PRC Economy and Industry: News and Discussions

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Theo_Fidel

Re: PRC Economy and Industry: News and Discussions

Postby Theo_Fidel » 03 Oct 2011 20:12

^^^^
More on the rail crash. Hollysys apparently is fully Panda state owned company with western neutral sounding name.

http://online.wsj.com/article/SB1000142 ... 61372.html

China Bullet Trains Trip on Technology

Key signaling systems were assembled by Beijing-based Hollysys Automation Technologies Ltd., one of the few companies China's Ministry of Railways tapped to handle such work. In some cases of the signal systems it supplied, technology branded as proprietary to Hollysys contained circuitry tailor-made by Hitachi Ltd. of Japan to Hollysys specifications, according to people familiar with the situation.

The problem, these people say, is that Hitachi—fearful that Chinese technicians might reverse-engineer and steal the technology—sold components with the inner workings concealed from Hollysys. Hitachi executives say this "black box" design makes gear harder to copy, and also harder to understand, for instance during testing.

"It's still generally a mystery how a company like Hollysys could integrate our equipment into a broader safety-signaling system without intimate knowledge of our know-how," a senior Hitachi executive said.


To avoid the embarrassment of canceling an opening ceremony, operators decided to begin passenger service on the high-speed line and assign one person in the train's cab the exclusive task of watching that the seconds continued to scroll on the computer's clock—thereby ensuring the device was functioning.
:eek: :rotfl:

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Re: PRC Economy and Industry: News and Discussions

Postby Singha » 03 Oct 2011 20:22

it looks like a small miracle that more disasters have not occurred given the panda style glueing together of imported , cloned and local techs and their whole attitude of safety being a avoidable luxury.

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Re: PRC Economy and Industry: News and Discussions

Postby ashi » 03 Oct 2011 21:04

Chinese National Day 2011: Beijing-Shanghai HSR Just About Sold Out

Well, it had to happen, folks: The Beijing-Shanghai HSR is now officially sold out. If you’re planning to leave the Chinese capital on 1 October 2011, your chances are slim — even if you are willing to pay through the nostrils for it. A late-night check on 25 September 2011 (nearly a full week before 1 Oct) shows that all tickets for HSR trains leaving Beijing South for Shanghai are totally sold out


When even the super-expensive Business Class (CNY 1,750! instead of CNY 555 for Second Class for G trains from Beijing South to Shanghai Hongqiao) seats get snatched en masse, this is a sure sign that the new HSR is popular.

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Re: PRC Economy and Industry: News and Discussions

Postby Christopher Sidor » 03 Oct 2011 21:36

^^^^
That is good piece of news. Hope there are no more instances of trains ramming into one another.

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Re: PRC Economy and Industry: News and Discussions

Postby Purush » 03 Oct 2011 22:53

Probably all bought up by the Railway ministry using proxies, to save face and boost confidence in the HSR.

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Re: PRC Economy and Industry: News and Discussions

Postby Purush » 03 Oct 2011 22:59

Singha wrote:some good details about the china bullet train technology issues ... foreign cos are not allowed to bid directly, they have to find a state approved local partner. hitachi apparently was asked to supply some parts and did so in a black box manner to make 'cloning' tough.

http://online.wsj.com/article/SB1000142 ... stpop_read


. China's biggest signaling company, Beijing-based China Railway Signal & Communication Corp., originated within China's railways bureaucracy. Shortly after the crash, a CRSC unit, Beijing National Railway Research & Design Institute of Signal and Communication, issued a statement of "sorrow" and pledged to "shoulder our responsibility."

CRSC hasn't commented about the accident directly, aside from a statement Aug. 23 stating that its top executive, 55-year-old Ma Cheng, collapsed and died during questioning by crash investigators. :shock:

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Re: PRC Economy and Industry: News and Discussions

Postby Rishirishi » 04 Oct 2011 02:25

In all fairness, the Chinease has managed to build a massive infrastructure very very fast. Also to their credit is the fact that they have managed to learn (copy, steal, or what ever) and indigenised a lot of the technologies. Some crashes and failures has to be seen in this light.

