Shanghai Auto Parts & Equipment Exhibition

The Shanghai Auto Parts and Equipment Show opens next week. You know we wish we could attend. If you go, please let us know what you though, either in the comments section of this blog, or by e-mailing us at Faculty Imports.

A question nobody thought we'd be asking

Business Week and the Economist each published articles this week asking, "Is China Running Out Of Workers?" Just a few short years ago analysts were talking about China's "endless supply" of low-cost unskilled labor reserves. With 50 percent of the population still residing in the countryside (many without steady employment), we've long believed that the demand could never outpace this labor supply. Well, it turns out that despite higher pay, the poor working conditions at many of the country's manufacturers just aren't enough to lure people off the land. The result will certainly be higher prices for Chinese goods at some point down the road...

Despite prices, a rush into China

A throng of foreign buyers trampled security barriers and pushed aside guards in their haste to enter the Canton Trade Fair at its opening Friday, another sign of how companies all over the world are still rushing to do business in China. This rush into China has led to worries of inflation in the PRC, a perpetual worry for any economy but even more so in a country where prices were long fixed by the government. Now that market forces are determining prices for most products, Chinese firms are having to adapt to rising commodity prices for their inputs while dealing with the constant downward pressure on the price of outputs applied by Wal Mart and others. More...

Good Summary of China's Currency Situation

If you're interested in reading a nice summary of where China sits with its decision on currency revaluation, you may find thisProspects for China's Currency Revaluation from the Center for American Progress useful. The Center is a very liberal organization and hardly a big booster of free trade, yet here supports China's reservations on revaluation. It is extremely important for China to strenthen the miserable state of its banking system, and the Chinese worry any currency revaluation could have the opposite effect.

China may be growing too fast

China is probably the only country in the world that dislikes signs of excess economic growth. The country's economy is overheated, with the private sector growing at astonishing rates, leaving languishing state-owned and collective enterprises behind. As many as 2/3 of public companies in China are losing money--and more are slipping into the red each year. Without state subsidies, these firms would have already collapsed, leading to widespread unemployment and possible social unrest. The country's banks are laden with bad debt; as loans on highly speculative industries begin to default, it could lead to a massive downturn for the world's most populous nation. The country's "socialist" leaders are working overtime to cool down the economy to avoid catastrophy. Whether they succeed or not is a matter of tremendous import for the global economy.

Currency not coming off its peg soon, says China

Today China dismissed rumors that it is poised to allow its tightly controlled currency to strengthen, saying an immediate one-off revaluation of the yuan was "impossible" and "unwise."More...