PRC Economy - New Reflections : Dec 15 2011

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Theo_Fidel

PRC Economy - New Reflections : Dec 15 2011

Post by Theo_Fidel »

Last Page of previous thread : viewtopic.php?f=2&t=4036&start=3960
___________________________
Chola,

My question still stands. I'm quite curious about this phenomenon.

chola wrote:
A good start is to realize that it is a huge consumer market, many times larger than India's, even if it is not "consumption-led."
Chola,

Can you explain this. Doesn't make sense superficially.
Theo_Fidel

Re: PRC Economy - New Reflections : Dec 15 2011

Post by Theo_Fidel »

Meanwhile.... ..transfer of wealth to the CPC overlords continues...

http://www.nytimes.com/2011/12/15/world ... ities.html

Image
A long-running dispute between farmers and local officials in southern China exploded into open rebellion this week after villagers chased away government leaders, set up roadblocks and began arming themselves with homemade weapons, residents said.

The conflict in Wukan, a coastal settlement near the country’s booming industrial heartland in Guangdong Province, escalated on Monday after residents learned that one of the representatives they had selected to negotiate with the local Communist Party had died in police custody. The authorities say a heart attack killed the 42-year-old man, but relatives say his body bore signs of torture.

Spasms of social turmoil in China have become increasingly common, a reflection of the widening income gap and deepening unhappiness with official corruption and an unresponsive legal system. Despite the government’s best efforts to control social media outlets, such frustrations have only grown as millions of ordinary Chinese gain access to the Internet.

Last year, there were as many as 180,000 outbursts of what sociologists here describe as “mass incidents,” strikes, sit-ins, rallies and violent clashes that have mushroomed alongside China’s breakneck economic expansion. Government figures from the mid-1990s put the number of mass incidents at less than 10,000.

“People don’t have sufficient faith in legal procedures or the media and feel they have no redress when bad things are done to them,” said Martin K. Whyte, a Harvard sociologist who studies Chinese social trends.

While some protests are prompted by unchecked pollution, claims of unpaid wages or instances of police brutality, the majority of such cases appear to be related to government land grabs that invariably end in forced evictions that often leave the disposed with meager compensation.

More than just unalloyed greed, these seizures are fueled by local governments that have come to rely on the proceeds of land sales and development for funding day-to-day operations.
Public ire exploded in September, when thousands of people took to the streets to protest the sale of a village-owned pig farm for luxury housing that netted the government $156 million. In addition to greater compensation and a public accounting about earlier land deals, the residents called for democratic elections to replace village officials, including the party secretary, who has been in power since the early 1980s. After two days of demonstrations, during which police vehicles were destroyed and government buildings ransacked, riot police moved in with what residents described as excessive brutality.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by VikramS »

x-post of previous thread
wong wrote:
Since when did silicon valley move to mainland china. I thought this was a thread about mainland China and not Chinese Americans??? The relevance of your example escapes me and I've owned a home in SF Bay Area before (Walnut Creek). And my experience is different from yours, but then I work in finance and not technology. Perhaps if you sited stats from Beijing or Shanghai it would be more on topic.

The observation which Chola made was that given a choice a lot of Asian women marry non-Asian which is not likely to help the gender imbalance situation. Clearly that can not happen in PRC since non-Chinese are not residents there.

However, when they have a choice, as in the US, twice the number marry non-Asian than the reverse. As the mobility of people increases, this is likely to put an even greater pressure on the gender imbalance in China. More specifically the original context was the 200 million bride-less males in China and the CCP reaction to that.

I personally feel that this line of discussion is pretty fruitless. Both Indian and China have huge gender imbalances and the sooner they do something about it the better it is.

wong wrote: I think results speak for themselves. This is 100 page thread of Indian predicting a Chinese collapse that by all rational indicators isn't even close to happening. In fact China, being a creditor nation, is stronger than ever. Meanwhile, what's INR trading today??
You are so trained to see only one side of the coin that any critical analysis of China is perceived as "predicting Chinese collapse". The fact of the matter is that most Indians do not know much about China. What they are doing here is collect articles and try to make an inference.

However, whenever their is a negative article, we have CCP drones like you come in to defend China. Among a bunch of folks who are so critical of the actions of Indian leaders, such dedication to defending the CCP is amusing, to say the least.

