PRC Economy - New Reflections : Dec 15 2011

[sha]

OT: Read it at length and the curiosity seems to be all around how poor India should be rather than what India is. Am sure you can do better and make it a billion hits. Point is if you are genuinely interested, there are a gazillion lonely planet and other such travel threads that outline travel in India.You can get the viewpoint of unbiased travelers right from backpackers to those that live in royal resorts.The choice is yours - accept India is an emerging rival (note the choice of words), and if there is a genuine interest, rely on genuine sources.

I think you got it wrong. I own it to the poor Chrome trannslator. As a matter of fact, the culture shock mainly came from social,political and religion aspects. Many people contributed to the thread, including businessmem and travlers who ever visited India and students who are studying in Indian university.
I believe there is no unbiased viewpoint from any person. We form our point based on different viewpoints with our rational judgement.

Of course, we encourage diversity of views and you might find it a new experience to have the same places both praised and cursed in the same thread.

I don't think you read the thread even quarter through. Or you will be find it your new expericence of diversity of viewpoint in communist country.

You're all welcome to visit India (without trying to sneak in through Arunachal Pradesh, of course). And you might just be surprised.

I just checked global map, there is no place called Arunachal Pradesh, so it seems you were worried for nothing.
I do have plan for visiting India, and hope to be surprised.

[Raja Bose]

I just checked global map, there is no place called Arunachal Pradesh, so it seems you were worried for nothing.

You mean the same map which shows Taiwan as a part of PRC?

[sha]

Marten,
If you're convinced that the thread is completely unreliable, please prove it. I'm glad to hear another side of a story. As a democracy worshiper I can't be too ready to take your words to defend the ideal of democracy which seems damaged in the thread.
Before you do so, I'm afraid that India is the last place for me to apply for asylum. You read the thread and you knew why.

Raja Bose.
I saw maps which show Taiwan as part of PRC and other maps which show mainland China is part of ROC. Of cource , none of which has a place named Arunachal Pradesh.

[Suraj]

I saw maps which show Taiwan as part of PRC and other maps which show mainland China is part of ROC. Of cource , none of which has a place named Arunachal Pradesh.

So what ?

[amit]

Name one major country which recognize Taiwan is a country. Not even India. I guess you can vote a government that will next time.

I guess then you should tell us, na educate us as to why the great peoples republic of China armed forces have so many missiles pointed at an island which is supposed to be a part of the Mainland? Do the Chinese threaten their own people with missiles?

[amit]

The Chinese people should be proud of the fact that it is doing as well as it has despite being a communist dunghole. But it should be less proud that it is communist. Because without a shadow of a doubt, all communist states were failed ones from the USSR to Romania to North Korea.

Without communism, you chinis should be at where Taiwan, Japan and South Korea is today. But you are not, you are many many times poorer per capita.

Conversely, India should be more confident of the fact that the wealthiest nations on earth are democracies. Instead, while we speak of democracy as being great for freedoms of speech, association and other higher aspirations onlee, we refuse to acknowledge that it is also the most powerful creator of material wealth on earth.

As a democracy India should be already be where Taiwan, Japan and South Korea is today. We are rightly proud of democracy but we should be less proud of how we we've failed to use this advantage.

If China remains communist, and I hope it does, it will eventually collapse. If it democratizes in the future, it will take a lead that no one else can ever overcome as a Japan times 10 or a Hong Kong times 100.

But my bet is that it will remain communist and eventually crumble under its own weight and contradiction -- at which point, it will be rebuilt by the US in its own image and Panda will remain as an American lapdog like South Korea or Japan forever more.

Great post Chola. You should contribute more often.

[amit]

Having a look at the thread after a short break. I find it telling that our Chinese guests have been reduced to proving Taiwan to be a part of the Mainland and denying that there exists a place called Arunachal Pradesh and that the people there prefer that name to Southern Tibet!

Jai Hu, Jai Mao!

[Sri]

I just checked global map, there is no place called Arunachal Pradesh, so it seems you were worried for nothing.
I do have plan for visiting India, and hope to be surprised.

