Following on from the censorship issues in China, Google has announced that they are going to be taking a new approach to expanding in one of the biggest business opportunities in the world.

Google had a public disagreement with Chinese authorities regarding the blockage of some content that appeared in search results, with the operator redirecting Chinese citizens to an uncensored Hong Kong site in protest. However, the company has now announced that those who wish to use the service in the country will have to click through a preliminary page in order to access the uncensored service.

There are fears amongst Google shareholders that this could damage the opportunity for the company to get involved with the lucrative Chinese market – which has hundreds of millions of users. It is likely the Government will not respond lightly to the acute difference in Google’s approach, and some of the options they have include revoking Google’s license to operate.

The ethical decision which Google has made against China’s politics could cost them dearly. With $600 million of sales being projected for the Chinese markets, the dispute has affected this potential dearly – and this has meant that the company could have lost a fiftieth of the trade which they could have expected otherwise. They have also lost lucrative deals of advertising with other influential companies in the state.

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Many countries, including the US, have welcomed the Chinese government’s decision to make it’s currency policy more flexible.  However, with the complicated intertwining of the economies of China and Japan, the impact of the new policy could be harmful to the island country.

Many companies from Japan have manufacturing locations in China where they produce a variety of goods sold both in Japan and to export to other countries.  A higher yuan could hurt some of these companies as the costs of raw materials and labor will rise.  This could really hurt some of the companies, such as Toyota, who are already dealing with labor issues in their coastal factories.

There are some businesses in Japan who would benefit from a stronger yuan, on the other hand.  The biggest to benefit would be those producing heavy equipment for the construction industry, which is very strong in China right now.  These companies would see increased profits from the trade.

Japan imports more than $125 billion in Chinese goods annually, particularly apparel and food stuffs.  At the same time, China imports $112 billion in goods from Japan and those numbers are getting closer every year.

Economists say that trade with China is a major factor in the recovery Japan has been experiencing and that it shows no sign of slowing down.  While some things that are being exported to China from Japan may get some price increases it may help the Japanese economy with the deflation they have been fighting.

Another result of the stronger yuan could help Japan in a different direction and that is with tourism.  There has been a rising interest in Chinese tourists as they find it relatively inexpensive to vacation in Japan.  There has been so much demand that last month, Japan made it easier for the Chinese to get visas.

Matthias93 / Wiki Commons

Labor unrest and work stoppages within the factories of two major automakers have led to wage increases for Toyota and Honda employees in China.

Workers have been unsatisfied with their salaries for an incalculable amount of time, but only recently has it become urgent for company officials at both Toyota Motor Corp. and Honda Motor Co. to consider raising wages in China.

Foxconn, the Taiwan technology manufacturer that supplies many American brands such as Apple, Dell, and HP, announced that they would be doubling the salaries of most of their wage workers in their factories after concerns over poor workplace standards loomed over the company.

Events like these, combined with what Jim O’Neill, a Goldman Sachs Group chief global economist, calls a general shift in the economy in “moving to the consumer,” have made it almost impossible now for Toyota and Honda to ignore the seemingly low wages they have been paying to their factory workers in foreign countries.

These pay raises will not be the only things eating into Toyota and Honda’s future earnings, however. Recent developments in the China have resulted in the Chinese government’s decision to continue to let the yuan, the country’s national currency, continue to strengthen.

A surging yuan will not yet prevent foreign companies from seeking wage workers in China, as the currency is still far weaker than others. The country remains one of the most competitive places to do business.