iPhony: Fake Products Produced in China Hurting World Economy

By Crystal Brockington, Matt Melhem, Ann Legg-Margiotta, Clare Miller

SharpieVsShoupie
Counterfeit production of Sharpie Photo Credit: DangApricot

Have you ever been walking through a big city and seen someone selling a handbag for $20, but it looks exactly the same as a $200 designer bag? Well these types of counterfeit goods, which are often produced in China, are having a major impact. Not only are they affecting China’s economy by increasing their exports and employment numbers, but the market for these fake goods is so large that it affects the entire world economy as well. While the influence of these counterfeit companies is a positive thing for the Chinese economy, it hurts the legitimate companies that produce the original goods.

Counterfeit goods vary from electronics, clothing and even medications. While these items are in high commodity to the global market, China is able to produce vast supplies of goods that are almost exact replicas of the original product. China’s ambitions have expanded far beyond simple products. Today, they have developed fake Ikea and Apple stores and even produced an exact replica of a Ferrari…without an engine. Continue reading “iPhony: Fake Products Produced in China Hurting World Economy”

Chinese Village Tourism

By Thomas Stubbs, Connor Courtney, Christian Frabitore, Simone Alimonti, and Kate Stevens

IMG_1695
A young girl dressed in stylized garb for a village processional during the Bun Festival in Hong Kong. Tourists seen in the background. Photo credit: Mister Bijou, accessed 4/14/15, via blogspot

Like the rest of China’s economy, the tourism industry is growing at an almost unimaginable rate. Travel was highly restricted for Chinese citizens until the mid-1980s, but since then it has become a form of leisure affordable for an ever-increasing number of people. For example, when Hong Kong was finally made open to mainland Chinese in 1997, soon they made up 75% of the island’s tourist population. Until the mid-2000s most Chinese tourists still traveled in big tour groups to keep their trips affordable, but since then independent tourism has become much more commonplace (Chan and Zakkour). Since more people have money and a desire to travel there has been a growth in tourism in the rural villages of China, as seen in one of our Chinese Environmental Film Festival Films, Peasant Family Happiness. The pumping of new economic life into these traditional agricultural villages would seem to be a positive occurrence. However, the conversion of an agricultural community into a tourist mecca comes with certain consequences. Continue reading “Chinese Village Tourism”

Before and After the Beijing Olympics: Economic Change

By T. Farnish and M. Baker

Thousands of Beijing residents celebrate the Opening Ceremonies in a park in front of TV screens broadcasting the show.
“2008 Beijing Opening Ceremonies @ Ditan Park,” by Kris Krug, Flickr, licensed with CC BY-SA 2.0.


The 2008 Beijing games were welcomed by 94% of the Chinese population. This is no surprise, because the Olympics are a great world tradition, and they provide a great opportunity to show off a country.

Many people believe that there is great economic opportunity in hosting the Olympics, and there is. The problem with hosting is that the country needs to be able to handle such a huge event. This requires an infrastructure that can handle an extraordinarily high volume of people, can handle all the Olympic events, and can house all the Olympians. This of course costs a very large amount of money. In China’s case the total cost of hosting the Olympics in 2008 was over 40 billion U.S dollars. Part of the process for raising this money were tax increases. Nothing drastic, but every increase was noticed for those citizens that struggled with money. The issue is that the host country needs to make it all back for the Olympics to positively affect the economy.

Also, after the Olympics have ended the facilities need to be put to use or they become bad investments. Some were bad investments from the start, like building a new airport terminal to handle all of the traffic. Beijing will not experience that very high volume of people regularly, but it was necessary for the few weeks that the games were taking place. According to Michael Wines in a New York Times article, these issues have greatly affected previous countries, like Greece, “where 21 of the 22 stadiums erected for the 2004 Olympics were reported last year to be unoccupied.” Also in Greece, “The $14.4 billion cost of that party is being cited by some as a source of Greece’s potentially destabilizing fiscal troubles.” After the 1976 games Montreal also experienced economic difficulty due to the Olympics.

The difference with China, however, is that most of its real estate is already vacant. The increase in jobs from building these structures is moreimportant for China than keeping them occupied. Due to China’s extreme growth, the building will eventually be filled. Even if they stand empty for awhile, the building process creates jobs, and raises GDP, which theoretically raises living quality.  The lasting effect that the 2008 games had on China is yet to be seen, but so far the empty structures have not slowed the economic juggernaut down. The Olympics brought new development to China, which cannot be ignored.

