Cheap China?
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Posted by:
moneysolutions
In 2011, China exported nearly 2 trillion US dollars worth of product, churned out by its ever-increasing cheap labour force. It is an extraordinary amount of money, and ten years ago, nobody would ever have predicted that the country would have been that dominant – especially when European and American economies are struggling under the weight of the biggest financial crisis since the Great Depression. So how has China done it?
 China has largely achieved its dominance of the market by undercutting every other country in the world with its cheap labour – to the extent that it is cheaper to ship products from China across miles of ocean to the consumer, rather than have products made in the country itself. But there are drawbacks to this. In order to make a profit, the product has to be made extremely cheaply and quickly, in large volumes. This has resulted in Chinese products gaining a reputation for being cheap and poorly-made rather than good value.
A vast number of cheap instruments are produced in China, for example, but these are often purchased by schoolchildren on their first instrument. This is due to shortcuts taken by the Chinese companies in order to make a profit. Fine violin wood must be dried over a period of seven years, but this is time-consuming and not cost-effective. As a result, Chinese companies may choose to dry the wood manually in an oven over a few days, but this does not allow the instrument to produce a good sound. Consequentially, you would never see a Chinese violin in a professional orchestra, as musicians of that calibre choose their instruments from renowned violin workshops in France or Germany. Often, these are workshops which have been in business for many years.
Which beggars the question – will China ever have this sort of legacy? In 100 years, will any of their violin workshops still be going? And will they have got that far by continuing to create cheaply-made products, or will they adapt and start creating more expensive merchandise? Only time will tell.
Tags: Lasting Product, Chinese Economy, Undercutting, M...
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Invest Money Now?
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Posted by:
moneysolutions
There are many ways and means to invest your money. Many people often wonder how and where to invest their money during difficult times. One of the easiest ways to invest money is to keep it in your bank account and to gain interest out of them. Some people believe that investing money in the bank's provident fund gives better returns than simply depositing the money in a savings account. The interest rate of provident fund is higher than savings rate and hence, this option it is quite beneficial for the investors. 
However, it becomes very difficult to invest our money during the time of inflation, slow growth of economy and occurrence of natural calamities. Hence, people try and search for safe alternatives to invest their money. People have a constant fear of losing their money and try and remain coy towards financial investment ideas. However, it is a fact that all these factors do not stop people from making investments. There are many cases where the investors have earned huge profits, even during difficult times. Every person making any kind of huge investment always bears a risk of losing his money.
It is a fact that the whole world is facing economic problems. Some countries like India and Singapore have, at present, a high degree of inflation and the scenario has been terribly affecting the investment decisions of the investors in these countries. Investing money in shares can also be profitable at times but a sudden fall in the economy can lead to significant loss of invested money. There are certain tricks that an investor must follow while investing money in shares, during inflation. Just as investing money in shares makes you susceptible to a high risk of losing money; it can also give you handsome profits. Investing money in forex can also be beneficial.
Tags: Investment, Money, Interest, Profit, Inflation
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34 Billion Dollar Project
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Posted by:
moneysolutions
The Inpex Corporation and Frances Total SA have just approved a 34 billion dollar project in Australia. The cost outlay is huge and almost unbelievable given the current financial crisis. You may be wondering why the Japanese have put so much into this project, seeing as they are generally known for their highly strategic and well thought out moves. If you think they are becoming erratic you may be way off in your assumption. The investment is on the Ichthys gas export project. This development is aimed at tapping natural gas from Australia’s northern coast; around 12.8 trillion cubic feet. Japan is currently the world’s top exporter of the LNG natural gas which is cooled to liquid prior to exportation. Benefits of the project: • Environmentally friendly The Japanese are highly industrialised and have had environmental issues brought on by gas emissions into their atmosphere. The natural gas has less emission in comparison to other fuels. This will help Japan to clear their atmosphere of the emissions caused by coal. • Cheaper to produce In comparison to other fuels, especially coal; natural gas costs much less to produce. This will immensely reduce the production costs of the industries in Japan and Asia, giving them an edge in production. • More reliable Unlike other sources of fuel, namely solar power, the natural gas is more reliable. Its production will provide a constant and available source of power that will enable running of industries round the clock. • Stable political environment The Japanese have been able to invest such a huge cash outlay in Australia, due to their political environment. Australia’s politics are stable and thus their investment can be certain of being followed through to the end. An unstable political environment would present a bad investment. • Proximity to Asia Australia and Asia are close to each other. This also works in the favor of the Asians when it comes to shipping costs. They end up spending less and thus there are lower production costs. The project location is very well suited to the top importers of natural gas. • Profitability The Japanese are also confident that the Ichthys project will be a financial success. It is expected to produce a huge amount of condensate at its peak, the daily approximations of which is of 100,000 barrels. This translates to over 1 million tons of liquid in a year. The Japanese have also foreseen the great demand that will follow the natural gas as a substitute for other fuels.
