Tag Archives: china

Revised Blog 5: No Japanese Animation!!

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China should take some actions to regulate Japanese animations. Japanese cartoons are definitely one of the most celebrated Japanese symbols. It has magical power can make millions of people addicted. “It is not a coincidence that Japanese animation has become a leading force in the cartoon industry. Relying on a meticulous approach, superb skills and colorful subject matter, it controls two-thirds of the global market. In the world’s 300 billion Japanese Yen (US$3.6 billion) cartoon market, Japan accounts for 65 percent, according to a statistics of the Ministry of Culture, Sports and Tourism of the Republic of Korea.”

In China, countless teenagers are crazy about various Japanese animations. Even some adults are waiting the new series eagerly per week. Actually, many of my friends cannot live without watching Japanese animations and they persuade me joining in since watching Japanese animations can gain lots of spiritual strength as for their considerations. However, as for the benefits of developments of Chinese teenagers, China should provide appropriate regulations for Japanese animations.

Overwhelming injections of foreign cultures lead people overlook their own treasures. Japanese animations do not only show those fancy pictures, attractive plots, and interesting lines but profound cultural influence from Japan. Different kinds of stories presents the belief of Japanese in every aspects. Japanese language, food, costume, and ritual are transmitted from those animations to Chinese teenagers’ minds. I am not telling that learning foreign cultures is harmful. In fact, proper acknowledge of other cultures helps teenagers deeply. But many Chinese students do not know Chinese history but are familiar about Japanese cultures. What’s worse is many Japanese animations delivers negative influence to young people.

There are lots of unhealthy items in Japanese animations for teenagers and children. “China’s animation market is dominated by imported content, especially Japanese products. Classic manga series like “One Piece” have fostered a large group of followers. Earlier series like the basketball-themed “Slam Dunk” are part of the collective memory of many Chinese born in the 1980s. Japanese video content often show revealing scenes of violence and sex.” Children and teenagers are living in an age that can be influenced easily. They are in a period of setting up valid values. Overwhelming violence and pornographic contents can be even more harmful than hard drugs. If Chinese government did not build limit for Japanese animations, Chinese teenagers and children can be misled deeply.

Another significant issue is China should be aware of culture invasion. Nowadays, cold arms are laid down apparently. Nevertheless, the war of information, finance, economy, and culture never stop. Culture war is so cruel that if a country is imperialized by the other one, the teenagers will admire the foreign cultures then this nation will lose the ability of critical thinking and acknowledge of domestic culture. Surely, I do not advocate seclusion for China but a country should be a global one only after being a national one first. What Japanese animations famous of is just the Japanese characteristics. While regulating Japanese animations, China urgently demands producing own cultural strength in the world.

 

Revised Blog 4: America Should Join AIIB

“’China is playing the long game effectively,’ said Cornell University economist Eswar Prasad, a former senior China official at the IMF. ‘They are in absolutely no rush. They know other countries will come to them.’”

This long game’s name is called AIIB (Asian Infrastructure Investment Back), which was proposed by Beijing in 2013 initially. From the name, we can infer that this is an investing bank mainly for developing infrastructures in Asian countries. However, the members are not limited only for Asian countries, while British, Germany, France have announced to join in. Chinese government injected 49 percent of initial capital to the new bank. Till now, the collected funds have been almost prepared. “Meanwhile, the bank is on track to reach its target of $100 billion in registered capital, up from the $50 billion initially announced and that China is providing, according to Chinese and Western officials.” The start-up capital was only $10 billion of the World Bank, though we should consider about the time cost and inflation rate. But, without doubt, AIIB will definitely not only be an Asian but a worldly economic and financial center.

For such a big game, will America be a role paler? I think so whereas American government officials do not. Admittedly, at the first glance, we may consider that America should set tremendous barriers for China to form AIIB to firm its dominant status of the world’s economy. However, what is the really wise choice for America? Join in!

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America’s join will provide a positive influence to form a valid and qualified regulation within AIIB. “Over the past year, however, the U.S. has urged its allies not to sign up for the bank, saying it would be an instrument of Beijing’s foreign policy and that without proper governing rules it could contribute to debt and corruption in borrowing nations.” America expressed that they did not frown to form AIIB, but could not nod to China’s regulatory policies. They worry that China is not qualified to govern and lead such a huge organization successfully. They doubt China is not capable to provide rules and regulations scientifically and efficiently. If America join AIIB, they can bring many matured rules and regulations by their various former experiences from leading the World Bank and IMF. After all, global economic chaos will also present negative effects on America. As AIIB has such a magnificent scale, if this organization expose essential problems, it is hard to image America will not suffer any harm.

