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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 05 Mar 2013 19:14

Sure, denying is always the most convenient way to face the real hard world. :D

It is so hard for you to believe that Inner Mongolia being the 5th richest Chinese province with a per capita GDP =US$10,189, way above the Chinese average of $6,200. And Ordos being the richest city of Inner Mongolia, and the nation too, boast of a per Capita GDP >$30,000 for her local residents only, and >$25,000 if you include the immigrant workers also. It is one of the major reasons why the city can afford such a big brand new town being built to shock the world in some sense.

Just keep putting your head into the sand, as ever.

amit wrote: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. :-)

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 05 Mar 2013 22:39

Yes, yes, and the GDP of the area surrounding the bedroom of the Ambani residence in Bombay is ~$20 billion/person.

AnimeshP
BRFite
Posts: 514
Joined: 01 Dec 2008 07:39

Re: PRC Economy - New Reflections : Dec 15 2011

Postby AnimeshP » 05 Mar 2013 22:45

Some recent developments - China's housing bubble CBS report ...

anishns
BRFite
Posts: 1348
Joined: 16 Dec 2007 09:43
Location: being victim onlee...

Re: PRC Economy - New Reflections : Dec 15 2011

Postby anishns » 06 Mar 2013 04:57

^^^ :rotfl:

at 4:05 min mark....all the sign boards of top brands are fake! :D
with the intention of fooling the buyers in to believing that brands like Starbucks, KFC, Apple, Nokia are going to set up shop

Jeez! what a country? Makes our scams pale in comparison

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 06 Mar 2013 09:05

From "ghost town" to "ghost mall", now it turned out to be a "ghost building"......
I am expecting a "ghost room" or "ghost bed" soon.

Please, China has hundreds of new town, thousands of new malls, just show me a second "ghost town", or at least a "ghost mall" please.

Now you can only find your luck from the hundreds of thousands of new buildings that we are building in China every year?

:rotfl:

anishns wrote:^^^ :rotfl:

at 4:05 min mark....all the sign boards of top brands are fake! :D
with the intention of fooling the buyers in to believing that brands like Starbucks, KFC, Apple, Nokia are going to set up shop

Jeez! what a country? Makes our scams pale in comparison

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 06 Mar 2013 09:08

Suraj wrote:Yes, yes, and the GDP of the area surrounding the bedroom of the Ambani residence in Bombay is ~$20 billion/person.

Big difference, Ordos has a population of 2 million and Inner Mongolia more than 22 million.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 06 Mar 2013 10:03

wrdos wrote:
Suraj wrote:Yes, yes, and the GDP of the area surrounding the bedroom of the Ambani residence in Bombay is ~$20 billion/person.

Big difference, Ordos has a population of 2 million and Inner Mongolia more than 22 million.

Big difference indeed. Two people in Bombay have the GDP of two million in Ordos.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby member_20292 » 06 Mar 2013 10:31




Seems like another great leap forward level scam is in the making, yet again. Artificially steroidal growth and people rushing to buy property since they cannot invest in other things, and bank rates are low.

Buying shares is also not an option for the common man of China since the companies are not well run, and the share bazaar is a fix, and underperforms.

So everyone buys property.

20-30% of the Chinese economy is in real estate.
50 million workers in the field.

To build behemoths, they had to clear out the older cheap housing, the shanty towns which people could actually live in, and afford to maintain.

Some people have invested 3 generations of savings into buying houses.

The chinese govt. has started a ONE HOUSE rule in the big cities---each person cannot buy more than one house for himself. People get around it by buying in the smaller cities.

Developers are in debt . If DLF , one of the best run private companies in India, can have an ocean of debt on its books....how will chinese inefficiently run companies not have the same or even more.

Soho China is a good company. It has focused on office space in Shanghai and Beijing only. This is a good strategy.

