China 2 Flashcards
how have China been investing in ports
in major ports such as Rotterdam, Dubai
Capturing parts of supply chain and amintaining control
what are some other measures of economic growth and indicators of economic activity that are not gdp
energy used
railway freight traffic
new home construction
passenger car sales
imports (consumer spending)
why is growth in China so exceptional compared to the other Asian Tigers such as Japan, South Korea and Taiwan
The size of China compared to these countries is massive
The scale that China has grown is impressive
how does services as a sector in China perform in relation to the other industries
lags behind
how does the average Chinese person’s wealth compare to the average American person’s wealth
Chinese are poorer than the average American
but there is a reduced number of rural people living under the poverty line
inequality in China
what currency is used in China
Chinese Renminbi RMB/Chinese Yuan
(as Sterling is to Pound)
What position in the world currencies in RMB used for global payments
5th
what % of China’s bilateral trade is settled in renminbi
30%
what currency dominates in global functions
Dollar
what are the two versions of the Yuan
onshore and offshore
onshore dictated by market forces and against a basket of other currencies with the dollar and euro holding the most impact
what does the gap between the onshore and offshore yuan indicate
the market’s perceptions of the Chinese economy
what happens in chinese markets if the onshore yuan appreciates in value
import become cheaper
exports become more expensive
there is more competition from imports
reduced inflation
what happens in Chinese markets fi the onshore yuan depreciates in value
import become more expensive
exports become cheaper
there is less competition from imports
increased inflation
does it matter that the yuan manipulates their currency
yes because it decreased confidence in the yuan as a global currency
is the number of Chinese companies buying foreign companies overseas increasing or decreasing
increasing
examples of Chinese acquisitions
Riot games
Waldorf Astoria
Volvo
Why do Chinese people often invest in property in the USA
for their children attending American universities
In what countries do Chinese people invest in property the most
USA
Australia
Germany
UK
When the IMF approved the RMB as a major world reserve currency, what currencies’ weights shifted to accomodate
all but the dollar
(Euro, Pound and Japanese Yen)
How has China derisked themselves from Western Financial Dominance
developed an alternative to SWIFT which is CIPS
what is the e-CNY
China’s Central Bank Digital Currency
an alternative financial channel as means of protection
why have the commodity countries been doing well lately
they supply to China
how did China use more cement in 3 years than the US did in the entire 20th century
Urbanisation due to a huge stimulus package
(construction and infrastructure)
what is another indicator of China’s urbanisation
elevator demand, almost 70% of all elevators and escalators installed around the world are in China
From where does China source the iron ore used in steel production
Brazil and Australia
why does China produce lots of steel
for property construction, infrastructure and machinary
how do wages in China differ between different geographical locations
coastal locations have higher wages than midlands
coastal = Shanghai, Beijing, Tianjin
midlands = Sichuan, Gansu, Hubel
how is China dealing with the geographical wage imbalance
Government incentives to move production inwards
what is overcapacity in China
China produces more than it demands in e.g. coals, metals
leading to exports
Zombie enterprise
what are zombie enterprises
sectors that are not economically viable but are kept afloat by government because they employ lots of people and unemployment would cause more pressure on the government and would affect the country’s stability
what is the dependency ratio
number of people of working age supporting younger and older people
why is the population falling in China
higher wages = more family planning, lower fertility rates
how is there a gender imbalance in China
surplus of males