Hope your firewall lets the links through.

http://arunachalpradesh.nic.in/

http://en.wikipedia.org/wiki/Arunachal_Pradesh

the region was mentioned in the Hindu texts Kalika Purana and Mahabharata, and is attested to be the Prabhu Mountains of the Puranas, and was where sage Parashuram washed away sins, the sage Vyasa meditated, King Bhishmaka founded his kingdom and Lord Krishna married his consort Rukmini.

http://www.collinsmaps.com/maps/India/A ... 32.00.aspx

[Suraj]

Forget Taiwan, PRC does not even have jurisdiction over Kinmen and Matsu Islands. Look at the maps to see where they are. They're not adjacent Taiwan; Kinmen is 2km from the mainland coast, off Xiamen. As an analogy, this would be like the Lankans controlling Rameswaram Island (which is about 2.5km, connected by Pamban Bridge) and keeping us out.

Let's have some perspective here - if my hypothetical Rameswaram example had been the case there's have been a 500-part thread going on with posters whining about impotent PMs and political establishment on our part. Here we have PRC - gleat powel with P5 membership, allied winner, SSBNs, SSNs, spacewalks etc but no control over an island so close. Yes they're a rising power, but are beset with absurd issues like this.

One needs to separate the bluster from the reality in the PRC-Taiwan crisis. Not only is Taiwan a thriving independent country but they hold territory right in front of PRC, and are backed by the US:

The PRC extensively shelled the (Kinmen) island during the First and Second Taiwan Strait Crises, which was a major issue in the 1960 United States Presidential Election between Kennedy and Nixon. In the 1950s, the United States threatened to use nuclear weapons against the PRC if it attacked the island.

Could things change in future. Sure. But the present is what it is.

Folks, please stop wasting time trying to prove Arunachal Pradesh's existence.

[Theo_Fidel]

Guys! look away if squeamish. Behold the Supel Powel.

[Raja Bose]

Raja Bose.
I saw maps which show Taiwan as part of PRC and other maps which show mainland China is part of ROC. Of cource , none of which has a place named Arunachal Pradesh.

You mean both the maps you consulted were incorrect maps or you looked at maps which only show countries and not the states of each country.

Actually the bolded part of this statement of yours gives me a very nice insight into your thinking. You thought that since I am supposedly anti-China hence I would automatically consider the maps which show mainland China as part of ROC as being correct. That kind of polarized blinkered thinking only happens in totalitarian societies where it is more important to toe the party line rather than follow the truth.

[sha]

Raja Bose.
I saw maps which show Taiwan as part of PRC and other maps which show mainland China is part of ROC. Of cource , none of which has a place named Arunachal Pradesh.

You mean both the maps you consulted were incorrect maps or you looked at maps which only show countries and not the states of each country.

Actually the bolded part of this statement of yours gives me a very nice insight into your thinking. You thought that since I am supposedly anti-China hence I would automatically consider the maps which show mainland China as part of ROC as being correct. That kind of polarized blinkered thinking only happens in totalitarian societies where it is more important to toe the party line rather than follow the truth.

That's not my way of thinking. Judging from the context, obviously I suppose the two kinds of maps are all correct.
It seems I can infer from your statement that you think the later kind of maps I saw is correct. In this case I think we can reach an agreement on it.

Base on my clarification and following your logic, obviouly this kind of polarized blinkered thinking is nothing but your way of thinking. I can't help wonderding why this happened in a democratic society. Maybe you're an Indian but lives in some totalitarian country. ?Then I get even more confused. Why do you prefer a totalitarian country over democratic India? Make no sense.

[shyam]

That's not my way of thinking. Judging from the context, obviously I suppose the two kinds of maps are all correct.

In fact both maps are wrong. They are correct only from propaganda point of view. The reality is that they are two independent countries with no control over the other one.

Please learn to distinguish propaganda from reality.

[Raja Bose]

It seems I can infer from your statement that you think the later kind of maps I saw is correct. In this case I think we can reach an agreement on it.