Joining in AIIB also help America lessen China’s dominant power. “Another pending issue is how to structure the board of directors at the new bank. In the World Bank and the IMF, countries are represented by resident directors who are actively involved in the institutions and vote on new projects, programs and policies. Those representatives act as a check on management. The U.S. has been pushing the Chinese to adopt the same structure, according to those involved in the discussions, but Beijing is resisting. Instead, it wants the bank’s management, which will likely mean Chinese officials, to have a more powerful position.” Without America’s joining, China will absolutely be the sole dominator of AIIB. Then, China will readily and legitimately introduce some foreign policies that benefit itself. That is definitely what America did not want to see. “Still, Mr. Jin, interim chief of the new bank, said over the weekend that more than 35 countries will join as the bank’s founding members by the end of this month. South Korea and Australia, key U.S. allies in the Asia-Pacific region, are also expected to come on board by then, according to Chinese officials involved in the effort.” Moreover, as some America’s allies joined AIIB for their own profits, America could draw them on the same side to against China and balance the authority in the AIIB.

Till now, 46 countries have applied to join in AIIB and this number will continue goes up seemingly. China successively introduced “One Belt and One Road” and AIIB, the goal is so clear—forming and consolidating the Eurasian Economic Community. After setting down the deep fraternity between African countries, China is ready to lobby Europe with its strong power. If America cannot propose some effective strategy back, the day of China’s dominance will come soon. Actually, Joining AIIB is an indispensable move for America.

China to Begin Deposit Insurance (Blog 30)

Thesis: Deposit Insurance system is theoretically good for China, but some consequent actions also need to take to make sure it works.

Deposit Insurance is not a new word for Americans, who established a national deposit insurance system as early as 1933 during the great depression period, and even before that various deposit insurance scheme based on self-regulation were also tried out. But China did not introduce such a policy until recently. On Tuesday China detailed a plan to launch a deposit-insurance system in May and which is seen as a prelude to liberalize financial system (WSJ, Mar 31th).

Most people are excited about the news. For the public, deposit insurance is another safety lock for their money saved in the bank. China has one of the most amount of saving in the world. Up to 2015, the total saving is around 122 trillion yuan ($19.654 trillion). Based on the Chinese Center Bank calculation, the up-to 500,000 yuan ($80,558) deposits limit could cover 99.63% people’s all deposit. For the banks, especially those small and private banks, it is a chance to enlarge their clients. since for those people who have more than 500,000 yuan deposit in one bank, it is time that they shift part amount of money to other institutions in case the deposit insurance cannot cover lose, which give chances to some small banks. For the central government, deposit insurance scheme frees the government from the role of ‘invisible person in charge’. Before deposit insurance, it is the central government who takes duty and pays for the clients when a bank goes to bankruptcy (it also explained why no bank has bankruptcy in China before, government is their supporter). Now the central government does not have the burden. What is more, deposit insurance encourages the competition among banks which is good for market.

However, people may over emphasis the advantages of deposit insurance. First, the deposit insurance requires banks to pay a certain amount of insurance premium, given that the current deposit-reserve ratio is around 20% in China, the running cost for banks are going to increase hugely. To overcome the cost problem, banks may charge a higher service fee to clients. Second, deposit insurance bring moral hazard problem. Banks have more incentives to risk clients’ money since they have insurance as their back up, plus that they need to make more money to compensate the insurance premium. Most importantly, the core goal of deposit insurance is to protect depositors’ money. Being differ from American free market, the saving account in China actually already been in shield by the central government even without deposit insurance. Personally thinking that most Chinese never worry about that the banks are going to bankruptcy and they are going to lose deposit given the government is supporting behind. Thus introducing deposit insurance does not make any difference for depositors or banks if the central government does not exit.

Chinese Investment

Thesis: Investment by foreigners (notably China) damages the economy in many ways.

