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Plato-fullerene chemistry and global economic collapse

On February 18, 2011, the Cornell University Library announced the quantum biological discovery of two Chinese scientists from Mongolian universities. Scientists have used mathematics to explain why proteins are strangely composed in DNA, contrary to the scientific worldview of the twentieth century.
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Excerpt from a book called, Science-art and human survival technology, published a decade earlier by the Australian Arts Research Center, predicted a discovery made by Liaofu Luo and June Lu. The following is an excerpt from the book, which mentions the cell membrane. “The evolutionary direction is ensured by the ever-changing forms of the evolving protein, which when measured demonstrates that it is moving toward universal infinity.” This concept does not correspond to Einstein’s worldview.
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The properties of the liquid crystal optical structure of the cell membrane at the nanoscale take into account the existence of holographic reality. This awareness is transmitted to the mind through endorphins, which create the pleasure of recognizing the patterns of the “Golden Mean” involving an electromagnetic process (the Greek concept of wisdom through beauty). Variable protein patterns are known to express aspects of infinite fractal geometry, which in ancient Mesopotamia was called sacred geometry. The connections of geometry with the design of living beings were taught by students, including Leonardo da Vinci, in the 15th century by Fibonacci and Pacioli, when they introduced Babylonian mathematics into European civilization.

Pacioli summed up this mathematical connection with biology with his famous quote“Like God, God’s destiny is always like itself,” today it is known as an expression of the infinite property of fractal logic. Such a design geometry is found in the construction of living things such as pine cones, sunflowers and pineapples. The emotion molecule, discovered in 1972 by Dr. Candace Perth, evolves by increasing the speed of its molecular motion as an infinite fractal expression. Mesopotamian mathematics can now be linked to emotional platonic Greek science Science for ethical purposes. However, this science was not obtained from the schools of the Babylonian mystery, but from the ancient Egyptian schools of the Mystery of Misopotamia, as discovered by the mathematician Buckminster Fuller.

Nanotechnology has shown that the difference between Fuller’s results from Egyptian schools and the mathematical conclusions of Bertrand Russell and Albert Einstein obtained from the Babylonian schools is very important. As Fuller noted, this difference lies in the choice between Utopia and Oblivion. Bertrand Russell’s most popular essay, written in 1904, is entitled Freeman’s Worship, insisted that we must endure the constant domination of chaos and despair associated with Einstein’s worldview. Their common worldview suggested that the second law of thermodynamics, also known as the law of universal chaos, should always govern our scientific culture. This law certainly includes science that upholds global economic rationalism.

Russell and Einstein insisted that if the universe eventually radiates all its energy into cold space, then all life in the universe must be destroyed. This miserable end to all Russell called “the universe in thermodynamic destruction.” However, this concept has been proven incorrect. A recent CERN experiment, published in the journal Nature, showed that dying new ones in the Milky Way are directing cosmic radiation through millions of years of space-time to influence the development of life on earth. This cosmic radiation from new ones in the Milky Way causes clouds on earth to emit rain. This discovery has created chaos in the European carbon credit economy, which is now on the verge of collapse. So much for global economic rationalism.

The death of a dinosaur in the ancient fields of jasper formed a liquid crystal soap with fatty acids, which, being exposed to the same cosmic radiation, began to turn into crystals of jasper. In this process, sacred geometries can be observed, and mathematicians have published that crystal structures form infinite fractal logical expressions pertaining to ancient mathematical mythologies.

The thinking of Bertrand Russell and Albert Einstein could never have imagined that such a phenomenon could exist. Their scientific worldview would never offer them the opportunity to use mathematics to discover the relevant laws of physics responsible for this. For them, no scientific explanation of how sacred geometry could take into account the human mythical intuition that the living process went on indefinitely would be impossible. No patterns of life on earth associated with the work of the infinite holographic universe are allowed under their dictates, which believed that eventually all life in the universe should be destroyed.

In 1990, a mathematician from the Australian Research Center discovered the new laws of life energy, which were published by the world’s largest technology institute, the IEEE-SPIE Milestone Series, as one of the greatest discoveries of twentieth-century literature. The legacy of Einstein’s death wishes, which governs the higher education system of Western culture, simply forbade basic science to continue research into this discovery. In 1995, an international peer review under the auspices of the Institute for Basic Research in America announced the discovery of the Center’s Mathematics as relevant to the new physical laws governing optimal biological growth and development in space-time. Therefore, Einstein’s worldview can be considered cancerous.

