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New Challenges for ‘Made in China’

Manufacturers in China — whether foreign or domestically owned — face a series of key challenges in the years immediately ahead. Major tests involving product quality and safety, energy costs and environmental viability all come against the backdrop of a difficult world economy.

Yet, while world demand for Chinese products has dipped in the short term, the long-term need to hold down costs while meeting shifting customer requirements has never been greater. In this special report, experts from Wharton and The Boston Consulting Group look at how this growing list of challenges will change the way manufacturers must think about their operations in China.

Over the past several years, substantial cross-border capital flows have generated large swings in exchange rates that only partly reflect underlying economic fundamentals. These exchange rate movements have had a substantial impact on the competitiveness of countries and of companies. Increased exchange rate volatility and uncertainty about future movements are also complicating company investment decisions. So the way in which the global exchange rate system evolves is an important issue for boards and executives.

Access and Control: A growing diversity of threats to internet freedom
By Karin Deutsch Karlekar and Sarah G. Cook

As the internet and other new media come to dominate the flow of news and information around the world, governments have responded with measures to control, regulate, and censor the content of blogs, websites, and text messages.

Indeed, the recent case of an Iranian blogger who died in police custody is a disturbing reminder that expressions of political dissent or even independent thought circulated through the internet carry as much risk as those circulated via underground journals in an earlier era. And just as authoritarian regimes once devoted massive resources to controlling the print media and the airwaves, so today China employs a small army of functionaries tasked with monitoring and censoring the content of websites and blogs.

Planning for retirement is a universal concern of American workers, regardless of their ages. But certain groups of workers must plan for the financial challenges of retirement in a context of unequal access to the institutions and public programs that help workers save for and manage that phase of their lives.

Gay, lesbian, and bisexual employees (among other disadvantaged groups) face challenges that reflect employer practices and legal institutions that create a context of inequality. In particular, the lack of legal recognition for the same-sex partners of employees results in unequal treatment in employersˇ retirement plans.

After the shock to the global financial system and world economy in 2008, 2009 was a year of appraisal and adjustment. The risk landscape that this report has explored over the past five editions has in fact changed remarkably little.

What has changed dramatically is the level of recognition that global risks, like the world, are now tightly interconnected and shocks and vulnerabilities are truly global, even if impact and response can still differ at the “local” level. This recognition is illustrated by the increased number of interlinkages on the 2010 Risks Interconnection Map (RIM).

Growing competition for scarce water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities and the ecosystems upon which they rely. It is an issue that has serious implications for the stability of countries in which businesses operate, and for industries whose value chains are exposed to water scarcity.

Charting our water future: Economic frameworks to inform decision-making shows that while meeting competing demands for water will be a considerable challenge, it is entirely possible to close the growing gap between water supply and demand. This report provides greater clarity on the scale of the water challenge and how it can be met in an affordable and sustainable manner.

This is the fifth year that the Paying Taxes indicator has been included in the World Bank Group’s Doing Business project. The indicator measures the ease of paying taxes for a small to medium sized domestic company, in 183 economies around the world – two more than in last year’s publication.