Growth slows but China is not collapsing

Is the Chinese economy going to face the same problems as many western ones?

Read this BBC article and answer the following questions:



Level 1: Knowledge
1a) Define the term “Gross Domestic Product”
1b) Identify the fiscal policy and monetary policy measures taken by the Chinese Government that are mentioned in the “Limited effect” paragraph

Level 2: Application
2) Explain the difference between Chinas calculation of its GDP and that of most other economies, and why this makes the job of an economist harder

Level 3: Analysis
3) Based on your knowledge of Western economies such as the USA, examine the comment president of Shanghai Current Economics Research Institute (Wang Liang) when he said that "I don't think the stimulus package will have much effect,"

Level 4: Evaluation
4) Discuss the argument put forward by Professor Sun Lijian, from Shanghai's Fudan University in this article.

Note Level 1 – Level 4 are questions based on IB standards where
Level 1: Knowledge
Level 2: Application
Level 3: Analysis
Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

For hire - Low level unrest in China

This article from the Economist magagine describes further unrest in China caused in part by the current economic crisis. This time, taxi drivers in Chongqing and Sanya are angry. Read it and answer the questions below

Level 1: Knowledge: Q1: Identify the ‘social turbulence’ mentioned in the first paragraph of this article.

Level 2: Application: - Q2a: Explain why Chinese workers such as these taxi drivers may find it easier to arrange strikes now than in earlier times. Q2b: Explain the reasons why the taxi drivers have decided to go on strike.

Level 3: Analysis - Q3: What change do the taxi drivers want to implement? Use a force field analysis to analyse the forces at work in this change.

Level 4: Evaluation - Q4: Recommend 2 strategies that the Chinese Government could take to solve the ‘social turbulence’ caused by the taxi drivers Chongqing and Sanya.

Note
Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

Chinese trade surplus hits record

This article describes Chinas record trade surplus, but explains why there may be harder times ahead for the Chinese economy.

Read it and answer the questions below. Read it and answer the questions below. Level 1 – Level 4 are questions based on IB standards where

• Level 1: Knowledge
• Level 2: Application
• Level 3: Analysis
• Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). Thees meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

Level 1: Knowledge
Q1: Based on the article, define the term ‘Trade Surplus”, and write down how to calculate it

Level 2: Application
Q2a: Explain why Chinas Trade surplus may fall in the near future.
Q2b: Explain why China’s Government might choose to cut interest rates because inflation has fallen.

Level 3: Analysis
Q3: Analyse how conditions in other world economies have impacted Chinese fiscal policy measures

Level 4: Evaluation
Q4: To what extent does this article support the argument for China being part of the global economy?

Unemployment rises in China

These 2 items from the BBC show the impact of increasing unemployment in Chinese manufacturing caused by the current world financial crisis

Chinese mother's struggle to find work

This short video shows how unemployment caused by the current world financial crisis has changed the life of a worker in China's manufacturing sector.

Chinese job losses prompt exodus

This article describes why unemployment has risen in Guangzhou, and why the Chinese Governement should be worried about the decline in China's manufacturing sector.

China manufacturing downturn

This short video from the BBC mentions

a) What was the growth rate of the Chinese economy in the year to October 2008?

b) What percentage of Chinese toy manufacturers have closed in the last year?

c) What 2 reasons does the video mention for declining overseas orders for Chinese products?

d) What 2 steps has the Chinese Government taken to fix this decline in overseas demand for Chinese products

e) What has happened to Chinese inflation? What type of inflation do you think the presenter is talking about?

Why China's milk industry went sour

Submitted by Urvashi Sharma

The Chinese milk scandal has thrown up issues of Quality Control in China which in turn is having a spill over impact on all exports out of China.


Issues that arise from this article include:

• Quality control and quality assurance
• Stakeholders
• Benchmarking
• CSR
• Balance of Payments (PEST analysis)

Questions to think about

1. What are the current Quality Control measures in use in Chinese industry?
2. What damage could the milk scandal do to exports of Chinese goods?
3. What can China do to try and limit the damage to ‘Made in China’ label in overseas markets?

Milk scandal in China

Submitted by Ian Goff

This article

Syllabus
1. Examine the reasons why organizations consider setting ethical objectives.
2. Analyse the advantages and disadvantages of ethical objectives.
3. Discuss the impact of implementing ethical objectives.

Wen Jiabao has promised that business leaders who do not act in an ethical way will be severely dealt with! Send me your ideas based on the article attached using the syllabus points above and lets see if we can get a discussion going based on the advantages and disadvantages of being a business that operates in an ethical way!

China lung disease 'to kill 83m' - the true cost of busness?

This article reminds us that the TRUE cost of doing business can be very hard to measure . A US report predicts that more than 80 million Chinese people may die over the next 25 years partly due to lung disease caused by cigarette smoking.

What is the TRUE cost of producing cigarettes?
Until very recent times, everyone would have said that the cost of producing any product is the cost cost of the business inputs to produce it. So th cost of producting cigarettes would be the cost of tobacco, paper, labour and chemicals to make them. However, more recently, economists have started to rethink how we should measure the true cost of producing a product. For example, shouldnt we include the cost of pollution and the cost of increased health services for smokers in the real cost of making cigarettes?

Why Should we think about the true cost of making products?
All of us need to be worried about the impact of business on peoples health - for exaple, the Chinese Milk Crisis , and businesses contribution to global warming. We seem to be prepared to damage our health and our planet in the race to produce more and more products to meet our needs and our unlimited wants.

Some theory - Social Costs and Social Benefits
Economists have started to see production in terms of its SOCIAL COSTS (Total Cost of Production) and SOCIAL BENEFITS (Total Benefit from Production)

1) SOCIAL COSTS = Total Cost of Production = Private Cost + External Cost
2) SOCIAL BENEFITS = Total Benefit from Production = Private Benefits + External Benefits

Private Costs: These are costs that a person or business must pay themselves in order to carry out their consumption or production. For example the private cost to a concumer is the money paid plus the damane usiness that makes cigarettes is the cost of buying the resources to produce their products.For example the private cost to a business that makes cigarettes is the cost of buying the resources to produce their products.

Private Benefits: These are benefits that a person or business receives when they carry out their consumption or production. For a person, the benefits will be the satisfaction from consumption the cigarettes. For a business, the benefits will be the revenue received from the sale of its product.

External Costs (negative externalities): These are the costs to 3rd parties from the production of the business. For example people's health may be damaged by passive smoking. Also, cigarette manufacturers use chemicals that may pollute the area surrounding their factory, further harming the health of the people who live nearby.

External Benefits (positive externalities): These are the benefits for 3rd parties from the production of the business. For example the cigarette manufacturers may train their workers who may later leave the business and use these skills in another job.

Many Economists belive that society should only accept production when

Total Benefit from Production > Total Cost of Production

Do you agree??