Actually wished it was possible to expand infrastructure as fast as that in India.

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Re: PRC Economy and Industry: News and Discussions

Postby Christopher Sidor » 04 Oct 2011 09:44

Why would we wish to expand infrastructure as fast as China did, knowing fairly well the cost that chinese people and their economy pays as a consequence.

Theo_Fidel

Re: PRC Economy and Industry: News and Discussions

Postby Theo_Fidel » 04 Oct 2011 10:10

Actually we ARE investing pretty much as much as Panda as a proportion of our economy in Infrastructure, esp. construction. Both of us are at 10% +/- and have been for some time now. So no need to get all weak kneed. :)

Of course because of the scale difference the absolute amount seems quite different right now but even that is changing rapidly.

Panda is very good at razing everything and building from scratch, we are very good at surgically removing stuff and inserting modern equipment into the middle of our cities. IMHO Panda-land can't hold a match to our better paid construction workers. Esp. the millions who have returned from the Gulf/Africa/Europe to work on some of our truly nightmarish construction projects.
Last edited by Theo_Fidel on 04 Oct 2011 10:15, edited 1 time in total.

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Re: PRC Economy and Industry: News and Discussions

Postby Singha » 04 Oct 2011 10:12

recently when I took the chennai bypass from NH4 on outskirts of city(maduraval) heading south toward vandalur, saw a gigantic complex of buildings on the left across a swampy area.... reminded me of chini style infra plays. must be some engg or medical college?

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Re: PRC Economy and Industry: News and Discussions

Postby Vasu » 05 Oct 2011 19:48

But the ‘iPhone 5’ is already out… in China

But over in China, where pirated DVDs of the latest Hollywood movies hit the streets even before the films are released worldwide, “the latest iPhone5” is on sale – at a throwaway price of just under $50. The only catch: as with many things about China, this one is decidedly a fake.

China’s official news agency Xinhua reports that authorities in Fuzhou in Fujian province in China’s southeast have seized fake iPhone 5s that were being sold in a mall in the city. Chinese media reports have it that in terms of design, finish and operating system, the phones appeared to be “90 percent genuine” – and were in fact labelled the “latest iPhone 5”.

The phones even came embossed with Apple’s trademark logo, but the packaging bore no details of the manufacturer’s name or the serial number. According to Xinhua, the distributor of the fake iPhone 5 said the phones were manufactured in Shenzhen in southern China, considered the factory floor of the world.

In recent days, police in Shanghai have launched a crackdown on counterfeit iPhones assembled using recycled accessories. Earlier this week, five people were arrested on charges that they had scavenged genuine components from discarded iPhones and fused them along with fake components to patch together iPhone 5s that looked a lot like the real thing.

Ever since it was revealed that entire Apple stores had been faked in many Chinese cities, authorities have been on the defensive and making a show of cracking down on intellectual property rights violations.

iPhone 4S not a ‘vanity buy’

On the Chinese-language Internet, responses to the official launch of the iPhone 4S have been just as downbeat as they have been elsewhere. Among the most common criticism of the new model is that since it resembles the iPhone 4, it didn’t help as a ‘vanity purchase’.

“If I buy a 4S, how can I let people know that I’m using a 4S and not an iPhone 4?” wondered one commentator.

“If we can’t show off with it, what’s the point of buying one?… Vain people don’t care about features, they care about how it looks,” said another.



:)

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Re: PRC Economy and Industry: News and Discussions

Postby vivek_v » 05 Oct 2011 20:37

Singha wrote:recently when I took the chennai bypass from NH4 on outskirts of city(maduraval) heading south toward vandalur, saw a gigantic complex of buildings on the left across a swampy area.... reminded me of chini style infra plays. must be some engg or medical college?


Might be the SRM group of Engineering/Medical college(s). They have a pretty huge campus near Vandalur and it is quite good.

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Re: PRC Economy and Industry: News and Discussions

Postby milanforever » 05 Oct 2011 22:55

Purush wrote:Probably all bought up by the Railway ministry using proxies, to save face and boost confidence in the HSR.