We can understand why Western culture destroys itself by comparing the difference between worshiping the dominant religious deities of Ancient Babylon and Ancient Egypt. Western mathematics and physics linked the use of sacred geometry as a mythical worship of the Babylonian goddess Ishtar, the goddess of sex and war. In his autobiography, Bethran Russell wrote that in his youth he was very lonely, and the only reason he did not commit suicide was his desire to learn more about how ancient mathematics was related to metaphysical philosophy.

In Russell History of Western Philosophy, it seems to elevate the status of Goddess Ishtar, although the use of sacred geometries to explain her mythical existence is extremely difficult. However, he became the most famous British supporter of “free love”, as published in his book entitled “Marriage and Morality.” His appointment as a professor at New York City College in 1940 was revoked by a court order that found him morally unfit to teach at the college. The first three marriages ended in shameful public disgrace, but his attitude toward sexual behavior seemed to be less relevant during his fourth marriage in recent years.

Bertrand Russell was a courageous man who received the Nobel Prize for his contribution to freedom of thought. However, his personal sex life, associated with the Babylonian mathematical myth, was associated with Western scientific thought. This becomes apparent when comparing Russell’s findings with Buckminster Fuller’s discoveries, which were related to the worship of the mythical goddess Maat of ancient Egypt.

Maat was the Goddess of Truth and Beauty who prevented the Universe from returning to chaos. In Russell’s most popular essay entitled Worship of Freeman, he advocated a reverse, desperate, heartless worship of chaos itself, as defined by Einstein’s misidentification of universal chaos as ” The supreme law of all science.

A comparison of the impact of intuitive mythology on the health of Babylonian and ancient Egyptian civilizations reveals the enormous development of Russell-Einstein’s Western science. A 1995 government report entitled Sexual relations, benefits and infections in Ancient Egypt Robert Morton reveals why global economic rationalism is actually at the point of collapse. C “modification‘, Fulleren’s medical science, proposed by the Nobel laureates in chemistry in 1996, could change this threat to world humanity. The United Nations mandate, which guarantees that the administration of governments will be guided by the Platonic-Fullerene medical principle, will help get rid of this. Aristotle’s concept of ethical medical science for the health of the universe presupposes that his enriching government, designed to prevent the destruction of civilization, becomes a reality.

The governing government, in which people sought to become personally responsible for the continuing ethical actions valued by ethical medical science, would be able to obtain the supertechnologies that Fuller understood were innate in Platonic science for ethical purposes. We can thank Pythagoras for his definition of spiritual freedom, which linked him to the nature of light while studying in the ancient Egyptian schools of mysteries. Spiritual freedom is associated with the electromagnetic transmission of holographic consciousness from the cell membrane of the “All Visible Eye” that controls human evolution. Thomas Jefferson had some intuition of this phenomenon when he reflected the Pythagorean concept of spiritual freedom on the Great American Seal.

In a report on the ancient Egyptian society governed by the worship of Maat, Robert Morton explained that the autopsy of ancient Egyptian mummies showed that the incidence of sexually transmitted diseases was low compared to other Mesopotamian civilizations. Children were taught in the teachings of Maat about truth and justice until the age of 12-14, when at puberty they became adults. Morton notes “the lack of any recognition of adolescence as we know and define it.” The report found that “the structure functioned successfully thanks to Maat and the social cement of the family.” The satisfaction of the family, genuine respect for motherhood and democratic existence in their forms of government, a lucrative export market with taxes paid on the construction of the pyramids, and the absence of rebellion in adolescence outlined a society that Morton believed we could envy today. .

The sacred geometric myth of Egyptian thinking infused mercy and compassion into the daily lives of the population, who had to be responsible for ethical behavior in order to recognize it fit to enter the afterlife. After the collapse of the First Kingdom of Egypt due to a prolonged drought, the inhabitants of the Second Kingdom merged the ethics of mercy, compassion and justice into the fabric of political law. Later, Greek mathematicians added the dignity of Platonic love to their atomistic science of universal love. This is in contrast to the scientifically unbalanced concept of modern democracy, in which the unethical greed of people who do not feel the need to take responsibility for their actions accelerates social chaos.

In the 5th century AD the custodian of the Great Library of Alexandria, the virgin-mathematician Hypatia was killed by a Christian mob that collapsed and the scrolls of the library were burned. St. Augustine declared all Mesopotamian mathematics of sacred geometry to be the work of the devil, referring to the Bible’s description of the Great Whore of Babylon.

