PRC Economy - New Reflections : Dec 15 2011

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby amit » 24 Jun 2013 15:35

For all the folks shocked and awed by China, another bit of reality check:

Doubts Cast on Chinese Exports

China's customs bureau reported in March that exports rose 19.8% year-to-year in the three months through February, despite a fragile recovery in the U.S. and Europe. The report has buoyed confidence that China's economy is strengthening, after growth in gross domestic product touched a three-year low of 7.4% year-to-year in the third quarter of 2012.



But some exporters, trade agents and economists said the export numbers were likely to be inaccurate because of false reporting by exporters and local governments. They point in particular to mismatching trade figures with Hong Kong, the first destination for many mainland Chinese goods.

In the three months through February, mainland customs reported $94.9 billion in exports to Hong Kong, but Hong Kong customs reported only $58.7 billion in imports from the mainland. The discrepancy during the period was greater than at any other time in recent years.

China's export growth for February could have been overstated by around seven percentage points, based on an analysis of data discrepancies, Louis Kuijs, China economist at RBS, estimated.


BusinessWeek has some more details:

Outbound shipments may have grown 7.1 percent in May from a year earlier, less than half the previous month’s reported 14.7 percent, based on the median estimate of 34 economists ahead of data due June 8. Import growth probably slowed to 6.9 percent from April’s 16.8 percent, a Bloomberg News survey showed.


I'm sure the knowledgeable posters here understand the implications of the massive slowdown of imports in May on China's export driven economy.

Economists in a separate survey last month said January-April export growth was overstated by 4 to 13 percentage points. Shipments abroad probably rose 8.5 percent in the first four months of 2013 from a year earlier, based on the median estimate of 15 economists, less than half the official 17.4 percent number. Imports may have gained 8.25 percent, according to 14 analysts’ median estimate, compared with the government’s 10.6 percent figure.


Here's an interesting tidbit:

]The slowdown may be too much for the government to stomach, said Hu Yifan, chief economist at Haitong International Securities Co. in Hong Kong, who previously worked at the World Bank. Authorities may start “active supportive policies,” including a cut this month in banks’ reserve-requirement ratio, said Hu, the only analyst surveyed to project a May decline in exports.

China’s gross domestic product expanded a less-than-estimated 7.7 percent in the first quarter and analysts last month trimmed forecasts for the April-June period to a median projection of 7.8 percent. The government in March set a goal of 7.5 percent for the year.

“The pressure on the Chinese leadership may grow to do more to boost domestic demand,” such as faster approvals of investment projects, said Sun Junwei, a Beijing-based economist at HSBC Holdings Plc. “The government doesn’t want another stimulus package, but it won’t like a deepening slowdown either.”


The above should be read in conjunction with an earlier piece of stats in the article:

The trade data from the General Administration of Customs will be followed June 9 by National Bureau of Statistics releases on prices, industrial production, retail sales and investment that are forecast to show little change from April growth figures. New yuan loans may have increased to 850 billion yuan ($139 billion) from April’s 792.9 billion yuan in People’s Bank of China numbers due over the next week, based on the median estimate in a Bloomberg News survey.



The point is - and I have always maintained this - there is much that China has done which is good, admirable and worth emulating. However, being shocked and awed by their model and wringing our hands and asking why we can't do the same is useless activity IMO.

They have had two major advantages: One is that that they had more than a decade headstart and two being a authoritarian dictatorship - which pays lip service to Communism - they have been able to ram through a lot of stuff in the guise of "reforms" at which we Indians would take to the streets and rightfully so.

It is useful to remember this when we do our regular ronna dhonna about how China=Good! and India=Bad!

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Sri » 24 Jun 2013 16:30

^^^

I think 'authoritarian dictatorship' is no advantage it is a BIG disadvantage. I think if China was democracy it would have been doing much better than what it is doing today. CCP keeps them down.

Other examples of Hans under democratic system are Hong Kong, S'pore and Taiwan.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Christopher Sidor » 24 Jun 2013 19:38

Taiwan became democratic after it became prosperous. Similar to Korea. Singapore is a small city state. In such a limited environment it is easy to manage. Think of Mauritius. Hong Kong had non-official democratic system since PRC founding. It was only formalized by the British keeping true to their creed, "When an Englishman departs from a garden he wrecks it as it is the only way he knows how to leave"

Authoritarian dictatorship is no handicap. Democracy and Authoritarian systems are both equally vulnerable to pressure and influence from the business class. The problem is that current population expects to run the system and country on its own. It likes its voice to be considered in decision making. This is difficult to reconcile in a single party or Authoritarian rule. There is no guarantee that democracy leads to enlightened decision making. Look at Greece, Spain or Argentina or many other cases.