You're wrong. I'm currently in China. My flight from Shanghai to Chongqng was at 7:30pm on Oct 2nd, I wanted to change the flight to a bit earlier but was told that all the tickets were sold out. Oct 3rd, my sister , her husband and son were driving to Xi'an, another city 900km away on highway for a 5 day trip. BTW, it took them 8 hours to get there.

I asked her why not talk the high speed train? She told me that it was all sold out, the only option is to drive there. And yesterday she told me, in Xi'an, she couldn't find a hotel because all the hotels were full. She eventually found a family hostel at 3am after driving around for 2 hours, lol.

Anyway the high speed train is very popular, even after the crash earlier this year. And the economy booming in China is real.

Actually I'm curious about the economy development of India in the last decade. Which sector has been the driving factor? Is it mainly service? How is the manufacturing sector doing and the industrialization process?

Cheers!

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Re: PRC Economy and Industry: News and Discussions

Postby VikramS » 06 Oct 2011 07:39

Its festival time in China so yes all the transportation hubs are busy.

Theo_Fidel

Re: PRC Economy and Industry: News and Discussions

Postby Theo_Fidel » 06 Oct 2011 09:53

milanforever wrote: And the economy booming in China is real.


Everyone in a market bubble has looked around and said those exact same words. Since you live in China your perspective is limited. When things change, they will change in a hurry, be prepared...

Meanwhile Wenzhou circles the drain.

http://www.irishtimes.com/newspaper/wor ... 00131.html
Two shoe factory bosses have taken their own lives and about 10 local business owners have fled the city in eastern China, leaving thousands of employees in a state of shock and enormous unpaid loans of hundreds of millions of yuan.

The crisis was brought about by tighter lending conditions and most of the troubled firms are in the manufacturing sector. “Business is not good at the moment, people borrowed money at 17 to 18 per cent, made some money then put it into repaying the interest. Or bought a house, or lent the money again,” said one Wenzhou businessman, who gave his surname as Zeng. “I don’t know what they were thinking. The business of borrowing money like this and then spending so much is not stable. The problem is that investing in property these days is too risky, and the European and American markets are very weak,” said Mr Zeng.


One of those who died was the owner of the shoemaking firm Zhengdeli, who jumped from his 22-storey apartment building on Tuesday. :eek: Shoes are big business in Wenzhou – 40 per cent of the world’s total are made here, along with one third of the world’s sunglasses, nearly all the world’s cigarette lighters and a panoply of other goods.

Theo_Fidel

Re: PRC Economy and Industry: News and Discussions

Postby Theo_Fidel » 06 Oct 2011 11:39

A little birdie says Chanos is making a killing right now. Just about all his bets are coming in. Look at the direction the yuan is going...

I hope the Panda overlords lose their nerve and open the cash spigots again. They appear to have done so already for the SOE's. They can delay this a couple of years if they want to. I sure hope they try, very hard, with lots of money....

BTW 'milanforever' is not very human sounding. Not only that we know you are not 'innocently' posting from Pandaland as BR is banned in Pandaland. So drop the ruse and don't fill your quota over here.

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Re: PRC Economy and Industry: News and Discussions

Postby ashi » 06 Oct 2011 11:51

Theo_Fidel wrote:A little birdie says Chanos is making a killing right now. Just about all his bets are coming in. Look at the direction the yuan is going...



If Chanos had been shorting Indian market this year, he would have made a lot more ... It is a bear market.

Theo_Fidel

Re: PRC Economy and Industry: News and Discussions

Postby Theo_Fidel » 06 Oct 2011 11:57

^^^^
That is OT on this thread. And almost flame bait.
If you have the guts go post that in the India economy thread.

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Re: PRC Economy and Industry: News and Discussions

Postby ashi » 06 Oct 2011 11:59

Theo_Fidel wrote:^^^^
That is OT on this thread. And almost flame bait.
If you have the guts go post that in the India economy thread.

I just simply saying this is a bear market. What? You are offensed?
:rotfl:

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Re: PRC Economy and Industry: News and Discussions

Postby Christopher Sidor » 06 Oct 2011 12:27

The bad news just keeps on coming. Unless Europe takes some concrete steps, we might as well see the worst case scenario, the dreaded double dip, come true. There were a few bright spots, namely that jobs growth in US has very very slightly picked up. The manufacturing confidence index in US has perked by a fraction of points. Yuan has appreciated a bit, not much but still a good sign.

