US group: China's business environment favorable

Harley Seyedin, president of the American Chamber of Commerce in South China, said that most foreign enterprises considered that the business environment in China is good. The American Chamber of Commerce is an association that represents more than 1,650 enterprises and individual members.

China's economic recovery is well on its way and the investment prospect is very optimistic. The Chamber made a report that stated that more than 90% of the foreign enterprises that took part of a study by the chamber considered China's business environment to be good, very good or outstanding. Also, 90% believed that the business environment has improved compared with 1 year ago.

The report indicates that investors and foreign enterprises are confident about China's economic future. The members of the chamber would invest a minimum of $9.4 billion this year. In the future, they will further increase their investment budget because of the favorable investment environment.

Zhu Jiming, president of the China branch of Caterpillar said that the investment environment of China has improved tremendously since the country joined the WTO in 2001. Since then, a lot of laws and regulations got changed so that the market became more transparant and open for foreign investors and enterprises.

He also said that the press always exaggerates trade disputes between the US and China, but that the trade disputes between for example the US and Canada are outnumbering those by far.

I think that it is important for both Chinese as foreign enterprises that China resists protectionism measures and keeps providing an environment of fair competition in the future. If not, the entire world economy would suffer from major trade disputes that can be avoided if all parties do some efforts.

Tom Bogaert

Source : http://www.chinadaily.com.cn/china/2010-03/31/content_9664659.htm

China steams ahead on clean energy

China isn’t only ahead technologic and export wise, they are also getting ahead on the use of clean energy. They have nearly as much green energy, the so called clean energy, as the United States. Researchers say that China invested nearly twice as much as the United States in clean energy. On the third place of the list you find the UK, followed by Spain and Brazil.

South Korea has known the biggest global growth. The last five years their capacity rose by 250 percent. Despite the global economic recession, the market of clean energy has experienced a globally impressive growth. A reason for this might be the jobs, export opportunities and businesses that the clean energy brings.

The US still has the lead in the total amount of installed capacity, but if China continues the grow, they will overtake the lead. The target of china is having 30GW renewable capacity by 2020. This goal will soon be exceeded by wind energy alone.

In my opinion this is another good move of China to invest in green energy, this will boost their economy even more, because the installation of renewable energy brings new jobs, businesses and it also boost their export, which is already at a top level. This isn’t the first economic affair where they hurt the United States.

Niels Steyaert

Source:http://news.bbc.co.uk/2/hi/science/nature/8587319.stm

Podcast1: Asian Economic Affairs

Link to podcast: http://soundcloud.com/pelzant/podcast1-asian-economic-affairs

Ford Agrees to Sell Volvo to a Fast-Rising Chinese Company

Ford agreed with The Zhejiang Geely Holding Group to sell its Volvo subsidiary.
This Chinese company is willing to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.

It is not the first time that Ford sells one of its brands. Jaguar and Land Rover were sold to the Tata Group of India for $2.3 billion a year ago. Ford has changed its strategy to focus on its core brands and that’s why it is selling all of its luxury brands.

Zhejiang Geely is planning to keep the production of Volvo cars in Sweden, but also to build another Volvo-factory in China.

Michael Dunne, an independent auto analyst, says that it Zhejiang Geely made a strong and smart move with buying Volvo. Buying a well-known brand like Volvo is the fastest way for a young company like Geely Auto to move up.

Many automakers in China are loaded with ambition and it is nice to see that Zhejiang Geely is showing those other companies how it has to be done.

I see this shift from west to east in the car industry as a good thing. These young Chinese companies could actually save the car market.

Bram Verstraete

Source: http://www.nytimes.com/2010/03/29/business/global/29auto.html

Japan retail sales boosted by government stimulus

The retail sales in Japan rose dramatically in February as a result of the government stimulus measures. With their stimulus measures the government has encouraged the consumers to spend more.

Sales rose by 4.2% compared with the year earlier, much more than analysts had expected. They say that this rise in retail sales is too good to be true.
Some of the government stimulus measures will continue until April and others will go on until September. After these stimulus measures expire, there should be a big negative rebound in retail sales.

The consumer prices fell by 1.2% in February from a year earlier, it is the 12th month in a row that the consumer prices have fallen. The Japan’s central bank increased the amount of money that they set available to banks for short-term loans. With this they try to halt the fall in prices

Despite of the government and central bank measures, analysts believe that Japan could be set for a long period of price falls.

