Feel Better...Chinese College Grads Can't Get Jobs Either

While China faces the worst economic downturn in 20 years, college graduates are having a difficult time finding employment. As more and more graduates enter "the real world" they are finding more competition, "Up to one-third of last year's 5.6 million university graduates are still looking for work, and this year will see another 6.1 million hit the labor market." As China required their state-run universities to increase their enrollment rates they had planned on the increase in tuition to pay for the expansion of campuses across the country.

These plans had drastically overestimated the amount of new funding universities would receive. This is very similar to the credit bubble which occurred in the United States when lending companies severely overestimated the values of homes thus resulting in consumers receiving more money than they could afford to repay. Universities were essentially giving out degrees to very under qualified students who had not been given the resources or instruction necessary to earn a degree in their respective fields. In comparison, US lending institutions rarely executed the research necessary to ensure that their clients had the required job stability or income to reliably back up their loan.



The majority of the university debt problem stems from the 2,100 average universities which have also been state funded. They have been defaulting on their loans totaling $1.2 billion in debts. Local governments have had to require banks to restructure the terms of repayment for the universities to ensure that they do not collapse. The 75 elite universities throughout China (relatively comparable to Ivy League) have maintained adequate funding from the state to ensure sound operations.

As though the exponential increase in enrollment was not enough for China's universities to deal with; many corrupt university administrators used the state funding to improve and expand their educational efforts for economic gain. After an investigation of several universities it was found that funds were used to purchase a golf course and adorn the school with lavish statues.

This wide-spread problem exemplifies the problems that China faces on a regular basis with any governmental project. Corruption and poor state planning have be laden such ambitious efforts which may have had potential to improve the economic status and direction of China. With such impediments it will become more difficult for citizens to stabilize and expand the middle class; a necessary requirement for a successful nation.

China, US, Protectionism....Oh my

As the economy continues to strain American and Chinese businesses, we are beginning to see an increase in protectionism ideology. This sentiment is clearly out of concern that too much reliance on the other country's economy and business base will result in further losses. Last Friday, China passed a law that placed restriction on expedited parcel delivery services like Fed Ex. Additionally, Coca-Cola was denied in purchasing a large Chinese juice maker. Such moves as these point to the increasingly domestically based movements to localize business. Laws have become written in ambiguous manners concerning American businessmen as they feel they are in a difficult position in negotiating and expanding their enterprise. The Chinese have effectively created laws which can be used to their advantage when applicable but are vague enough to control foreign investment.

It is only natural for countries to work towards a self-sustaining and self-interest policy when economic times are debilitating prosperity. However, if China and The United States begin to break their ties in trade there will be long-lasting negative impacts. China depends on utilizing the US market as much as the US depends on China to produce goods at a cost far lower than they are capable. Instead of restructuring foreign business policy it would behoove both nations to work together in this difficult time. There are clearly aspects of our trading habits which could be improved as the US has a seemingly insurmountable deficit. However, at this time, I believe shifting China's policy in doing business with the US will only do more harm.

Model UN Reflection...Iran rocked it

Model UN was an interesting experience. It was not set up in the manner that I had expected. I thought each nation would remain in La Rose digital theater throughout the entire simulation but I was pleased to see that we each had our own room to operate in secrecy. This ensure that everyone had the ability to speak their mind and our leaders were able to research our different ideas to analyze the viability of our decisions.

I enjoyed meeting with other nations to negotiate various deals. I felt as though I had a stake in the process by orchestrating the pacts we made and having a central role in the process. It was interesting to be able to leave our group's room and converse with other nations as though we were truly diplomats. This gave me a real sense for what it is like to be a foreign diplomat in international relations. Additionally, I gained an appreciation for the complexity and difficulty in making a move at the international level. Various alliances, pacts, treaties, economic interests and enemies make it quite difficult to work with other nations.

I feel as though it would have been beneficial for our group to have completed more research on the history of Iran so that we were fully aware of the precedents for decisions we wanted to make. We had a fundamental understanding of each minister's duties and the scope of their rule; however, it would have been helpful to understand why some of our ideas were not feasible in the context of reality. Each participant should have been required to compile a list of allies and enemies and the context for which each entity is labeled as such.

I was very proud to orchestrate a deal with China in which our oil deficiency was fully taken care of and an alliance was formed if Iran were threatened by another state. In a second meeting we were able to convince China to invest in our water system to improve the quality and cleanliness of the purification process. I believe our negotiation skills allowed us to take advantage of the representatives China sent to meet with us. After their group realized how much they had relinquished for permission to set up an intelligence agency near the sea, they sent new representatives to orchestrate negotiations. This was a clear sign of success on the behalf of Iranian ministers.

It would have been interesting if we had made the acquisition of nukes a top priority from the beginning of the game. With such power, I believe the dynamics of our objectives for the rest of the game would have significantly shifted. Because we were not able to acquire the nukes until late in the game, we were not able to pose a security threat to other nations.


Overall, I believe our group (led by great IR students) was very successful. This success made the simulation very enjoyable and eye opening to the real process that the UN must work within each day.

What’s Goin on in Taiwan?

What’s Goin on in Taiwan?


Stimulated by Taiwanese President Ma Ying-jeou, Taiwan and China will soon begin to discuss a partial free trade agreement. Such talks are in opposition of the former president of Taiwan’s anti-China stance in regards to trade and economic cooperation. President Ma Ying-jeou views such discussions as an opportunity for the Taiwanese to remain a competitive player in the fiercely competitive region. The agreement would allow freer trade for goods, services, and capital but would not pertain to agricultural produces as Taiwanese farmers pleaded that their products would not have to compete with the strong output of crops by Chinese farmers. Additionally, banks of both nations would be able to expand operations into each country, flights into both nations would be scheduled more regularly, and cross-criminal investigations would be permitted.