Tags: Japanese, Project, Investment, Natural Gas, Fuels
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High Inflation Rate
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Posted by:
moneysolutions
Singapore is one of the leading nations in Asia and is well known for its rapid growth, so long as its economy is concerned. Although Singapore is making progress very fast, it is facing certain problems. One of the greatest problems that Singapore is facing in recent times is inflation. The government of this country is leaving no stone unturned to eliminate inflation. According to the reports, the inflation rate in Singapore has reached 4.3 percent now. There can be several reasons behind such high rate of inflation but the main reason is known to be the increasing costs of houses in this country.
Due to such high rate of inflation, people are making fewer investments in every field. The day to day expenses of every common man has increased. The demand for high quality products has decreased and as a result, only limited number of quality goods is produced. The Singapore government is assuring the people that the inflation period will last for a few years only. Many companies have stopped small production units to reduce the cost of production, thus leading to unemployment among many people. The interest rates on loans have also increased which has led to decreasing number of people applying for loans. Fuel like petrol, gas, tax prices has been increased drastically. Moreover, the prices of gold and silver are at an all-time high. The tourism in Singapore has been on a decline, in recent times. Tourists are considering other cheaper Asian destinations.
The inflation has tremendously affected the common man in Singapore. The price hike has caused the common man to struggle very hard to win bread and butter for his family. It has been very difficult for people to cope up with such high rate of inflation. Growth and inflation need to be strictly regulated!
Tags: Inflation, Rate, Increasing Costs, Investment
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Emerging Market in China
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Posted by:
moneysolutions
There is a very old story that has been told many times when talking about investments and economy. It is all about an investor whose will was to take his money and plant it somewhere fertile, where he could watch it grow and produce. However, this investor was toned with fear, and there was nothing he could do calmly, because every investment had its own risk. This investor had an assessor, who was the total opposite from him when it came to thinking about investments. This assessor was optimistic about every single investing idea that was born.
When a very valuable opportunity presented to the investor's sight, they sat down and analyzed the situation. The idea is great Sir, things should workout incredibly great, at least for the first year- said the assessor. However, the investor's words were: “No, imagine what would happen if I put all my money and my investor's money on this? Imagine, if things go well for the first year, after this time they will want to take their money out of action. I will be left alone with tons of debts and unemployed”
Well, it is easy to sympathize with both the investor and the assessor. However, this is exactly what Asia is starting to do, mostly China! They are seriously investing in emerging markets which, in these hard times, can have a great boom and a horrible bust later. It is not a surprise that China is looking for a way to invest, but their investments in banks and private initiatives are too risky.
Tags: Markets, Emerging, China, Economy, Money
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Japan Having Hard Times
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Posted by:
moneysolutions
You probably heard about Japan's horrible nuclear disaster, which took place in the first half of 2011. A minimum imperfection in a nuclear plant's system was enough to leave Japan and the rest of the world in a strong crisis. People in Japan were moving all around the country to find areas which were not affected by radiation. Others preferred to cross the borders and move to other countries of Asia or even Europe. There were a few who stayed inside the affected areas, trusting they wouldn't be harmed, as they were economically unable to move anywhere else. Other countries in the other side of the world like The United States, Central American countries, Mexico, and South America areas were worried about the radiation traveling through the air and reaching their lands in the form of acid rain. This is not as mythical as it sounds. In fact, it was very probable that this radiation could pollute the clouds and invade the rain in an invisible way. Little by little the radiation would've fallen from the sky and ruined thousands of square miles of terrain, making it infertile. Not to mention what could've happened to people who had contact with this substance.
Japan definitely felt this tragedy a million times harder than any their country. Their lands did get ruined, their people moved out, the plant was no longer producing and their investments were practically gone. This is one of the main reasons why Japan's economy today stands a lot weaker than before the explosion.
Tags: Japan, Nuclear, Disaster, Asia, Radiation
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China’s Eyes on The West
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Posted by:
moneysolutions
It is not necessary to tell you that our world is going through a strong economical recession. See, when it comes to China, people from all over the world were definitely too optimistic about the crisis and the way it might affect this country. However, times have not improved a lot. In fact, the economical crisis has done nothing but getting worse during the last ten years. This is exactly the period of time that it has taken analysers to take off their rose-tinted glasses and take a look at the real China, with the actual problems they are living.
