Chinese walker

Recently I suggested that someday it might be illegal for untrained citizens to invest in stocks of individual companies because it is too risky. As regular readers know, I sometimes throw out provocative ideas just for the fun of it. I didn’t think much about that idea until after I wrote it. But the more I mulled it over, the more it started to make sense. So I’m going to develop that argument here.
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Here we are yet again in the midst of another “global economic crisis.” From the hilltops of Davos, Switzerland, Morgan Stanley’s permabear Stephen Roach has shouted warnings of potential economic “Armageddon.” Superinvestor George Soros designated the current state of the global economy “the worst market crisis in 60 years.” Bill Clinton labeled it “the biggest financial crisis since the Great Depression” —— even as global stocks responded by slumping 7.7% in January —— the worst start to an investing year since Morgan Stanley began publishing data in the 1970s.

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The National Meeting on Commercial Works which lasted two days was held in Beijing on December 23 and December 24. The meeting emphasized the general requirements on the commercial requirements of 2009, which are: fully implementing the spirits of the 17th CPC National Congress and the Third Plenum of the 17th Party Congress, taking the Deng Xiaoping Theory and the important thoughts of “Three Represents” as guidance, deeply implementing and fulfilling the scientific outlook on development, taking “expanding of domestic demands and maintaining steady development of foreign trades” as the focuses, improving the policies, enhancing the services, wholly planning both the domestic and international markets and resources, accelerating the structural readjustment and transition of development modes, and achieving a effective and rapid development of commercial businesses.

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1, The General Situation of the China-Europe Economic and Trade Cooperation during the Period of Reform and Opening-Up

The total area of Europe covers 2,700 square kilometers and the population of Europe exceeds 800 million. The member countries of the EU and the counties which are located in the west of Europe but not member countries of the EU, are developed economic entities, and have mature and highly integrated market and steady policies. The countries in the middle and east of Europe are all carrying on their economic transition very quickly, and joining the EU successively. The countries of the Commonwealth of Independent States are also countries with transition economies. In the economic and trade cooperation with Europe, the countries in the west of Europe are important trade partners and important source places of capitals and technologies for China. And the countries which belong to the Commonwealth of Independent States or are located in the middle and east of Europe, are the important places for China to carry out the market diversification and the “going out” strategies。

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General Motors Corp, which is under cash flow pressure, will stay as a solid investment in China and continue with new plans to maintain sustained growth in the world’s second-largest car market.

Ding Lei, general manager of GM’s flagship venture in China, said although GM is shedding brands and closing plants to boost liquidity in the US market, business in Latin America and Asia remains healthy.

“There won’t be changes in GM’s investment in China,” said Ding from Shanghai General Motors Co Ltd, “The Chinese market will be the top priority for future development.”

Overseas car makers are still investing in emerging markets like China to help offset slackening demand in traditional markets in Europe, the US and Japan.

Although the stocks slump and a slowing economy in China is also hitting demand for vehicles, the 11-percent sales increase for the first 10 months remains one of the world’s fastest.

Ding expects the car maker will be able to get through the tough times with government support as the US car industry, with annual sales of 15 million units, plays a crucial role in the US economy.

In China, GM is also facing challenges with declining market share and sluggish sales despite new models like the Buick Excelle and the Chevrolet Aveo compact car.

Shanghai GM Monday launched a revamped Buick Regal mid-class sedan in Shenzhen, as part of its efforts to upgrade products to win back Chinese customers who have been buying more cars from Volkswagen and Toyota.

Next year, the Chevrolet Cruze mid-class sedan will also begin domestic sales ahead of another 10 new models for the Asia-Pacific region by 2010, according to Ding.

The car maker is also boosting the production capacity of its plant in Shenyang to 150,000 units every year.

Ding believes China’s car sales will not post a year-on-year decline for the coming year because a 4-trillion-yuan (US$586 billion) investment being offered by the government will help rebuild market confidence and will boost domestic consumption.