Archive for ‘Economics’

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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 »

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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.

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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, 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.

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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 »

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02/05/2013

* 28,000 rivers disappeared in China

Is this a case of “Statistics, statistics and damned lies!”?

Posted in China alert, Economics, Environment, Pollution | Leave a Comment »

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01/05/2013

* China Manufacturers Survive by Moving to Asian Neighbors

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

“In a corner of a sprawling factory in this coastal southern city, sewing machines that stitched blouses and shirts for Lever Style Inc.’s clients now gather dust. As the din on the factory floor has dropped, so, too, has the payroll. Over the past two years, Lever Style’s employee count in China has declined by one-third to 5,000 workers.

The company in April began moving apparel production for Japanese retail chain Uniqlo to Vietnam, where wages can be half those in China. Lever Style also is testing a shift to India for U.S. department-store chain Nordstrom Inc. JWN -0.34% and moving production for other customers.

It’s a matter of survival. After a decade of nearly 20% annual wage increases in China, Lever Style says it can no longer make money here.

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A board shows workers’ statuses at each production line at Lever Style’s factory in Shenzhen, China.

“Operating in Southern China is a break-even proposition at best,” says Stanley Szeto, a former investment banker who took over the family business from his father in 2000.

Companies from leather-goods chain Coach Inc. COH -0.53% to clogs maker Crocs Inc. CROX -0.94% also are shifting some manufacturing to other countries as the onetime factory to the world becomes less competitive because of sharply rising wages and a persistent labor shortage. The moves allow the companies to keep consumer prices in check, although competition for labor in places such as Vietnam and Cambodia is pushing up wages in those countries as well.

At Crocs, 65% of its colorful shoes are expected to be made in China this year through third-party manufacturers, down from 80% last year. Coach will reduce its overall production in China to about 50% by 2015 from more than 80% in 2011 so the handbag maker isn’t too reliant on one country, a spokeswoman says.

Some migration of apparel manufacturing from China is expected, and even encouraged by the government, as the country’s economy matures. As other Asian nations become efficient at mass manufacturing, China must embrace research and high-technology production to transform its economy as South Korea and Japan once did. But healthy economic growth requires that China expand its service sector and create higher-skilled manufacturing jobs at a rapid clip to compensate.

“If costs continue to rise, but China is unable to become more innovative or develop home-grown technologies, then the jobs that move offshore won’t be replaced by anything,” says Andrew Polk, a Beijing-based economist for the Conference Board, a research group for big American and European companies.

China continues to be the developing world’s largest recipient of foreign direct investment, attracting $112 billion last year. But that was down 3.7% from a year earlier. And exports still are rising in the double-digit percentages. Growth is slowing.”

via China Manufacturers Survive by Moving to Asian Neighbors – WSJ.com.

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01/05/2013

* China Grapples With Labor Shortage as Workers Shun Factories

The government’s plan to shift the economy from manufacturing and export to services and internal consumption may be a step in the right direction to re-balance the economy – see https://chindia-alert.org/2013/04/19/chinas-growth-the-making-of-an-economic-superpower-dr-linda-yueh/.  But only if the move doesn’t “hollow out” manufacturing and export as a result. Otherwise, China will be treading a path Western nations have trod and are still treading to one of slow growth and increasing debt.

WSJ:

Second in a Series: China’s Changing Work Force

“For 15 years, Cui Haifeng worked in China’s manufacturing industry, stitching together leather to make soccer balls before working her way up to warehouse manager at a wood-flooring factory.

image

A young woman stands in the street as a hostess and advertisement for a hotpot restaurant in the shopping district Dongman in Shenzhen.

Last month the coal miner’s daughter traded a past of factory uniforms for a blouse and skirt, training as a customer-service representative for a life insurer in Guangzhou, southern China’s largest city.

The insurance industry “provides a more promising future and flexible working hours,” says Ms. Cui, 34 years old, who grew up in central China’s poor Henan province. “I want to earn more money to give my two kids a better and stable living environment.”

Her experience mirrors a transition sweeping China. This year, service-related positions—such as those in retail, travel and leisure—for the first time will account for more of the country’s gross domestic product than industrial-sector jobs, J.P. Morgan Chase JPM -1.90% predicts. Government figures show that the service sector created 37 million new jobs in the past five years, compared with 29 million in the industrial sector, which includes manufacturing, construction and mining.

Growing competition between the service and industrial sector for migrant workers like Ms. Cui is contributing to China’s tightest labor market in years, putting upward pressure on wages that already are rising in the double digits annually. That is leading apparel manufacturers to shift some production out of China, although concerns about worker safety in countries such as Bangladesh are forcing factory owners to consider the risks of doing so.

Demand for urban workers in China exceeded supply by a record amount in the first quarter, according to the government. Meanwhile, the average monthly income for migrant workers rose 12.1% from a year earlier.

“There is no let up in the labor shortage,” says Kelvin Lau, a senior economist Standard Chartered Bank. Manufacturers “are realizing that this is not a cyclical thing. It’s not about riding out a storm.”

In southern China’s industry-heavy Pearl River Delta region, nearly 90% of factory owners surveyed by Standard Chartered say the labor shortage will remain the same or get more severe this year.

Stronger growth for service-sector jobs signals that the government’s long-promised transition from an industrial economy focused on exports to one led by domestic demand is under way. Creating jobs in hair salons and insurance companies, instead of in steel mills and soccer-ball factories, helps fuel growth in the world’s second-largest economy.”

via China Grapples With Labor Shortage as Workers Shun Factories – WSJ.com.