How can the govt diffuse the bubble? It has to allow other things for people to invest in. Like companies ---this requires good capital markets. Bank interest rates have to be allowed to rise. People should be allowed to invest outside the country.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 06 Mar 2013 10:40

So the two people in Bombay have a GDP >US$50 billion every year? And it means the other 20million Bombay citizens have to share the left $10 billion?
What a society? No wonder......

Suraj wrote:
wrdos wrote:Big difference, Ordos has a population of 2 million and Inner Mongolia more than 22 million.

Big difference indeed. Two people in Bombay have the GDP of two million in Ordos.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 06 Mar 2013 11:10

China of course, is the epitome of social equality, where everyone earns exactly the same income and all are happy and content, after all.

Yagnasri
BRF Oldie
Posts: 9970
Joined: 29 May 2007 18:03

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Yagnasri » 06 Mar 2013 12:59

Ya. except for princelings of the Party bosses.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 07 Mar 2013 13:15

China bets on consumer-led growth to cure social ills
(Reuters) - China's new rulers will focus on consumer-led growth to narrow the gap between rich and poor while taking steps to curb pollution and graft, the government said on Tuesday, tackling the main triggers for social unrest in the giant nation
China admitted earlier this year there was an urgent need for reforms to narrow an income gap that is now one of world's widest and at levels that analysts say sparks social unrest, despite three decades of blistering economic growth that have lifted hundreds of millions of people from rural poverty.

Beijing also announced an 8.7 percent rise in the 2013 domestic security budget to 769.1 billion yuan ($128 billion), exceeding military expenditure for the third year in succession. {Makes you wonder what kind of government fears its own people, the ones they are supposed to represent, more than it fears outsiders}
There are growing concerns that more fixed-asset investment - already worth about 50 percent of GDP and at a level that worries the International Monetary Fund - would simply add to the inefficiency of China's state sector.

Industrial inefficiency also exacerbates pollution, which has its origins in China's factory-fuelled expansion.

Wen acknowledged the massive environmental cost of growth.

"The state of the ecological environment affects the level of people's well-being and also posterity and the future of our nation," Wen said.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 07 Mar 2013 13:58

China faces social, financial risks in urbanization push
(Reuters) - China's urbanization drive could fuel social unrest over land disputes and pose financial risks if money is thrown around recklessly, a senior communist party official and a leading economist said on Thursday.

<snip>

The urban population jumped to above 700 million from less than 200 million in the previous three decades, but that explosion has triggered sometimes violent clashes over expropriation of farmland for development as well as water shortages, pollution and other problems.

<snip>

The government must protect farmers from losing their land in the process as local governments have been relying heavily on land sales to finance local investment, Chen said. "If the urbanization process becomes a process of depriving and harming farmers' interests, it cannot be sustained and society cannot maintain stability."

<snip>

Li Yining, an influential economist at Peking University, warned that China's banks could be dragged into another spending binge that could spark a financial crisis.

"When we talk about urbanization, it seems the whole country is going into mass action to spend heavily ... this could trigger a financial crisis," he told the news conference.

<snip>

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 07 Mar 2013 17:11

The Curious Case of China’s GDP Figures
Early this year, China found a missing province, one doing very well for itself. The total GDP for 2012, according to the National Bureau of Statistics, was 51.9 trillion yuan. The total GDP figures of China’s 31 provinces for 2012 added up to 57.6 trillion yuan, giving the phantom 32nd province an annual GDP of 5.7 trillion yuan. For many economists, this was just a shining example of what they have believed for years: that China’s GDP numbers are questionable at best, and often exaggerate China’s growth, largely for political reasons.

In fact, in 2007, Li Keqiang, then-party secretary of Liaoning and now soon-to-be premier, said that GDP statistics were “for reference only” and “man-made,” and that for his purposes, he preferred to look at electricity consumption, rail cargo volume, and loan disbursements. He did not say this publically–rather, his statements (reflecting what many officials surely believe) came to light in 2010 in a U.S. government cable released by Wikileaks.
Several years ago, analysts looked to electricity production to more accurately gauge growth figures. However, last year the New York Times reported that power company managers have been ordered by government officials to report false numbers, exaggerating power production.
In light of the challenges of assessing China’s true GDP, there have also been discussions about abandoning the fixation on the GDP figure altogether, and moving toward other, alternate figures, including a happiness index, or green GDP, which accounts for environmental degradation.