Actually from my statement you can clearly infer that both the maps are wrong because neither is PRC a part of ROC nor is ROC a part of PRC. But you are so eager to show that the later kind of maps would be considered 'correct' by me (since its anti-PRC and allegedly I am anti-PRC) that you didn't even read my post and just blindly assumed that I considered them correct. Guess what biladel? - in a democratic society we are taught to follow facts and the truth regardless of whether they adhere to our biases or not,....not some 'party approved' wonderfool version which may not have any link to reality. Speaking of blinkered blind obedience without thinking - my dear biladel you just yourself proved through your previous post that you have it and why you have it (all the reasons I gave above).

[paramu]

What happened to the drones? Did they suddenly gain wisdom or what?

[Theo_Fidel]

I always think they put in for their 50 cent payment vouchers and don't get paid for poor performance. No re-educated Indians for instance. Once they get paid they are back in force like a pack.

[Raja Bose]

hmm....the drones seem to have emigrated. I guess they didn't like the le-education here.

[abhischekcc]

Perhaps they want to do some re-education on Bo Derek Xilai.

[paramu]

Drones.... Where are you? We miss you. Earlier pakis used to provide us the entertainment in this forum but they stopped after some time. Recently you guys took over that role and I was relieved that somebody decided to make this forum entertaining. Now, I really miss you. Please come back......

[Murugan]

More Chini developers filing for bankruptcy

http://www.sify.com/finance/more-chines ... iaegc.html

[wong]

Gakakkad, I suggest you to pay a trip to China to see if anyone stopping you from filming the poor village. Every year there are far more tourists go to China than India. You heard anyone complaining (not counting the spies)?

Whatever the judiciary,democracy you have, has it stopped the rampant corruption and inept government? The democracy you have, it is as real as the communism we have in China currently.

The Chinese people should be proud of the fact that it is doing as well as it has despite being a communist dunghole. But it should be less proud that it is communist. Because without a shadow of a doubt, all communist states were failed ones from the USSR to Romania to North Korea.

Without communism, you chinis should be at where Taiwan, Japan and South Korea is today. But you are not, you are many many times poorer per capita.

Conversely, India should be more confident of the fact that the wealthiest nations on earth are democracies. Instead, while we speak of democracy as being great for freedoms of speech, association and other higher aspirations onlee, we refuse to acknowledge that it is also the most powerful creator of material wealth on earth.

As a democracy India should be already be where Taiwan, Japan and South Korea is today. We are rightly proud of democracy but we should be less proud of how we we've failed to use this advantage.

If China remains communist, and I hope it does, it will eventually collapse. If it democratizes in the future, it will take a lead that no one else can ever overcome as a Japan times 10 or a Hong Kong times 100.

But my bet is that it will remain communist and eventually crumble under its own weight and contradiction -- at which point, it will be rebuilt by the US in its own image and Panda will remain as an American lapdog like South Korea or Japan forever more.

The main fallacy with what you wrote and I've addressed it here before is that Taiwan, Japan and South Korea were all under some form of martial law or military government during the difficult stage of their development. Democracy didn't cure illiteracy, extreme poverty, low life expectancy and zero infrastructure in those 3 countries to create a lasting industrial base.

As for where are the 'drones', some of us take a 1-2 week holiday to Orlando with our children during Easter break and have better things to do than visit BR while on holiday.

[vina]

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

Okay. So even if we take your argument at face value on th need for authoritarianism, going by the same statistics that you seem so proud of and post regularly, China has gone way past the stage of "illiteracy, extreme poverty, low life expectancy and zero infrastructure", as is obvious to everyone.

When that is the case, why isn't anyone in China talking about a transition to multi party democracy with freedoms and rights for all ? .

As far as I know, the last time the Chinese asked for that in 1989, tanks were sent in at Tiananmen Square to gun them down and crush them!

