Posts Tagged ‘China’

Wierd headline: “Safety in Emerging Markets Bonds”

Monday, August 1st, 2011

It used to be that a headline like the one attached to the story below would have seemed incongruous. Now, we just shake our heads and realize it’s a sign of the times and the current state of affairs. (Click on the story for the full version.)

 

Given the state of global finances, perhaps we shouldn’t find this surprising. Here is a look at debt-to-GDP levels for advanced and developing countries, the constituents of which are defined by FTSE. The developed countries are represented by the blue bars, while the emerging countries are shown in green. Averages are shown in the respective colors.

 

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You won’t believe this

Wednesday, August 4th, 2010

Foxconn is a Chinese company that, according to Wikipedia, Among other things, produces the Mac mini, the iPod, the iPad, and the iPhone for Apple Inc.  The company made a big splash back in May when there was a rash of suicides by workers.

Unlike my previous employer, where the motto was, “the beatings will not stop until the morale improves,” Foxconn apparently decided not to fight the underlying causes but instead to install maximum frustration devices; i.e. suicide prevention nets.  That story can be read here, and you can see a picture below of the nets in place.

As you’ll notice if you jump to the story above, this isn’t breaking news, but this week’s issue of The Economist had the following headline:  “The Rising Power of the Chinese Worker.”  They see this–not the suicides, exactly–ending well, to which the subtitle attests:  “In China’s factories, pay and protest are on the rise.  That is good for China, and the world economy.”

In short, instead of being the low-cost producer of all things Walmart, China is–grudgingly, it seems–on the path–or The Economist insists it should be–toward becoming a consumer of the worlds’s goods, not necessarily just a producer.  The magazine, or as the English call it, the newspaper, estimates that if China’s consumption rises by 20% it could lead to increased U.S. exports of $25 billion.  “That could create over 200,000 American jobs.”

As if by decreeing it he somehow hopes to will it into being, the President declared that he will double exports over the next five years.  That would be a massive feat, but this article and, hopefully, this trend might be a key way to do it.   Perhaps instead of trying to bully the Chinese into revaluing the Yuan, which seems more likely to produce intransigence, we ought to make things the country’s workers can’t resist.

In the meantime, the Chinese–or at least the folks in charge at places like Foxconn and Honda–need to address the underlying issues behind the suicides.  Maybe issue is a better word.  Most protesters–including those at a Honda plant–base their complaints on compensation, not working conditions.  Indeed, most solutions are to increase compensation, and that may need to be more than just an ad hoc appeasement tactic, it may be required to induce more workers from inland China to leave the countryside and come into the city.  There is concern that the labor pool is drying up, and the country’s one-child policy is not helping.  The “number of 15-29 year-olds will fall sharply next year,” according to The Economist.

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Weekly Recap & Outlook – 07.09.10

Friday, July 9th, 2010

Tower Private Advisors

Below

  • Summer rally underway
  • Mixed economics, but Jobless Claims poised to improve

Prior posts

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