Global Economy, Money & Finance, GDP, Government Finance
Estimated at RMB 10.7 trillion as of the end of 2010, China’s local government debt has expanded rapidly over the past several years. The country's fiscal position, however, is not yet an acute concern and will not likely pose immediate threats to economic growth.
China achieved its position as the largest manufacturing economy through extremely fast growth in physical volume of manufacturing activity and modest inflation. When accounting for population, however, China has high manufacturing intensity for a developing economy but is well behind advanced countries such as the United States.
Global Economy, Economic Environment, Labor, Money & Finance, GDP
The global spotlight has been on the troubled Indian economy in recent weeks as investors fear that a plunge in the rupee will evolve into a destabilizing financial and economic crisis. The current turmoil is partially a function of broad emerging market difficulties but also very much reflects unique growing problems brought about by an inefficient regulatory regime, a shortage of skilled labor, widening fiscal and current account deficits, and poor economic governance. Nonetheless, while the moment is indeed troubling for India, U.S. manufacturers need not worry about a repeat of the severe 1991 balance of payments crisis. External debt is much lower than during that year and foreign exchange revenues are able to cover short-term obligations. Indian policymakers, however, do have to heed current distress signals and take action. Otherwise, this large and globally important country faces a bleak future.
Global Economy, Economic Environment, Labor, Leadership, Human Resources, Recruiting & Hiring
After three decades of fast economic expansion, China’s labor market has gone through significant changes. While the dwindling supply of young migrant workers has been widely reported for several years, the growing skills shortage is now attracting more attention. The potential talent pool appears to be enormous and so the talent shortage challenge seems puzzling.
China produces some 95% of rare earths but controls less than half of the global resource base. The country achieved this dominant position by lowering prices. Attractive pricing and the ability to avoid environmental consequences associated with mining and processing rare earths essentially prompted other countries to cede such operations to China.
The relationship between the two economic juggernauts cannot exactly be characterized as free trade nirvana, and there is a growing sentiment in the United States that China has not fully lived up to the commitments it made when joining the WTO. This is fueled in no small part by concern over the massive trade surplus China has built up with the United States, its largest trading partner. By deliberately undervaluing its currency, critics charge, China has propped up its export-dependent growth model.