This is such sad news, Diana. He was a presence of calm and reason in our discussions which were sometimes…
Wednesday Night #864 – China
Written by Diana Thebaud Nicholson // September 23, 1998 // Herb Bercovitz, Jacques Clément, Reports, Wednesday Nights // Comments Off on Wednesday Night #864 – China
March 18, 2008 This makes for fascinating reading 10 years later. Note the absence of any reference to environmental concerns or demographics. DTN
Report (More notes and photos)
The format of the Nicholsons’ eight hundred and sixty-fourth consecutive Wednesday Night Salon, did not resemble its predecessors. Jacques Clément presented a researched snapshot of China today, a heavily populated country with a history going back four millennia, now grappling with its difficult metamorphosis into a powerful, modern state, an awakening giant whose output has attained 2.4% of world output, just ahead of that of Canada at 2.3%.
The discussion around Jacques’ presentation was enlivened by the presence of two new faces, both young women students in the International Aviation MBA programme offered by Concordia. Amy is from Taiwan while Anna Chen is from Hunan, but has spent the last four years in Singapore.
China’s economy projected to grow at 8% this year may reach only 6% growth because of unpredictable flooding which has directly affected 2.5 million people, reduced agricultural production and trade. The government has responded by increasing investment in infrastructure and flood control, increased incentives for export, increased money supply, loosened up bank credit and reduced interest rates. Reserve requirements have been lowered. 40% of total loans are non-performing. China is currently in a deflationary mode with a 2.5% to 3% negative compared with 12% inflation in the previous three years. Banking and taxation reform, essential to reduce the large debt, now standing at 20% of G.D.P., has been postponed.
China’s trade surplus continues at three to four billion dollars monthly, but money is leaking out of the country to pay for illegal imports. One guest illustrated this statement by commenting on the number of expensive imported cars (Mercedes, Cherokees) on the streets of Beijing.
There are twelve million unemployed in the urban areas, five million outside the urban areas. Five million are registered as unemployed, officially 4.5%,, but internally the figure is closer to 8.5%. The apparent anomaly of unemployment in a Communist country is probably due to the fact that it is indeed a mixed economy. The banking system is problematic, but there is no banking crisis and
no danger of China suffering long term problems. With the highest saving rate in the world at almost 30% (4.5% in Canada) there are five trillion dollars invested in savings, representing 40% of GNP. Interest rates in Hong Kong are about 0.5% higher than those on the mainland, with short term rates are 5.25%, long term, 7%, roughly two percent above Canadian rates.
The principal investors in China are Japan, Hong Kong and Taiwan. The Chinese are cutting their cost of production by as much as 25% and increasing exports.
The stock market has declined 38% between January and September of this year.
Taiwan and China are in a sense, similar to Australia and New Zealand in that the populations of both are similar and closely related, but there is much more progress and democracy in Taiwan.
Please see David Zgodzinski