 

The expensive ceremonies certainly had a huge “wow” factor. But what was the economic cost for China?
“Beijing Impresses,” by Kris Krug, Flickr, licensed with CC BY-SA 2.0

 

See also:

Before and After the Beijing Olympics: Political Change

Before and After the Beijing Olympics: Physical Change

 

Sources

Yong Zhou and John Ap, “Residents’ Perceptions Towards the Impact of the 2008 Olympic Games,” Journal of Travel Research 48, no. 1 (2009): 78-91.

Wines, Michael. “After Summer Olympics, Empty Shells in Beijing.” The New York Times, New York edition, sec. WK3, February 06, 2010. http://www.nytimes.com/2010/02/07/weekinreview/07wines.html?_r=1& (accessed March 3, 2014).

Soo-Bum Lee, Choong-Ki Lee, Jae-shik Kang, Eun-Yong Lee, Yu Jung Jennifer Jeon, “Residents’ Perception of the 2008 Beijing Olympics: Comparison of Pre- and Post-Impacts” International Journal of Tourism Research
Volume 15, Issue 3, (2012): 209–225.

 

 

 

 

The Rise of China During the Soviet Demise

By A. Nichols

In the 1900’s, the USSR’s GDP was higher than that of China. Today, however, it is China’s GDP which is higher. The swap was due to a multitude of reasons including better reform decisions and work culture in China than in the USSR. Furthermore, the USSR used prisoners of war as mass laborers, who did shabby work because they resented it. China’s mass laborers (who were Chinese), on the other hand, felt obliged to work for their motherland, and thus did better work.Photo by Cliff1066

Photo of Sputnik, the first satellite in space. By Cliff1066

The Soviet Union spent a huge proportion of its GDP on the military, reducing funding to other sectors of the economy. This reduced economic growth. China comparatively spent a small proportion of its GDP on its military. China, therefore, had enough left to spend on other economic activities, thus burgeoning economic growth. In the 1970’s, China allowed some level of capitalism in its economy and individuals set up companies, thereby expanding growth. The USSR didn’t allow any individual to establish a company, and so did not get the benefit that comes from an increase in companies: higher revenue. Also, the abundance of cheap labor in China attracted foreign investment, further expanding job creation and growth. Russia at that time lacked, and still lacks, abundant cheap labor. This discouraged foreign investment, leaving investment largely to the sole local investor, the state.

When both countries reformed in the 1980’s, China opened up to general ideas from the West about economic reform, and these copious ideas led to a greater understanding of how the economy works. China then used these to properly rearrange its economy in a way that has now made the country prosperous.

Chengdu, China. By jdklub

Chengdu, China. Photo by jdklub.

Russia, on the other hand, believing that the West had nothing to teach them, utterly rejected reform ideas from the West, thus, limiting the reform options that the Soviets could have had. This led to poor reform decisions, which consequently led to the collapse of the Soviet Union. The Soviet Union also dismissed globalization, equating it to Americanization. This meant that Russia did not get the benefit of trade, more income. China, on the other hand, opened up to globalization, exporting numerous goods, and is now enjoying a high rate of growth due to the exports.

A human rights protest. Photo by hunxue-er

A human rights protest. Photo by hunxue-er.

However, China might collapse just like the Soviet Union did. Many Chinese citizens now resent their government for its repression, brutality, and high corruption. If these vices of the government accelerate, people could revolt. A specific example would be the repression of the Tibetans, and the Uyghurs in Xinjiang province. Just like the Soviet republics of Georgia and Ukraine started to demand secession from the Union, residents of Tibet and Xinjiang are also demanding secession from China. Simply put, despite China having achieved more than the Soviet Union, it could end up disintegrating just like it.

What has China Done to Become an Economic Leader?

By A. Nichols

Today, China’s economy thrives with yearly exponential economic growth rates. However, the country has seen overwhelming amounts of economic turmoil in the past such as the demolition of private businesses and universities. In 1953, private universities were transformed into state universities, which the Chinese had modeled after the Soviet educational system. The government acted upon private businesses as well around the same year. Head officials of these businesses were slowly denounced in rank in order to give the government control of company operations. These actions gave a lot of economic power to the government.

