Changing China

from MacroScope:

The iPod – the iCon of Chinese capitalism

Walking past Apple's sleek shop along London's Regent Street on Sunday, my wife asked me what I wanted for Father's Day.

"An iPad?" I ventured, half-jokingly.

"Are you sure you want one? Don't you care how they're made?" came her disapproving reply.

She was, of course, referring to the rash of suicides among Chinese workers at Foxconn, the Taiwanese manufacturer of Apple's much desired iPads and iPhones.

The deaths prompted the company to raise salaries and cut working hours but lingering concerns over conditions for its over 1 million workers in China were underscored by a plant explosion last month that killed at least 3 people.

Workers like those who live and work in Foxconn's sprawling Chinese facilities have long been the backbone of the country's vast manufacturing sector which churns out a torrent of consumer goods for export.

But the recent labour unrest that has erupted in parts of China suggests that this low-cost export-fuelled growth model may be wheezing towards its expiry date.

from MacroScope:

Will China make the world green?

Joschka Fischer was never one to mince words when he was Germany's foreign minister in the late '90s and early noughts. So it is not overly surprising that he has painted a picture in a new post of a world with only two powers -- the United States and China -- and an ineffective and divided Europe on the sidelines.

More controversial, however, is his view that China will not only grow into the world's most important market over the coming years, but will determine what the world produces and consumes -- and that that will be green.

Fischer, who was leader of  Germany's Green Party, reckons that due to its sheer size and needed GDP growth, China will have to pursue a green economy. Without that, he writes in his Project Syndicate post, China will quickly reach limits to growth with disastrous ecological and, as a result, political consequences.

This will have serious consequences on the the way the West lives.

Consider the transition from the traditional automobile to electric transport. Despite European illusions to the contrary, this will be decided in China, not in the West. All that will be decided by the West’s globally dominant automobile industry is whether it will adapt and have a chance to survive or go the way of other old Western industries: to the developing world.

This is not the usual view of China. Many greens have long feared the impact of a huge leap in Chinese growth on the global environment -- refrigerators in a billion homes, cars in a billion garages etc.

China’s infertile ground for (some) Western sports

Soccer is in a tight spot in China — literally. Huge crowds roar for Manchester United but the national team is a laughing stock at 108th in FIFA world rankings. Poor coaching, lack of grassroots development, even corruption and violence are variously cited as reasons for the sport’s demise. But the real reason may be more basic: the fact of physical space, or the lack thereof, in China.

If geography is a determinant of economic development, then it is fair to extrapolate that urban geography underpins the development of sports. And here’s the rub for soccer, not to mention American football and baseball. With few parks, small concrete schoolyards and a dearth of quiet streets, urban China offers little of the space needed for the sprawling play that defines those sports. Soccer has deep roots in China, but playing space has been squeezed as cities sprawl and swallow land in big gulps.

The NBA’s huge popularity in China has left other sports leagues salivating. They, too, dream of their own Yao Ming bringing forth TV audiences in the tens of millions and merchandising opportunities galore. But basketball can thank China’s spatial constraints more than its own marketing wizardry for such success. Dozens of nets crammed into schoolyards make the sport accessible to a huge number of young enthusiasts. The ease with which basketball has been woven into China’s urban fabric has a precedent in the explosion of Chinese table tennis in the 1950s. Both are simple enough games that can be played in tight spaces.

Curiously, the physical limitations of the crowded country augur well for one sport that uses more space than almost any other: golf. Unlike baseball, football and soccer, golf does not need a critical mass of ardent supporters to take off. Golf, in fact, can thrive in conditions of scarcity, when a small number of high-priced courses consolidate its position as an elite pastime. The lack of space in China makes it an expensive sport, out of reach for the great unwashed and just the ticket for the country’s nouveau riche.

Photo Credit: Local fans of Manchester United hold signs and posters as they look into the hotel where the players stayed in on July 25, 2009 ahead of a friendly match against Hangzhou Greentown. REUTERS/Nir Elias

from MacroScope:

Victory for emerging BRICs?

Emerging market ministers, particularly those from the BRIC economies -- Brazil, Russia, India and China -- are painting this weekend's G20 meeting as a victory in dragging them out of the shadows of global policy-making.

The finance ministers' statement included the promise of more money for the International Monetary Fund and regional development banks, on whom struggling emerging economies rely for support.

It accelerated a review of IMF quotas by two years to 2011, which should give emerging economies more say in the running of the multilateral lender. It also suggested that the headship of IFIs -- international financial institutions -- would no longer be guaranteed to Americans or Europeans. 

BRIC countries even issued their own communique, ahead of the final statement. "There is a conclusion that has been reached in recent years, which is that the resolution to today's global problems is only possible with the participation of emerging countries," Brazil's central bank governor Henrique Meirelles told MacroScope.

 "There is a natural evolution of the decision-making process, which many important countries agree on, that decisions move from the G7 to the G20."

But were there actually any major concessions?  Tim Ash,  head of emerging Europe, Middle East and Africa research at RBS thinks not.

"Clearly they would like things to change, but I'm not sure that much has actually changed," he says.