We are all in this together. We live in an interconnected world. Right now the situation reminds me of the American-Japanese-Tiger Story.

Somewhere in the jungle a man eating tiger was on the prowl. In the same jungle an American and Japanese were strolling. Seeing the man eating tiger, the Japanese started putting on his running shoes. The american was incredulous, "You cant outrun the tiger", he said. "I only have to outrun you", replied the Japanese and then proceeded to do exactly the same, he outran the american. The american fell to the tiger. Unfortunately this is not the end of the story. The problem was that this tiger was too hungry, he had not anything to eat for many days. So after he devoured the American, we went after the Japanese, and the American was right, even by putting on the running shoes, the Japanese could not out run the tiger. He was able to outrun the american but not the tiger.

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Re: PRC Economy and Industry: News and Discussions

Postby Christopher Sidor » 06 Oct 2011 12:29

^^^^
In the above story, please replace Japanese with whatever nationality/group/class you wish.

:wink: :wink: :wink: :wink:

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Re: PRC Economy and Industry: News and Discussions

Postby ashi » 06 Oct 2011 12:35

Marten wrote:Your point being?

Chanos has said for years that China will make him money. Your opinion doesn't count unless you have made that much through your prediction. :)


Chanos has a hedge fund. He is shorting and longing Chinese stocks at the same time. You never know how those guys play. If he had started shorting a few years back the same time he started speaking bearishly on China market, he would have already taken some big loss.

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Re: PRC Economy and Industry: News and Discussions

Postby wong » 06 Oct 2011 18:41

Ashi is right. Going back to being flat is NOT the new killing it. Chanos is simply not a macro investor. He's getting killed and recovering some losses. That's what happens when hedge fund managers change style and a clear signal for his limited partners to run for the door.

A real macro guy like Rogers is really killing it. Long China, short India as the hedge. There's a BBC interview from the beginning of this year where he says that's exactly his strategy. He's minting money like an extremely successful macro investor with a 40 year track record should.

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Re: PRC Economy and Industry: News and Discussions

Postby wong » 06 Oct 2011 18:51

And Chanos has been shorting commodities (that's his China play) since Gold was $800. Gold went to $1,900, drop to $1,600, but that's still double the price from when he started shorting commodities. If you believe he's making money, I have a nice bridge in Brooklyn to sell you.

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Re: PRC Economy and Industry: News and Discussions

Postby milanforever » 06 Oct 2011 22:01

Theo_Fidel wrote:
milanforever wrote: And the economy booming in China is real.


Everyone in a market bubble has looked around and said those exact same words. Since you live in China your perspective is limited. When things change, they will change in a hurry, be prepared...



Actually I don't live in China. I've been living in Canada for several years, but visit China every couple of years. I've also traveled in Europe, South America, mideast and the U.S. So I have some first hand experience about the change happening in China and the living standard compared to other countries.

Of course not all things are rosy. And I agree with you that there is a real estate bubble in China, especially in first tier cities like Beijing and Shanghai. In 2nd tier cities or less advanced areas, it's not nearly as bad though. Another thing which separates the Chinese real estate with the U.S. disaster in 2008 is that in China, you have to pay a huge percent down payment, and it's hard to get mortgage approval, unlike back then in U.S. e.g. My sister who has a steady job in the government, just bought her 3rd apartment, and she had to pay 40% down payment according to the law in the city, which is unthinkable in the U.S. where the rule was much more loose . Basically banking in China is in a much more secure situation.

The economy booming is for sure real. My city, a 2nd tier one, has been changing at an insane speed. I visited it in 2006, but in 2009 when I visited again, I often couldn't recognize the road and get lost, even at places where I grew up and lived for many years. Within a few years time they built a few more big bridges to connect different areas in the city together, more highway, way more high rise buildings, btw, they're all selling fast. Often I wasn't able to tell the taxi driver how to get the destination because of the roads are changed completely. Without exaggeration, the infrastructure in my home city is pretty much on par as Toronto, where I live right now.