Some of us also find the hubris people like you display a bit scary. It is somewhat reminiscent of the Nazi Germany, where a powerful nation, with a sense of vicitmhood, with little internal checks and balances, and a powerful suppression mechanism went on to cause so much death and mayhem. In a lot ways modern PRC is acting like the Nazis, lacking a moral compass.

BTW, what is wrong with a cheap INR? It helps Indian exports, forces Indian energy consumer to become more efficient and encourages longer term capital inflows. The CCP huffs and puffs to keep the Yuan pegged below its natural value.

How come what is good for the Chinese is bad for the Indians? :((

And you claim to be in finance... :rotfl:
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Hari Seldon »

From twitter:
@marykissel Mary Kissel
>>The remarkable thing about China's #Wukan protest isn't that it's happening, but that the outside world is hearing about it in such detail.

I'm worried now. I sincerely want china's communistas to hang on and hang in there for as long as physically possible. I'm decidedly *not* looking forward to glasnost in PRC. Oh no....
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by VikramS »

Shri Ambrose

http://www.telegraph.co.uk/finance/chin ... egins.html


Fitch Ratings said China is hooked on credit, but deriving ever less punch from each dose. An extra dollar in loans increased GDP by $0.77 in 2007. It is $0.44 in 2011. "The reality is that China's economy today requires significantly more financing to achieve the same level of growth as in the past," said China analyst Charlene Chu.

Ms Chu warned that there had been a "massive build-up in leverage" and fears a "fundamental, structural erosion" in the banking system that differs from past downturns. "For the first time, a large number of Chinese banks are beginning to face cash pressures. The forthcoming wave of asset quality issues has the potential to become uglier than in previous episodes".

Investors had thought China was immune to a property crash because mortgage finance is just 19pc of GDP.
Wealthy Chinese often buy two, three or more flats with cash to park money because they cannot invest overseas and bank deposit rates have been minus 3pc in real terms this year.

But with price to income levels reaching nosebleed levels of 18 in East coast cities, it is clear that appartments – often left empty – have themselves become a momentum trade.
The point to ponder is not the need for all the housing and infrastructure. It is the return on investment.

If the masses can not afford to pay those prices, the money used to finance these projects is essentially lost. I guess it is hard to calculate the impact of these issues in a place where eventually everything is owned by the state, and most banks are ultimately backed by the state.

It is however true that housing which used to be the one avenue available to the common Chinese to hedge against inflation is deflating. It is hard to study what will happen until we know when and at what prices those purchases were made; i.e. how many buyers are going to underwater and at what price.

Once the current deflationary scare thanks to Europe passes, we are likely to see a rush into Gold thanks to the common Chinese. They will have little else to hedge against inflation and the likely CCP reaction, pumping liquidity, is going to make inflation even worse.

The time to buy Gold is coming; keep your powder dry.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by wong »

VikramS: How come what is good for the Chinese is bad for the Indians?

That's simple. India runs a huge current account deficit every single month. China runs a surplus. Do I need to explain why a low currency hurts the former but benefits the latter?? Hint: Try paying for that Iranian oil now. It just got even more difficult.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by chola »

Theo_Fidel wrote:Chola,

My question still stands. I'm quite curious about this phenomenon.

chola wrote:
A good start is to realize that it is a huge consumer market, many times larger than India's, even if it is not "consumption-led."
Chola,

Can you explain this. Doesn't make sense superficially.
It doesn't make sense only if you do not separate the idea of a consumer-led economy from the consumer market itself.

A "consumption-led" or "consumption-driven" economy means that the underlying engine of growth is consumers buying goods which in turns create jobs for the population who in turns buys more goods to create more jobs, etc., in a virtuous cycle. This is what the US and Indian economies are.

An "export-led economy" is the model pursued by Japan, South Korea and Germany. Some people would put China there but I wouldn't. Job and wealth creation through accumulation of hard currency from trade surpluses.

A third type are "investment-led" economies. China, like the former USSR, is a communist nation. By definition, communist nations run investment-led economies. The government picks and chooses what it wants to invest in and jobs follows. It can choose to invest in infrastructure to help its exporters and thereby create additional wealth through trade surpluses or it can decide to create bridges to nowhere which will give no return and saddle the nation with debt. It all up to the whim of the communist bureaucrat.