Bertrand Russell and Albert Einstein grew up in a society unaware that the living process was an expression of an infinite universal fractal evolutionary process. The sooner the United Nations creates a new Plato-Fulleren medical science that will drive government enrichment, the sooner we will be able to develop the supertechnology of human survival from lost science for ethical purposes.

© Professor Robert Pop.

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The rise of the rest

As globalization and glocalization merge, the economic growth gap between developed and developing countries narrows significantly. The G7’s total GDP in 2000 was 133% of EAGLE’s GDP (emerging and developing economies). In 2016, the EAGLEs frog jumped growth by 128% from the G7. If the trend continues, this figure will reach 138% by 2020, and the projected GDP growth of the ARL will double the growth of the “Big Seven” by 2050 (G7 – 73 787 US dollars against E7 – 145 349 US dollars).
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Although EAGLE has a dynamic definition based on projected contributions to the global economy relative to the G6 (G7 minus the US), it is considered extremely important for foreign investment and the global market for innovation. The E7 countries are the forerunners of the world economy, and the EAGLE is considered the next frontier economy.
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The Eagles have been a lucrative destination for the foreign investment and innovation portfolio. Developed countries are now completing labor-intensive manufacturing industries and introducing an additional manufacturing process through a smart factory and the Internet of Things (IoT). These manufacturing facilities as well as design and research centers are moving to these EAGLE countries for Greenfield investments. The government and corporations find it more appropriate to take advantage of the inexpensive advantage and availability of cheap labor in these emerging markets. Instead of stagnating on high indebtedness and accompanying the slow development of developed countries, investors now find healthy growth and the EAGLE budget deficit more convenient for business.
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But low incomes and high unemployment pose a big problem for economies. Eagles are now getting into the “sweet spot” of consumer growth after 2017, when people earn more than $ 10 a day. Additional threats are a structural problem and a relatively costly market trade, especially in Latin America. Asian countries face the challenges of authoritarian government, political instability, terrorism, and technological adaptation between the Fourth Industrial Revolution and innovation.

To stimulate the rapid economic growth of eagles, developing countries should help identify determinants of external shock that could undermine potential growth. Deep, lasting transformations in the world economy are achieved through the skill of developing and developing countries. The monumental shift of this global economy can achieve a sustainable and balanced momentum if market liberalization, political stability, and infrastructural and institutional support are ensured. In addition, going beyond can help the founder of the world economy stay afloat. At the same time, corporations and governments capable of meeting the interests of Western democracies must effectively ensure optimal business and promote a regulatory environment for the new bourgeoisie of Asia, Africa, and beyond so that the eagles can move to the next level of economic advancement.

Credit score calculations and bank lending in the global financial crisis

It is now 5 years since the onset of the global financial crisis, and it is interesting to reflect on how credit risk analysis processes have ultimately affected the global economy. The subprime mortgage crisis in the US was the beginning of a chain event that had a domino effect, when the financial viability of some of the largest financial institutions was reduced, leading to a stock market crash and, ultimately, a national recession, rising unemployment, declining unemployment and indeed a global recession as the economies of the rest of the world were affected by events in the United States.

The catalyst for what eventually turned into a catastrophe was a set of sophisticated financial instruments that essentially allowed banks to sell the risk of default to other players in the economy. At a time when financial institutions focused more on the credit rating of consumers claiming their products, buyers of these instruments, called pledged debt, could comfortably profit from the transaction because of the credit risk associated with their purchase of the right to these loans. were low enough that they could profit from the deal despite lending to occasional defaulters.

However, this has led to behavior in banks where they have virtually ignored the credit history of consumers who have applied for loans. Over time, there has been no correction in the risk of non-repayment of the loan accounted for in these securitization transactions, and both banks and securitization companies have been left without loans that could be expected to repay. This has clearly undermined the financial viability of banks.

Worse, banks that did not engage in such securitization practices and were considered more financially sound often lent money to tier two banks and thus faced credit rating problems starting with the “snowball” worst financial crisis in vivid memory. .

While this may seem inconspicuous when someone applies for a loan or credit card, it actually involves an analysis process conducted by banks to try to make sure that credit risk does not further undermine the viability of the company. After the global financial crisis, lending criteria were significantly limited, so that only borrowers with a high level of loan reliability can access the best market rates in this area.

Global warming – how much will a ton of carbon dioxide cost?

One of the most discussed methods of counteracting global warming is to limit carbon and charge carbon emissions for investments in carbon-absorbing technologies. Planting new trees with the money raised is a frequently mentioned solution, the effectiveness of which still needs to be proven.

