Jimmy Johns Under Fire for Workers Contract

http://money.cnn.com/2014/10/22/news/jimmy-johns-non-compete/index.html?iid=SF_E_River

It's one thing for a high paid exec to be prohibited from working at a competitor. But Jimmy Johns actually imposes non compete clauses on its low-wage workers. Now, lawmakers are calling for an investigation into the sandwich chain's policy of making workers sign contracts that bar them from working for its competition. Calling the practice a form of intimidation, House members Rep. Joseph Crowley and Rep. Linda Sánchez have drafted a letter calling on the Labor Department and the Federal Trade Commission to investigate "disturbing reports" of the chain's contracts which are "inconsistent with trade and labor laws."

The letter already has over 30 signatures from other Washington lawmakers. The Huffington post reported last week that the sandwich chain requires hourly workers to sign non compete agreements that would prohibit them from working at any other restaurant that sells sandwiches or has a location within three miles of a Jimmy John's for a period of two years.These sorts of agreements are commonplace for highly-paid top executives or employees who have access to trade secrets. But requiring sandwich makers and delivery drivers to sign such contracts "looks more like bullying under color of law."

This contract intimidates workers who are already making minimum wage or close to it. The contract prevents workers for possibly earning higher wages at another job.  This also goes against the idea of open competition markets.  I don't believe that the contract will help give workers incentives to work harder nor will it benefit the company in the long run of things.  

When iPhones Ring, the Economy Listens

The latest iPhones are selling quickly, which benefits not only Apple but the economy and stock market as well. Because of popularity and high price, iPhones have a large impact. Michael Feroli, chief United States economist for JP Morgan Chase estimates that iPhone sales "are adding one-quater to one-third of a percentage point to the annualized growth rate of the gross domestic product." The author of this article considers the iPhone to be a significant financial force.
Obviously, iPhone sales benefit Apple. The company experiences a strong increase in profits every two years when they release a new model. The average price of an iPhone is $603. This is much higher than advertised price but "the full price is embedded in service agreements" with phone carriers. This is lucrative for Apple, since the cost of producing an iPhone has stayed around $200 for a while. An analyst at Sanford C. Bernstein says "the gross profit margin for the iPhone is close to 50%…[and] it accounts for a disproportionately large percentage of Apple's overall profit, somewhere between 60 and 70 percent."
The iPhone also has significant impact in the stock market. Apple is the biggest company in the world by market capitalization. Through Thursday "because its stock has performed magnificently while the overall market has not, Apple accounted for 18 percent of the entire rise of the S. &P. 500 index this year."Apple impacts even those who don't directly own its stock. "Nearly every pension fund holds some stock, and these days, there's a good chance the biggest holding is Apple."
The iPhone benefits foreign economies, because it is made mainly overseas and sold throughout the world. This makes it difficult to directly determine Apple's impact on the US economy but the impact is definitely present. The article points out that electronic and consumer appliance store sales jumped 3.4 percent last month. With all of these combined factors and the approach of the holidays, economies should be enjoying the benefits of increase iPhone sales for the next couple of months.
I hadn't considered the massive effects of the iPhone on the economy. What products had this kind of effect prior to the iPhone? And how long can the iPhone maintain such a significant impact?
Source: http://www.nytimes.com/2014/10/26/your-money/when-iphones-ring-the-economy-listens.html?ref=business

Deflation in the Eurozone, Low Inflation in the US

http://www.nytimes.com/2014/10/25/business/eurozone-falters-amid-deflation-as-a-mildly-inflationary-us-grows.html?ref=international

There has been a recenet rise in the amount of deflation in the Eurozone while the United States has seen a raise in inflation.

The rise of goods and services has been linked to the rise in prices of food. The CPI has risen 1.7 percent over the past 12 months in the US but that is the highest rate of the 15 largest countries in the EU.

The a main reason for the declining prices in Europe can be attributed to the weaker economies. Some economies look to be heading towards a double recession The price of goods have fallen but the price of services have risen.

In the past 12 months, the only European country to grow more than the US has been Poland. This can be attributed to the different currency than the Eurozone. The countries outside of the Eurozone: Poland, Britain, and Denmark all have done better than those within. Finland, Greece, Italy, Portugal, and Spain all have regressed in their economies since 2010.