Another huge difference is the number of cars increased. In 2006, the apartment building of my sister , the underground parking was half full, while in 2009, it became completely full and many people had to park on streets. My sister's family is a typical middle class. All her friends, coworkers, and my high school mates, they all have cars, mostly Ford, Honda, volkswagen and some with cheaper domestic brand. They take vacations within China, or to Taiwan, other Asian countries or even to Europe, pretty much every year. Their life quality, I'd say, isn't much different to a typical Canadian middle family except one thing : in Canada there are way less people , much more space and better natural environment. Sometimes I'm tempted to move back, but the overcrowdedness in China has been putting me off.

BTW, many of my friends who decided to stay in China are richer than me. I'm doing decent myself : making $95k CAD a year before tax. I had a reunion with my university classmates in Beijing last year, and I belong to middle of the group when it comes to money, better than many, but worse than quite a few too.

The government has also been investing a lot in the last years to develop western area, which is less advanced than eastern, and help improve living standard in rural areas, reduce the gap between city and rural. My parents, who grew up in country side and still have relatives there, told me that farmers are also getting richer, and have a better life. In rural areas, children not only get 12 years free education. They also get free lunch at school provided by government while kids in cities don't get such thing. Pretty much all the families in countryside have refrigerator, color TV, cell phone , and starving is pretty much eliminated, even the poorest have enough food to feed themselves.

China still has a long long way to go, but future is indeed bright, much better than I could've thought when left the country for Canada.

Theo_Fidel

Re: PRC Economy and Industry: News and Discussions

Postby Theo_Fidel » 06 Oct 2011 22:09

Ah! yes. The ding-dongs back each other up. :roll: Got to make the payroll some how.

Rogers is also the guy famous for not visiting China due to pollution. :) He does not actually a fund manager anymore. And does not invest his own money. The only time he got things right was when he worked with Soros. He's been coasting on that ever since.

The fact that the Panda trolls on here would pick up on him say a lot about the lack of intellect on the Inside.

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Re: PRC Economy and Industry: News and Discussions

Postby gakakkad » 06 Oct 2011 23:32

@ milanforever , no one is denying China's growth..what we are debating on is the sustainability of the growth..you and your friends belong to the upper-middle class... The same class most of the posters in this forum belong to ... most well do do Indians or chinese hardly encounter poverty in day to day life... So we feel that all is well with the country...

>>The government has also been investing a lot in the last years to develop western area, which is less advanced than eastern, and help improve living standard in rural areas, reduce the gap between city and rural. My parents, who grew up in country side and still have relatives there, told me that farmers are also getting richer, and have a better life. In rural areas, children not only get 12 years free education. They also get free lunch at school provided by government while kids in cities don't get such thing. Pretty much all the families in countryside have refrigerator, color TV, cell phone , and starving is pretty much eliminated, even the poorest have enough food to feed themselves.


The govt is investing way too much ..in fact the growth is investment driven...thats what raises a question mark on sustainability...

>>>BTW, many of my friends who decided to stay in China are richer than me. I'm doing decent myself : making $95k CAD a year before tax. I had a reunion with my university classmates in Beijing last year, and I belong to middle of the group when it comes to money, better than many, but worse than quite a few too.


yes that is a known phenomenon... due to considerably lower cost of living than canada they ll save more money...Part of my family that stayed back in India has considerably more wealth that those who migrated to the US...

Essentially the problems with China a growing inequality , artificially and excessively micromanaged economy ...and bad accounting by the government... Most people expect a hard landing ..lets see if it happens...

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Re: PRC Economy and Industry: News and Discussions

Postby wong » 07 Oct 2011 02:16

LOL, Rogers called the start of the biggest, longest commodities rally in history. He has a family office, just like Soros. It means he runs his own money. And he's making a mint going long China, short India. That spread has only widened every single year since 1990.

And to think shorting Enron is the same as shorting any sovereign country and one skill translates into another, I just roll my eyes on that one.

