{"id":7136,"date":"2012-01-18T08:50:53","date_gmt":"2012-01-18T06:50:53","guid":{"rendered":"http:\/\/www.myza.co.za\/01\/reuters-magazine-wheatley-whats-going-right\/"},"modified":"2012-01-18T08:50:53","modified_gmt":"2012-01-18T06:50:53","slug":"reuters-magazine-wheatley-whats-going-right","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/reuters-magazine-wheatley-whats-going-right\/","title":{"rendered":"REUTERS MAGAZINE-Wheatley: What’s going right"},"content":{"rendered":"

\t\t<\/span><\/p>\n

By Alan Wheatley<\/span><\/p>\n

<\/span><\/p>\n

Jan 17 (Reuters) – With the British economy flat on
\nits back, the Jaguar Land Rover (JLR) factory in Birmingham, the
\nsecond largest city in England, is doing something unusual:
\nhiring. The company is doing well. With exports to China and
\nother big emerging economies rising strongly, Britain’s largest
\nautomotive manufacturer recently said it would hire another
\nthousand workers and build a new engine plant, creating a
\nfurther 750 fifty jobs.<\/span><\/p>\n

<\/span><\/p>\n

The Jaguar plant, which manufactured Spitfire fighter
\naircraft and Lancaster bombers during World War II, is an
\namalgam of state-of-the-art robots and old-fashioned craftsmen
\nintent on their work. Electric carts laden with parts buzz
\nacross the factory floor, passing beneath big screens that flash
\nthe number of cars completed that shift. It takes 48 hours to
\nprocess the top-of-the-line XJ model. As sedans roll off the
\nassembly line, each customer’s specifications are given a final
\ncheck, and the cars are driven away to be shipped everywhere
\nfrom Australia and Azerbaijan to the United States and China.
\nThe company, bought by India’s Tata Motors from Ford Motor in
\n2008, exports 75 percent of its output. Britain and the United
\nStates remain JLR’s biggest markets, but China has sped into the
\nthird spot and now accounts for 14 percent of the company’s
\nsales, which reached 232,704 vehicles last year.<\/p>\n

<\/span><\/p>\n

That the luxury tastes of newly rich Chinese are generating
\nemployment in the birthplace of the industrial revolution is a
\npowerful expression of Asia’s rising clout and a reminder that
\nthe West’s protracted debt crisis has not sucked all life out of
\nthe global economy. JLR’s sales to China have risen by more than
\n750 percent in the past five years. “Nearly everybody’s cutting
\nback because of the recession, but China is still an expanding
\nmarket,” said Jim Kearns, an experienced assembly-line worker at
\nJLR’s Castle Bromwich plant in Birmingham. “They’ve got their
\nheads screwed on over there.”<\/p>\n

<\/span><\/p>\n

Europe’s debt malaise is prompting talk of a lost decade for
\nthe economy, like Japan in the 1990s. In the United States,
\ndeadlocked debt reduction talks, high unemployment, and
\nlong-stagnant incomes are sapping confidence. But many less
\naffluent countries, though not immune to the West’s woes, have
\ndisplayed remarkable resilience. While advanced economies are
\nlikely to expand just 1.6 percent this year, emerging and
\ndeveloping countries should notch up growth of 6.4 percent,
\naccording to the International Monetary Fund. For the past five
\nyears, developing countries have contributed as much as 65
\npercent of world growth and 70 percent of the growth in global
\nimports,
\nthe World Bank estimates. Nor is this growth purely a function
\nof final demand in the West. South-South trade – for instance
\nbetween China and India or Brazil and Africa – now makes up 45
\npercent of developing country imports, up from about 23 percent
\nin the early 1990s.<\/p>\n

<\/span><\/p>\n

The BRIC countries are in the vanguard of this reordering
\nof the world economy. Brazil, Russia, India, and China accounted
\nfor just 8.5 percent of global GDP at market exchange rates in
\nthe period between 2000 and 2004, according to the IMF. Between
\n2005 and 2009 that share rose to 13.1 percent, and by 2015 it
\nwill have overtaken that of the euro zone to reach 20.7 percent,
\njust shy of the United States at 21.1 percent. “We’re in the
\nearly days of the rise of the BRICs,” said Jim O’Neill, the
\nGoldman Sachs economist who coined the concept a decade ago.
\nTrade tells a similar story. Over the past two decades, the
\nshare of world exports among the BRIC countries has nearly
\ntripled, while their share of global imports has nearly doubled.
\nAt the same time, the gulf in productivity between industrial
\nand developing economies – what economists call the “convergence
\ngap” – remains very large. Hundreds of millions of people have
\nbeen lifted out of dire poverty thanks to the 10 percent annual
\ngrowth China has enjoyed since the late 1970s, but an estimated
\n300 million Chinese still do not have access to clean water.
\nMeasured at purchasing power parity, annual income per head in
\nChina is just 16 percent of that in the United States. In India,
\nthe figure is just 7 percent. It’s this catch-up potential that
\nhas businesses salivating.<\/p>\n

<\/span><\/p>\n

“I’m still optimistic. We will continue to see hyper growth
\nin these markets,” said Yang Yuanqing, the chairman of Lenovo,
\nthe world’s number two personal computer maker. In China, for
\nexample,many people in the biggest cities already own a
\ncomputer, Yang said, but the penetration rate in smaller cities
\nand townships remains very low. His confidence is broadly shared
\nby the man in the street in China even if there is resentment
\ntowards officials suspected of having acquired their wealth
\nthrough connections or corruption. Zhu Lijun, a postgraduate
\nstudent in Beijing, said he was satisfied with his standard of
\nliving. “As a college student, I feel optimistic about my
\nfuture,” Zhu said. “What matters is not whether other people
\nget wealthy faster than me, but the way they get wealthy.”<\/p>\n

<\/span><\/p>\n

Economic growth in China is slowing but incomes are still
\nrising fast; the government is committed to boosting household
\nconsumption’s share of the economy so that growth relies less on
\ninvestment and exports. HSBC reckons 40 percent of China’s urban
\nhouseholds now fall into the middle-class category, with annual
\nincome of 60,000 yuan to 500,000 yuan ($9,450 to $78,600). Five
\nyears ago, the proportion was just 10 percent. “This group has
\nboth the capacity and the desire to buy branded products and
\nmore expensive consumer durables as well as spend money on
\ntravel and culture,” said HSBC’s chief China economist, Qu
\nHongbin. That’s good news not only for Jaguar Land Rover,
\nLenovo, and the thousands of other companies currently flogging
\ntheir wares in China, it also bodes well for other companies,
\nand entire countries, that would like to feed China’s voracious
\ndemand for components, energy, and minerals.<\/p>\n

<\/span><\/p>\n

Australia owes much of its long economic expansion to sound
\npolicy-making, but credit is due as well to China’s hunger for
\niron ore, coal, and other natural resources. China accounted for
\n27 percent of Australia’s exports in the first nine months of
\n2011, up from just 5 percent in 2000. Because the price of
\nnatural resources has soared while the cost of manufactured
\ngoods has fallen, a shipload of iron ore from Australia in 2010
\ncould buy about 22,000 flat-screen television sets, 10 times
\nmore than just five years earlier.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By Alan Wheatley Jan 17 (Reuters) – With the British economy flat on its back, the Jaguar Land Rover (JLR) factory in Birmingham, the second largest city in England, is doing something unusual: hiring. The company is doing well. With exports to China and other big emerging economies rising strongly, Britain’s largest automotive manufacturer recently […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-7136","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/7136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=7136"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/7136\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=7136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=7136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=7136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}