Is the U.S. holding too much oil in reserve?

http://money.cnn.com/2014/10/24/news/u-s-oil-reserve/index.html?iid=SF_E_River

This article brings up the debate that the U.S. could be holding too much oil in reserves, as opposed to putting this oil into the economy. The U.S. now has the largest emergency reserve of oil in the world and some people think it would be better off in use since we are on track to surpass Saudi Arabia as the world's largest energy producer. Personally I think this excess reserve could be good for the economy since oil prices are already so low. Lower gas prices give people the condfidence to consume more which boosts GDP. If we have a large backup of oil then perhaps if there is some sort of shock to oil production abroad which causes prices to rise, we can dip into our reserves to keep our supply equal to demand so that prices don't rise here. This would keep prices low and continue the trend of boosted consumption, thus boosting GDP even if the amount is miniscule. We learned in class how much a small percentage change in GDP growth can affect future GDP, so if these reserves could give a buffer to rising oil prices elsewhere perhaps it could pay off in the long run.

3 black eyes in the job market

Article Link

This article by Patrick Gillespie tells us that even though the unemployment rate it's now 5.9%, does not necessary mean that the economy is becoming a lot better. The truth is that millions of people are still unemployed or underemployed. Now we have 54% more part-time workers than when the recession first started. There are three types of unemployed or underemployed workers: 1) People who want to work full time but can only find part-time jobs. 2) People who are discouraged to find jobs for weeks due to skills, age or no available work. 3) People who can't find work for months. Also, according to the article that long-term unemployment is becoming a bigger issue for women. 44% of long-term unemployed workers are women compare to 35% in 2007. Once government stops unemployment benefits, "Many people temporarily or permanently give up the search." Even though the job market will continue to improve, it may take a long time for these economic wounds to fully heal.

Discouraged worker was due to baby boomers retiring from the workforce. Over the next ten years, the workforce participation rate will still be low due to baby boomers. And lots of people cannot find full-time jobs is due to many companies would like to hire more part-time workers, so they don't need to pay benefits for long-time workers. Our economy is recovering even this is the weakest one in decades. However, unemployed workers should not be discouraged, as the economy is growing and finding a job would be around the corner.    

This is what Ebola is doing to West African economies

http://qz.com/286701/this-is-what-ebola-is-doing-to-west-african-economies/

West African economies are plummeting in all facets of business due to the Ebola outbreak. The West Africa sub-region, the Adjame market in Abidjan, held a prestigious reputation as the largest commercial hub for traders. The market creates a network with neighboring countries to undergo various types of trade but they recently had to close its boarders to Guinea and Liberia due to Ebola. Due to this closing, many bus drivers are unable to transport traders to bordering countries because  the health certification requirements disable such activity resulting in a loss in work.  The article states that the economic outlook is the opportunity cost of for survival in West Africa. Ebola is stagnating international businesses across the board such as airlines. International airlines have banned flights to and from these Ebola affected countries. Due to these bans, CEO’s of multinational firms are calling for a review of these bans as they’re halting trade, diminishing agriculture, and terrifying investors. Liberia and Sierra Leone are currently experiencing a food crisis due to farmers abandoning their farms which is hurting production revenue. Famine Early Warning Systems (FEWS) has released a statement that the virus will soon lead to a food insecurity in the region. It is stated that 200,000 to 250,000 Ebola cases will be recorded by January 2015 and more than 2.7 million people could reach a high risk food security level by March 2015. Africa’s largest football tournament is also an issue due to the outbreak which will result in wounding economic benefits from infrastructural development along with the patronage of goods and services by 40,000 visitors. The cancellation of the tournament would amount to a $154 million revenue loss towards Africa. West Africa being the center of this global health crisis must adjust to these depreciating economic benefits as the sub-region is being cut off to prevent further outbreaks of this deadly virus.