The fall of prices is not a good thing for the economy in Japan. I think they should find other measures to slow down or to stop the price falls. The deflation is a sign that the Japan’s economy is starting to show some unhealthy signals. Japan has a history of struggling with deflation, so measures and solutions to stimuli the economy are needed.

Thibaut Delsoir
Source: http://news.bbc.co.uk/2/hi/business/8592222.stm

Japan's consumer prices continue to fall

Over the last 12 months Japan has been struggling with deflation. The prices of consumer goods fell by 1.2% in February with is not that bad, it has been worse. But the predictions for march for Tokyo (which is an indicator for the whole country) are even worse, they show an steeper decline. This deflation causes a lot of problems while people are not willing to buy things today because it might cost less tomorrow. Which leads to a vicious circle of failing company profits.

Now the government is pushing the Bank of Japan to make sure that the prises will start rising. Because this summer there are elections. But they have said that more efforts will be needed, that is why the parliament has passed a record budget of $ 1 trillion. Most of this amount of money is financed by borrowing.

For my opinion i think it is kind of crazy that a country in such problem can stil be the third largest economy behind the US and China. But according to me this is not a problem since the crises started last year. Because I have always heard when you put your money on a Japanese account every year you are losing money instead of making money.

http://news.bbc.uk/2/hi/business/8588399.stm

Rio Tinto signs mining deal with China's Chinalco

The australian mining company Rio Tinto has signed up a deal with the Chinese metal group Chinalco to develop a massive iron ore mine in Africa. The Chinese metal group will invest 1.3 billion dollars or 47% of the Simandou project in Africa.

The two companies did recently have some problems while four employees of Rio Tinto hace been caught and accused for commercial spying. That is whythe Chinese wil not be fully open to the diplomats. The australian embassyin Beijing has confirmed that alle the parts of the trail related secrets will be kept behind closed doors. Although they say this incident will not harm their cooperation in the Simandou project. They said: "the two matters are fully seperated".

It is also a great deal for Guinea because the railway infrastructure wil go through their country witch creates a lot of jobs, what is very good for the gouvernement while there are elections in June.
I hope that they will be able to work together without being suspicious who could possibly leak some information. Because this couok mean severe damage to both companies. But this will certainly be not easy keeping their history in mind. When it might work to cooperate it could mean big opportunities vor both companies.
http:/news.bbc.co.uk/2/business/857537.stm

Samsung chief returns after tax-evasion pardon

The former ceo of Samsung Electronics returned to the company. He was convicted of tax evasion, but was later given a presidential pardon.

Lee Kun-hee headed Samsung Electronics for almost 2 decades before he was accused for tax evasion. Analysts said Mr Lee’s return was good news for the electronics giant. Lee’s return removes what has been an uncertainty for Samsung Group.
Mr Lee, who is 68 year old, his father founded Samsung. He is seen as one of the South Korea’s most prominent businessman. Mr Lee is also one of the country’s richest men.

Lee Kun-hee received a presidential pardon last year, so that he could return to the International Olympics Committee and help South Korea’s appeal to host the 2018 Winter Olympics.

A founding family member in the ownership management offers a long-term vision and helps Samsung to find its long term goals and plans. However there were some discussion about re-appointing a convicted tax evader.

It is good for Samsung that they have found a good leader again. The uncertainty for the Samsung group is now cleared. A good leader in a company as big as Samsung is important for the image of the company. The fact that he is convicted for tax evasion is not so good for the image, but he received a presidential pardon so that problem is solved.

Thibaut Delsoir
Source: http://news.bbc.co.uk/2/hi/business/8584397.stm

U.S. firms worry over business chill in China

57 percent of U.S. IT firms in China expect new rules for government purchases will hurt their business in the fast-growing Chinese market.

New rules requiring government agencies to purchase goods from "indigenous" companies is having a chilling effect on sales. Anything that restricts or reduces access to Chinese customers will restrict or reduce interest in investing or doing business here.

One-third of the 203 companies surveyed by the American Chamber of Commerce have seen their China sales slide as confusion grows over the new directive for China's government agencies to purchase goods from Chinese companies.

Washington is accusing Beijing that it is manipulating its currency, causing it to be undervalued to help boost exports. Commerce Minister Chen Deming said that such allegations were irrational.