The real answer here is to not rely on the figure of China’s GDP as the end all, be all. With the structural issues present, primarily a changing economic structure, it is instead imperative that one looks at a range of economic indicators, including, but not limited to, new car sales, home construction, fixed asset investment, and freight volume. It is also crucial to understand the political underpinnings of the accounting for and reporting of China’s GDP.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 07 Mar 2013 22:12

pankajs wrote:In fact, in 2007, Li Keqiang, then-party secretary of Liaoning and now soon-to-be premier, said that GDP statistics were “for reference only” and “man-made,” and that for his purposes, he preferred to look at electricity consumption, rail cargo volume, and loan disbursements.

:rotfl: comlade Li-bhai's statement needed to be preserved for reuse every time a Chinese poster comes running here breathlessly telling us about Ordos or anywhere else.

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 » 08 Mar 2013 10:09

^^^^^

Aha, now I can understand Wrdos' $30,000 GDP figure for Ordos. It's for reference only! :-)

I just love this new China and I wish I could live there. You can wish for something and write a "reference" about your wish somewhere and voila it will soon become real and concrete.

:rotfl: :rotfl: :rotfl:

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 08 Mar 2013 11:02

Sure, always the last strategy. "It is not true! It is Shanghai statistic" :rotfl:
As I mentioned, just keep your head in the sand. :lol:


amit wrote:^^^^^

Aha, now I can understand Wrdos' $30,000 GDP figure for Ordos. It's for reference only! :-)

I just love this new China and I wish I could live there. You can wish for something and write a "reference" about your wish somewhere and voila it will soon become real and concrete.

:rotfl: :rotfl: :rotfl:

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 08 Mar 2013 11:11

Suraj wrote:
pankajs wrote:In fact, in 2007, Li Keqiang, then-party secretary of Liaoning and now soon-to-be premier, said that GDP statistics were “for reference only” and “man-made,” and that for his purposes, he preferred to look at electricity consumption, rail cargo volume, and loan disbursements.

:rotfl: comlade Li-bhai's statement needed to be preserved for reuse every time a Chinese poster comes running here breathlessly telling us about Ordos or anywhere else.


Sure, because "the national figure is LESS than the province figure combined", therefore "the national figures was OVER-ESTIMATED". What a perfect logic. :rotfl:

Sir, all nations' GDP is an "estimated" data, India included. And I always wonder how India could report a GDP as high as 1/4 of China, despite a trade value less than 1/10 of China, consumptions of almost every thing 1/10 of China, and especially, a government revenue about 1/15 of China?

Sir, I need more detail of the Bombay GDP. How two persons could rob the 85% GDP of the largest Indian city?

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 » 08 Mar 2013 11:24

wrdos wrote: And I always wonder how India could report a GDP as high as 1/4 of China, despite a trade value less than 1/10 of China, consumptions of almost every thing 1/10 of China, and especially, a government revenue about 1/15 of China?


Wrdos Ji,

There's a famous quote: "The person who stands proclaiming to know the truth is often called a bigot."

This is the problem with all the paid China drones that visit our small little forum situated in the backwaters of this big bad global economic galaxy.

See your stats once more. It will show you that China is a export driven economy which means most of its consumptions are just inputs for exports. However GDP numbers are not just a summation of export numbers (many of them just a reference point as your great new leader says! :-) ). It also includes internal consumption and internal economy. In that respect India is a less export driven economy and more of a local consumption economy, which is why its GDP numbers are 1/4 of China but other figures like steel consumption is way below that of China.

BTW do you know that the internal Chinese steel production capacity is more than the total capacity of the next 10 biggest steel producers - and this figure includes Korea, Japan, the US, Europe and India among others. This has been the case for a long time. Do you feel your "reference point" GDP number(s) justify this kind of production capacity minus exports?