But how much will such an approach cost per tonne of carbon dioxide (CO2) emissions? How will this affect the global economy? The numbers are slowly growing.

A United Nations report published in May 2007 estimates that global efforts to reduce greenhouse gas emissions, such as carbon dioxide, could cost the world economy 3% of total production by 2030. That is, by 2030 World economic output could be 3% lower than it would otherwise be due to the cost of carbon pollution control programs.

According to the World Resources Institute, an environmental think tank in Washington to reduce carbon levels to the level proposed in the UN report will cost between $ 20 and $ 100 per tonne of carbon dioxide.

McKinsey & Co., an energy consulting firm, estimates that to reach the level of greenhouse gases by 2030, recommended by a UN study, will cost $ 40 per tonne of CO2.

In Europe, where “carbon trading” has become a new buoyant specialty “derivatives trading”, as of May 2007, the price of a ton of CO2 will cost $ 25. That’s how much it would cost you today to emit a ton of CO2 next year.

Duke Energy Corporation of Charlotte, North Carolina, uses a figure of “$ 7.50 to $ 30 per tonne of CO2” in future investment plans.

Another study is given by Professor Robert Sokolov of Princeton University, who was quoted by the Wall Street Journal as saying that a carbon cap that would result in a $ 30 fee per tonne of CO2 emissions would also cost American consumers an extra 30 cents. liter on the gas pump.

Thus, estimates still range from $ 20 to $ 100 per tonne of CO2 emissions, creating many opportunities for politicians and economists to constantly change alternative plans, giving affected consumers a reason to scratch their heads.

The way it looks now, not only science and politics, but the economics of global warming also looks equally complex.

Where is the company that is most likely to go insolvent in 2016?

Insolvency is one of those elements of business that will never leave us. Just as some businesses thrive in the market, others struggle, and those of them are always destined to become insolvent. While you may be forgiven for believing that the level of insolvency remains the same everywhere, it is simply not true. Indeed, according to the leading trade credit insurer Atradius, there is an imbalance in the global economy that will cause some countries with increased insolvent businesses to shrink.

In their latest insolvency forecast, they published their forecasts for 22 major trading markets, and while their overall forecast is a drop in the number of insolvent businesses in 2016, this drop will be extremely modest. The potential of a new global economic recession and continuing low oil prices around the world pose a threat to business. However, they adhere to the projected -5% change in total insolvency.

Of greater interest is the news that the total number of bankruptcies expected in 2016 is 67% higher than in the pre-recession of 2007, and in some key countries surprisingly higher. Note for a moment that Portuguese companies are 440% more likely to become insolvent than in 2007, Italian companies are 280% insolvent and Spanish companies are 250% more insolvent. Obviously, economic recovery has not affected every nation equally.

The story goes to Greece, which in 2015 had huge economic problems as a result of which their parliament passed a deal to rebuild the eurozone. Of course, in 2015 the number of business failures increased by 10%, but in 2016 an increase of another 5% is expected, making it a very difficult time to be a Greek business.

Switzerland, Luxembourg, Norway and New Zealand are not expected to improve insolvency levels in 2016. While in the UK the number of insolvent businesses will improve by only 1%, which has fallen sharply from an improvement of 9%. observed during the 2015 fiscal year.

It all depends on a number of very volatile factors in the world economy, especially in China. The country has published a number of reviews of its growth over the year, and they have many times had to suspend their stock market due to a sharp drop in its value. If China recovers from these stumbling blocks, we may witness a completely different type of global economy that has good growth despite dire forecasts.

Jason Curtis, commercial director of Atradius, said in a report: “” The difficult external environment combined with low commodity prices is putting pressure on world markets, increasing the risk of insolvency despite the strengthening of the domestic economy. This is a clear warning to businesses that need to be mindful of trade risks, even if the economy recovers.

Despite improving UK and Irish statistics in 2015 and forecasting improvements for 2016, the market remains complex, with insolvency still much higher than before the recession. Few businesses are able to absorb the effects of a failed customer, and businesses need to continue to defend themselves and have sound credit management systems. ”

The impact of the global economic crisis on business

The global recession, caused by several reasons, is terrible news for every business in every country in the world. The trend adopted in this downturn by companies seeking to survive during a chaotic period is to enter into a staffing review as well as freeze the budget along with numerous cost-cutting measures.