Political Advertising: Golfers to the Right, Jokers to the Left

http://www.economist.com/news/united-states/21627660-politicians-know-which-television-shows-you-watch-and-tailor-their-advertisements?zid=319&ah=17af09b0281b01505c226b1e574f5cc1

"Political Advertising: Golfers to the Right, Jokers to the Left" explores the effect of media on political advertisements.  Modern political ads aim to reach specific groups of people, and television has helped to accomplish this.  Nielsen, a TV ratings firm, began to include political questions in its TV surveys in the early 2000s, which helped to show which television programs people in different political categories tended to watch.  For example, it was found that most people who watched the golf channel were more conservative, while most people watching Comedy Central were left leaning.  This explains why 93% of political ads on The Golf Channel are for Republican nominees, while 86% of Comedy Central ads are Democratic.  Advertising is expected to get more precise as time goes on.  One potential problem is the type of media that is becoming more mainstream.  Many younger voters are tending toward sites such as Netflix and Hulu for watching TV, and there is little to no availability to advertise on these sites, and definitely not to the same extent as a standard TV commercial.  There is also the possible issue that by selecting such specific groups, it will be difficult to reach the wide range of people necessary to make a difference in an election.

Biotech Firm Adaptimmune Attracts $104 Million Investment

http://dealbook.nytimes.com/2014/09/24/biotechnology-firm-adaptimmune-attracts-104-million-investment/?_php=true&_type=blogs&_r=0


A New Enterprise firm is currently investing in a biotechnology company that is developing a treatment for cancer.  The 104 million dollar investment went towards Adaptimmune, they are making it easier to recognize cancers.  In June, Adapimmune began a partnership with GlaxoSmithKline to develop cancer treatment.  The money will allow clinical programs for the next several years.  Many other firms and investors in with Adaptimmune to cure cancers. On top of that two executive of New Enterprise Associates: David Mott and Ali Behbahani are joining the board of Adaptimmune.

Amazon to Hire 80,000 Workers for the Holiday Season

Amazon has announced they plan on hiring 80,000 seasonal employees this year.  These workers will be placed in the network of fulfillment and sorting centers, where the locating, sorting, and shipping of the orders occurs.  The employees will be paid between $10-$11.50/hr and many will find themselves with permanent jobs after the season, as Amazon plans to hire back “thousands.”

I think this is a commendable move on the part of Amazon.  Although most of the employees will be working temporarily, it will provide many people with a source of income for the time being.  They will also be making a decent amount of money, as the wages are set a few dollars above minimum wage.  I realize Amazon needs extra help anyway for the increased holiday sales, but the amount of people they are hiring has significantly increased.  They hired 70,000 people last year and 50,000 people two years ago.  Hopefully they stick to their word and actually hire back thousands of these employees to permanent jobs as well.

http://money.cnn.com/2014/10/16/news/companies/amazon-holiday-hiring/index.html?iid=EL

Venezuela’s Maduro Says Default Fears are the Work of Foreign Media

            With Venezuela’s economic as well as overall fate looking worse and worse everyday, President Nicolás Maduro has stated that foreign media have started a “campaign to destroy Venezuela”. The statement comes after the news agency Reuters as well as others reported on Venezuela’s growing probability of defaulting on its external debts.  Maduro seems to think that news agencies from external countries are only looking at the bad in Venezuela and causing people to become alarmed over the current situation. This is hard to believe when numerous economic experts have written about and predicted this fall of the economy in Venezuela. 

            Maduro’s approval ratings fell to 30.2 in September while 81.6% of Venezuelan’s viewed the economic situation negatively. Overall, the fact that Maduro is battling and lashing out at the foreign media rather than dealing with the situation at hand is cause for further alarm. Falling oil prices and the country getting closer and closer to defaulting on their loans makes for an even scarier situation in Venezuela.

(Source: http://www.ibtimes.com/venezuelas-maduro-says-default-fears-are-work-foreign-media-1711210)

After six months of recall costs, GM making money again

Over the past six months General Motors has been hit with wave after wave of recalls, severely damaging their reputation and, according to the article, nearly eliminating their bottom line. However, in the aftermath of this, GM is finally back to making a profit, taking some gains from the $1.4 billion dollar revenue earned in the third quarter, some of which came from an increase in global sales.

The most interesting thing about this article, in my opinion, is that global sales for the car manufacturer have been increasing. This could possibly be an indication of a resurgence of American automotive presence in the global market. This would be a great thing for the automotive industry, helping to finally close the wounds caused by the 2008 financial crisis.

Michigan to Tesla Motors: You're Not Welcome

The governor of Michigan signed a law into action making it illegal for Tesla Motors to sell their vehicles directly to consumers in the state. Tesla Motors is an up and coming electric car company run by Paypal inventor and SpaceX CEO Elon Musk. The independent company was the first to offer a completely electric sports car and is at the forefront of development lithium-ion batteries as an alternate energy source. Michigan's ties to other big car manufacturer's means it is very unlikely to have the law reversed, essentially taking away another large market of potential Tesla customers. Michigan -- along with Texas, North Carolina, New Jersey, and Missouri -- joins the fight against allowing Tesla to sell directly to consumers in their respective states.

