China's Economy in Trouble?

Is China's economy in trouble?


Central Bank of China made announcements last week that it would be reducing the reserve requirement ratio for commercial lenders to maintain the liquidity for China's financial system.  This move is seen by the global markets as a reaction to the first quarter GDP results for China that showed a slower growth rate of 8.1% annualized verses the expected 8.4% that analysts were expecting.  Zhang Zhiwei, Chief China economist at Nomura Holdings Inc. was quoted by Bloomberg as saying that the Central Bank had "sent a message that further loosening measures will be rolled out".

Actually, the results from the Chinese economy and all of these steps that their Central Bank is taking are quite expected from a free market economy which the Chinese government has been moved towards in the last decade.  The US and the world economies have demanded it and now we should expect natural ups and downs...we cannot have a everything.

“The Hunger Games” was banned in China...Why not in the USA too?

I went to see the movie, “The Hunger Games” by Suzanne Collins this weekend and was shocked. I knew it had been banned in China, but did not think too much about it; however, after I saw the movie, I came away thinking, “How could so many people ($152 million in the first Weekend box office) want to watch such gratuitous physical and psychological violence”. I then actually became scared when I learned that the book version won the California Young Reader’s Medal Award which is voted by our children in California as their favorite book of the year for 2011.

It became more clear when I learned that Ms. Collins was inspired to write this book from a combination of the Iraqi War and US Reality TV shows. Is this what are children should gravitate towards?

Now it’s clear to me why the Chinese said “No” to this movie…the Chinese have been working very hard in the last ten year to re-instill civilized way of life back into the mainstream public in China. It was not long ago that China suffered from lack of food and violence like this movie. Now, with new found stability and economic prosperity, the Chinese government realizes that many of its citizens have forgotten to be courteous to others and other basic civilities. Therefore, now one literally sees many signs to be polite, messages played in public places like elevators not to push, etc…. One also sees many statues of Confucius being placed in cities all over China to reinforce moral conduct. It is obvious that the Chinese are trying to raise the quality of life in China (not only the economy). I discuss many of these cultural points of change in my book on Doing Business with China as well.

It is no surprise that this novel has also been very controversial in the US; it ranked in fifth place on the American Library Association's list of frequently challenged books for 2010, the reasons being it was unsuited to the age group, and violent.”

This is definitely a case where we should take China’s lead and not allow our youth to be exposed to such violence so that we desensitize their emotions to such tragedy, even if the story might have a twisted ending that has some glimmer of hope.

Growth in Free Trade and Jobs Go Side-by-Side… Why are we in Danger as a Country?

As a country we need to recognize that Free trade creates jobs and benefits a county economically as a whole… the citizens of the United States need to start thinking of our country as a publicly traded stock with our actions either increasing or decreasing our country’s “Value” on a daily basis. If this notion could be created and we could get the general populace to feel like real ‘stake holders’ then we would be able to move in unison on major issues (i.e. healthcare, social security, trade, partner countries, etc…) and lobbyist groups would not have their strangle hold on this country.

A perfect example of this situation where Free Trade, jobs and our country’s “Value” are being impacted by lobbyists is the recent issue between Boeing and Delta Airlines. Recently, Boeing has been trying to ensure that the United States Ex-Im Bank loans are available for their increased trade sales pending to Air India; however, Delta Airline has been using their lobby power to prevent Boeing from getting access to the additional credit so Boeing would not be able to sell additional planes to Air India, one of Delta’s main competitors internationally. Delta Airlines has not been able to compete successfully with Air India on the Newark-Mumbai route. If Delta is not competitive then this is an issue that they have to strategically fix internally. It is not appropriate for Delta to use its influence with Senator Cantor from Virginia to sabotage the growth of one our country’s last major industries and the 1000s of jobs that weigh in the balance. The DeIta Lobby as well as the many other Lobby groups continually pull our country’s real “Value” lower and lower each day, while increasing the value of other countries and companies such as AirBus. AirBus would be a clear winner if Delta gets their way in this situation along with the other countries that provide labor/jobs for the Airbus production.

I am not speaking as a Republican or Democrat…this is a bipartisan issue.

This just happens to be a clearly black and white example that illustrates ‘Free Trade’ must be protected and encouraged as a vital part of a country’s existence.

I just want the people of the United States to come out of their 60 year comma, come together, and say “No” by voting in masses again for candidates that speak for the people!

