Yizhuang Guo's Blog

Russia has been chosen to host the 2018 FIFA World Cup and Qatar has been selected to stage the 2022 World Cup. The Russian bid was picked ahead of England, Span-Portugal and Holland-Belgium to host the 2010 event, while Qatar got the better of the US, Australia to stage in 2022. Both decisions were made on Thursday. It is the first time that either Russia or Qatar has been chosen as host nation for the World Cup.

I personally am a big soccer fan, and so is every member in my family. I didn’t miss every single World Cup ever since I was born (there was a 1994 World Cup when I was only 2). I say hosting these sporting events is a very good way to stimulate our current economy. We all know that South Africa hosted the 2010 World Cup: thousands and thousands of fans and tourists went there not only to watch World Cup Games, but also to go there and spend money. I hope that sporting events like World Cups and Olympics never stop, because that is a way to keep the world peaceful and stimulate the economy.

One of the world’s largest soft drinks maker PepsiCo has said that the company is buying a 66% stake in Russian dairy and fruit juice maker Wimm-Bill-Dann for $3.8 billions. Pepsi also said that the company would seek to buy the remaining shares in Wimm-Bill-Dann when the initial deal is finished. The firm added that the deal would increase it’s annual revenues to nearly $13 billion, putting it on course to achieve its strategic goal of building a $30 billion nutrition business by 2020.

Pepsi was always one of the leading soft-drinker makers that ever existed. However, it can’t deny the fact that CocaCola’s market share is way bigger than Pepsi’s. In my opinion, Pepsi is doing the right decision to buy shares in foreign markets, not only in America and Europe. That might be a way for Pepsi to increase it’s profit in the competitive soft-drink markets. However, some mergers, or more specifically, investments, are really risky and dangerous. Pepsi needs to consider those risks before buying any shares in another company, and then still stand in the competition.

US house prices was declining again in September, and the rate of decline is faster than expected. The survey found that Cleveland recorded the largest decline in house prices, which fell by 3% from a month earlier. Washington and Las Vegas were the only metropolitan areas to experience gains in house prices. Despite the month-on-month fall, the index also showed that house prices were up 0.6% from the same point last year. And a separate monthly survey showed US confidence in the economy rose in November to its highest level in five months.

One of the most important reasons (perhaps also the biggest reason) for the economic recession is that the real-estate market collapsed, nobody could afford their houses anymore. However, as the house prices fall, consumers’ confidence rose up. As we can tell from the business article, the consumer confidence rose to its highest level in five months. It’s a simple price vs. demand chain: When the house prices fall, there will be more consumers willing and able to buy the houses. Thus, the economy can continue to function and hopefully it can get back on track. So I consider this a good sign.

Sales of Tata Motor’s Nano – the world’s cheapest car, experienced a significant sales decline (about 85%) in November compared to a year earlier. Tata’s statistics showed that in November 2009, there were 54,622 sales across all the models, where there were only about 509 sales in November 2010! One important reason for the sales decline is fire hazard of the car: This came after owners of the hatchback reported about half a dozen since April last year. Another reason for the sales decline is the rises in prices.

Nano is the world cheapest car in the world, and it is considered very environmental friendly. As the Nano was designed for a population currently using eco-friendly bicycles and motorcycles, environmentalists are concerned by the increase in pollution that would allow a mass motorization in developing countries such as India. However, compared to developed country autos, Nano has a way lower emission. I think it is important for the manufacturers to ensure the car’s safety: because nobody will buy a automobile that is vulnerable to fire hazard. Also, if Nano wants to continue to increase their sales, they have to keep the price to a reasonable amount that customers will accept.

Australia’s rate of economic growth slowed between July and September as the high value of the Australian dollar ate into export earnings. The country’s gross domestic product rose by a very small amount between April and June. However, what’s the good news is that the Australian economy is set to grow, led by the demand of China’s demand for raw materials from Australia. Helped by it’s vast exports of iron ore and other raw materials, Australia has not been experiencing and successfully avoided recession for 19 years.

One of the biggest source of wealth for Australia is exporting mineral ores such as iron ores. However, too much high value of the Australian dollar ate into export slowed Australian economy down. At the economic recession today, most countries, down to individuals, are not willing to spend money, or they are very careful and tight with their money. I think that according to the benefits of trade off, every nation has to participate in international trading and businesses in order to get the economy back on track.  Australia has to continue it’s exports in order to continue to grow their economy.