, who recently retired as a senior vice president and chief economist at the World Bank, is holding his ground...

2011 Foreign Policy Speech by Paul Ryan

Michael Warren
Weekly Standard
Ryan also called for China to liberalize and become “integrated into the global order.” But, he said, Chinese leaders should not count on the decline of the United States as a great power. “We must demonstrate that planning for the post-American era...

China Leadership Monitor--Issue 38

Alice Miller et al.
Hoover Institution
Includes articles on Bo Xilai and the PLA, the Pacific PIvot, Economic Uncertaintly Its Effect on Politics, and China's Top Future Leaders to watch...

Reports

08.06.12

Shaping the Future—Part I: Domestic Developments in Taiwan

Alan D. Romberg
He Jianan
China Leadership Monitor
Three main themes emerged in Taiwan politics in the wake of President Ma Ying-jeou’s convincing reelection victory in January. First, in a highly contentious election that portended continuing intra-party strife, the DPP chose its new chairman,...

Reports

08.06.12

Economic Uncertainty Fuels Political Misgivings

Barry Naughton
He Jianan
China Leadership Monitor
Political uncertainty is inevitable as China prepares for this fall’s leadership transition. This year economic conditions are also unusually unpredictable. In particular, while China is undergoing an inevitable economic slowdown, few have a clear...

Huawei: The Company That Spooked the World

Unattributed
Economist
BANBURY, a little English town best known for a walk-on part in a nursery rhyme and as the eponymous origin of a fruitcake, is an unlikely fulcrum for the balance of power in the world of telecoms. But the “Cyber Security Evaluation Centre” set up...

Ideas Will Determine China's Future

Zhang Weiying
Wall Street Journal
Even as China's economy gallops ahead, its society is facing increasingly sharp contradictions. Income and regional inequalities are expanding, official corruption is rampant, access to medical care and education are uneven, and environmental...

Caixin Media

08.02.12

Landlords of the Rings Push Urban Rents Higher

A twenty-six-year-old woman who moved to Beijing from a distant town for work could be a poster child for urban China’s latest housing market phenomenon: skyrocketing rents.The woman, surnamed Fang, said goodbye to Liaoning province three years ago...

Chinese Property: The Most Important Sector in the World?

S.C.
Economist
CHINA'S property market was once described as the "most important sector in the known universe" by Jonathan Anderson, formerly of UBS, a Swiss bank. It certainly felt that way on a recent visit to Sanya, the resort city in Hainan,...

Lies, Damned Lies, and China's Economic Statistics

Tom Orlick
Wall Street Journal
China's statisticians get a tough press. After all, it was Europe, not China, whose fudged public finance data helped usher in the latest round of global financial turmoil. The biggest corporate fraud in recent memory isn't China's...

Books

07.26.12

Winner Take All

Dambisa Moyo
Commodities permeate virtually every aspect of modern daily living, but for all their importance—their breadth, their depth, their intricacies, and their central role in daily life—few people who are not economists or traders know how commodity markets work. Almost every day, newspaper headlines and media commentators scream warnings of impending doom--shortages of arable land, clashes over water, and political conflict as global demand for fossil fuels outstrips supply. The picture is bleak, but our grasp of the details and the macro shifts in commodities markets remain blurry.Winner Take All is about the commodity dynamics that the world will face over the next several decades. In particular, it is about the implications of China’s rush for resources across all regions of the world. The scale of China’s resource campaign for hard commodities (metals and minerals) and soft commodities (timber and food) is among the largest in history. To be sure, China is not the first country to launch a global crusade to secure resources. From Britain’s transcontinental operations dating back to the end of the 16th century, to the rise of modern European and American transnational corporations between the mid 1860’s and 1870’s, the industrial revolution that powered these economies created a voracious demand for raw materials and created the need to go far beyond their native countries.So too is China’s resource rush today. Although still in its early stages, already the breadth of China’s operation is awesome, and seemingly unstoppable. China’s global charge for commodities is a story of China’s quest to secure its claims on resource assets, and to guarantee the flow of inputs needed to continue to drive economic development.  —Basic Books

WTO to Probe China's Rare-Earth Policies

Chuin-Wei Yap
Wall Street Journal
The World Trade Organization has set up a panel to probe China's rare-earth export policies, a widely expected move following requests by the U.S., the European Union and Japan, the trade body said in a report on its website Tuesday.The trade...

What’s Driving China’s Real Estate Rally?