The issue is when Authoritarian system stumbles are its opponents ready to capitalize on its stumble ?

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Theo_Fidel » 24 Jun 2013 22:06

PRC is taking a bath this morning.
Still I think the real crunch is still in its future when the bankruptcy wave begins.
With the end of QE3 is that the end of China easy liquidity as well?

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 25 Jun 2013 13:43

This CHINESE liquidity crunch is basically sister of US sub-prime where banks picked up so much bad loans and when the debts went bad they started to collapse. So basically CHINESE banks lended to sub-prime exporters and now that they are not able to export and pay for the loands it is natural that the banks will collapse. Central bank need to step in with a massive bail out package and that would tank the value of currency and stoking inflation......

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 25 Jun 2013 13:45

i would go a step further and state that this 10X consumption that Chola admires so much was driven by these bad loans just like the house bubble in US which burst alogn with the banks. Expect this consumption bubble to burst now.....

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 25 Jun 2013 13:50

http://economictimes.indiatimes.com/new ... 756046.cms

Notice the statment "good time are over...."

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 25 Jun 2013 16:01

^^

Most economists say China's financial system is not facing huge systemic risks, and that growth could even come in at 7 percent, which would still make it the world's fastest-growing major economy. But there are mounting concerns here that the good times could be over partly because the banking sector is hiding piles of bad debt.


If they can manage 7 % growth its still good considering the state of the economy the world is in and QE in US will fade away ......as far as bad debts goes I guess like all the bank you see in west the chinese gov will just wash it over.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby chola » 25 Jun 2013 17:28

subhamoy.das wrote:i would go a step further and state that this 10X consumption that Chola admires so much was driven by these bad loans just like the house bubble in US which burst alogn with the banks. Expect this consumption bubble to burst now.....


Idiocy. Stating the fact that the MNCs sell 10X in China what they sell in India is admiration? You sound like a paki who insists that India is the devil and its people are poorer despite all the facts.

Rational armies and companies take intelligence they gathered to formulate appropriate strategy. A light battalion who goes up against an armor division because it refuse to believe its intelligence will get killed. The same when you compete in the global economy.

Refusing to look at the true size of a competitor's economy will get your corporation killed.

They have had two major advantages: One is that that they had more than a decade headstart and two being a authoritarian dictatorship - which pays lip service to Communism - they have been able to ram through a lot of stuff in the guise of "reforms" at which we Indians would take to the streets and rightfully so.


Garbage. There is no advantage in communism. One only has to look at North Korea versus South Korea and China itself versus the states that Sri mentioned.

India as a free nation had a 50-year lead on China not the other way around. What worked for the Chinis was a strategy that Japan, SKorea and Taiwan followed. And they only followed it partially which is why they are far poorer than those other East Asian nations.

This manufacturing had worked for nation after nation in the East. It is a global strategy, it is not Chinese.

Manufacturing is such that they are running out of affordable workers in chiniland. They cannot find work for their college graduates because the so-call knowledge economy simply can't generate enough job just as it can't in ours.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 25 Jun 2013 19:23

We are trying to find the root cause of size of the economy and it is driven by cheap credit garnered by contract manufacturing and pegging the currency and bonded cheap labor and which is going to burst now. Thats all i am saying.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby TSJones » 25 Jun 2013 19:41

subhamoy.das wrote:We are trying to find the root cause of size of the economy and it is driven by cheap credit garnered by contract manufacturing and pegging the currency and bonded cheap labor and which is going to burst now. Thats all i am saying.


.....and you are absolutely correct. State driven, export targeting economies can have great success........for a while. China denies they do export targeting :evil: Japan had great success with it also, but when the US battled them on their structured foreign import discrimination, Japan slowed down too.

Let's face it, the sweet spot is where an economy is trying satisfy it's own needs w/o any *kind* of targeting. I don't think the US is there yet, btw.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby sha » 25 Jun 2013 19:42

China Travel ---from Chengdu to Chongqing from an India travel forum.
http://www.bcmtouring.com/forum/travelo ... ng-t44519/

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Theo_Fidel » 25 Jun 2013 19:54

I think what Chola is saying is that we too should borrow and splurge like the Chinese.
This goes against Indian sensibilities on debt, meaning we have a deep aversion it. Sometimes bordering on irrational…

For instance, there was a report from the CAG a few years ago that the Indian railways is sitting on roughly $ 1 Trillion of prime property.
Using that as collateral, IR should be able to borrow and invest ~$600 Billion, say in a HSR network, creating a lot of construction.
Fares will have to rise naturally to pay interest and principal costs.

