Stronger Renminbi will cost jobs - Shaun Rein

Shaun Rein by Fantake via Flickr

China should resist calls from the US to strengthen its current, since that would have a negative effect on the job market, even though many American says China is not playing the game fair, argues Shaun Rein in BusinessWeek.  Those voices include the famous New York Times columnist and economist Paul Krugman.

At a time when the U.S. unemployment rate is just below 10%, not much grabs Congress' attention better than accusations of 1.4 million jobs lost to China. However, China bashers are raising expectations too high with dubious assertions that if the yuan were revalued, manufacturing jobs would suddenly move back to the U.S. and the trade surplus would be reduced. If manufacturers found costs were too high in China, they wouldn't return to the U.S. 

They would just move to countries such as Vietnam and export back to the U.S. from even lower-cost production centers. Nor do Krugman and others take into account the damage a rising yuan could inflict on low-earning workers in China. The Chinese government is under intense pressure from factory owners not to revalue the yuan more than the 20% it has risen since 2005.

According to Rein's assessment at least five million jobs could be hurt in China, and perhaps many more. In the end the value of the Renminbi will go up, but the time is not yet there:

Finally, it is doubtful that constant public pressure by governments to push China to revalue the yuan will work; such calls are almost certainly counterproductive. Reform-minded Chinese officials will be forced to stand strong to appease hard-liners within the government and not come off as too weak. A better strategy should push for change behind the scenes. Krugman is 

not wrong that at some point the yuan should appreciate, but that time has not yet arrived.

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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February Newsletter due tomorrow

Janet Carmosky, one of our authors by Fantake via Flickr

The monthly newsletter of the China Speakers Bureau is due tomorrow. We have a report on how our speakers try to explain the unexplainable: Google and China. The first of a new sequel of CBS trends, now on the issue whether China's migrant workers will be coming back after Spring festival.
Also the top-10 most-sought speakers for February and information on our just published book "A Changing China" with essays from 17 of our speakers, including Janet Carmosky.
You can have a preview of our February newsletter here, or subscribe here, to get it in your mail box tomorrow and the following months.

Praising the bridge blogs - Kaiser Kuo

Kaiser Kuo by Fantake via Flickr

Internet watcher Kaiser Kuo is very enthusiastic about an emerging feature on the Chinese internet, Chinese bloggers who translate what is happening at the Chinese internet into English. From AFP:

"Bridge blogs have become an incredibly precious resource," said Kaiser Kuo, a Beijing-based Internet consultant. "I just wish there were more of them and they covered a broader range of what people are talking about online.

"The hype-worthy is just the tip of the iceberg, there's a lot down there," he said.

Although far from weighty, chinaSMACK [on of those bridge blogs]captures the "Internet memes" -- jokes, concepts and catchphrases that are shaping Chinese culture online and beyond, Kuo said.

"The Chinese Internet for some reason seems to be a lot more tightly integrated. A meme will start in one corner and will bounce its way up to every corner a whole lot faster in China," Kuo said.

Shaun Rein follows Kaiser Kuo's enthusiasm in the AFP article:

Like the US celebrity news site TMZ.com, chinaSMACK is a cultural weather vane, said Shaun Rein, managing director of the China Market Research Group.

"It's one of my must-reads everyday," Rein said, adding it captures youth and digital culture well.

"It has a great finger on the pulse of the Internet culture in China that is a lot more vibrant than Americans think," he said.

In the AFP article also an interview with Fauna, the leading force behind ChinaSmack.

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Both Kaiser Kuo and Shaun Rein are speakers at the China Speakers Bureau. When you want to share their insights at your conference, do let us know.

Sergio Marchi joins China Speakers Bureau

Sergio Marchi

Sergio Marchi is Senior Fellow at the International Centre for Trade and Sustainable Development in Geneva and
a former Ambassador to the World Trade Organizations, a Cabinet Minister in Canada with responsibilities for both international trade and the environment. Former president of the Canada China Business Council (CCBC). Sergio Marchi is a very well qualified speaker on China and its international position. At the China Speakers Bureau we are very happy to welcome him between our other distinguished speakers.
Mr. Marchi travels from Geneva.