All three economic types -- whether driven primarily by consumption, export or investment -- create consumers and therefore consumer markets. There is no reason why an investment- or export-led economy cannot have a huge consumer market as long as jobs and wealth is created. It does not take a consumption-led economy to create a large consumer class.

My statement is the consumer market of China -- even though it is not a consumption-led economy -- is massively big, many times the consumer market of India. If you are in my field then the sales figures of US, Japanese and other Western and Asian MNCs in China are not something you can ignore unless you literally want to go into another line of work. Indian companies will be left on the wayside if we do not establish a foothold in this market. One of the reasons we haven't is we do not have the cold, hard calculating business acumen of the West and the East Asians which dictates they make money from friends and enemies alike. Westerners and Japanese also study their foes. The amount of American and Japanese researchers, reporters and analysts on China and operating in China is probably several thousand fold of the few resources we have there.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by vina »

One of the reasons we haven't
Chola, the more brutal fact is that we don't have really much to sell to the Chinese consumer and don't have the brand power.

What can do sell in addition to the usual trade is pharma and IT/Vity, where the Chinese govt clamps down with non trade and market access barriers, because they want to give "protection" to their weak indutries there and want to build it up long term.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by gakakkad »


My statement is the consumer market of China -- even though it is not a consumption-led economy -- is massively big, many times the consumer market of India. If you are in my field then the sales figures of US, Japanese and other Western and Asian MNCs in China are not something you can ignore unless you literally want to go into another line of work. Indian companies will be left on the wayside if we do not establish a foothold in this market. One of the reasons we haven't is we do not have the cold, hard calculating business acumen of the West and the East Asians which dictates they make money from friends and enemies alike. Westerners and Japanese also study their foes. The amount of American and Japanese researchers, reporters and analysts on China and operating in China is probably several thousand fold of the few resources we have there.
+100 . Wish the Indian government reads this.

Narendra Modi seems to have picked up the cue. Did a lot a business with the Chinese in his recent trip. The central government is myopic as expected.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by gakakkad »

>>Chola, the more brutal fact is that we don't have really much to sell to the Chinese consumer and don't have the brand power.

Jewellery , Bollywood , idli dosa restaurants , fashion etc etc.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by chola »

wong wrote:VikramS: How come what is good for the Chinese is bad for the Indians?

That's simple. India runs a huge current account deficit every single month. China runs a surplus. Do I need to explain why a low currency hurts the former but benefits the latter?? Hint: Try paying for that Iranian oil now. It just got even more difficult.
India runs a deficit now because it doesn't artificially lower its currency to gain export work. In the long run, a lower rupee will benefit the export sector of India just like the low Yuan benefits China now. There is no getting around this. In the global economy, costs -- like water -- always find its level.

But I doubt that the rupee will continue to drop for long since the fundamentals of the Indian economy is weighted towards local consumption and not export markets like the EU which is causing the current panic. But if it does drop for an extended period, India will began to eat into the export sector jobs now enjoyed by China.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by chola »

vina wrote:
One of the reasons we haven't
Chola, the more brutal fact is that we don't have really much to sell to the Chinese consumer and don't have the brand power.

What can do sell in addition to the usual trade is pharma and IT/Vity, where the Chinese govt clamps down with non trade and market access barriers, because they want to give "protection" to their weak indutries there and want to build it up long term.

Korea had nothing in the 1990s and now it beats the Japanese across the boards in China and elsewhere. There are hundreds of brands from Thailand and Taiwan that nobody even heard of in the West who are making huge amounts in China.

Practically every East or SE Asian nation runs a huge surplus with China. Whether it is Malaysia, Taiwan, SoKo or Mongolia, they run a surplus with the chinis.

This is not a sophisticated market like Japan or Singapore. It is like Africa in a lot of ways except a few exponentials wealthier. This is the time to create brand awareness.

It can be done, Mahindra has the number three best selling tractor in China and 10% of the Chinese tractor market.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by ashi »

chola wrote: India runs a deficit now because it doesn't artificially lower its currency to gain export work. In the long run, a lower rupee will benefit the export sector of India just like the low Yuan benefits China now. There is no getting around this. In the global economy, costs -- like water -- always find its level.