With the rise of Mao Zedong, economic disaster was waiting to happen. One of Mao’s goals during his Great Leap Forward was to boost production agriculturally and in factories by a drastic percentage. Gregory C. Chow states in his bookChina’s Economic Transformation, that Mao was no economist. In fact, he tackled his economic concerns the same way he tackled politics: with the support of China’s citizens. Throughout Mao’s rein, many suffered from starvation due to the heavy demands that Mao had for crop production.Mao

In 1962, Liu Shaoqi rose to power. Under his rein, a majority of Mao’s policies and regulations were abolished and new goals were set. Gregory Chow describes these goals as the “four modernizations” which were to increase proficiency in industry, defense, agriculture, and technology.

In 1966, Mao returned with his Cultural Revolution. This movement caused destruction in the homes of elderly citizens that were infiltrated by the younger generation. Many universities closed their doors as a result of the hostility shown by the younger generation. This act made the education system completely dysfunctional. The Chinese economy could not flourish with all of the political chaos that occurred through a decade a of Mao’s rule until he died in 1976.

Deng Xiaoping rose to power after Mao’s death. Xiaoping, in 1979, opened diplomatic relations with the U.S. This was a big move for China as they began to show more diplomacy and recapture the “four modernizations” that were sought after under Liu Shaoqui’s rule.

Throughout the 1980’s China began to show strong economic growth. In 1982, yearly energy production began to increase above 9% per year.  This large increase was a result of increased efforts in coal production, hydroelectric power, and intensive extraction of petroleum. With such cramped, fast-moving cities, the energy was needed for everything to function proficiently. Another improvement shown throughout the 1980’s was the growth in exports to other countries. This served as a huge economic booster for China.China Trade Chart

China today is undergoing a lot of economic problems as a result of consistent growth in production. Though the growth continues, citizens are losing interest in the purchasing of goods. An article in The New York Times called “China Confronts Mounting Piles of Unsold Goods” talks about the massive overflow of goods in warehouses in China as a result of reduced spending by the citizens.

China is still well on its way to becoming the world’s top economy, but flaws in China’s system still exist that will hinder the growth of the economy. However, China has seen some of the worst economic disasters. Therefore, history teaches what not to do, leaving only improvement for the future.

Hong Kong

Capitalism in Communist China

By A. Nichols

The world we live in today is no longer dominated by the United States’ economy; a new power from the East is rising. That new power is China. China’s economy has been booming over the last few decades, steadily increasing faster than other country. However, when one thinks of China the first thought that comes to mind is that China is communist. As reform is slowly enacted, the economy sees more privatization and market-oriented concepts.

China's Capitalist Revolution

China has not always had a capitalist economy. It was not until the late 1970’s that reform was enacted to help open up China’s economy to capitalism and the international world. When Mao Zedong was in charge, he ran the economy into the ground with his economic reform, “The Great Leap Forward”. A new Chinese leader took over by the name of Deng. He sought to reform legislation, to open up the economy, and allow for more privatization. Deng pursued this new reforms because he saw what was happening in the Soviet Union. Deng, himself, believes the Soviets collapsed because of so little economic reform.

China’s system of capitalism is a very different one from that of the United States. China has what is called Sino-Capitalism, whereas America has Anglo-American capitalism. Sino-Capitalism relies heavily on informal business networks instead of legal codes and transparent rules. Sino-Capitalism is based off networking, and there is a term, “Guanxi networks” that describes this complicated process. This process is essential to succeed in China’s economy. Sino-Capitalism is typically used by authoritarian countries mainly located in Southeast Asia, so this is a perfect match for China. China and the US

“In 1973 when I asked, ‘What do you want to be?’ the answers were political,” Mr. Koppel said. “People said, ‘I’d do whatever the motherland needs of me”. This quote was used in the movie, People’s Republic of Capitalism, to describe how people responded to such questions in fear of their life because one could not express personal desires. However, since then China has seen many economic reforms for the better. People asked today respond differently from how they did in previous years. They responded as such: “Today people say, ‘Hey, I want to get rich, I want to make money”. Since the reforms, more freedom has come about and people can truly pursue their dreams and ambitions.