This pact is crucial for the Taiwanese as China is the most dominant nation in the region. It will be extremely beneficial for the citizens of Taiwan to be able to access the Chinese market, increasing national exports for the strong manufacturing nation. The more economically liberal policy of Ma Ying-jeou should prove to stabilize the economy at a trying time.

As oil prices have been cut in half since last year, the Taiwanese people have experience much lower transport costs helping to stimulate a declining economy. For a nation which imports 99% of its energy, this is a critical change as citizens desperately seek a break in daily costs. Consumer prices have dramatically lessened and interest rates have hit rock bottom. In the fourth quarter the Taiwanese economy contracted by 8.36% which forced the country into its’ first recession since 2001 when the tech bubble burst.

Japan: Economy Down…Communism Up

Japan: Economy Down…Communism Up


Many Japanese are turning new interests to entertaining a communistic influence in the government. With banks failing and industry declining, many blue collar citizens are out of jobs and looking for an answer. Communism, in recent history, has been a strong second party in Japanese politics despite their little representation in parliament. Many look to communism as a method to curb the recession which has depleted the economy. Capitalism, at the time of a recession, is easy to point the finger at; however, during previously prosperous years, the communist party remained of stable size. It is important to note, however, that those who advocate communist influence are not requesting a radical or immediate response. They realize that such a movement would be counterproductive. Their focus is more centered upon increased representation so that all sides are more equally heard. The Japanese youth are increasingly enticed by the communist party to join as they are concerned of the job market after college graduation. It is understandable that those who feel uncertain about their financial future look for answers in government reformation, however increasing communist influence would not allow Japan to maintain their prominent position in world politics and economics.

I find this reaction to economic turmoil interesting as Americans, young and old, are responding in very different ways. In my personal experience I have noticed a sharp rise in recent and future college graduates who plan to immediately attend graduate school to improve their status in the severely competitive job market. Such a response appears to have a focus upon personal betterment and self-improvement as opposed to changing the political climate of the nation. This is not to say that many Americans are not calling out for governmental reform, but it is clear that American citizens realize that they must react to the recession in a manner that will allow them to beat the state of affairs.

Chinese Consumers still Makin’ it Rain

Chinese Consumers still Makin’ it Rain


Prime Minister of China, Wen Jiabao, stated the Beijing stimulus package has allowed Chinese consumers to continue to spend despite the difficult economic conditions. Specifically, tax cuts on new car purchases and lower mortgage rates are helping the two hardest hit industries. With the unemployment rate of China rising and diminishing productivity of economies in other nations; confidence, according to Jiabao, is more important than available funding as it is essential for consumers to continue to spur the economy in a prosperous direction. Confidence is so high right now that ¾ of Chinese people plan to maintain or increase their spending over the next year. Such news is a beautiful sound for automakers as they are depending on the Chinese to help make up for lost sales in most other countries. Lower and lower middle class citizens are taking advantage of government subsidies to purchase cars. Many are purchasing minivans and starting taxi services.

What does this all mean? It is important that one of the world’s largest and economically critical countries’ consumers are continuing to spend money and stimulate their economy after being hit by the declination of the United State’s economy. In today’s world, large companies are global as it is easier to expand operations and communication has improved. The current recession of the United States is clearly showing the interdependency of each economy of the major players, especially those of the G20.

As China has one of the world’s largest populations and market bases for global companies, it is imperative that these consumers are able to make up for the loss in other markets. China is in a stronger position than most that are dependent upon the United States economy as the government has consistently been more conservative in spending and citizens have traditionally saved more of their income than citizens of other countries.

Times are a changin'

You know times are changing when Japan has no one to export their plethora of goods to, China is actually showing an ability to help other countries despite their belief that their ideas do not hold enough weight in international policy, and people believe India could be the next China. All of these perspective changes are clearly correlated to the economic crisis in the United States.

Over the past week China has made their desire to have a bigger say in organizations like the International Monetary Fund (IMF) known to the public. Of course they realize the only way to make this possible is to aid other states in this time of financial downturn. Currently China is operating with a surplus which, today, is not the norm of many powerful countries. This is a perfect time for China to start putting in the money so that they can become a bigger player as changes are made.

China sees this as a good opportunity to increase its influence," said Jun Ma, China economist for Deutsche Bank. China doesn't want to miss out on the chance to help rewrite the rules that will govern global finance for coming decades. "China is more actively contributing their thoughts. This is very different from 10 years ago, when China was much quieter and more low profile," said Mr. Ma, who previously worked for both the IMF and the Chinese government.

China’s stimulus plan to offset the consequences of the crisis is one of the largest in the world. Recently, China contributed $350 million to the Inter-American Development Bank which is aiding Latin American and Caribbean nations.
While China is improving its position in international politics and economic unions other countries see room for competition. Many believe India has the potential to become the next China. Why? One simple reason, democracy. China’s oppressive “communist” government has hampered their development despite a capitalistic style economy. The most powerful nations in the world have adopted democracy and India is realizing its potential.

Admittedly slow, the democratic process has begun to set the foundations which will stabilize and deter political unrest. This will help form a stronger and more united basis of the common population which will be necessary to establish continuity and progress in the near future. In addition to improving the political and economic structure, democracy will play a large role in voicing opinions in global organizations. Other countries will be more apt to listen to the diplomats and economic leaders of India with the reassurance that the views they express are of the people they represent. Countries without the luxury of a democratic political structure enter meetings like the G20 or IMF conferences without a certainty of expressing the desires of their citizens. India believes they are catching up. They believe they have an unprecedented opportunity during this time of financial crisis. Coordinated properly, India can become a player in global economic politics.