China Emerging_ 1978-2008 - Xiao-bo , Wu [60]
Once more, China’s economic performance made scholars around the world adjust the spectacles on their noses. In the third quarter of 2004, the AsianDevelopmentBankforecastthatthegrowthofChina’sGDPwouldfall to 8.3%, while China’s Ministry of Commerce was even more conservative and put it at 7.5%. In the end, China’s National Bureau of Statistics showed thatthegrowthrateofGDPin2004was10.1%,thefastestgrowthrateinany year since 1996. Investments in fixed assets nationwide were RMB 7 trillion, an increase of 25.8% over the previous year. Exports exceeded US$1 trillion. All indicators showed that the Chinese economy was still on a fast track. People later commented that the macroeconomic measures had only caused a very mild slowdown rather than a full blown one.
Trade Frictions
O
ctober 12, 2005, was another historic day for China. Two Chinese astronauts flew into space on the Chinese-made Shenzhou-6 spacecraft. Two years earlier, on October 12, China’s first astronaut rode into space on the Shenzhou-5, realizing a millennial dream of the
Chinese people to conquer the skies.
Ascending into the stratosphere with this spaceship was a clear sign of China’s economic clout. In 2005, a journalist living in Baton Rouge decided to spend a year without using anything “Made in China.” She first threw out her son’s shoes. She went to the local European discount shoe store to buy a new non-madein-China pair but found that the place had closed down due to poor business. Instead, a toy store occupied the space, and everything in the store was made in China. Daily utensils were another problem. When hers broke, she could not find a non-Chinese replacement because what ap
The Long March 2F carrier rocket takes the Shenzhou-6 spacecraft into the heavens at 9 a.m. sharp on October 12, 2005.
Yang Li-wei, the first Chinese astronaut to venture into space (October 15, 2003).
peared to be “Made in U.S.A.” was in fact full of spare parts produced in China. From mousetraps to lanterns, birthday candles, and firecrackers, it was rare to find anything that was not made in China. She wrote about her experience in a book titled A Year without “Made in China.” Her conclusion was that she and her family had to compromise with the reality of the situation; else the price would be too great.
Nothing could speak more clearly than this woman’s experience. Cheap prices were the sole weapon in the “Made-in-China” arsenal, and the cheap prices were making it difficult for the rest of the world to compete. As a result, the manufacturing industries of all countries were faced with a severe challenge. The other side to China’s success in exporting was that trade frictions rose one after another and China soon became the focus of anti-dumping cases at the WTO. Of every seven anti-dumping and trade subsidy cases, one was aimed at China.
As early as June 2002, the European Union had begun an anti-dumping case against the Wenzhou region of China with regard to cigarette lighters. This became Case Number One in anti-dumping, after China’s entry into the WTO. At the time, several hundred companies in Wenzhou were producing 90% of the world’s metal-sheathed lighters, and the cost of production was one-tenth of that in Japan. In its defense, Wenzhou enterprises contended that the low price of Chinese goods was largely due to their labor cost advantage. The annual income of Wenzhou workers was one-twentieth that
From left: Li Ning, dubbed “Prince of Gymnasts,” is representing China at the 23rd Olympics held in Los Angeles in 1984; Founded by the former Olympic champion gymnast, the company Li-Ning ranks fourth among general sports companies, after Nike, Adidas, and Puma (March 21, 2007).
of European workers. Their argument was, “Chinese enterprises do not engage in loss-making business.