Economically, we could divide China into two major parts: the east and the west. These two areas have some sort of different economical reaction against the crisis. Both halves were equally considered stable during the first years of the crisis. Now, the first pink glasses have come off analyzers eyes. The west is the first are expected to fall. Although China is definitely strong, the problems are starting to appear notably in the West. They are expecting to have a long period of low growth, which would represent horrible profit decreases for them.
So we all know that there is no way this crisis is stopping soon, or at least in a way that it doesn't cause horrible effects somewhere. Therefore, the economical crisis seen in the west is most likely to be seen in the east very soon. However, analyzers still have their rose glasses when it comes to the eastern area of China.
Tags: China, West, Recession, World, Crisis
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Trade War with the US
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Posted by:
moneysolutions
Did you know that China has been going through a very strong economical crisis, just as any other country in the world? Well, the answer is pretty obvious. However, some people think that China has been completely resilient to the economical recessions that have affected us all. In fact, some think that the crisis is actually benefiting them in some way. Well, they probably get some kind of profit from the United States incredible economical decrease, as they are not very friendly with each other. However, they don't get a direct economical profit from it.
Now that China is actually feeling some critical problems, they have decided that they will boost their stakes. Not only will they do it in a couple of banks, but in four top banks of the country. Of course, this will be great for the Chinese state and economic base. In fact it could really give them some calmed times meanwhile the crisis is a little more controlled. However the US is not even close to like this decision. The reason why the US has this attitude regarding the subject is because it will cost American jobs by giving exporters very few advantages. Of course, while China is playing with its banks, they will start selling the internal products more expensively and buying external ones very cheaply. US exporters could seriously feel an economical impact due to this.
Now, this could actually be the sparkle needed to start a trade war between these two world powers. A trade war, just like the one that took place in the 1930's could be generated soon if these disagreements are not solved.
Tags: Trade, War, US, Crisis, China, Profit
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Hong Kong Dollar Too Famous
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Posted by:
moneysolutions
Did you know that the Hong Kong dollar is starting to be frozen compared to other dollar exchange currencies? For example, Singapore's dollar is still increasing its own value for more than a 40%. While this happens, the Hong Kong dollar is recessively having no increasing rate. This is what leaves analysers with doubt: what is causing the Hong Kong dollar's recession?
Well, you can easily blame the worldwide crisis on this. However, it can be a lot more complex than that. Those who see at the crisis like something cities can't fight against to have to start analysing the situation a little more deeply.
So first of all, it is important to mention that Hong Kong has never had a very formal central bank. HSBC was one of the banks that produced most of Hong Kong's establishing actions when they were experimenting with free-floating currencies. Consequently, Hong Kong has no real base to start an economy sustainer, as it has no central bank. Not having a central bank is not a negative thing itself. In fact, it only causes problems when the external currency demand becomes too high, and it is impossible for local banks to sustain all these requests and still offer their services locally.
That is the main reason why the Hong Kong dollar is having such a hard time evolving! It has become too famous. Hong Kong is known as a city with too much trading action. Therefore, people from other areas are buying too many Hong Kong dollars, leaving the local deposits practically empty.
Tags: Hong Kong, Dollar, Singapore, Recession
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China’s Slower Growth
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Posted by:
moneysolutions
If you have had the opportunity to analyse China's economy in the last year, you will know that it is definitely slowing down. Its economical growth is still present; however it came from 9.8% to 9.1% from 2010 to 2011. This means that China's growth rate is even lower than the minimum 9.2% that was expected by analyzers. What can this mean for those who live in the UK?
Is it possible that China is heading to a hard, forced landing? Well, China is definitely aware of its inflation problem, as it increases a little every year. In fact their only solution to this problem is letting some air out of their property bubble. This method is temporarily working. However, what will happen when they run out of usable properties?
See, property prices are shockingly decreasing. This wouldn't be a problem is credit was not getting tighter every year. Consequently, projects that are funded by the government will end up having economical issues. Bad debts will start filling the nation's banks, and little by little their economy will be definitely in strong crisis.
Have you thought about what consequences could this lading have on Britain's general economy? Well, it is very simple. Even if a soft landing was waiting for China, Britain's inflation rates are still above 6%, and food is much more expensive than that. China's total recession would surely have some horrible effects in the world's economy. However, the UK could have a very strong relief on its inflation pressure. Just now, the price index is increasing at a 5.2% per year! This could be substantially lowered if China was down.
Tags: China, Economy, Uk, Inflation, Property
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