G-20 summit ends without resolutions

The most recent meeting of the Group of 20 concluded in mid-November without achieving many of the participant’s concrete aims.

The Seoul Summit Leaders’ Declaration included phrases on remaining “determined” and “vigilant”, to “pledge coordinated efforts” and “promote job creation”. There were even sections addressing (Chinese) currency valuation, (American) capital flows and (European) trade protectionism. Most notably, the G-20 leaders all signed that:

“We will move toward more market-determined exchange rate systems and enhance exchange rate flexibility to reflect underlying economic fundamentals and refrain from competitive devaluation of currencies. Advanced economies… will be vigilant against excess volatility and disorderly movements in exchange rates. Together these actions will help mitigate the risk of excessive volatility in capital flows facing some emerging market economies.

“We will refrain from introducing, and oppose protectionist trade actions in all forms… We reaffirm our commitment to avoid financial protectionism.”

Yet none of these statements clarifies any of the 20 nations’ specific commitments, targets or planned actions. As Newsweek reported, “The messiness of the negotiations was made clear by the nebulousness of the final press releases, which left enough wiggle room for all 20 nations to sign.”

China gave no ground on its controlled currency appreciation, which has hindered the ability of other exporting nations to compete. The US was unable to promise that the Federal Reserve would refrain from purchasing US Treasury bonds, which the Christian Science Monitor notes would consequently reduce interest rates, turning global investors onto emerging economies.

Even if the leaders had stuck their necks out and offered to make the first compromise, none of the G-20 declarations are legally binding for signatory nations.

Economies that were not too long ago a case of all action and no talk now seem to be a case of all talk and no action. Let us hope that the coming year will help these 20 major economies to strike a balance between the two.

Business Tianjin, DEC 2010 (.pdf)

The tortoise or the hare

Much like the rabbit in Aesop’s fable, China is racing ahead at full speed. Its economy has paced itself at an average 10% GDP growth for nearly 30 years, during which foreign investment, real estate and infrastructure have surpassed all expectations for sustaining their acceleration. All charts curve up. The hare seems poised to win.

Yet in many fields, China – like the methodical, determined turtle – slowly marches along. After a two-year pause, the CNY exchange rate again creeps upwards; the nation’s fingers grasp further over other lands in search of long-term secured natural resources; and worldwide the government pursues economic ties, staving off political ones with its steadily growing cash reserves. The tortoise is set endure.

Hare skeptics say it may be running low on energy. China’s one-child population will age and increasingly enter retirement over the next few decades, leaving an overreaching nation understaffed.

Tortoise skeptics cite the hurdles it has yet to jump. Nations around the world grow louder and more aggressive in their protests: they resist China’s increasing presence in everything from petroleum to movie production.

Although a finish line awaits somewhere beyond the horizon, the outcome is already known. By embodying both contestants, China has assured its own victory.

This leaves organizations working in China with just one business decision: whose back to ride.

Business Tianjin, NOV 2010

The World Economic Forum and sustainable growth

Tianjin hosted the annual summer meeting of the World Economic Forum last month. The three-day symposium promoted renewable energy and green technologies, and their successful uses by multinational organizations that have experienced sustainable growth over the past two years.

Starting with the September issue, Business Tianjin has been interviewing the leaders and decision-makers of these organizations, uncovering their paths to prominence during a depressed global economy. This month and next, turn to the Dialogues for their insight and ambitions. And for tips on overcoming language and cultural barriers – of vital importance to doing business in China – read through this month’s Last Word column.

This issue also shares a wealth of legal information on technology transfer, franchising, human resources and China’s newly passed tort law, all composed by experts in their relevant fields. We are proud of our longstanding relationships with the contributing authors and members of our local business community.

As always, we welcome your constructive input and inquiries. If you are interested in contributing to a future issue of Business Tianjin, or just have questions or comments on an article, please reach out to us at the contacts on this page.

Business Tianjin, OCT 2010 (.pdf)

Socioeconomic concerns for the World Economic Forum

The economies of Asia, Europe and North America have relied heavily on two years of government stimuli to weather the global economic crisis. While the EU and US struggle to avert a crash, China aims to ease its rise. We have reached a peak in uncertainty over the Euro, US dollar and Yuan currency markets. Investors, seeking control and stability, are increasingly turning toward sustainable options to meet their long-term strategies.

This month Tianjin welcomes a thousand such CEOs and decision-makers from institutions around the world to the summer session of the World Economic Forum. The Annual Meeting of the New Champions invites participants whose organizations have experienced remarkably rapid growth over the past two years while demonstrating responsible leadership in their industries. Their goal: to drive the sustainability vital for global, national and business competitiveness in the 21^st century.

The current socioeconomic issues that most concern investors in and residents of China involve clean and green economic and technological development (see WEF Dialogues), currency revaluation (Economy column), changes to foreign direct investment policies (Economy, Legal Assistance), the accelerating costs of land and property (Real Estate) and health care challenges (Last Word).

We at Business Tianjin magazine support and promote the pursuits of the regional business community. And as always, we welcome your constructive input and inquiries. If you are interested in contributing to a future issue of Business Tianjin, or just have questions or comments on an article, please reach out to us at the contacts on this page.

Business Tianjin, SEP 2010 (.pdf)