New dormitories for Chinese workers may appear to have little to do with the deaths of hundreds of textile workers in Bangladesh. But in today’s globally interconnected economy one may be the fabled butterfly to the other’s subsequent hurricane.
Chinese workers’ demands for better conditions and higher pay have been driving manufacturers to seek cheaper alternatives. That has brought many textile firms to Bangladesh, which is reputed to have the lowest textile industry wages in the world – and they have certainly been increasing much more slowly than those in China. Read more
Chinese exports grew less than expected in November, fueling fears of a further economic slowdown. But exports from western inland Chinese regions have never grown so fast as in 2012, beating export growth rates of the rich industrial coastal regions.
Chinese export growth declined to 2.9 per cent in November from 11.6 per cent in October. On a rolling 12-month sum exports grew at an annual rate of 7.9 per cent in November, a figure well below the more than 30 per cent growth of the late 2010 and early 2011 and marks a 28-month record low. But not all regions in China experienced the same slowdown.
Tension between China and Japan over the East China Sea is threatening to disrupt the strong trade relationship between the two countries.
In July Japan exported a higher value of goods to China than to Europe or to north America. It also imported a higher value of goods from China than from north America and Europe combined, and about the same amount as from the rest of Asia combined. Read more
Angela Merkel has been making much of Germany’s predominant role in the EU’s trade relationship with China – the oft-touted ‘special relationship’. The EU overtook Japan as China’s main source of imports back in 2011, and Germany is the biggest contributor to that. But Europe’s elevated status is not due to its own export growth; rather, it is due to Japan’s continuing performance slide.
Source: IMF/Haver Analytics
The latest data from the FT/Economist Business Barometer, the quarterly global business sentiment survey, was published last week and the business-friendliness section again made for interesting reading.
France’s “business friendliness” has plummeted since the last barometer survey, which was conducted before before the election of François Hollande as president. For the first time, more of the business executives surveyed by the EIU rated the country’s ”unfriendly” than “friendly” to business. Read more
Whilst the slowdown in China’s headline rate of growth has been extensively covered, what deserves more careful attention is its regional component.
This chart shows the economic growth rate in Q1 2012 of the various Chinese regions and their relative importance, sourced from China’s National Bureau of Statistics.
The growth of smaller regions was more volatile and was generally faster than for larger regional economies. Tianjin – a metropolis in northern China along the coast that boasts the highest GDP per capita in the country – had an impressive double digit growth, but its impact on the national number was fairly limited as it accounts for just above 2 percent of national production. Read more