PRC Economy and Industry: News and Discussions

TonyMontana · Post by **TonyMontana** » 27 Sep 2010 06:52

shynee wrote:James Chanos on China

You don't really own any real estate in China, you're only renting it from the government. I wonder if that matters to a real estate bubble. Also, if you lived in Beijing, or any big chinese cities, we seems to pull down huge buildings every couple of years and build a bigger one in it's place. This has been going on forever. Does this make any difference to the bubble?
As far as I can tell. Real estate prices are "set" by the central government. Does that have any impact on the bubble?

OT:
Is it me or does James keep calling the Yuan, the Wong?

They even had a little discussion on it in the end.

Sanjay M · Post by **Sanjay M** » 27 Sep 2010 07:57

(NYT)China Imposes a Steep Tariff on U.S. Poultry

Sanjay M · Post by **Sanjay M** » 27 Sep 2010 10:09

NYT

Op-Ed Columnist
Their Moon Shot and Ours
By THOMAS L. FRIEDMAN
Published: September 25, 2010

China is doing moon shots. Yes, that’s plural. When I say “moon shots” I mean big, multibillion-dollar, 25-year-horizon, game-changing investments.

chaanakya · Post by **chaanakya** » 28 Sep 2010 01:25

China begins work on 253-km Lhasa to Xigaze railway line

Agencies Tags : China, rail network, Tibet, Lhasa, Xigaze Posted: Mon Sep 27 2010, 14:56 hrs Updated: Mon Sep 27 2010, 16:11 hrs Beijing:
Railway line
The 253-km Lhasa to Xigaze railway line, costing about 13.3 billion yuan, will take four years to complete.

China has begun constructing a strategic USD 2 billion rail network to connect the Tibetan capital of Lhasa with the region's second largest city of Xigaze that borders India, Bhutan and Nepal.

The extension of the 253-kilometre railway line costing about 13.3 billion yuan will take four years to complete, said Zhang Ping, head of the National Reform and Development Commission.

Xigaze city, besides being the home of Panchen Lamas, the second highest Tibetan spiritual head of Tibetan Buddhism, is also famous for its proximity to Mt Everest which virtually rises from it.

The sprawling Xigaze prefecture has an area of 182,000-sq-km neighbours India, Nepal and Bhutan.

The extension from Lhasa to Xigaze, is the first extension of the Qinghai-Tibet Railway, which opened in July 2006 raising concerns in India as it also provided speedier and easier access to the Chinese military to move its troops.

China also backed the extensive rail link with a network of roads and five airports in the remote region, called the roof of the world.

The new section will pass through five counties and over the 90-km long Brahmaputra Canyon, (Yarlung Zangbo Grand Canyon), to reach Xigaze, a city with a history of more than 600 years and the traditional seat of the Panchen Lamas.

"It will play a vital role in boosting tourism in the southwestern part of Tibet and promoting the rational use of resources along the line," said Liu Zhijun, Minister of Railways.

The extended rail line will be a single line with a speed of 120 km per hour. Nearly half of the line, or 115 kilometres, will be laid in tunnels or on bridges.

"Laying rail tracks in tunnels in the mountains can avoid passing through the fragile natural reserves in Tibet," Wang Mengshu, a railway tunnel expert and member of the Chinese Academy of Engineering, told the China Daily.

In a statement, the Ministry of Railways said the extension line avoids four natural reserves in the area.

In addition, using tunnels can help reduce damage to the railway by earthquakes, since Tibet is prone to earthquakes, Wang said.

"But the tunnels will add to the difficulty of construction, as it will be impossible to lay the tracks as fast as in the previous construction of the Qinghai-Tibet Railway, which was built on top of the permafrost," he said.

The Qinghai-Tibet Railway is the world's highest railway. Some 960 kilometres of its tracks are located 4,000 meters above sea level. About 550 kilometres of the tracks run on frozen earth, the longest of any of the world's plateau railways.

The Qinghai-Tibet Railway's first section from Xining, capital of the Qinghai province, to Golmud of Qinghai was completed and opened to traffic in 1984. Its second section from Golmud to Lhasa started construction in 2001 and opened to traffic in 2006.

