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A Map of Two Chinas — Internet Penetration and Economic Development

A Map of Two Chinas — Internet Penetration and Economic Development | China: Pre-U Economics | Scoop.it

On Friday, China’s National Bureau of Statistics announced that income inequality in the country exceeds a warning level set by the United Nations.

China’s publication of its Gini coefficient – a widely used measure of economic equity – drew attention for a number of reasons. For one, China has not published its Gini coefficient since 2000. More significantly, China’s figure of 0.47 exceeds a UN-established benchmark of 0.4, indicating an increased risk of social unrest.


Via DOSID
Graham Watson's insight:

Another great find, courtesy of China Commentary - I've started to follow it. It looks a fascinating source of China material. This little article looks at formal and informal indicators of welfare and implies that there are increasnigly 'two' Chinas.

 

Well worth a look.

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DOSID's curator insight, February 23, 2013 8:27 PM

"

In terms of the production of online content, the gap is even wider. Beijing-based websites host over 38 billion web pages, or an average of 1,890 pages per city resident. Tibetan-based sites host fewer than 3.5 million pages, or just over one page per person.

 

Tea Leaf Nation highlights some of the CNNIC findings in the maps below, which show that Internet penetration corresponds roughly with the level of economic development by region (with the notable exception of Inner Mongolia, a resource-rich but sparsely populated area)."

China: Pre-U Economics
All things Chinese - for Paper 3 of the Pre-U Course
Curated by Graham Watson
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GSK in China - where now? - YouTube

GlaxoSmithKline must pay the largest corporate fine ever levied in China after its subsidiary there was found guilty of bribery. Lex's Oliver Ralph and Joseph Cotterill discuss what changes the pharmaceuticals group will have to make in the country.

Graham Watson's insight:

The FT take on GSK's humiliation in China - they look at the implications for the company in the Chinese market.  Whilst the size of the fine isn't massive for a company like GSK, the company will need to change the nature of its business there.

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China 'injects $81bn' into top banks

China 'injects $81bn' into top banks | China: Pre-U Economics | Scoop.it

China's central bank is said to be injecting 500bn yuan ($81bn; £50bn) into the five biggest state-owned banks to counter slowing growth in the world's second-largest economy. The People's Bank of China (PBOC) is reportedly giving each bank a $100bn low-interest loan over three months. The move may be the first of several stimulus measures, analysts say.

Graham Watson's insight:

Well, Quantitative Ease me. China's government has acted to head off the prospect of slowing growth by acting to stimulate the economy. The government is clearly concerned that they might miss their 7.5% growth target, and this has implications for employment creation and, by inference, social stability. However, getting the size of the injection right will be problematic.

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China promises much but it won't be easy

China promises much but it won't be easy | China: Pre-U Economics | Scoop.it

In China, anything is possible, but everything is difficult. That is how one participant at Summer Davos, the annual meeting of the World Economic Forum in China, described doing business in China to me. It's not the first time that I have heard that phrase, but after listening to the speech of the Chinese Premier Li Keqiang and chairing a few sessions, I was duly reminded.

Graham Watson's insight:

Linda Yueh reports from 'the Summer Davos', WEF event in China - and encapusulates a great deal of the ambiguity of China in a brief article. It's certainly the land of the possible, although many might suggest it's equally the land of the unlikely.

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China investment at 'record high'

China investment at 'record high' | China: Pre-U Economics | Scoop.it

China was the world's third largest investor in 2013 for the second year running, according to state news agency Xinhua. Outbound direct investment (ODI) from China reached a record high of $108bn (£66.98bn) last year, a 22.8% rise on ODI made in 2012, the agency said. Meanwhile, on Sunday the government said it would relax rules for Chinese companies making overseas investments.

Graham Watson's insight:

Investment into China may be falling, but investment bvy China overseas might be on the increase...

 

More from the imperial kingdom of Push-Me, Pull-Me Economics in due course.

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The growing threat to our recovery

The growing threat to our recovery | China: Pre-U Economics | Scoop.it

I've returned from my short break to a world that looks pretty messy - and (very sorry) I am suffering from a degree of trepidation at the start of the new school term (and that's not just because of my beloved Arsenal's traditionally erratic start to the new season).

 

Graham Watson's insight:

Peston's back with an overview of the current state of play. I could have written this myself...

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▶ Concerns grow over China's property market - YouTube

The FT's Beijing Bureau Chief, Jamil Anderlini, reports on China's real estate sector and examines the signs of a property bubble developing in the market.