Patrick Chovanec
Patrick Chovanec: An American Perspective from China
Yesterday, I began an investigation into the potential causes behind the latest bump in China’s property sales numbers, and whether they portend a genuine turn-around in the nation’s real estate market.  I noted that five basic theories to...

A Slowdown is Good for China and the World

Michael Pettis
Financial Times
What the rest of the world needs from China is not faster growth but more demand. Rebalancing will provide that, although the trade surplus will probably rise before it begins to decline. This will result in falling prices for hard commodities, and...

Violence Against Doctors on the Rise

Unattributed
Economist
AFTER a growing number of attacks on medical staff in China, doctors and nurses are finding hospitals increasingly unsafe. According to figures from the Ministry of Health, more than 17,000 “incidents” aimed at hospitals and their staff occurred in...

Sinica Podcast

07.20.12

Attack of the Piranhas

Jeremy Goldkorn, William Moss & more from Sinica Podcast
This week on Sinica, Chinese economic growth is on the rocks, ASEAN tensions are breaking through the facade of East-Asian political unity, a major Chinese telecom company is implicated in an international trade scandal, and man-eating fish have...

Yum Profit Trails Estimates as Costs Increase in China

Leslie Patton and Kelly Blessing
Bloomberg
Yum! Brands Inc. (YUM), owner of the KFC and Taco Bell restaurant brands, said second-quarter profit rose 4.7 percent, falling short of analysts’ projections, as costs increased at locations in China.

Caixin Media

07.18.12

Financial Reform Has Only Begun

The Chinese economy’s rapid growth over the past thirty years has fundamentally changed global economic structures. But our achievements have come at a price: We have run up against hard limits in many areas, including factor investment costs and...

More Slowdown in China (Audio Interview)

Unattributed
Peterson Institute for International Economics
Nicholas R. Lardy assesses the latest Chinese economic output numbers, which show that a drop in exports and housing investment are contributing to slower growth.

Wage Rises in China May Ease Slowdown

Tom Orlik and Bob Davis
Wall Street Journal
Wages are still climbing rapidly in China and many companies are having trouble filling jobs despite the sharp economic slowdown here—evidence of a structural shortage in the labor market that may help China adjust to slower growth without political...

Inner Mongolia: Mining the Grasslands

Unattributed
Economist
LOCAL legend has it that the beauty of the grasslands in Xilin Gol, a prefecture in eastern Inner Mongolia, so captivated the 13th-century warrior Genghis Khan that he planned to settle down there once his battles were over. He might be less...

Deeper Slowdown Suspected in China

TOM ORLIK And AARON BACK
Wall Street Journal
Official data due this week are expected to show growth in China slowing to its lowest rate since the global financial crisis. But some economists say they are turning up evidence that the true picture could be even worse.

China's Coming Economic Transformation

Andrew Batson
Wall Street Journal
China is grappling with an economic downturn, but there is more than the usual amount of disagreement about how fast it's slowing down. The battle is not between the usual bulls and bears. The most interesting split this time is between those...

Caixin Media

07.11.12

Railroaded into a Fast-Train Technology Trap

The professional dreams of a team of locomotive designers and rail systems engineers sped along steel tracks through the countryside of northeastern China.The year was 2003, and high-speed track testing was under way between the cities of Shenyang...

5 Signs of the Chinese Economic Apocalypse

TREFOR MOSS
Foreign Policy
The lights are flickering in the world's economic powerhouse. Although China's outlook may still be positive by, say, European standards, the numbers show that the country's storied growth engine has slipped out of gear. Businesses...

A Hard Landing?

JONATHAN R. LAING
Barron’s
After three decades of annual growth averaging 10%, China's bullet-train economy is slowing markedly. Economic problems in Europe and the U.S. are stunting export growth, long the primary driver of China's economic miracle. Growth in...

Is the Chinese Economy Running Out of Steam

Evan Osnos
New Yorker
John King Fairbank, the father of Chinese studies in America, once described China as a “journalist’s dream and a statistician’s nightmare, with more human drama and fewer verifiable facts per square mile than anywhere else in the world.” These days...

Caixin Media

07.06.12

Powering Down Coal-Fired Economic Expansion

Slowing nationwide power demand and coal consumption, twin barometers for economic growth, suggest the Chinese economy may be sailing into the doldrums while at the same time changing its course.Electricity use in May rose a relatively mild 5.2...