However, it is possible that the growth of the company will be stopped if you continue to practice or react too strongly to the whole situation. As can be seen, the recession that affected the economy has forced many international companies to reorganize their activities. Basically this was done by shutting down the production facilities. Because of the ongoing crisis, millions of workers had to quit their jobs. The course of action taken by the company should be to come to the fore and rethink the results of your company and at the same time think through the procedures of global recovery.

Large-scale business is facing a crisis. The economic crisis has hit businesses around the world so hard that several businesses have had to seek financial help from the government to survive. Several industries were threatened and the rest were threatened with bankruptcy. For almost all monetary institutions it was as if the floor had been swept underfoot. And as a conclusion the power at acquisition of things by the public became weak. Consumers were again very well aware of the budget.

Almost all people were forced to make careful decisions when it came to buying something because everyone did not know when the recession would come out. Market trends began to fluctuate along with demand for various goods. Almost every business has been hit by the global economic crisis, but the companies that have been hit hard have become companies that operate on a large scale as well as those that provide their services at high prices. Consumers are now turning to businesses that provide similar services at relatively low prices.

Businesses that can better survive this economic recession are mostly small as well as medium-sized industries. However, this does not mean that they were not affected by the economic crisis. The difference in the first place is that small as well as medium-sized enterprises have relatively small activities and have the ability to support work with less income. Usually such a business has an optimized way of working that minimizes the overall effect of the global crisis for survival.

The period of time needed for the international economy to recover is long, as the magnitude of the crisis is large. Nations will have to make every effort to restructure the economy. What awaits us next is vague, and a clear picture has yet to emerge. However, it is hoped that companies will maintain their normal position again.

Multipolar world economy

The world economy is currently undergoing a major transformation in terms of economic structure, power and influence. Economies, commonly referred to as “emerging markets,” appear to have finally emerged and come into their own in terms of their contribution to global economic and financial activity. The international corporate and landscape nature and even the form of the international financial system in the revision of the international economy have become even more important for understanding this phenomenon, both for the major developing countries at the forefront of these changes and for those who developing especially the least developed economies that remain on the periphery. The phenomenon of changing the engines of growth is not new, at least in terms of world economic history.

This time, indeed, the hitherto unprecedented importance of developing countries at the forefront of these changes looks different. Economies such as China and India are increasingly becoming important in the development of global growth for advanced countries such as the United States and Japan. From the first major component of trade, finance and technology, growth rates, measured in constant dollar terms, normalized to a maximum and a minimum for the entire period. What it turns into a world is becoming increasingly multipolar, and will only continue to do so in the future. In fact, in terms of relative economic magnitude, the world is now more multipolar than it was in the 60s, and this trend of greater diffusion should continue in the future, certainly until 2025.

However, it is important to recognize that a more diffuse distribution of global economic activity should not involve a more balanced distribution of the relative share of the contribution to growth, which does fall from the highs of the 1970s, but we live in the midst of what appears.

If we leave the financial crisis of 2007/2008, the consolidation of economic growth coupled with the rising economic levels of new states such as China and India means that the world is actually moving away from the multipolar contribution to growth we see today. Now, although some set the framework for the transition to a language of competition and in the context of developed countries, these changes need to be thought of more in terms of how the global distribution of global activity and influence is now simply less concentrated. So the story is not so much about the fall of an advanced economy, or about an emerging economy. But a more balanced distribution of the huge benefits of economic growth.

In other words, it is the kind of economic convergence of production and income that the economy has long dreamed of, and which has thus been elusive and is now approaching realization, at least for the largest developing countries.

The future that a multipolar world expects for developing countries is advanced for the whole phenomenon of multipolarity, their greater involvement in the future direction of the world economy means that greater diversification of growth activity turns into a better world in terms of equality.

Forecasts for the global perspective of agriculture in 2016

Prospects for the development of the global agricultural sector in 2016 cannot be considered separately.

The interdependence between it and other segments of economic activity is complex and subject to wide divergence of interpretation, but nevertheless it exists. So what does this mean in terms of 2016?

The global economy

If you write in the first few weeks of the year, it is clear that again next year will be difficult for the world economy. While this may seem like something of a repeat of the news of any year since 2008, unfortunately, it seems to be true.

Currently, the economies of the United States and the United Kingdom are growing moderately healthy, but their economic recovery remains volatile. Consumer spending in both countries is extremely subtle and unpredictable.

The once-unstoppable Chinese economy is slowing, although growth still remains at a level that almost any other country would consider an unattainable ideal! It seems likely that the demand for some agricultural products in China will continue to increase, which is good for their domestic producers and those countries from which they import things like tractors and agricultural machinery as well as produce.

