PRC Economy - New Reflections : Dec 15 2011

All threads that are locked or marked for deletion will be moved to this forum. The topics will be cleared from this archive on the 1st and 16th of each month.
Suraj
Forum Moderator
Posts: 14353
Joined: 20 Jan 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 08 Feb 2013 10:41

JE Menon wrote:Suraj, seriously? Yin Du? What does it mean? In the past we used to be "Noble Land"... May have something to do with a direct translation of Arya Varta in sanskrit, but what does Yin Du mean? Hindu?

Yep. Yin Du = land of SDREs cowering in dark narrow places and worshipping idols :)

We used to be called TianZhu, which means heaven center / spiritual center, reflecting where they got their Buddhist traditions from. I really like that name, both for how it sounds and what it means. Presumably the name gave them a complex because it made 'Middle Kingdom' seem less imposing in comparison :twisted:

member_20292
BRF Oldie
Posts: 2059
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : Dec 15 2011

Postby member_20292 » 08 Feb 2013 14:10

^^^ the chinese love their money.

It was STARKLY demonstrated to me, when I heard the name of a female Chinese friend and its translation for the first time.

Mei Yuan.


"American Dollar"

:D

Don
BRFite
Posts: 412
Joined: 09 Dec 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Don » 10 Feb 2013 16:35

http://www.bloomberg.com/news/2013-02-0 ... ation.html

China Passes U.S. to Become World’s Biggest Trading Nation
By Bloomberg News - Feb 9, 2013 3:36 PM ET

China surpassed the U.S. to become the world’s biggest trading nation last year as measured by the sum of exports and imports, a milestone in the Asian nation’s challenge to the U.S. dominance in global commerce that emerged after the end of World War II in 1945.

U.S. exports and imports last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s total trade in 2012 amounted to $3.87 trillion. China had a $231.1 billion annual trade surplus while the U.S. had a trade deficit of $727.9 billion.

China’s emergence as the biggest global trading nation gives it increasing influence, threatening to disrupt regional trading blocs as it becomes the most important commercial partner for countries including Germany, which will export twice as much to China by the end of the decade as it does to neighboring France, said Goldman Sachs Group Inc.’s Jim O’Neill.

“For so many countries around the world, China is becoming rapidly the most important bilateral trade partner,” O’Neill, chairman of Goldman Sachs’s asset management division and the economist who bound Brazil to Russia, India and China to form the BRIC investing strategy, said in a telephone interview. “At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”

U.S. Leadership

Still, the U.S. economy is more than double the size of China’s, according to the World Bank. In 2011, the U.S. gross domestic product reached $15 trillion while China’s totaled $7.3 trillion.

“It is remarkable that an economy that is only a fraction of the size of the U.S. economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mail. “The surpassing of the U.S. is not because of a substantially undervalued currency that has led to an export boom,” said Lardy, noting that Chinese imports have grown more rapidly than exports since 2007.

The U.S. emerged as the preeminent trading power following World War II as it spearheaded the creation of the global trade and financial architecture and the U.K. began dismantling its colonial empire. China began focusing on trade and foreign investment to boost its economy after decades of isolation under Chairman Mao Zedong. Economic growth averaged 9.9 percent a year from 1978 through 2012.

Biggest Exporter

China became the world’s biggest exporter in 2009, while the U.S. remains the biggest importer, taking in $2.28 trillion in goods last year compared with China’s $1.82 trillion of imports. HSBC Holdings Plc forecast last year that China would overtake the U.S. as the top trading nation by 2016.

China was last considered the leading economy during the height of the Qing dynasty. The difference is that in the 18th century, the Qing Empire -- unlike rising Britain -- didn’t focus on trade. The Emperor Qianlong told King George III in a 1793 letter that “we possess all things. I set no value on objects strange or ingenious, and I have no use for your country’s manufactures.”

While China is the biggest energy user, has the world’s biggest car market and the world’s largest foreign currency reserves, a significant portion of China’s trade involves importing raw materials and parts to be assembled into finished products and re-exported, an activity that provides “only modest value added,” Eswar Prasad, a former International Monetary Fund official who is now a professor at Cornell University in Ithaca, New York, said in an e-mail.

More Involved

Last month China’s trade expanded more than estimated, with exports rising 25 percent from a year earlier and imports increasing 28.8 percent, government data released yesterday showed. China’s trade figures in January and February are distorted by the week-long Lunar New Year holiday that fell in January of last year and started yesterday.

Economists from banks including UBS AG and Australia & New Zealand Banking Group Ltd. recently questioned the veracity of China’s export data after the customs administration reported an unexpected 14.1 percent export gain in December. The General Administration of Customs defended the data last month, saying all statistics are based on actual customs declarations, and the Ministry of Commerce said the jump was caused by exporters who hurried shipments before a waiver of inspection fees expired at the end of the month.

Trade Deficit

The U.S.’s bilateral trade deficit with China, which peaked in 2012, could remain a flashpoint of tension between the two countries, Prasad said.

“This trade imbalance is not representative of the amount of goods actually produced in China and exported to the U.S., but this perspective tends to get lost amidst the heated political rhetoric in the U.S,” said Prasad.

According to O’Neill, the trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create.

“One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,” O’Neill said, mentioning China’s inclusion in the International Monetary Fund’s Special Drawing Rights currency basket. “To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.”

jamwal
BR Mainsite Crew
Posts: 5376
Joined: 19 Feb 2008 21:28
Location: Somewhere Else
Contact:

Re: PRC Economy - New Reflections : Dec 15 2011

Postby jamwal » 11 Feb 2013 14:38

“To get the gold, they will have to kill every one of us”
The most-storied warrior tribe in Ecuador prepares to fight as the government sells gold-laden land to China


Three years after “Avatar’s” Quito premiere, declarations of martial readiness are multiplying and gaining volume throughout the tribal territories of Ecuador’s mountainous southeast. The warnings bare sharpest teeth in the Shuar country of the Cordillera del Condor, the rain forest mountain range targeted by President Rafael Correa for the introduction of mega-mining.

In recent years, the quickening arrival of drills and trenchers from China and Canada has provoked a militant resistance that unites the local indigenous and campesino populations. The stakes declared and the violence endured by this battle-scarred coalition is little-known even in Ecuador, where Correa has made muscular use of state security forces in arresting activists and intimidating journalists who threaten his image as an ecologically minded man-of-the-people. This repression has only intensified in the run-up to Correa’s expected reelection on Feb. 17.