[Christopher Sidor]

^^^^
What is the point of having high literacy, an absence of poverty (which china still has not achieved), high life expectancy and higher than zero infrastructure (despite the fact that chinese infrastructure is just for show, recall the high speed train crash) if one is still living in a prison?

And if you have better things to do than visit BR, then why visit us at all? It is because we, as in Indians, are the only ones who are not convinced or impressed by what PRC has done till date?

[Theo_Fidel]

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....

[Ameet]

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

The diplomats here regard it as a diplomatic success considering that Beijing was found dithering ever since New Delhi formally sought an opening for India's top rice in 2006.

In India, the annual production now stands at around 4.5 million tonnes. It fetches about USD 1,100 per tonne in the global market.

........Further some traders pointed out to the case of Indian mangoes for which China has granted export permission in 2003, not a single mango was shipped.

[ArmenT]

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

Allowing rice imports is just one part of the equation. Whether the average Chinese consumer will buy basmati rice or not remains to be seen. For one thing, Chinese consumers like their rice to be stickier and short grain types. They're also not used to eating aromatic rice types in general.

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.

[vina]

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.

Basmati is a gourmet rice and not meant for daily consumption and certainly not for the Chinese and other East Asians accustomed to sticky rice.

It will be sold on the same lines as in Europe & USA as a gourmet rice meant for special dishes and occasions (like Pulav, Biriyani etc.. the Uighurs will love it absolutely, and the wider Han population too I think) and more importantly it is a long term, market penetration thing . As awareness increases and tastes sink it, it will take off.

Somewhat similar to Pizzas selling in India and of course all the imported Pasta from Italy selling in India. People will be more than happy to try new stuff. The problem was Panda put up these non trade barriers (was it to help Pakis export basmati ?) on rice and specifically for the reasons you quoted , it was easy to lift them as well, when India brought it up.

[Raja Bose]

Drones are back! Balle Balle

[Singha]

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.

[Gus]

Chinese do have a veggie cuisine that's nothing to be sneezed at. Couple of experiences stand out. In SF Chinatown, we walked into a place (don't remember name, unfortunately) after a last day at some company training. The chef made sure that the veggies in the group will not rue going to Chinese. He made about 10 dishes veggie (starting with soup, rolls..) and in the middle of the course, people shifted to veg because it was so good.

There's another one, bamboo garden (or something similar) in Seattle - where they made everything on tofu, but the taste and texture is brought as close to meat as possible. Their menu has this story that a Chinese emperor was ordered not to eat meat (for some reason, don't remember) and the chef designed this cuisine so the emperor won't miss eating meat. I was skeptical at first, but it truly was delicious.

[krishnan]

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.

Same here...NV usually mutton or chicken biryani is the fav food...some cant even live without NV for a day...there is this biryani shop near our office...the get sold out within 1 hr

[Dileep]

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.

Sometime in the 60s, during the period of rice scarcity in SRK, the govt tried to promote a chinese rice cultivar named Tainan (sic? I know only the mallu rendering തൈനാൻ) which was supposed to be high yielding. It was sooo sticky, that people threw it out after one crop.

[anishns]

LOL

So, much for 1 China

Hong Kong 'to limit' mainland China maternity services

[wrdos]

http://www.bricsindia.in/publication.html
An excellent data source for the comparison among the 5 BRICS countries.

[Hari Seldon]

More masala from AEP. TIFWIW.

China’s property boom has peaked, forever

Well, AEP has been a China-bear and the fact that PRC hasn't collapsed into recession yet goes against his record, I guess.

Anyway, some ge(r)ms:

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).

Yada yada. Sound familiar?

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.

More yada yada. I recall such dire prophecies made in 2007 as well.

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.

Yawn.

"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."

[ashi]

Where we stand, where we may stand

World's largest economies

[ashi]

China's growing middle class

[Austin]

Russia, China to trade in national currencies

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.

[pankajs]

China Hard Landing Scenario `Worrying' Investor - WaPo

[pankajs]

China: is it a big bubble about to burst? - Al-G

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.

Both sides of the story. Will have to watch out for signals.