Saar you motherland has become the dirty, polluting factory of the world with little value add. Enjoy your success.

Sir, I need more detail of the Bombay GDP. How two persons could rob the 85% GDP of the largest Indian city?


Subtle irony and humour is lost on these Chinese drones.

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 » 08 Mar 2013 11:41

wrdos wrote:Sure, always the last strategy. "It is not true! It is Shanghai statistic" :rotfl:
As I mentioned, just keep your head in the sand. :lol:


Your great new leader Li Keqiang says:

GDP statistics were “for reference only” and “man-made,”


Are you questioning the party line, Comrade?

Forgive us economically backward Indians, we are konphused onlee - should we call GDP numbers Shanghai stats or Politburo fantasies?. :-)

BTW I'm glad to see that Shanghai statistics has gained credence among our Drone population. Which means it's real and existing.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 08 Mar 2013 11:51

wrdos: Your vice-premiers words carry FAR more weight than your own.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 08 Mar 2013 15:33

Suraj wrote:wrdos: Your vice-premiers words carry FAR more weight than your own.


Suraj-ji, GDP data in every country is an "estimated" or "man-made" data, if compared with the electricity consumption or other directly measured data such like railway freight transportation volume. Mr. Li just stated some common knowledge to everybody with a primitive level of macro economics.

He was by then the governor of Liaoning Province that is famous in China with its heavy industry , which depends on electricity consumption and railway freight transportation. Sure for Liaoning, such kind of directly measured data is more useful, faster and more directly.

Unfortunately, for those observers who are not willing to accept the China development truth, his words turned out to be a new excuse for them to keep putting their heads into the sand.

Sir, China reports its GDP as India's 4 times. It seems that you really insist on Mr. Li Keqiang's favorite measures of electricity consumption or rail freight transport. If these measures are used instead, I think China will turn out to be at least 6 times of India.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 08 Mar 2013 22:13

wrdos wrote:Suraj-ji, GDP data in every country is an "estimated" or "man-made" data, if compared with the electricity consumption or other directly measured data such like railway freight transportation volume. Mr. Li just stated some common knowledge to everybody with a primitive level of macro economics.

No he isn't. He's admitting directly that Chinese GDP numbers are heavily distorted by political compulsions on the part of a totalitarian system to overstate it. When a system has an inbuilt bias towards doing so above all else, those numbers are going to be worth less than a pile of dung.

Someone in the Chinese system once said China is run like a company. It is true - it's run like a company whose sole prerogative is reporting the highest possible top line growth at any cost. While every government everywhere desires to maintain good economic growth, the difference is that growth is one of the several imperatives:

A mayor of a small Chinese city that is beautifully administered, very clean, has no crime, and where the buses run on time, but has no industry to speak of and grows very slowly, will make no career headway up CPC ranks, will make no money, and will probably see his wife divorce him and have no mistresses. He'll never have much guanxi connections. In the words of your culture he suffers major loss of face within his peer system.

A mayor in another city that has a glitzy showpiece downtown around Zhongshan St/Renmin St and has plenty of industry and reports high GDP growth numbers, but corruption, above average crime and squalor behind the glitz, will make it up the party ranks rapidly. This comrade sees plenty of success, women, and influence, all making him look better to his peers.

When the inbuilt prerogative for anyone in the system is to report high GDP numbers to get ahead, they will. If the Indian system magically changes overnight where all political success revolves around the GDP number a state or city reports, we'll do exactly the same thing - report GDP growth in any manner possible, even if the cost is to turn the country upside down and trash it to do so.

The Chinese system has a huge positive - it biases towards brute efficiency, something I admire and wish for us to emulate. However, it also biases towards heavy data bullsh1tting, which is a fact surrounding any number coming out of there too. so when anyone comes running in here saying 'our fake numbers are 4x your numbers, we :rotfl: at them.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby VKumar » 08 Mar 2013 22:22

Essentially what matters is that citizens are able to fill their stomach and sleep soundly.