Graham Watson's insight:

Another 'ghost town' in the 'wilds' of China?  Yujiapu  is intended to be a new global financial centre to rival Manhattan but is it the height of folly, and a visible indicator of the end of the property bubble?

 

This is well worth a watch for some remarkable statistics about the amount of cement that China has produced and the contribution of the construction sector to Chinese GDP. A great piece for a wet Tuesday morning.

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Amazon in Shanghai e-commerce pact

Amazon in Shanghai e-commerce pact | China: Pre-U Economics | Scoop.it

Amazon has stepped up its presence in China with a strategic partnership with the Shanghai Free Trade Zone (FTZ). Amazon's branch in China has signed a memorandum of understanding (MOU) with the Shanghai FTZ and Shanghai Information Investment Limited (SII). The deal paves the way for Amazon to bring millions of its e-commerce product offerings from around the world directly to Chinese customers.

Graham Watson's insight:

But alas, might Alibaba and JD.com not already have first mover advantage? And if so, how can Amazon compete? You would assume that they are selling homogenous goods, but might Amazon be trying to exploit its 'brand' - and if so, can this be done in e-commerce...

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UK urged to attract Chinese tourists spending £650-a-day - Telegraph

UK urged to attract Chinese tourists spending £650-a-day - Telegraph | China: Pre-U Economics | Scoop.it
A survey of Chinese travellers unveils the importance of shopping as the Government is urged to continue relaxing tourism visas to make the UK a more attractive destination
Graham Watson's insight:

Little known fact - Bicester Village, is one of the  most popular UK tourist destinations for Chinese tourists. And this article highlights why they are coming, and why their spending could represent a significant injection into the UK economy.

 

So we need to sort out our visa regulations to encourage them to come!

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China manufacturing growth speeds up

China manufacturing growth speeds up | China: Pre-U Economics | Scoop.it

China's manufacturing activity grew at its fastest pace in 18 months in July, an initial survey by HSBC showed, the latest in a series of signs that the country's economy may be stabilising. The bank's purchasing managers' index (PMI), a gauge of the sector's health, rose to 52 in July, from 50.7 in June. A reading above 50 shows expansion. It is the second successive month in which HSBC's PMI has been above that level.

Graham Watson's insight:

Chinese manufacturing data is always worth treating with extreme skepticism, but in this case there appears to be some sort of pattern emerging, suggesting that growth is returning. This is a good thing, although quite how this fits with rebalancing is anyone's guess. The most recent FYP explicitly stated that growth should be 7.5% and more balanced - and the figures for April to June suggest, conveniently enough, that the economy is growing at that rate.

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▶ China commodities -- fiction and fact - YouTube

Anne Stevenson-Yang, co-founder of J Capital Research, says China's demand for commodities is partly driven by the need for physical collateral, such as gold, to finance business.

Graham Watson's insight:

This is a fantatstically insightful piece of reporting from 'Camp Alphaville' - with Anne Stevenson-Yang introducing an interesting perspective on Chinese demand for commodities. Iron ore and other commodities are increasingly be used as collateral bypassing traditional finance markets. However, the other angle is that it throws further doubt upon the usefulness of Chinese data.

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BoE appoints yuan clearing house

BoE appoints yuan clearing house | China: Pre-U Economics | Scoop.it

The Bank of England has appointed one of China's "big four" banks as the Chinese currency clearing bank in London. The China Construction Bank will be the London renminbi clearing house. The appointment is part of a plan to make London a hub for Chinese currency dealing.

Graham Watson's insight:

As China moves towards a convertible currency, this sort of move is going to become more frequent. It will be interesting to track the volume of Chinese currency traded in London and where that money originates from. However, it does suggest a liberalisation of policy.

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China warns that visa restrictions are 'eroding UK's strength' - Telegraph

China warns that visa restrictions are 'eroding UK's strength' - Telegraph | China: Pre-U Economics | Scoop.it
Britain's failure to relax visa restrictions in order to allow more Chinese tourists and businessmen to come to the country is damaging its global "strength", China's ambassador has warned
Graham Watson's insight:

Important to get this right if we are to maintain our favoured position with the Chinese. We currently gain an awful lot, both from FDI but also tourist incomes. We need to ensure that we continue to benefit from China's rise.

