February 22nd, 2011
02:17 AM GMT
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Beijing, China (CNN) – Peng Gaofeng appeared exhausted, but the migrant worker couldn't have been more content.

After three years of searching for his son, Wenle, he and his child were playing together at the offices of internet company Sina in Beijing. Peng traveled here last Friday to express his gratitude to some of the people behind China's version of Twitter for helping him bring his son back home. "Without the Internet, it would be too difficult - nearly impossible - to find my child," he told me.

Across the Middle East, social media is fueling political change. In China, it is fanning civic campaigns. Chinese bloggers are encouraging private citizens to fight injustices such as child trafficking. People are taking photos of street kids and uploading them on blogs for hundreds of millions of people to see and potentially identify them as missing children. And the Internet censors aren't stopping them.

Deng Fei, a reporter turned activist, says saving children is an indisputably worthy cause. Thousands are kidnapped every year here, he said, to be sold to factories or parents who want a son. Deng says the Internet is a game changer in this regard. He said, for many distraught parents, searching for one kidnapped child in a country of 1.3 billion people is seemingly futile and often costly. Deng said, "Tweeting changed all that. It spreads information openly, quickly, and cheaply."

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January 27th, 2011
06:27 AM GMT
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Beijing (CNN) - When it comes to labor rights, collective bargaining is forbidden in China. But if you're talking shopping, it's all the rage.

Group buying, or tuan gou in Chinese, is wildly popular across the country. Groupon of the U.S. isn't here yet but over a thousand local websites are. These sites offer similar services– hooking up China's 140 million online shoppers looking to buy the same thing and negotiate hefty discounts.

The Chinese have taken the concept and run with it. Sites like Lashou, Meituan, and Teambuy are selling everything from cars to home furnishings, to the homes themselves in bulk.

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January 18th, 2011
06:00 PM GMT
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Beijing, China (CNN) - In a battle between the Chinese yuan and the U.S. dollar, which currency would you bet on? Currently, the dollar reigns supreme in the world of trade and finance. But HSBC economist Qu Hongbin told me, longer term, he would bet on the yuan.

The Chinese government is making a big push to raise the stature of its currency. Hardly anyone uses it outside China. But, with China's economy now the second largest, authorities here are actively encouraging business people to use the yuan. The government is allowing Chinese companies to conduct some international business in yuan. It is allowing yuan trading in Hong Kong and, to a much smaller degree, New York. It is also encouraging companies to issue yuan-denominated - or "dim sum" - bonds.

The yuan's value is still determined by the Chinese government, raising tensions with Beijing's trading partners, including the U.S. Even so, Qu believes China's recent moves will raise the yuan to be among the top three currencies in global trade. "Within five years' time," he said, "one third of China's cross border trade will be settled in yuan rather than dollars."

Chinese President Hu Jintao called the dollar a "product of the past" ahead of his meeting with U.S. President Barack Obama. Will the yuan be the currency of the future?



December 30th, 2010
03:25 PM GMT
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BEIJING, China - If you have been to Beijing recently, chances are you have had to sit in frustrating, mind-numbing traffic. The Chinese capital's traffic stats, based on official figures and the Chinese Academy of Sciences, say it all:

* Record traffic jams in one day: 143

* Average commuting time: 52 minutes

* Number of cars on the road in 2010: 4.7 million

The number of automobiles has doubled since 2005 and, as Beijingers become wealthier, so more people in the Chinese capital want their own set of wheels. The city's roads haven't been able to cope, so the government has decided to crack down hard on the congestion.

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December 28th, 2010
02:07 AM GMT
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Beijing, China (CNN) – I am enjoying my new assignment in China but, boy, are things surprisingly expensive. Housing prices in the nation's capital seem to be almost as high as those in my last posting - Hong Kong. Food is costlier - especially vegetables, because of bad weather. Even clothing in the "world's factory" isn't cheap.

Fighting inflation: Prices here are expected to continue to rise in 2011. Chinese policymakers have made fighting inflation a top priority.  Economists expect a cocktail of tightening measures, including interest rate hikes, stricter lending practices, and price controls to keep inflation in at bay.

Decent growth: The moves will likely impact growth, too, but many analysts believe a slowdown could be mild. China is still healthy compared to many other economies and is expected to continue to drive the global recovery.

Rebalancing: One way is for China to continue to encourage consumer spending. That should be another theme in 2011. Expect to see higher wages and even a stronger Chinese currency. A more robust yuan should increase local purchasing power and address some of the concerns over inflation.

What themes do you see for China in 2011?

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December 7th, 2010
12:31 PM GMT
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Beijing (CNN) – Every month, investors, analysts, economists, and journalists pore over China's latest batch of economic data. We spend hours sifting through official numbers hoping to get a better gauge of China's economic future. Maybe we'd be better off throwing darts.