Which is the better country on this measure - India or China?

How to measure this? What data is most relevant and how can we acquire such data?

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 08 Mar 2013 22:28

No India vs China debates here please. It just leads to flame wars. This thread will remain about dissecting and critiquing Chinese economic news.

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

Re: PRC Economy - New Reflections : Dec 15 2011

Postby VKumar » 08 Mar 2013 22:56

OK I will re-phrase my query

Essentially what matters is that citizens are able to fill their stomach and sleep soundly.

How does China measure on this?

How to measure this? What data is most relevant and how can we acquire such data for China?

a_bharat
BRFite
Posts: 679
Joined: 07 Aug 2009 09:54

Re: PRC Economy - New Reflections : Dec 15 2011

Postby a_bharat » 10 Mar 2013 06:51

NYT article on Chinese match making; enough material to make a movie.
The Price of Marriage in China
In Joy City, Ms. Yang gave instructions to her eight-scout team, one of six squads the company was deploying in three cities for one Shanghai millionaire. This client had provided a list of requirements for his future wife, including her age (22 to 26), skin color (“white as porcelain”) and sexual history (yes, a virgin).

Dozens of high-end matchmaking services have sprung up in China in the last five years, charging big fees to find and to vet prospective spouses for wealthy clients. Their methods can turn into gaudy spectacle. One firm transported 200 would-be trophy wives to a resort town in southwestern China for the perusal of one powerful magnate. Another organized a caravan of BMWs for rich businessmen to find young wives in Sichuan Province. Diamond Love, among the largest love-hunting services, sponsored a matchmaking event in 2009 where 21 men each paid a $15,000 entrance fee.

Three miles away, in a Beijing park near the Temple of Heaven, a woman named Yu Jia jostled for space under a grove of elms. A widowed 67-year-old pensioner, she was clearing a spot on the ground for a sign she had scrawled for her son. “Seeking Marriage,” read the wrinkled sheet of paper, which Ms. Yu held in place with a few fragments of brick and stone. “Male. Single. Born 1972. Height 172 cm. High school education. Job in Beijing.”

Single men have a hard time making the list if they don’t own a house or an apartment, which in cities like Beijing are extremely expensive. And despite the gender imbalance, Chinese women face intense pressure to be married before the age of 28, lest they be rejected and stigmatized as “leftover women.”

One Friday last fall, I met with Yu Jia and her son Zhao Yong at a McDonald’s in western Beijing. Now 39, Mr. Zhao has a youthful, unlined face. Still, he worries that time is passing him by. To save money and to enhance his marriage prospects, he works two jobs simultaneously — one selling microwaves, the other cosmetics — crisscrossing the city on his electric bike. He earns about $1,000 a month, and sometimes adds $80 more by working weekends as a film extra.

It is a respectable income, but hardly enough to attract a bride in Beijing. Even in the countryside, where men’s families pay bride prices, inflation is rampant. Ms. Yu’s family paid about $3,500 when Mr. Zhao’s older brother married 10 years ago in rural Heilongjiang. Today, she said, brides’ families ask for $30,000, even $50,000. An apartment, the urban equivalent of the bride price, is even further out of reach. At Mr. Zhao’s current income, it would take a decade or two before he could afford a small Beijing apartment, which he said would start at about $100,000. “I’ll be an old man by then,” he said with a rueful smile.

Mr. Zhao has met several women on online dating sites, but he lost faith in the Internet when several women lied to him about their marital status and family backgrounds. His mother, however, had come through, arranging a meeting between him and the daughter of the woman she had met in the marriage market.

ArmenT
BR Mainsite Crew
Posts: 4239
Joined: 10 Sep 2007 05:57
Location: Loud, Proud, Ugly American

Re: PRC Economy - New Reflections : Dec 15 2011

Postby ArmenT » 11 Mar 2013 00:40


vina
BRF Oldie
Posts: 6046
Joined: 11 May 2005 06:56
Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists

Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 11 Mar 2013 12:50

wrdos wrote:From "ghost town" to "ghost mall", now it turned out to be a "ghost building"......
I am expecting a "ghost room" or "ghost bed" soon.