I was born and raised in metro Detroit, Michigan, and have been familiar with the economic situation of Detroit for many years. In 2013, the city of Detroit went through bankruptcy on the public front. However, in the private realm, there were (and still are) two major proponents for the city. Their names: Mike Ilitch and Danny Gilbert – two billionaires who have been pouring their money and resources into rebuilding Detroit. They have done everything from purchasing casinos, buying buildings, knocking down blighted homes, and creating jobs through their various entities. When one of these two billionaires acquire property in Detroit, they actively improve the buildings and surrounding area in an effort to help revitalize the city. But this is not the case for all investors. Many Chinese investors purchase real estate in Detroit simply due to the low cost, but then do nothing to improve the property. So while some activist investors are aiming to improve Detroit and revamp the local economy; other investors are simply buying and holding hoping others will do the work for them. In an article by Forbes titled, “China’s Newest City: We Call it ‘Detroit”” it discusses the attraction of Detroit properties to Chinese investors.

My first example was one that hit close to home and contained some economic impacts that are less robust than my next argument, but nonetheless prevalent. An article by Bloomberg titled, “China Wants to Buy Europe” discusses how aggressive Chinese investors are being in foreign markets. “Until 2011, China was mostly a receiver of European investment, but then the debt crisis drove down asset prices. Some governments became desperate to privatize, and venerable corporations got less picky about potential investors. Chinese buyers acquired Volvo in Sweden, a large stake in Peugeot Citroen and fashion house Sonya Rykiel in France, the Piraeus Port in Greece, Pizza Express restaurants and the upscale clothing maker Aquascutum in the U.K. Chinese investment increased exponentially” (Bloomberg). Essentially, before the financial crisis, companies were able to be picky about where they received credit. Once the credit markets dried up, they needed to look for outside investors where the Chinese were aggressively investing.

Chinese M&A activity

The preceding image taken from the Bloomberg article does an excellent job depicting Chinese investment. The large increase in investing in the EU is concerning, due to the current financial position of the EU. The increased investment by the Chinese will increase their net exports (thereby decreasing net exports of the EU) which will have a further compounding effect on the EU. So China’s increased investment in the EU is further crippling an area that is already struggling on many fronts as evince by the near parity of the U.S. dollar and the Euro. That being said, if the Eurozone does make it out of the crisis, it is quite possible that these Chinese investors bought at the bottom.

Revised Blog 1: Don’t Coddle China’s Domestic Business

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Which was the most rapidly growing country in the past decade years? If we collect 100 answers, there will be no surprise if 99 answers are China. China’s GDP increase rates were about 10 percent for years. So which part contributed most to China’s impressive GDP growth? If we collect 1000 answers, there will be no surprise if 999 answers are exports. Great exporting power has become a tag of China. “Made in China” can be found in apparels, groceries, toys, and electronics all over the world. Low wage labors provided China an essential advantage on exports. Squeezing cost made Chinese firms be competitive on price war. Without doubt, exports did devote a lot for China’s development. Though, meanwhile, problems also became more and more dazzling. More important, the original cause of the problems was that Chinese domestic businesses were coddled excessively.

“Exports fell 3.3% in January from a year earlier, data from the General Administration of Customs showed Sunday. This was a sharp deterioration from December’s 9.7% rise and short of a 4% increase expected by economists polled by The Wall Street Journal”. This was a brief report about Chinese export in January this year. China experienced the slowest developing period last year with about 7 percent GDP increase rate. Though Chinese governments proposed to push Chinese economy bouncing back to a speedy pace, there were challenges in front of them.

China relied too much on exports. When losing price advantage and facing more competitions from developing countries, China had no enough effective ways to deal with this trouble. Taking car market as an example, we may found that China almost had no competitive independent domestic car business. “Even as China’s car sales grow at a 10% annual clip, many of its domestic auto makers are expected to report 2014 results that will be their worst in years. Great Wall Motor Co. , considered a rising star, projects a 2% decline in net profit for 2014, its first year-over-year drop since 2008. Geely Automobile Holdings Ltd. , whose parent company owns the Swedish Volvo brand, warned of a roughly 50% slump in last year’s net profit, its first year-over-year decline since 2002. Great Wall cited hefty research expenses and Geely blamed its drop on a 24% slump in its overall car sales”. Chinese government set a high tariff on foreign cars with the aim of protecting and developing domestic business. Things went athwart, Chinese domestic car companies relied on government’s protections excessively that they failed to build up a true competitive independent domestic business. They knew that even if they had no stronger power than foreign competitors, the government will help them by introducing policies or providing them fund. Too much state owned firms depended on government’s compensation on their budget deficit to be alive. Furthermore, along with China’s rapid growth, more and more Chinese people have enough money to purchase importing cars, regardless the high tariffs. This caused a harmful consequence to Chinese domestic car business.