The question is do we wish to go down this route.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 25 Jun 2013 20:42

Not sure how CAG came with $1 trillion worth prime property.

Chinese Debt is 20 % of GDP if that is what we are talking off and its quite manageable.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby jamwal » 25 Jun 2013 22:40

Concrete Floors! No Working Toilet! Just $200K In Shanghai

Every weekend, I rise at 7 a.m. to get on the subway to hunt for apartments. The cheapest two-bedroom homes in the suburbs of Shanghai cost $200,000 or more, which would take me more than 12 years to pay off — if I don't spend a dime of what I make.

This is the reality of China's boom. After decades of explosive growth, the cost of living in China's big cities has skyrocketed, and many young people have been priced out of the housing market.

People in the West tend to think the Chinese are taking over the world; the reality is young people here struggle to make ends meet. Putting food on the table and having a shelter are still their biggest concerns. I'm 27, with a graduate degree in journalism and a good job in my field, and I'm worried about these basics.



Not A Supply Problem

After seeing a lot of real estate during my three months of house hunting, it seems to me that the high prices aren't a result of demand outstripping supply but the result of a policy failure. Block after block of apartments in suburban Shanghai sits empty. It's more obvious at night, when few lights in those buildings are on.


The popular Chinese magazine Caijing recently reported that a survey done by the Beijing police last year indicated that of the 12.3 million apartments in the city, 3.8 million were vacant. That's a vacancy rate of 29 percent.

With limited investment options, companies and the rich have poured money into the real estate market. They are willing to let property sit empty so it can fetch a good price — in the belief that incomes and demand will eventually catch up.


What A "Bargain"

To find a cheaper home, I focused on the areas at the end of each subway line. The search for a good price pushed me so far out, I came within a few miles of the next province. After months of painstaking online searches and visits, I settled on an 860-square-foot, two-bedroom apartment that costs $208,000. That price tag is so big that it felt like a boulder on my shoulder. However, in the current market, this price really seems like a bargain.

The apartment was built six years ago; colorful fliers from small businesses cover the walls of the building's hallways. It's just the skeleton of a living space, really; rooms with walls and uneven bare concrete floor and not much else — no appliances, no wooden flooring or carpeting, no usable toilet even.


To modestly outfit the place will require an additional $40,000. A rough calculation reveals that every month after paying the mortgage and for food and other essentials, I will have a little more than $100 left. A crowded bus ride to the office now takes nearly two hours.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Manish_Sharma » 26 Jun 2013 00:22

Apologies in advance if this has been posted already, as I rarely visit economy threads:

http://www.bloomberg.com/news/2013-06-24/china-loses-control-of-its-frankenstein-economy.html

China Loses Control of Its Frankenstein Economy
By William Pesek Jun 25, 2013 3:30 AM GMT+0530

The world has grown used to the idea that China’s leaders are masterful stewards of their gargantuan economy. They steered brilliantly around the iceberg of the 2008 financial crisis, maintaining growth of near-double-digit rates. So when People’s Bank of China chief Zhou Xiaochuan began clamping down on excessive liquidity last week, some observers viewed him as a Chinese Paul Volcker. Now that the worst was over, Zhou seemed to indicate, it was time for China to rein in lending and prevent a credit bubble from swelling.

Then reality intervened. After the overnight repurchase rate zoomed to a record 13.91 percent, Zhou had to back off, hastily injecting fresh funds to stem the turmoil. The chaos traumatized money markets. Some were dismayed by signs that Zhou would end the era of easy money in China. Others feared that he couldn’t.

Indeed, continuing unease this week underscores how limited Zhou’s powers actually are. Over the past decade, China’s economy has grown addicted to excessive credit growth, with state-owned banks encouraged to finance as many new skyscrapers, highways, airports, dams and ghost towns as needed to pump up gross domestic product. Free-flowing liquidity -- mostly to state-owned enterprises -- kept stocks and real estate buoyant, foreign investors bullish and China’s 1.3 billion people away from Tiananmen Square.

Zhou can’t cut off the money now without banks suffering from withdrawal. And the danger is that nobody really knows how healthy China’s giant, state-owned banks are, or how big its shadow-financing system has grown. When Stephen Green of Standard Chartered Plc in Hong Kong called China’s credit system “a big black box, and it’s quite scary,” he wasn’t exaggerating.
Mystery Data

How can anyone trust that China is growing at a rate of 7.7 percent, as the government claims, when crucial variables in its data tabulation are a mystery? Bank of America Corp. economist Lu Ting in Hong Kong risked China’s ire by alleging its trade surplus was 1/10 the $61 billion it reported as of mid-May. The nobody-knows character of China’s credit system -- quantity, quality or excesses -- is even more worrisome.

