Topic Category: Economy

China’s unexpectedly strong economic rebound may appear miraculous. In reality, it’s derived from a combination of that government’s huge economic stimulus package and increasingly strong domestic consumer demand. Our firm, InterChina Consulting, views Chinese consumer spending as an increasingly important contributor to the Middle Kingdom’s long-term economic growth. It also is offsetting continued weakness in global demand for China’s exports and will be the foundation for sustainable growth in the future.

Topic: Economy
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The Margaret Thatcher-Ronald Reagan economic model of free market capitalism is under attack. The system, which was responsible for jumpstarting this era of globalization, created the greatest economic growth the world has ever seen. It empowered people to achieve their dreams and unleashed their innovative and creative abilities that paved the way for tremendous gains in efficiency and productivity, not only in the U.S., but around the world.

Unfortunately, this lesson has not always been well understood. In turn, many policymakers now see free market capitalism as suspect and wish to “fix” it.

Topic: Economy
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Small business is the backbone of the U.S. economy. It’s also key to our economic recovery. Unfortunately, we don’t hear much about the large role small business plays in this country’s exporting efforts.

Laying Out the Facts

On June 30th, Senator Mary Landrieu of Louisiana, Chair of the U.S. Senate Committee on Small Business and Entrepreneurship, held a hearing in New Orleans at the Port Authority’s headquarters. The committee hearing was entitled Keeping America Competitive: Federal Programs that Promote Small Business Exporting.

Topic: Economy
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As the global financial crisis negatively impacts growth worldwide, new opportunities are emerging for companies that position themselves to seize the long-term potential upside of the Chinese market. And there is reason for optimism since the current Chinese government has the financial ability and political means to manage a soft economic landing.

More Flexible Positions

The Chinese government is clearly concerned about slower economic growth and the ability to attract sought after investment. On the other hand, early signs are positive that the $582 billion Chinese domestic stimulus package will start to have an effect beginning in the second or third quarter of 2009. Nevertheless, the uncertain future is impacting Chinese economic realities, policies and negotiating positions.

Topic: Economy
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Speculation is growing that the U.S. economy may have already slipped into recession. If the past is any guide, politicians on the campaign trail will be tempted to blame trade and globalization for the passing pain of the business cycle.

Rising unemployment and falling output can provide fertile ground for attacks on imports and foreign investment by U.S. multinational companies. But an analysis of previous recessions and expansions shows that international trade and investment are not to blame for downturns in the economy, and may, in fact be moderating the business cycle.

Topic: Economy
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The United States attracted $180 billion in foreign direct investment in 2006. This is extremely important since inbound investment creates millions of high-wage, high-skilled American jobs that support our growing standard of living. But protectionist trends could disrupt this.

Global Funds Are Needed

In 2006, 20 bills were introduced in Congress that, if implemented, would have restricted foreign investment in the United States. What’s more, they could have prevented the Abu Dhabi Investment Authority’s $7.5 billion investment in Citigroup or the China Investment Corporation’s $5 billion injection in Morgan Stanley at the end of last year.

Topic: Economy
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World commodities prices remain high, even as they recover from a recent sell-off due to interest rate concerns. Despite the volatility that goes hand-in-hand with commodities, prices have benefited from sky-high energy markets this year and growth in China that has resulted in an almost insatiable appetite for industrial raw materials.

The Dow Jones AIG Commodity Index has trended upward since January 2002, more than doubling as of mid-May this year. Continuing instability in the Middle East and the onset of the summer travel season pushed oil over $70 a barrel earlier this year, while copper prices hit historic highs, surpassing $6,000 a ton during the first quarter.

Topic: Economy
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Many Americans fear an increasing U.S. deficit and believe it will ultimately lead to economic crisis. The facts, however, may surprise you.

By the most basic measure of economic performance—the change in real gross domestic product (GDP)—the U.S. economy performs best when current account deficits (which largely consist of the trade deficit) are high.

Topic: Economy
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Since the emergence of local, regional and national economies, there has been a constant evolution in the stages of cultural and economic development. Globalization is another step in that evolution. It is not a unique event just bursting onto the scene, but rather, the 21st century version of a predictable age old dynamic. Yet due to the accelerated pace at which change now occurs, a backlash is growing and supported by a variety of groups.

Topic: Economy
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New research and analysis reveal that companies linked to the global marketplace perform better than those that only operate domestically. And the employees and communities of globally-engaged firms prosper more. But the benefits don’t just apply to exporters.

The data reveal that companies that import, invest abroad or are recipients of foreign direct investment (FDI) also prosper more than their domestically focused counterparts. And, the analysis compares apples to apples: companies of the same size in the same industries. This research is likely to persuade many firms to expand their horizons. How will it affect your strategic plan?

Topic: Economy
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