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News :: Globalization : International : Labor
Zhibin Gu: heart of China currency issue: outsourcing, export, jobs, tech and politics in post global financial crisis era
by globalization forum
31 Mar 2010
Is weak Chinese yuan to blame for causing global financial crisis? What is really behind China's stock market, trade, outsourcing and politics in light of the next stage world wealth, employment and investment? Get challenging ideas.
China and the New World Order:
How Entrepreneurship, Globalization, and Borderless Business are Reshaping China and the World (Book Excerpts)
by George Zhibin Gu
Foreword by William Ratliff
Publisher: Fultus; 248 pages
taken from; http://www.financialsense.com
Chapter 6. China's Competitiveness vs. a Rising Yuan
China's surprise revaluation of the yuan on July 21, 2005, has raised many questions and issues. As a result, both inside and outside of China, there has been a great deal of commentary on how different sectors of China's economy stand to gain, or lose, from the policy change.
But the most important question is how the stronger yuan will affect China's competitiveness over the long term. A serious analysis shows that the revaluation could boost China's general competitiveness. And the entire world may benefit from a more competitive Chinese economy.
China's most basic economic challenge for the next generation will be to move from a low-value-added, investment-driven economy to a high-value-added, efficiency-driven one. The stronger yuan and the outside world will both play a significant role in causing this shift.
Business Chains: China's Hidden Strength
China's vast underpaid labor force is widely regarded as the foundation of the nation's competitiveness. But cheap labor is not the key ingredient in the recipe. True, the average manufacturing job in China pays only $115 per month. But many other developing nations, such as India and Indonesia, have a large supply of inexpensive labor, yet China has pulled ahead of them, and other developing nations, as a top business and investment center. Why?
China's Banking, Insurance, and Stock Market Reforms
China's economic expansion has given birth to many new things, especially a stock market as well as a booming insurance industry. But there are tremendous problems still. The basic problem is continuing bureaucratic domination, which has produced vast messes. For example, commercial banks have hardly performed though the nation抯 economy has been expanding fast.
Resolving these problems now takes central stage. What is really needed is for the government to completely withdraw from the business sphere. But until lately, no decisive actions had taken place. Happily, this urgently needed reform is being pursued more actively now.
Several reform measures are taking place simultaneously in banking, insurance, and the stock markets. These actions are aimed at cleaning up the mess created by overextended government power. In particular, foreign banks, insurers, and investors are being invited to take part in the reform process. Consequently, more opportunities are emerging for international parties. These measures may in the end avoid huge disasters for China.
Chapter 15. The Explosive Insurance Market
One day recently, while I was sitting in a Beijing hotel lobby waiting for a business lunch, a nicely dressed, pleasant young Chinese man started a conversation. We exchanged business cards, and he turned out to be an insurance man. Scenes such as this, long common in other parts of the world, have now come to China, in a big way.
A rising standard of living invariably brings with it an insurance industry as people try to protect what they have. With more than 3 million workers in the sector, China now has an exciting, fast-growing insurance industry. It is a remarkable change from the recent past.
Only 20 years ago, Chinese citizens had rather a simple life, and perhaps 98% of them did not even know what insurance was. Today, hundreds of millions of citizens hold policies of every sort, from health to life to property. The commercial insurance business has come a long way, from nonexistent during the Mao era to explosive today.
(China's insurance history is this: By 1958, the government shut down all existing insurance companies. In 1980, the very first state-owned insurance company reemerged.)
And the Chinese public has made equally rapid strides in accepting insurance products as a routine part of life. In today's urban China, talking to an insurance agent is nearly as common as talking to your neighbor. Industry observers expect that, in time, holding an insurance policy will become as popular as having a mobile phone. In the rural regions, insurance commerce is also spreading, though not as fast as in the urban regions today.
This book consists of 26 chapters, which are organized into eight parts:
I. China's New Role in the World Development
Ch 1. China's social changes vs tourism
Ch 2. Whose 21st century?
Ch 3. Go east, young man!
Ch 4. Everyone in the same boat
ch 5. Power and limits of later developers
II. The Yuan, Trade, and Investment
ch 6. China's competitiveness vs rising yuan.
ch 7. Where to invest your money?
ch 8. Behind a rising yuan
ch 9. Beyond textile trade wars
III. China's Fast-Changing Society, Politics, and Economy (in light of Chinese and global history)
ch 10. Lessons from Shenzhen, China's new powerhouse.
ch 11. Hunan province: from red state to supergirl and superrice.
ch 12. A revolution of Chinese professions
ch 13. What is the Chinese bureaucratic tradition?
ch 14. Why does Beijing want to reform?
IV. China's Banking, Insurance, and Stock Market Reforms
ch 15. The explosive insurance market
ch 16. Chinese banks on the move, finally.
ch 17. lessons from China's stock market.
V. Chinese Multinationals vs. Global Giants
ch 18. The coming of age of Chinese multinationals.
ch 19. Behind Chinese multinationals' global efforts.
ch 20. China's technology development.
VI. The Taiwan Issue : Current Affairs and Trends (federation as an alternate way for unity)
ch 21. Federation: the best choice for Taiwan and mainland China.
ch 22. Taiwanese businesses in the mainland.
a vibrant Taiwanese force.
What is the next?
Will Spring follow winter?
VII. India vs. China : Moving Ahead at the Same Time
ch. 23. China and India: can they do better together?
ch 24. Uneven development: India vs China.
VIII. The Japan-China Issue : Evolving Relations in Light of History
ch 25. Japanese business in China.
ch 26. Japan's past aggressions vs current affairs.
Author George Zhibin Gu is a journalist/consultant based in China. He has written three other books: 1. China's Global Reach: Markets, Multinationals and Globalization (Fultus, 2006); 2. Made in China: National and Business Players and Challengers under Globalization and Capitalism (English edition forthcoming, 2007); and 3. China Beyond Deng: Reform in the PRC (McFarland, 1991)
This work is in the public domain