Personally, I'm not quite sure what to make of this. On the surface it looks like these states are making these laws in the interest of other, larger car companies to protect their consumer base. It seems very unfair and counter-capitalist as it takes Tesla out of the picture to compete with larger companies. The laws also severely hinder Tesla's progress to perfecting an alternate energy source for our vehicles and elsewhere so it seems like a bad thing for all people. To me, it seems completely unfair and should be illegal in some form but I feel like there is some aspect of the issue being left out or that I don't fully understand. I think the things Tesla is doing can revolutionize the car industry, help the environment by eliminating our dependence on fossil fuels, and promote competition and progress in the car industry by entering the market. I sincerely hope this isn't some form of corporate bullying which hinders our progress into the future. Plus, by cutting out another potential market, it makes it harder for Tesla to perfect their autopilot technology, which would be awesome.

Tesla Motors Banned from Michigan

Big oil Stealing jobs

In oil booming towns in North Dakota, Texas, and Colorado there is shortage of construction workers. This is because oil companies are paying construction workers a substantial amount more to work for them than their normal construction jobs.  Construction managers are having trouble building houses and completing projects because as soon as they get a full crew they lose most of them to the oil companies in a couple of weeks. This is harming the towns because it raises the standard of living. Since the construction crews cannot build houses on time there are fewer to go around to the booming towns, causing rent to increase a great deal. Another threat looms in the future because Mexico just privatized its oil industry and will need skilled laborers to help build it up. A good amount of construction jobs come from Mexico, this will further hurt the construction industry and raise the standard of living even higher in the booming oil towns.

http://money.cnn.com/2014/10/21/real_estate/oil-boom-construction-workers/index.html?iid=SF_PF_River

Apple Pay Launches Today

http://money.cnn.com/2014/10/20/technology/mobile/apple-pay/index.html?iid=HP_River

Apple has launched its new mobile payment system for the iPhone 6 and iPhone 6 Plus users, called the Apply Pay. This new innovation in technology could perhaps one day render physical credit cards obsolete. Not only the new iPhone 6 and 6 Plus users, users of the older models can also use this service.

The way this payment method works is by sending short-range radio waves. The message goes from a special chip inside the new iPhone to the register. It is known as NFC that is available in these new devices. The users can simply tap on ‘Pay with Apple Pay’ on the participating website or online stores, put their finger on the fingerprint reader, and voila. The charge goes straight into the credit or debit card of the user that is setup with Apple. This service is now also available on roughly 220,000 store locations such a Macy’s, McDonald’s, Staples, etc.

This new service is actually safer than using credit cards. It relies on the fingerprint of the user rather than an unsafe PIN number. This greatly reduces the risk of any credit card fraud. This new technology is a major improvement over the static, easy-to-copy information on a credit card.

It was about time that Apple has introduced such a technology. Competitors like Google has already been capturing a large share of the market by its Google Wallet service. The amount of Apple users around the world, especially in the more developed countries has significantly risen over the last few years. This service will not only allow Apple to regain the lion share of the mobile market by selling even more of these devices but also allow the giant customer base to pay for their transactions more securely. More people will be interested to invest in the Apple stocks, along with which consumer spending is more likely to increase. The demand for using credit cards because of this new turn in technology may fall gradually in the future. As a result, most of the electronic transactions will go through successfully and help businesses, and eventually the economy in the long run.  

China's Economy Grows More-Than-Estimated 7.3% in Third Quarter

http://www.bloomberg.com/news/2014-10-20/china-s-economy-grows-more-than-estimated-7-3-in-third-quarter.html

China's economic growth beat analysts' expectations by 0.1%. Analysts had a median estimates of 7.2%. China's central bank has pumped funds to lenders to avoid a downturn in the economy due to housing. China is headed for the slowest full year growth since 1990. The Goldman Sachs Group expects more loosening in policy over the rest of the year. Industrial production rose 8% compared with analysts expectations of 7.5%. Fixed-asset investment rose 16.1% compared with median estimate of 16.3%.