A spokesman with the Ministry of Railways said the future railway network in Tibet will have a "Y" shape, with two extensions planned.

In addition to the extension from Lhasa to Xigaze, the other is from Lhasa to Nyingchi in the southeastern part of Tibet. Previous media reports had said construction would begin in 2013 at the earliest.

abhishek_sharma · Post by **abhishek_sharma** » 28 Sep 2010 07:36

A constructive approach to China’s currency

http://shadow.foreignpolicy.com/posts/2 ... s_currency

nandakumar · Post by **nandakumar** » 28 Sep 2010 16:22

There is bear market for predictions on imminent collpase of the real estate market in China as this author argues.
http://www.businessinsider.com/andy-xie ... ion-2010-9?
The point that many China watchers miss is that here is a country that has weathered catastrophic consequences of many misconceived policies in the past and survived. One might say, has even propspered. The Mao's experiment to make China leapfrog to a status of industrial power in the late 50s. The cultural revolution that decimated practically the whole of intellectual manpower or the brutal crackdown on the protestors in Tiananmen Square and so on. My guess is even if their current export led strategy of growth suffers a stumble in the face of West's inability to keep consuming what the Chinese can produce, the country may well dust itself up and carry on. perhaps a few million lives may be lost- although it must be said that they are better equipped to face the consequences of wrong policy choices a lot better than the flexibility that Mao had back then- it would be business as usual.

starek · Post by **starek** » 28 Sep 2010 17:24

chaanakya wrote:China begins work on 253-km Lhasa to Xigaze railway line

Katmandu, next stop.

zlin · Post by **zlin** » 30 Sep 2010 08:35

http://www.indianexpress.com/news/Don-t ... nce/683662

Tavleen Singh
Tags : tavleensingh, column

This is a week when I feel especially hopeless about India’s future. A week in China has caused this gloomy mood. I have just returned from the World Economic Forum’s ‘Summer Davos’ in the city of Tianjin. I had not heard of Tianjin till two weeks ago and, because I was told that it was near Beijing, expected an obscure dormitory town. So when I found myself in a magnificent, modern city of shiny skyscrapers, spectacular bridges and fine boulevards, I was stunned. Even more so when I heard that the city has been built in the past decade and then I found myself reduced to speechless wonder when I heard that Tianjin’s amazing, futuristic Convention Centre took just nine months to build. There were Indian officials and businessmen at the meeting whose mouths fell open when they heard.

We chattered amongst ourselves in Hindi about why such a Convention Centre would take ten years to build in India and agreed that it could be because democratic processes take longer than totalitarian ones. Then we went to Tianjin railway station to take the high speed train to Beijing and we stopped making excuses for the Motherland. Tianjin railway station looks like Delhi’s new international airport and the train that covered the 130 kilometres to Beijing in thirty minutes is faster and more modern than any I have ever been on. When we got to Beijing, the Indians I was with, were as angry as I was at how far India had been left behind by a country that till the seventies was at least twenty years behind us.

There are those who blame democracy for this and they are wrong. If there is one thing that makes us better than China it is democracy, but to come back to India and find our biggest political leaders, and the whole of our media, absorbed by ancient political problems only added to my gloomy mood. What is the point in discussing Kashmir if all we can come up with is the idea of sending yet another all-party delegation to the Valley? What for? We have been doing this for decades. And, what is the point in all this sudden new excitement over Ayodhya when we know that the issue does not fall in the realm of reasoned debate or judicial solutions. What difference can next week’s court judgment make to a problem that is caused by religious hysteria and not historical facts?

Why are we discussing temples and mosques at all when we know that the biggest political problem in India is governance? If China has overtaken us in infrastructure, in urban development, education, sanitation and healthcare, it is because China has understood that the key to delivering these things is governance. It is not the fault of democracy that we have bad governance, but the fault of our political leaders. Of the present lot, only the Prime Minister understands that India cannot hope to become a fully developed country in this century unless we begin a massive process of administrative reforms, but he does nothing about it.

