China
Inland shift of China’s core, a dream yet to come true
In May, Liu Junwei, head of Refiner Technology Corp., moved his company to Nanchang, capital city of Jiangxi Province, and away from the southern boomtown of Shenzhen. Liu’s company makes LED screens, which are exported to the United States, Japan and European countries. Rising labor costs and a shortage of labor in Shenzhen made him decide to shift inland. “In Shenzhen, it has become impossible to hire a skilled worker for the usual monthly pay of 1,500 yuan (223.8 U.S. dollars),” Liu sai …
In May, Liu Junwei, head of Refiner Technology Corp., moved his company to Nanchang, capital city of Jiangxi Province, and away from the southern boomtown of Shenzhen.
Liu’s company makes LED screens, which are exported to the United States, Japan and European countries. Rising labor costs and a shortage of labor in Shenzhen made him decide to shift inland.
“In Shenzhen, it has become impossible to hire a skilled worker for the usual monthly pay of 1,500 yuan (223.8 U.S. dollars),” Liu said. The monthly minimum wage was 1,100 yuan for a worker in Shenzhen, but in Nanchang, the level falls to 720 yuan.
Liu has hired more than 130 staff in his new plant and planned to recruit 370 more workers. He anticipates revenues of 50 million U.S. dollars this year.
Like Liu, increasing numbers of manufacturers are relocating their plants from China’s east coast or building new plants in the inland region.
A main role of the inland region in China’s boom of the past three decades has been to supply labor to the coastal areas. However, the industrial community is now moving inland from the eastern and southern provinces.
Economists believe the inland shift could be crucial to China’s economic prospects. As the country seeks sustainable growth during increasing economic uncertainties, the accelerated development of the inland would provide a new boost, they said.
On September 6, the Chinese government released a directive to encourage the process of relocating industry inland. Taxation, finance, investment and land policies would be used to support the effort, according to the directive.
It warned local officials to adhere to a market orientation and avoid administrative meddling.
The preferential policies, improving transportation infrastructure and huge market potential all become the main attraction of the inland region, Zhang Zhiwei, an analyst at China International Capital Corporation, said in a report e-mailed to clients.` According to the report, since 2008 the Pearl River Delta and Yangtze River Delta regions have been less attractive for foreign investors, compared with the inland provinces, because of rising labor and land costs.
For the inland region, industry transfers would promote the increase in government revenue and residents’ earnings, which would then boost investment and consumption, Zhang said.
However, it is still not the time to say industry transfers would lead to an inland shift of China’s economic core as many challenges remained, economists said.
After four months operating in Nanchang, Liu found the business reality was not as ideal as he previously thought. For him, the trouble is overall costs increased 20 percent because of higher logistics spending as he had to turn to Shanghai ports for import and export.
Further, workers’ production efficiency was lower here, he said.
Considering the production efficiency problem, the inland areas’ labor advantage would decrease, said Shen Minggao, chief economist for Greater China at Citigroup. Higher operating costs would also make the inland region lose its lustre, he said.
To help the central and western regions catch up with the coast, China has many regional development plans, including plans to develop the western region, to promote the rise of the central areas and rejuvenate the northeast industrial base.
However, in terms of infrastructure facilities, industrial coordination capability 
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Inland shift of China’s core, a dream yet to come true
After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2 % against the US dollar and moved to an exchange rate system that references a basket of currencies.
The government vowed to continue reforming the economy and emphasized the need to increase domestic consumption in order to make China less dependent on foreign exports for GDP growth in the future.
China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.
The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.
Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.
A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.
The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.
The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade.
In this period the average annual growth rate stood at more than 50 percent.
China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.
Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.
Since the late 1970s, China has decollectivized agriculture, yielding tremendous gains in production.
In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.
China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).
China is one of the world’s major mineral-producing countries.
Alumina is found in many parts of the country; China is one of world’s largest producers of aluminum.