Our Govt Missed the Course on ‘How to Win Friends and Influence People’ when it comes to China

Many at the top in the US Government apparently have not read Dale Carnegie’s book or have chosen to simply refute its findings. When dealing with another, try to be appreciative and see the situation from their angle and work backwards to achieve the mutually beneficial goal … this sums up a strategy that would be very effective when dealing with the Chinese (but it probably wouldn’t be good for his re-election).

For example, greeting the soon to be President of China, Xi Jinping in Washington after his first visit in 27 years with a two second hello and then an inquisition on his policies for trade, currency, and human rights for the rest of the time just does not seem right, especially when he is still the Vice President of China and cannot trump his current boss President Hu. It just seemed so obvious that this invitation to visit the White House was so staged for Obama’s re-election propaganda machine as if he were throwing free meat to his Labor Union voters that are chomping at the bit for blood.

In the Wall Street Journal yesterday, Obama again is slamming China at the WTO for not giving us complete access to all the precious metals they are mining…he is now setting up another “New Task Force to Press China’s trade and Business Practices”.

If he only spent this much effort trying to reduce our deficit and fix the major issues in our economy like Social Security and Medicare…we would all be in such a better position for ourselves and our children.

China is not the enemy and once the people of our country realize our politicians and media are just using China as an escape goat for their inability to lead and make our country a place where business and education flourish again, then we will remain in this state of slow deterioration that likes of Rome and other great nations eventually succumbed to ….

I am just saying… hope some cares about this stuff as well because I am just in shock on a daily basis when reading the news. History does not lie and this is the truth.

Will Cheap Capital from China Stop? Who should worry....

Based on latest data, China is becoming more savvy by way of investing its $3.2 trillion in reserves. Because of our politicians inability to agree on a real budget and deficit reduction plan, our economy has not only been down-graded, but worst of all, our currency keeps loosing more of its value.

China currently owns $1.73 trillion in US treasury notes as of June 30th which is slightly up from last year, but more disturbingly, China has divested their dollar portion of their reserve holdings from 65% to 54% as of June 30. This trend could easily signal a trend and drive interest rates higher in our economy as attracting new investors would require higher returns.

Our leadership keeps talking about currency manipulation and deficit issues with China, but if we corrected these issues, our economy would still see little material impact... we certainly would not see the creation of the +4 million jobs we have lost since 2007.

We need a government that is focused on our economy at home and that does not create 'red-herrings' in order to be re-elected. We need politicians that care about our country more than they care about being re-elected.

CNN REPORT REBUTTAL: ChinaMart Hosts Match-Making Event to create Jobs in LA, Not Sabatoge....

As the CEO of China Mart Los Angeles...I provided CNN recently with my rebuttal to their iReport posted on China Mart Los Angeles and the Tibetan Protesters activity at China Mart on Feb 16th during our hosted event for VP Xi Jinping's business delegation. Here is CNN's iReport: http://ireport.cnn.com/docs/DOC-751104?ref=feeds/latest and...

Below is my rebuttal which is not meant to be political in anyway, just a comment on how groups with issues whether Tibetan or other should work on effecting change in more constructive ways.

As the CEO of ChinaMart Los Angeles (USA), I am always concerned about other countries rights for freedom; however, “Sabotaging” our event at China Mart Los Angeles and having your Tibetan-freedom advocate, Giovanni violently jump up and down hitting people and causing a commotion is not the right way to go about effecting change for Tibet. Human rights and freedom are very big topics politically and need to be addressed in the proper forum...in fact, there was much discussion and pressure on the US side during VP Xi’s visit to this effect. However, I find it immature and insulting to have any guest at the ChinaMart call our efforts in “Creating Jobs in the US” and “Increasing Exports from Los Angeles” which account for 1 out of 5 jobs in Los Angeles, “Garbage or Nonsense”. Gandhi and many other great pacifists throughout history made much more progress using passive protests…I do have footage of the event and Giovanni was very aggressive, borderline violent…and it wasn’t a stunned look on the “Chinese Delegates faces you saw”…it was fear. I am not sure many would agree with your tactics...as these tactics resemble terrorism more than reform. There are better ways to be heard than sabotaging legitimate gatherings that are honestly trying to help our Los Angeles community which is hurting from lack of jobs and ways to make keep their own families fed. I write clearly in my recent book on ‘Doing Business with China: The Secrets of Dancing with the Dragon’ that understanding a culture is fundamental to making any relationship succeed, so I would appeal to your more logical side to work harder at building those relationships you need to succeed, instead of the strategy of sabotage.
Sincerely, Stephen Perl, CEO China Mart USA

Xi Jinping's China Is A Trade Partner, Not A Trade Enemy

Los Angeles, CA—With the visit of China's vice president Xi Jinping to the United States and his meeting with President Obama, there is renewed hope for calming American fears regarding the Chinese superpower, according to one Asian business expert.

