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clay dubeOne of the themes we sought to touch upon during the tour was the dramatic economic development that has occured in China since the late 1970s. I've attached an AP article about Ikea opening its largest Asia store in Beijing. Some of you may have noted that we had an Ikea just north of our hotel in Shanghai. In a moment I'll attach a couple of photos.
clay dubeOne image. I wish I was permitted to photograph within the store, where to mark the 8th anniversary of Ikea's presence in China, they had Chinese women in Swedish garb singing what seemed to be Swedish folk songs.
clay dubeAnother image, note the shoppers headed off to the subway.
AnonymousConsidering the vast amount of growth throughout China, I am not suprised that IKEA has found yet another happy home! In each city we visited, I remember discussing the change and modification of housing with almost everyone. From the architecture to the quantity, we all agreed that the housing growth not only reflects the economic grwoth of China, but many of the newer designs reflect western homes. For example, in Beijing, I remember seeing a billboard of a man who was a realtor, standing proud infront of a single family stucco home with red tile roofs, very similar to our "suburbia" track homes.
clay dubeYou've seen the Ikea picture and you saw furniture shops and more in China. But did you see a Home Dept? The attached article explains the giant retailer's go slow approach and also provides information about buying a new home in China -- no "turn key" jobs, as we explained during the visit, one buys a shell and then needs to finish everything.
The article is from the 5/1/06 issue of BusinessWeek.[Edit by="Clay Dube on Apr 29, 7:51:51 AM"][/Edit]
clay dubeThe LA Times (4/29/06) offers the attached article on China's richest families and individuals.
AnonymousIn Xian, we asked Jessica why there were so many KFC and Pizza Huts. I expected to see more McDonalds. She said that KFC made it to China a full 10 years before CPK, therefore the chicken place had more of a hold on the population than McDonalds. If only I could develop a product or service to fill a need there. So many people that would need my product!
AnonymousI had lunch with my uncle today and he asked if we saw the Starbucks in the Forbidden City. I told him there wasn't one. Maybe he was thinking of Tianamen square, but he was convinced he saw something on 60 minutes that there was a starbucks in The Forbidden City. Is that true?
AnonymousNever mind, I answered my own question
Forbidden City Store
No. 4 of Jing Shan Qian Jie
Dongcheng District
Beijing, Beijing 100009
That's just wrong!
clay dubeKFC is more popular in many places in China than McDonalds, but McDonalds is big enough. Read more about how Ronald McDonald and the crew moved into East Asia in Golden Arches East available in a second edition from Stanford University Press (the first ed is probably available cheap via net sources. My friend and colleage, Yunxiang Yan, is the author of the China section.
http://www.sup.org/book.cgi?book_id=%203207
I have attached an H-Asia review of the work.
clay dubePeter Hessler is a graceful writer and one of the sharpest observers of contemporary China. I enthusiastically recommend his River Town on teaching in Sichuan and Jonathan Spence endorses his new book Oracle Bones. I've attached Spence's review. If you'd like to read either of these works and write a review from the perspective of a teacher, please do. We'd love to see your observations in the Asia in My Classroom forum.
AnonymousOn a similiar note, I also asked Jessica questions about these American franchises in China. I was interested on Jessica's opinion of body image in China.... its the counselor in me. Not suprisingly, she stated that over the past 10 years, obesity is on the rise, especially in children. In her opinion this is due to the growth of KFC, McDonalds, and Pizza Hut in China. For some reason, this did not suprise me!
Anonymoushttp://www.nytimes.com/2006/07/11/business/worldbusiness/11yuan.html
SHANGHAI, July 10 — China reported a record trade surplus with the rest of the world on Monday, the largest monthly trade imbalance any country has ever recorded and one that is likely to heighten trade tensions, particularly with the United States and Europe.
The government said that the surplus in June reached $14.5 billion, a record for the second month in a row, eclipsing each of the giant surpluses recorded by Japan in the last few decades.
China’s results were released on the day that Henry M. Paulson Jr., the former chairman of Goldman Sachs, was sworn in as the American secretary of the Treasury, a bit of timing that underscored the challenge Mr. Paulson faces. Because he played a pivotal role in expanding Goldman Sachs’s China business, traveling there frequently in the last few years, Secretary Paulson is expected to use his influence to coax Chinese officials into taking steps to close the trade gap between the two countries.
