The subprime mortgage financial crisis firstly started in the subprime mortgage market in the United States then became a global financial crisis in July 2007, and still has a strong impact globally.
Charles Prince, the Citigroup chief, quit for masses of losses during the subprime mortgage crisis. Citigroup announced that the losses was up to 11 billion dollars – much higher than the 2.2 billion reported in September. Merrill Lynch reported 8 billion of losses in October and then O’Neal resigned. British banks such as Barclays and Royal Bank of Scotland also faced the situation that their stock had shed around 3.0 percent in value. In Tokyo, the stock value of Mitsubishi UFJ Financial, Sumitomo Financial and Mizuho Financial fell similarly.
According to the United States Treasury data, till June 2006, investment on the real estate mortgage securities in America made by China’s financial institutions has summed up to 107.5 billion dollars. It is supposed that the subprime mortgage crisis will result in direct losses of 4.9 billion yuan for six listed banks in China.
In recent months, Chinese mainland media has published a lot of articles with the view that: the subprime mortgage crisis in US will not occur in China. The reasons are in the following:
Firstly, China’s mortgage business is at the initial stage, and it only accounts for relatively low in the business of commercial banks at present. As a result, in spite of several risk loans, the overall impact on the banking area will not be great.
Secondly, currently there is no securitization of individual housing loan in China. Therefore, it is thought that the scope affected by the subprime crisis in rather limited even if there are risks.
Thirdly, income level in China mainland has been high in recent years. According to China National Bureau of Statistics data, in the first half year, the income of urban residents increased by 14.2%, and the income of farmers went up by 13.3%.
Finally, the links between China and the global economy is not really strong. For example, Shanghai stock market is completely separated from the stock market in Wall Street. Furthermore, the National Bureau of Statistics has announced China’s property prices rose 8.2% in the third quarter 2007.
2007年10月16日星期二
2007年10月14日星期日
Golden-week holiday makes quite an impact on China's economic growth
China introduced three annual vacations called "Golden Weeks" in 1999, which include Spring Festival early in the year, Labour Day holiday in May and National holiday in October.The purpose was to boom the domestic economy after the great impact of the Asian financial crisis in the 90s. Because during these vacations, people could take a rest, do shopping and travel, this could help boost consumption, which is a relative weak engine compared with exports and investment.
This recommendation really plays an important role in China economy. For example, this year, the revenue of Chinese airline reached 2.94 billion yuan over the National Day holiday. During the same period, the railways made 1.48 billion yuan revenue from passenger transportation. Transport earnings up during China's National Day holiday
This reform has a good influence on the economy these years. However, there is no longer an urgent need to continue this implemention as China has been seen four consecutive years of double-digit economic growth, moreover, the traffic and environment burden during golden week are very serious.
On the National Day holiday this year, the number of passengers travelling by road and train hit 363 million, almost 110 percent as much as that in last year. Railways added extra trains to meet the increasing demand. Highways were congested and more buses were used on the roads. Airlines were filled with travellers. People feel uncomfortable when they were in the traffic jam and just saw travellers on hot scenic spots. And there are masses of complaints and appeals from domestic residents.
China is considering whether to cancel one of three gold-week holidays in order to ease the traffic and environment burden. A survey conducted this year by Chinese mainland shows more than half of the 3000 participants agreed that "some reforms should be taken" . Previous articles said the Dragon Boat Festival and the Middle Autumn Festival may be listed as holidays, and people could have two days off work. Report: China may cut one golden-week holiday -- china.org.cn
China government has to make a balance in this issue and resolve the conflict of interestes from communities, consumers, and businessmen as well.
This recommendation really plays an important role in China economy. For example, this year, the revenue of Chinese airline reached 2.94 billion yuan over the National Day holiday. During the same period, the railways made 1.48 billion yuan revenue from passenger transportation. Transport earnings up during China's National Day holiday
This reform has a good influence on the economy these years. However, there is no longer an urgent need to continue this implemention as China has been seen four consecutive years of double-digit economic growth, moreover, the traffic and environment burden during golden week are very serious.
On the National Day holiday this year, the number of passengers travelling by road and train hit 363 million, almost 110 percent as much as that in last year. Railways added extra trains to meet the increasing demand. Highways were congested and more buses were used on the roads. Airlines were filled with travellers. People feel uncomfortable when they were in the traffic jam and just saw travellers on hot scenic spots. And there are masses of complaints and appeals from domestic residents.
China is considering whether to cancel one of three gold-week holidays in order to ease the traffic and environment burden. A survey conducted this year by Chinese mainland shows more than half of the 3000 participants agreed that "some reforms should be taken" . Previous articles said the Dragon Boat Festival and the Middle Autumn Festival may be listed as holidays, and people could have two days off work. Report: China may cut one golden-week holiday -- china.org.cn
China government has to make a balance in this issue and resolve the conflict of interestes from communities, consumers, and businessmen as well.
2007年10月6日星期六
Elites are going from Japanese company
In the past years, more and more foreign companies enter China mainland. According to a survey, when wages and conditions are the same, Chinese staff are inclined to work in Europe and the United States or domestic enterprises rather than Japanese companies.