"If we can cut through the anti-China rhetoric, most American would see that the Chinese want to be our friends and business partners," says http://www.doingbusinesswithchina.net [Stephen Perl, author __title__ stephen perl book author china] of "Dancing with the Dragon: the Secrets for Doing Business with China.” "The Chinese are huge admirers of America...and increased trade and investment between our two countries brings business profits for both, and especially jobs to the US as as my book alludes to if the US could just take a moment to understand their culture and concentrate on building relations," continues Mr. Perl.

US exports to China grew faster than any other country in last several years and are only continuing to accelerate with almost 10% of all US exports going to China now, according to Mr. Perl who is also the CEO of http://www.pmfbancorp.com [1st PMF Bancorp __title__ pmf bancorp factoring], a leading U.S. commercial bank lender and the CEO of http://www.chinamartusa.com [ChinaMart Los Angeles __title__ sell to usa, export to usa], a platform that assists Chinese Companies to invest in and open US companies

Yesterday, Mr. Perl's PMF Bancorp was a host and key sponsor of China's Vice President Xi Jinping's Business Delegation to ChinaMart Los Angeles at LAX . The event provided a morning business mixer to meet many Chinese factories in the general merchandise area and to introduce the Canton Fair's trading division and the China Chamber of Commerce for Import/Export of Light Industrial Products & Arts-Crafts (aka "CCCLA" or "QQ"), the largest Chamber of General Merchandise in China with over 100,000 active members to encourage Trade between the US and China. "The CCCLA's main initiative this year is to focus on encouraging US exports to China and supporting US companies to exhibit in China," states Mr. Wang, the Chairman of the CCCLA.

Mr. Perl believes that there are two major issues in the media that need to be addresses quickly in order to help rectify the public perception between the US and China:

1. DEBT: Many American believe China owns most of US debt. The truth is that the Chinese own less than eight percent of the nearly $15 trillion American debt (Japan owns seven percent and England owns three percent). The majority of American debt is actually held by the US federal government (40%) and local and state governments (5%), with American taxpayers and companies (21%), and other foreign governments (17%) making up the rest.

2. IMPORTS: Many Americans believe that most of their paycheck goes to buying goods and services originating in China. But according to reports from the Bureau of Labor Statistics and the Federal Reserve the actual number is less than three percent (2.7% worth of imports measured against America's $14.5 trillion economy). In fact, nearly 86% of American consumer spending is on home-grown, made-in-the-USA products.

According to the Office of the US Trade Representative (USTR), exports to China neared one hundred billion dollars last year, an increase of nearly a third over the previous year.

US exports to China grew faster than any other country in last several years and are only continuing to accelerate with almost 10% of all US exports going to China now.

Mr. Perl is not alone in his positive attitude toward the Chinese. Erin Burnett, now the CNN anchor of "Outfront," pointed out as far back as 2007 that "China is our greatest friend right now.They're keeping prices low, and they're keeping prices for mortgages low too." She made the comment on "Hardball" when she was an anchor of CNBC's "Street Signs."

Stephen Perl's book, "http://www.doingbusinesswithchina.net [Doing Business with China: The Secrets of Dancing with the Dragon __title__ stephen perl book china business mart]" is a how-to that can help struggling American businesses and government policy makers better understand the Chinese culture and to do business with China in the future.

About the Author
Stephen Perl is the CEO of 1st PMF Bancorp (www.PMFbancorp.com), a leading US commercial bank lender, and the founder and CEO of ChinaMart Los Angeles (www.ChinaMartUSA.com), the first non-government platform that assists and supports Chinese with investing in the US and with US trade. Located at Los Angeles International Airport (LAX), ChinaMart is the largest physical showroom and investment platform of its kind in the US. Mr. Perl actively serves on the County of Los Angeles Board of Governors and the City of Los Angeles Economic Advisory Board. Additionally he is a director on the board of the Commercial Finance Association, the largest commercial lender’s association in the US, and a certified United States Export-Import Bank loan officer.