But I doubt that the rupee will continue to drop for long since the fundamentals of the Indian economy is weighted towards local consumption and not export markets like the EU which is causing the current panic. But if it does drop for an extended period, India will began to eat into the export sector jobs now enjoyed by China.
Cheap cost is not the only factor of having an export industry. It is only one of them. You need great infrastructures, a large pool of educated and young labors, supportive government policies, efficient supply chains etc. India lacks all of these. And this cannot be changed overnight.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by krishnan »

http://www.rediff.com/business/slide-sh ... 111215.htm
With local governments often dependent on land sales to fund payments on a staggering 10.7 trillion yuan ($1.7 trillion) of debt, Beijing worries that a collapsing property market will trigger a wave of defaults that in turn will hit the banks.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by VikramS »

wong wrote:VikramS: How come what is good for the Chinese is bad for the Indians?

That's simple. India runs a huge current account deficit every single month. China runs a surplus. Do I need to explain why a low currency hurts the former but benefits the latter?? Hint: Try paying for that Iranian oil now. It just got even more difficult.

Seriously, what kind of job do you have in the finance sector? Do you do deliver lunch or go under tables to hook up cables?

Why do you think the entire world is after China to let the Yuan appreciate? Or the US wants a lower US dollar to allow US exports to grow and lead it out of trouble?

You either lack the very basic understanding of modern finance, or are paid to act stupid.

Or you are just plain dumb.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by VikramS »

ashi wrote: Cheap cost is not the only factor of having an export industry. It is only one of them. You need great infrastructures, a large pool of educated and young labors, supportive government policies, efficient supply chains etc. India lacks all of these. And this cannot be changed overnight.
First of all thank you for posting something with some reasoning behind it. Talking with wong is like banging a head against a brick wall.

The issues you raised above are valid. However, they are not unsurmountable.

Over the past three decades, the CPC was able to get away with a lot, "for the greater good", while ignoring individual rights. Going forward their ability to force change, at the cost of individual rights is going to come down. Once people have full stomachs, they start looking for more than just the bread.

Purely from a strategic point of view, many in the West want to reduce their dependency in China, simply because China has grown much faster than most in the West could imagine. Couple that with China's strong focus on defense and her strong-arm foreign policies, have raised a lot of alarm bells, which is going to have an impact.

Also note that India's peninsular geography also means that it is much easier to develop self-contained zones, along the coast without having to go deep into the country. You do not need long transportation lines.

I do agree that India needs more reforms and a better business friendly environment. A weaker INR creates that opportunity for those looking to invest, to invest at much better ROI than a few months ago. This does not mean that India is going to replace the PRC as the factory of the world. All it means that her exporters will now have a price advantage which is bound to translate in to some upside in exports.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by gakakkad »

>> You need great infrastructures, a large pool of educated and young labors, supportive government policies, efficient supply chains etc. India lacks all of these. And this cannot be changed overnight.

India does have a large pool of educated and young labour. Though the average age will decline till 2020s . China did not have the infra when t started with the process of being the "world factory" .Supply cains can be generate once the demand comes . The only thing I am terribly worried about is a supportive government . That is indeed a problem. But there is a leader who , if elected can change it all .
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Hari Seldon »

gakakkad wrote:But there is a leader who , if elected can change it all .
Amen to that. And a clear, rational and strategic one who, IMHO, even PRC could get along with, actually.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Singha »

he and Amma probably are the most 'chinese' of indic leaders in business-friendly 'pragmatism' . chinese cos are investing in his state.

but I dare not utter his name for fear of being branded a saffron trouble maker :)
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by wong »

Resorting to personal insults just shows how weak your arguments are.

Let's look at the case for China as a currency manipulator.

In 1984, the Chinese Yuan was around 2 to the dollar. Today, it's 6.36. A depreciation of 3x.

Now, let's look at the Rupee. The Rupee was 10 To the Dollar in 1984. Today, it's 54. 5.4x. Almost twice China's currency manipulation, but with none of the benefits. FX are the most liquid market on the planet, the numbers don't lie.
VikramS wrote:
wong wrote:VikramS: How come what is good for the Chinese is bad for the Indians?