The U.S. shadow-banking system, with its off-balance-sheet vehicles and murky dealings, helped drive world markets off the rails in 2008. Imagine the damage an entire shadow economy could cause if it unravels.

China’s leaders avoided bursting one bubble in 2008 by creating new ones. Yet China cannot forever delay its day of reckoning. Total credit may reach 200 percent of GDP this quarter, up from 130 percent in 2008. Mainland banks are currently adding assets at the rate of an entire U.S. banking system every five years.

Traditionally, Beijing has viewed opacity as a powerful tool for policing the channeling of funds between banks and companies. That murkiness is now proving dangerous. The central bank needs to confirm it will rein in interbank liquidity, explain the means by which it plans to do so, and indicate what the endgame is. Its vague, boilerplate statements are only exacerbating distress in the markets.

At the same time, Zhou is fundamentally helpless: He cannot be truly effective unless the country’s top political leadership decides that the Communist Party is going to get out of the banking business. China needs to allocate capital less recklessly and price it according to economic reality, not according to the dictates of officials who profit from the current arrangement. If the government really wants to reduce the role of state-run companies in China’s economy -- as it should, because only a thriving private sector can increase innovation and competitiveness -- it must privatize the banks first.
Powerful Creature

Putting off that hard task has turned the Chinese economy into a Frankenstein monster. It’s a giant and powerful creature born of unorthodox experiments, and its makers are increasingly losing control.

No one envies Chinese President Xi Jinping and Premier Li Keqiang. They must manage a slowing economy and institute critical reforms, all without panicking the markets and destabilizing Chinese society. They should study the precedent set by former premier Zhu Rongji, whose efforts to modernize state-owned enterprises in the late 1990s put more than 40 million Chinese out of work but added much-needed balance to the economy.

Any shock therapy will be painful. And to be effective, it must treat the underlying problem, not just the symptoms. Otherwise, Zhou’s every effort to drain credit will only send waves of panic through the markets. He’s right that China’s Frankenstein needs to be stopped. But only its creators can do that.

(William Pesek is a Bloomberg View columnist.)

To contact the writer of this article: William Pesek in Tokyo at wpesek@bloomberg.net.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby sha » 26 Jun 2013 01:52

sha wrote:China Travel ---from Chengdu to Chongqing from an India travel forum.
http://www.bcmtouring.com/forum/travelo ... ng-t44519/
.

Another relative thread.
A Trip to China---Chengdu
http://www.bcmtouring.com/forum/travelo ... du-t44487/



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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 26 Jun 2013 11:11


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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 26 Jun 2013 11:17

http://news.xinhuanet.com/english/china ... 417589.htm

Now service is becoming the main industry of CHINA - what happened to contract manufacturing? It seems be giving up to service when PPP GDP per capita at 8k level only ? For a small sized country like Taiwan this would have taken PPP per capita GDP to high income level but not for CHINA.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 26 Jun 2013 12:25

subhamoy.das wrote:Chinese govt debt is 50% of GDP http://news.xinhuanet.com/english/china ... 417716.htm


Ok so it has increased but even our debt is hovering around 70 % of GDP but people here tell me its not a problem as those debt are held mostly by Indian , Any thing different in Chinese case ?

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby ArmenT » 26 Jun 2013 12:48

jamwal wrote:Concrete Floors! No Working Toilet! Just $200K In Shanghai

What A "Bargain"

To find a cheaper home, I focused on the areas at the end of each subway line. The search for a good price pushed me so far out, I came within a few miles of the next province. After months of painstaking online searches and visits, I settled on an 860-square-foot, two-bedroom apartment that costs $208,000. That price tag is so big that it felt like a boulder on my shoulder. However, in the current market, this price really seems like a bargain.

The apartment was built six years ago; colorful fliers from small businesses cover the walls of the building's hallways. It's just the skeleton of a living space, really; rooms with walls and uneven bare concrete floor and not much else — no appliances, no wooden flooring or carpeting, no usable toilet even.