Our ruling family appears to have no interest in governance at all and prefers to fritter away their years in power by taking us back towards an economic model that caused us to get left behind in the first place. In 1978, when Deng Xiaoping realised that Mao’s Marxist economic model had served mostly to keep China poor and starving, he made dramatic changes that we should have paid attention to. If we had, we might have kept pace with China. We did not and so we wasted another two decades investing in a totalitarian economic model that gave enormous power to the public sector and killed private enterprise. Only when we changed course in the nineties did things improve. Today we can be proud of a middle class of more than 200 million people and Indian companies that are recognised as world class. But, there is a huge section of Indian public opinion, led by the ex-novelist, that hates what has happened. In yet another one of her lengthy diatribes last week, she praised Sonia and Rahul Gandhi for being on the right track. If I were them, I would be more worried about this endorsement than anything else. There is a growing impression in the business community and among those who understand economics better than the ex-novelist does, that our ruling family is moving us back towards socialism Indian ‘ishtyle’.

Meanwhile, the country from which our Lefties, Liberals and Maoists get inspiration, has moved with spectacular success towards a market economy. When I twittered about this, someone twittered back that perhaps we should lease India to the Chinese for the next 200 years. It might come to that if we do not buck up.

Follow Tavleen Singh on Twitter@ tavleen_singh

RamaY · Post by **RamaY** » 30 Sep 2010 08:48

^

1. Temple issue has nothing to do with China's success or India's failure. So it is stupid to bring unnecessary issues into the farticle.

2. Even if we want to discuss temple issue, it is something close to our consciousness. Reconstruction of the temple indicates that our leadeship is doing what is right.

3. While PRC's single party rule brought stupendous economic progress at the cost of culutural rvolution, India's one party rule (50 out of 60 yrs) didn't bring any success despite the (Psecular) revolution, partition riots, religious and political riots, drought and poverty.

4. What india needs is nationalistic leadership. Everything else will flow thru that.

TonyMontana · Post by **TonyMontana** » 30 Sep 2010 09:20

RamaY wrote:
3. While PRC's single party rule brought stupendous economic progress at the cost of culutural rvolution, India's one party rule (50 out of 60 yrs) didn't bring any success despite the (Psecular) revolution, partition riots, religious and political riots, drought and poverty.

The sooner people can seperate the pre-1989 "Old China" with the post-1989 "New China" the sooner people can understand what happened.

vina · Post by **vina** » 30 Sep 2010 09:55

Yawn.. The Cheenis seem to be keen on picking fights with everyone in their neighborhood. Japan, entire S.E Asia over the south china sea , S. Korea , India and now the US. Notice that much of it has to do with territorial irredentism.

And now after the US Congress vote on trade sanctions against China, the Chinese actually LOWERED the RMB ! Pop the corn, grab a couple of beers and watch the show folks. This is going to get bigger.

Now all you need to do is watch out for Wen Jia Bao when he visits India. I expect soothing cool aid to be dished out when here and rhetoric of "piss, plogress and plospelity" to be hand out gratis, but nothing of consequence , more an attempt to quieten down the Chinese eastern flank while the west and southern flanks of China heats up.

Varoon Shekhar · Post by **Varoon Shekhar** » 30 Sep 2010 10:01

"The sooner people can seperate the pre-1989 "Old China" with the post-1989 "New China" the sooner people can understand what happened."

It's not enough to show Chinese smoking, drinking, wearing jeans etc, leaving aside whether these are always good( esp smoking). There should be real, open public debates about historical issues, including the Sino-Indian war of 1962, China's perverse post 1971-role as totalitarian balancer to totalitarian Russia, and the Chinese support for the genocidal Khmer Rouge in Cambodia. Open, free debates on public television, universities, newspapers and journals. Not discreet whispers in coffee houses.

Theo_Fidel · Post by **Theo_Fidel** » 30 Sep 2010 10:05

nukavarapu wrote:
RamaY wrote:What india needs is nationalistic leadership. Everything else will flow thru that.
I agree 100%

This is not a wise move.

The question is not of patriotism.

The question is of money and governance.

It is this sort of confusion that has brought us to this pass.

Theo_Fidel · Post by **Theo_Fidel** » 30 Sep 2010 10:16

This sort of weak minded journalism always annoys me, esp. as it is rarely dissected for what it is in this forum. Foolishness.
If Panda be such a wonderful place, how come Tavleen Singh and her ilk don't move there permanently? I didn't think so.

