Economy

Many Chinese people are now quite wealthy and there are many German cars as well as locally manufactured and Japanese cars.  There are still quite a number of locally fabricated electric rickshaws and delivery vehicles.  The motors are obviously mass produced on a large scale. 

I saw one being serviced in our street.  They are a pancake design with a permanent magnet outer rotor and there is one at the hub of each driven wheel.  The batteries are recharged from the grid and seem to give quite a good range.  They are quiet and efficient with no exhaust; but I doubt that they have the same hill climbing ability as the Tuk Tuks used in India or Indochina.

Education is clearly very important; possibly as an outcome of the ‘one child policy’.  For part of out time in Beijing we stayed in a Houtong (renovated traditional dwelling).  We were surrounded in adjacent streets by schools and a University.  In the playground at the local primary school there seemed to be a lot of chanting and organized exercise.  But during breaks they run and scream like children everywhere.  The children are very neatly turned out in their uniforms and delivered to the door by bus or car.

At the time of our visit the local newspapers were very concerned about the state of the US economy.  China has very significant overseas reserves invested in the United States and they were concerned that policies like ‘quantitative easing’ would erode the value of the American dollar and degrade their investment in general.  China is not a free country and most of the commentary in the newspapers can be interpreted as an official view.

To support their development several developing and developed countries keep their currency well below its underlying market value. While this denies their citizens lower cost imports and some luxuries, it makes their exports more competitive internationally and local manufacturing more profitable.  It also results in an accumulation of foreign currency reserves that are effectively accessible by others, through the banking system, as loans for investment.

Developing countries often apply this mechanism as the higher work for less real income imposed on a domestic labour force can be hidden in (and is justified by) an environment of rapidly improving living standards.  China is the prime example in the World today.  As a result there is an ongoing exchange between the US and China as to how long this can go on;  with China now challenging Japan as the principle source of US foreign investment; and the Chinese remarking unfavourably on the current US deficit and fiscal policies.