Officials in Beijing said that in June, exports soared 23 percent, to $81.3 billion, while imports rose 18.9 percent, to $66.8 billion.
Economists say the huge surplus is likely to compel officials in the United States and Europe to increase pressure on the Chinese government to allow its currency, the yuan, to appreciate against the dollar and other currencies as a way of reducing the trade deficits.
Some economists also warn that China’s growing trade dominance creates significant imbalances in the global economy. Already this year, China overtook Japan to hold the world’s largest foreign currency reserves, now about $875 billion, and is on track to reach reserves of $1 trillion by the end of the year. That figure would represent nearly half of China’s gross domestic product.
While placing a great deal of the global surplus and credit in the hands of China, the global imbalance also helps to saddle the United States with much of the world’s debt, creating a lopsided economic relationship that can be destabilizing, particularly to currency exchange rates.
If such imbalances become more exaggerated, these economists argue, the dollar could slide further and the global economy could face a serious downturn.
“This is a significant number,” Dong Tao, an economist who specializes in Asian countries other than Japan at Credit Suisse, said of the monthly trade imbalance. “We’re expecting a trade surplus in China of $130 billion this year and a current-account surplus of $200 billion. This is unprecedented.” The current account, the broadest measure of trade in goods and services, includes changes in interest payments.
China has taken some steps to narrow the deficits. Last year, it allowed its currency to appreciate modestly, and promised to gradually allow more gains, though those have been small so far.
Today, the yuan trades at about 7.99 to the dollar, up from its longstanding peg around 8.27 to the dollar before 2005.
The Chinese government is also encouraging consumers to spend more money at home, hoping that the domestic economy will pull in more imports. But as imports have been rising over the last year, exports have climbed at remarkable rates, even after years of double-digit gains.
In May, China reported a $13 billion surplus, surprising many analysts who say that the biggest surpluses for China typically come near the end of the year. And in June, many analysts were forecasting a $13 billion surplus, $1.5 billion less than Monday’s figure, which is a record in recent global trade history according to statistics by Global Trade Information Services, based in Columbia, S.C.
So far this year, China’s surplus with the rest of the world has risen to about $61.5 billion, up 55 percent from a year earlier and on pace to surpass last year’s record of $102 billion.
“This is sure to increase the trade war between the U.S., Europe and China,” said Chen Jianan, a professor of economics at Fudan University in Shanghai.
And China has other problems on its hands. The government has been trying to gently cool down a sizzling economy that grew about 10 percent in the first half of this year, according to official statistics.
In recent months, Beijing has raised interest rates, announced administrative measures to rein in the real estate market, and tried to curb bank lending — all aimed at tempering growth and inflationary pressures.
Yet economic activity still seems frenetic — with Chinese still opening factories, building roads, constructing housing developments, malls and even new cities, particularly in advance of 2008, when Beijing will be host to the Summer Olympics and draw attention to the country.
And money is flowing into the country at an unprecedented pace. China now has the world’s fourth-largest economy, surpassing Britain last year.
Stephen Green, an economist at the Standard Chartered Bank, said that though the new trade surplus was likely to increase pressure on the government to allow its currency to appreciate further, he did not expect any sharp move.
Mr. Tao, the Credit Suisse economist, who uses the Western form of his name, said that a revaluation might be meaningless because the real problem was that American consumers were eager to buy low-cost Chinese goods but that the United States did not have much in return to offer China.
“The U.S. has little to sell back to China but Boeing and beef,” he said. “And this is something China and the U.S. realize.”
Still, he said that the imbalance was a matter of serious concern for the global economy, adding, “A $200 billion current-account surplus is something problematic for the rest of the world.”
Despite its economic advances, China faces significant challenges. If it allows its currency to appreciate, many domestic producers will be squeezed and some companies may move factories to other parts of Asia or elsewhere.
And if China does not act, pressure could mount from outside, possibly to the point of some sort of sanctions.
Analysts say that if no major steps are taken to reverse the trend in trade, the global economy will continue to expand in lopsided fashion, forcing a showdown over credit or interest rates, because these days, Asians are essentially lending the United States the cheap money to purchase Asian goods.
AnonymousAnonymousCheck out Vegas going to China...