My guide to this simmering “Avatar” in the Amazon was a 57-year-old Shuar chief named Domingo Ankuash. Like many elder Shuar, Ankuash does not appear to be blustering when he says he will die defending his ancestral lands in the province of Morona-Santiago, which borders Peru. Early in my month traveling the Condor, he took me deep into the country for which he is prepared to lay down his life. After a steep two hours’ hike from his village, we arrived at a forest clearing of densely packed earth. Through the trees and hanging vines, a 40-foot waterfall replenished a deep rock-strewn lagoon. The cascade is one of thousands in the Condor cordillera, a rolling buffer between the cliffs of the eastern Andes and the continental flatness of the Amazon basin.

“We have been coming to these sacred cascades since before the time of Christ,” said Ankuash, preparing a palm-leaf spread of melon and mango. “The government has given away land that is not theirs to give, and we have a duty to protect it. Where there is industrial mining, the rivers die and we lose our way of life. They want us to give up our traditions, work in the mines, and let them pollute our land. But we will give our lives to defend the land, because the end is the same for us either way.”

Beside the bright melons, Ankuash unfolds a frail map of the Condor to come. The industrial future overlays the natural present in a dense geometric circuitry that blots out the region’s rivers and mountains with a patchwork of oddly patterned boxes, as if some madcap Aguirre had gerrymandered the jungle. Rafael Correa’s PAIS Alliance was elected in 2007 with heavy indigenous support, but the map’s vision is the president’s own. His economic development plan, enshrined in a series of controversial laws and strategic declarations, centers on prying Ecuador’s southern rain forests of their rich placer deposits of base and precious metals, which fleck the Condor’s soils and loams like the stars of the universe. Ecuador, Correa has declared, can no longer be “a beggar sitting atop a sack of gold.”

Image
To help him grab these shiny metals, Correa has invited foreign mining firms to deforest and drill much of the country’s remaining pristine forests. Not far from where Ankuash and I are sitting, a Chinese joint venture led by the China Railway Corp. is building infrastructure for an open-sky copper mine with the “Lord of the Rings”-sounding name of Mirador. To the north and east of the Chinese concession, the Canadian gold giant Kinross is prepping its 39 lots, including the envy of the industry, Fruta del Norte, believed to be Latin America’s largest deposit of high-grade gold. These projects are merely the first wave; others wait in the wings. Together they threaten more than the Shuar way of life and the sustainable agricultural and tourist economies of Ecuador’s southern provinces. The Condor is a hot spot of singular ecological wealth and a major source of water for the wider Amazon watershed to the east. What happens there is of global consequence.
But there’s no international outcry on the horizon to concern Rafael Correa and his commercial partners abroad. What they face is a local security problem. It is the same security problem known to regional colonial powers dating back to the Inca. As Correa has always known, and as the Chinese are learning, the Condor is ancestral home to 8,000 Shuar, the most storied warrior tribe in the annals of colonialism in the New World.

“The strategy is to unite the Shuar like the fingers of a fist,” Ankuash tells me as I prepare to dive into the icy waters of the lagoon below. “The forest has always given us everything we need, and we are planning to defend it, as our ancestors would, with the strength of the spear. To get the gold, they will have to kill every one of us first.”

cdbatra
BRFite -Trainee
Posts: 82
Joined: 17 Sep 2008 13:59

Re: PRC Economy - New Reflections : Dec 15 2011

Postby cdbatra » 13 Feb 2013 05:23

http://www.plasticsnews.com/article/201 ... ward-trend

Declining Plastic export sales is another indicator that real economy (Read Private) is still languishing. Current round of pump priming probably benefits sectors like steel and construction which are mainly related to state patronage.

Don
BRFite
Posts: 412
Joined: 09 Dec 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Don » 14 Feb 2013 13:06

Nexen has 5.6 billion barrel of crude oil in its Holding.

http://www.reuters.com/article/2013/02/ ... SU20130212

CNOOC-Nexen deal wins U.S. approval, its last hurdle

By Roberta Rampton and Scott Haggett

WASHINGTON/CALGARY | Tue Feb 12, 2013 5:30pm EST

WASHINGTON/CALGARY (Reuters) - U.S. regulators have approved the $15.1 billion takeover of Canadian oil and gas company Nexen Inc by China's state-owned CNOOC Ltd, removing the final obstacle to the Asian country's largest-ever foreign takeover.


OIL SANDS RESERVES

The Nexen acquisition gives CNOOC new offshore production in the North Sea, the Gulf of Mexico and off western Africa, as well as producing properties in the Middle East and Canada.

In Canada, CNOOC gains control of Nexen's Long Lake oil sands project in the oil-rich province of Alberta, as well as billions of barrels of reserves in the world's third-largest crude storehouse.


But the federal government also insisted that CNOOC-Nexen was the last deal of its kind that it would approve, drawing a line in the sand against state-controlled companies taking majority stakes in Alberta's strategic oil sands.
Last edited by Don on 14 Feb 2013 16:20, edited 2 times in total.

Don
BRFite
Posts: 412
Joined: 09 Dec 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Don » 14 Feb 2013 13:49

http://economictimes.indiatimes.com/new ... 491892.cms

14 Feb, 2013, 05.00AM IST, Reuters

Rosneft eyes $30 billion loan from China in exchange of oil

LONDON/MOSCOW: Rosneft is seeking to borrow up to $30 billion from China in exchange for possibly doubling oil supplies, making Beijing the largest consumer of Russian oil and further diverting supplies away from Europe.

Four industry sources familiar with the situation told Reuters Rosneft was in talks with China's state firm CNPC about the borrowing, which would echo a $25 billion deal the two companies clinched last decade.


Russia's leading oil company, controlled by the Kremlin, is considering ultimately doubling supplies to China, sources said.

"It can be a combination of delivery options. The strategic line is to increase supplies to China," one source familiar with the situation said.

"The reason why China is willing to lend is simple. They sit on over 3 trillion of dollars in reserves and are looking to diversify their investments," he added referring to China'sforex reserves of $3.3 trillion.

Rony
BRF Oldie
Posts: 3348
Joined: 14 Jul 2006 23:29

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Rony » 17 Feb 2013 08:50

Interesting debate and good pros and cons from both sides.


subhamoy.das
BRFite
Posts: 1027
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 17 Feb 2013 23:21

There is no debate. Service driven INDIA will surely outperform factory driven CHINA unless they are able to increase their service share of GDP from 38% to 70% in next decade which looks daunting since their service portion is stuck at 38% for last 10 years or so. And another factor is that they must increase local consumption section of GDP to much higher levels where again INDIA is far ahead even though its share of local consumption in GDP has been falling. CHINA is also aging fast. The bottom line is who will be able to create mass well paying jobs which will driven local consumption and hence the economy. I would say that INDIA is in a much better position in that regards as well. Democracy is another factor. India is also uniquely positioned to harness the diversity of its people. India is like EU. With this diversity INDIA will be able to leap frog in multiple areas where as CHINA being more homogeneous will be able to do only a few things right.