Panda grows and builds because its governments are enjoying a one time land sale & debt dividend.

See report below on the actual situation.

That is an incredible debt fueled construction investment of $40 Billion every year.

2/3 of all loans go towards building instruments.

If we did that we too could grow like that.

Total Delhi budget 2010 - $4.5 Billion dollars. Yes all inclusive.
This is the highest in India too. Bangalore is $700 Million 2009 & Chennai is $500 Million 2010.

So Ms Tavleen how about ponying up and diverting 2/3 of your savings to putting up building?

http://blogs.wsj.com/chinarealtime/2010 ... n-tianjin/

According to the survey, financial institutions in Tianjin had 432.5 billion yuan in loans to local-government fundraising platforms on their books at the end of 2009, double the amount a year earlier. New lending to the local-government vehicles totaled 217.1 billion yuan in 2009, accounting for a majority – 62.5% — of all new loans that year.

So why the explosion of off-budget borrowing in Tianjin? It is not a particularly poor city: Its fiscal revenue more than doubled in 2009, and average incomes are 18% above the national average. Rather, a high level of local-government debt seems to be the flip side of an over-reliance on investment-driven growth.

Tianjin’s economy expanded 16.5% in 2009, making it the second-fastest-growing of all of China’s provinces. Top of the list was resource-rich Inner Mongolia, which benefited from a surge in commodity prices. But Tianjin’s economic growth was almost freakishly dependent on government investment projects: Its fixed-asset investment jumped 47.1% in 2009, the fastest growth rate in 18 years.

Much of that is associated with the Binhai New Area, a massive development zone. The high level of loans to local-government vehicles helps explain how that investment boom was financed: The platform companies used the loans primarily to build infrastructure and transportation projects, according to the report.

zlin wrote:http://www.indianexpress.com/news/Don-t ... nce/683662

Tavleen Singh
Tags : tavleensingh, column

This is a week when I feel especially hopeless about India’s future. A week in China has caused this gloomy mood. I have just returned from the World Economic Forum’s ‘Summer Davos’ in the city of Tianjin. I had not heard of Tianjin till two weeks ago and, because I was told that it was near Beijing, expected an obscure dormitory town. So when I found myself in a magnificent, modern city of shiny skyscrapers, spectacular bridges and fine boulevards, I was stunned. Even more so when I heard that the city has been built in the past decade and then I found myself reduced to speechless wonder when I heard that Tianjin’s amazing, futuristic Convention Centre took just nine months to build. There were Indian officials and businessmen at the meeting whose mouths fell open when they heard.

Follow Tavleen Singh on Twitter@ tavleen_singh

zlin · Post by **zlin** » 30 Sep 2010 10:36

The role of Tianjin is going to be the start engine to north of China, especially the area around Bohai Bay, just like Shanghai to east of China and Shenzhen/Guangzhou to south of China. The similar role to the west of China is Chongqing. Chongqing also gets lot of investment.

The return to the investment will be much larger, and comes not only from these cities. It comes from the whole area, just like developing of Shanghai and Shenzhen can achieve.

chaanakya · Post by **chaanakya** » 30 Sep 2010 12:13

starek wrote:
chaanakya wrote:China begins work on 253-km Lhasa to Xigaze railway line

Katmandu, next stop.

Why Kathmandu only. We will link up with Janakpur Jayanagar in Bihar , Valmikinagar Raxaul and then onto mainline so that Beijing Delhi link is complete. If Visa free travel is agreed upon this Trans Asian Line would prove better than that via POK.

Manu · Post by **Manu** » 30 Sep 2010 12:15

I don't understand why Warren Buffet has still not 'discovered' India.

Gates and Buffett Call China Charity Meeting a Success

September 30, 2010
Gates and Buffett Call China Charity Meeting a Success
By MICHAEL WINES
BEIJING — After a night of wining and dining 50 of China’s richest people in the name of promoting philanthropy, Warren Buffett and Bill Gates told a horde of journalists on Thursday that the biggest difference between eating with Chinese tycoons and Western ones was the food.

