Saturday, September 13, 2008

Thursday, February 12, 2004

Moving to a new url

I'm moving my new weblog "China Herald" to a new host at www.chinaherald.net, that is - unlike the blogspot host - also available in China. Still finding out the right settings: I'm also trying to prove that a one-person enterprise by a journalist is possible today. I think it is, but it is not easy. Please have some patience.

Sunday, January 25, 2004

Consolidation: this blog is moving ahead

I'm running at this stage about four blog-like operations and that is a bit too much, I discovered, so I'm going to consolidate my China-blogs into one new one: chinaherald.blogspot.com

Do expect here also a strong economic angle, but there will be much more variation. Hope to see you there again. Postings here will basically stop from now.

Saturday, January 17, 2004

What can stop China's growth? - the WTO column

Now at Chinabiz


Ann Arbor, MI - China's economic growth has been hitting headlines over the past few months at least a few times per week. Of course, it is that time of the year when the accounts on 2003 have to be closed and the budgets for 2004 are set, but the tone is remarkably optimistic to put it mildly, compared to even one year ago when SARS held China captive.

We saw exports grow like never before, a record in the official GDP growth of 8.5 percent over 2003 (now we even think that reality might be rosier than the official numbers) and investment bankers are making overtime like they only did during the internet bubble. Meanwhile non-performing loans reduced dramatically with a major recapitalization by the government, opening a way to swift IPOs. Conferences worldwide focus on China: everybody wants to have a piece of the action.

That seems a good moment to look around and for the remaining doomsday scenarios, that were so popular until not so long ago. I have been trying to act as the pessimist - or clown as some might say - but that seems a useful function as the next China craze is in full swing. Fortunately, some of my colleagues at ChinaBiz also have a gloomy take on the future. Up to not so long ago roles were reversed, me being a lonely optimist while the rest of the world thought China was collapsing.

China has gotten much blame from manufacturers and trade unions in the US for cheating them out of work. Much of those arguments only show that those groups are clueless about globalization itself and in general do not make sense.

But what should not be forgotten is that globalization is always a two-edged sword. China is doing very well, partly because export to the US has never been as high as now. China's economy is doing very well, partly because the US is still doing well. This does not have to continue automatically.

The main problem for President George Bush is that the economy is not doing as good as he needs for the upcoming presidential elections later this year. More than ever, President Bush needs an economic upswing, but developments are not really supporting his efforts at this stage.

Even my regular taxi driver here in Michigan agrees with me. Jay is not an ardent follower of the debates on the presidential elections to put it mildly. He lost, like three million other US citizens, his previous job because of the economic downturn caused by the current president and he wants only one thing: no Bush. But when the economy is doing well a few weeks ahead of the elections, most people will forget about years of hardship and three million lost jobs.

Doomsday scenarios suggest that at the present rate of deindustrialization and indebtness the US might become a developing country in 20 years time, with analysts noting that the only superpower has much less leeway to tumble compared to Japan. That might put China ahead of the US in many instances, but it will not all be rosy given its present dependence on the US market. A US with third world wages may also offer stiff competition to the Asian giant.

Fons Tuinstra

Wednesday, December 31, 2003

US beef was Chinese

Why do journalists sometimes have to make up stories, since the truth is already so funny (that is: when the following story in the Shanghai Daily is true, of course).
A Japanese restaurant in Shanghai had joined at the end of the 1990s a promotion drive for US beef and had put up a large sign saying it sold US beef. The owner discovered that the differences between US filets and its Chinese counterparts were considerable: 200 Renminbi (24 USD) for a kilo and 30 Renminbi (3.5 USD) and decided silently to replace the US beef by Chinese filets.
Now the mad cow disease has struck US beef, the promotion has become a problem and the owner has decided to tell his customers the truth: he only serves honest Chinese meat.

Wednesday, December 24, 2003

The 2004 China craze – the WTO column

(An New-Year advance on my Chinabiz-publication)

Ann Arbor – Is doing business a science? At many business schools I have visited during the past few months they claim it is, but the only major that comes close to doing business in my viewpoint is theology, this other major that defies basic logic and where the outcome is hard to prove in scientifically.

Doing business seems rather basic as long as you have not obtained your MBA. When you invest in a business that guarantees some return on investment, when you avoid companies that have a reputation of only losing money, you should be on the safe side and be able to make some money. But all those basic precautions are thrown overboard when you get into this higher level of awareness, when greed get into this play, when a shortcut seems to allow faster access into the paradise of capitalism.
Some of you might still remember this funny time when the expectations regarding internet were high up and eyeballs had replaced harder currencies. Those eyeballs would translate into solid revenue was the assumption. And in China, yes, in booming China the internet would be a winner for sure, since the number of eyeballs was anyway countless.
It was a tough wake-up call when those eyeballs did not equaled money.

China is red hot yet again at the end of 2003 and the worst still seems to be coming. Hungry investors, unable to find decent investment objects elsewhere, flock to this Promised Land in need for salvation. Basic logic does not apply anymore. Why are we building more and more production capacity for cars in a world that has already an overcapacity? China!
Why we have spent last week US$ 3.47 billion on a bankrupt insurance company China Life? China! And because Hong Kong high priest Li Ka-shing also spent some pocket money into this venture.
Why are we investing into an insurance company that mainly has a reputation for losing billions? China!
Why invest into an industry that is only attracts the Chinese because there are not other ways for them to invest their savings? Because it is China and we do not expect any other investment tools will ever emerge for the Chinese! It China!

The only difference with a religious sect is that a charismatic leader is missing in this latest run for paradise. No investment banker yet can elevate himself from the ground by focusing on his toes, although some business schools think of including this concentration into their curriculum too. Nobody who can heal people, although cheating all those investors out of their money seems a healthy side effect: they seem to have too much anyway. Jezus won our admiration by changing water into wine, a very successful business model, but changing money into air does not seem enough to qualify as a business leader.

Let’s all see it from the bright side. Communism has failed to bring down capitalism. What bigger evil can bring down capitalism apart from capitalism itself? Let’s invest our capital, hold hands and pray, since the Lord has done bigger things.


PS: Best wishes for 2004 
PPS: Some of you asked me after my previous column on the internet as a disruptive technology to give some Chinese examples too. Hold on: next week you will get a follow up, this seemed more urgent.

Tuesday, December 16, 2003

IBM move high-tech jobs to China, India

IBM plans to shift thousands of high-tech jobs from the US to China and India, the largest of such actions ever planned, writes AP today.
IBM documents obtained by The Wall Street Journal said about 4,700 programming jobs could be shifted overseas to save costs, a growing high-tech industry trend known as "offshoring", says the article.
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