VKumar
BRFite
Posts: 603
Joined: 15 Sep 1999 11:31
Location: Mumbai,India

Re: PRC Economy - New Reflections : Dec 15 2011

Postby VKumar » 17 Feb 2013 23:31

India has great potential but whether we will realize it? Enemies of MOTHER INDIA include politicians/corrupt (almost all) government servants/big industrialists/gangsters.

I suppose every country has these elements but in case of India I worry because this set has almost all the power, money and reach required to influence events and make sure that their reign will be perpetuated.

I wonder how this will play out?

Hari Seldon
BRF Oldie
Posts: 9288
Joined: 27 Jul 2009 12:47
Location: University of Trantor

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Hari Seldon » 18 Feb 2013 05:03

PRC only needs to sabotage Yindia's growth to stop us *ever* catching up with them. And the lawd knows there're enough beijing bhakts in India - CPM, chindu etc - to do their bidding for free.

amit
BRF Oldie
Posts: 4325
Joined: 30 Aug 2007 18:28
Location: The Restaurant at the End of the Universe

Re: PRC Economy - New Reflections : Dec 15 2011

Postby amit » 18 Feb 2013 13:32

Don wrote:http://www.bloomberg.com/news/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.html

China Passes U.S. to Become World’s Biggest Trading Nation


Aha,

I see our Drone bhais are given too much of free pass nowadays, what with folks too busy talking about India (and its many negatives - doom and gloom) in the China thread. :-)

In this case here's the real story behind China passing US to become world's biggest and greatest.

Claims China is world's No 1 trading economy are nonsense


The most obvious way they are wrong is because China's import and export numbers are heavily distorted by domestic companies fiddling their taxes.

Under mainland regulations, exporters of electronic gadgets and other widgetry can claim a value-added tax rebate worth 17 per cent of the goods' value.

What's more, under the Closer Economic Partnership Arrangement, no tariffs are charged on goods imported into the mainland from Hong Kong, provided the importer claims a relatively small component of value was added in the city.

As a result, mainland companies ship huge quantities of goods to Hong Kong, where their value is marked up by around 20 per cent before they are re-imported back into the mainland.

With this dodge, the scammers not only get their tax rebate when they export. By over-invoicing the re-imports, they get to circumvent the mainland's capital controls and ship money offshore, either to invest in international markets (or Hong Kong's properties) or to round-trip back into the mainland as foreign direct investment, which qualifies them for yet more tax breaks.


Figures from the Hong Kong government show the city was responsible for re-exporting some US$116 billion worth of stuff from the mainland back to the mainland last year, a 13 per cent increase over the year before (see the first chart).

If we assume the mainland importers claimed that 17 per cent of the value of their purchases was added in Hong Kong, which is in line with the Trade Development Council's figures, then we can estimate that the value of the mainland's total goods trade - both exports and imports - last year was exaggerated by some US$212 billion.

As a result, it looks very much as if China still lags some US$160 billion behind the US in terms of its international trade in goods, with just US$3.66 trillion of combined imports and exports in 2012, compared with America's US$3.82 trillion.


Infamously, one 2011 study estimated that China's share of the value added in a made-in-Shenzhen iPad with a US retail price of US$499 was just US$8.{We had this discussion before...}

Overall, according to the trade in value added database compiled by the Organisation for Economic Co-operation and Development, the foreign value-added share of China's exports amounted to 26 per cent of their face value in 2009. For US exports, the proportion was 11 per cent.

That makes a huge difference to the raw trade numbers. In 2009, the foreign value-added content of China's exports was worth almost US$400 billion, compared with US$160 billion for US exports (see the second chart).


Image

pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 19 Feb 2013 15:32

China’s booming fake muni bonds
Despite racking up huge debts, China’s local governments aren’t allowed to issue bonds to help pay them off. Although there is a small trial programme underway, the market is still effectively closed.

However, the ban doesn’t stretch to local government finance vehicles – LGFVs for short – which are technically corporations, even though they do the work of a government body. Bonds issued by LGFVs – called chengtou bonds – have been booming.
While such bonds helped local governments avoid serious problems during the growth and credit slowdown of last year, ANZ’s Liu Ligang and Louis Lam believe that they could be building fresh problems for the future.
In our view, the rise of chengtou bonds was largely because local governments were unable to issue bonds on their own. Such bonds are issued as corporate bonds and they have become off-balance sheet liabilities of the local governments. In times of fiscal stress, these bonds have a greater risk of default and the local governments could simply allow them to fail, passing the loss to investors. Therefore, such pseudo-municipal bonds could be riskier and will have far-reaching negative implications for China’s capital market developments.

pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 19 Feb 2013 15:39

China media: Housing law anger
Media outlets criticise controversial measures taken by authorities in several cities to protect the privacy of homeowners amid concerns that the new rules could shield the ill-gotten assets of corrupt officials.
"Rather than protecting privacy, many outraged netizens suspect the new regulations will merely help to hide illegal wealth amassed by corrupt officials," Hong Kong's South China Morning Post reports.

China has been hit by a series of housing scandals involving officials and bankers using multiple identities to amass property.

Zhou Weisi, a Shenzhen official nicknamed "House Uncle", was arrested earlier this month for alleged bribery and amassing 2bn yuan in assets, including villas and luxury cars, Beijing Times reports.

Last month, Gong Aiai, a former bank executive known as "House Sister", was charged with allegedly using multiple identities to buy 41 properties in Beijing.
Beijing Institute of Technology Professor Hu Xingdou tells Hong Kong's Oriental Daily News that "interest groups" are doing everything possible to cover up corruption and stop authorities "beating tigers" or going after high-ranking officials.

Prof Hu calls the move a "step backwards" and "open resistance against the central government's anti-corruption initiatives".
Other nuggets

Mukesh.Kumar
BRFite
Posts: 1191
Joined: 06 Dec 2009 14:09

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Mukesh.Kumar » 22 Feb 2013 22:45

Unbridled growth without heed to environment catching up with PRC?

