The World Bank has raised its forecast for growth in China this year from 6.5% to 7.2% amid signs that the economy is doing better than expected. Bank analysts say the government’s four trillion yuan ($585bn, £358bn) stimulus package has helped the economy. But it says the country’s exports are still down, as the rest of the world struggles with the global recession [Source BBC].
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Leaders of Brazil, Russia, India and China, known collectively as the BRIC countries, will gather for their first official summit in Yekaterinburg, Russia, on Tuesday June 16th.
China and India have continued to grow reasonably quickly despite the global downturn, and although Brazil is in recession many expect it to recover soon. Of the four economies Russia, which is heavily dependent on oil exports, has been the worst affected.
The leaders may discuss long-term plans to find an alternative to the dollar as a global currency. Another possible topic for consideration is trade in commodities: China and India are heavy importers of many commodities such as oil; Russia and Brazil are big exporters of raw materials. [Source FT] [Source BBC]
Even as they struggle through the economic meltdown, car makers can look ahead to a high-growth, flexible, global future according to “strategy+business”.
Research conducted by Booz & Company shows that the global customer base for cars over the next 10 years falls into three broad categories, based primarily on which countries customers live in.
- The rapidly emerging economies (REEs) consist of the so-called BRIC nations (Brazil, Russia, India, and China) and a group of other relatively wealthy developing nations, such as Malaysia, Argentina, Mexico, Turkey, Thailand, Iran, and Indonesia. Millions of families in these countries are making or contemplating the purchase of their first car.
- The lower-growth economies (compared to the REEs) consist of about 100 nations with relatively impoverished populations and poor economic prospects. However, their political leaders are interested in building up the middle class and see personal mobility as a major stepping stone. These countries may become markets for motorised transportation after 2020.
- The mature economies include the established industrialized nations in North America and Europe, and Japan. Population growth and vehicle replacement, rather than economic growth, will determine the market for cars there.
Together, these three groups add up to an enormous amount of market potential. Estimates suggest that more than 370 million additional vehicles could be sold by 2013 and more than 715 million by 2018. Please click here to download the complete article.
Imports to China plunged in January, signalling that demand is shrinking alarmingly: they fell by 43.1% compared with a year earlier, worse than forecast and double the decline in December. But China’s trade surplus, at $39.1 billion, is one of the biggest on record because a huge tumble in exports of 17.5% was dwarfed by falling imports.
Shortly after midday on January 20th, Barack Obama will sit for the first time at the desk where the buck stops. The American presidency is always the world’s hardest and most consequential job, but it seems particularly so this month. A global recession of a severity not seen for perhaps 80 years; a new war in the Middle East and old ones in Africa; missions very far from accomplished in Iraq and Afghanistan; a prickly Russia and a rising China.
These international challenges must jostle for the president’s attention alongside noisy domestic concerns like rocketing unemployment, the desperate need for a better health-care system, exploding deficits and failing cities. The burdens, surely, are too many for one man to bear.
Furthermore, today, BusinessWeek devoted a string of articles to the Olympics as well.
* As Olympics Open, China’s Economy Slows
* Olympics Security Is No Game
* Slide Show: China’s Olympic Stars
* Slide Show: Olympic Innovation
* Case Study: Ambush Marketing
With the 2008 Beijing Olympics, the eyes of the world have turned to China. The McKinsey Quarterly has taken this opportunity to devote its current print issue to the country and its global business prospects. Selections range from a discussion of how Chinese companies can succeed abroad to a special report on how corporate China is evolving. Find here a selection of the McKinsey articles on China.
To date foreign Telecom players like SK Telecom (S-Korea), Telefonica (Spain), and Vodafone (UK) have been limited to minority stakes of under 7% in Chinese telecom operators.
However brighter times for foreign telecom operators may lie ahead! Owing to the ongoing Chinese telecom industry restructuring (consolidation wave) and a planned infrastructure revamp (issuing of 3G Network licenses). As Chinese Telcos are not primarily looking to attract more capital the latter can provide opportunities for foreign players. Respectively for foreign telecom operators that are already engaged in 3G networks in their home markets.
Foreign telecom operators have the technology and experience their Chinese counterparts lack.
“We should attract more foreign investment when we roll out 3G and use other people’s money to build the networks,” says Beijing University of Posts & Telecommunications professor Lu Tingjie (source).
Is all the negative publicity around China over the last few months truly justified? If you look above the surface the answer may be yes. However much change in happing in China below the surface as well. For example China is increasingly opening up to international media: BBC website ‘unblocked in China’.
Although this great initiative there is still a long way to go for complete freedom of speech in China: Stories China’s media could not write. Nevertheless, generation Y in China seems to have much more in common with generation Y in the West as initially thought by most Westerners: China and its Talent, and Modern China.
From a macroeconomic perspective China is well positioned to live upon its potential somewhere within a decade and half a century. Thus somewhere between the medium run (>1decade) and the long run (>half a century) source.
On the medium run the supply side (technology advancement, capital usage, labour force skill fullness) matters more then the demand side (consumer confidence, interest rates).Taking in account the aforementioned, the future seems to be bright cos of the entrepreneurial spirit of China’s generation Y: China’s young entrepreneurs.
The BBC wrote a great article on Chine plc. A must read if you’re interested in emerging markets at large and Chinese emerging giants and its challenges in specific.
Chinese companies remain in a hurry to expand abroad.
“Chinese firms are saying we want to be world-class and we want to do it tomorrow,” says Edward Tse, head of Booz Allen Hamilton’s Chinese management consultancy practice, who has been advising leading Chinese companies for 15 years.
But their hunger has not always been matched by their capacity to get what they want. Among the challenges that China plc needs to grasp, experts argue, is how to use “soft power” to its advantage.
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