Unfortunately, from now on the picture looks increasingly bleak.

Australia and the eurozone appear to have relatively anemic growth prospects next year. In addition, Greece continues to be huge, despite the fact that European financiers are not currently worried about the “headlines”.

Many economies in South America and Africa seem to be in dire straits, and even the one-time, energy-rich Russian economy appears to be threatening a spiral that is almost out of control.

In the first weeks of 2016, there were also several moderate panic situations in various stock markets, and although they have not yet rolled over the precipice in a mass sale of panic, several times approached this. Once again there is some evidence that capital is starting to move back into things like gold and other safe havens.

In terms of political impact on the world economy, the situation in the Middle East is far from encouraging, although it is safe to say that the world has become largely accustomed to this over the past 70 years. If the situation there does not threaten oil supplies, terrible tragedies may not have a direct impact on the world economy.

A more immediate concern for markets and economists is the escalation and escalation of tensions between Russia and NATO along its vast border with Europe. The economic instability in Russia and the lack of predictability associated with political decision-making are conceived by many investors.

The situation with mass migration to Western Europe is also proving to be an economic problem.

The exact figures are unknown. The European Union itself estimates that in 2015, about 1.8 million people migrated to Europe.

Even conservative estimates of the number of those who have entered Europe since 2012 and who will enter by the end of 2017 give quite staggering figures. Given the uneven distribution of migrants in relatively few of the more industrialized and wealthy EU countries, the immediate short-term impact of the associated costs and potential of social disruptions with economic effects may cause some.

Summary

It seems reasonable to predict that at least some of this will affect the agricultural sector and have a detrimental effect on producers trying to attract investment capital. However, this negative impact may be more than offset by the constant global demand for affordable food due to population growth.

Agriculture is perhaps one of the relatively few sectors that has good enough performance in 2016, even when times elsewhere are difficult.

What needs to be done to combat the global economic crisis?

The catastrophe in the economy, which began in 2008, escalated into a global economic crisis. The detrimental impact on investment and trade is now being felt in many economies that survive on exports. Even close threats of dehydration of economic trade and strengthening of protectionism are also observed at close range. The constant reduction in finance has made greater development support to improve trade more necessary to reduce the negative impact on the world economy, especially in the least developed countries.

It is important to provide trade support in the form of new infrastructure, as well as opportunities for trade-led development to rebuild the future and stabilize the global economy, so that structural modifications and progress can take place in the long run. There are several impressive approaches to trying to resolve the global economic crisis, such as the UN Millennium Development Goals. However, these are excellent standards. They are frightened by the consequences of the economic problem. This will reduce the current funds for these purposes. Goals try to only partially divide poverty. It is of no use. This means that most rich countries do not have the will to move forward politically to achieve motivated goals. For example, they are willing to fill only their banks. It is time for a more necessary set of measures. They need to be thought out well, on a global scale. Today, many countries are paying attention to the basis of the world economic system. The global economic crisis threatens forever. Many smart people put everything in order to withstand the storm and also defeat it to come out triumphant!

China’s Important Role in the Global Economy – Rise of China and the State of Its Financial Markets

Introduction:

The People’s Republic of China, herein China, is rapidly becoming one of the most important countries in which to do business. It has accomplished a great deal in a short period of time, including developing two major domestic stock exchanges over the past twenty years, and garnishing entry into the World Trade Organization (WTO). China’s economic modernization has lifted nearly 400 million Chinese out of poverty since 1990. Sadly, 415 million citizens still live on less than $2 per day. China has one of the most open countries in which goods flow freely to and from the country. However, the country also consistently ranks as one of the least politically free in the world. China is the first poor global superpower in history: It is the fourth-largest economy, yet its per capita income is ranked around 100th in the world.

Rise of China as a Superpower:

The phrase ‘Made in China’ has become as universal as money itself. China has progressed technologically over the past few decades in terms of the goods it produces. This nation sews more clothes, stitches more shoes and assembles more toys than any other nation. China is also the world’s largest maker of consumer electronics, including TVs, DVDs and cell phones. Furthermore, they are moving quickly into biotechnology (biotech) and computer manufacturing. Lastly, China makes parts for Boeing 757s and is exploring space with its own domestically built rockets. In terms of trade, China is one of two main sources of imports to the Eurozone area, with shares of over 10%. These levels are below that of the United Kingdom (UK), but are above the share of imports by the United States (US). This makes China a direct competitor of mature economies.

