<Introduction to Business 신문스크랩>

성명(학과/학번) 유예린(융합인재학과/202403783)

주제 Chapter1. What is business?

기사제목 National People's Congress: China sets ambitious 2024 economic target

출처,날짜 BBC NEWS, 2024.03.05

기사내용 China has set an ambitious growth target of around 5% for this year, as it outlined
a series of measures aimed at boosting its flagging economy.

Premier Li Qiang made the announcement at the opening of the annual National
People's Congress (NPC) on Tuesday.

Mr Li acknowledged that China's economic performance had faced "difficulties", adding

that many of these had "yet to be resolved".

It comes as China struggles to reinvigorate its once-booming economy.

"Risks and potential dangers in real estate, local government debt, and small and
medium financial institutions were acute in some areas," he said. "Under these
circumstances, we faced considerably more dilemmas in making policy decisions and
doing our work."

A series of other measures to help tackle the country's slow recovery from the pandemic
were also announced, including the development of new initiatives to tackle problems in
the country's crisis-hit property sector. Beijing also aims to add 12 million jobs in urban
areas.

Regulation of financial markets will also be increased, said Premier Li, while research
will be stepped up in new technologies, including artificial intelligence (AI) and life
sciences.

Along with measures to boost the economy, defence spending will be increased by 7.2%
this year.

Beijing's defence budget is closely watched by its neighbours and the US, due to
concerns over its intentions as tensions remain high over Taiwan.

For decades the Chinese economy expanded at a stellar rate, with official figures putting
its gross domestic product (GDP) growing at an average of close to 10% a year.

Can a rubberstamp parliament help China's economy?

On the way it overtook Japan to become the world's second largest economy, with
Beijing claiming that it had lifted hundreds of millions of people out of poverty.

Beijing says that last year the economy grew by 5.2%, which even at that level is low
for China. However, some critics argue the real figure could be less than a third of that.

"I think the next five or 10 years is going to be difficult," Andrew Collier Managing
Director from China research firm Orient Capital Research told the BBC.

"A lot of economists think the numbers are completely fabricated. The idea of 5.2% or
5.5% growth is much likely wrong. It's more like 1% or 2%," he added.

Whichever figures are accurate, it is clear that this vast country and its leaders face a
daunting array of economic challenges.

That list includes a property market in crisis, a shaky stock market, high youth
unemployment and the threat of deflation as consumer prices continue to fall.

Those immediate problems are compounded by longer term issues from trade and
geopolitical tensions to China's falling birth rate and aging population.

Economic challenges

One of the most serious of these challenges are associated with the housing market,
which according to the International Monetary Fund (IMF) accounts for around 20% of
the economy.

It is a major problem "not just for property developers but also the regional banks that
are highly exposed to it," Dan Wang, chief economist of Hang Seng Bank (China), said.

The real estate industry crisis was highlighted last week when the country's biggest
private developer Country Garden was hit with a winding-up petition in Hong Kong
by a creditor.

It came just a month after debt-laden rival Evergrande was ordered to liquidate by a
court in the city.

And while much of the rest of the world has struggled with soaring prices in the wake of
the pandemic, China was one of the few major economies to avoid high inflation.
Now though it is having to deal with the opposite problem - persistently falling prices or
deflation.

Consumer prices in China fell in January at the fastest pace in almost 15 years, marking
the fourth month in a row of declines.

It was the sharpest drop since September 2009, when the world economy was still
reeling from the effects of the global financial crisis.

Deflation is bad for economies as it can mean that people keep putting off buying big
ticket items, like washing machines or cars, on the expectation that they will be cheaper
in the future.

It also has an impact on people and businesses with debts. Prices and incomes may fall,
but debts do not. For a company with falling revenue, or a household with a declining
income, debt payments become more of a burden.
All of this means China is lacking something vital to a strong economy: confidence.
And authorities have been scrambling to reassure investors and consumers.

"Messaging from policymakers continues to be about restoring confidence and domestic

demand," Catherine Yeung from Fidelity International told the BBC.

So far that has meant a series of relatively small measures targeting different parts of the
economy.

This year alone, borrowing costs have been cut and direct support offered to developers
along with other actions to tackle the property crisis.

Earlier this month, in a shock move, the head of China's stock market regulator was
replaced, in what was seen as a signal that the government was ready to take forceful
measures to end the rout in its $8 trillion stock market.

Officials have also moved to clamp down on traders betting against shares in Chinese
companies, and imposed new rules on selling shares at the start and end of the trading
day.

An aging China at odds with West

Beyond these immediate issues China also faces a number of more far-reaching
challenges, including slowing productivity growth and an aging population.

"The demographic dynamics are quite unfavourable, with the population aging fast due
to the one-child policy," Qian Wang, chief Asia-Pacific economist at investment firm
Vanguard said.

"Unlike Japan that got rich before it got old, China is getting old before it gets rich," she
added.

There is also the seemingly intractable geopolitical issue of Taiwan.

Beijing sees self-ruled Taiwan as a breakaway province that will eventually be part of
China, and has not ruled out the use of force to achieve this. But Taiwan sees itself as
distinct from the Chinese mainland.

