It really is amazing how strong GDP growth in China over the past 35 years. Of course, every move rapidly emerging nation will have its time to decide whether or not you choose not to control its growth. Also surprising is the number of U.S. companies and companies that do the action as a middle layer is formed and the world’s largest consumer class, every time – and at least these are not the predictions right?
I recently read an article in the International Business section of The Wall Street Journal “Business in Asia” 7 May 2011 to afford the title “China fines Unilever price observations” by Paul Sun and Laurie Burkitt Eliot Gao in Beijing and Ellen Byron in New York to the article. Yes, you read the title correctly; the Dutch company was punished, called the price increases in the future. Wow, this is not interesting? Sure it is, but should not be too surprised. The article had stated;
“Have become the punishment will come to the Unilever Chinese consumers from the rising cost of food and other daily needs fearful. In order to alleviate their suffering, is the Chinese leadership that the government might believe a critical component to obtain economic growth and stability, but have The Chinese government was limited tools to curb inflation, partly because of its exchange rate regime. ”
First, no one should be surprised that the prices of goods and gone, that consumer goods companies have to increase prices. Secondly, no one should be surprised that Unilever makes a press release in which its shareholders, and what to do to explain how Unilever is to maintain growth and profits. Third, no one should be surprised at the aggressive attitude of the Chinese government, and who are in control of their media and has become acquainted with his own press releases that inflation coming under control – not a bit, but that the official party line.
Interestingly enough, China, on the one side is a communist country, but uses the funds to promote efficiency and growth, and then try a socialist tactics against some of the largest free market. Fine company to tell the truth of the free market is a real problem, what we could expect from Hugo Chavez in Venezuela, Rafael Correa in Ecuador and Evo Morales in Bolivia. Apparently in China the “official media is the truth, and that surpasses all reality, including the reality of free trade, fair trade and free markets. This is a real problem, and that’s the truth.
You see, not a government can think to impose economic performance, and the more we of the free market economy, the faster the decrease caused in the economy. Now it seems that China is headed for an economic implosion and tries to avoid as far as possible, rather than the marketplace is not magic, and what the global scale back to reality. In many ways the least bit surprised no one should, but adds a layer of caution to those companies, they receive substantial benefits from China’s emerging middle class class believe.
Why? Well, a few reasons. One of them, when a company begins to earn money, which might as arbitrary rules of China to do in the future knows. Two, if China maintains such tactics economic suicide, it does not sell, no middle class anyway. See, here is the final result, not many things that shake me, or is a red flag on my radar screen. In fact, I could have predicted that legal measures of this kind, as were many in the past, and I suspect many more will follow, but there should be a warning and a caution flag in the Western world to be free enterprise Doing Business in China market.