China has made some rather interesting business moves recently, adding to the speculative fire that China is ‘moving in’ on the U.S. China's recent move, as highlighted by PolicyMic pundit, Henry Zheng, is a desire to build economic zones in Michigan and Idaho. This has been well received by the community leaders in each location and, because it is China, the moves are viewed with caution.
There’s obvious and justifiable mistrust between the U.S. and China as China has been accused and brought to court on numerous occasions over copyright violation, intellectual property infringements, along with infringements on patent rights. Further, China’s human rights record has been abysmal. Yet, there have also been numerous reports that China’s economy is showing signs of a slowdown and it would make sense for a country like China to seek financial safe haven in America.
One of the key indicators China is slowing down is the continued struggle to maintain home prices in China. The National Bureau of Statistics (one of China’s official reporting arms) reported that home prices in China have fallen in 46 of the 70 cities they track. In an effort to combat the falling home prices, China’s central bank dropped lenders reserve requirements for the third time in six months in an effort to encourage home purchases. As America learned the hard way, this is a very risky move.
Additionally, China’s auto-sales have fallen leaving many dealerships with more than 45 days of inventory at the end of April. Dealerships cut prices to increase sales to offset the expired tax breaks China introduced in 2009. The National Development and Reform Commission’s monthly report indicated that the average car price is down 1.9%. This is the fourth time they have reported a decline this year.
Another area China is struggling with is the care for their elderly. Living conditions have worsened for China’s most vulnerable population and China has been unwilling to increase elder-aide.
Finally, Chinese citizens have shown their concern by increasing their gold purchases. In fact, the first quarter of 2012 showed that demand for gold for investment reached a record high in China.
In looking at the overall environment in China, the recession is leaving a mark and China is looking at new growth opportunities to offset their own downturn. So, the question remains, is China’s latest move to strategically gain insight into American exceptionalism? Or, are they expanding their portfolio to weather the economic storm that appears to be bearing down on China? Either way, the fact that Chinese businesses are setting up shop in America demonstrates that American exceptionalism and resiliency continues to pose a challenge to the Chinese government.