Internet censorship hurts China - Jeremy Goldkorn

Jeremy Goldkorn by Fantake via Flickr

China is hurting its own interest by censoring the internet, says Danwei-owner Jeremy Goldkorn in a podcast of the American Chamber of Commerce in China (AmCham China).
First, they put a brake on their ability of their internet industry to turn internationally competitive, Goldkorn says. And while China is increasingly looking for tools to present their story to an international audience, they are robbing themselves from those tools and learning possibilities by blocking sites like Facebook and Twitter.
More at the AmCham podcast.

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Jeremy Goldkorn is a speaker at the China Speakers Bureau. When you want to share his insights at your conference, do get in touch.

China needs market mechanisms to solve debts crisis - Victor Shih

Victor Shih by Fantake via Flickr

Victor Shih has been counting how much local Chinese entities have been lending to outspend the economic crisis. His conservative estimation, on his website,  1.6 trillion US dollar:

The data are far from perfect because borrowing by low-level government entities and lending by small banks are difficult to track. Nonetheless, my evidence suggests that the scale of the problem is much larger than previous government estimates. At $1.6 trillion, the size of local debt is roughly one-third of China's 2009 GDP and 70% of its foreign-exchange reserves.
So basically, in addition to the 20% of official debt-to-GDP ratio, one has to add an additional 30%. We also have to add other debt that the central government guarantees, such as the nearly 1 trillion RMB in Ministry of Railway bonds and bonds issued by the asset management companies. All of this gives China a high debt to GDP ratio.

Local government, who rely mostly on land sales for their revenue, cannot afford to reduce the real estate bubble, if there is one. Victor Shih does also see opportunities to get out of this mess, he writes:

A sudden contraction of lending to local investment vehicles will generate a wave of nonperforming loans, but a greater reliance on market mechanisms can easily solve this problem over the next few years. First, banks will fully recover the debt of the healthiest local entities, which may account for half of total local debt. For the remainder, the government needs to allow banks to directly sell subprime or distressed loans to both foreign and domestic investors. Beijing need not fear that China's listed banks will sell their nonperforming loans at below-market prices, as these banks report to shareholders. Banks, in conjunction with investment banks and distressed-asset investors, should also explore ways to securitize local debt for sale to both domestic and international investors. The latter in particular would have a healthy appetite for yuan-denominated security, anticipating a currency revaluation soon.

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Victor Shih is a speaker at the China Speakers Bureau. Are you interested in discussing his challenging viewpoints? Do let us know.

The internet as the de facto publish sphere - Kaiser Kuo

Kaiser Kuo by Fantake via Flickr

Kaiser Kuo is one of ten experts predicting the trends for the upcoming year of the tiger in the Jing Daily, documenting the trend in the business of luxury and culture in China.
 The internet in China is only at the start of a profound change in China, he says:

I suspect that 2010 will see an even greater acceleration of a trend we’ve seen emerge over the last two or three years, and that is that the Internet — already the de facto public sphere of Chinese life — will become an even greater consideration for decision makers at all level of authority in China. I believe they will, on the one hand, take the temperature of public opinion online with increasing frequency and, on the other, seek ways to contain the voice of the netizenry and prevent it from overwhelming institutions, as it now threatens to. I expect that at some level we’ll also see efforts to move beyond the ad hoc response to Internet public opinion that we’ve seen in recent years to a more systematic, quasi-institutional approach.

 More, including also our Shaun Rein, in the Jing Daily.

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Both Kaiser Kuo and Shaun Rein are speakers at the China Speakers Bureau. When you need them at your conference, do get in touch.

Most-sought speakers for February 2010

Shaun Rein by Fantake via Flickr

Just in time to convey you with the best wishes for the year of the tiger, at the global offices of the China Speakers Bureau we have done our home work again and figured out who were the most popular speakers of this month. Last month we skipped our monthly happening, since because of the holidays, the results were really lackluster. But activity is back again with some amazing scores and newcomers.
Both Kaiser Kuo and Shaun Rein have been swapping the top-2 position for a while with almost a similar score. But, while Kaiser Kuo keep a firm popularity, Shaun Rein has broken this month every record. There were weeks when he was quoted by mainstream media on a daily basis.
Fastest rising star in newcomer William Bao Bean, and also Victor Shih has reappeared. Shih has appeared as a leading doomsday sayer, predicting that China is heading for heavy financial weather. Not surprisingly, he is at odds with some of our other speakers, but for a good overview you can check our Speakers Corner.
Let switch to the top-10 list for January 2010.

