Bharat Rakshak

Democracy didn't cure illiteracy, extreme poverty, low life expectancy and zero infrastructure in those 3 countries to create a lasting industrial base

China allows import of Indian basmati rice
http://www.ndtv.com/article/india/china ... ice-201315

For the same reason, I don't know if a Chinese rice variety will sell very well in India. It all has to do with the local taste.

per a visitor, chinese meals are moving into being heavily meat based. they were served meat with every lunch in the manufacturing plants over multiple days and locations...same lunch as all the workers. usually chicken , duck and pork curry of some type. but there is a lot of vegetarian dishes also in the culture.

I suppose as income increases, people move into meat bigtime for a few generations before pulling back into a more sustainable vegan mould.

For the same reason, I don't know if a Chinese rice variety will sell very well in India. It all has to do with the local taste.

Land sales make up 30pc of total tax revenue for the central government and 70pc for local government. (For those of us who watched the Irish state balloon on the back of property taxes – when they had a fat budget surplus – this has a familiar ring.)

Construction makes up 10pc of total jobs, and a further 20pc indirectly in cement, steel, metallurgy etc. The government is building 36m homes for the poor, but that will start to run down in two years or so.

Residential investment typically peaks at 8pc to 9pc of GDP for emerging nations during their catch-up growth spurts. It is already 12pc in China.

Japan’s ratio peaked in 1973, long before the property price bubble burst. China has almost certainly peaked too on this crucial measure.

The minimum down-payment rate on mortgages is 30pc, so leverage is in theory low. (How this can be the case when the IMF says that the house price to incomes ratio is 16 to 18 times in the Eastern cities of Beijing, Tinajing, Shanghai, Shenzhen, and Guangzhou has long been a mystery).

A week ago I heard a talk at the ChunQiu Institute in London by Nobel laureate Edmund Phelps (one of the truly great Nobel economists who first debunked "Keynesian" misuse of the growth/unemployment trade-off or Phillips Curve and has devoted the last part of his academic life to trying to understand China).

His view is that China has already reached the point where it can no longer offset soaring wage costs with productivity gains imported through Western technology. It has hit the time-honoured wall. Diminishing returns are setting in, and there lies the "middle-income trap" that ensnares most challengers.

Be that as it may, Xianfang Ren said China has the means to bail out the banking system and property market in this cycle, and will use them if need be. "Housing is way too important to allow a hard landing."

These include deposits (170pc of GDP), government revenues (30pc), the assets of state behemoths (75pc), foreign reserves (50pc) of GDP – I don’t agree on this last point since the FX reserves cannot be repatriated without a big currency rise and a shock for exporters. It would amount to monetary tightening.

"At first sight China looks fine. Unfortunately, there is a big problem of misclassification of loans. The financial system has much larger exposure to real estate than appears, and the weak links are the real estate trusts and non-bank lending. The smaller developers are cash-flow constrained and will find it hard to roll over debts. Any defaults will have to be recognised immediately."

Russia and China have started making mutual payments in trade in their national currencies, Chinese Deputy Commerce Minister told reporters in Moscow on Saturday.

“The Chinese yuan is now a hard currency in Russia,” Chong Shan said, adding that the two countries were mulling a joint investment fund.

In the past 12 months the bilateral trade figure has reached almost $80 billion, and the volume of direct investment now stands at $4 billion.

Diana Choyleva is the bear in the China shop. The analyst from Lombard Street Research says last week's China GDP figures – which revealed growth slowing to a three-year low – are an early warning signal of the hard landing to come.

Dig deep into the data, she says, and you'll find that Chinese exports are falling. All that is propping up the economy is gargantuan investment in infrastructure financed by state- directed banks that look more and more like Western banks just before the collapse of 2008. Except they are bigger and badder.

