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Monthly Archives: March 2010

For better or worse, two articles today point to a more mature economy here in China. One says,– China’s new generation picky about factory jobs. It claims that there are shortages of labor in manufacturing–something I heard from friends but could not quite believe–partly because of restrictions for too many people to get out of the agricultural sector.

The second is titled–China to bid on US high-speed rail projects. The irony here might be painful for some in the US, that high tech manufacturing needs to be imported from a country that has dominated low tech manufacturing over the last 25 years.

One of the difficult lessons of development economics is that investment somehow needs to encourage movement away from primary industry in favor of manufacturing and–finally–the tertiary sector. A subset of manufacturing might be a move from low tech manufacture toward high tech, where higher wages can be generated and better education can be rewarded.

That brings us back to the article on shortages in the labor markets, where younger workers are demanding more from a job than just a living wage.

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Parts of this report confirm my first reaction to the Google-China dispute over censorship of the Internet. Part of Google’s anger was fueled by hacking that was tracked to Chinese locations.

China has denied any role in the Google attacks and has said it will punish the hackers if they are found. American experts have said subsequently that the attacks had been traced to computers at a prominent Chinese technical university and a vocational school with ties to the Chinese military.

My own Internet experience in China, including the blocking of every website and blog I have produced here, made me suspicious that locals were responsible for the censorship. There was nothing in anything I produced that was anti-China–quite the opposite I think.

Most of what I produce is meant to be educational, mostly economic related, and I can only justify the censorship by assuming those responsible are simply not educated enough to understand what is being said.

(This post is no doubt going to get the blog blocked again.)

If China is serious about controlling the Internet, they need to bring regional servers under their wing and allow the service to complement the education and flow of information that allow for continued growth in the country.

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China is targeting new stimulus spending for minorities in an effort to minimize social unrest.

In a speech that is China’s equivalent of a state-of-the-nation address, Premier Wen Jiabao said the government would more than halve the increase in spending, to 11.4 percent, as it eases off the heavy stimulus that warded off last year’s global recession. Still, Wen promised hefty outlays for pensions, education, health care and subsidies for farmers to buy small cars and household appliances — all to spread prosperity more fairly.

“Everything we do, we do to ensure that the people live a happier life with more dignity and to make our society fairer and more harmonious.”

While expecting growth of 8% this year, domestic demand is falling among fears of inflation and perhaps a bursting bubble for housing prices.

“The Chinese nation’s life, strength and hopes lie in promoting solidarity and achieving common progress of our ethnic groups,” Wen said. “We need to take a clear-cut stand against attempts to split the nation, safeguard national unity, and get ethnic minorities and the people of all ethnic groups who live in ethnic minority areas to feel the warmth of the motherland as one large family.”

Perhaps surprisingly, budgets are rising more for social causes than for the military, which has expanded Chinese influence on the world’s sea lanes, presumably to ensure transport of goods in and out of the country.

Of course this all sounds positive, though the true justifications are likely more pragmatic than philanthropist. Targeting the lower classes is more likely to result in respending than if the wealthy were the first beneficiaries.

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