Chinese Premier Wen Jiabao said China would resist calls to appreciate the yuan and keep its currency "basically stable” because increasing the value of the yuan could lead the world to a "double-dip" recession. He also urged the United States and the European Union to lift restrictions on exports of certain technology to China.

A political fight between Washington and Beijing would of course impact interest in doing business in China. I think the governement should be careful with these new rules to prevent a collapse of the turnover of all the involved companies. These mesures can have great consequences when taken without care for the economic stability.

Tom Bogaert

Source : http://www.cnn.com/2010/BUSINESS/03/22/china.amchan.survey/index.html

China’s Internet Giants

A lot of big American internet companies, like Yahoo, Ebay and Google, fail to earn a place in the top of the Chinese market. And other companies like Facebook, Twitter and Youtube are blocked by the government.

Instead of these American companies, the market consists of fast-growing companies like Baidu, Tencent and Alibaba. These local firms are making huge profits because of the lack of competitors. The cause of this is due to the Chinese government, who continues to favor domestic companies.

Because those companies are unknown for us, it’s hard to analyze them. Still, the success of Chinese companies here can be measured by the numbers.
For example, the revenue at Tencent, a kind of Internet conglomerate, jumped over 70 percent last year, to about $1.8 billion.

Some analysts say the success of these companies is because of the young people who dominate Web use in China. They’re searching for a lifestyle. A combination of music, games and social networking. These Chinese companies apply these demands and they adjust their websites to be attractive and useful for the Chinese youngsters.
Those companies, however, have a small change to become global brands, because the Western society has other interests.

I think it would be interesting if the American internet companies would use the same strategy as the Chinese companies. If they should study the interests of the local citizens, they could make a better product.


Bram Verstraete

http://www.nytimes.com/2010/03/24/business/global/24internet.html

Chinese netizens divided over Google move

The persons who frequently use the Internet, the so called netizens, have divided opinions about the move of Google. Google is an American internet searching machine. They decided to stop censoring the search results, and automatically direct to the Hong Kong’s unrestricted site.

The majority of the Chinese population says that Google should stop their business in China. They came to China a few years ago and they already try to dictate rules. They also say that Google has to leave the business in Hong Kong, cause it’s also a part of China. China has other alternatives for Google such as “baidu.com” a Chinese searching machine.

The other part of China doesn’t want Google to leave. They say that it’s a tragedy for the Chinese internet users. They support the vision of Google and show anger for the Chinese government.

I do agree with the majority of the Chinese people, Google shouldn’t be allowed to do what they want, they have to obey the law of a country. They came to China to make so much money, it’s not such a big effort to follow their rules. But China will be able to survive in the cyber world without Google, they also have a lot of alternatives to use. But accusations such as “they came here to cause destruction and destroy Chinese unity” are over the top.

Niels Steyaert
Source: http://news.bbc.co.uk/2/hi/asia-pacific/8582556.stm

Japan's central bank seeks to boost lending

The central bank of Japan has increased a stimulus measure, they want to encourage Financial institutions to lend more money.

The central bank has doubled the amount of cheap short-term loans that it is offering to the banks.

The scheme the central bank uses for lending money at a rate of 0,1% was introduced in December to try to tackle the deflation which is threatening Japan’s economic recovery. They want to help the economic recovery by lowering the cost of lending. So the bank voted to hold interest rates at 0,1% the level which they have been since December 2008.

The economy in Japan grew less than first was expected in the final quarter of 2009. The Cabinet Office said the economy expanded by 0.9% between October and December of last year, but they estimated it would be 1,1%.
The bad revision increased the pressure on the Bank of Japan to ease monetary policy. However, with interest rates already down to 0,1% they do not have much room to move.

The continuining process of deflation is not good for an economy as it tends to make consumers and businesses delay major purchases in the expectation that prices will fall further in the future.

I think that with the measures they took they should be able to stop the deflation and so help to recover their economy. It is hard for a lot of countries in the world to keep their chin up in time of the crises, but everything will fall back into place I guess.

Thibaut Delsoir

source: http://news.bbc.co.uk/2/hi/business/8571624.stm

China Drawing High-Tech Research From U.S.

For years, the United States was the number one in high-tech developments in the world. Lately however, more and more U.S. companies and their employees are drawn to China, where the high-tech industry is booming really fast.