According to two different Chinese colleagues of mine, this is pretty standard in Chinese cities. That's how the builders have always done business there. Apparently, the notion there is that the buyer of the apartment will customize their new home anyway, so the sellers leave it bare-bones so that the buyer doesn't have to remove stuff. Therefore, the apartments are generally sold without taps, sinks, toilets, switches, appliances etc. and they've always done it that way. The buyers are often surprised to hear that apartments are sold furnished in other countries.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 26 Jun 2013 13:43

the key take away from the article is that it will take 12 years to payout the apartment. In India a similar job would pay 30,000 per month and a similar apartment , which is 2h driven from the main city, about 30L ( assuming 1000 sq.ft and 3000 per sqft cost ) and hence can be paid of in less than 10 years. I am still not able get data points to prove that manufacturing jobs are has significantly improved the living standard of average CHINESE grads.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby chola » 26 Jun 2013 16:16

Theo_Fidel wrote:I think what Chola is saying is that we too should borrow and splurge like the Chinese.
This goes against Indian sensibilities on debt, meaning we have a deep aversion it. Sometimes bordering on irrational…


No, I am saying we look at the manufacturing strategy that created far wealthier societies in Japan, SoKo, Taiwan and now, even the PRC which as a communist state should have ended up like North Korea or Romania but for this strategy.

And we do borrow and splurge, Theoji. But not like the chinese, more like goddam Angola or any number of third world crapstates. We spend but there is no infrastructure.

We have the highest debt ratio in the BRIC, and one of the highest in Asia, but without any of the capital goods needed to tamp down shorts on our currency.

Look at the goddam rupee right now and look at the slants' yen/yuan. The chinis need to sell yuans for dollars to keep their currency low because their fiscal fundamentals are too high while the RBI has to buy rupees with dollars (from a dangerously low forex stash) to keep the rupee collapsing past 60 and into oblivion because our debt and account balance is crap.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby wrdos » 27 Jun 2013 11:17

The guy in the quoted article is only 27, and he has been considering the ownership of an apartment a "necessity". Often we Chinese are pursuing too much in our life with extra pressure.

BTW, a suggestion to Indian friends on this forum. When analyzing the monthly income of a Chinese family or its living standard, one needs to remember that most if not every Chinese women have their own jobs with a salary averagely about 70% of her husband. Also Chinese families tend to have fewer children, at most 2 and often only 1, than their Indian counterparts.

So if a Chinese husband's salary is about US$1000/month, averagely it can be translated to "a family of 3 members with a $1700/month income".

Also, there are 4 or 5 hundreds of millions of Chinese people working in the formal sectors.

subhamoy.das wrote:the key take away from the article is that it will take 12 years to payout the apartment. In India a similar job would pay 30,000 per month and a similar apartment , which is 2h driven from the main city, about 30L ( assuming 1000 sq.ft and 3000 per sqft cost ) and hence can be paid of in less than 10 years. I am still not able get data points to prove that manufacturing jobs are has significantly improved the living standard of average CHINESE grads.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby ArmenT » 27 Jun 2013 13:28

As Chinese workers are becoming more expensive, Foxconn is considering other options:
http://www.itworld.com/362706/foxconn-speed-robot-army-deployment-20000-robots-already-its-factories
Manufacturing giant Foxconn Technology Group is on track with its goal to a create a "million robot army", and already has 20,000 robotic machines in its factories, said the company's CEO Terry Gou on Wednesday.

Workers' wages in China are rising, and so the company's research in robots and automation has to catch up, Gou said, while speaking at the company's annual shareholder's meeting in Taipei.

Interestingly, they are also establishing factories in other places as well:
In addition, Foxconn's CEO said the company is prepared to expand its manufacturing in the U.S., but the move will depend on "economic factors." The company already has factories in Indianapolis and Houston, and employs thousands of workers in the country, according to Gou.

Last December, Foxconn customer Apple said it would manufacture one of its Mac lines in the U.S. by the end of next year. Soon after, Foxconn said it was considering growing its existing manufacturing base in the country.

The Taiwanese company is also exploring building factories in Indonesia, a country with significantly lower labor costs than the U.S. or China.


Interesting times ahead.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 28 Jun 2013 13:08

Yawnnn.. Jai Hu, Jai Mao, Jai Xi. . Back to regular programming about Chinese theft, dacoity and plain knavery I guess.

Chinese Firm Charged in theft of turbine software

June 27, 2013
Chinese Firm Is Charged in Theft of Turbine Software
By MATTHEW L. WALD

WASHINGTON — China’s biggest wind turbine company and two of its executives conspired with an employee of a Massachusetts wind company to steal the American firm’s software for controlling the flow of electricity, causing $800 million in damages, according to an indictment on Thursday.


AMSC says that after Sinovel stole the software, it refused delivery of merchandise it had ordered, worth more than $700 million. It is seeking $70 million in arbitration in that case. It is also suing in China for $450 million for infringement of trade secrets.