X-posting from "The China China does not want to be known":
Mukesh.Kumar wrote:Yet more confirmation of the effects of reckless industrialization without thoughts of environmental impact

Till now though French, American, British, Aussie and Singapore media have carried the article, nothing on Russian media (Novosti) or al Jazeera. Just trying to map how bad news on a country is spread in the current scenario.

An interesting infographic comes from a Chinese discussion board.

And probably the first mention is from a [url-http://english.caijing.com.cn/2013-02-21/112520130.html]Chinese [/url]news source two days ago.

P.S. Noob questions to the guru's. Is there a way to track how news gets disseminated. Doing a Google search and noting timestamps, but it's a very awkward way. How can I do this better?

subhamoy.das
BRFite
Posts: 1027
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 23 Feb 2013 18:09

China is a large, rapidly emerging, densely populated country. It is inevitable that the country would compare more favorably with the United States, a large, advanced, lightly populated country growing at a relatively modest pace. Rather than using total manufacturing value-added, a more relevant analysis of very different economies involves normalizing the comparisons based on the size of the respective populations. In other words, divide total manufacturing value-added by the size of the population to get a per capita figure.

Per capita manufacturing value-added is a better way to show the manufacturing intensity of a country. As seen in Figure 1, there is a dramatic reordering when the per capita measurement is used. The most manufacturing-intensive countries (among the 15 largest manufacturing countries in the world) are Japan ($8,566 per capita) and Germany ($7,463). The United States ($5,980) is third and South Korea ($5,799) is fourth.


China ($1,459) has a much lower stature in world manufacturing when using a per capita comparison, ranking 12th. With its 1.318 billion people, China had more than four times the population of the United States (310 million) in 2010 but only a slightly larger manufacturing value-added. Brazil ($1,445) is only somewhat less manufacturing intensive than China and ranks 13th. India, the second largest country in the world in terms of population (1.225 billion people in 2010) is the 10th largest manufacturing economy but has a manufacturing intensity of a very low $185 per person.

There is a tendency to take too narrow of a view when calculating whether China has the largest manufacturing economy in the world. China's currency appreciation gave it a boost in surpassing the United States in the 2000s; however, when manufacturing value-added is normalized into a per capita metric, the nation's rank among global manufacturers falls to 12th.

http://www.mapi.net/china-largest-manufacturer-world

So with such a low manufacturing intensity it is already harming its eco system so badly. I wonder what would be the cost if the intensity reaches, if at all it will, the levels of the rich nations. I am sure that the CHINESE will soon find out the manufacturing driven model of growing rich does not apply to countries of 1b+ population. But i guess, they had no other option to try either. Thank god that INDIA was fortunate to have an alternate route to wealth. While CHINESE gdp per capita is about 2.5X ours their manufacturing intensity is about 8X ours clearly showing that we are creating wealth via non-manufacturing route. No points for guessing which route....

subhamoy.das
BRFite
Posts: 1027
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 23 Feb 2013 18:56

http://economictimes.indiatimes.com/sli ... 609688.cms

China aims to spend $850 bn to improve filthy water supplies -> a by product of mad manufacturing to get rich quick....

pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 24 Feb 2013 19:03

Why A China Crash May Be Imminent
Those silly enough to believe that China‘s economy has “recovered” should at least been given some pause by this week’s events. For China surprised the market with moves to reduce liquidity in the banking system and curb the property market. Clearly, the government is worried about the re-appearance of bubbles due to excessive credit growth. And they should be worried because it’s obvious that the bubbles which caused China’s slowdown never went away. In fact, they’ve gotten worse from government stimulus designed to prevent a hard economic landing. These government actions have made the chances of an imminent China crash more likely.
It’s obvious that the government is concerned with three things:

[*] Local governments are again turning to fixed asset investment, particularly property sales, to boost their revenue and GDP. The problem is that local governments own the land so they’re incentivised to sell that land to get revenues. These governments are already heavily in debt and this is exacerbating the issue.
[*] Property sales have led to increased bank lending, as January figures attest too. This is not what the government wants given total credit to GDP is already high, at 190% according to Fitch.
[*] More broadly, the property bubble has never really deflated. As economist Andy Xie points out, NBS data shows 10.6 billion square metres of property was under construction at the end of last year, half in residential and the other half in office/commercial. If you put market prices on this inventory, it equates to 1.5x Chinese GDP. Quite the bubble.
But I’d suggest that economists who take this data at face value are either extraordinarily lazy, ignorant of basic economics or both. Here are three initial quibbles:

[*] Anyone taking GDP growth as a sign of economic health needs to be seriously questioned. GDP growth in developed world economies before the 2008 crisis was supposedly showing healthy economies when they were anything but.
[*] Anyone taking GDP growth in China as a sign of economic health needs more serious help. The GDP figures can’t get more rubbery, as highlighted by recent reports suggesting the real GDP growth for China was closer to 5.5% in 2012, rather than the 7.8% recorded.
[*] I was one of the first to question the export data out of China late last year and the latest data makes me more sceptical. Exports from China to its largest partner, Europe, are sharply recovering, really? Given the deterioration in European economies, it’s more than a little hard to believe.
As the economic downturn gathered steam in the second quarter of last year, the government turned to the easiest way it knew how to boost economic activity: fixed asset investment funded by debt. The central government officially unveiled a Rmb1 trillion (US$160 billion) infrastructure package in September last year. Unofficially, local governments launched a similar package totalling up to Rmb13 trillion (US$2.1 trillion).
The unique thing this time around is that the debt financing is being done less via traditional banks but non-banks. In 2012, total credit financing grew 20%, with trust loans up 80%, FX loans up 27% and bond financing increasing 45%.
Credit Suisse estimates that the so-called shadow banking system now totals Rmb22.8 trillion or 44% of GDP, making it the second largest asset class in China!

All of this means that an economy that was unbalanced and fragile before 2012, has become more so thanks to the governments actions. The options to maintain the investment-led, credit boom are narrowing, and fast. As hedge fund titan Jim Chanos said of China: “They’re on a treadmill to hell”. Meaning, they either try to keep the bubbles going to maintain economic growth or they don’t and risk an immediate economic crash.
Now, the same economists who proclaim a Chinese economic recovery will also suggest that a hard landing isn’t possible because China has the money to throw at any problems. They’ll point to considerable savings, at 53% of GDP, and US$3.3 trillion in foreign exchange reserves.

There are several large holes in this argument. China’s foreign exchange (forex)reserves cannot be swiftly used to help prevent an economic crisis. The majority of these reserves are tied up in U.S. government bonds. If China decided to sell just 10% of these bonds to throw at its own economy, it would have severe consequences. U.S. interest rates would spike, the U.S. economy would tank, closely followed by economies around the world. China’s export-reliant economy would also be impacted. In other words, the forex reserves argument is largely an illusion.

