The multiplicity of global economic complexity of the recent past and a fragile economic future has led the Asian economic linchpin, China, to cut its growth forecast. Recently, the country cut its economic growth rate to 7.5 percent from its previous 8 percent, which had been in place since 2005.

Premier Wen Jiabao, in his annual state of the union, announced at the National People’s Congress in Beijing that the government has a gross domestic product target of 7.5 this year. This is the lowest economic growth target for China since 2004.

Across the board, there are plenty of problems that may impart great damage on the Chinese economy. Starting with a decline in European services and manufacturing output, a fall in US factory orders for the first time in three months, and an impending Greek debt storm, China is going through a radical demographic makeover.

The main suspect for this turnaround in growth forecast is the debt crisis in Europe and the US. This is because there is an iron-strong connection between what China produces and with whom it exchanges goods.

Demand for Chinese goods declined in troubled economies due to falling employment, diminishing domestic production, dragging corporate profits, high borrowing costs for the government, and perhaps only a few ways to get out of it. After years of a torrid growth rate of at least 9 percent, China needs better quality development over a longer period of time. Economists and investors agree that China is now entering a new era of slower growth rate, where the 8 percent growth figure is no longer important.

On the other hand, what happens in China does not stay in China. China had been the number one trading partner for most Asian countries, and a declining economy for the dragon will hit many Asian economies negatively. On the face of it, Chinese commodity imports may slow down, impacting economies from Australia to Brazil.

Interconnections at the global economic platform have created a scenario where it is legitimately impossible to imagine escaping from these  events.  It is ubiquitous that a lower phase of GDP growth in China will diminish import demand in the country, affecting economies or trading partners directly.

In a globalized environment, interconnection is interdependence. Suppose, for example, X is partly independent, and Y and Z are mostly dependent on X.

Any event that has a direct forbearance on Y and Z that takes place in X will for sure impact both Y and Z. In this case, export-oriented economies, like Australia, whose economic growth was derived from fast and partly unfettered GDP run-up in China, will suffer. On the face of it, prices of copper, gold, and the Australian dollar have fallen immediately after the announcement in Beijing, mining stocks in the Australian stock exchange felt headwinds, and the region’s stock market closed on a weak note.

Gerard Lyons, chief economist at Standard Chartered Bank in London, stated, “What the authorities are trying to do is to move from strong to sustainable rates of growth. No one is quite clear where sustainable is, but clearly, it’s one that’s slower than we’ve seen in the recent past.”

At the end, we could say there is a possibility of radical economic transformation in China, emphasizing development, rather than an erratic chase for economic growth.

Image Courtesy of  BartlomiejMagierowski / Shutterstock.com

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The Beijing police department announced on Wednesday that Chinese artist and activist Ai Weiwei has been released on ‘bail’ after nearly 3 months in detention. He was released from detention after pleading guilty to charges of tax evasion and for intentionally destroying accounting documents.

As an outspoken critic of the Chinese governments human rights record, his arrest in April was seen by many as an attempt to silence him during the widespread crackdown on dissidents called ‘the big chill’ – where human rights advocates, artists and other activists were being arbitrarily arrested within the Chinese mainland.

According to the Chinese news agency Xinhua who first published Mr. Ai’s release, the grounds for his bail were “his good attitude in confessing his crime as well as a chronic disease he suffers from.” It was also taken into consideration that Mr Ai had “repeatedly said he is willing to pay the taxes he evaded,” according to the police.

The high-profile detention has been the focal point of heated debate and criticism from international observers who pointed to China’s faltering effort in living up to international standards of human rights. Mayor Michael R. Bloomberg of New York and British sculptor Anish Kapoor were among the prominent people who publicly protested the detention of Mr. Ai. “Without the wave of international support for Ai and the popular expressions of dismay and disgust about the circumstances of his disappearance and detention, it’s highly unlikely the Chinese government would have released him,” said Phelim Kine, an Asian researcher for Human Rights Watch, to the New York Times.

While the 54-year-old artist looked a little slimmer as he arrived back home, he ensured reporters that he was ok. “I am already home, released on bail, I can’t talk to media but I am well, thanks for all the media attention,” he said to the BBC over the phone.

