what goes around comes back around…

As a result of its expansionist economical policy or a consequence of its tools of production, China based its economy and competitiveness upon a cheap human capital and a production without value-added.

With a yuan below the dollar and the euro originally, China increased its shares at the exportation, making its economy the first worldwide. In 2005, the billateral US- China surplus was $ 203 billion, chinese international reserve augmented by $ 207 billion, ending the year at $ 821 billion.

Criticized for its manipulation of its currency, for its pressure on trade barriers, for its negligence on quality, countries such as the USA, Japan restricted their trade. The Chinese in result was an important drop of its cifer at the exportation. The USA refused 257 Chinese products at its border and Japan’s importations dropped from 40%.

However and unexpectedly China, former known as the bicycle country, is threatening the USA world’s largest car market with its low-cost domestic production of Geely, Chery… To understand the amplitude of the phenomenon, you have to know that four-fifths of the buyers are first-time buyers- they represent the driving force of the record car sales.

With a potential market of 1 billion people, wouldn’t China be the dream of joint ventures of multinationals such as Buick, Volswagen, Peugeot? Little problem however in this ideal situation, the chinese protectionism is intensively encouraged. If the Chinese economy reached 9 % this year, isn’t it because China is trying to expand domestic consumption? As a fact, China uses tax policy to discourage its automakers from using imported parts. Isn’t it what America did when she felt threatened by any competitor before?

Against all odds, China is experiencing a disengagement form its domestic demand. A significant change is born in Chinese minds. As the economy grows, as the Net opens up the boundaries, the Chinese consumer dreams of quality and prestige or is it prestige and quality?

To the example of the Westerners they are privileging style, comfort, reliability in the process of purchase. It seems like, to adapt itself, China will have to adopt a costly step towards Japanese excellence!

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