That’s not too mention that China’s forex reserves have crawled to a stand-still: they’re not growing anymore. If these reserves start to decline, it would mean China would need to start selling renminbi to maintain its currency peg. This would be deflationary.

The savings argument has some more merit. But anyone that has money in China and can get it out, is doing just that at present. The Chinese have few good options as deposit rates are negligible, they don’t trust the stock market given its woeful performance since 2007 and property has become a less reliable investment too.

The other question that needs to be asked is: firepower for what? How can the money be productively used to both prevent a crash and re-orientate the economy to a more sustainable path. The likely answer is that it can’t be: the bubbles have gone on for too long and are too large.

The best solution for China is to reduce its reliance on investment and promote the services sector. Doing this quickly though would mean plummeting economic growth. Doing it slowly would the bubbles of today could get larger and more problematic.

Don
BRFite
Posts: 412
Joined: 09 Dec 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Don » 25 Feb 2013 20:12

http://www.forbes.com/sites/kenrapoza/2 ... ry-status/


2/23/2013 @ 6:01PM |10,905 views

China, On The Road To High Income Country Status

China is expected to join the club of high income nations like Japan within the next 15 years. But to get there successfully, a number of things have to happen first with the government and the economy it manages.

China is currently turning itself inside out. It’s an arduous process of switching from an export driven economy of low wages, to a middle class society driven by local consumer spending power. That shift is still in its early stages. But as it unfolds, China has already become a middle income nation, according to World Bank standards. This is most evident along the highly populated eastern seaboard cities, from Guangzhou to Beijing, where incomes are well over the $12,000 a year needed to be classified by the World Bank as middle income. In those cities, incomes are well over $25,000.


Currently, China’s GDP per capita is $6,000. The World Bank’s criterion for high income is per capita above $12,000. China needs to double its real per capita income to get there.

“We think this could happen before 2020 if we assume growth potential at 7% to 8% and modest currency appreciation of, say, 3% a year,” says Yiping.

By then, the Chinese economy would be at least as large as that of the United States. And per capita income will be more like $22,000, putting it on par with Korea’s current income level.

svinayak
BRF Oldie
Posts: 14223
Joined: 09 Feb 1999 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby svinayak » 26 Feb 2013 10:54

Most contradictory news we are hearing about China now. This is the period of confusion when the past propaganda meets the reality check
This period will be followed by unraveling of hidden information

jamwal
BR Mainsite Crew
Posts: 5376
Joined: 19 Feb 2008 21:28
Location: Somewhere Else
Contact:

Re: PRC Economy - New Reflections : Dec 15 2011

Postby jamwal » 26 Feb 2013 13:53

China’s riskiest property market just collapsed. Is this how it starts?
The real estate market in Phoenix Island, a development project in the Chinese island province of Hainan, was so inflated, so outrageously expensive and unsustainable, that it became known as the Dubai of China. With its palm tree-lined streets, glimmering high-rises and ostentatious sports cars, it even looked a little like Dubai. And now, also like Dubai but maybe more in the vein of south Florida, the Phoenix Island real estate market that drove so much local economic growth has imploded.

Phoenix Island is an extreme case, but it’s in many ways symptomatic of China’s skyrocketing real estate market, which is both a blessing and a curse for China. A blessing because it helps to drive economic growth and domestic consumption, which the country’s economy needs more of to be healthy. It’s a curse because, as Americans are well aware, it can burst, pulling down much of the national economy with it.

If the national real estate market collapses in China, it would be disastrous not just for China but for the entire world economy, risking a third wave of the global crisis that began with the U.S. financial collapse and worsened with the Euro crisis. Is Phoenix Island an outlier, a crazy market so extreme that it tells us little about China? Is it the start of a major but recoverable setback? Or, in the worst-case scenario, is it the beginning of the end for China’s astounding 20 years of miraculous economic growth?

In some ways (but not all), China is even more exposed to the dangers of a real estate collapse than America was. Washington Post business reporter Jia Lynn Yang pointed out last fall that urban housing stock constituted 41 percent of Chinese household wealth of 2011. The number was 26 percent in the U.S. In other words, Chinese families tend to invest almost twice as much of their money in urban real estate than do American families. So, if you thought Americans were hit hard when that real estate suddenly lost value, it could be even worse for Chinese, who also tend to put much more of their earnings into long-term investments than do Americans. That said, it would also take a bigger drop in prices for the market to collapse, as Chinese buyers tend to put down larger down payments.

Don
BRFite
Posts: 412
Joined: 09 Dec 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Don » 26 Feb 2013 20:10

http://www.chinadaily.com.cn/bizchina/2 ... 255868.htm

China, Russia ink major energy deal
Updated: 2013-02-26 03:40
By DING QINGFEN and DU JUAN ( China Daily)

Russia set to supply natural gas in act of 'strategic' cooperation

In a perfect demand and supply arrangement, energy-rich Russia agreed to provide an annual supply of 38 billion cubic meters of natural gas to energy-thirsty China.

The deal was struck during a high-level meeting in Beijing on Monday and comes ahead of an expected visit by Party leader Xi Jinping to Moscow after the National People's Congress in early March.

Gas was not the only energy source discussed by the two countries. A consensus on cooperation regarding oil, nuclear and coal was also reached.

"China and Russia need each other in energy cooperation, and they have their own advantages in resources, markets and technology," said Vice-Premier Wang Qishan during his meeting with the Russian Deputy Prime Minister Arkady Dvorkovich.

"There are complementarities, necessities and possibilities for us to strengthen energy cooperation, and more than that, the cooperation has strategic significance," he said.

Russian officials agreed at the meeting to guarantee the annual supply of natural gas through the east pipeline to China.

And both countries will continue to study the possibility of supplying China with liquefied natural gas through the east pipeline and natural gas through the west pipeline.

Negotiations on increasing oil supplies to the world's largest energy consumer were not finalized, but Wang said the countries should "accelerate consultations and wrap up the agreements''.

The two countries also agreed to advance wide cooperation in the non-traditional energy sectors including nuclear, coal, electric power, renewable energy as well as aluminum.

A trade target of $100 billion by the end of 2015 was set.



Reuters said recently that Russia is seeking to borrow up to $30 billion from China in exchange for possibly doubling oil supplies, making the world's second-largest economy the largest consumer of Russian oil.