The People's Bank of China has avoid cutting interests rates or banks' reserve requirements to boost growth. They have injected some liquidity into banks. China has expectations of 7% growth for 2015.

U.S. Consumer Sentiment Rises Despite Ebola Fears

http://www.reuters.com/article/2014/10/17/us-usa-economy-idUSKCN0I619U20141017

In the article, U.S. Consumer Sentiment Rises Despite Ebola Fears, Jason Lange discusses the impact that the ebola virus in the United States is having on the economy. Although many Americans are deeply concerned about the spread of the virus, this concern has not had any significant impact on the economy. In fact, consumer sentiment, which measures the economic health of the economy as determined by consumer opinion, is at the highest it has been since July 2007.

While the three cases of ebola in the United States have not had a significant effect on the economy thus far, if the outbreak spreads significantly (which by expert accounts is highly unlikely), there would be the potential for an economic impact. Some of the possible effects of an ebola outbreak in the United States are outlined in the article attached below:

http://dallasmorningviewsblog.dallasnews.com/2014/10/ebola-costs-just-the-tip-of-the-economic-political-iceberg.html/

What is interesting is that in addition to the actual costs associated with treating the virus, there would be significant costs due to panic. Already we have seen this, with news programs showing people purchasing masks to prevent their chances of being infected, as well as people showing up at hospitals requesting to be tested for the virus when they have no chance of having the virus and simply have a cold, or the flu. Additionally, the Dallas hospital where the first man diagnosed with ebola in the US passed away, is said to be like a ghost town at this point, which is certainly having an economic impact on the group that owns that hospital. It is fortunate that the ebola virus has yet to make any significant impact on the US economy, and that the likelihood of it spreading to the point where it could do so, as has happened in several African countries, is slim.

Stimulus

This article looks at the current Chinese Economy and how their GDP and Consumer-Price Index is well below the wanted inflation rate. There has been so much government intervention in China that economists are wary of calling for further stimulus. They are worried that it will increase lending to parts of the economy that have already borrowed too much. The sectors that have already borrowed too much include property developers, state-owned enterprises, and some local governments. They say that "extra lending to these groups is not the only kind of stimulus." Instead they believe that  "much of the borrowed money was spent on existing assets, such as land and property, that do not add much to production, jobs or consumer-price pressures. If this form of credit expansion packed much of a GDP punch, China would already have rapid growth and high inflation." Many economist believe that fiscal authorities can help by cutting taxes and lifting social expenditures. Lending needs to help produce new goods, not speculation in existing assets.

http://www.economist.com/blogs/freeexchange/2014/10/stimulus

CITI: These 6 Huge Trends Are Completely Reshaping The World Economy

A team of Citi Research analysts and Oxford University contributors teamed up to analyze the impact of six global mega-trends in a new 92-page report to clients.

Here are 6 key points from the report:

1. The world is getting more integrated, which has lead to increase in trade
2. The global population is getting older so countries will need to address healthcare costs
3. Nano-technology, genetic advances and 3D Printing are revolutionizing manufacturing
4. Emerging technologies will drive economic growth making China and India's middle class the biggest consumers
5. National Disasters will have a much larger impact on the global economy than before
6. Global governance systems will fail to solve international problems

To read more visit Business Insider: http://ow.ly/D0qg6

Cynthia Rowley: There's never been a better time to design

         This article discusses how technology has made it easier to enter into the world of fashion. Before the internet age, you had to have financial backers and enough money to create a startup. Then you had to open a store front and hope people walked in and bought your stuff. Now, however, it is much easier. As Cynthia Rowley put it, you can create something small and that's okay. There are online outlets that allow you to sell your product no matter the quantity. This allows for designers to try new things and experiment without the added stress of having to make a huge profit. And it makes it easier to abandon an idea or move on to something bigger and better. Overall, the online shopping craze has allowed many aspiring designers into the fashion world.

America's Economy

America's Economy: Not sputtering anymore

           http://www.economist.com/blogs/freeexchange/2014/10/americas-economy

Employment in America is continuing to improve. According to figures published on 10/13 by the Bureau of Labor Statistics, total employment in America increased by 248,000 in September, driven by big jumps in professional services, retail and healthcare. The unemployment rate dropped below 6% for the first time since 2008. Most importantly these figures are are proof for economists that the economy really is bouncing back.

