May | 2013 | CHINDIA ALERT: You'll be living in their world, very soon

05/05/2013

* China Still Has a Long Way to Go to Build a Service Economy

BusinessWeek: “The bad news keeps coming. Following two days of dismal numbers showing China’s manufacturing sector is slowing, now the service sector has disappointed. The not-so-happy takeaways: Don’t expect an economic recovery soon, and Beijing’s much sought-after goal of rebalancing still looks far off.

Shoppers pick up vegetables at a market in Beijing

On May 3, China’s National Bureau of Statistics and the China Federation of Logistics and Purchasing announced that their nonmanufacturing purchasing managers’ index cooled to 54.5 in April, down from 55.6 the month before. Anything above 50 indicates expansion. The index tallies responses from 1,200 companies in 27 service industries, including retail, catering, construction, and transportation. A separate services index will be released by HSBC (HSBA) on May 6.

“The reading suggests that growth momentum will remain relatively soft” in the second quarter and that China’s economy “has shifted to a weaker growth trajectory,” Crédit Agricole CIB (ACA) economist Dariusz Kowalczyk said to Bloomberg News.

Beijing has set a goal of weaning its economy off excessive reliance on investment and exports and rebalancing toward a cleaner, more sustainable, services and consumption-driven GDP. That requires an end to artificially low interest rates, the undervalued yuan, and subsidized energy prices (three-quarters of energy goes to industry), as well as more government social spending, argue Nicholas Lardy and Nicholas Borst, of the Peterson Institute for International Economics, in a February policy brief.

“Higher lending rates lead to less capital-intensive economic development resulting in more job creation, higher household income, and ultimately higher levels of household consumption,” write Lardy and Borst. (Household consumption makes up a very low 37 percent of GDP today, while investment has exceeded 40 percent every year for the past decade). And “an appreciation of the currency would also decrease the profitability of the export-oriented manufacturing sector to the relative benefit of the service sector of the economy, which has languished since 2002,” the authors add.

via China Still Has a Long Way to Go to Build a Service Economy – Businessweek.

Posted in Economics, Services | 1 Comment »

Tags: Beijing, Business, China, Consumption (economics), economy, Economy of the People's Republic of China, household consumption, Peterson Institute for International Economics, purchasing managers index

05/05/2013

* Plans to Harness China’s Nu River Threaten a Region

NY Times: “From its crystalline beginnings as a rivulet seeping from a glacier on the Tibetan Himalayas to its broad, muddy amble through the jungles of Myanmar, the Nu River is one of Asia’s wildest waterways, its 1,700-mile course unimpeded as it rolls toward the Andaman Sea.

The Nu River at Bingzhongluo, China. The government stunned environmentalists by reviving plans to build dams on the river. More Photos »

But the Nu’s days as one of the region’s last free-flowing rivers are dwindling. The Chinese government stunned environmentalists this year by reviving plans to build a series of hydropower dams on the upper reaches of the Nu, the heart of a Unesco World Heritage site in China’s southwest Yunnan Province that ranks among the world’s most ecologically diverse and fragile places.

Critics say the project will force the relocation of tens of thousands of ethnic minorities in the highlands of Yunnan and destroy the spawning grounds for a score of endangered fish species. Geologists warn that constructing the dams in a seismically active region could threaten those living downstream. Next month, Unesco is scheduled to discuss whether to include the area on its list of endangered places.

Among the biggest losers could be the millions of farmers and fishermen across the border in Myanmar and Thailand who depend on the Salween, as the river is called in Southeast Asia, for their sustenance. “We’re talking about a cascade of dams that will fundamentally alter the ecosystems and resources for downstream communities that depend on the river,” said Katy Yan, China program coordinator at International Rivers, an advocacy group.

Suspended in 2004 by Wen Jiabao, then the prime minister, and officially resuscitated shortly before his retirement in March, the project is increasing long-simmering regional tensions over Beijing’s plans to dam or divert a number of rivers that flow from China to other thirsty nations in its quest to bolster economic growth and reduce the country’s dependency on coal.

According to its latest energy plan, the government aims to begin construction on about three dozen hydroelectric projects across the country, which together will have more than twice the hydropower capacity of the United States.

via Plans to Harness China’s Nu River Threaten a Region – NYTimes.com.

Member of the National Committee of CPPCC urges hydro development on the Nu River (journal.probeinternational.org)
China-backed dams escalating ethnic tension in Myanmar (eco-business.com)
Karen Communities Demand Halt to Salween River Dams (irrawaddy.org)
Bring China in on a rule-based Asian regional water order (dailystar.com.lb)
China’s great water wall (washingtontimes.com)
What happens when Asia’s ‘water tower’ dries up (eenews.net)

Posted in China alert, Construction, Economics, Electricity, energy, water scarcity | 1 Comment »

Tags: Asia, Burma, China, environment, Salween River, unesco world heritage, unesco world heritage site, Yunnan

05/05/2013

* Protest in China at chemical plant plans for Kunming

BBC: “Hundreds of people have rallied in the Chinese city of Kunming to protest at plans for a factory producing a toxic chemical for the textile industry.