Top-10 speakers for February 2010 (December 2009 in brackets)

1. Shaun Rein (2)
2. Kaiser Kuo (1)
3. Jeremy Goldkorn (6)
4. Tom Doctoroff (4)
5. William Bao Bean (-)
6. Arthur Kroeber (4)
7. William Overholt (3)
8. Paul French (8)
9. Victor Shih (-)
10. Rupert Hoogewerf (9)

Be advised that since a few week our book A Changing China where a large number of our speakers describe how they have seen China change. When you are interested in organizing a conference with one or more of our speakers, we are happy to set you a complimentary copy.
Otherwise, we can advise the good services of Amazon.

Internet crackdown caused by more freedoms - Jeremy Goldkorn

Jeremy Goldkorn by Fantake via Flickr

Getting it right when it concerns China and the internet is not easy, but media-watcher Jeremy Goldkorn of Danwei gives it a good shot. Yes, there are unprecedented constraints on the internet in China, but they were triggered of when the close to 400 million internet users in the country took equally unprecedented freedom, he tells Sfgate.  

"In the last year ... the liberal elements, the forces for change on the Internet have become more vocal and better at using tools like Twitter than they ever were," said Jeremy Goldkorn, founder of Danwei.org, a blog about Chinese media and urban life. "But this has been met with sort of the biggest sustained clampdown on the Internet that we've seen for years."

Google threat to leave China, unless it can work uncensored, has drawn massive attention, and a prompt refusal by the Chinese central government to give in. According to Goldkorn, here in the Money Times, Google is asking for a special treatment, giving it an advantage over its domestic competitor Baidu:

"Baidu does face the same censorship issues, but without the corporate culture that resents censorship."

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Jeremy Goldkorn is a speaker at the China Speakers Bureau. When you need him at your conference or other meetings, do get in touch.

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• Expected for 2010: more internet censorship - Jeremy Goldkorn (chinaherald.net)
• US work-around for internet blocks not needed - Jeremy Goldkorn (chinaherald.net)
• Internet nanny tighter than ever - Jeremy Goldkorn (chinaherald.net)
• Can foreign media make money in China? - Jeremy Goldkorn/Kaiser Kuo (china-speakers-bureau.com)

Why China is not collapsing - Shaun Rein

Shaun Rein by Fantake via Flickr

The story that China will collapse sells books and magazines, but according to Shaun Rein the bubble in the real estate is not going to be that trigger. In Forbes he tells why some of the doomsday sayers are wrong:

Why? Because China's underground economy is far bigger than the 10% to 20% of the total economy that most economists estimate when they do their calculations. Politically the government can't admit that. A decade ago the U.S. Treasury estimated that 50% of Russia's economy stayed underground, evading onerous taxes. China's underground economy as a portion of the overall economy is at least as large as Russia's. Many company executives keep three sets of accounting records: one for official purposes, one for investors and one for themselves.

It does not mean Shaun Rein is taking all the figures that are published for granted: he accept that much of the basic data collection do have serious flaws:

It would be politically impossible for the government to say just how large the underground economy is without causing clashes among the responsible ministries. The government is, however, actively cracking down on receipt forging and tax evasion and is implementing new tax and receipt policies that will force cash businesses like restaurants to pay more based on their actual business results.

It is true that certain sectors in China's economy are overheating and that there are structural economic issues that need to be addressed. But predictions of doom and gloom in China by Jim Chanos and his ilk are largely exaggerated. China is no Dubai. The growth is real.

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

'A Changing China' now available

The book 'A Changing China', written by a selection of the speakers at the China Speakers Bureau is now available for purchase. Not yet in a bookstore nearby, but most certainly at Amazon. In the book more than a dozen China veterans tell how they have seen China change. With contributions of Kaiser Kuo, Shaun Rein, Janet Carmosky, Zhang Lijia and many others. A historical overview from many different angles.