Car market is just a tiny view of China’s domestic business. While losing price advantage and exporting power, China need to find a way to build up reliable independent domestic business. Otherwise, China’s development might endure a more and more sluggish circumstance in the coming years. Actually, the most urgent mission for Chinese government is to encourage domestic firms discovering advanced techniques but not to continue to protect them too much. Chinese business should not be treated as a coddling boy but a competitive soldier.

Don’t Coddle China’s Domestic Business

Which was the most rapidly growing country in the past decade years? If we collect 100 answers, there will be at least 99 answers saying China. China’s GDP increase rates were about 10 percent for years. What contributes most to China’s impressive GDP growth? If we collect 1000 answers, there will be at least 999 answers saying exports. Great exporting power has become a tag of China. “Made in China” can be found in apparels, groceries, toys, and electronics over the world. Low wage labors provided China an essential advantage on exports. Squeezing cost made Chinese firms be competitive on price war. Without doubt, exports did devote a lot for China’s development but problems also became more and more dazzling.

“Exports fell 3.3% in January from a year earlier, data from the General Administration of Customs showed Sunday. This was a sharp deterioration from December’s 9.7% rise and short of a 4% increase expected by economists polled by The Wall Street Journal”. This is a brief report about Chinese export in January this year. China experienced the slowest developing period last year with about 7 percent GDP increase rate. Though Chinese government proposed to bounce back to a high speed, there were some challenges in front of them. The essential problem is that China relied too much on exports. When losing price advantage and facing more competitions from developing countries, China had no enough effective ways. Taking car market as an example, we may found that China almost had no competitive independent domestic car business. “Even as China’s car sales grow at a 10% annual clip, many of its domestic auto makers are expected to report 2014 results that will be their worst in years. Great Wall Motor Co. , considered a rising star, projects a 2% decline in net profit for 2014, its first year-over-year drop since 2008. Geely Automobile Holdings Ltd. , whose parent company owns the Swedish Volvo brand, warned of a roughly 50% slump in last year’s net profit, its first year-over-year decline since 2002. Great Wall cited hefty research expenses and Geely blamed its drop on a 24% slump in its overall car sales”. Chinese government set a high tariff on foreign cars with the aim of protecting and developing domestic business. Thing went athwart, Chinese domestic car companies relied on government’s protections excessively that they failed to build up a true competitive independent domestic business. Along with China’s rapid growth, more and more Chinese people became having enough money to purchase importing cars, regardless the high tariffs. This caused a harmful consequence to Chinese domestic car business.

Car market is just a tiny view of China’s domestic business. “The domestic industrial sector is definitely under pressure and I don’t see much improvement this year,” said Guo Jinsong, deputy general manager at Beijing Stone Automation Corp Ltd, which imports automation equipment for the steel, power, machinery and petrochemical sectors”. As the global economy environment is in a gloomy period, China’s industrial exports has been punched heavily. While losing price advantage and turbulent world’s economy environment, China need to find a way to build up reliable independent domestic business. The most urgent mission for Chinese government is to encourage domestic firms discovering advanced techniques but not to protect them too much. China should not be treated as a coddling boy but a competitive soldier.

Internet Supervision Intensify in China (Blog 19)

I went back China today. To my surprised, I cannot log into my UM email anymore, neither use Google browser or look through the WSJ website. It seems that after a year, the internet suspension(block) in China is being even more strict instead of loosening.

Indeed, right recently, China announced a new regulations requiring users of an array of internet services to register with their real names and avoid spreading content that challenges national interests, which is going be effective in March 1st. The requirements apply to users of blogs, instant-messaging services, online discussion forums, news comment sections and related services. In a word, the characteristic of anonymity in the internet, which is one of the most attractive features of the internet is gone in China.

Most people complained about the new regulation as well as those extreme internet monitoring. Personally saying, I could understand why is Chinese government requiring internet users to register with their real names: to maintain the stability of the Chinese society.

First of all, China is a ‘one party rule’ nation. Unlike U.S that different parties involve in governing the nation(though there would be a dominate party in a period, it won’t hurt too much if a party fade since others will replace it), in China Communist Party takes all charge of the country although there are some other auxiliary minority parties. Thus once the Communist Party are threaten by something or someone, the whole country are in danger. Maintaining the stability of Chinese society is equal to maintaining the stability of Communist Party in a way.