That's simple. India runs a huge current account deficit every single month. China runs a surplus. Do I need to explain why a low currency hurts the former but benefits the latter?? Hint: Try paying for that Iranian oil now. It just got even more difficult.

Seriously, what kind of job do you have in the finance sector? Do you do deliver lunch or go under tables to hook up cables?

Why do you think the entire world is after China to let the Yuan appreciate? Or the US wants a lower US dollar to allow US exports to grow and lead it out of trouble?

You either lack the very basic understanding of modern finance, or are paid to act stupid.

Or you are just plain dumb.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by wong »

I would just like to add that Bloomberg data for Yuan doesn't go beyond 1984, but the rupee does and if you plot the rupee/dollar exchange rate, it's basically an exponential depreciation since the late 1970s. The Yuan plot is not even close. It's like a flatline in comparison. Why the world doesn't care about the Rupee exponential depreciation is another topic. Mostly it's because India is still not competitive even with all that currncy manipulation, while China certainly is competitive but I digress & that's for another thread
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Theo_Fidel »

Chola,

I completely agree that Panda is an investment lead economy. Your comparison with the Soviets is perfect. Despite the sham of appearing to be open to market policies, it is a communist economy.

The question of course is how did a investment economy support such a massive consumer market. What was the mechanism to transfer wealth to the populace. And what is source for this investment. Is it resource investment as it was for the Soviets. They were at one point the Soviets were burning 7 tonnes of coal per ton of steel as compared Western plant.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by shyam »

wong wrote:Let's look at the case for China as a currency manipulator.

In 1984, the Chinese Yuan was around 2 to the dollar. Today, it's 6.36. A depreciation of 3x.

Now, let's look at the Rupee. The Rupee was 10 To the Dollar in 1984. Today, it's 54. 5.4x. Almost twice China's currency manipulation, but with none of the benefits. FX are the most liquid market on the planet, the numbers don't lie.
You are still wrong in your analysis.

When a country has current account deficit, its currency will go down. When it has current account surplus, it has to go up. What we saw in China's case is that currency went down despite current account surplus, and that is a clear sign of manipulation.

BTW, big reason for INR depreciation is that during 1991 economic crisis, India was asked by IMF to depreciate the currency for the forex loan after pledging gold.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by wong »

^^^

Not true. The Rupee has been depreciating exponentially since the 1970s way before 1991 (as if China should spend recklessly and wait for IMF bailouts). I don't have data for earlier. Does anyone remember if the Rupee was 6:1 in the early 1970s.

There is also not a 1:1 relationship between current accounts surplus and an appreciating currency. Germany and the Middle East states also have a very strong surplus and weak currencies, but no one accusing them of manipulation. If a tree falls in the forest and no one hears, does it not make a sound ?? If a country depreciates its currency at almost twice the rate of China and no one gives 2 S's, is it not a currency manipulator??
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by VikramS »

chola:

Regarding the trade deficit of PRC to other ASEAN countries, how much of that is due to import of semi-finished products/components for final assembly and reexport versus for internal consumption in China?

A lot of companies manufacture their core components outside China, but use the Chinese factories for the final assembly and testing. A part of the reason is that the final assembly and testing is relatively more labor intensive than near automated manufacturing of components. Another part is to protect the core IP of the company since once the IP ends up in China it is sooner or later going to get cloned locally.

wong:

The INR had a lot of restrictions on conversions till the early 90s and was not a free floating currency; there were many controls even in terms of how much INR could be converted to foreign exchange. You could not exchange more than $500 if you were travelling abroad!

During the early 90s those curbs were removed and the INR found its natural range. The depreciation of the INR helped fuel the Indian export industry; and the INR tracks the current account deficit reasonably well.

As pointed by others, the Chinese Yuan is unique because it depreciated while PRC was running huge surpluses! The laws of economics reverse with it.

Incidentally, due to the tight peg of the Yuan, it is not the best metric of what is going on.

From the Pritchard article included earlier.
"There is so much spare capacity that they will start dumping goods, risking a deflation shock for the rest of the world. It no surpise that China has just imposed tariffs on imports of GM cars. I think it is highly likely that China will devalue the yuan next year, risking a trade war," he said.