Today, Mr. Pinto is the first chief technology officer of a major American Tech company, Applied Materials, to move to China. Also, the company has set up an entire research lab in China because of the high demand for more technology and energy.

But Applied Materials and their employees aren't alone, more and more companies invest directly in the Chinese market by setting up new research and development buildings in the country itself. It is becoming clear that China is becoming a high-tech economy that increasingly competes directly with the United States.

The 'immigration' of foreign workers in China shouldn't come as a suprise. China has become the largest auto market of the world, has the most internet users and also is the biggest market for desktop computers. Many well-known western companies such as Intel and General Motors have already opened research labs.

Not only are they drawn to China because of the high demand for technology, but also China's reservoirs of cheap, highly skilled engineers and subsidies offered by the governement seem to be very attractive. For example, newly graduated engineers with master's degrees can be hired for only $730 a month.

Personally I think it is good that companies are flexible enough to move to other countries to provide in the needed technology and energy because it supports the entire world economy. I don't think this will effect the position of the United States and Europe a lot, China has the right to develop itself and become an economic world player.

Tom Bogaert

Source : http://www.nytimes.com/2010/03/18/business/global/18research.html

LG Display Sees Firmer Prices, Positive on Second Half

LG Display, the world's No.2 maker of liquid crystal display screens has enjoyed a strong demand for flat-screen TV’s. This because of the Chinese holidays and sports events such as the World Cup.

However, concerns have grown recently that the sector might return to oversupply as makers ramp up output.

The CEO of LG display, Kwon Young-soo said that the company is not concerned about oversupplying and the market will not crash, because despite increasing capacity, panel makers are struggling to meet demand for high-end products such as LED-backlit LCD and large-sized screens.

The demand in more advanced panels will grow and that’s why LG is setting a new production line in the first half. The company is awaiting approval from China on a proposed $4 billion LCD plant to increase capacity in South Korea.

Kwon Young-soo says that the demand is strong and the company is meeting only 80 percent of their customer demand. So it is wise to add new capacity.

The CEO also says that the prices of some products including TV and IT may actually rise due to supply shortages.

These affairs have a good influence on the stock exchange. The shares in LG Display rose 2.3 percent.

Bram Verstraete

Source: http://www.cnbc.com/id/35829509

Number of Chinese billionaires 'second only to US'

China has the second most billionaires in the World, only the United States are doing better with 403 billionaires, according to the Forbes magazine. In the annual list of world’s richest people there are 64 people of china mentioned, those people are living in the mainland of China. The number of billionaires increases to 89 if Hong Kong is included. It’s not surprising because China is in a booming economy the last years. China might take over the leader position in a few years.

The list of millionaires contains 1011 members, there is a total of 97 new additions this year, and 27 of those are from the mainland of China. The richest man in China is Zong Qinghou. He runs the Wahaha group, a so called gold mine, known from its soft drinks. He told that you don’t have to be afraid of competition, if you innovate, that’s his key of succes.

In my opinion it’s not good that the number of Chinese billionaires keep increasing. China already faces a wealth gap, the gap between the rich and the poor. In the future China will need to find a solution to reverse the widening income gap and to make the society fairer and more harmonious. The question is whether China will be able to close the gap, they did already solve a lot of problems in the past, but this problem is a tough one.

Niels Steyaert

Source: http://news.bbc.co.uk/2/hi/asia-pacific/8561433.stm

China denies currency undervalued

last week i did write about the huge growth of Chinese economy last month, by keeping the Yuan (undervalued) at the same level of the VS dollar. 40% below its value. Now premier Wen jiabao has rejectedthis aquisitions, he said that keeping the Yuan stable was very important for global economy which is in a downturn.

The relations between China and the USA did not get any better by this incident. He said: The other countries are just finger pointing at each other who made a mistake, but they don't do anything for a fast recovery of the economy. The relation chip between China and the USA was not very good untill this moment while they are still dilivering weapons to Taiwan, a dicision of former president George W. Bush. And Barack Obama visited the Dalai Lama. ant these two are not relly loved by the Chinese gouvernment.

i do not know if the Yuan is undervalued but China is very good in hiding information for the rest of the world. But it is really bad that the relations between China and the werstern countries are worsening again because they just started to spread some more information about their country. Although Google had to limit the information that could be seen by Chinese people which is another issue between these countries.

http:// news.bbc.co.uk/2/hi/asia-pacific/8566597.stm

China's exports up to 46% in February

BBC news announced us that the Chinese export has risen up to 46% in February, comparing with the previous year. These numbers give us hope in a fast recovery in global trade. The result is hihger than expected, analysts estimated a rise of 35% up to 40%. But it is not only the Chinese export that has been rising, the import has also risen by 44.7% last month.