Oh. before we forget, ghost factories as well, in their hundreds.

Bloated China steel sector faces closure, big miners to suffer

Bloated China Steel Sector Facing Closures, Big Miners to Suffer
By REUTERS

¶ BEIJING (Reuters) - China's bloated steel sector is facing a wave of closures in the next few years, with slowing demand and decades of "blind" expansion finally about to catch up with the industry, a senior executive and parliamentary delegate said.

¶ Zhang Wuzong, the chairman of the privately-owned Shandong Shiheng Special Steel Group and a forty-year veteran of the industry, told Reuters in an interview that China's problems would also scupper the huge expansion plans of suppliers like Rio Tinto and BHP Billiton, which have bet their future on sustained demand growth in China.

No steel firm will be immune, with the future of even state-owned firms like the loss-making Angang Group at risk, he added.

¶ "The Chinese market is now oversupplied," he said. "The government knows it and we know it. 'Survival of the fittest' is the only way to solve the problems."

¶ "It will take time but I believe a lot of the backward private enterprises will be closed. I also believe there will be some state-owned enterprises that will be eliminated too, including some of the big ones. This is a certainty."

China has at least 900 million tonnes of crude steel production capacity, far higher than its official total output of 716 million tonnes in 2012. Profits in the sector fell 98 percent last year with many firms making losses.

¶ The government said earlier this year that it would implement new policies to encourage mergers and close obsolete smelters, with the aim of bringing 60 percent of total capacity under the control of its top 10 mills by 2015.

¶ "The best way a market can develop is on the principle of 'survival of the fittest' -- it is not a question of state-owned firms taking over private firms or the other way around, but which is the strongest," said Zhang, noting that current policies were mistaken because they distorted "market order".

¶ By forcing better-performing firms to take over the nearly bankrupt, the government was making the situation worse. Angang's listed assets made losses of around 4 billion yuan ($644 million) last year, but the group company has also been forced to acquire other loss-making state-owned steel firms like Panzhihua Steel, despite having no economic rationale to do so, he said.

¶ Zhang said his own company had shed around 2 million tonnes of crude steel capacity in the last few years to improve efficiency. Last year it was only the 64th largest steel mill by capacity, but the sixth most profitable.

Many larger firms, now saddled with capacities higher than the whole of Germany, will have to follow suit, but after assembling huge workforces, they remain under pressure to stick to a losing strategy.

¶ Still, any hope that the government will come and bail them out could finally be dashed, Zhang said.

¶ "Government support is extremely limited -- it's not like before when the government can find the money to help out a company that is facing bankruptcy. They just can't do this any more. They need to just let them die."

¶ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

¶ GRAPHIC: China trade suite http://r.reuters.com/fut96s

¶ ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

¶ IMPACT ON MINERS

¶ With steel demand already slowing and 2013 growth highly unlikely to beat last year's 3.1 percent, the big overseas miners were wrong to stake their future on China, and could also be facing massive future losses, Zhang said.

¶ "China has driven the growth of Rio Tinto and BHP but they now are too dependent on Chinese demand, which cannot continue growing at the same rate as before," he said.

¶ Rio Tinto expects Chinese steel production to peak at 1 billion tonnes a year around 2030. Rio, fellow Australian miner BHP and Brazil's Vale together plan to lift their total iron ore production by about 60 percent to more than 1 billion tonnes a year over the next three years.

¶ Even the development of China's western regions, which the miners have cited as one of the biggest drivers of global steel demand in coming years, will not be enough, says Zhang.

¶ "Western development is going to happen, but it won't be the same as in the east. It also won't rely on foreign iron ore. There are big domestic mines in the west that will go into operation, and it is irrational to think that BHP or Rio Tinto will be able to deliver their cargoes to places like Sichuan."

¶ Sichuan, in western China, lies about 1,500 km inland.