U.S. diplomatic cables released by WikiLeaks suggest that China's leaders are aware their economic numbers get a little massaging. One cable dating back to 2007 refers to a dinner conversation between China's now vice premier Li Keqiang and the U.S. ambassador at the time. Li reportedly said statistics, including gross domestic product, are "for reference only." The cable paraphrases Li saying GDP data is man-made. Li is tapped to be the next premier, leading the nation's economic policy.

As with all these WikiLeaks, it's important to remember these are off the cuff remarks. However, RBS economist Ben Simpendorfer says the comments underscore the challenges China's leaders face in truly understanding their own rapidly evolving economy. "The data is improving," he told me. "But, in such a large and fast growing country, it is difficult to get accurate data."

Yet how long before reality catches up and China, along with the rest of the global economy, suffers?

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November 1st, 2010
12:24 PM GMT
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Hong Kong, China (CNN) - Markets all over the world are watching the Fed.  The U.S. Federal Reserve is expected to take further action this week to support America's weak recovery.  Investors are waiting for a second round of "quantitative easing" - what is being nicknamed "QE2."

Say what?

Quantitative easing is a way central bankers can help boost economic growth.  It's a little controversial, but the idea is to create money out of nothing and to get it in the hands of bankers, businessmen, and consumers to spur economic activity.

So how does it work?

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October 8th, 2010
08:15 AM GMT
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Hong Kong, China (CNN) – Chinese Premier Wen Jiabao said in Europe this week that a free-floating yuan would be “a disaster for the world.”

He noted that Chinese export companies have small profit margins and could be hit hard, setting off a potential wave of social turmoil.

Yet a report by Mark Williams, a senior China economist at Capital Economics, on Thursday noted that export margins of Chinese companies did not fall when the yuan loosened its peg to the dollar from 2005 to 2008. The yuan increased in value against the U.S. dollar nearly 20 percent during that period.

In fact, “because most firms were able to raise either prices or productivity, margins did not fall at all” when the yuan rose against the dollar. The price of low-end exports rose, but so did Chinese firms’ market share.

The Chinese government is expected to focus on rebalancing its economy away from exports at its policy meeting next week. Economists at Goldman Sachs and JPMorgan expect they will look for ways to boost domestic consumption and investment and wean China off exports as demand for Chinese goods globally slows down.

That may be good news for China’s trading partners in the long run. But at the IMF meetings this weekend and the G20 summit next month, China’s currency policy is clearly going to remain a controversial topic.

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July 15th, 2010
01:52 PM GMT
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Hong Kong, China – One of China's big banks has debuted on the Shanghai stock market.

Agricultural Bank of China, or AgBank for short, has raised over $19 billion. If enough investors show interest in the stock, the listing could bring in another $3 billion and become the largest initial public offering in the world.

With so much buzz, it looked as though the listing was headed for a strong first day. But that never happened.

Many investors are worried about the state of the global economy, including China's slowing growth.

Analysts such as Victor Shih with Northwestern University believe the country's banks have made bad bets funding projects by some "reckless" state-owned companies.

Shih estimates the Chinese financial system is clogged with up to $440 billion of defunct loans. In AgBank's case, some investors are concerned the bank's government mandate to lend to farmers could limit its loan portfolio.

One financial analyst pointed out to me that many of China's big banks (AgBank, Bank of China, ICBC) are rushing to raise funds - perhaps billions of dollars - to help replenish their reserves after a record year of government directed lending.

AgBank has a customer base of around 320 million people - bigger than the entire population of the United States. At the listing ceremony in Shanghai, the bank's chairman said by purchasing AgBank shares, investors are "buying into the future of China's economy."

Given all the uncertainty, is now the right time?

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June 21st, 2010
05:13 PM GMT
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(CNN) – After a lot of finger pointing, squabbling, and teeth-sucking, the Chinese have finally loosened their grip on their currency.

Over the weekend, the government said it would allow the yuan to be more flexible. So far, no one thinks the Chinese will tolerate anything more than a small blip.

However, longer term the flexibility could bring greater purchasing power to Chinese consumers by making imported goods cheaper.

Brokerages say consumer companies globally could benefit from a new currency rate and the official push to encourage the Chinese to spend.

Internationally-branded cars and cell phones might become more affordable.

Other kinds of multinational firms like those in the construction business may also enjoy a bump in buyers. Analysts though say major retail chains could suffer a bit as some of their suppliers struggle to offset potentially unfavorable currency fluctuations.

In business, are you a Chinese currency winner or loser?



About Business 360

CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.

 
 
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