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An environment of opportunity in China
Feb. 4, 2009
Much of the media has focused on the size of the country’s stimulus plan (US $585 billion), the extent of China’s trade surpluses, the country’s huge stockpile of cash, and the possibility of China buying up more foreign debt (It hold $2 trillion in US Treasury notes).
Among myriad economic policies are some environmental discussions, too. Specifically, China refuses to accept a quantitative cap on its carbon emissions. Jiabao says China will self-regulate its carbon emissions to help combat global warming, but he’s not making any specific promises.
Adhering to carbon emissions would slow China’s economy at a time when more than one in seven rural migrant workers - which propel the manufacturing sector in China - is laid off or are unable to find work, twice as many as estimated by China just five weeks ago. Subsequently, worker protests are expected to rise, and social unrest could mar the country’s rise from recession.
Environmental restrictions could further exacerbate the economic malaise in China, where the government must expand exports to create more jobs amid an increasingly restless workforce. About 20 million Chinese workers have fled the cities since work dried up, according to China’s Ministry of Agriculture. That means inexpensive labor that facilitated China’s meteoric rise to the world’s third-largest economy is readily available to the country’s chemical manufacturers ready to capitalize on favorable employment opportunities.
Economists often say that businesses that survive recessions will be stronger in more lucrative times because they use management practices that streamline operations. One of the largest potentials for efficiency is with your workforce. And with unemployment creeping up around the world, businesses that re-evaluate their workforce might be the first ones to reap the rewards when global economies begin to accelerate.
And agrochemical companies in China might have additional advantages: A government ready to roll out a stimulus package that includes farm chemicals in the coming weeks, and environmental rules that help businesses compete in the global marketplace.
Source: FCI
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