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China Will Need A Series Of Miracles To Sustain Growth

China Will Need A Series Of Miracles To Sustain Growth | China: Pre-U Economics | Scoop.it
The problem is that today China is the most significant macroeconomic wildcard in the global economy.
Graham Watson's insight:

A close second for article of the day - again via MR.

 

Another really insightful piece and symptomatic of the quality of material that Cowen and his time scout out...

 

The gist? We're all doomed, captain. China will drag us all down because it cannot avoid a hard landing.

 

And with that: good luck to my top year economists in their China paper tomorrow. If you're reading this on 9th June - then you should be in bed...

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GSK fined $490m by China for bribery

GSK fined $490m by China for bribery | China: Pre-U Economics | Scoop.it
China fines UK pharmaceuticals firm GlaxoSmithKline $490m (£297m) for bribery and its former head of Chinese operations is given a suspended jail sentence.
Graham Watson's insight:

An interesting conclusion to this investigation into the practices of GSK in China. A massive fine, systemic corruption and a suspended jail sentence for its former head of operations - although why it's only suspended, I don't know.

 

Of course, in these Murdochian days, no-one's actually really taking responsibility, and you can't expect executives earning six- or seven-figures salaries to do that sort of thing either...

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China's leaders refuse to blink as economy slows drastically - Telegraph

China's leaders refuse to blink as economy slows drastically - Telegraph | China: Pre-U Economics | Scoop.it
Premier Li Keqiang is determined to drive through deep reforms and wean the economy off exorbitant levels of debt before the damage becomes irreversible
Graham Watson's insight:

Has China changed? This article certainly suggests that the Chinese leadership are keen to reduce the dependence upon double digt growth, provided that employment holds up, and rebalance the economy.

 

Furthermore, commentators have become aware that the tenor of policy is less shrill than it has been in the past.

 

If true, both of these are moves in the right directio. An engaged China, operating within itself and aware of the challenges it faces, will be better placed to help the global economy than one saddled by debt and over-capacity, yet still trying to engineer growth via credit, irrespective of its source.  

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China's inflation below target

China's inflation below target | China: Pre-U Economics | Scoop.it

China's consumer inflation rate rose 2% in August from a year earlier, below the government's target of 3.5% and marking a four-month low. The country's official consumer price index (CPI) figure is its main inflation gauge and the August figure compares with a rise of 2.3% in July. Lower prices for pork, a Chinese staple, contributed to the monthly CPI reading, state news agency Xinhua said.

Graham Watson's insight:

It's tough to get a handle on China, data is never straightforward and rarely lines up like ducks in a row, but in this instance there's mixed evidence regarding consumer demand and business confidence which appears to suggest the possibility of a slight reduction in expenditure. Hence, it shouldn't be a surprise that inflation's below target, even if it's predicted to rise.

 

However, I'm intrigued to see that the inflation target is 3.5% - some analysts argue that UK/European inflation targets are too hawkish and the cost of an overly-harsh target is a significant reduction in output and employment levels.  

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Golden age for foreign companies in China 'is over' - Telegraph

Golden age for foreign companies in China 'is over' - Telegraph | China: Pre-U Economics | Scoop.it
Foreign investment in China plummets as companies' double-digit growth becomes a thing of the past
Graham Watson's insight:

Is this a warning of things to come...

 

A decline in foreign investment means slower technological transfer, a lower investment multiplier and potentially adverse effects for confidence, both among foreign firms and Chinese consumers, perhaps.

 

The beginning of the end, might be too melodramatic. Only time will tell if this marks a significant moment in China's recent economic history.

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China factory growth misses forecast

China factory growth misses forecast | China: Pre-U Economics | Scoop.it

China's manufacturing activity missed expectations in August, indicating that the country's economy may be losing momentum and require more stimulus.The official purchasing managers index (PMI) fell to 51.1 for the first time in seven months from 51.7 in July, the National Bureau of Statistics said. Economists had forecast a reading of 51.2.

Graham Watson's insight:

More push-me, pull-me. I'm increasingly of the view that there's a monkey/octopus/parrot locked somewhere and allowed to choose any number between 50.1 and 51.9.

 

And if there were would it really make so much difference?

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▶ For Rural Migrants in China, Skills Make a Difference - YouTube

http://www.worldbank.org/china - China has seen millions of rural workers migrating to cities. But these migrant workers are relatively poorly educated, with...
Graham Watson's insight:

Just proof that irrespective of where you live, boosting your human capital is essential if you wish to boost your employability, salary and there's also  the fact that these migrants will remit a lot of their higher incomes back to their home villages. Anyone for a Saturday morning multiplier?  