Thus ended the two billionaires’ mission to promote charity in China, a journey which provoked weeks of breathless speculation here about whether this nation’s much-resented class of super-rich was too miserly to measure up to Western philanthropic standards.

At a news conference, Messrs. Buffett and Gates said the answer was an emphatic “no.”

“I was amazed last night, really, at how similar the questions and discussions and all that was to the dinners we had in the U.S.,” Mr. Buffett, who had wisecracked about the food, said. “The same motivations tend to exist. The mechanism for manifesting those motivations may differ from country to country.”

Mr. Buffett and Mr. Gates, two of the best known and most admired Westerners here, announced last month that they planned to invite 50 wealthy Chinese entrepreneurs to dinner in Beijing to encourage philanthropy among this nation’s newly minted rich. The mission became the object of feverish news coverage — and something of a litmus test of Chinese generosity — after it was reported that some tycoons were turning down the invitation because they feared they would be pressed to donate money.

The two men have made headlines worldwide for enlisting Western tycoons in a public promise to give away their fortunes either during their lifetimes or in bequests after their deaths. To date, 40 people have taken the pledge, and at least one Chinese multimillionaire has said he will join them.

On Thursday, the two men pronounced the dinner an unqualified success, saying that two-thirds of those who were invited showed up, and that more than half of those at the dinner offered their own ideas on how Chinese philanthropy should work.

The guest list was not made public, but Chinese news media reported that it included a Chinese film star, Jet Li, Niu Gensheng, the founder of a Chinese dairy business, and Pan Shiyi and Zhang Xin, who control the SOHO China real estate empire.

As with four earlier dinners held in the United States, Mr. Buffett and Mr. Gates said, no one at the Beijing event was asked to donate money or make any promise to engage in charity. While they have made follow-up telephone calls to some previous dinner guests, Mr. Buffett said, “Bill and I will not be calling anybody. What happens in China will depend on what the Chinese people feel about a project of this sort.”

China is widely reported to be second only to the United States in the number of dollar billionaires. Mr. Gates and Mr. Buffett said the nation is unique in that its wealthy class has arisen almost wholly in the last 30 years, so than philanthropic practices that are entrenched among European and American dynasties are new here, and open to change.

“What you have is a first generation of fortune,” Mr. Gates said, “and it’s natural they they’re thinking through, in this society in particular, what do you do?” {A history lesson may be in order here}

The two said the dinner with China’s superrich was not a long-planned matter, but an offshoot of a trip that Mr. Buffett had already scheduled to Guangdong and Hunan provinces, where BYD Company, a fast-growing maker of clean-energy automobiles, has factories. Mr. Buffett’s investment conglomerate Berkshire Hathaway holds a 10 percent stake in the company.

“Bill and I did not sit down, take a map of the world, and say, ‘We’re going to go to that one and that one and that one,’” Mr. Buffett said.

But Mr. Gates suggested that their philanthropic globetrotting was not yet over. “We may do an event in India,” he said.

Chinmayanand · Post by **Chinmayanand** » 30 Sep 2010 15:10

China: Proudly Demolishing Buildings Before Completed In Pursuit Of The Glorious Housing Bubble Perpetual Engine

See it in full through clicky.

Abhijeet · Post by **Abhijeet** » 30 Sep 2010 17:21

There's no doubt that China is overspending on infrastructure. But whatever the cost, at least the infrastructure is world-class and should last several decades with low maintenance.

I think infrastructure -- especially public infrastructure like roads and railways -- is a place where there are so many positive externalities, and payback over so many decades, that over-spending may not be as much of a disaster as it is made out to be.

RamaY · Post by **RamaY** » 30 Sep 2010 19:57

Theo_Fidel wrote:
What india needs is nationalistic leadership. Everything else will flow thru that.
This is not a wise move.
The question is not of patriotism.
The question is of money and governance.
It is this sort of confusion that has brought us to this pass.

These two are interrelated TF-ji.

The nationalistic thought process will ensure that the money/governance is focused on RIGHT THINGS and that they are EXECUTED RIGHT.

