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Showing posts with label short termism. Show all posts
Showing posts with label short termism. Show all posts
Sunday, April 7, 2013
Small, micro firms in China are hungry for long-term loans
From - http://www.chinadaily.com.cn/china/2013-04/07/content_16379110.htm
China 's small and micro enterprises are still struggling with lackluster business , and most badly need long-term rather than short-term loans , said a report based on a survey released on Saturday at the Boao Forum for Asia .Of the 1,000 small and micro enterprises surveyed across China , 56.7 percent said their order numbers declined or stayed flat last year compared with 2011, and 57.7 percent said profit dropped or kept flat in 2012. In addition , 49.9 percent complained about an unstable workforce .One-third of SMEs need medium - and long-term loans to upgrade their equipment or invest in new products , the survey found , yet 63.3 percent of loans they got were short-term , less than a year .
"This stands in conflict with the fact that driven by fiercer competition , 39.3 percent of SME s have considered improving their product quality , 43.9 percent of SMEs have considered extending their product chain and 27.7 percent have considered upgrading their technology ,"said Ba Shusong , a banking expert with the Development Research Center under the State Council , who led the research .
A revelation of the report is that though 66.7 percent of SMEs regard bank loans as a primary financing measure , 62.1 percent of them do not now have them .Yao Wang , executive president of the Research Institute of the Boao Forum for Asia , said SMEs have little expectation of getting bank loans ."The survey showed most SMEs don 't have bank loans . They don 't expect to get a loan from big banks . This is pathetic ," Yao said .
In consequence , SMEs sought financing from family members and friends - 24.3 percent of micro enterprises and 7.5 percent of small enterprises . They are much less aware of the multiple new financing methods : 38.8 percent of SMEs , for example , do not know about intangible assets mortgages .==============================================================================
So it's not only British banks who are shy of lending to SMEs!
Sunday, January 27, 2013
Wednesday, January 23, 2013
Davos man thrives while the rest of us pay for his excesses
from - http://www.guardian.co.uk/commentisfree/2013/jan/20/davos-world-economic-forum-bad-capitalism?CMP=twt_gu
'Dynamism' is the World Economic Forum's watchword as the way out of the crisis and it is meaningless
The village of Davos where the World Economic Forum meets. Photograph: Fabrice Coffrini/AFP/Getty Images
More than 2,500 alpha men and women from more than 100 countries will descend on Davos this week to spend four days discussing the world's urgent need to adopt "resilient dynamism". This, the organising watchword for this year's annual gathering of panjandrums at the World Economic Forum, is allegedly the way out of the crisis. It is meaningless.
Who, for example, would support non-resilient stagnation? Western capitalism, and, arguably, global capitalism, has arrived at an apparent dead end. It is in profound trouble. But if the best answer to austerity and economic malaise is resilient dynamism every delegate should stay at home. As a call to action, you might as well urge everyone to be manly, womanly and decisive. Virtuous states of mind, but hardly blueprints for action.
In any case, for most of the business leaders attending Davos, the economic malaise is an abstraction. Profits as a share of GDP in almost all western countries are at record highs, along with executive pay. Meanwhile, real wages for the majority are stagnating, if not falling, justified by our economic leaders in Davos as the proper if sad consequence of "structural adjustment". Goldman Sachs, for example, shamed from deferring its bonus payments into the next financial year so that its staff could enjoy the lower tax rate, has just enjoyed a bumper year. Davos men and women are prospering. No structural adjustment for them.
There will doubtless be the usual appeals for more free trade, more scientific research and more investment in skills as the expensively clad executives move from seminar and sonorous keynote speech to reception and back to the dinner table. But what there will not be at Davos is a willingness to countenance a sea change in the way capitalism is organised. It can do what it will and that is to continue to confer fortunes on those at the top, with little risk, while directing pain on to others.
The paradox is that the chief reason capitalism is in crisis is that without such challenges it has undermined its own dynamism and capacity for innovation. Instead, it merely offers enormous and unjustified self-enrichment for those at the top.
Nor does the malign impact of inequality stop there. I was stunned to read in a recent IMF working paper, with the hardly catchy title Income Inequality and Current Account Imbalances, that the whole – yes the whole – of the deterioration of the British current account deficit between the early 1970s and 2007 could be explained by the rise in British inequality. It is a similar, if less acute, story across the rest of the industrialised or, rather, deindustrialising west.
What the IMF team shows is that as the share of national income devoted to profits and top pay rises to its current levels, so a noxious economic dynamic is created. By definition, there is less of the pie available to the mass of wage earners, whose real wages become squeezed. To sustain their living standards, they borrow, which has been easier than ever over the past 40 years as banks take advantage of financial deregulation. Overall demand thus carries on growing, but at the price of sucking in imports and ever higher personal debt levels for ordinary wage earners.
Finally, the music stops, as it has now, as both debt and import levels become unsustainable. The state of play in Britain – crazy levels of private sector debt and a record trade deficit – can thus be explained by the rise of inequality. And one of the chief causes of that, the IMF believes, is the decline in trade union bargaining power!
Tuesday, October 2, 2012
To hoard or to invest?
Capitalism's soft underbelly otherwise called short-termish is exposed again.
Companies world-wide are reported to be hoarding $4 trillion in cash rather than spend for fear of the continuing recession. But, of course, this very hoarding is contributing to the continuing recession!
See - http://unintend-conseq.blogspot.co.uk/2012/10/little-venture-little-gain.html -
Companies world-wide are reported to be hoarding $4 trillion in cash rather than spend for fear of the continuing recession. But, of course, this very hoarding is contributing to the continuing recession!
See - http://unintend-conseq.blogspot.co.uk/2012/10/little-venture-little-gain.html -
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