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▶ Chinese property faces bumpy road - YouTube

China has been responding to a housing market downturn with measures to boost demand. The FT's Josh Noble talks to Andy Chang, associate director at Fitch Ratings, about whether looser policy will have the desired effect or lead to longer term problems

Graham Watson's insight:

It is interesting to see how central the property market is to China's future growth prospects. But is this sustainable? The recent economic history of the West suggests not, and that then poses the question of whether it is possible for China to wean itself off this course of action. And if it does what the consequences of this are for both China and the rest of the world.

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China manufacturing growth speeds up

China manufacturing growth speeds up | China: Pre-U Economics | Scoop.it

China's factory activity grew at its fastest pace in more than two years in July, indicating that the country's economy may be stabilising. The official purchasing managers index (PMI) rose to 51.7, from 51 in June, the National Bureau of Statistics said. The PMI is a key gauge of the sector's health and a reading above 50 indicates expansion. The data comes as China has taken a series of steps in recent months to help boost its economic growth.

Graham Watson's insight:

Official confirmation of strengthening Chinese economic actiivity, but as earlier posts of mine have suggested - can we trust the data? Is this necessarily desirable? In the light of both of these concerns, is it worth paying attention to such releases.

 

I suppose the answer to the rhetorical question is that - yes, it is - but only as part of a wider data set - and most China analysts have their own favourite data source...

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China detains five over meat scandal

China detains five over meat scandal | China: Pre-U Economics | Scoop.it

China has detained five people as part of its probe into a firm that allegedly supplied out of date meat to fast food chains, including McDonald's and KFC. State-owned Xinhua news agency said the five were held by the Shanghai police, but did not give any further details.

Chinese regulators suspended operations of Shanghai Husi Food earlier this week after reports in local media claimed it re-processed expired meat.

Graham Watson's insight:

An example of one of the problems of doing business in China - there are still issues with contamination and so on - and thus not everything is exactly what it says. What with scandals involving everything from baby milk, to the paint in children's toys, this sort of thing isn't good for 'Brand China'.

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Why London is first for Chinese currency

Why London is first for Chinese currency | China: Pre-U Economics | Scoop.it

The Bank of England has hailed the appointment of The China Construction Bank as a renminbi clearing house in London as an "important milestone" in the progress toward greater cross-border use of the currency. And chancellor George Osborne said it was "another major step forward" for the UK as the western hub of Chinese finance. But what does it actually mean? And what will change as a result of the deal? We answer five key questions.

Graham Watson's insight:

A very good, straightforward Q&A from the BBC looking at the establishment of a renminbi clearing house in London. Initially, the implications of this move aren't earth-shattering - however, in the longer-term, there are significant potential benefits, not least if the renminbi's role as a reserve currency continues to grow.

 

However, there's also the symbollic value of closer Sino-UK ties and that can only be a good thing going forward.

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UK poised to push for more Chinese investment - Telegraph

UK poised to push for more Chinese investment - Telegraph | China: Pre-U Economics | Scoop.it
Premier Li Keqiang will visit the UK this week to build on 'indispensable partnership' between countries
Graham Watson's insight:

Britain is well-placed to capitalise on the rise of China, in large part because of the pragmatism of our trade policy, and the fact that we've bene more willing to allow Chinese companies, such as Huawei, to enter British markets where others have used national security arguments to deny them access.

 

However, it isn't a one-way street, not only do British companies increasingly want to do business in China, but there's also a transfer of ideas, with Britain looking to advise China over market-based reforms.

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China takes new steps to boost growth

China takes new steps to boost growth | China: Pre-U Economics | Scoop.it

China has announced new measures aimed at bolstering its economic growth. These include plans to build railways, roads and airports along the Yangtze River - which connects China's less developed inland provinces to Shanghai. Meanwhile, China's central bank said it will encourage banks to lend more to exporters to boost shipments.

Graham Watson's insight:

Clearly, there are still those in China worried about the possibility of slowing growth and the implications of this, particularly for social cohesion. Thus, the government has announced ambitious plans to invest in infrastructure.

 

Quite how all of this ties in with 'rebalancing' I'm not entirely sure, 'c'est plus ca change' perhaps? However, it could be suggested that it this instance the growth measures are targeted so as to diversify income distribution and help exporters/SMEs.

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