¶ When Zhang first got into the steel business in 1976, total capacity stood at around 30 million tonnes, he said, and it is now thirty times larger. Any further expansion was impossible.

¶ "It is just unsustainable -- demand isn't going to rise that much, Chinese energy and infrastructure cannot support it." ($1 = 6.2147 Chinese yuan)


Yeah. I too wonder, how Germany with a far lower steel consumption and capacity than China as such high per capita GDP :rotfl: , not to mention the whole of Europe and US and Japan !

But think of it. All that building frenzy and operating those steel plants of 900 million tons capacity and keeping them supplied must have boosted the GDP. Now that they have to get flushed down the toilet, what will happen to the GDP ?

And oh, what about the bank loans and other loans that must have been literally trillions to build a 900m capacity steel industry ? Now when you have to drop to 400m tons and write off 500m tons of capacity, what will happen to all those loans, and who will pick up the tab for that (the poor toiling citizen of course..). Now what will happen when this overbuilding craze that occurred in EVERY industry in China turns south and contracts ?

That sounds like a giant bubble bursting!

krishnan
BRF Oldie
Posts: 7342
Joined: 07 Oct 2005 12:58
Location: 13° 04' N , 80° 17' E

Re: PRC Economy - New Reflections : Dec 15 2011

Postby krishnan » 11 Mar 2013 12:55

i really wonder, how they can up the defence budget when so much loss is going on

vina
BRF Oldie
Posts: 6046
Joined: 11 May 2005 06:56
Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists

Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 11 Mar 2013 13:03

Krishnan wrote:i really wonder, how they can up the defence budget when so much loss is going on


As Warren Buffet said, "It is only when the tide goes out, you know who has been swimming naked" . The tide is still up for China (pumped up for now for now , desperately), but the tide does go out eventually, just as night follows day and low tide follows high tide. When it does go out, it is not going to be pretty there, believe me.

Singha
BRF Oldie
Posts: 66601
Joined: 13 Aug 2004 19:42
Location: the grasshopper lies heavy

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Singha » 11 Mar 2013 13:16

...in other news the railway ministry was scrapped overnight , its top bosses being under fire for corruption and the apparatus placed under the transport ministry.

I suppose with capex spends of $50-100b over last 10 years it was a place where the corrupt bosses must have made a fortune. some will be executed for sure.

ashi
BRFite
Posts: 456
Joined: 19 Feb 2009 13:30

Re: PRC Economy - New Reflections : Dec 15 2011

Postby ashi » 11 Mar 2013 13:27

krishnan wrote:i really wonder, how they can up the defence budget when so much loss is going on


And you should also wonder why in the last three decades there were people predicting China collapse every year but China has not collapsed but gotten bigger and richer.

vina
BRF Oldie
Posts: 6046
Joined: 11 May 2005 06:56
Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists

Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 11 Mar 2013 13:30

some will be executed for sure

Some out of luck , underling fall guy will get executed. The Plincerings and their gang will get away scot-free as usual.

ashi
BRFite
Posts: 456
Joined: 19 Feb 2009 13:30

Re: PRC Economy - New Reflections : Dec 15 2011

Postby ashi » 11 Mar 2013 13:34

vina wrote:
Yeah. I too wonder, how Germany with a far lower steel consumption and capacity than China as such high per capita GDP :rotfl: , not to mention the whole of Europe and US and Japan !

But think of it. All that building frenzy and operating those steel plants of 900 million tons capacity and keeping them supplied must have boosted the GDP. Now that they have to get flushed down the toilet, what will happen to the GDP ?

And oh, what about the bank loans and other loans that must have been literally trillions to build a 900m capacity steel industry ? Now when you have to drop to 400m tons and write off 500m tons of capacity, what will happen to all those loans, and who will pick up the tab for that (the poor toiling citizen of course..). Now what will happen when this overbuilding craze that occurred in EVERY industry in China turns south and contracts ?

That sounds like a giant bubble bursting!