Choyleva radiates a pessimism that is almost unique among Hong Kong's investment professionals. Westerners, she says, are so awed by the China dream they can't see the coming China-geddon. The excesses that drove the West into a financial crisis and, in Europe, an economic depression, are gripping the Chinese economy, too. "It's just that they have become bigger," she says. The country's vast pool of savings is being squandered on dead-end infrastructure projects that make Japan's roads to nowhere look like prudent planning.{Will all Chinese wake up one day to discover their account balance as zero?}

"China's miracle growth is over," she proclaims, saying that if Chinese policy makers get it right they might, just, see the country's growth halve to 5% or below. Get it wrong, and the consequences could be devastating not just for China but for the rest of the world, too. "Building those roads to nowhere can go on for a long time, but ultimately financing it will become unbearable," warns Choyleva.

As long as US and European consumers were accumulating colossal amounts of debt, much of it to pay for goods made in China, the merry-go-round worked just fine. But as western economies deleverage, the driver for growth has been extinguished.

"The financial crisis has changed everything," she says. "It can no longer rely on abroad to buy its excess production. The US will consume less, and produce more. The years of current account surpluses are over, rendering the growth model obsolete."

Meanwhile, the banks that have been the lynchpin of growth are insolvent, and their mountain of bad loans will eventually lead to a liquidity crisis.

But Choyleva's is a lone voice. At brokerage CLSA, one of the region's biggest investment banks, China macro strategist Andy Rothman, a former US diplomat, says the wall of worry comes from a fundamental misunderstanding.

The first myth to explode, he says, is that it is an export economy. It's not. It assembles the likes of iPads (they are all made in China), but the value remains, mostly, in the US. Even Korean firms make more money from the iPad than China. Over the last decade, while it has enjoyed GDP growth of 10% per annum, only 1% of that was from exports. What we haven't woken up to is that China is a domestic growth story.

It's not an unbalanced export-only economy – instead, it's the world's best domestic consumption story, claims Rothman. It is being driven by "phenomenal" increases in wages for average workers; incomes are up 173% over the past 11 years. That also puts the so-called property bubble into perspective. The price per-square-foot of an apartment in a major Chinese city has leaped by nearly 10% a year, for many years. But as incomes are rising even faster – by around 13% a year – it's not the issue it became in the west.

Better still, it's not on the never-never. Mortgages are still in their infancy in China. One in five first-time buyers purchase entirely with cash. The average downpayment is 30% – a long way from the 100% loans that became common in the US and the UK.

"Even if prices fall by a third, almost no one will actually be underwater," says Rothman. Westerners are also obsessed with startling property price rises in Shanghai and Beijing. But go into the interior and prices are "dramatically lower," he says.

The reality is that since 2007/2008, a significant part of China's growth has been an illusion. Since 2008, China's headline growth of eight to 10 per cent has been driven by new lending, averaging around 30 to 40 per cent of GDP. Up to 20 to 25 per cent of these loans may prove to be non-performing, amounting to losses of six to 10 per cent of GDP. If these losses are deducted, Chinese growth is much lower.

China now faces significant problems in maintaining its high-growth strategy.

The case for the soft landing assumes the investment and property bubbles are less serious than thought. Beijing has sufficient financial capacity to boost growth by loosening monetary policy and bank lending, while adjusting specific policies, such as lifting restrictions on housing sales to prop up prices. China is able to boost domestic consumption, replacing investment as the key driver of its economy. Excess capacity is gradually absorbed as the world economy recovers. Growth comes down gradually, without causing social and political disruptions.

The case for the hard landing assumes the rapid and destructive unwinding of asset price bubbles and problems within the Chinese banking system. A poor external environment and losses on foreign investment exacerbate the problem. Growth collapses, triggering massive social unrest and political tensions.

The end of a cycle of debt and investment-driven growth is typically disruptive. Japan's experience, which China has drawn on in shaping its economic model, is salutary. Japan grew by 10 per cent in the 1960s, five per cent in the 1970s, four per cent in the 1980s and has remained stagnant since, adjusting to the deflation of its debt-fuelled bubble.