China's $3.2 trillion foreign reserves have been falling for three months despite the trade surplus. Hot money is flowing out of the country. "One-way capital inflow or one-way bets on a yuan rise have become history. Our foreign reserves are basically falling every day," said Li Yang, a former central bank rate-setter.

The reserve loss acts as a form of monetary tightening, exactly the opposite of the effect during the boom. The reserves cannot be tapped to prop up China's internal banking system. To do so would mean repatriating the money – now in US Treasuries and European bonds – pushing up the yuan at the worst moment.
wong wrote: There is also not a 1:1 relationship between current accounts surplus and an appreciating currency. Germany and the Middle East states also have a very strong surplus and weak currencies, but no one accusing them of manipulation. If a tree falls in the forest and no one hears, does it not make a sound ?? If a country depreciates its currency at almost twice the rate of China and no one gives 2 S's, is it not a currency manipulator??
And your definition of currency manipulation is right out of the PRC circulars. When did Germany have its own currency in this century??

The RBI does not set the band for the INR. It floats freely based on the context of current capital controls. OTOH, the PRC explicitly sets the exchange rate for the Yuan in a band which is completely artificial and not market driven. The RBI in fact has been accused of being too lethargic in intervening in the Forex market; they try to be as hands off as possible.

In fact the INR tends to track the global economy quite well. The chart below shows INR.USD vs the SPY. While the scales are different, the fractals are almost identical.
https://www.google.com/finance?chdnp=1& ... USD&ntsp=0

Compare it to that of the Yuan which seems immune to what is happening to the rest of the world because it is so heavily manipulated.
https://www.google.com/finance?chdnp=1& ... CNY&ntsp=0
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by PrasadZ »

wong wrote:Resorting to personal insults just shows how weak your arguments are.

Let's look at the case for China as a currency manipulator.

In 1984, the Chinese Yuan was around 2 to the dollar. Today, it's 6.36. A depreciation of 3x.

Now, let's look at the Rupee. The Rupee was 10 To the Dollar in 1984. Today, it's 54. 5.4x. Almost twice China's currency manipulation, but with none of the benefits. FX are the most liquid market on the planet, the numbers don't lie.
Well, wong, your argument seems to be that china is allowed half the manipulation that india is allowed. :lol: Been taking lessons in isloo lately? :rotfl:

Never been clear why economic analysis of china needs an india comparison?! We do have a thread for ind econ if thats the objective, innit?
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by svinayak »

In one Chinese business conf the host started with like this
"Last year 2010 Indian conomy grew at 9.3% in Gdp but China was able to manage 10.4% growth and maintaining the fastest growth in the world.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by shyam »

PrasadZ wrote:Well, wong, your argument seems to be that china is allowed half the manipulation that india is allowed. :lol: Been taking lessons in isloo lately? :rotfl:
He claims he works in finance.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by gakakkad »

before 91 Rupee was a pegged currency . Only post 91 did the RBI begin to float it . So you cannot consider pre 91 and post 91 Rupee as a model for comparison .
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by ashi »

PrasadZ wrote: Never been clear why economic analysis of china needs an india comparison?! We do have a thread for ind econ if thats the objective, innit?
Well, Vina challenged everyone in this thread that India was going to outgrow China starting two years ago. Without comparision we wouldn't know if he is right, right? :-)

Also most of the time whe you accuse someone of something, it is natural that person will question if you are indeed in a good position of doing that.
Last edited by ashi on 16 Dec 2011 10:21, edited 2 times in total.
ashi
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by ashi »

PrasadZ wrote: Well, wong, your argument seems to be that china is allowed half the manipulation that india is allowed. :lol: Been taking lessons in isloo lately? :rotfl:
You are obviously making an wrong assumption of what Wong has said. That fact is every country can and do manipulate their currencies. What do you think of the feds has printed tons of money in each round of the QEs?
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by PrasadZ »

ashi wrote:
PrasadZ wrote: Never been clear why economic analysis of china needs an india comparison?! We do have a thread for ind econ if thats the objective, innit?
Well, Vina challenged everyone in this thread that India was going to outgrow China starting two years ago. Without comparision we wouldn't know if he is right, right? :-)