In 2009, China and Russia reached a framework agreement that the latter will deliver about 70 billion cubic meters of natural gas to China annually for 30 years starting from 2014.

China consumed 145 billion cubic meters of natural gas last year. China will import 78.5 billion cubic meters of natural gas in 2014, according to data from ICIS C1 Energy.

Echoing his Chinese counterpart Wang Qishan, Dvorkovich also called for further cooperation in the energy sectors between the two countries. "It is necessary and possible for Russia to increase the oil supply to China," he said.

He also emphasized that "natural gas is the priority and focus" of the two-way energy cooperation, and "we expect to unswervingly push forward the natural gas and LNG projects."

Prem
BRF Oldie
Posts: 21195
Joined: 01 Jul 1999 11:31
Location: Weighing and Waiting 8T Yconomy

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Prem » 26 Feb 2013 23:14

http://www.bloomberg.com/news/2013-02-1 ... bsite.html
Secret China Weapon Is on SEC Website
( Its about Chinese Paki style accounting )

Muddy WaterCarson Block, the 36-year-old short-seller who heads Muddy Waters, said he’s an avid reader of letters from the SEC’s corporation-finance experts to executives about the adequacy of disclosures in regulatory filings. Carson Block, founder and research director at Muddy Waters LLC. Feb. 20 (Bloomberg) -- Carson Block, founder of Muddy Waters Research, talks about short selling, his investment strategy and Olam International Ltd. He speaks with Erik Schatzker and Sara Eisen on Bloomberg Television's "Market Makers." .The CorpFin accountants do a good job of spotting issues in the companies’ filings,” said Block, co-author of “Doing Business in China for Dummies.” “We’ve read some astute questions from CorpFin on a range of issues.”

jamwal
BR Mainsite Crew
Posts: 5376
Joined: 19 Feb 2008 21:28
Location: Somewhere Else
Contact:

Re: PRC Economy - New Reflections : Dec 15 2011

Postby jamwal » 26 Feb 2013 23:22

Chinese Junk Patents Flood Into Australia, Allowing Chinese Companies To Strategically Block Innovation

Techdirt has been writing for a while about China's policy of providing incentives to file patents -- regardless of whether those patents have any worth. That's led to a naïve celebration of the large numbers now being granted, as if more patents corresponded to more innovation.

Until now, this problem of junk patents has been confined to China, and the companies that operate there. But last year China went even further with its subsidy system, offering to pay the fees for filing overseas, presumably to encourage Chinese companies to build up patent portfolios in foreign markets that can be used for defensive or even offensive purposes. We're now beginning to see the effects of this further distortion to the patent system, as Australian businesses struggle with the flood of new patents there. The Patentology blog explains:
A Chinese government scheme providing financial incentives for small and medium sized enterprises, public institutions or scientific research institutions appears to be resulting in abuse of the Australian patent system, and the 'dumping' of numerous low-quality innovation patents on the Australian Register.

These 'junk' patents are not being examined or certified. They therefore represent no more than potential enforceable rights. Even so, they generate costs to companies operating legitimately in Australia, which may need to obtain advice on the likely scope and validity of these patents in order to avoid possible infringement. In extreme cases, the existence of junk patents could result in an Australian business choosing not to take the risk of bringing a new product to market, even though the Chinese owner of a patent is not itself offering any products or services in this country.

subhamoy.das
BRFite
Posts: 1027
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 28 Feb 2013 15:05

what kind of mind set be that of a nation which worships copying and junking. What will they clone/copy next ? What is the social driver for copying....

pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 01 Mar 2013 10:28

China plans bond overhaul to fund $6 trillion urbanisation
(Reuters) - China plans major bond market reform to raise the money the ruling Communist Party needs for a 40 trillion yuan urbanisation programme to buoy economic growth and close a chasm between the country's urban rich and rural poor.
Central and local governments, as well as bank loans, will fund the costs, the sources said. But, sweeping reforms to create a fully-functioning municipal bond market, boost corporate and high-yield bond issuance and actively steer foreign capital into the sector, are crucial to raising the sums of money China will need, they added.
"If we continue to walk down the path of government spending, it'll be like wearing new shoes, but walking the old road," a source with leadership ties said, requesting anonymity to avoid repercussions for speaking to foreign media without authorisation.
China's economy largely relies on state-directed bank lending to fund investment projects, but the massive 40 trillion yuan outlay envisaged to urbanise the rural outskirts of some 270 cities is far beyond the means of the current system.

Bank credit quality was badly strained by the economic stimulus programme of 2008 that, at a headline 4 trillion yuan, was only a tenth the size of the urbanisation programme.

By the end of 2010, local governments had racked 10.7 trillion yuan of mainly bank debt to fund their commitments to the stimulus.
Urbanisation could cure China's economic imbalances, a study by consultants at McKinsey showed last November, putting it on a path to domestic consumption-led growth within five years to replace three decades of investment and export-driven development that stoked global trade tensions.
But urbanisation and market reform must go hand in hand, as simply adding to housing stock risks creating "dead cities", according to Xia Bin, a former adviser to the central bank and now head of the financial research institute at the cabinet's think-tank.

A senior financial diplomat in regular contact with Chinese officials concurred.

"The focus should not just be on construction. They should also focus on creating a market," the diplomat said. "If they fail to create a market, they will end up with an urban poor much worse off than the rural poor."

Don
BRFite
Posts: 412
Joined: 09 Dec 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Don » 04 Mar 2013 19:53

http://www.bloomberg.com/news/2013-03-0 ... e-day.html

China Reserves Ample to Buy World’s Gold Twice

By Bloomberg News - Mar 3, 2013 10:00 AM PT

China’s foreign currency reserves, which have surged more than 700 percent since 2004, are enough to buy every central bank’s official gold supply -- twice.

The CHART OF THE DAY shows how China’s foreign reserves surpassed the value of all official bullion holdings in January 2004 and rose to $3.3 trillion at the end of 2012, data compiled by Bloomberg show. The price of gold increased 263 percent from 2004 through Feb. 28, with the registered volume little changed, according to data based on International Monetary Fund and World Gold Council figures. By comparison, China’s reserves rose 721 percent through 2012, while the combined total among Brazil, Russia and India rose about 400 percent to $1.1 trillion.

Dollars brought into China are sold to banks, which in turn sell the greenbacks to the central bank, increasing the reserves. That process has been fueled by trade, with China exceeding Germany to be the world’s largest exporter in 2009. The size of the reserves means the government can’t make major adjustments to its holdings on the open market, according to Mirae Asset Financial Group’s Joy Yang.