Daniel P. McGahn, the president and chief executive, said in a statement, “We have worked with law enforcement to verify that these Sinovel-manufactured wind turbines contain AMSC’s stolen intellectual property.”

“The fact that Sinovel has exported stolen American intellectual property from China back into the United States — less than 40 miles from our global headquarters :mrgreen: :mrgreen: :lol: :lol: — shows not only a blatant disrespect for intellectual property but a disregard for international trade law,” he said.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby alexis » 28 Jun 2013 16:09

jamwal wrote:Concrete Floors! No Working Toilet! Just $200K In Shanghai



What A "Bargain"

To find a cheaper home, I focused on the areas at the end of each subway line. The search for a good price pushed me so far out, I came within a few miles of the next province. After months of painstaking online searches and visits, I settled on an 860-square-foot, two-bedroom apartment that costs $208,000. That price tag is so big that it felt like a boulder on my shoulder. However, in the current market, this price really seems like a bargain.

The apartment was built six years ago; colorful fliers from small businesses cover the walls of the building's hallways. It's just the skeleton of a living space, really; rooms with walls and uneven bare concrete floor and not much else — no appliances, no wooden flooring or carpeting, no usable toilet even.


To modestly outfit the place will require an additional $40,000. A rough calculation reveals that every month after paying the mortgage and for food and other essentials, I will have a little more than $100 left. A crowded bus ride to the office now takes nearly two hours.


This is less than comparable flat in Mumbai!
Last edited by alexis on 28 Jun 2013 19:08, edited 1 time in total.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby sha » 28 Jun 2013 17:48

sha wrote:
sha wrote:China Travel ---from Chengdu to Chongqing from an India travel forum.
http://www.bcmtouring.com/forum/travelo ... ng-t44519/
.

Another relative thread.
A Trip to China---Chengdu
http://www.bcmtouring.com/forum/travelo ... du-t44487/


And another thread posted by the same guy.
China's Yunnan province travel photos
http://www.bcmtouring.com/forum/travelo ... os-t48326/

I'm expecting Theo_Fidel and amit's comments which will balance some indians' "dhoti shilvering" comments with regards to China's development on these threads.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 29 Jun 2013 19:16

Nothing so far in the pictures that can show "rubber met the road" for the 10X consumption trumpeted by Chola. The cars, the trains, the people on the streets reek of 3000 - 4000 PPP per capita income. Only thing that stands out are the tall building which shows that tons of fixed investments has poured in but has not created the jobs on the ground.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby jamwal » 30 Jun 2013 19:12

What about the labourers, engineers and suppliers involved in making those buildings ?

Austin
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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 30 Jun 2013 22:13

Many are talking off the property bubble burst in China

New Developments Threaten To Burst China's Staggering Housing Bubble

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 05 Jul 2013 07:04

Ah.. When the yellow matter hits the fan and facts look bad and don't support the 8% "glowth" for "halmonious society" , what do you do ? Stop reporting data!

China Suspends PMI Details in added hurdle for scrutiny of economy :eek: :eek:

Have a nice day folks. Legular Ploglamming will commence once we can cook up data to project "Glowth" and " Halmonious Society"

Jai Mao, Jai Xi,

chola
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Re: PRC Economy - New Reflections : Dec 15 2011

Postby chola » 05 Jul 2013 17:49

subhamoy.das wrote:Nothing so far in the pictures that can show "rubber met the road" for the 10X consumption trumpeted by Chola. The cars, the trains, the people on the streets reek of 3000 - 4000 PPP per capita income. Only thing that stands out are the tall building which shows that tons of fixed investments has poured in but has not created the jobs on the ground.


Why bring up my name in response to pictures from a 50-center?

Why continue to act like a Paki who can't digest intelligence from the field?

No, MNC figures don't come from pictures but from sales records. Not only do companies like GM, VW, Caterpillar and Intel (or Samsung and Nestle) sell between 10 and 20 times more in chiniland than India, they also sell their products at a mark-up that is between 30-100% higher than in the US or Western Europe. They can charge a premium because chini products are shite. But they are able to charge it and still generate huge sales because the chini economy can afford it.

Again, why do you insist on India going into battle with faulty intelligence? Actually with no intelligence at all but mindless jingos from the likes of you. Actual intelligence (sales) are there in the open from the largest and most transparent corporations in the world.