Also most of the time whe you accuse someone of something, it is natural that person will question if you are indeed in a good position of doing that.
By that logic, ashi, only a thief may accuse another of theft :shock: Thanks for the insight, ashi !
I only note that you arent comparing economies here. Since you, clearly, need the validation, I assure you your chinese d#$% must be longer than vina's indian one. The logic you employ shows it must be so :lol:
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by PrasadZ »

ashi wrote:
PrasadZ wrote: Well, wong, your argument seems to be that china is allowed half the manipulation that india is allowed. :lol: Been taking lessons in isloo lately? :rotfl:
You are obviously making an wrong assumption of what Wong has said. That fact is every country can and do manipulate their currencies. What do you think of the feds has printed tons of money in each round of the QEs?
come on, ashi .. if every country manipulates their currency is the best you can do to justify Chinese trade behavior, its natural that you are accused of a mercantilist mindset. Since you see trade as a zero sum game, its natural that your trade policy is resisted. The accusation against China is that its far too protectionist and their size and weight leads to far too many other countries becoming similarly protectionist.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by ashi »

PrasadZ wrote:By that logic, ashi, only a thief may accuse another of theft Thanks for the insight, ashi !
Jeez, my logic is if you are a thief, you are not qualify to be a cop. You need to improve your comprehension.
PrasadZ wrote:
I only note that you arent comparing economies here. Since you, clearly, need the validation, I assure you your chinese d#$% must be longer than vina's indian one. The logic you employ shows it must be so :lol:
Which part of my discussion here is not about economies??? And which part is about d#$%? It looks like you have some sort of obession about d#$% size and likes to turn the discussion towards that.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by gakakkad »

ashi wrote:
Well, Vina challenged everyone in this thread that India was going to outgrow China starting two years ago. Without comparision we wouldn't know if he is right, right? :-)

Also most of the time whe you accuse someone of something, it is natural that person will question if you are indeed in a good position of doing that.

Well the challenge still stays . Last year India grew faster than China. The slow down this year is by all means temporary . Inflation is now under control , and rates will come down any time soon .

http://en.wikipedia.org/wiki/List_of_co ... test_year)

In fiscal 10 the real gdp growth rate of India was 10.4 % while that of China was 10.3 % . As per sources the official inflation in PRC is understated so the real clowth rate of China in fiscal 10 will even be lesser. Nominally India grew by almost 25 % .

Wait for a few more years . (2,3 AT THE MOST) and Indian growth rate will comprehensively outpace any other major economy . The major policy decisions are yet to be implemented. There is the national manufacturing policy , the power sector reforms , FDI reforms etc. The point I want to make is that in spite of the policy constraints India grew so rapidly , so what will happen when the constraints are removed ? Most of the decisions will be executive decisions not needing constitutional amendment . And the pressure to reform is high of the government . So in the long term , I d hedge in the favour of reforms happening .
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by PrasadZ »

ashi wrote:
PrasadZ wrote:By that logic, ashi, only a thief may accuse another of theft Thanks for the insight, ashi !
Jeez, my logic is if you are a thief, you are not qualify to be a cop. You need to improve your comprehension.
Well, jeez ashi, by your new logic, a thief cannot accuse another of theft. I like your new claim that India is a cop, but I think wong was, at least, honest in his claim that he believes india to be a fellow thief (aka ccy manipulator) and you seem to believe that the US, along with the entire world, are thieves as well :cry:
ashi wrote:
PrasadZ wrote:
I only note that you arent comparing economies here. Since you, clearly, need the validation, I assure you your chinese d#$% must be longer than vina's indian one. The logic you employ shows it must be so :lol:
Which part of my discussion here is not about economies??? And which part is about d#$%? It looks like you have some sort of obession about d#$% size and likes to turn the discussion towards that.
About the only comment one can infer economics in so far, dear ashi, is this : "Cheap cost is not the only factor of having an export industry. It is only one of them. You need great infrastructures, a large pool of educated and young labors, supportive government policies, efficient supply chains etc. India lacks all of these. And this cannot be changed overnight."

Am sorry, I only see a d#$% comparison here. You are welcome to post comparative information about China's "great infrastructures, a large pool of educated and young labors, supportive government policies, efficient supply chains". As it stands, this post is poor, uneducated and unsupportive of any of the 2 implications you drew from it.

