Economist, Sept 12, 2015 (II)

choi

(continued)
There is no need to read the rest of articles (2) to (6) in the Special Report: Business in China.

(2) How Red Is Your Capitalism?  Telling a state-controlled from a private firm can be tricky.
(" 'THERE ARE NO genuinely private companies in China,' declares a veteran adviser to multinational companies. In one sense he is right. The state and the party are omnipresent and their role is enshrined in the law. Moreover, as Kent Kedl of Control Risks, an investigative firm, explains, 'You don't become successful in China as purely private entity, you need a powerful connection. But this can prove an asset or a liability.'

(3) Private firms  | Paper Tiger, Roaring Dragon; It is the private sector, not state capitalism, that is responsible for modern China's economic rise.

last paragraph: "The bureaucrats' most important achievement in recent times has been to stop doing things that killed free enterprise. That vital task is not finished, however. * * * As Arthur Kroeber of Gavekal Dragonomicsputs it, 'just walk into the street and it's clearly a market economy. Yet in the background state interference is pervasive.'

(4) Consumer | The Wild, Wild East; A booming middle class is creating the world's most dynamic consumer market.

paragraph 1: "MORE THAN FIVE centuries ago Christopher Columbus scrawled in his copy of Marco Polo's 'Travels' hat the Middle Kingdom would bring mercacciones innumeras (an immeasurable amount of commerce). Columbus never reached that promised land. China has continued to disappoint foreign businessmen ever since, not least because many ordinary Chinese people have been too poor to buy anything.  That is changing as the country's middle class is growing explosively.

Note: It is unclear whether “mercacciones innumeras” or individual words are modern or medieval, or Italian or Spanish -- because they were not found in the Web except two articles (this and in 2004) of Economist.

choi

(5) Manufacturing | Still made in China; Chinese manufacturing remains second to none.
http://www.economist.com/news/sp ... ne-still-made-china

Quote:

"Manufacturing is almost entirely controlled by private firms, both Chinese and foreign, which unlike SOEs will not be pushed by bureaucrats into making unprofitable investments.

"Terry Gou, Foxconn’s boss, claims that within five years the 30% of his labour force doing the most tedious work will be replaced by robots, releasing them to do something more valuable. The highly inventive firm, which holds many American patents, is building all its automation in-house.

"China’s state planners also want to help companies leapfrog to the forefront of technology. Their plan involves policies to encourage the adoption of robotics, 3D printing and other advanced techniques. But factories will invest in advanced kit only if it makes commercial sense. * * * A visit to a middling factory in a middling city illustrates the point. The Guangneng Rongneng Automotive Trim Company 重庆光能汽车配件有限公司 in Chongqing is not a fancy place. Stock is piled hither and yon. Owned by a privately held firm, the factory makes injection-moulded and welded automotive parts, mostly for Ford. Chen Gang, its director of operations, says wages have gone up so much that he has to pay itinerant workers the same as they can earn in Shenzhen.  He points to a fancy ABB robot on one side of an aisle that makes complex parts to go on instrument panels. Across the aisle sits a Chinese robot made by Kejie 广东科杰机械自动化有限公司, which lacks the range and precision of the foreign model but is one-third the price. And plenty of the work at his firm is, and will remain, done by hand. “China is headed in this direction,” he says, pointing to the robots, but the pace of adoption will vary from factory to factory.
Note: "Michael McNamara, the boss of Flex, a big American contract manufacturer"

Flextronics (the official name of the contract maker, which fallen more and more behind Foxconn) is based in Marlborough, Massachusetts (a western suburb of Boston) and has NASDAQ ticker symbol FLEX.

choi

(6) Foreign investment | The New Silk Road; China’s latest wave of globalisers will enrich their country—and the world.
http://www.economist.com/news/sp ... world-new-silk-road

the first three paragraphs:

"AN ENORMOUS MAP of the historic Silk Road hangs on a wall at Wensli 万事利集团 [1975- ; headquarters 杭州市], a leading Chinese silk producer. Nearby exhibits put China’s silkmaking tradition into context. The Chinese first encountered silkworms about 6,000 years ago. Two millennia later they built the first silk machine. When France emerged as Europe’s silk centre in the 16th century, it learned techniques from China, then the world’s most advanced economy.

"The Chinese love invoking their country’s rich and glorious past, so they lapped up President Xi Jinping’s 'One Belt, One Road' plan * * *

"Li Jianhua [集团总裁] 李建华, Wensli’s chief executive, is quick to praise the president’s initiative. He tweets a silk-themed message on WeChat every day in support of One Belt, One Road. Wensli, a private conglomerate with revenues approaching $1 billion, has long been close to the Communist Party. Shen Aiqin 沈爱琴, Wensli’s founder (and Mr Li’s mother-in-law), served as a deputy to the National People’s Congress. But Mr Li is not a party member and insists that “nothing in our operations has to do with the government.”

Note:
(a) The photo that comes with this article is courtesy of, and owned by, Wensli.
(b) "France emerged as Europe’s silk centre in the 16th century"

history of silk
https://en.wikipedia.org/wiki/History_of_silk

section 5.3 The silk industry in France:

"Louis XI [reign 1461-1483] decided to develop a national silk industry in Lyon. * * * His main objective was to reduce France's trade deficit with Italy, which caused France to lose 400,000 to 500,000 golden écus a year.

"In 1540, the king [Francis I of France (reign 1515 – 1547] granted a monopoly on silk production to the city of Lyon. Starting in the 16th century, Lyon became the capital of the European silk trade * * *  Gaining confidence, the silks produced in the city began to abandon the original oriental styles in favor of their own distinctive style, which emphasized landscapes.