 Deutsche Bank has already raised their forecast of annualized GDP growth in the third quarter from 3.7% to 4.2%. The labor force participation rate fell due to the fact that the demand for work is remaining high due to the higher wage rate. Labor participation is now as low as it has been since 1978. That suggests that the number of entrants to the work force is struggling to match the number of  people leaving the workplace due to retirement. In particular the baby boomer generation is full of workers that have chosen to retire later in life. This decision is not a result of monetary or fiscal policy but more to personal choice as a result to the rising expenses of parents in this age group. Expenses such as college tuition has risen dramatically in the past decades as well as high amounts of student debt, marginally in the baby boomer generation but primarily in the early 20's to early 30's age bracket. The large supply of workers is causing the wage rate to remain stagnant, which affects the average worker in our economy but also has political ramifications. For Democrats any improvement or chance at an economic bounce as a result of the positive signs in the economy who greatly improve chances in mid-term elections.This will not occur unless the average worker feels their quality of life relatively improve, this can only happen if wages stop being stagnant soon.

Some workers are at least getting longer hours. In manufacturing, the average workweek lengthened to a point it hasn't seen in 60 years. Combining the increased output of workers and the price of shale gas reaching low prices,  America's manufacturing decline seems to have been arrested and if these trends continue as they have been the decline may be partly reversed. Unemployment may reach a point where communication issues and other types of frictional unemployment cause the search for qualified employees to become more expensive, this again would not have any political ramifications by the mid-term elections.

Since the report was published, the dollar has surged to a 4-year high as investors have interpreted the data to mean that the Federal Reserve will soon begin to tighten monetary policy.

I found this article to be really interesting as it examines the relationship of the economic figures and upcoming political standing. It is very easy to lose track of how the government deals with and responds to the economy, after all the central bank and the government both have their overall success assessed by how the economy goes. I would think it to be an interesting study to see how these economic results translate or trend over the next couple years with the election in 2 years roughly. I feel that if we could more properly analyze what these figures mean then the general public will be able to make a more educated vote based on their wants/needs from the economy.

China Poised for Slowest Growth since Financial Crisis

Since 2009, China has experienced growth of around 10% for each of its quarters. However, with the United States economy appearing to be getting back on track with its recent jobs report and other financial indicators, China seems to be experiencing a bit of a lull. Many factors could be partially responsible and the article goes into no detail about such possibilities, so I will speculate on some. Europe is in a tough spot economically and this lack of buying power may be a reason for China's lack of growth, with Europe being one of its largest importers of goods. The real possibility of democracy coming to China could also be at play, as political uncertainty can impact investment.

Inequality in the US

http://www.nytimes.com/2014/10/18/upshot/what-janet-yellen-said-and-didnt-say-about-inequality.html?ref=economy&abt=0002&abg=0

This article is a critique of Janet Yellen's speech on Growing Inequality in the United States.

In her speech, Yellen questions whether the trend of growing inequality is in conflict with the core American value of equal opportunity. Unfortunately, Yellen does not delve into any of the Fed's policies although she does mention areas which need to be re-looked at.

Income inequality can create a positive incentive for people to work harder, but recently inequality has reached its highest levels yet, with the wealthiest 5% of people owning 63% of the total wealth. Many of the policies from the Fed have benefited the upper class while having a less direct effect on the poorest people. It is likely we will see some drastic changes in the future to deal with these issues as the inequality becomes more severe.

Chinese Debt

This article looks at the current debt crisis that China is facing. Their debt has reached about 250% of their GDP, up from 150% six years ago. The reason there has been such a large spike in debt since 2008 was because of their stimulus package that they implemented after the 2008 financial crisis. China's total debt-to-GDP ratio increased faster than any other big country during that time. What many are afraid of is that their economy will have a sudden drop off and decline, however, they say that the same thing that got China so deep into debt is what keeps it from blowing up: state control of the financial system and the perception, often substantiated, of government backing for debts. What needs to happen is the government needs to let failing companies fail. Also authorities could make banks and investors allocate their capital much more carefully, therefore slowing the rise in China's debt.

I think that there should be some government intervention to help with certain companies, but clearly China is way too dependent on their government and needs to let some of their companies fail, in order to decrease their debt.


http://www.economist.com/news/finance-and-economics/21625823-rein-its-debt-china-must-be-willing-let-companies-fail-moral-deficit