A child holds up protest posters in Kunming, China, 4 May

Some demonstrators wore symbolic masks and brandished posters warning against the dangers of a paraxylene (PX) spill.

“We want to survive, we want health, get PX out of Kunming”, a banner read.

Two years ago, protests against a PX factory in the city of Dalian forced the city government to close the plant, though it reportedly re-opened later.

Saturday’s protest in Kunming, in the south-west of the country, attracted at least 200 people, according to state media.

Chinese bloggers, however, put the number at up to 2,000.

The China National Petroleum Corporation plans to build a chemical plant in the nearby town of Anning to produce 500,000 tonnes of PX annually.

PX is is used to create raw materials for the production of polyester film and fabrics.

Correspondents say urban Chinese are becoming increasingly confident about protesting at potential threats to their environment.”

via BBC News – Protest in China at chemical plant plans for Kunming.

Posted in China alert, Economics, Manufacturing, Politics, Pollution, public protest | Leave a Comment »

Tags: Chemical plant, China, China National Petroleum Corporation, environment, Kunming, politics

03/05/2013

* Xi Jinping’s vision: Chasing the Chinese dream

The Economist: “THESE have been heady days for Chen Sisi, star of a song-and-dance group run by China’s nuclear-missile corps. For weeks her ballad “Chinese dream” has been topping the folk-song charts. She has performed it on state television against video backdrops of bullet trains, jets taking off from China’s newly launched aircraft-carrier and bucolic scenery. More than 1.1m fans follow her microblog, where she tweets about the Chinese dream.

Ms Chen is playing her part in a barrage of dream-themed propaganda unleashed by the Communist Party. Schools have been organising Chinese-dream speaking competitions. Some have put up “dream walls” on which students can stick notes describing their visions of the future. Party officials have selected model dreamers to tour workplaces and inspire others with their achievements. Academics are being encouraged to offer “Chinese dream” research proposals. Newspapers refer to it more and more (see chart in full article). In December state media and government researchers, purportedly on the basis of studies of its usage, declared “dream” the Chinese character of the year for 2012.

It was, however, one very specific usage just before that December publication which set the country dreaming. On November 29th, two weeks after his appointment as the party’s general secretary and military commander-in-chief, Xi Jinping visited the grandiose National Museum next to Tiananmen Square. Flanked by six dour-looking, dark-clad colleagues from the Politburo’s standing committee, Mr Xi told a gaggle of press and museum workers that the “greatest Chinese dream” was the “great revival of the Chinese nation”.”

via Xi Jinping’s vision: Chasing the Chinese dream | The Economist.

Netizens are challenging Xi Jinping’s Chinese dream (whilechinarising.wordpress.com)
‘Chinese dream’ is Xi’s vision (chinawatch.washingtonpost.com)
Xi Jinping promises to pursue Chinese dream (thehindu.com)

Posted in China alert, Politics, The Chinese Dream | 2 Comments »

Tags: Beijing, Chen Sisi, China, communist party of china, Politburo, politics, Tiananmen Square, Xi JinPing

03/05/2013

* Credit-Card Companies Battle in China

BusinessWeek: “The Ms. Magic credit card from China Citic Bank (601998) is dotted with Swarovski crystals and offers free beauty treatments and health insurance. Huaxia Bank’s (600015) Pretty Lady card, co-issued with Deutsche Bank (DB), entices women with triple points for cosmetic purchases and fitness club memberships. Citigroup (C), which last year became the first U.S. bank allowed to issue its own solo logo cards in China, offers to waive its first-year annual fee of 300 yuan ($49) for Rewards cardholders applying before March or spending more than 20,000 yuan by the end of December.

Credit-Card Companies Battle in China

They’re all part of a battle for affluent consumers in the world’s fastest-growing market for plastic, even as delinquencies have tripled in the past five years and profits remain elusive. “Credit cards are the ultimate growth area and also the battlefield for banks in China,” says Rainy Yuan, an analyst in Shanghai for Taipei-based Masterlink Securities. “Some may never earn a profit out of it, but they have to join the fight, as that’s the most efficient way of grabbing deposits and cross-selling other financial services.”

With interest rates fixed by the government at 18 percent annually, China’s banks can’t compete by lowering rates, so they differentiate themselves by offering merchant discounts and gifts, including Coach (COH) wallets, Hugo Boss (BOSS) quilts, and free Starbucks (SBUX) upgrades to a larger coffee. Chen Junjun, a marketing manager at China Guangfa Bank, spends 10 hours a day, seven days a week trying to lure customers to his roofless booth outside a subway station in Shanghai’s Pudong district. Among the gifts he offers: a wireless mouse, storage boxes, and coffee mugs. “No annual fees, buy-one-get-one-free for Starbucks coffee, and you get a free Coach wallet, too,” Chen says to a female passerby. “If you have a job, you are qualified. If you have a credit card, you are qualified.””

via Credit-Card Companies Battle in China – Businessweek.