Taiwan is a key flashpoint in the tussle between China and the US for supremacy in
Asia.

This, at the very least, greatly complicates China's relations with the US and many other
major Western economies.

There is also the ongoing trade dispute with the US, which started in 2018 under then-
president Donald Trump and has shown no sign of easing during the Biden
administration.

A potential second term in office for Mr Trump could well see tensions ramp up
between Washington and Beijing.

Mr Trump, in characteristically hawkish comments about China, said he would impose

 more tariffs on its goods if he wins the US presidential election in November.

In an interview with Fox News, he said the tariffs could be in excess of 60%: "We have
to do it," he said.

While that may make for plenty of headlines, Ms Yeung suggests financial markets may
be able to take this in their stride.

"Most of this negative news has already been factored in to share valuations," she said.

Whether Mr Xi's long-term plans for China will turn around his country's fortunes
remains to be seen.

What is clear though is that its more than 1.4 billion people are unlikely to enjoy a
return to double digit annual growth, and the prosperity that comes with it, anytime
soon.

의견 [Reason]
The main resaon I chose this artical corelated with the theme (1. What is
business?) starts with the question of the way business affecting the society.
By comprehending the methods of the business naturally and intentionally
contributing to the society, I found that the nation's status quo and the
economical issues incorporating the real estate industry crisis, persistently
falling prices or deflation commensurates with political and diplomatic
challanges such as trade diputes and increasing customs after U.S.
presidential election. This enlightened me that the word 'Business cannot be
separated from the society and community' is an critical message that we
have to keep in mind to prepare resilience brace for the economic recession.
Since I was interested in international relationships and diplomatic studies,
investigationg about the international criteria of global economy balancing
the inner social problems allowed to have appreciation in Business and
convergence managemant to link the nations economy and social
phenomenon in crisis. So having concern of the international issues about
global business plans, I found the artical named [National People's Congress:
China sets ambitious 2024 economic target] written in 4hours ago, and
breifly took a look to find the somthing in common with our lecture's first
chapter. Defining that the artical suggests the China's business project
considaring the prior Dark Ages, I could read, ponder, and seek the
prospecting resolution about the challages in Korea's situation as a lesson.
[Summary]
Let me briefly summarize the above artical. According to the artical, in
Econimic field, China has set growth target of around 5% for this year, as it
faced a daunting array of economic challenges including property market in
crisis, a shaky stock market, high youth unemployment and the threat of
deflation as consumer prices continue to fall. Those problems are
compounded by longer term issues from trade and geopolitical tensions to
China's falling birth rate and aging population. On the other hand in the
political difficulties, corelated with the U.S. presidential election, China is
confronting the dimlomatical regulations which makes harder to resiliate
from current challenges.

[What's new]
I leared that business is not just confined in economic field, and vastly
affecting the social structure and international diplomatic issues. It made me
feel all of the branches, secters are somehow realated by a word 'Business'
to circulate the nation's interest and infrasrtuctures to rebirth the challenges
left to be continue.

[Criticizm]
The article itself was brightly clear and accurate to describe the current
China's status quo, however, the reporter's point of view is limited to the
physical outcomes which doesn't takes the boost of artificial intelegence or
ICT into account which accompanies subconsious development possibility in
computer technology science. I felt a bit sorry about the narrow-minded
reporter's opinion, but it was a great chance for me to understand the
mutual relation between the economy and social cause and effects in diverse
point of view.

[Post investivation]
Navigating Financial Crossroads: What Korea Must Do to Tackle Economic
Challenges

In light of recent financial developments highlighted in the BBC article,

"South Korea's central bank raises interest rates for first time since 2018," it's
evident that South Korea stands at a critical juncture in its economic
trajectory. With the Bank of Korea hiking interest rates for the first time in
four years amidst mounting inflationary pressures, it's imperative for
policymakers to enact strategic measures to navigate these challenges
effectively.

Balancing Growth and Inflation: As South Korea aims to sustain economic

growth, it must also address inflationary pressures. The recent interest rate
hike underscores the necessity of finding a delicate balance between
stimulating growth and curbing inflation. Policymakers need to implement
measures that encourage growth while also mitigating inflation risks, such as
targeted fiscal policies and prudent monetary adjustments.

Enhancing Fiscal Resilience: South Korea should prioritize enhancing fiscal

resilience to weather economic uncertainties. This entails bolstering public
finances, diversifying revenue streams, and effectively managing debt levels.
By fortifying fiscal buffers, South Korea can better withstand external shocks
and maintain stability in times of economic volatility.
Investing in Innovation and Technology: Embracing innovation and
technology is paramount for South Korea to sustain its competitive edge in
the global economy. Continued investment in research and development,
fostering a conducive environment for startups, and promoting digitalization
across sectors are essential steps in driving long-term growth and resilience.

Strengthening Financial Regulation: Given the interconnectedness of global

financial markets, South Korea must prioritize strengthening financial
regulation and supervision. Robust regulatory frameworks are essential for
safeguarding financial stability, mitigating systemic risks, and enhancing
investor confidence. Stricter oversight measures should be implemented to
prevent excessive risk-taking and ensure the resilience of the financial
system.