Sunday, July 15, 2012

Hmmm... a China slowdown. Surprised?

 Just the other data I read a report about growth in China slowing.  Sure it's still high, at 7.6%, but it's the slowest in 3 years.  And it's still hard to understand if the data we get from China is reliable.  I think not, so the fact that we're seeing announced slowing, means it's likely slowing more than that.  Most analysts are calling this a soft landing.  But if any of the bubbles that are in China decide to burst.  The soft landing ain't going to be so soft.

Chinese officials hoped to ease fears by announcing a growth in retail sales and new bank loans, but those are obviously lagging indicators.

Another notable issue is the observation that coal has been available in excess.  It is apparently sitting in supply depots as demand slows. 

At least the US is still investing in China with those 2012 United States Olympic uniforms being manufactured there.

I can't say I'm too surprised by this turn of events.  First of all, with the rest of the world suffering, there's no way that China can continue to grow like they have.  Secondly, the Chinese have not put any measures in place to clean up their economy.  If you've ever visited China - you'll know what I'm talking about.  Extreme rich and extreme poor in the same neighborhoods.  Little infrastructure outside of major cities.  Incredibly high prices in cities.  Incredibly low in the countryside.  And of course, government and local corruption ever prevalent. 

Monday, December 19, 2011

Have the Poor in China Had Enough? Not Yet.

Are the poor or rural Chinese ever going to have enough?  Enough that they take up arms or at least take up signs in protest against the government?  There were mighty concerns during the Arab Spring by those in the highest levels of the Chinese government.  Access was shut down to micro-blog sites and other external news and social networking sites.  The Great Firewall of China was further extended.  They banned demonstrations.

While all of this works for a while, China's increasing presence on the global stage is putting these  efforts in jeopardy.  They can't play without continuing to open up their country and society a little more each day.  They can't develop economically while remaining stagnant philosophically - it is my assumption that the world won't stand for it... for long.  Trademark, patent, IP issues will eventually decay interest.  And the continuing thirst for wealth and power will force the hand.   

The drive for wealth continues to push the lower class down.  There's going to be a tipping point.  Yet for some reason, I was still surprised to see a threatened revolt publicized on Reuters.  Villagers complaining about Communists stealing land for decades.  There's a lucrative housing project that just got approved that took more land from the villagers.  They've pushed the Communists out and are threatening more action.  Full story (here)

Sunday, December 11, 2011

Will China Rise or Fall? What Does the Future of China Look Like?

I've been bullish on China for quite sometime. So much so that I thought about and still do think about moving there. I'm not calling a near impending doom for the fastest growing economy in the world, but I am calling for caution. For an increased skepticism.

I've come to this conclusion after my latest trips to Beijing and Shanghai. I have been 5 times in the past four months and it's the first time I began to see some chinks in the seemingly impenetrable armor.  First - it's no surprise that there's a huge discrepancy between the rich and poor. They have over a billion people. But it's becoming quite egregious. I was in a mall where items were more expensive than if you purchased them in the United States. Sure, some of that is tax and duty - but you wouldn't have found this 10 years ago. And stores carrying these high end and luxury products are abundant. In Beijing they're on every street corner. There cannot be that much wealth so concentrated.  If there is, things aren't going to go well.  Particularly when just down the street, in stark contrast, are hutongs - old dilapidated slums, without running water or plumbing.

Outside of the cities, things aren't much different - that is, if you're not too far outside of the cities. Hangzhou. It's the ame story. While Beijing looked incredibly modern right around the Olympics, it's already showing signs of decay. And not just with air quality.  But windows are popping out of skyscrapers and I don't think it's just the heat (here).  The buildings are nice enough, on the outside, but not so on the inside.  At least not from a quality perspective.   I would look around at the construction - the joints, the paint, the hardware.  And lots of it was suspect.  Not all of course.  The bullet train accident is another example.  I can go on.

My hope was that as China evolved - as they grew and competed on the global stage, that they'd begin to take seriously the issues that have plagued its reputation in recent years.  Corruption.  Piracy.  Civil rights.  Freedom.  But things are only getting worse. 

The reason I'm calling for skepticism and not catastrophe is because there's still a chance for China to save itself, from itself.  There's a new set of leaders expected next year.  Rather than continuing to crackdown and increase the wealth gap, they could possibly take the high road.  Time will tell.  I'm hopeful, because I am awed and fascinated with China.  I want to see it succeed.

Sunday, September 4, 2011

Inaugural Post on the Rise and Potential Fall of China

I've been thinking about beginning this blog for quite sometime now, but my recent trip to Beijing has made me take notice of the risk of issues affecting China right now.

I first visited Beijing in 2004, on a tourist trip which left me in awe. The sheer magnitude of everything in China, from the Great Wall, to the Summer Palace, to the sprawling size of the capital. It wasn't just the size that struck me, it was the contrast, a contrast that has become increasingly stark as China has grown increasingly important.

I studied China and the Asian economy in business school.  I spent a semester abroad in Hong Kong.  I've traveled throughout the region countless times and have visited more times than I can remember.  It's a passion of mine.  One that's kept me enthralled ever since I first visited.

We have seen the sleeping dragon stir.  What will happen over the coming years is anyone's guess.