U.S. Files Trade Complaint Against China on Cars

Mark Landler
New York Times
The United States filed a trade complaint against China on Thursday for new duties it imposed on American-made cars and trucks. The move came as President Obama kicked off a campaign bus tour through the manufacturing heartland of Pennsylvania and...

China’s Looming Pension Crisis Spooks Workers

Lillian Lin
WSJ: China Real Time Report
China faces a pension crisis as its population ages, and that prospect is starting to alarm Chinese workers who are already struggling to pay for education, healthcare and housing. By the time those people who joined the workforce in the 1980s...

Caixin Media

06.29.12

Barclay’s Diamond Offers an Optimistic Vision

A calm, confident Robert Diamond discussed financial restructuring in Europe and economic options for the Chinese government during a June 14 interview—thirteen days before the British bank where he serves as CEO, Barclays Group, was fined for...

Reports

06.25.12

U.S.-China Public Perceptions Opinion Survey 2012

Emily Brill
Committee of 100
The re-establishment of U.S.-China relations in 1971 marked a strategic step that ended China’s isolation and transformed the global balance of power. Since that historic milestone, the United States as an established superpower and China as an...

Caixin Media

06.21.12

Economist Sees Room for Slashing Taxes

Increasing government spending would be a disservice to society rather than a benefit if Beijing wants to create a consumption-led economy, one economist says in a recent research report.“The so-called ‘structural optimization,’ which refers to...

Can China's Rust Belt Reinvent Itself?

Jonathan Kaiman
Foreign Policy
To understand this industrial Chinese city's past, begin with the smoldering crater on the south side of town, an open-pit coal mine as wide as Manhattan and deeper than the height of the Chrysler Building. Known as Haizhou, or "Sea State...

Books

06.12.12

Sustaining China’s Economic Growth After the Global Financial Crisis

Nicholas R. Lardy
The global financial crisis and ensuing economic downturn have raised many questions concerning the future of global economic growth. Prior to the financial crisis, global growth was characterized by growing imbalances, reflected primarily in large trade surpluses in China, Japan, Germany, and the oil exporting countries and rapidly growing deficits, primarily in the United States. The global crisis raises the question of whether the previous growth model of low consumption, high saving countries such as China is obsolete. Although a strong and rapid policy response beginning in the early fall of 2008 made China the first globally significant economy to come off the bottom and begin to grow more rapidly, critics charged that China's recovery was based on the old growth model, relying primarily on burgeoning investment in the short run and the expectation of a revival of expanding net exports once global recovery gained traction.This study examines China's response to the global crisis, the prospects for altering the model of economic growth that dominated the first decade of this century, and the implications for the United States and the global economy of successful Chinese rebalancing.   —Peterson Institute for International Economics

Reports

06.11.12

China Invests in Europe

Thilo Hanemann and Daniel H. Rosen
Daniel H. Rosen
Rhodium Group
Europe is experiencing the start of a structural surge in outbound direct investment in advanced economies by Chinese firms. The take-off was only recent: annual inflows tripled from 2006 to 2009, and tripled again by 2011 to $10 billion (€7.4...

Can China Escape the Low-Wage Trap

James Fallows
New York Times
The news out of China this year has been relentlessly bad. The political system was embarrassed in front of its own people by the Bo Xilai scandal and in front of the world by the Chen Guangcheng incident. The Chinese economy has slowed and its...

Arthur Kroeber: Bear in a China Shop

Arthur Kroeber
Foreign Policy
Time and again, China has defied the skeptics who claimed its unique mixed model -- an ever-more market-driven economy dominated by an authoritarian Communist Party and behemoth state-owned enterprises -- could not possibly endure. Today, those...

Books

05.21.12

China Airborne

James Fallows
More than two-thirds of the new airports under construction today are being built in China. Chinese airlines expect to triple their fleet size over the next decade and will account for the fastest-growing market for Boeing and Airbus. But the Chinese are determined to be more than customers. In 2011, China announced its Twelfth Five-Year Plan, which included the commitment to spend a quarter of a trillion dollars to jump-start its aerospace industry. Its goal is to produce the Boeings and Airbuses of the future. Toward that end, it acquired two American companies: Cirrus Aviation, maker of the world’s most popular small propeller plane, and Teledyne Continental, which produces the engines for Cirrus and other small aircraft.In China Airborne, James Fallows documents, for the first time, the extraordinary scale of this project and explains why it is a crucial test case for China’s hopes for modernization and innovation in other industries. He makes clear how it stands to catalyze the nation’s hyper-growth and hyper-urbanization, revolutionizing China in ways analogous to the building of America’s transcontinental railroad in the nineteenth century. Fallows chronicles life in the city of Xi’an, home to more than 250,000 aerospace engineers and assembly workers, and introduces us to some of the hucksters, visionaries, entrepreneurs, and dreamers who seek to benefit from China’s pursuit of aerospace supremacy. He concludes by examining what this latest demonstration of Chinese ambition means for the United States and the rest of the world—and the right ways to understand it. —Pantheon Books