People would think how they have done it? They kept the value of the Yuan at the same level as the dollar for 18 months to help their exporters. But particularly the VS is not very happy with this measure, and said the yuan is unfairly undervalued. Ans now the Cinese exports are retaken they still don not want to revalue the Yuan. While the futureof the global economic is not realy certain jet.

The rise of 46% is pretty impressive because last year New Year's festival was in January, and this year it was in February. In China the people use the whole week to celebrate New Year's festival. concluding there were five fewer days of economic activity.

I think it is great that a country van boost their economy by taking measures. But is I agree with the VS that by taking measures you can not put other countries in problems to protect your own. But it is still pretty impressive what they have done.

http://news.bbc.uk/2/hi/business/859088.stm

East or famine

Asia’s economic weight in the world has risen, but by less than commonly assumed.
It is not new that we have a feeling the world’s economic centre is moving to the east. But the global financial crisis, many argue, has given the shift in economic power from America and western Europe to Asia a big shove.

China overtook Germany in 2009 and it became the world’s biggest exporter. And now it looks like China is becoming the world’s biggest economy within ten years. It also has certainly become more important to bankers and businessmen, accounting for a record share of many companies’ profits last year.

But if we take a closer look at the figures from the last years, we see that the shift in economic power from West to East can be a bit exaggerated. Asia’s GDP stays slightly smaller than western Europe’s GDP. This means that the output of the rich West is still almost twice as big as that of the East.

The rise of the East is not a myth. The numbers clearly show us that Asia’s export keeps on growing. However, these GDP numbers show us Asia’s real expansion.
Asia’s GDP numbers are clearly lower than the GDP of western Europe and this because of the Asian financial crisis in the late 1990s. More importantly, prices of many domestic products are always cheaper in low-income countries, implying that households’ real spending power is bigger.

If GDP is instead measured at purchasing-power parity (PPP) to take account of these lower prices, Asia’s share of the world economy is higher and more steadily.

Bram Verstraete

http://www.economist.com/business-finance/displaystory.cfm?story_id=15579727

Economic concerns to dominate China's parliament

This friday, China's parliament starts its annual session of the National Peoples Congress where many politicians will cover various economical and social topics. This annual meeting has gained more importance and attention over the years, which makes it a useful platform for airing of public opinion and political debating. However, it stays mainly a ceremonial act as a part of the Chinese political policy.

China's economy, as everyone knows, has been growing very fast in recent years. The country reported that last year it recorded an 8.7 percent Gross Domestic Product growth despite the worldwide crisis. Chinese planners hope that China keeps growing this fast without falling in inflation or creating stock market bubbles as this would put an immediate stop to the growth.

Nonetheless, the economic growth doesn't give benifits to everyone . The poor seem to get poorer as the rich get richer. Also, the sky-rocketing house prices should be discussed at the National Peoples Congress aswell as people's incomes and the rising environmental corruption.

The growing rich-poor divide is very troubling and Chinese leaders acknowledged that it is undermining social stability and weakening their control on 1.3 billion people!

Around 135 million people still live on less than $1 a day, which is an amazing 10% of the population. Also, 10 million people have no access to electricty. I hope the Chinese leaders address the social and economic instability for the common people so that they can change the current outlook, which looks very dark for a lot of people.

Tom Bogaert

Source : http://www.cnn.com/2010/WORLD/asiapcf/03/04/china.congress/index.html

Cathay Pacific returns to profit

Cathay pacific, one of Asia’s biggest airlines, has reported that it returns to profit. The cost cutting and bets on the price of fuel paid off.

Fuel hedging, which has a lot of risk in it, helped the airline to avoid a fall in revenue of almost a quarter over the period. Despite the profit they made in the fourth quarter of the year, Cathay said it was cautions about prospects for 2010. They used fuel hedging which has a lot of risk so it could go wrong, luckily for them it did not.