Secondly, with the development and popularization of internet, some voices which against the Communist Party or against some regulations or creeds of Communist Party can be spread very quickly and wildly. Some people are easily believed by those reactionary information, considering China has over 1.4 billion population, those ‘some people’ could have a quite large number. Which is a potential threaten for Communist Party, hence a potential threaten for the stability of the society.

Applying real names on the internet users is quite an effective way and quickest way to find out where those voices comes from, which makes it easy to fix the problem. What is more, applying real names also could reduce the reactionary information from the beginning since people will know that they will be tracked. Put another way, reactionary information or voice may bring little externality to the society, but internet amplifies the negative externality by spreading those information to millions of people. Appling real names on the internet is like putting a fetter on the internet, which minimal the externality. For those who obey the ‘net neutrality rule’, register using real names may not disturb one’s life too much.

However, while enforcing real names does reduce the negative externality, it may also reduce some positive externality. For example, the freedom of speak. people may afraid of being caught by government that they cannot speak out their ideas. Or missing ‘real appeals’. Because internet and media maybe the only way for some people to expose their unfair treatment by local government. Once the center government enforcing using the real names, the local government could ‘clean’ the person first.

Personally speaking, I may prefer not to using real names in the internet. Real names in the internet could bring stability for the nation, I doubt the effect may be only temporary. However, let the public lose the freedom of speak because of the fear for being punished by government, eventually the government would become to dictatorship and cause the even worse fury of the public.

Other Source:

http://en.wikipedia.org/wiki/Communist_Party_of_China

The Argument for State Monopolies

The nationalization of industry is viewed by many nations as a bad thing, favoring capitalism over socialism, especially in the United States. China, however, has been a long proponent of nationalized industries, emphasizing that is better for everyone involved, not just the people in power.

“China’s leadership is exploring ways to consolidate the country’s oil industry, creating new national champions able to take on the likes of Exxon MobilCorp. and operate more efficiently as prices slide” – Lingling Wei and Brian Spegele from the Wall Street Journal.

I think this is a good thing for China, and I am going to make the argument that many nations should do the same. The biggest downside to monopolies is their ability to have complete control of the market, which they can then use to reduce quantity of output in order to drive up prices, creating higher profits from themselves. However, when it is state/nationally controlled the government can regulate output in a way that is best for consumers, virtually getting the best of both worlds. Government-run monopolies do not have to worry about spending a large deal of money on advertising, another plus, as they are not competing with anyone, allowing them to kick back all potential profits to the government, and ultimately the people. Obviously if the government is corrupt those profits may never reach the general public, but that is besides the point that I am arguing. Any nation with a corrupt government faces a great deal of issues. I am focusing on the idea of state-owned and run industries in a nation free of corruption, at least as much as any nation can be free of corruption.

“Combining and then streamlining the operations of the major Chinese oil producers could help reduce waste caused by redundant staff and projects, the officials said” – Lingling Wei and Brian Spegele from the Wall Street Journal.

Another upside to consolidation of an industry is reduced waste and redundancy. Basically, pick and choose the best parts of each firm and then combine them into one firm.

A foreseeable potential downside is reduced efficiency. The idea behind the free market and competition is companies that are not constantly innovating will be forced out of the industry, leaving a more lean and efficient market. This is where, I believe, the role of the government is critical. If the monopoly is privately owned, it is safe to assume that one of their focuses will be establishing barriers to entry to secure them the market in the future. This would allow them to slack off on the innovation part of their business, with no threat of being forced out of the market. However, government involvement, such as routine check ups on the research and development sector of this company could reduce this problem, although it would most likely exist to a certain extent. With the right pressure and monitoring by the government overseeing the monopoly, the positives seem to outweigh the negatives.

Can China become consumer-driven? (Revised)

As most of you have already heard by now, China’s economic growth in 2014 have slowed to levels not seen in over 20 years: a mere 7.4%, Wall Street Journal reports.  Raising concerns of diminishing global demand for commodities which could weaken the global economy as a whole.

