While most of the world has fixated on the plunging Shanghai and Shenzhen stock exchanges and Beijing's missteps managing the currency, China's labor market has become increasingly fragile. As wage arrears and layoffs grow, unrest in factories and on construction sites is spreading.
China became the largest manufacturing economy in the world (with a 23.2 percent share of manufacturing activity) through extremely fast growth in the physical volume of value-added and modest inflation. The U.S. is in second place with a 17.2 percent share. China has more than four times the population of the United States, and though its manufacturing intensity of $1,978 per capita value-added in 2013 is high for a developing economy, it is well behind advanced countries such as the United States ($6,338).
Surprisingly strong exports reported by China on Friday bolstered the view that the global economy is improving, just as Chinese leaders were set to hold an important policy meeting to flesh out their economic agenda for the coming years.
So the Chinese are gearing up to sell their branded merchandise in the U.S. But what about the other way around? Can American manufacturers capture a healthy share of China's burgeoning consumer market?
So we have a handful of Chinese companies that haven't grown up by the traditional method of attaching an umbilical cord to the government and receiving endless amounts of financial support and monopoly status in return. These "Second Mouse" ventures are going head to head, both in China and around the world, with entrenched, Western-style multinationals. The question is: can they really compete?
Considering the astonishing growth of China's economy over the past decade, it should come as no surprise that 73 Chinese companies showed up on this year's Fortune Global 500. That's up from 11 just ten years ago, but given that fact that the nation saw average annual GDP growth of 9.91 percent between 1979 and 2010, and is now the world's second largest economy, one might ask why more Chinese companies aren't on Fortune's list.
Doesn't it seem as though we are forever plunging into recession, then clawing our way back to recovery? In recent months we've seen hints that the U.S. economy is on the mend, with unemployment levels dropping. At the same time, consumer confidence is once again on the decline. It's a mixed bag by anyone's measure, but we've yet to return to pre-recession numbers in key sectors.