Theo_Fidel wrote:Ah! yes. The ding-dongs back each other up. :roll: Got to make the payroll some how.

Rogers is also the guy famous for not visiting China due to pollution. :) He does not actually a fund manager anymore. And does not invest his own money. The only time he got things right was when he worked with Soros. He's been coasting on that ever since.

The fact that the Panda trolls on here would pick up on him say a lot about the lack of intellect on the Inside.

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Re: PRC Economy and Industry: News and Discussions

Postby VikramS » 07 Oct 2011 03:37

wong:

Chanos is short Chinese growth themes. I did a bit of research and this is what I found.

Dont know what you are seeing but Shangai Composite peaked in August 2009 and is down almost 30% from its post bubble peak.

http://stockcharts.com/h-sc/ui?s=$SSEC& ... 8574995793

Copper, one primary & reliable mechanism for measuring global infrastructure demand is down 40% from its peak early this year

http://stockcharts.com/h-sc/ui?s=$COPPE ... 5470021066


Commodity Bellweathers like Freeport McMoran are down almost 50% from their peak last year

http://stockcharts.com/h-sc/ui?s=FCX&p= ... 7290316498

Chanos should be doing very well....

Gold is not a commodity per se; at least not a commodity vis a vis China growth story.

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Re: PRC Economy and Industry: News and Discussions

Postby wong » 07 Oct 2011 05:34

^^^^

C'mon, did he put his trade on in the last 12 months?? No. He's in the hole. He probably was forced to unwind back earlier this year when he was on television every single day desperately trying to talk China down. He's not a macro guy like a Kovner or Soros or Rogers. In hedge funds, traders only have one style and they trade it until they either blow up or retire. End of story.

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Re: PRC Economy and Industry: News and Discussions

Postby Christopher Sidor » 07 Oct 2011 10:32

milanforever wrote:....
....
Their life quality, I'd say, isn't much different to a typical Canadian middle family except one thing : in Canada there are way less people , much more space and better natural environment. Sometimes I'm tempted to move back, but the overcrowdedness in China has been putting me off.

BTW, many of my friends who decided to stay in China are richer than me. I'm doing decent myself : making $95k CAD a year before tax. I had a reunion with my university classmates in Beijing last year, and I belong to middle of the group when it comes to money, better than many, but worse than quite a few too.
.....
.....
China still has a long long way to go, but future is indeed bright, much better than I could've thought when left the country for Canada.


I congratulate you and your brethern on the progress that has been made. It is hearting to see the level of living rising.

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Re: PRC Economy and Industry: News and Discussions

Postby VikramS » 07 Oct 2011 10:48

wong:

Hedgies trade very actively. Do you seriously think that he would have held through the great collapse, the great rally, and now the new drop?

His basic thesis is what is public knowledge now: The great Chinese Stimulus has resulted in a massive investment in the construction/building sector (30-40% of the GDP?) and that can not last.

So if he was short starting 2007, he has had his thesis play out, not once, but twice in the past three years.
==========
Rogers is long China short India??? Since when.

http://www.bloomberg.com/quote/SHCOMP:IND/chart
Add SENSEX:IND to that chart. Over the past five years, the performance has bee almost exactly the same. Just that the Shangai composite has a much bigger boom/boost, while the Sensex has been relatively a lot more stable. On a risk (beta) adjusted basis, the SENSEX has outperformed the SHCOMP by miles over the past 5 years.

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Re: PRC Economy and Industry: News and Discussions

Postby alexis » 07 Oct 2011 11:53


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Re: PRC Economy and Industry: News and Discussions

Postby Singha » 07 Oct 2011 13:37

this has already been posted and trashed in another thread as based on 2001 data for India.


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Re: PRC Economy and Industry: News and Discussions

Postby VikramS » 12 Oct 2011 03:47

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

Shri AEP on the Chinese debt issue and how it is being addressed. This is going to be a defining moment in our generation. China has been the engine driving the world for the past few years, and if it sputters, there will be danger.

I pray that CCP can manage this.

If they are unable to, the easiest way out for the CCP-PLA would be war; and not off the dossier kind. I wonder how prepared Indian leaders are for that eventuality.