China is a communist state and unless it changes it will fail because of the market inconsistencies that come with any commie nation. You can never get the demand part correct in a command economy. It is insane that we are behind this commie shitehole. What's worse are jingoist idiots with no understanding of economics who continue to claim that communism is an advantage to the PRC and democracy as a drag to India. Onlee in India do we have idiots who believe this shiite. We are not a decade behind in politics, we are a full five decades ahead.

Where we are behind is economics. Where we stupidly stood by while the PacRim sped ahead. Again, it was only with the tried and true manufacturing process that built Japan, SoKo and Taiwan that allowed China to escape being a giant North Korea. This process is leaving China now because it already made them many times wealthier than when they started. It is going to build wealth in other countries, yes even in goddam Bangladesh. The test is whether we will be able to finally grab a hold of this opportunity after passing on it in the 1960s and the 1980s.

Theo_Fidel

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Theo_Fidel » 05 Jul 2013 23:28

Chola saar,

Easy on the language. Detracts from your points.

I think we all get your point. There is an opportunity in global manufacturing.

My question to you is how to we overcome the key challenges India faces.

- Money is expensive as there are many competing demands on savings.
- Energy is expensive as there are few domestic sources of power and even I balk at strip mining the country side for 3 Billion tons of coal per year.
- Land is expensive as we are small and there are fractious war like battles over acquiring even 1000 acres of land. Private property is protected after all.
- Our folks are still not 90% HS educated.

Folks are definitely not willing to work for BD type wages in most of India.
How do we overcome these limits.

Also another question. There are states in India that have tackled these challenges.
Take GJ, MH & TN. Usually in these state power is guaranteed to industrial factories.
Water is guaranteed. States provide all the land that is necessary. Doors are open, one step clearances, etc.
Yet according to you the global manufacturing has still refused to come to even these states.

Why is that so?

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 06 Jul 2013 12:29

The Chinese authorities have told the intention to turn the yuan into a global reserve currency
http://vz.ru/news/2013/7/4/639995.html
Speaking about plans to achieve full convertibility of the yuan, head of the Chinese State Administration of foreign exchange transactions Guan Tao said that Beijing plans to reform in two stages, transfers

At the first stage of the reform will be a "radical" weakening of the Central Bank foreign exchange restrictions, and then will move to convertibility of the capital account

The determination of the Chinese authorities even caused some concern to the IMF experts attending the conference.

"Premature liberalization could lead to a crisis, so China should continue to take a cautious approach," - said in his speech, Deputy Director of the Asian Department of the IMF Marcus Rodler.

Publication of the March conference in the media coincided with a conference on the role of the yuan in global markets, which took place on July 3 in Frankfurt, whose members also appreciated the prospects of the Chinese currency.

During his speech, a member of the Central Bank of Germany Joachim Nagel said that the growth of the world's banks offering their customers a transaction in RMB, increased by several times (from 900 in mid-2011 to ten thousand in the current year).

At the same time, Nagel noted that the use of the Chinese currency in international markets does not match the growing importance of the Chinese economy and stressed the prospects of the yuan to become one of the world's reserve currency.

Chinese yuan freely convertible for current account transactions in 1996, but Beijing still retains the ability to manage the yuan to protect the financial system from external shocks. However, this policy has led to the accumulation of huge foreign exchange reserves and the emergence of financial imbalances in the Chinese economy.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby chola » 07 Jul 2013 19:06

Theo_Fidel wrote:Chola saar,

Easy on the language. Detracts from your points.

I think we all get your point. There is an opportunity in global manufacturing.

My question to you is how to we overcome the key challenges India faces.



It is not just an opportunity, it is the one sure way to create national wealth the last 60 years. Unless you have oil or minerals, there is no other process to bring wealth to a developing nation.

The key challenges have always been

1. the GOI's hostility to FDI (we attract liquid FIIs instead)
2. its devastatingly poor ability to execute projects (horrendous infrastructure)
3. socialist subsidies instead of jobs (food and fuel programs that drain GOI coffers instead of enriching it with corporate taxes)

The master key for a developing nation is fixing the first one. That was what every country in the Far East did from something as tiny as Singapore to China. The formula was the same and it worked.

How? That can be answered in conjunction to the rest of your questions.

- Money is expensive as there are many competing demands on savings.
- Energy is expensive as there are few domestic sources of power and even I balk at strip mining the country side for 3 Billion tons of coal per year.
- Land is expensive as we are small and there are fractious war like battles over acquiring even 1000 acres of land. Private property is protected after all.
- Our folks are still not 90% HS educated.



Money is expensive in India because we are a third world nation. It is expensive for every third world nation. In the US and Japan, money is extremely cheap. They print them by the bushels and their currency will still rise against the rupee.

