Theo_Fidel wrote:The thing to remember is that none of these China boosters saw the 2008 collapse coming. While the drone on BR was that housing price was unsustainable and debt levels in the world were crazy and unsustainable. Based on this, several of us including myself, did not buy that big new fancy house and conserved cash, liquidated stock and mostly came through the crash unscathed.
No one saw the 2008 collapse coming. What is the point? Who are the China "boosters" here? All we know from 2008 is that India, Brazil, Russia and China did far better than the West and Japan. And from the BRICs, Panda did far better than anyone else in improving its position vis-a-vis the West. The consumer markets in China began overtaking those of the US across the board in this time period.
We are not in the business of shorting companies or even day trading based on sentiment and manipulated data. We are in the business of capital preservation and not leveraging. To our mind China is leveraged like crazy and the gearing increases every year.
Who trades according to manipulated data? China is leveraged like crazy to whom? This is the kind of emotional jingoistic responses we always get that sheds no light on understanding the PRC economy.
Theoji, no one trades according to manipulated data. Unless they are in the business of losing money. That is why we depend on sales figures from MNCs. As I said time and again, the Fortune 500 do not depend on government data. The chini government lies. But it lies in a way that Indians cannot accept because of jingoistic attitude. It lies to the smaller side not the larger. That is why their markets are so much larger across the board.
As far as China being leveraged, there is no foreign bank or government with any substantial stake in that leveraging so we don't know. We do know they can paid for whatever external debt they have many times over with their 3T forex pile.
Now if you feel they are leveraged then you can play that investment strategy. It should be easy money shorting the MNCs, all of which are becoming heavily dependent on the chini market -- VW, Caterpillar, GM, YUM, Tio Rinto to name but a few. Good luck, sir.
Sure the claim is the population is massive and people will fill the production capacity. But this was the exact comment made about the USA remember. The USA now has a younger, and faster growing population than Panda. Yet when it hit the debt wall the wall did not give way. So now there are entire condo type cities built in Florida and Nevada and California sitting empty and being demolished as people can not afford them. Is there a population for it, absolutely. Just that they are all renting as they can not afford these things.
I have no idea where you are going with this. The US is most highly developed nation in the world. Chiniland is third world with millions who still live in caves. I have no doubt that like in India or anywhere else in the world an empty building in chiniland will be squatted.
Instead of building $20,000 apartments, Panda is busy building $300,000 apartments.
It is far more likely apartments built with $5000 that sellers are listing for $300,000.
China could then have cleaned up, right sized, learnt a lesson and moved to a more realistic sustainable pattern. It did not because the insane CPC is in charge. So the credit taps continue to open wider every year. More cars are bought and apartments built the people can not afford.
According to Western firms selling in China, credit buying even for cars, is extremely low. In fact, 10% of chinis use car loans. About 1/7th of that in India.http://www.bloomberg.com/news/2010-04-2 ... -cash.html
One of the oddest experiences is to discuss salary levels in India and China and discover that despite the supposed 4 times greater GDP salary levels remain roughly matched.
Salary levels in what industry and according to whom? Is this hearsay from your experience only? In the corporate world, the average Indian have a salary level about 1/6 to 1/3 that of china's depending on methodology and targeted industry. For example, those in the BPO and offshoring industries catering to western firms have much higher salaries than the average chini while those in farming lower. BPO workers as a percentage are much smaller part of the working pool.
So for all its GDP the people earn very little. The real difference maybe that the middle class in China is 3 to 4 times the size of India’s 300 million strong middle class. This would explain the 5 times India car market and the 6 time India refrigerator market.
If India's middle class is 300 million and china's is 3 or 4 times that then its practically the whole chini population. China is not a middle class nation. Even then it doesn't match up with sales of Western products (using MNC sales we can even out the disparities between Indian and Chinese government data collection.) In terms of Western sales, the disparity is often 15/1 or 20/1.
Suffice it to say that India overstates its middle class and China consistently understates it to cheat at trade regimes like the WTO. Lying about being wealthier gains you nothing at the top level while crying poverty gets you concessions. Chinis are far more hard-edged about real benefits. We are more happy to jingo.
They don’t earn more, and don’t really appear to be making a transition to the next level. They are still solely competing on wage arbitration. So why is Panda building for a Nevada style society rather than an Asian style society.
What is Asian? The part of China that works is following the same pattern as Japan, South Korea and Taiwan. The part that doesn't work follows that of the USSR. The question really is whether the first overwhelms the second or the second strangles the first.
It will hit the wall like everyone else and its governance system will collapse. The CPC will be history too in our lifetimes. This I can guarantee.
I agree. The problem is if the CPC goes, we could very well get a giant sized South Korea, Taiwan or Hong Kong that we will never catch up with. It would mean the part of China that followed Japan, South Korea and Taiwan has won out over that which followed the USSR.
I much rather have the Soviet latter for dragon than the East Asian former.