I have a new article in Shanghai Daily analysing China's attempt to develop high value added production. It shows that China is rightly emphasising technology. But an equally key issue, that of high quality design, is not receiving the attention which is required. The article looks at the examples of Apple, Intel and Samsung and their lessons.
18 May 2011
Need for some realism in EU-China discussions
I have a new article at China.org.cn looking at present China-EU discussions surrounding the European debt crisis.
It analyses that the current negotiating position of the EU is unrealistic: 'the EU is asking China to engage in activity which does carry definite financial risk... With EU encouragement, China has been buying bonds in Spain, Greece, Portugal and some of the other European countries which face risk on their sovereign debt. At least some "restructuring" of this European country debt is realistically inevitable...
'Take Greece. Its debt is rising towards 160 per cent of GDP. Its interest rate to borrow money on private markets is 16 per cent – meaning in practice Greece is excluded from private finance. The EU already agreed a $156 billion bailout for Greece and this has been insufficient to stabilize the situation. Greece is most unlikely to be able to repay its debts on the originally agreed terms. Astronomical interest rates are the markets estimate of how much the value of Greek debt will be marked down by – in reality an interest rate plus a calculation of by how much the debt will be devalued...
'China is to be asked to put its money into risky European financial instruments without any serious agreement that will bring benefits to China. That is not an approach any country would accept.' The response of China is therefore likely to be limited.
The article looks at the type of broader issues that might bring benefits to both the EU and China and therefore lead to a more significant agreement which would be more stabilising for the European debt crisis.
The full analysis can be found here.