China is the largest market in the world, containing one-fifth of the world’s population. Over 100 cities in China have populations of one million people or more. In comparison, the U.S. has nine cities with such a population; Western and Eastern Europe combined has thirty-six of that size. Customers in China do business with household names, such as Citibank, Disney, General Electric (GE), Toyota and Microsoft.

Foreign direct investment (FDI) in China has been very impressive in recent years. Shanghai, China’s most populous city and foremost financial hub, attracted $12 billion alone in FDI in 2004 for industries that export mainly to the U.S. By the end of 2003, 14,400 wholly owned foreign companies were in the city with another 13,000 underwritten with foreign money. Shanghai, alone, attracted approximately the same level of investment as all of Indonesia and Mexico combined. There have been both successes and failures in efforts by firms to enter the Chinese marketplace. For instance, Unilever launched fourteen joint ventures in China from 1986 through 1999 and was in the red most of the time. In contrast, Proctor and Gamble (P&G) ended up as a market leader in almost all categories they introduced in China.

By the end of 2002, just one year after joining the WTO, China overtook the U.S. in FDI inflows. China became the 143rd member of the WTO on December 11, 2001, after nearly fifteen years of negotiating the terms of its entry. China agreed to substantially reduce its tariffs on agricultural and industrial goods, to limit subsidies on agricultural production and forgo state monopolization of international trade in grain. Also, the country agreed to enforce property rights for intellectual property, open up its service sector to foreigners and remove restrictions on trading and distribution for most products. In return, China received permanent most-favored-nation status with the US and gained access to WTO dispute-settlement mechanisms to protect trade interests and participate in multilateral negotiations on trade rules and future trade liberalization. China is expected to become more productive over the years as it adjusts to world prices.

China’s labor force is larger than the sum of all labor forces in developing countries. The unemployment rate in urban settings is currently 4.5% and is usually isolated among newcomers to the urban labor force. Chinese cities currently create a combined total of around eight million new jobs per year. The entry into the WTO inevitably led to the displacement of millions of workers at inefficient state-owned factories. The economy must grow at a rate that will absorb these workers and find them new jobs. Slower economic growth could lead to social unrest and displacement of Chinese leadership.

China’s export and import of merchandise and services has grown substantially over the years. China is also a key outward investor: China is the world’s largest holder of foreign reserves, at $853.7 billion at the end of February 2006. FDI has also contributed to a technology transfer in China, leading to such things as production of aforementioned technology-driven goods. According to the International Monetary Fund’s (IMF) World Economic Outlook database, China’s current account surplus, since 2004, is expected to continue to increase. By 2005, it had reached 7.5%. China has five firms in the top fifty transnational corporations from developing countries over the period of 2002 through 2004. More than 50% of FDI in China is held on offshore centers, such as Hong Kong.

China is poorly endowed with natural resources, with the exception of coal. It is becoming increasingly dependent on imports of petroleum and other natural resources. China’s energy consumption grew 80% from 1995 to 2005, and its share of world energy consumption over that time frame increased from 9% to 12%. As of 2002, China was the number two oil consumer after the U.S. and now relies on imports to meet almost half of its oil demand. It goes without saying that both countries share an interest in a stable Middle East to provide a significant quantity of oil to their sovereign nations.

State of China’s Financial Markets:

In 1992, investment by foreigners in the Chinese stock market was permitted through multiple share classes. Access, however is still restricted and there is limited attractiveness due to the significance of the state-owned shares. Debt inflows are also heavily restricted, as have been private capital outflows. Bank deposits to GDP rose almost three-fold between 1991 and 2004; the banking sector remains excessively focused on lending to state-owned enterprises (SOEs), however, and is not an adequate provider of credit to private enterprises and households. Bank loans accounted for approximately 20% of firm financing. Stock and bond issuance played only a minor role. Poor intellectual property rights in China means that much of inward FDI is confined to labor-intensive sectors that do not rely on proprietary technologies. This situation is slowly being addressed and corrected since China’s admission into the WTO.

As of 2004, 64% of all shares in the Chinese stock markets were non-negotiable, government-owned shares. These shares are not priced, and therefore, central governments tend to be indifferent toward the financial conditions of the enterprises in which it has control. In April 2005, the government announced a reform policy regarding the rights of traded shares, bearing the risk of decline in share price when non-negotiable shares are sold on the market. Non-negotiable shares were to not be traded during the twelve months after the reform is implemented. Even after the twelve-month lock-in period, holders of over 5% of shares in an enterprise were limited in terms of the number of shares they may sell at any one time. By July 2006, more than 1,000 listed firms, or 80% of all listed companies, adopted the reform.