The global economic slump last year resulted in extremely challenging business conditions for Cathay Pacific Group and commercial aviation in general, a lot of other airlines had a harsh time as well. They also had to make cuts in effort to survive the economic slump.

Cathay Pacific Group reported an increase in passenger numbers and cargo business in the second half of the year, but it would not be enough to cover the sharply reduced revenues for the first half of the year. They would still have take measures to recover and return to profit.

The other problem they had to face was the cost of fuel, which rose steadily from the middle of 2009. That could undermine the profitability.

According to the International Air Transport Association, 2009 saw the biggest decline in air passenger traffic in the post-war era. It estimated that airlines lost around $11bn together.

Now with the most of the global economic slump behind us they will have to keep up the cost cutting and keep the price of fuel in mind. The business conditions for commercial aviation are better in general, but there are still some airlines who are struggling to survive.

Thibaut Delsoir
source: http://news.bbc.co.uk/2/hi/business/8559328.stm

Climate goal is supported by China and India

On Tuesday 9 march, China and India formally agreed to join the international climate change agreement of Copenhagen. They were the last two major economies to sign up. China and India are among the most important and fastest-growing sources of greenhouse gas emissions in the world.

China and India together with 200 other countries have signed to support the climate goal. The contract contains a measure for limiting the rise in global temperatures to no more than 2 degrees Celsius.

The countries who signed the contract will have to spend 100 billion dollars a year to develop low-carbon energy systems, to protect tropical forests from destruction and to bring energy technology more quickly to the developing world. At the climate meeting in Copenhagen they did not formally adopt the accord, but they took note of it. The entry of china will give it a boost.

China said that it will try to reduce its emission of carbon dioxide by 40 to 45 percent by 2020 compared to 2005. The united states will reduce the greenhouse gas emission by 14 to 17 percent by 2020 compared to 2005.

It’s a good thing that two major economies support the climate change agreement of Copenhagen. First of all two big economies will bring a lot of money in the 100 billion dollar fund, which helps countries to become more ecologic. Secondly the entry of China and India will give the agreement a strong boost, because they were the last two major economies who didn’t join yet.

Niels Steyaert

Source: http://www.nytimes.com/2010/03/10/science/earth/10climate.html?ref=asia

China leads the world in auto sales, production

The production and sales of Chinese passenger vehicles both more than doubled from a year earlier. This causes China's auto market to lead the world industry. It's also the first time the domestic monthly production and sales were over 1 million units.

Rao claims this is strong evidence of the popularity of the auto market, despite the high oil prices and bad weather conditions lately which had an impact on the sales. He also predicts that sales will keep increasing in December and the sales peak will be in january.

It will be the first time in any country's auto industry that the montly sales continued to break records for seven months in a year. The total vehicles sales in China exceeded 12 million in the first months, which is enough to get the lead as the world's biggest auto market, reported Xinhua News Agency, citing the China Association of Automobile Manufacturers.

I think this is one of the many examples we can find to prove that China is an enormous economy that will only keep growing in the future. It will take over more and more market share of the world economy because of their improving technology, low labour costs, ... . Their turnover of vehicles for example in western countries is rather low at the moment, but I think they will keep improving their products and will conquer a bigger place in the world's technology economy in the near future.

Tom Bogaert

Source : http://www.chinadaily.com.cn/business/2009-12/08/content_9135316.htm

Shanghai opens doors to financial world

Shanghai is a city in China with 70 million people, known as a touristic paradise. Chinese leaders want to turn the city into a globally competitive financial capital, this should be done by 2020.

Shanghai has come from a long way, twenty years ago Shanghai had no stock exchange and now their stock exchange is already bigger than the one of Hong Kong.

If Shanghai wants to compete with New York and London in the next decade, they will have to recruit Chinese and foreign money managers, lawyers, accountants etc… New York has 10 percent of its workers in financial services against 2 percent of Shanghai, because China’s largest banks have their headquarters in Beijing and not Shanghai.

The last ten years, Shanghai has added a lot of facilities to become a higher value and to get rid of the manufacturing and industry image.

To become a global financial center, China has to allow the renminbi to become a convertible international currency. There’s never been a world financial center without a freely flowing currency. The question is whether China will allow the renminbi to become a convertible international currency.