“China’s foreign-exchange reserves are a blessing in bad days but a curse in good days,” said Yang, Mirae’s Hong Kong- based chief Greater China economist, who has previously worked for the IMF.

About two-thirds of China’s assets are dollar-denominated and another quarter is in euros, according to Yao Wei, a Hong Kong-based economist at Societe Generale SA. China is now encouraging companies and residents to keep more foreign currency in a strategy known as “hiding foreign currencies among people,” meaning that the government’s foreign reserves may “gradually fall,” Yang said.

China’s reserve assets were 30.2 percent of the world total at the end of last year, compared with 14 percent at the start of 2004, Bloomberg data show. China’s total was about triple Japan’s, now the second-largest holder. Japan held about 23 percent of global reserves at the start of 2004.


Image

subhamoy.das
BRFite
Posts: 1027
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 04 Mar 2013 21:30

Means nothing. By that yard a number of fortune 500 companies could buy out nations but that does not happen in real life. Forget buying the world, CHINA cannot even deal with its small but powerful neigbours like Japan and Vietnam and SOKO, Taiwan. This reserver simply points to the fact that CHINA is nothing but a currency manipulator with cheap bonded labor doing contract manufacturing. I am not sure what use this reserver will be. If they encash it then it will bring on high inflaction and if they sit on it will erode in value due to inflation of US currency.

RoyG
BRF Oldie
Posts: 5180
Joined: 10 Aug 2009 05:10

Re: PRC Economy - New Reflections : Dec 15 2011

Postby RoyG » 04 Mar 2013 22:07

subhamoy.das wrote:Means nothing. By that yard a number of fortune 500 companies could buy out nations but that does not happen in real life. Forget buying the world, CHINA cannot even deal with its small but powerful neigbours like Japan and Vietnam and SOKO, Taiwan. This reserver simply points to the fact that CHINA is nothing but a currency manipulator with cheap bonded labor doing contract manufacturing. I am not sure what use this reserver will be. If they encash it then it will bring on high inflaction and if they sit on it will erode in value due to inflation of US currency.


Everybody is a currency manipulator. What the Chinese are doing is something India should've started a long time ago. They along with Russia and Germany are slowly accumulating gold to protect against dollar devaluation. Moreover, they physically posses it and have high security facilities to house it. The households of this country do it but the government needs to step into the game as well. The great thing about our economy is that we aren't too dependent on the global economy. Yes we have a fiscal deficit problem but our economy is still much more balanced than other countries. Therefore, we can afford to covertly and overtly buy much more if we get a power leader at the center and get the state machinery in order.

Suraj
Forum Moderator
Posts: 14353
Joined: 20 Jan 2002 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 04 Mar 2013 23:07

The problem with China's forex reserves that the entire reserves are valued at their marginal value. If they spend a few billion off the top here and there, they can get a few billion worth of stuff. If they go out and attempt to spend $2 trillion tomorrow, they're not going to get stuff equivalent to $2 trillion today or even anywhere close - every seller will respond to the glut of money by jacking up nominal prices to astronomical levels. That's what will happen if they attempt to 'buy the whole world's gold supply' - they won't get much of it before they run out of the $3 trillion, because gold prices will nominally rise to ridiculous levels, say by about an order of magnitude or more, in response to demand. That's ignoring the additional issue of 500 million irate Indian women yelling at them for sending up the price of gold...

pankajs
BRF Oldie
Posts: 14746
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 04 Mar 2013 23:20

Don wrote:http://www.bloomberg.com/news/2013-03-03/china-reserves-ample-to-buy-world-s-gold-twice-chart-of-the-day.html
“China’s foreign-exchange reserves are a blessing in bad days but a curse in good days,” said Yang, Mirae’s Hong Kong- based chief Greater China economist, who has previously worked for the IMF.

The above, in my view, is the key take away. The blessings are detailed in the first few paragraphs. Let us look at the curse part of it.
Don wrote:
The size of the reserves means the government can’t make major adjustments to its holdings on the open market, according to Mirae Asset Financial Group’s Joy Yang.

To elaborate, I will quote another article that was posted before.
pankajs wrote:Why A China Crash May Be Imminent
China’s foreign exchange (forex)reserves cannot be swiftly used to help prevent an economic crisis. The majority of these reserves are tied up in U.S. government bonds. If China decided to sell just 10% of these bonds to throw at its own economy, it would have severe consequences. U.S. interest rates would spike, the U.S. economy would tank, closely followed by economies around the world. China’s export-reliant economy would also be impacted. In other words, the forex reserves argument is largely an illusion.

Another curse has been described far better than I could ever have by a well known economist. John Maynard Keynes, the famous British economist, observed: "If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has." In this case the bank is China and the borrower is the US of A and the funny part is that the loan can be re-payed back in a currency fully controlled by the borrower.

There are other issues that I could list but will leave our Chinese friends to ponder on a simple question. Who has/is going to finance the American "pivot" to Asia-pacific? Again, in answer, I will quote from Don's post.
Don wrote:China’s reserve assets were 30.2 percent of the world total at the end of last year, compared with 14 percent at the start of 2004, Bloomberg data show. China’s total was about triple Japan’s, now the second-largest holder. Japan held about 23 percent of global reserves at the start of 2004.
I know there are other nations that hold large amounts of dollar reserves like Japan, SoKo, Taiwan, etc. These countries want the US in their back yard but China doesn't and yet has ended up financing the American military machine more that any other country in the world.
Last edited by pankajs on 05 Mar 2013 05:09, edited 2 times in total.

saip
BRF Oldie
Posts: 4013
Joined: 17 Jan 2003 12:31
Location: USA

Re: PRC Economy - New Reflections : Dec 15 2011

Postby saip » 05 Mar 2013 01:04

If you build they will come seems to be the Chinese motto. But if they don't come what will the Chinese do? Drive them in with guns?

World's biggest mall a China 'ghost town'
CNN

wrdos
BRFite
Posts: 312
Joined: 26 Feb 2004 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 05 Mar 2013 04:05

saip wrote:If you build they will come seems to be the Chinese motto. But if they don't come what will the Chinese do? Drive them in with guns?

World's biggest mall a China 'ghost town'
CNN


Once more the South China Mall example?
It was opened in 2005, a terrible planned commercial project aroused interest of western reporters since then.

However 8 years have passed, the Chinese GDP has been more than tripled and hundreds if not thousands new malls should have been opened around China. In Dongguan alone, something around a dozen new malls should be there.

And they still stick to the South China Mall, and failed to find even a single update in a country as huge as China?

