CHINA’S ECONOMY 30 October 2013 by Sigrid Brevik Wangsness

I. The Old China: Mao’s China Official name since 1949? Communism Workers in the cities: in state-owned factories or public offices Workers in the country: on state-owned collective farms

The Old China: Mao’s China Clothing choice: blue or grey Mao suits The Cultural Revolution: persecution, brutality Severe poverty - starvation Heavily subsidized housing, public services (health care)

II. The New China: Early 1980s - today Population? Measures to prevent over-population? More than 400 million people lifted out of poverty; more than 600m now belong to the Chinese middle class Increasing urbanization, but around 50% still live in the countryside

The New China: Early 1980s - today Early 1980s: Introduction of market reforms (Deng Xiaoping) From central planning to market-led capitalism 2001: Member of the WTO

III. China’s Current Economy Economic indicators for 2013: GDP growth:7.5% (Q2) Est. 2013: 7.5% Industrial production: 10.4% (Aug.) (vs. USA: 2.7%) Inflation: 3.1% (Sep.) (2013: 2.6%) Unemployment: 4.1% (Q2)

China’s Current Economy Current-account balance:+ $42.3bn (Q2) +1.9% of GDP Budget balance: -2.1% of GDP Speedy recovery from global financial crisis; China’s growth helps the world economy Steady economic pace –but is it too fast to be sustainable? The source of its growth?

China’s Current Economy What do you know about China’s banking system? Any bad debt in China? Steady growth and job creation necessary to prevent social unrest

China’s Current Economy Domestic security – anxious state Has globalisation led to political freedom? (e.g. The Olympics, the Nobel Peace Prize) Change of leadership – continuation of “modernized business- supported repression”? (See Compendium, p. 161) Xi Jinping as the new president of China

IV. The Chinese Dream What is Xi Jinping’s dream? Are there indications that Xi Jinping’s slogan is a deliberate reference to “the American Dream”? Which aspect is NOT part of the dream? According to the article, what are the main dangers of Xi Jinping’s dream? (See Compendium, p. 162)

China’s Domestic Challenges The challenges emphasized by Xi Jinping Bo Xilai China’s other growing domestic problems: huge wealth gap, pollution, health care, human rights

V. The Relationship between China and Japan The two economic giants in East Asia, “China and Japan, have been rivals for the best part of a millennium” (Compendium, p. 156) Who has had/ has the upper hand – economically and politically? How important are China and Japan as trading partners today etc. etc.?

Tension between China and Japan Historical enemies 1972: Normalization of diplomatic relations between China and Japan Still anti-Japanese feeling in China. Recent examples? Current reasons for tension between the two countries?

VI. China As a Global Power The world’s largest new car market and automobile producer The world’s largest oil importer (as of Oct 2013 when it surpassed the USA) Chinese companies are expanding – several on Fortune 500 list – foreign acquisitions

China As a Global Power Huge investments in fixed assets: factories, equipment, property, infrastructure Focus on capturing markets abroad and obtaining natural resources Forming alliances with countries such as Venezuela, Iran and Sudan

China As a Global Power Africa and Latin America: Taking advantage of weak economies to get hold of valuable assets? The IMF, the WTO and the summit on climate change – examples of increasing Chinese dominance China and the EU: Trade and competition

VII. Chinese Business Culture Outline the main aspects of the Chinese business culture as Richard D. Lewis portrays it (Compendium, pp , 33-34, 58, 70-73) Hierarchy, harmony and face-saving Communication: reserved, formal, subtle and indirect