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30/04/2013

* Author Sam Geall on China’s Green Awakening

BusinessWeek: “Most of the headlines about China’s environment involve victims and villains. On one side are the regular people suffering from exposure to toxic rivers and contaminated food; on the other, greedy factory owners and recalcitrant officials. Not visible in that black-and-white picture are China’s emerging ranks of environmental activists—some full-time nongovernmental organization workers and others simply volunteers responding ad hoc to threats to their health and livelihood. China’s first environmental NGO, Friends of Nature, was allowed to legally register in 1994, and since then thousands more have followed in its footsteps.

The Tiger Leaping Gorge on the road from Lijiang to the logging town of Zhongdian, in northwestern Yunnan province, China

A new book edited by Oxford University lecturer Sam Geall, China and the Environment: The Green Revolution, traces the evolution of green activism in China. Geall is also executive editor of the online magazine ChinaDialogue.net. In an interview with Bloomberg Businessweek, he shared his perspective on civil society in an authoritarian country—and how technology changes the picture.

Who are China’s environmentalists? How would you characterize today’s green advocates?

Journalists and broadcasters founded many of China’s most prominent green NGOs—after all, they witnessed the scale of the unfolding environmental crisis. China actually has a long history of civil society, which was suppressed during the Mao era. But the past 20 years have seen a flourishing of green NGOs. Now there are thousands registered, and many more unregistered. Today all sorts of people get involved in China’s environmental campaigns, from university students and middle-class urban residents protesting against the construction of polluting petrochemical factories or incinerators, to villagers in the countryside angry about pollution ruining their crops and their health.”

via Q&A: Author Sam Geall on China’s Green Awakening – Businessweek.

See also: https://chindia-alert.org/economic-factors/greening-of-china/

Posted in China alert, Climate change, Ecology, Economics, Environment, Green, greenhouse gas, Pollution | 2 Comments »

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30/04/2013

* Samsung Galaxy S4 lands on Bangalore, hundreds get in line

reutrs: ““I’m very excited. I’ve been waiting a couple of hours; I couldn’t get any sleep last night,” said Arif, an employee of UK retailer Tesco. He was near the front of the line of hundreds of people to line up at the UB City Mall in Bangalore to buy the new Galaxy S4 smartphone.

The phone went on sale at the Samsung store on Saturday, and Arif waited for about two hours for the privilege of spending 41,500 rupees, or about $763, on the new model, which comes with a 5-inch screen and 13-megapixel camera, and runs on Google’s Android platform.

Samsung is trying to increase its lead over Apple, a possibility for the South Korean company, considering the preference of many Indian shoppers for a good discount over products priced at the top of the line compared to their competitors. Both companies are now handing out discounts on some of their older models. The S4 also is competing with other phones on sale in India such as the HTC One and the BlackBerry Z10, not to mention Apple’s iPhone 5 — its primary rival.

Manu Sharma, Samsung India’s director for its mobile business, said Samsung is looking forward to selling more Galaxy S4s than previous phones in the line. The S3 has sold more than 50 million units since its launch last year, the Wall Street Journal reported in March.

Sharma also promised that there would be no supply problems that forced it to begin selling the S4 later than planned in the United States. The S4 is going on sale in the United States on Saturday as well, and warned that supply problems might strike there. Its reason for this? Better-than-expected demand, of course.

In Bangalore, crowd control was more of a problem than availability. People waited impatiently in a queue that snaked past a near-empty Apple Imagine store. Some people tried to shove and jump the queue, while some got into arguments with store guards who were trying to maintain order. For technology fans in India’s IT capital, arguing that it’s “just a phone” probably wouldn’t make much of an impression anyway.”

via Samsung Galaxy S4 lands on Bangalore, hundreds get in line | India Insight.

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30/04/2013

* India foreign minister Salman Khurshid to visit China

BBC: “India’s Foreign Minister Salman Khurshid has said he will visit China in May amid tensions near the de facto border in the Himalayas.

Salman Khurshid

Mr Khurshid’s trip comes ahead of a scheduled visit by Chinese Premier Li Keqiang to India.

It comes at a time when India has asked China to withdraw troops it says have moved into a territory near the border.

China denies violating Indian territory. The two sides are holding talks to resolve the row.

“I believe we have a mutual interest and we should not destroy years of contribution we have put together,” Mr Khurshid was quoted by AFP news agency as telling reporters on the sidelines of a business event.

“I think it is a good thing that we are having a dialogue.”

Mr Khurshid said he would be visiting China on 9 May, ahead of Mr Li’s visit on 20 May for his first overseas trip, reports say.

India says Chinese troops erected a camp on its side of the ill-defined frontier in Ladakh region last week.

China has dismissed reports of the incursion as media speculation.

The two countries dispute several Himalayan border areas and fought a brief war in 1962. Tensions flare up from time to time.

They have held numerous rounds of border talks, but all have been unsuccessful so far.

The BBC’s Soutik Biswas in Delhi says there has not been a fatality in skirmishes along the undefined India-China boundary since 1967, but the memories of the crushing defeat inflicted by the Chinese on India in the 1962 war have not faded from the minds of some Indians.”

via BBC News – India foreign minister Salman Khurshid to visit China.

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