New markets

It is a wide perception among Europeans that Western countries  can only lose from East Asia's success in terms of growth and employment. Development in one part of the world may require lower growth in another and Europeans are worried about competition from developing countries, such as China, India and Brazil. But what are they worried about? Since 2007 German, British and Dutch export to China and India has risen steadly. German car makers and chemical companies are focused on what is going on in East Asia economies. The expansion of educational products and services has become a good opportunity for UK.
At the same time, other developing countries, such as Indonesia, Mexico and Turkey, may soon show an extraordinary growth in demand for consumer products because people, who live in those parts ot the world, may desire the same consumer goods that we all desire in Western countries. Of course, a change is always demanding, especially for those workers with narrow or manual skill. That's why most experts estimate that 2 billion people are going to be brought into the global middle class as some of the most challenging parts of East Asia and South America economies develop. Consequently, 4.9 billion people are predicted to be middle class in the world by 2030. As Jim O'Neal wrote in 2012, since a couple of years we have been seeing  Indians paying prices to go up in ski lifts in Switzerland in the summer, Chinese traders offering rewards to native Parisians to buy them Louis Vuitton bags and Tibetan street traders walking across high mountain ranges in the Himalayas using mobile telephones. 

On the other hand, some European peripheral countries situated on the edge of Mediterranean sea have been seeing their unemployment rate rising sharply since 2008. For instance, Italy's unemployment rate has risen at 12.5 % and this obviously means that Italian policy-makers have made something wrong from a political point of view. They are still predicting disaster, quite routinely, in order to justify the distruction of social security and other popular programs. At the same time, companies investing in Italy, Greece and Spain have been becoming entangled in bureaucracy, poorly drafted regulation and corruption cases. Ambiguous tax laws for investors exacerbate the challenge.
Morevover, as it is known, the current economic crisis has led many South European companies to lay off some of their employees. This explains partly why direct investments in South Europe countries have been weaker than in those parts of the world above mentioned. If South Europe coutries had a friendlier environment for investors, employment (and investment) would grow gradually.
It's much better to be open-minded and think more globally. 

(photos used with cc permission from Stefano, http://cavnero.blogspot.it/ )

Fast food companies still continue to use palm oil

While travelling abroad maybe we have seen some of the world's most popular fast food restaurants with slogans at the entrance. In recent years there have been serious accusations against these multinational companies that get a monopoly in some strategic points of the world and dominate the market by excluding others.  It is known, they serve unhealthy food, considering that palm oil is a key ingredient in many fast food dishes such as deep-fried potatoes.

For instance, the world's leading baked goods chains, "Dunkin' Domuts", provide a kind of dessert which are usually deep-fried from a flour dough. Those cakes are fried in palm oil which contains an unhealthy composition of  saturated fat. As a deduction, too much saturated fats can increase the amount of cholesterol in the blood, which can increase the risk of coronary heart desease. Actually, "Dunkin' Domuts" decision makers know that frying with palm oil is cheaper but unhealthy. But they don't care!

The most important pizza restaurant in the world, which is called "Pizza Hut" and has over 34,000 restaurants in 100 countries, also uses that unhealthy oil above mentioned for their pizzas. And the same goes for "KFC", the world's most popular chicken fast food restaurants, which serve deep-fried food and still use palm oil. In 2002, Pizza Hut, KFC and Taco Bell formed "Tricon", which later become "Yum": it is the largest food company in the world.

In addition, using palm oil is also unethical and in this perspective these multinationals companies are adding a gruesome side of  "forest destruction" with every meal: sucking out palm oil for these fast food monsters slays tropical rain forest and gives a wide contribution to the extinction of some animal species, such as sumatran tiger, asian rinoceros and pygmy elephant. Please, take a few minutes of your time to see the following website that reveals the truth about the palm industry and it's effect on the wildlife, environment and people of East Asia:  http://www.saynotopalmoil.com/ .
It is encouraging to hear that, since the second decade of the twentyfirst century, awareness among people about the unhealthy meals served by these restaurants chain has been increasing sharply. I really hope palm oil usage in food industry products will face change soon.

China's unfair advantage

In my two last posts I wrote down my thoughts about China's economy and its blooming which we've seen since the late 1990s. In most European countries we can find Chinese shops and restaurants whose goods are very cheap. It is known that China and other Asian countries, with weak enforced labour standards and poorly environmental protection laws, can export their good easily. That's why their goods are cheaper than European ones. But this is an unfair advantage in international trade. 

And while East Asian people (first of all China and India) don't control their internal carbon dioxide emissions and still continue to pollute their environs, one in three South European under 25 are unemployed and are coming of age. 

A "harmonius society"

In my last post the spotlight was on China's economic growth. And some interesting information about that topic, which I got from my blogger friends,  give me the opportunity to write again a few words about that Asian vast country.

As known, since 2002 China's export started to surge and, as a consequence, every adult chinese people, who live in South and close to the coast of the country, have been enjoying strong improvement in their wages: in those developed regions of China hundreds of millions have joined the new middle class. During the last decade, manufacturing employment in five coastal regions ((Guangdong, Zhejiang, Fujian, Jiangsu and Sahndong) rose by a cumulative total of 4.9 million jobs.
At the same time, in the countryside condition are not so good. And in this unequal perspective, most Chinese people located in the Eastern urban area show the tolerance toward the regime, which holds elections for candidates of one party alone. Actually, Popular Republic of China may be classed as "pseudo-democracy" in polical terms. Politician would have to begin to deal with China's economic development which shows quite clearly a difference in average income and standard of life between coastal cities and counrtyside. Everyone can see that the rise of wealthy coastal cities, such as Beijing, Shanghai and Guangzhou, integrated with the world global economy, is in contrast to an interior that remains quite for behind. And there aren't attemps to begin to deal with that, which is important.

Compared with western democracies, China shows a particular ability to increase inequality and it seems that Chinese policy-makers don't care. 

All of this has a distorting effect on the Chinese population who can see a conflict with the formal policy objective of their country. In this perspective, the main risk is that the Chinese dream, which since 1990s have been wealth and strenght in the frame of a "harmonious society", ends up handing more power to a repackaged authoritarianism.   

(photos used with cc permission from Stefano, http://cavnero.blogspot.it/ )

Who own the world?

Most people have triggered a lot of thoughts about a global shift of power and the main question is: who is going to become the new great power? Americans believe China to be more economically powerful, whereas the Chinese think America is.

As seen by many economists, since 2000 the rise of the Asian economies has shown that family-owned conglomerates are adequately equipped to advance capitalism's geographical frontier. Actually, China has seen its share of world GDP rise sharply from just 1.8% in 1991 and, at the moment, its economy is growing at a pace of about 8%. The reason is that the more advanced countries of the Eastern Asia production system, such as Singapore, Japan, South Korea and Taiwan, send their advanced technology to China, where the labor force to assemble goods is cheap. And U.S. corporations do the same. Consequently, Chinese factories assemble and send their final products out of the country.

In this perspective, transnational institutions can shift their outsorcing from China to some other low-wage countries whenever they want. For instance, Malaysia, Indonesia and Thailand are other Eastern Asia low-wage countries. As mentioned by Noan Chomsky, Emeritus professor at the MIT, in Cambridge, Massachusetts, that's why "China's economic growth is a bit of a mith", although since 2005 the Asia's giant has been holding two third of U.S. national debt (a few year ago Japan held most of the U.S. debt, now surpassed by China). As long as the CEOs who manage transnational capital are happy to have very cheap labor in China, the economic growth of the Asian giant will continue.

It's easy to see that the global power is in the hands of financial institution and multinationals.