Economist Wary of China Economy Downfall

Several factors have led economist to worry that the China economy is headed towards a hard fall.  The real estate sector, which is running red hot, is bound to burst, in the eyes of analysts.  The Chinese stock exchange, entitled the Shanghai Composite, has steadily fallen this year.  The nationwide estimated gross domestic product has fallen below the government’s desired standards.  However, despite these factors, in an article recently completed for CNN Moneyan analyst and several economists have cautioned against over-worrying.

Jim Oberweis, a co-manager of the corporation Oberweis China Opportunities, particularly thinks stressing will only cause more harm than reprieve.  While Oberweis does believe that the property market needs to cool off to avoid creating a problem of the exact opposite nature, he sees no exceptional need for concern.

In terms of stocks, according to tracking from the iShares MSCI China ETF, the P/E ratio for major stocks in China is over fifty percent below that of American and Japanese stocks.  However, Robert Howe, chief executive officer of Geomatrix, a hedge fun based in Hong Kong, doesn’t believe this is cause for concern.  To Howe, inflation is the root of the stock market performance issue.  With inflation running rampant, China’s central bank couldn’t be generous with monetary policies.

However, this is about to change, with the announcement of the estimated gross domestic product falling to almost seven and a half percent in the first quarter of 2014.  This will provide the central bank to have a bit more freedom in terms of stimulus for the economy.

While the GDP of 7.4% is low by the Chinese government standards, it is the envy of every other economy on the planet, which renders many of these concerns moot.  Although, in the eyes of the Chinese government, that is anything but the case, as they continue to see the GDP fall.  The article states, however, a belief that, while the gross domestic product may continue to waver a bit, it should hold steady at just above seven percent.  This figure may be lower than the government would like, but it is still a strong statistic.

 

Europe Economic Growth Tops United States Growth for First Quarter

In the first quarter of 2011, Europe managed a gross domestic product growth that was higher than the United States.  By the second quarter of the same year, the eighteen countries were dropped into a large recession that has had the eurozone struggling to keep its head above water since.  However, according to an article recently completed by CNN Money, for the first time in three years, the European economy has managed to outpace the growth of the United States.

According to a report generated by the European Union’s statistics office, the gross domestic product grew at an annual pace of just under one percent.  Comparatively, the United States growth for the first quarter of 2014 was at 0.1 percent.  Weather seems to be a factor for both figures; the United States blames harsh winter weather for depressed exports, housing markets and business investments.  On the other hand, the eurozone experienced a mild winter, which resulted in a booming of growth.  In particular, this was seen in Germany, which had a growth rate of 0.8 percent higher than the previous quarter; Germany’s annual growth rate was two and a third percent.  According to the Germany statistics office, the success of their economy was largely due to the exceptional winter, an advantage that won’t be a factor for the second quarter.

The European Central Bank is content with the results of the first quarter, but they worry that there are prospects of little improvement in the second.  Without the advantage of pleasant winter weather, the central bank will need to do more to stimulate the economy, if they hope to continue the growth they have shown thus far in 2014.

 

Global and Local Strike Organized to Demand Higher Pay for Fast Food Employees

According to the United States Bureau of Labor Statistics, fast food employees make approximately nine dollars per hour of work on average.  This figure may be twenty four percent more than the federal minimum wage, but it is lower than a number of states and cities require.  In the case of larger cities, such as New York, workers earn below the average hourly rate; on top of this, employers frequently work to assign employees just below the thirty hours of work that is required to receive health care benefits.

This issue isn’t just prevalent in the United States; fast food employees of American owned corporations in countries across the world struggle to make ends meet.  As a result, an international strike was organized for the fifteenth of May.  An article recently completed by the International Business Times summarized the strike and its overall goals.

In more than one hundred and fifty American cities and an additional eighty international cities, the strike reigned supreme this past Thursday, as workers walked off the job and joined sign-wielding protestors and activist on the streets and sidewalks outside some of the most recognizable fast food establishments.  Fast Food Forward organized the strike, with the support of the United States-based Service Employees International Union.  McDonalds, who has already made just over one billion dollars in the first quarter of 2014 alone, was the main target.  KFC, Pizza Hut, Dominos, Burger King were also under attack, resulting in several struggles for the restaurants across the world; one Burger King, completely devoid of workers, was forced to close for the entire day.

All of these corporations, though based and originated in the United States, are steadily growing to rely on their international operations.  As a result, international demands for the strike varied.  In Indonesia, employees are demanding a five percent service charge to be distrusted to employees.  In Karachi and Pakistan, local unions are rallying to demand higher pay.

Defenders for the current method of compensation claim that McDonalds doesn’t shy away from sharing stock profits with its employees; this year alone the corporation has already shelled out just over eight hundred million dollars in dividends.