During the great recession of 2008, China was one of the few countries to make it out alright. In the midst of their survival, China was able to obtain about one trillion dollars of America’s debt. The article, China’s Capitalism: A Rigged Game, describes how China has been making money off US debt. China has also manipulated their own currency in their favor. China has rigged the game and that comes from the vast amount of corruption that is seen within the government. China’s economy is essentially a state-capitalist economy, and it has had so much success that it does not seem like there will be a democratic China in the near future. China's economic rise

Capitalism in China

By A. Nichols

When discussing China, the question of whether or not China is a socialist or a capitalist country is always brought up. While the Communist party is in power in China, the economic structure of the country looks very different from a typical communist economy. By looking at the reforms that China went through under Deng Xiaoping, the increase in privatization of factories and homes, and seeing if socialism and capitalism can work harmoniously, it shows that China is no longer a strictly socialist nation, but rather a nation that is capitalist with socialist qualities.

To understand how China’s economy shifted towards a more capitalist economy, one has to look at Mao Zedong’s successor, Deng Xiaoping, and all the reforms he put into place. After Mao Zedong died, it was not long until Deng Xiaoping changed the way China was run. Deng Xiaoping encouraged China to open up to foreign investments and he encouraged others to “get rich gloriously” (BBC). It drastically changed China’s economy; China’s economy soon stabilized and then it started to grow rapidly: ten percent a year, lifting two hundred million out of poverty (BBC).

One key aspect of deciding whether or not China is indeed capitalist or not is the privatization of China’s businesses and homes. When Deng Xiaoping opened China up to the West, many previously state-owned businesses become were soon privatized by Western businesses. See Edward Gargan’s New York Times article about an American businessman coming to China. American companies came to China; not only big industrial companies, but fast food chains and commercial stores.

McDonalds_medium

Photo Credit: capl@washjeff.edu

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With a shift in attitude towards privatization of businesses, it comes as no surprise that there was also a huge focus on the privatization of homes.The idea of being wealthy enough to own your own home is very appealing to many Chinese, and is forming a new class that is focused on the social status that comes with owning one’s own home (Li Zhang). It gives the people in China a small sense of what freedom is like when they can own their own home. The privatization of what was once state-owned housing and companies shows that China is shifting away from the traditional “communist” ideas and moving towards capitalism (Li Zhang). See Joseph Kahn’s article on the shifting views of capitalism in China.

DSCN3027Photo Credit: Erin Bailey

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With the emergence of private property and businesses, it is clear that China is no longer a truly socialist nation, but is it one hundred percent capitalist? There is no black and white answer, though there was a major shift in political and economic thought when the economic reforms of Deng Xiaoping were put into place. The reforms allowed there to be an opening up of ownership, and allowed there to be the existence of private business owners (Faure).

Noting that China is no longer a strictly socialist society, the question now is whether or not capitalism and socialism could possibly work at the same time. China is truly a unique country at the moment; it has somehow been able to mix the socialist, capitalist, bureaucratic, and business sectors all together, creating this interesting hybrid system. See Ming Li’s article on how capitalism and socialism work together in China.

Bible Factory in China

Photo Credit: Erin Bailey

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China is definitely in a unique situation. China is never going to fully be free of the socialist qualities, which means China is a mix of socialism and capitalism, and it will stay mixed for a while. China is capitalist with “Chinese characteristics;” not fully capitalist, but not fully socialist either (Mingi Li).

Works Cited:

BBC, “Becoming a Superpower: Deng Xiaoping’s Reforms and Their Legacy.” 

 China’s Capitalist Revolution, Web,URL
 Li Zhang, “Private Homes, Distinct Lifestyles: Performing a New Middle
     Class,” Privatizing China: Socialism From Afar, editors Li Zhang
     and Aihwa Ong, United States of America, Cornell University Press,
     2008,Chapter. 23-40
David Faure, “China and Capitalism: A History of Business Enterprise in
     Modern China,” Hong Kong China, Hong Kong University Press, 2006,
     1-124, 68.
Mingi Li. “A Harmony of Capitalism and Socialism?.” Science & Society 73,
      no. 2: 216-221 ,April 2009, Academic Search Premier, EBSCOhost,URL