The Chinese stock market has made positive strides in the past ten years, but there is still much work to be done in order for it to be comparable to that of mature markets such as those in the US or UK. On the positive side, sixty-five million Chinese have investment accounts today and are participating in the capital markets. The negatives, unfortunately, may trump the positive reports today. First, speculation is a huge problem in the Chinese stock markets. Individual investors are driven by a herd mentality and institutional investors routinely engage in speculation.

The Chinese market, therefore, does not reward investors for long-term investing. It is much more of a traders market. Furthermore, market segmentation is a barrier between China’s capital markets and international investors. Foreign investors can only trade class B shares, while domestic investors are able to trade both those and class A shares. Class B shares is composed of less than 10% of the number of class A shares and its total market value is only 2.4% of that of class A shares. The long-term performance of class B shares has lagged class A shares in the market as well. These are two issues requiring governmental reform in order for the Chinese markets to develop.

The banking sector in China has limited investment overseas. At the end of 2002, all of China’s commercial banks together have around 670 foreign branches, over 90% of which belong to the four largest state-owned commercial banks-known today as the ‘Big Four’. The Big Four state commercial banks are comprised of the following banks: the Industrial and Commercial Bank of China, the Bank of China, the China Construction Bank and the Agricultural Bank of China. These branches held $160 billion in assets and $156 billion in liabilities at the time. As of 2005, 111 Chinese firms were listed on exchanges overseas. One-hundred-and-eight were listed on the Hong Kong Stock Exchange (HKSE), thirteen were listed in the US, on the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation (NASDAQ), three were listed in the U.K. and two in Singapore. Inefficiencies in the Chinese stock market can be attributed to poor and inefficient regulation. Using a buy-and-hold strategy from 1992 through 2003, the Shanghai Stock Exchange (SHSE) index underperformed the Standard and Poor’s 500 (S&P 500) index by 120%. This suggests that listed firms are among the low-quality firms in China.

The government bond market in China grew slower than the stock market, but between 1998 and 2002, the growth rate was 11.7%, with outstanding bonds reaching $232 billion. Corporate bonds, on the other hand, were only one-fifteenth the size of government bonds at the end of 2001. The Chinese bond market has slowly begun expanding in recent years, however, due to the growth in U.S.-based investment banking activity in the region.

China’s venture capital industry has been underdeveloped since its inception in the 1980s. Its role in supporting the growth of young firms has been very limited. However, in recent years, China has become a central hub among emerging economies for private equity. China was ninth out of the top twenty countries in the world for receiving private equity investment in 2004, trailing Japan and South Korea among Asian countries, and has attracted $1.67 billion that year. Many venture capital companies are wholly foreign-owned and registered in tax havens such as the Cayman Islands for tax purposes. The exit strategies for venture capital firms include trade sales and initial public offerings (IPOs). Total gross proceedings raised in IPOs on the Chinese stock exchanges was $25.74 billion in 2006, just shy of the $32.05 billion raised in the U.S. market. In the same year, the Industrial and Commercial Bank of China, one of the Big Four, issued the world’s largest IPO. It raised $14 billion in Hong Kong and $5.1 billion on the SHSE.

The asset management business in China has grown tremendously in recent years. Wall Street firms have been buying into China’s fund management due to the fact that it has one of the most attractive segments of the financial services industry. Currently, there is an astonishing $1.7 trillion in Chinese personal savings. Assets under management have ballooned to about $60 billion by 2005, up from almost nothing a few years ago. In 2005, China had fifty-four closed-end and 164 open-end funds under the management of fifty-three fund management companies.

The Chinese government owns 99.45% of the ten largest commercial banks in China as of 1995. Competition is extremely low due to dominance of the Big Four. There is a risk of an impending banking crisis due to a severe level of non-performing loans (NPLs), which may be at over fifty percent as of 1999. To address NPLs, the Chinese government set up four state-owned asset management corporations (AMCs) in 1999. The purpose of the AMCs was to buy bad debt from the Big Four and dispose of them over a period of ten years. The Chinese Ministry of Finance (MoF) provided each AMC with an initial capital injection of $1.2 billion, making the MoF the sole owner of the AMCs. The AMCs were given three mandates: to maximize asset recovery, lesson the financial risks facing the Big Four and restructure China’s SOEs. Currently, however, cash recovery rates are expected to not exceed 20%. Financial market reform and development is a key priority in China.