13 January 2009
Zero growth, Trade loses and the Foreign Corrupt Practices Act: China business news roundup
A few interesting articles on China from around the web. Some furniture related, some business related – all worth paying attention to:
“â€œThis year is going to be characterized by much, much weaker growth in China than I think people are anticipating,â€ says Jim Walker, chief economist at Asianomics Ltd. in Hong Kong.
The trouble is, China must turn its economic model upside down, relying on growth from within rather than from abroad. Spooked by a 66 percent decline in Chinaâ€™s benchmark stock index last year and growing economic gloom, consumers are more likely to increase saving than spending.”
(From the New York Times)
“Millions of workers have lost their jobs, according to Chinese officials. Others have been given extended furloughs by their employers because there is little work for them. And some workers have resigned from their jobs early to collect their paychecks before an expected wave of bankruptcies in the manufacturing sector over the holidays. A lack of trade finance has also hurt exports. Chinese suppliers have become more wary of shipping goods on the promises of American retailers and other overseas buyers that they will wire the payments later. Exporters are increasingly demanding that overseas buyers obtain letters of credit from banks, and those letters of credit are becoming more expensive and harder to get.”
“Of 25 criminal prosecutions under the law in the last two years, six involved activities in China — the largest number after Iraq and Nigeria.
With Ding gone, Avery’s arrangement to supply reflective materials for police vehicles ended. The same materials that Avery sold for $62 per square meter eventually went for as little as $12, according to Avery salespeople and competitors.
Johnson Jiao, 44, held on to his job until May. Now employed at a new company in a similar industry, Jiao looks back bitterly at his three years with Avery. “All my values were blurred,” he said. “I didn’t know what was right or wrong.” “
Slippery slope here, is all I can say…
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