Resolving rumors: Distortions of the Chinese economic climate
August 4th, 2008 by AdministratorAudio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Rumors. We all love them — when they are about someone else. In China rumors are called “xiao dao xiao xi” — back-alley news. The Chinese phrase evokes people leaning over backyard walls to share the latest titillating news gathered on a nearby neighbor or peering over walls to gather such intelligence. In an ancient culture fueled more by relationships than first amendment rights, the course of Chinese history has been determined by the potency, longevity and geographical reach of rumors.
There have been a lot of rumors about China lately, masking themselves as “facts” in the international media. For those of us who live this stuff every day, it has been rather frustrating swatting down these buzzing insects of misinformation, trying to calm our clients’ (and our own) fears and understand what is really going on.
In this podcast, we are going to consider some of the more prevalent China rumors flying about and try to add some perspective. I caution the listener that I am NOT an economist and I am sure there are deeper economic algorithms at play of which I am not aware. Fine. But get three economists in a room and you’ll get five opinions. I am just relating what we are hearing on the streets here in China.
Rumor #1: China’s exports are drying up.
Rumor #2: China is manipulating its currency, the RMB.
Rumor #3: China is no longer THE low-cost country for sourcing and is, in fact, losing manufacturing business to other Asian markets such as Vietnam.
For deeper discussion of these rumors, give a listen to today’s podcast.