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Re: PRC Economy and Industry: News and Discussions

Postby chola » 12 Oct 2011 09:18

VikramS wrote:http://www.telegraph.co.uk/finance/china-business/8821094/Chinas-debt-spree-returns-to-haunt.html

Shri AEP on the Chinese debt issue and how it is being addressed. This is going to be a defining moment in our generation. China has been the engine driving the world for the past few years, and if it sputters, there will be danger.


Only for the resource exporters like Russia and Fortune 500 Western multinationals like GM, Tiffany's and BMW. It will not affect the middle class in the West much and even less so for India. The Fortune 500 haven't created any new jobs in the US for the past three decades despite record profits.

In fact, a weakened China would mean weakened Fortune 500 firms that will allow American small and medium enterprises to compete more effectively -- the flood of cash from China operations acts as an unfair advantage for MNCs. The SMEs are the ones creating jobs in the West so it could be a net gain if China does fail.


I pray that CCP can manage this.

If they are unable to, the easiest way out for the CCP-PLA would be war; and not off the dossier kind. I wonder how prepared Indian leaders are for that eventuality.


I have no doubt they would. It is easy to handle debt in a country where money is owed to itself and the government can make its people eat losses at the point of the gun.

Fiscal decisions are hard only if you need to factor in humanity. The PRC has none.

What will bring down the CCP will not be debt, it'll be the inefficiency inherent in the communist political system that doesn't allow its companies compete effectively against its neighbors -- especially its Eastern ones like Japan and Korea that its people look to and compare themselves against.

Prem
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Re: PRC Economy and Industry: News and Discussions

Postby Prem » 13 Oct 2011 07:45

http://www.businessweek.com/news/2011-1 ... risks.html
China Offers Help to Small Companies Amid Wenzhou Risks

) --
China announced a package of measures to help small companies, including tax breaks and easier access to bank loans, after the collapse of manufacturers in Wenzhou city highlighted growing risks to the economy.
The government will provide financial support and preferential tax policies for small companies, the State Council said in a statement yesterday, after a meeting at which Premier Wen Jiabao presided. The government will be more tolerant of bad loan ratios for small-company loans, the Cabinet said.Small companies play an “irreplaceable” role in job creation, technical innovation and social stability, and the funding difficulties and tax burdens facing some of them “deserve high attention,” according to the statement. The support comes after Wen visited Wenzhou in Zhejiang province during a public holiday this month, urging greater support for small- and medium-sized companies.“These measures are not likely to revamp the entire system for SME financing, but they are long-awaited measures in the right direction to help China’s small business cope with the current monetary tightening and rising uncertainties of external demand,” Lu Ting, a Hong Kong-based economist at Bank of America Corp. who is currently in Wenzhou, wrote in a research report today. “The private lending woes in Wenzhou could potentially worsen if the local government and Beijing do not take steps to intervene.”Media “hype” surrounding reports of Wenzhou factory owners fleeing after failing to pay debts unnerved investors concerned about Chinese banks’ asset quality and a slowdown in the property market, UBS AG said in an Oct. 11 report. The city is known for a “vibrant private sector,” non-bank lending, and speculative investment in property, the brokerage said.
Informal Lending
Tighter credit policies have forced smaller manufacturers to seek loans through informal channels. Excessively high lending rates prompted Wenzhou to set an upper limit on the interest rates that private non-bank lenders can charge, in an effort to control risk in the banking industry.China’s economic growth slowed to 9.2 percent in the third quarter from 9.5 percent in the second, while gains in consumer prices, exports and imports slowed in September, according to Bloomberg surveys ahead of data to be released this month.The government will extend income-tax breaks for small businesses until the end of 2015 and encourage bank lending by lowering requirements on bad loans and risk weightings, yesterday’s statement said.

kmkraoind
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Re: PRC Economy and Industry: News and Discussions

Postby kmkraoind » 14 Oct 2011 14:09

Foxconn to make iPads in Brazil from December - TOI

The deal involves local investors, as well as financing from state-owned development bank BNDES, Mercadante added.

If all goes well, Foxconn expects to invest up to $12 billion in coming years.