Do you know why? It takes decades if not centuries of economic dominance to build the dollar, yen and pound into what they are today. And what they are today are pieces of paper that people are willing to take in exchange for real solid goods. Energy is cheap for the US and any nation that holds lots of dollars.

That established, it is in your interest as a poor undeveloped nation to get as much of that hard currency as possible. This was what South Korea began doing when it was poorer on capita than India in the 1950s.

Land is a bull manure excuse since South Korea, Taiwan and Japan not to mention Hong Kong and Singapore have infinitely less land (and mineral resources) than the subcontinent that we inhabit.

Every nation on the PacRim save for maybe Japan had that piss-poor level of education. But that is the beauty of the MNC's industrial process, it creates massive amount of jobs for the uneducated masses. We saw this happening again and again in nation after nation to our East.

Folks are definitely not willing to work for BD type wages in most of India.
How do we overcome these limits.



Bull manure. I can guarantee several hundred million from our scheduled classes who would snap those up. Those BD type wages were Korean and Taiwanese type wages in the decades previous.

It's not the folks who won't work for those wages but our socialist babus who think it is beneath our dignity to work for starting wages that built other nations. This attitude is now enhanced by the Bangalore stuck-ups who think that IT will sold our problems without understanding that a tertiary sector can never produce the employment needed.


Also another question. There are states in India that have tackled these challenges.
Take GJ, MH & TN. Usually in these state power is guaranteed to industrial factories.
Water is guaranteed. States provide all the land that is necessary. Doors are open, one step clearances, etc.
Yet according to you the global manufacturing has still refused to come to even these states.

Why is that so?


According to me? When have I ever made a comment to that effect?

TN and GJ are pulling in FDI far in advance of the rest of the nation. Modi is courting everyone, including chini firms to build out GJ's infrastructure. Those are the type of people we need -- hard-edged technocrats.

Modi is one person and GJ is one state.

But think of this -- in 2006, we were the second largest textile export market. Today as jobs are pouring out of China because it had become far too expensive there, we are falling behind BD, Vietnam and Indonesia in the global market.

Of course, your IT wallah will say "Good, let them have it, we want white-collar onlee." BD is not a nation to aspire to. But South Korea wasn't one either when it had a lower per capita income than India's in the distant past.

Theo_Fidel

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Theo_Fidel » 07 Jul 2013 22:24

Chola,

You are still not getting my point.

Between them TN and GJ are bigger than BD, both in population and land area and resources. GJ all by itself has a population larger than most SE Asian countries. How come they have a smaller textile sector?
And you are wrong about wages in India. I can't even get a worker on my field for less than Rs 200 per day now. Every year the factories in my area send out trucks and round up more more workers offering to pay more. Every year agricultural labor gets more expensive. A third of the farms in my area no longer plant because they cant afford labor. You pay them any less than Rs200 a day and they will go work on the farms, India is small but has more arable land than BD or SoKo. Folks use agriculture like a wage back stop.

Hint: Could the duty free access EU granted BD have something to do with this?

Lets take a look at the data.
http://smehorizon.sulekha.com/assocham- ... sitem_7048
According to this report from ASSOCHAM, GJ accounts for 12% of Indias textile exports. So based on a $12 Billion export number, Roughly $1.5 Billion or so. This is less than 1/10th of BD. Why so....
Or take a look at this report out of Tirupur. Labor costs in India are much higher than BD.
http://www.business-standard.com/articl ... 027_1.html
The way to overcome this is higher productivity through automation. You can hire a 1000 engineers in India anytime you want. This is what folks are doing, most of the FDI coming in is for engineering type manufacturing. Rather than GOI picking 'winning' sectors, I would much rather the private sector makes this decision based on their projections.

Agree that GOI is hostile to 'some' FDI. I presume you are talking about retail. GOI is not hostile to all FDI. A manufacturing unit in TN is able to get all clearances and certificates in 16 days now. Even land is provided by the government. Take a look at the saga of the POSCO plant in odisha. GOI has been beating up folks and the state government trying to get movement but we essentially have a war situation developing.

Finally cost of money. Yes FDI is ideal but China or SoKo did not depend on FDI entirely. The key number is savings to GDP ratio. India's used to be 38%, it has now dropped to 32%. You find a way to get it back to 38% and most of this rhona-dhona will go away.

No argument on Infrastructure, but India is far far better than BD on this, so not sure what your point is.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 08 Jul 2013 08:45

How many reminders do posters need that this thread is NOT meant for discussions about the Indian economy, or comparisons with it ? Please stop. Further posts on the topic here will lead to active moderation.


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