What did the western countries do after finish industrialization? Who says China will make steel at this volume forever? But urbanization will take another x years to finish so this will go on for a while.

vina
BRF Oldie
Posts: 6046
Joined: 11 May 2005 06:56
Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists

Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 11 Mar 2013 13:49

ashi wrote: last three decades

Three Decades ? And here we were thinking that the wise Chinese think in terms of millennial! Oh well, how convenient, three decades huh ? Five decades and we start with stuff like " East is Red", "Let a Thousand Roses Bloom" , chanting lemmings crushing and destroying from within a fine civilization created by their ancestors over the past 5000 years, to be replaced with what ? Some high rise towers in Pudong and garish over the top buildings in Beijing and ink like pollution ?

krishnan
BRF Oldie
Posts: 7342
Joined: 07 Oct 2005 12:58
Location: 13° 04' N , 80° 17' E

Re: PRC Economy - New Reflections : Dec 15 2011

Postby krishnan » 11 Mar 2013 13:52

Are people really predicting chinese collapse for past 3 decades ???? with so much secrecy who knowns whats the truth...we just found out the real truth behind your so called designed in china attack helo Z-10

ashi
BRFite
Posts: 456
Joined: 19 Feb 2009 13:30

Re: PRC Economy - New Reflections : Dec 15 2011

Postby ashi » 11 Mar 2013 13:56

vina wrote:
ashi wrote: last three decades

Three Decades ? And here we were thinking that the wise Chinese think in terms of millennial! Oh well, how convenient, three decades huh ? Five decades and we start with stuff like " East is Red", "Let a Thousand Roses Bloom" , chanting lemmings crushing and destroying from within a fine civilization created by their ancestors over the past 5000 years, to be replaced with what ? Some high rise towers in Pudong and garish over the top buildings in Beijing and ink like pollution ?


I don't understand what your mumble jumble is here but I do remember you challenged everyone with a bid few years back that China was going to collapse and India was going to pass China in growth rate. "Yawn" for your prediction again.

ashi
BRFite
Posts: 456
Joined: 19 Feb 2009 13:30

Re: PRC Economy - New Reflections : Dec 15 2011

Postby ashi » 11 Mar 2013 14:01

krishnan wrote:Are people really predicting chinese collapse for past 3 decades ???? with so much secrecy who knowns whats the truth...we just found out the real truth behind your so called designed in china attack helo Z-10


For WZ-10, please see the article here. Russian provided the concept design but China took it into a real product.

http://www.flightglobal.com/news/articl ... gn-383147/

After Kamov completed the design, the Russian design bureau verified the design via testing. Kamov then delivered the design to China and the Project 941 concept was accepted by that country's government for further development, he says. Kamov did not participate in any further developmental work on the WZ-10, he insists.

Thereafter, to the country's credit, Mikheev says, the Chinese handled the rest of the developmental work. That includes the developmental prototypes and the operational aircraft that is currently in production for the Chinese military.

"So I wish success to the helicopter," Mikheev says.

Mikheev would not comment on the WZ-10's performance. "That is a question for the Chinese," he says. "I know what I have done."

vina
BRF Oldie
Posts: 6046
Joined: 11 May 2005 06:56
Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists

Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 11 Mar 2013 14:12

ashi wrote:I don't understand what your mumble jumble is here

What! They didn't make you sing this in school ? 东方红 and all the rest of it ? East is Red
东方红,太阳升,
中国出了个毛泽东。
他为人民谋幸福,
呼尔嗨哟,他是人民大救星!


And of course this. 百花齐放,百家争鸣 Hundred Flowers Campaign

but I do remember you challenged everyone with a bid few years back that China was going to collapse and India was going to pass China in growth rate. "Yawn" for your prediction again.

Well, the music is still playing. Remember the one who laughs last. Like I said, the tide still hasn't gone out for China. It happened in the 90s for S Korea for eg (who picked themselves up and came back stronger), Japan 90s again, never recovered after that, how China responds to that will decide things.


Return to “Trash Can Archive”

Who is online

Users browsing this forum: No registered users and 20 guests