In fact, I would call it borderline racist. I (and indians, in general) dont go about dissing Bangladesh or Nepal for not doing as well as India; its a surprise when the Chinese argue strenously that India is not doing as well as China - on an Indian forum, that too !! Why bother?! If you must promote China, feel free to do so. Why diss India to promote a viewpoint about China?! Guess where I have seen that behavior before? Guess why I ask you about your educational destination?
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Hari Seldon »

+1 ^^^PrasadZ,

Anybody notice how hard the chini drones try to *prove* PRC soup-e-rearity against us SDREs on an Indian forum.

My contention, back when I first noticed this pattern of behavior was, well, if you're oh so soup-e-rear and all that, then why would you bother spending time and trouble at an Indian forum at all? Why would it matter to you what we think or feel if indeed you were convinced that PRC is unbeatable by us Yindians only, eh?

Goes to show that these losers are paid drones CPC routinely uses to carpet bomb web forums everywhere only. My 2 cents of course, but why would the great, soup-e-rear chini angels care about boor SDRE opinions, eh?

Jai hu, jai mao, jai CPC, jai hor!
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by PrasadZ »

@VikramS :
Some of the claims in that Pritchard article are debatable :
1. Consumption has fallen from 48pc to 36pc of GDP since the late 1990s >> I guess this comes from the Lang interview but I havent seen any credible source for the data he uses
2. Investment has risen to 50pc of GDP >> this is, again, i presume, Lang data that 70 pc of GDP in 2010 came from infrastructure. this is far too high a number to be credible.

Lang's intention is alarmism; after all, his audience was the CPC. Tom orlik suggests that NBS numbers are questionable, not outright false

The article mixes in qualitative assessments as well :
1. This is off the charts, even by the standards of Japan, Korea or Tawian during their catch-up spurts. Nothing like it has been seen before in modern times.
2. The forthcoming wave of asset quality issues has the potential to become uglier than in previous episodes

China has, far too routinely, been dissed. Maybe its a bubble but I tend to agree with Chola that, whether fairy tale or not, Indian MNCs need more access to that market. NIIT makes money in China, so does Essel Propack. Its not only Mahindra. So one knows Indian industry is capable of competing in China given a fair playground.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Suraj »

Nothing new with any of the PRC drone psychology; it's been like this since back in 2000-01 or so when I first saw this forum.

The basic approach is "here's some great news from PRC! China rocks, right ?" We're expected to unquestioningly agree, whereupon the response will be a condescending "Thanks. You Indians are doing rather well too. Good luck trying to accomplish more." Of course the PRC has made tremendous progress that isn't lost on anyone. But that is not the point here.

Critical review on the other hand, prompts a furious "how dare you ? India is in no position to criticize because {insert randomly chosen Dharavi/Durex/dysentery item}. Know your place." Like I said before - to some, the irony of inviting responses by posting something, and then telling others what they can say, does not register.

Alternately, we see someone who posted a d*ck measurement survey now vigorously stating how it's beneath him to respond to the sexual innuendo targeting him. From a moderation perspective, I thought of editing his original post and censuring him for thread disruption, but decided to let the responses take their own natural course instead.

This isn't much different from the mechanism by which Chinese achievements are propagated in the press. There's a method to it. The process is to hide something till a moment when its revelation can be striking and unsettling, and hopefully intimidating leading to a sudden jump in sales of brown pants (Chinese made of course). It's not original, being an evolved version of the Soviet approach. Their approach is tailormade for a system where information release can be controlled in that manner.

Take for example the recent Varyag satellite pics. The western press response is typically Pavlovian, as if to suggest Chinese CBGs will blockade LA, SF, NY etc by new year. It's not supposed to get a BRF SDRE response like "Oh, a carrier ? Nice. We've been operating one or more of them continuously for the past 50 years. Have fun learning how to launch planes off them."

Disseminating information in short effective bursts like that helps control discourse in a manner that exaggerates your abilities and more importantly, acts as a camouflage that gets adversaries to react in a predictable manner focusing upon being unsettled by your strengths, rather than investigate your weaknesses and build up their own strengths to target those.

When you understand how the mechanism works, responding in a manner different from the kneejerk one becomes possible.
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Re: PRC Economy - New Reflections : Dec 15 2011

Post by Cosmo_R »

@ Suraj ^^^
+1

Also, good luck with trying to recover planes you've launched
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