The largest completed project, Gezhouba Dam, on the Chang (Yangtze) River, opened in 1981; the Three Gorges Dam, the world’s largest engineering project, on the lower Chang, is scheduled for completion in 2009.
Beginning in the late 1970s, changes in economic policy, including decentralization of control and the creation of special economic zones to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.
In the northeast (Manchuria) are large cities and rail centers, notably Shenyang (Mukden), Harbin, and Changchun.
China
China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
In November 2024, China’s economy exhibited mixed results: industrial production rose by 5.4%, while retail sales grew only 3%, below forecasts. Fixed asset investment also faltered. Policymakers are anticipated to introduce measures to stimulate domestic demand and combat deflation.
China’s economy showed mixed performance in November 2024, with industrial production and exports showing resilience, while retail sales and fixed asset investment underperformed, amid ongoing challenges in the property sector. Policymakers are expected to implement targeted fiscal and monetary measures to boost domestic demand and address deflationary pressures.
The National Bureau of Statistics (NBS) has released China’s economy data for November 2024, revealing a mixed performance across key indicators. Retail sales grew by 3 percent year-on-year, a significant slowdown from October’s 4.8 percent growth and well below the 4.6 percent forecast. Industrial production, however, showed resilience, rising by 5.4 percent and exceeding expectations of 5.3 percent growth.
The property sector continued to drag on the broader economy, with real estate investment contracting by 10.4 percent for the January-to-November period, further highlighting the challenges in stabilizing the sector. Fixed asset investment also fell short of expectations, growing by 3.3 percent year-to-date, down from 3.4 percent in October.
In November, China’s industrial value added (IVA) grew by 5.4 percent year-on-year (YoY), slightly accelerating from the 5.3 percent recorded in October. This modest improvement reflects continued recovery in key industries, supported by recent stimulus measures aimed at stabilizing the economy.
The manufacturing sector led the growth, expanding by 6.0 percent YoY, while the power, heat, gas, and water production and supply sector grew by 1.6 percent. The mining industry posted a 4.2 percent YoY increase. Notably, advanced industries outpaced overall growth, with equipment manufacturing and high-tech manufacturing rising by 7.6 percent and 7.8 percent YoY, respectively, underscoring the resilience of China’s innovation-driven sectors.
Key product categories showed robust output gains in November:
From January to November, IVA increased by 5.8 percent YoY, maintaining steady growth over the year despite headwinds from a slowing property market and external uncertainties.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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China
Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
Since Russia’s 2022 invasion of Ukraine, some Chinese citizens express dissent through potential boycotts of Russian goods, reflecting a complex relationship despite government support for Russia.
Since Russia invaded Ukraine in 2022, the Chinese government has been criticised for its refusal to condemn the war. In 2024, the economic and diplomatic relationship between the two nations appears stronger than ever.
Because of strict censorship and repression imposed by the Chinese Communist Party (CCP), it is difficult to know the extent to which the general public shares their government’s support of Putin’s regime. But a newly published study I carried out with colleagues found that more than 10% of Chinese people surveyed were willing to boycott Russian goods over the war in Ukraine.
This is a surprisingly large figure, especially since existing surveys indicate that Chinese people hold a broadly positive view of their neighbour. We used a representative sample of 3,029 Chinese citizens for this research, to dig into public attitudes to Russia. The survey was done in 2022 after the Ukraine invasion.
We were aware that due to widespread censorship, our participants might not be willing to give honest answers to questions about Russia’s actions in Ukraine. They might also not feel safe to do that in a regime where disagreement with the CCP’s position is often met with harsh punishment. This is why we asked them to tell us if they would be willing to boycott Russian products currently sold in China.
We felt this question was a good indicator of how much the participants disapproved of Russian foreign policy in Ukraine. More importantly, we were also curious to find out whether Chinese citizens would be willing to take direct political action to punish Russia economically for its aggressive behaviour.
