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Year in Review

China’s international business news in 2010 was primarily shaped by several milestones and increasing tensions between China and the United States, which threaten to fracture the countries’ symbiotic economic relationship. Here are eight news stories that dominated the broadsheets, airwaves and internet over the course of the year.

In the year’s first major news story, Google China announced in early January it would no longer censor internet search results, after two Gmail accounts of Chinese human rights activists were hacked in an attack that originated from inside the country. A global media frenzy ensued, in which the darling of Silicon Valley’s actions were either derided as spurious or praised for finally adhering to the tech company’s ‘don’t be evil’ mantra. After negotiations with the Chinese government, Google essentially exited the mainland market in March by redirecting all search queries to their Hong Kong site.

By early spring, media attention had largely refocused on the next scandal – a rash of suicides at Foxconn, a large Taiwanese contract manufacturer of Apple, HP and Nokia products. A total of 13 employees killed themselves by jumping from company dormitories, allegedly due to low pay, long hours and discrimination of the mainland Chinese workers by their Taiwanese bosses. The company eventually responded with pay hikes and bizarre, morale-boosting mass rallies, which eventually put an end to the suicides.

The next story to float out of China was the government’s move in April to curb speculative property purchases responsible for the current housing bubble. A series of regulations cracking down on housing credit slowed sales numbers, but have done little to reverse price levels thus far. Earlier this summer, Caixin Online economist Andy Xie shared with TALK his pessimism on the property market’s future. “The bubble pops when the interest rate goes high enough, which will happen when inflation becomes a crisis that forces the government to act – probably around 2012.”

In early July, the Agricultural Bank of China became the largest initial public offering in history with a USD 22.1 billion dollar debut on the Hong Kong and Shanghai stock markets. The ABC was the last of China’s ‘big four’ banking conglomerates to go public, although it failed to live up to earlier, higher value estimates of USD 30 billion. The bank also lost its ‘Largest IPO’ title only a few months later to Brazilian energy giant Petrobras’ colossal USD 70 billion share offering.

Surprising no one, China officially became the world’s second-largest economy in August, when its second-quarter nominal GDP eked by Japan’s. The country’s economy is currently 90 times larger than when Deng Xiaoping introduced market reforms 32 years ago and is on course to surpass the United States as the biggest economy in the next ten to 15 years.

While China continued to boom economically, things remained sluggish in the United States. Over the summer voices calling for China to revalue its currency grew in volume and vitriol, making one thing certain – it must be election season in the US! American politicians on both sides of the aisle threw toys out of the pram claiming currency manipulation was hurting US exports, while China responded by pointing the finger at the Federal Reserve’s quantitative easing – in essence printing money to help kick start the American economy. This action in turn lowers the value of the dollar which conversely raises the prices of commodities, hence China’s concern. This perennial debate will no doubt dominate the headlines in 2011 as well.

At the beginning of autumn, American billionaires Bill Gates and Warren Buffet inadvertently ignited a national debate on philanthropy when they sent out invitations to China’s super-rich to attend a dinner hosted by the duo. Their intentions were to encourage charity amongst the Middle Kingdom’s nouveau riche through Gates’ Giving Pledge, but initially were met with apprehension. In the end, over half of the invitees attended the event and took part in a frank discussion on the future of giving in China, which Buffet emphatically described as an all-around success.

Finally, following a diplomatic spat with Japan over territorial claims in the East China Sea in September, China began halting shipments of raw rare earth metals to the island nation. China currently controls around 95 per cent of the world’s rare earth production, as other countries have abandoned the environmentally-destructive mining; the metals are critical in electronic components. The unannounced trade embargo spread to the United States and Europe by mid-October and ended abruptly a week later. As China’s rise continues, the nation will no doubt become more adept at playing geopolitical and economic hardball.


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