In my opinion it’s good that Shanghai opens doors to the financial world, it will create new jobs and help china, who’s in a booming economy, grow even faster. The jobs will be more dynamic and challenging than a job in a bank or a security house. But in order to rival with New York and London, China will have to make the renminbi, their currency, convertible.


Niels Steyaert
Source:http://www.nytimes.com/2010/02/25/business/global/25iht-rshanfin.html?ref=asia

Japan Airlines reports huge loss

I have chosen an article which handles about the huge losses Japan Airlines has had the last months. The airline announced a loss of 177.9 bn yen, and apologized to their shareholders, creditors and customers.
Japan Airlines is under court supervision since they entered bankruptcy protection last month. Now the company is undergoing a major restricting which means they have to cut in their destinations, crew and amount of airplanes. They have to do all these measures to attempt to make Japan Airlines profitable again. They explain that they are working very hard to make their company profitable again, but they still want to provide a safe and stable flight and good services to their customers. Japan Airlines is one of the most high-profile airlines to fall victim under the pressure of the global recession.
I think it is unbelievable that a large company as Japan Airlines can suffer due to the global recession, and collapses under the pressure. Which started in the sector of real-estate. It is also really strange that their debts multiplied nine times before they asked for help. But it is very good that there is a thing like bankruptcy protection. A lot of companies have used it in the recession. GM, for example has used it and now they are making profit again. In the end, it is better for everyone, they can pay back their loans they have got from the government, the shareholders will not lose their money, and the employees will not lose their job.

http://news.bbc.co.uk/2/hi/business/8538347.stm

Asia’s boom conceals some darker prospects

It is a fact, Asia’s economic growth are clearly beating Europe and the United States in the recovery and proving to be a pocket of great hope for the global economy.

But as Asia’s role in the global economy expands, the threats facing the Asian economy grow in importance as well.

A look at Asia beyond the headlines shows the region still faces significant economic challenges. These challenges vary from export problems in Taiwan to deflation in anemic Japan.

The strongest pillar is China, but economists also warn of headwinds there. The real estate growth in China can change into a real estate bubble.

Robert Subbaraman, chief economist for Asia outside Japan at Nomura in Hong Kong, says that according to him, the issues lie beyond the region itself. They include a possible renewed slowdown in the world’s big advanced economies, where many households are still paying down debt and worrying about the unemployment rate.

Despite its problems concerning global economy, Asia has a couple of home-grown problems to contend with.

This number one concern is China. the pace of growth has been so rapid that many analysts are worried that the economy may soon begin to overheat.

Still, optimism is the overriding feeling despite the headwinds. “Asia is growing up,” said Bill Belchere, global economist at Mirae Asset in Hong Kong. “I think the recovery will actually be a lot stronger and a lot more durable than many people think.”

I also agree with all of these statements. China sure does have a lot of problems that they have to deal with. But they’ll surely overcome these problems, like they’ve solved many others.

Bram Verstraete

Source: http://www.nytimes.com/2010/02/23/business/global/23asiaecon.html?pagewanted=1&sq=asian%20economy&st=Search&scp=2

Asia defies forecasts and keeps growing during crisis

While Greece is in danger of default, Dubai still smarting from corporate collapse and 9.7 per cent of the US workforce is out of a job. In much of Asia, the question on people's lips is: crisis, what crisis?

Malaysia became the latest Asian country to report unexpectedly strong growth in gross domestic product for the fourth quarter of 2009. At the moment there gross domestic product rose with a 4.5 per cent over the same period a year earlier.
Hong Kong also beat forecasts when it announced a 2.3 per cent increase over the previous quarter. Taiwan announced a rise of 9.2 per cent from a year ago and Thailand saw comparable growth of 5.8 per cent.

The prime minister of Malaysia said the economy could expand by up to 5 per cent, which is a lot considering the rest of the world is in a crisis.
Economists said the recovery was not going to lead to rises in interest rates, even though several central bank governors have indicated moves to normalise monetary policy soon.

It is a good thing that the economy in Asia is recovering and growing. Governments in Asia pumped billions of dollars into their economies in response to the 2008-09 financial crisis. That leaves the problem of the downside when governments turn off the taps. So time will tell if the growth keeps going on or if the crisis will hit again.

Thibaut Delsoir

Source: http://www.ft.com/cms/s/0/f5e20ab2-21ae-11df-acf4-00144feab49a.html