RamaY
BRF Oldie
Posts: 17249
Joined: 10 Aug 2006 21:11
Location: http://bharata-bhuti.blogspot.com/

Re: PRC Economy - New Reflections : Dec 15 2011

Postby RamaY » 05 Mar 2013 04:28

^ you are right. China has enough money to build a few dozen such ghost malls every year, if it wants.

wrdos
BRFite
Posts: 312
Joined: 26 Feb 2004 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 05 Mar 2013 04:31

RamaY wrote:^ you are right. China has enough money to build a few dozen such ghost malls every year, if it wants.

Then find me another ghost mall in china, please.

amit
BRF Oldie
Posts: 4325
Joined: 30 Aug 2007 18:28
Location: The Restaurant at the End of the Universe

Re: PRC Economy - New Reflections : Dec 15 2011

Postby amit » 05 Mar 2013 11:46

^^^^^^^

Eh, Wrdos, are you finished searching for your ghost cities, that you want to search for ghost malls?

How's Ordos doing nowadays? Busting at it seams with people and economic activity? :lol:

Austin
BRF Oldie
Posts: 23387
Joined: 23 Jul 2000 11:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 05 Mar 2013 12:40

‘China is prepared for a currency war’ – central bank official

Xinhua reports that a top ranking Chinese official has issued a statement concerning the looming “currency wars”. China's central bank deputy governor Yi Gang expressed his dissatisfaction with the possibility of a global currency war and stressed that it is avoidable. At the same time, the Chinese official stated that “China is well prepared for a currency war”.

The term “currency wars”, introduced by James Rickards in his book “Currency Wars: The Making of the Next Global Crisis”, refers to the process of competitive currency devaluation, practiced by countries willing to risk inflation in order to make their exports more competitive.

The finance ministers of the G20 countries signed a joint statement promising to abstain from “competitive devaluations” and similar practices, but skeptics believe that such promises are made to be broken.

Yi Gang hopes that global currency wars will be avoided, but at the same time warned that China will monitor closely the actions of foreign central banks: “China is fully prepared in terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries”.

There is no doubt that China can resort to quantitative easing or other monetary measures in order to fight in the “currency wars” and keep its export sector alive. The major problem of the Chinese monetary authorities and the Chinese government is that any attempt at competitive devaluation will increase the inflation pressures. In 2011, inflation of food prices led to social tensions and it took Beijing considerable time and effort to avoid large scale protests. Also, there is a visible real estate bubble in China and the authorities are trying to curb the speculation and excessive investment in real estate. If China’s central bank starts a competitive devaluation program, all efforts to reduce the size of the real estate bubble will be in vain. The current state of affairs seems to be a no-win situation for China. Maybe, the way to win a currency war is to not fight in a currency war?

wrdos
BRFite
Posts: 312
Joined: 26 Feb 2004 12:31

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 05 Mar 2013 14:21

amit wrote:^^^^^^^
Eh, Wrdos, are you finished searching for your ghost cities, that you want to search for ghost malls?
How's Ordos doing nowadays? Busting at it seams with people and economic activity? :lol:


It is not my business. Hundreds of western reporters are living in Beijing or Shanghai; and they have kept searching around China to find a "ghost city" or a "ghost mall" for years. Despite the fact that in EVERY Chinese city there is at least a new city near the older one, and at least a DOZEN new malls around it, what they could finally find is a small town called Ordos in remote Inner Mongolia and a single bankrupted shopping mall in a Guangdong city called Dongguan, through the past whole 8 years.

The town and the mall have been then reported repeatedly and heavily. In this BR forum only, have been quoted at least 30 or 40 times, without any update from at least a second town or a second mall during all these 8 years. :rotfl:

BTW, you didn't find new reports from Ordos recently, right? The town has become populous from the last year with its streets full of cars, often luxury ones. The town is anyway a very rich city with a per capita GDP as high as >US$30,000. The western reporters are now busily traveling around the huge country of China to try to find an update of "ghost city", but without much success yet.

You can pray for them, sir. :rotfl:

amit
BRF Oldie
Posts: 4325
Joined: 30 Aug 2007 18:28
Location: The Restaurant at the End of the Universe

Re: PRC Economy - New Reflections : Dec 15 2011

Postby amit » 05 Mar 2013 15:15

wrdos wrote:BTW, you didn't find new reports from Ordos recently, right? The town has become populous from the last year with its streets full of cars, often luxury ones. The town is anyway a very rich city with a per capita GDP as high as >US$30,000. The western reporters are now busily traveling around the huge country of China to try to find an update of "ghost city", but without much success yet.

You can pray for them, sir. :rotfl:


Oh I'm sure Ordos is doing great. Why I think you may have even dropped a zero from the per capita GDP figure of that city just so as to not make us feel even more smaller - forcing us to cower in our dhotis. :)

But you know what, funnily enough my friend, who's a neighbour, and I were discussing per capita GDP the other day. We were calculating that, since both of us earn more than $200,000, our per capita GDP was $200,000. Yes the plot of land on which our houses stand is the richest in the world in terms of per capita GDP. Wowa!

But hey you know what? My friend has got a spare room that he's thinking of giving out on rent. If you're interested I can put in a word for you, having known you for so long. I'm sure Wrdos you'd love to live on a piece of land that has the world's highest per capita GDP. You guys were born to live in high GDP areas - they mean so much to you!

:rotfl: :rotfl:

amit
BRF Oldie
Posts: 4325
Joined: 30 Aug 2007 18:28
Location: The Restaurant at the End of the Universe

Re: PRC Economy - New Reflections : Dec 15 2011

Postby amit » 05 Mar 2013 16:06

For those who don't know about Ordos here's what BBC wrote about the town one year ago:

Ordos: The biggest ghost town in China

Now contrast this with what Wrdos ji wrote:

The town has become populous from the last year with its streets full of cars, often luxury ones. The town is anyway a very rich city with a per capita GDP as high as >US$30,000.


There you have it the Great Leap Forward.

In one year Ordos has gone from a ghost town into one with a per capita income greater than US$30,000.

Shanghai stats make Lahori logic seem like kindergarten stuff.

PS: Here's a wishy washy report from China Daily which must be the "information source for Wrdos ji. But even here they don't hazard the US$30,000 figure. It just claims Ordos has a GDP "more" than Shanghai, Beijing and Hong Kong.

Given the above, I hope you guys understand my analogy with the $200,000 per capita income me and my friend enjoy in our piece of land with a population of 2. :-)


Return to “Trash Can Archive”

Who is online

Users browsing this forum: No registered users and 18 guests