China’s growth in the past few decades, since Deng Xiaoping opened China to the world, has been one of the greatest success story of economic reform and policy in recent history. Fueled by rapid industrialization and infrastructural development, China’s GDP is over 10 times larger than what it was just 20 years ago. Many economists have questioned how long China can sustain it’s growth. And alas, China has slowed down. Despite falling oil prices, the IMF predicts that China’s growth in 2015 will be as low as 6.8%

China’s government is on top of this issue, with President Xi Jinping saying that the nation needs to adapt to a “new normal” in the pace of economic growth and remain “cool-minded” amid a slowdown that analysts forecast will lead to the weakest expansion since 1990. (Bloomberg)

In light of economic growth, rising labor costs is making China less competitive as a manufacturer of low-tech exports. This creates a need for a more sustainable growth model, one that is driven by consumer spending and service industry, like the United States and many fully developed western countries. But this will be no easy task. According to the CIA World Factbook‘s 2013 data, China’s GDP composition consists of 10% in agriculture, 43.9% in industry, and 46.1% in services. Compared to the U.S.’s which consists of 1.1% agriculture, 19.5% industry, and 79.4% services; United Kingdom’s consists of 0.7% agriculture, 20.5% industry, and 78.9% services; and many other developed countries share a similar spread. We can see a huge disparity in the proportions where China’s agriculture and industry is far ahead but services lag behind.

Yes, China’s growth has put more money into the consumer’s hands; yes, the Chinese are now spending more than ever on luxury goods and services; and yes, China is heading towards that goal. But there are also huge social issues that need to be addressed. In my trip to China last year, I have seen that much of China’s growth has been in urban environments, resulting in huge migrations of people into industrialized urban zones. This leaves rural area even more underdeveloped, creating huge income gaps. Cost of living in urban environments have also gone up; in places like Beijing and Shanghai, consumer goods cost even more than the U.S. In rural towns, however, there have not been much change. The Chinese government is aware of these issues and have increasingly made efforts to develop rural zones, but it doesn’t seem enough. Another issue is that the Chinese generally have a saver’s mentality; a lot of us emphasize saving now so that we can have more later. To top it off, the Chinese government is reluctant to adopt stimulus policies; though I am assuming this is because of the saver’s mentality, stimulus packages will not have much of an effect on consumer spending.

China’s endgame seems to be a consumer-driven economy. But as of now its rural zones still require large amounts of infrastructural development. To juggle industrialization in rural zones and de-industrialization in urban zone will surely be a challenge.

In a most recent article regarding incoming foreign investments, an increase in foreign invests is observed, and services accounted for 2/3 of inbound investments, while high-end manufacturing took up almost all of the remainder. While this demonstrates progress in China’s shift towards a service-industry, it also shows that China is no longer attractive for low-end manufacturing.

A Long Way For Chinese Heavy Industry

While china developing so rapid in the past decades years, more and more Chinese businesses went abroad to broaden their career. At first, manufactures are the most important part. Million tons of apparels, groceries were exported from China to the countries all over the world. Gradually, some light industries and technical products, including air conditioners, mobile phones, computers, became accepted by foreign consumers. Maybe it is time to talk about the issue of heavy industry.

China’s heavy industries are always controlled by the central government by nearly 100 percent. Due to the poor economy circumstance at the beginning of the People Republic of China, central planning economy was utilized, especially for fundamental industries. However, from the beginning of 90th in last century, the state-owned firms presented weak performance, which led Chinese government decided to make some profound reforms. Though the progress was a little sluggish, but the accomplishments were still impressive, especially in the last five year. “At the end of 2013, China had about 155,000 firms owned by central, provincial and local governments, according to the Ministry of Finance. Beijing itself directly controls less than 120 of the biggest and most strategically significant industrial companies, which are responsible for building the world’s largest nuclear reactors and most extensive high speed rail network, buying up mining and agricultural resources overseas, and spreading Chinese goodwill with infrastructure projects across the developing world. To do so, they get access to cheap credit and a raft of other subsidies.” Many Chinese industries have spread their business to foreign lands but problems also emerge meanwhile.

Chinese industry’s core competence is still in low price, which cannot be a sustainable mode to develop. More and more competitors with even lower cost, including India, Vietnam, and some Latin American countries, are swallowing the business from Chinese firms. Moreover, unlike apparels or groceries, heavy industry need to be pretty feasible and durable. Thus, high level of techniques should be pertained to ensure the quality. Besides the inner factors, other factors in the world also can be challenges for China. Economic environments all over the world are not well. Many governments suffered from heavy pressure of budget deficit. The constructions of infrastructure is stepping into a slumping way. Some expecting project was forced coming to a premature end unfortunately. “The halt on construction of the roughly 130-mile bullet-train line, from Mexico City northwest to Querétaro city, has become a sore point in China. On Monday, China’s National Development and Reform Commission, the country’s top economic-planning body, called on Mexican officials to protect the rights of Chinese companies.”

There is still a rocky road for Chinese heavy industry.