No Yuan appreciations anytime soon - Shaun Rein

Shaun Rein by Fantake via Flickr

Wishful thinking has led many analysts to call for an appreciation of China's currency, the Renminbi or Yuan. Shaun Rein goes against that trend and says that an appreciation soon would hurt the recovering export industry too much and might cost up to 5 million jobs, he tells Bloomberg.

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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Anti-porn "Whack a mole" strategy - Kaiser Kuo

Kaiser Kuo

China's authorities have gone far in an effort to curtain pornography, even by disallowing individuals to register domain names on the internet. It is not a very efficient strategy, says Beijing-based Internet-watcher Kaiser Kuo to China International Business. 

According to Kaiser Kuo, a Beijing-based digital media consultant who works with companies such as Youku.com, "the main difference in this campaign is the fact that they're going after a choke point they haven't targeted in the past – domain registrars." Kuo suggests that regulators are now being more stringent about only allowing business entities to register .cn domain names. 

After a CCTV investigation in December 2009 revealed a wide array of abuse by people registering .cn domain names, China's Internet administrator CNNIC made business licenses obligatory for all applicants trying to register domain names within China's top level domain. ...

As for the effectiveness of these tactics in the face of a seeming endless supply of inappropriate material on the Internet, Kaiser Kuo uses the current analogy: "Anti-pornography campaigns on the Chinese Internet usually tend to have a ‘Whack-a-Mole' quality to them. You whack it down in one place, but somewhere in the dark recesses of the Internet, the mole pops up."

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Kaiser Kuo is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

Challenge: reduce lending, create jobs - Arthur Kroeber

Arthur Kroeber by Fantake via Flickr

China faces this year unprecedented challenges, tells Arthur Kroeber the Wall Street Journal on the day the annual National People Congress (NPC) starts its meeting.

"Last year, Beijing had a simple strategy and a simple message: lend as much money as necessary to keep growth at 8%. This year, the job is trickier: it has to reduce lending, but not so much that growth stalls," said Arthur Kroeber, managing director of research firm Dragonomics in Beijing. "It will be hard to do that without damaging business and consumer confidence."

More in the WSJ.

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Arthur Kroeber is a speaker at the China Speakers Bureau. When you need him at your conference, do let us know. 

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The mismatch at the labor market - Zhang Juwei

Zhang Juwei by Fantake via Flickr

Much of the talk about the growing shortage of labor in China has been much too simple, tells professor Zhang Juwei of the Chinese Academy of Social Science to the Chinese media. Despite the growing labor shortage, some cannot find a job, especially recent graduates

"There is a pretty clear contradiction in the labor market," said Zhang Juwei, a professor and director of the labor and social security research center at the CASS. "Many businesses can't find workers but, at the same time, many people can't find jobs either."...

"If people lose their jobs, of course it impacts social stability," said CASS professor Zhang. "I don't know of any country where that's not true. It involves people's livelihoods and jobs. This is something the government should think about before anything else."

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Professor Zhang Juwei is a speaker at the China Speakers Bureau. When you need him at your conference, do let us know.

Debt crisis possible in 2012 - Victor Shih

Victor Shih by Fantake via Flickr

China's debts, caused by its massive rescue plan of the past few years, might trigger off a crisis as debts rise to almost 100 percent of its GDP in a worst case scenario, says professor Victor Shih in Business Week.

“The worst case is a pretty large-scale financial crisis around 2012,” said Shih, a political economist at Northwestern University in Evanston, Illinois, who spent months researching borrowing transactions by about 8,000 local-government entities. “The slowdown would last at least two years and maybe longer...

By Shih’s count, China’s debt may reach 39.838 trillion yuan ($5.8 trillion) next year. His forecast for debt-to-GDP compares with an International Monetary Fund estimate for China of 22 percent this year, which excludes local-government liabilities. The IMF sees Spain at 69.6 percent, the U.S. at 94 percent, Greece at 115 percent and Japan at 227 percent.

More in Business Week.

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Victor Shih is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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Billionaires "China's new nobility" - Rupert Hoogewerf

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Rupert Hoogewerf, compiler of the Hurun Rich List, describes China's growing number of billionaires as its "new  nobility, in the Global Times.

The Global Times:

In his eyes, a billionaire in Beijing should usually own three houses, a villa in suburb, a condominium in the urban field and a courtyard house, as well as an art collection of some kind.

A survey from the Hurun report showed that a billionaire in Beijing consumes 6.88 million yuan worth of goods a year.

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Rupert Hoogewerf is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

Stronger Renminbi will cost jobs - Shaun Rein

Shaun Rein by Fantake via Flickr

China should resist calls from the US to strengthen its current, since that would have a negative effect on the job market, even though many American says China is not playing the game fair, argues Shaun Rein in BusinessWeek.  Those voices include the famous New York Times columnist and economist Paul Krugman.

At a time when the U.S. unemployment rate is just below 10%, not much grabs Congress' attention better than accusations of 1.4 million jobs lost to China. However, China bashers are raising expectations too high with dubious assertions that if the yuan were revalued, manufacturing jobs would suddenly move back to the U.S. and the trade surplus would be reduced. If manufacturers found costs were too high in China, they wouldn't return to the U.S. 

They would just move to countries such as Vietnam and export back to the U.S. from even lower-cost production centers. Nor do Krugman and others take into account the damage a rising yuan could inflict on low-earning workers in China. The Chinese government is under intense pressure from factory owners not to revalue the yuan more than the 20% it has risen since 2005.

According to Rein's assessment at least five million jobs could be hurt in China, and perhaps many more. In the end the value of the Renminbi will go up, but the time is not yet there:

Finally, it is doubtful that constant public pressure by governments to push China to revalue the yuan will work; such calls are almost certainly counterproductive. Reform-minded Chinese officials will be forced to stand strong to appease hard-liners within the government and not come off as too weak. A better strategy should push for change behind the scenes. Krugman is 

not wrong that at some point the yuan should appreciate, but that time has not yet arrived.

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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