In our study, we split respondents into the three different ideological groups in China: “liberals”, who support the free market and oppose authoritarianism; “the new left”, who sympathise with the policies pursued in China under Mao Zedong; and “neo-authoritarians”, who believe the Russian-Ukrainian conflict is an extension of the rivalry between authoritarian China and the liberal United States. These groups were based on the main political beliefs in China.
We found that liberals were most likely to say they were willing to boycott Russian products. Liberals believe that China should work with, rather than against, western democracies. They also place a high value on human rights and democratic freedoms. Because of their beliefs, they are likely to think that Russia’s actions against Ukraine were unprovoked, aggressive and disproportional.
Chinese and Russian economic and diplomatic relations seem closer than ever in 2024.
American Photo Archive/Alamy
The new left and neo-authoritarians we surveyed were more supportive of Russian products. The new left see Russia as a close ally and believe that Nato’s expansion in eastern Europe was a form of aggression. Neo-authoritarians, on the other hand, believe that supporting Russia, an allied autocracy, is in China’s best interest.
Boycotting Russian goods
Asking Chinese participants if they are willing to boycott Russian products might seem like a simple matter of consumer preferences. However, our study reveals a great deal about the way in which regular citizens can express controversial political beliefs in a repressive authoritarian regime.
Boycotting products of certain companies has long been studied in the west as a form of unconventional political action that helps people express their beliefs. However, in the west, boycotting certain products is simply one of many ways people are able to take political action. In a country such as China, boycotting a Russian product might often be the only safe way to express disagreement with the country’s actions.
This is because citizens do not have to tell others they chose not to buy a product, and their actions are unlikely to attract the attention of the authorities.
Since Russian goods are readily available to Chinese consumers and China is encouraging more Russian exports to reach its market, the Russian economy could be significantly affected by an organised boycott campaign in China. The considerable level of support for a boycott expressed by some of our participants, as well as previous acts of solidarity with Ukraine in China, suggest that such a campaign could already be taking place in the country.
This could harm Russia because it regularly exports a number of different products such as meat, chocolate, tea and wine to China. These goods made up 5.1% of China’s total imports in 2023 – and this figure is likely to increase if Russia becomes more isolated from the west, and therefore more dependent on China for its trade.
While 5.1% of the Chinese market might seem like a low figure, China is home to over 1.4 billion people. In this context, even a small boycott could result in a serious loss to Russian companies.
Our research shows that Chinese citizens don’t always support the official position of the communist party. It also shows that many people there will express even the most unpopular political opinions – if they can find a safe way to do it.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
China
Australia Can Enhance China’s Credibility in the CPTPP
In early 2024, China sought to join the CPTPP, potentially offering modest economic benefits to Australia. Key reforms include limiting state-owned enterprise subsidies, enhancing data flows, and banning forced labor.
China’s Interest in the CPTPP
In early 2024, China expressed a keen interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement involving eleven Pacific Rim economies and the United Kingdom. This move is anticipated to yield modest economic benefits for Australia. However, it also opens the door for vital reforms in areas such as the control of subsidies for state-owned enterprises, allowing free cross-border data flows, and prohibiting forced labor practices.
Economic Implications for Australia
A May 2024 report from the Australian Productivity Commission indicated that China’s accession to the CPTPP might raise Australia’s GDP by only 0.01%. This modest gain isn’t surprising, given Australia’s existing preferential trade arrangement with China through the Regional Comprehensive Economic Partnership. Nonetheless, the CPTPP encompasses more than just tariff reductions, focusing on broader trade principles and standards.
Reform Commitments Required from China
For China to become a CPTPP member, it must demonstrate adherence to high-standard rules initially developed with the country in mind. This commitment will help alleviate concerns among member nations like Japan and Canada, particularly regarding China’s economic practices and geopolitical tensions, such as those with Taiwan. Membership would necessitate reforms, including limiting SOE subsidies, enabling freer data flows, and banning forced labor, with significant penalties for non-compliance.
Source : Australia can encourage China’s credibility in the CPTPP
- China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
- Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
- Australia Can Enhance China’s Credibility in the CPTPP
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- China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
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