Japanese firms generally have three types of employees: The first is life-time employee. Next is contract employee with a one-year contract. The final and perhaps the most commoncategory is a person who is sent to work at the company from an outside placement company .
As a result, If you start working at a Japanese company with the idea that you are the same as everyone else and may become a manager if you keep working hard, you are absolutely wrong. In fact, most Japanese companies have discrimination against people. For example, women cannot hold some kinds of position; foreigners cannot be hired as a life-time employee; some companies don't hire Korean staff, etc. What's more, ads will often read, "Japanese only," "male only," "must be under 28" (ladies in particular must often be under a certain age), "single ladies only," etc.
A survey shows that respect for human rights is the highest in the most state-owned enterprises. If the rights of workers are harmed, the government will come forward to solve. The second is Europe and the US firms, because they have traditional respect for human rights. Situation in Japanese enterprises is the worst. Japanese companies emphasized obedience to superior, as well as obeying authority.
Working overtime without extra pay is a tradition in Japanese firms. It is usually a way to show professionalism and loyalty to the company. Furthermore, wages in Japanese enterprises are lower than those in Europe and the United States. Important positions belong to employees sent from Japan, not to froeitgn people. The development space constraints lead to difficulty to retain Chinese elites in Japanese firms.
Japanese firms generally have three types of employees: The first is life-time employee. Next is contract employee with a one-year contract. The final and perhaps the most commoncategory is a person who is sent to work at the company from an outside placement company .
As a result, If you start working at a Japanese company with the idea that you are the same as everyone else and may become a manager if you keep working hard, you are absolutely wrong. In fact, most Japanese companies have discrimination against people. For example, women cannot hold some kinds of position; foreigners cannot be hired as a life-time employee; some companies don't hire Korean staff, etc. What's more, ads will often read, "Japanese only," "male only," "must be under 28" (ladies in particular must often be under a certain age), "single ladies only," etc.
A survey shows that respect for human rights is the highest in the most state-owned enterprises. If the rights of workers are harmed, the government will come forward to solve. The second is Europe and the US firms, because they have traditional respect for human rights. Situation in Japanese enterprises is the worst. Japanese companies emphasized obedience to superior, as well as obeying authority.
Working overtime without extra pay is a tradition in Japanese firms. It is usually a way to show professionalism and loyalty to the company. Furthermore, wages in Japanese enterprises are lower than those in Europe and the United States. Important positions belong to employees sent from Japan, not to froeitgn people. The development space constraints lead to difficulty to retain Chinese elites in Japanese firms.
2007年10月4日星期四
Why China-made products are cheap?
Some people think that the low price of China-made goods is largely due to poor quality. I quite disagree with this point of view. If that were true, these goods would have been blocked under anti-dumping rules and rejected by global markets. Admittedly, this has happened in a few cases in the past decades, but not universal.
In my opinion, the main reason for why China-made products are cheap is low labor costs . The average pay for a Chinese blue collar worker is around 20 thousand Yuan. By comparison, that for an American worker is around 40 thousand USD.
Low labor costs may due to the lack of a complete legal system which supervise employers in China. Under this uncompleted law system, Chinese employers save a lot money by abusing employees in many ways such as over time working with no extra pays, low cost on employee’s health care and no pay on life insurance. In one word, large amount of employees in China enjoy comparatively low welfares.
Another point is that, China lacks a complete taxation system. Tax dodging is common in China. Thus many firms are able to cut cost for sales and production.
What is more, protection of intellectual property rights (IPR) is also a problem in China. Though government has been making efforts to address and protect intellectual property rights since economic reforms began in 1978 , the problem still exists in many areas. And this could be an obstacle for domestic innovation in future.
Low price is not a sustainable competitive advantage for Chinese companies. Pricing war could also cause unfair competitions. According to Resource-Based Theory, domestic companies should focus on product quality, innovative technology and other non-price factors in order to gain long-tern success. And there is an urgent need for governments to perfect law system with the purpose of protecting labor and innovation. Further, education and training could also bring benefit to business world.
In my opinion, the main reason for why China-made products are cheap is low labor costs . The average pay for a Chinese blue collar worker is around 20 thousand Yuan. By comparison, that for an American worker is around 40 thousand USD.
Low labor costs may due to the lack of a complete legal system which supervise employers in China. Under this uncompleted law system, Chinese employers save a lot money by abusing employees in many ways such as over time working with no extra pays, low cost on employee’s health care and no pay on life insurance. In one word, large amount of employees in China enjoy comparatively low welfares.
Another point is that, China lacks a complete taxation system. Tax dodging is common in China. Thus many firms are able to cut cost for sales and production.
What is more, protection of intellectual property rights (IPR) is also a problem in China. Though government has been making efforts to address and protect intellectual property rights since economic reforms began in 1978 , the problem still exists in many areas. And this could be an obstacle for domestic innovation in future.
Low price is not a sustainable competitive advantage for Chinese companies. Pricing war could also cause unfair competitions. According to Resource-Based Theory, domestic companies should focus on product quality, innovative technology and other non-price factors in order to gain long-tern success. And there is an urgent need for governments to perfect law system with the purpose of protecting labor and innovation. Further, education and training could also bring benefit to business world.
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