"We will be still investing US$12 billion in a (few) years, maybe four years, maybe six years," Gou told reporters in a separate news conference.


Though its not directly related to China. Foxconn is one of the the biggest employer (and foreign exchange) in China. Moving partially or wholly assembly lines to Brazil means, loss to China. I see Foxconn moving to Brazil is a part of big game.

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Re: PRC Economy and Industry: News and Discussions

Postby Rishirishi » 17 Oct 2011 03:48

Actually I don't live in China. I've been living in Canada for several years, but visit China every couple of years. I've also traveled in Europe, South America, mideast and the U.S. So I have some first hand experience about the change happening in China and the living standard compared to other countries.

Of course not all things are rosy. And I agree with you that there is a real estate bubble in China, especially in first tier cities like Beijing and Shanghai. In 2nd tier cities or less advanced areas, it's not nearly as bad though. Another thing which separates the Chinese real estate with the U.S. disaster in 2008 is that in China, you have to pay a huge percent down payment, and it's hard to get mortgage approval, unlike back then in U.S. e.g. My sister who has a steady job in the government, just bought her 3rd apartment, and she had to pay 40% down payment according to the law in the city, which is unthinkable in the U.S. where the rule was much more loose . Basically banking in China is in a much more secure situation.

The economy booming is for sure real. My city, a 2nd tier one, has been changing at an insane speed. I visited it in 2006, but in 2009 when I visited again, I often couldn't recognize the road and get lost, even at places where I grew up and lived for many years. Within a few years time they built a few more big bridges to connect different areas in the city together, more highway, way more high rise buildings, btw, they're all selling fast. Often I wasn't able to tell the taxi driver how to get the destination because of the roads are changed completely. Without exaggeration, the infrastructure in my home city is pretty much on par as Toronto, where I live right now.

Another huge difference is the number of cars increased. In 2006, the apartment building of my sister , the underground parking was half full, while in 2009, it became completely full and many people had to park on streets. My sister's family is a typical middle class. All her friends, coworkers, and my high school mates, they all have cars, mostly Ford, Honda, volkswagen and some with cheaper domestic brand. They take vacations within China, or to Taiwan, other Asian countries or even to Europe, pretty much every year. Their life quality, I'd say, isn't much different to a typical Canadian middle family except one thing : in Canada there are way less people , much more space and better natural environment. Sometimes I'm tempted to move back, but the overcrowdedness in China has been putting me off.

BTW, many of my friends who decided to stay in China are richer than me. I'm doing decent myself : making $95k CAD a year before tax. I had a reunion with my university classmates in Beijing last year, and I belong to middle of the group when it comes to money, better than many, but worse than quite a few too.

The government has also been investing a lot in the last years to develop western area, which is less advanced than eastern, and help improve living standard in rural areas, reduce the gap between city and rural. My parents, who grew up in country side and still have relatives there, told me that farmers are also getting richer, and have a better life. In rural areas, children not only get 12 years free education. They also get free lunch at school provided by government while kids in cities don't get such thing. Pretty much all the families in countryside have refrigerator, color TV, cell phone , and starving is pretty much eliminated, even the poorest have enough food to feed themselves.

China still has a long long way to go, but future is indeed bright, much better than I could've thought when left the country for Canada.[/quote]

Hi
I go to china a lot, up to several times per year. Your statements just do not add up.

Firstly I find it hard to believe that people can actually afford a 40% downpayment. Mainly because the wages are really low. Something like 500 to 1000 dollars per month for professionals. Even managers etc hardly make more then 2000 dollars. Am not talking of Shanghai. But that is certainly the case in a place like Xiamen or hangzhou.

Secondly there are millions of flats left empty. Just in front of my hotel was 4 towers. Each 30+ stories and all empty. This is bang in the middle of Ximen, in front of the railway station. Then there is a mall a mile down the read. Must be over thousand shops there, and almost all are empty. SM and Robinson mall from the Phillipine owners are both full.

Dont get me wrong. The development of China is fantastic. The infrastructure build is very good and works.

But I do think that the Chinease economy has been on sterioids and will suffer.


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