Caixin Media

05.02.12

Yearning for the Yuan

London is forging ahead with plans for yuan-based financial services by developing an infrastructure and banking services that match its ambitions for the Chinese currency.On April 18, the city welcomed the first yuan-denominated bond issuance...

Reports

05.01.12

China’s Impact on World Commodity Markets

Shaun K. Roache
Luo Xiaoyuan
International Monetary Fund (IMF)
Shocks to aggregate activity in China have a significant and persistent short-run impact on the price of oil and some base metals. In contrast, shocks to apparent commodity-specific consumption (in part reflecting inventory demand) have no effect on...

Reports

05.01.12

RMB Internationalization: Onshore/Offshore Links

Samar Maziad, Joong Shik Kang
Luo Xiaoyuan
International Monetary Fund (IMF)
Among emerging market currencies, the RMB holds the most potential to become widely used internationally, due to China‘s large economic size, diversified trade structure and network, macroeconomic stability, and high growth rates - both current and...

Sinica Podcast

04.26.12

Chinese Industrial Policy and the Automotive Market

Kaiser Kuo & Jeremy Goldkorn from Sinica Podcast
Even as the Beijing Auto Show prepares to toast the Chinese market with its typical mixture of sex and tech, industry insiders have been stunned by recent news showing the market share of domestic Chinese manufacturers falling relative to their...

Caixin Media

04.24.12

China’s Tax Burden: A Mysterious Lead Sinker

(Beijing)—In much of the world, admiration and envy are common reactions to China’s consistently high GDP growth rates. But closer to home, the Chinese public’s admiration of their own economic miracle is shadowed by tax increases that...

Caixin Media

04.19.12

Strategic Reserves

(Beijing)—In an odd twist for China’s powerful banks, the biggest state-owned lenders last year started running low on the foreign currency needed for loans to enterprises investing overseas.“Some commercial banks suspended U.S. dollar loans” after...

Books

04.13.12

The End of Cheap China

Shaun Rein
Many Americans know China for manufacturing cheap products, thanks largely to the country's vast supply of low-cost workers. But China is changing, and the glut of cheap labor that has made everyday low prices possible is drying up as the Chinese people seek not to make iPhones, but to buy them. Shaun Rein, Founder of the China Market Research Group, puts China's continuing transformation from producer to large-scale consumer - a process that is farther along than most economists think - under the microscope, examining eight megatrends that are catalyzing change in China and posing threats to Americans' consumption-driven way of life. Rein takes an engaging and informative approach to examining the extraordinary changes taking place across all levels of Chinese society, talking to everyone from Chinese billionaires and senior government officials to poor migrant workers and even prostitutes. He draws on personal stories and experiences from living in China since the 1990s as well as hard economic data. Each chapter focuses on a different aspect of China's transformation, from fast-improving Chinese companies to confident, optimistic Chinese women to the role of China's government, and at the end breaks down key lessons for readers to take away.  —John Wiley & Sons, Inc.

Caixin Media

04.01.12

China’s African Challenge

Roughly 1 million Chinese nationals are working or doing business in Africa, from Egypt’s Mediterranean shore to the Cape of Good Hope.Theirs are the faces behind China’s soaring direct investment in Africa, which, according to the Ministry of...

Reports

04.01.12

Is China Slowing Down?

John H. Makin
American Enterprise Institute for Public Policy Research
With problems in the manufacturing, housing, and export sectors in China, we will likely see slower gross domestic product growth for the world’s second largest economy in 2012. China’s leadership is changing for the first time in a decade, and its...

Caixin Media

03.29.12

Give Wenzhou What It Needs

The development of China's private economy requires financial support, especially private financial support. Wenzhou is the home of the private economy. With 99.5 percent of companies falling into the category of small and micro enterprises,...