Growth may decelerate sharply as the identified problems emerge, falling below five per cent by the middle to end of the decade. While growth at this level is high by the standards of developed nations, it is below that required in China to meet the needs of its population and their aspirations. A lower growth rate is also problematic for external investors and trading partners, assuming higher rates of growth.

The global economy increasingly looks to China to drive the world's growth. These febrile expectations are ill-founded. China's GDP is only around 20 per cent of the combined GDP of the United States, Europe and Japan, which make up around 60 per cent of global output. The view China, because of its large population, can compensate for a decrease in consumption in the developed countries is fanciful. China's consumption is only a little more than France's, a little less than Germany's and around one-eighth of the United States'.

In the aftermath of the crisis, industrial and direct investors have looked at China for earnings growth and returns. High growth rates, fables of urbanization, rising domestic consumption and the need for investment in upgrading infrastructure have attracted investments. Fairy tales about how a billion Chinese would urbanize and consumerize, driving 10 per cent growth forever and replacing America as the global consumer of last resort, captivated audiences at business conferences.

Investors generally chose to ignore the truth underlying the fairy tales, ignoring how the growth was going to be achieved. China's debt-driven and investment-fuelled growth is now vulnerable.

China's problems are likely to affect global growth. There will be significant effects on commodity prices and volumes, affecting resource producers and commodity-exporting nations, such as Canada. It will also affect demand for industrial goods, especially advanced machinery. China consumes more than $500 billion of these products, mainly imported from Europe, the United States and Japan.

A hard landing will be especially traumatic for the global economy, which has not dealt with its core problems -- excessive debt levels, weak non-debt-fuelled demand and global imbalances. The crisis and its effects have been masked in developed economies by artificial demand from government spending, which is proving increasingly difficult to sustain. In China, it was masked by debt-fuelled investment. Now, that feast, too, is coming to an end.

Satyajit Das is author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011), and a consultant to Jory Capital.

-- April 26: China's not-so-miraculous economy

-- Today: Chinese landings -- hard or soft?

Drop in at the Winnipeg Free Press News Café, 237 McDermot Ave., this Thursday, May 3, to catch Satyajit Das in conversation with business reporter Martin Cash. The free event begins at 9 a.m.

What! godless panda observing easter now. Will wonders never cease. There is a reason Disneyland is so popular with drones.

So Indians work like beavers while Panda trolls take vacations on credit cards....

Plenty of athletes, actors, singers, inventors, hedge fund managers and writers work little and earn millions/billions. If you were in the latter group, you would know this basic fact of life.

Are you in any one of the above categories? I guess not. Becoz if you were you would know how hard these guys have to work before they even get a shot at earning their millions and billions - The grass always looks greener from the other side. BTW I didn't know "inventors" was a profession - is it a profession in China?

The wealthier the firm, the more they can afford to have lots of people do nothing but play politics all day.

being one of the a-holes you are referring to, who engage in "strategy, vision" BS while people under them slog

The upper end of the car market is still booming. BMW's Chinese sales rose by more than a third in the first quarter, compared with a year earlier. To capitalise on the apparently insatiable appetite for its cars, the German firm is launching a stretched version of its 3-series at the Beijing show. This is to appeal to the many buyers who want extra legroom in the back, since that's where they will be sitting, with their chauffeurs at the wheel.

Sport-utility vehicles are also selling like hot Chinese buns: if you can't afford a chauffeur, at least it's nice to drive a car with high seats so you can look down on other motorists. Sales of SUVs have gone up from about 350,000 five years ago to perhaps 2m this year (out of a total Chinese market for passenger cars of 15.5m) and look set to keep growing at more than double the rate of the overall market. That is why Ford launched three new SUV models at the Beijing show.

Encircling the cities

Things do not look so pretty at the smaller, “value” end of China's car market, dominated by local brands.

Chinese drones and their Paki sycophants, take note. Premier Zhu Rongji coined the term 'Tofu-dreg project', used to describe a poorly constructed building. Here are some delightful articles describing the shiny, towering edifices of modern China:

Tofu projects in china
The Collapse of China - the comments section is also well worth a read!