Posted in Affluence, China alert, Consumer, Economics | Leave a Comment »

Tags: Business, China, China Guangfa Bank, Citigroup, Credit card, Deutsche Bank, economy, starbucks, Swarovski

03/05/2013

* Stressed Chinese Leave Cities, Head for the Countryside

BusinessWeek: “Six years ago, Bei Yi did something many people considered crazy. He quit a high-paying job in Shanghai as a manager at an industrial glass company, sold his car and apartment, and left one of China’s most desirable cities. His destination: the town of Lijiang, deep in China’s poor southwest province of Yunnan, once a place of banishment for those who ran afoul of the emperor.

Friends and family were perplexed. “‘How can you come from such a lively, important city and move to a far-off mountain area to live?’ they all asked me. They didn’t understand at all,” recalls Bei, now 34 and proprietor of a guesthouse in Lijiang’s old city, which features rushing streams and ancient alleys. “In some ways, my life in Shanghai would have been considered quite good,” he says, sipping Pu’er tea in the bright sunshine on a recent Friday, with his Old English sheepdog lying nearby. “But I was not happy at all.”

Bei, in Lijiang’s old town, where 95 percent of residents are urban refugees

Bei’s decision to abandon city life has made him something of a pioneer. Fed up with choking smog, traffic jams, unsafe food, stress, and the general toxicity of life in urban China, a growing number of affluent Chinese are deserting big cities such as Beijing and Shenzhen and settling in remote regions, says Gary Sigley, professor of Asian Studies at the University of Western Australia, who is studying the migration. Bei cites work stress as the No. 1 motivation for his move. (His once-doubting parents have joined him and his wife in Lijiang.)

Although no statistics are available on how many people have moved, Yunnan is a very popular destination. An account of a husband and wife’s decision to leave Beijing and move there was one of the top posts on Sina Weibo (SINA), China’s microblogging site, in late February. Yunnan’s attractions include its tolerance—it’s home to 25 minority groups—and pristine environment. Other than tourism, tea, and tobacco, there is little industry.”

via Stressed Chinese Leave Cities, Head for the Countryside – Businessweek.

Lijiang the most laidback of 6 Chinese cities (wantchinatimes.com)
Top 10 Must See – Lijiang Yunnan (jiangxiandchinesecuisine.wordpress.com)

Posted in Affluence, China alert, Economics, life-style, Uncategorized, work-life balance | Leave a Comment »

Tags: Beijing, China, climate, Lijiang, Lijiang Yunnan, Shanghai, Sina Weibo, Yunnan

03/05/2013

* China Factories Try Karaoke, Speed Dating to Keep Workers

WSJ: Third in a Series: China’s Changing Work Force

“After years of offering production bonuses and other financial incentives to boost employee loyalty, TAL Group this year tried an unconventional tactic at its factory here in southeastern China: holding a “Sewing Olympics.”

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The manufacturer for such companies as Burberry Group BRBY.LN +1.21% PLC and Brooks Brothers Group Inc. had workers race to cut, stitch and fold raw fabric into high-end dress shirts. The 10 winners received small cash prizes and had their life-size images hung at an outdoor location where thousands of workers pass on the way to meals.

Cheng Pei Quan is a winner of the ‘Sewing Olympics’ at a factory. Manufacturers are looking beyond bonuses to retain workers and boost production in China.

First in the Series: China Manufacturers Survive by Moving to Asian Neighbors

Second in the Series: A Billion Strong but Short on Workers

“Chinese people put quite a lot of value on ‘face,’ ” says 23 year-old winner Cheng Pei Quan, who earned the nickname “The King of Collars” because he can sew 95 collars an hour, a third more than average. “This competition gives me a sense of pride that other benefits such as rising wages cannot give me.”

After boosting pay to compete with other manufacturers, factory owners are finding money alone no longer is enough to attract and retain a generation of workers that demand a greater work-life balance than their parents did.

Companies are holding “American Idol”-esque singing contests, sponsoring dating events, constructing libraries and karaoke rooms on campus, and organizing small dinners between managers and top workers.

Businesses also are sending postcards to workers who visit their families during the Lunar New Year—when manufacturers can lose 20% or more of their staff—urging the employees to return to work.

The measures are a response to an unprecedented shortage in China’s workforce. Demand for workers exceeded supply by a record in the first quarter. China’s working-age population, defined as people from ages 15 to 59, fell last year for the first time in decades, a result of the national one-child policy that was implemented in 1980.

While the number of migrant workers in China rose 3.9% last year, manufacturers face stiff competition from construction, mining and other industries for staff. The average monthly wage for such workers has increased 74% in the past four years, to $395 in the first quarter.

For factory owners, the ability to recruit workers is a matter of survival. If plants can’t find or replace staff quickly enough, they won’t be able to fill customer orders on time. Those that can’t will be forced to turn elsewhere in Asia to manufacture goods—or go out of business.

via China Factories Try Karaoke, Speed Dating to Keep Workers – WSJ.com.

Posted in Affluence, China alert, Economics, employment, Labour, labour reform, labour shortage, Low income, Manufacturing, Migrant workers, wage rises | Leave a Comment »