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China’s Internet Decision

Business, China, Company Strategy, Economics, Polyolefins
By John Richardson on 03-Jan-2013

By John Richardson

CHINA’S polyethylene (PE) market sentiment rebounded in mid-December on greater confidence that the country’s new leaders meant business on economic reform.

And since then, commodity prices in general, including those for iron ore  have rebounded thanks to a slew of data that indicates a recovery in growth.

Some of the renewed confidence in China’s PE market was generated by the belief that China’s new leaders were serious about tackling corruption.

Investigations into low level officials, allegedly caught with their fingers in the till, is likely to have added to this confidence, especially given that those who exposed the apparent wrongdoing were not being arrested or otherwise harassed. Wang Qishan (see below), the newWang_Qishan3.jpg head of the central agency tasked with dealing with misconduct among party members, certainly seems to mean business.

But in late December, the government announced new rules requiring internet users to provide their real names to service providers, while assigning internet companies greater responsibility for deleting forbidden postings and reporting them to the authorities. Does this still support the notion that the government is willing to implement root-and-branch reforms?

Aside from the issue of corruption, can China, without a vibrant online culture, escape the “middle income trap?” Can such a culture thrive under the new rules?

And as for the slew of positive economic data we mentioned at the beginning of this post, delve into the numbers and the outlook still looks very uncertain.