Anyone who's lived a reasonable length of time in ANY Chinese-dominated society would agree with the author of the second article when he says, "Like so much in China, it’s a case of style over substance. A glossy façade hides a rotten core."

So, my dear *deleted* and their bootlicking Paklurks, the whole shiny Chini package is a mirage. It's not just the construction industry, it's the economy, and society. Everything is made of tofu dregs. There's no quick route to development and glory.

As the toll adds up, political leaders and intelligence officials in the U.S. and Europe are coming to a disturbing conclusion. “It’s the greatest transfer of wealth in history,” General Keith Alexander, director of the National Security Agency, said at a security conference at New York’s Fordham University in January.

He didn’t do it alone. Sinovel is one of the best-connected clean energy companies in China. Among its major investors is the private equity group New Horizon Capital, co-founded by Wen Yunsong, also known as Winston Wen, son of China’s premier, Wen Jiabao. Han was also close to Zhang Guobao, until recently head of China’s powerful National Energy Administration. According to a former U.S. diplomat, who didn’t want to be named because he still works in China, Han’s relation to Zhang may have given him an early look at yet-to-be-published government regulations and given Sinovel preference in the kinds of turbines chosen to power the state-planned wind farms.

In hindsight, it now appears that Han never planned to fulfill the kind of long-term partnership McGahn had envisioned. In 2010, Han helped create a company called Dalian Guotong Electric, making himself chairman and giving Sinovel a 20 percent stake. When AMSC investigators opened up a Sinovel turbine in a second location in July, they found that an AMSC power converter had been swapped out and replaced with a nearly identical one made by Guotong. It was running on a version of AMSC’s control system software obtained the year before by Sinovel and decrypted by its engineers. It looks like Han wanted to make Guotong Electric the Chinese version of AMSC.

In terms of outright theft of intellectual property, there is growing evidence that China’s intelligence agencies are involved, as attacks spread from hits on large technology companies to the hacking of startups and even law firms. “The government can basically put their hands in and take whatever they want,” says Michael Wessel, who sits on the U.S.-China Economic and Security Review Commission that reports to Congress. “We need to take more actions and protect our intellectual property.”

The day after the press report, AMSC computer networks in Devens were hit by a cyberattack. Forged e-mails were sent to a handful of company executives; they contained spyware designed to copy confidential data, including documents and internal communications. Fredette says e-mails were expertly crafted and had a fake link to a story about Sinovel’s troubles, a bit of irony inserted by the attackers. The FBI is investigating the incident.

As McGahn surveyed AMSC’s technology, he focused on the company’s research into wind-turbine control systems. A modern 1.5-Megawatt turbine is the equivalent of a 160-ton, high-performance pinwheel. Each gets stuffed with as much as $200,000 worth of electronics, including a power converter and what’s called a programmable logic controller, an industrial computer the size of a couple of cigarette cartons. These devices are used to do everything from filling up the bottles in a Budweiser (BUD) brewery to controlling valves in oil pipelines. In the case of turbines, they can rapidly adjust the yaw and pitch of blades, among other functions. McGahn sensed an opportunity to take this technology and capitalize on China’s efforts to harvest energy from the wind.

McGahn says he still wants to do business in China. But even if the company never sells another component there, he contends AMSC will survive. He has since moved to secure deals in Russia and is eyeing India as the next big wind market. In the meantime, McGahn has been schooled about doing business in China in a way he never imagined. “I used to be a Sinophile,” McGahn says, then pauses for a long exhale. “I don’t know what I am now.”

Stealing information, however, is not the same as being able to use it. The Soviets ended up generations behind their U.S. rivals in computing technology because they could not advance the cloned equipment fast enough. Shih says that for the Chinese to succeed at the current game, they will need to build a research and development culture that can supersede their skills at mimicry. “Many countries go through an imitation phase, but the real challenge is moving to an innovation phase,” he says.