The conditions of his release are complicated. According to his sister, his wife received a phone call on Wednesday night, asking her to come to the police station. Reportedly, the officers informed her then and there that Mr. Ai was free to go. The word ‘bail’ commonly refers to the short translation of the Chinese term ‘qubao houshen’ which entails “obtaining a guarantee pending trial. [...] prosecutors have decided to drop charges against a suspect on certain conditions, including good behavior, and to monitor him over a period of time during which charges could be reintroduced,” The New York Times explains. According to a scholar of the Chinese legal system, the method is sometimes used as a ‘face-saving’ technique to end controversial cases and allows negotiation of the suspects condition of freedom.

Jerome Cohen, adjunct senior fellow for Asia studies at the Council on Foreign Relations, told the CNN that Mr. Ai’s bail conditions has lost him his freedom of speech for at least a year. “He will not soon again be on Twitter, Facebook, television, take part in fora, etc. He’s got to keep quiet and behave according to the criteria of the Chinese police for the foreseeable future. He’s not the only one. This has happened many times before.”

Observers have noted that it’s no coincidence that the dissident artist was released on the eve of Premier Wen Jiabao’s upcoming European tour since Mr. Ai enjoys great support in the Western world. “Beijing has been under enormous pressure to free the artist,” says the BBC’s correspondent Damian Grammaticas. Both the US state department and EU representatives have welcomed the news but highlighted the critical circumstances of his arrest as well as those of dissidents and commentators who are still being held at unknown locations.

Image Courtesy of  http://100aiweiwei.org

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In a recent statement reported by China Daily, China’s Premier Wen Jiabao showed his support of the growing effort to help children who are forced to become beggars – children who are often abused, exploited or worse; victims of abduction.

It is the last concern that has fueled a national campaign, led by the public in an unusual display of NGO activity, to stop child traffickers and return lost children to their biological parents. According to HumanTrafficking.org, China suffers from an epidemic of internal trafficking of children for sexual or labor exploitation and estimates suggests between 10.000 to 20.000 victims each year. One reason is that child beggars are an unfortunate source of revenue for crime organizations. In major cities such as Beijing and Shanghai, child beggars are not an unusual sight but their stories often involves being kidnapped and even deliberately crippled to raise profit.

Another reason is that the cultural values surrounding children has fueled a market for child trafficking. China’s ‘one-child’ policy – combined with a preference for sons – is held partly responsible for the development. Some parents are prepared to buy a stolen child if they are unable to have a boy of their own and the price is estimated to be around $5.000, according to the BBC. The cultural value, however, is much higher as is the male child that continues the family name and traditionally takes care of the elderly parents along with his wife. A daughter ends up being a social disadvantage as she is obligated to take care of her in-laws. Another aspect is that couples who are unable to conceive a child would be desperate enough to buy one illegally because adoption is complicated and most children who are delivered to orphanages are disabled.

Der Spiegel investigated the tragic phenomenon last year and found that desperate parents of kidnapped children had only small chances of tracking down their child. Family clans control things in the villages and corruption is ever present. “Everyone knows when a new child has suddenly arrived in the village,” Lo Shouquan told Der Spiegel in an interview, “and no one asks any questions.”

Between 2001 and 2005, the Chinese police led a strong campaign against trafficking and arrested more than 25.000 suspected traffickers while rescuing more than 35.000 victims. In November 2009, two men were executed for abducting and selling 15 children in total. In 2010, a woman was sentenced to death for 49 accounts of trafficking. Despite the effort, the numbers of abductions are still soaring and grassroots activity has taken over where the government seems to have failed. The most remarkable example of activism is the use of microblogs to connect parents with lost children; the pioneer is a professor from the Chinese Academy of Social Sciences who encouraged his readers to take photos of child beggars in the hopes that parents could identify missing children. The microblog inspired the creation of thousands similar sites and the most recent success story was Peng Wenle who was found, after having been snatched three years ago, through a user on Weibo, the Chinese equivalent of Twitter.

Despite a hopeful surge in public interest, China is listed on the Tier 2 Watch List in the 2010 U.S. Department of State’s Trafficking in Persons Report where it has been noted that the Chinese government fail to sufficiently address the country’s trafficking problem. The recent comment by Premier Wen Jiabao may be a step in the right direction but a massive effort is needed to effectively crack down on the lucrative trade. In the meantimes,   parents are advised to keep their children under a watchful eye.

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