The current Tamas-Leadership fails on both counts. They can't even execute the WRONG projects/programs EFFICIENTLY. Few examples are -

* Employment guarantee scheme (Wrong project, inefficient execution)
* Farm Subsidies (Wrong project, inefficient execution)
* Infrastructure development (Right project, inefficient execution)
* CWG (wrong project, inefficient execution) {The wrong part of this project is interlinking Delhi infra development with a single games event)
* Rs 100,000 Crore Urban Development plan started by UPA I (Right project, inefficient execution)
... and so on...

wlin · Post by **wlin** » 30 Sep 2010 20:27

vina wrote:Yawn.. The Cheenis seem to be keen on picking fights with everyone in their neighborhood. Japan, entire S.E Asia over the south china sea , S. Korea , India and now the US. Notice that much of it has to do with territorial irredentism.

And now after the US Congress vote on trade sanctions against China, the Chinese actually LOWERED the RMB ! Pop the corn, grab a couple of beers and watch the show folks. This is going to get bigger.

Now all you need to do is watch out for Wen Jia Bao when he visits India. I expect soothing cool aid to be dished out when here and rhetoric of "piss, plogress and plospelity" to be hand out gratis, but nothing of consequence , more an attempt to quieten down the Chinese eastern flank while the west and southern flanks of China heats up.

How many beers you hava?

Last time you talking about beer is for that tiny island. Hope that beer tasting good. Sorry for the spoiler, after the mid-term, everything will return to normal. There will some action both sides and involved billions but no more. I hope RMB can see 6.3 something this year, but probably end up 6.5X somewhere. You can not ask more from this government. They just do not understand why China needs a strong RMB.

Theo_Fidel · Post by **Theo_Fidel** » 30 Sep 2010 20:43

RamaY wrote: The nationalistic thought process will ensure that the money/governance is focused on RIGHT THINGS and that they are EXECUTED RIGHT.

The current Tamas-Leadership fails on both counts. They can't even execute the WRONG projects/programs EFFICIENTLY. Few examples are -

* Employment guarantee scheme (Wrong project, inefficient execution)
* Farm Subsidies (Wrong project, inefficient execution)
* Infrastructure development (Right project, inefficient execution)
* CWG (wrong project, inefficient execution) {The wrong part of this project is interlinking Delhi infra development with a single games event)
* Rs 100,000 Crore Urban Development plan started by UPA I (Right project, inefficient execution)
... and so on...

Nationalism rarely ever gets things right.
If anything is executed it is usually people.

Just about everyone of those projects you point out would have been started under
a nationalistic govt too. As you have pointed out the problem usually is execution.
I fail to see how a bunch of nationalist jingo's will do better. All evidence indicates
they will do much much worse. Then find a fall guy and execute him.

The NREGS is very similar to the Panda Nationalistic Roots and Shoots tree
planting scheme in the Mongolian desert running now for 32 years.

The desert has instead expanded phenomenally.

As nation we have to give up this emotional panting after Utopian dreams.

A nation is built through hard work and investment in its people.
Every thing else is intellectual masturbation.

wlin · Post by **wlin** » 30 Sep 2010 21:05

Tianjin's budget is about 180B RMB, that is 26B USD last year. Tianjin got a lot of big project recent year. About those local platforms, many stories. Truth lies somewhere in between. Mostly the loans got government land or asset as backup. For example if Tianjin Port Admin want to built new port, they will issue debt, and that is called local-government debt.

The so called platform is booming recently, since 2008, I think. The process is like, I know Beijing’s case, because my college room is on the project. They put all the Beijing owned company into one company which called Beijing state-owned asset management co. In this way, the new company is like a big consortium. This consortium got a lot of asset and also a lot of debt. Use their asset as guarantee, they issue new debt to spend on various project. Maybe infrastructure, maybe new investment on the vested companies. All these new loan and the existing loan now called local-government debt. And this company is called local platform.

The Beijing government got one, the district and county government of Beijing got their own platform. This concept maybe abused but you say it is a bomb and all loan are bad loans. That is 100% pure holly crap. This is the webpage of Beijing state-owned asset management co. You can get a idea what it looked like.
http://www.bjsam.com.cn/english/index.asp

If this system got abused several years down the line, then it will get big risk. But this concept only come up since 2008 and majority debt is carry over from the company they collected. So no big risk right now and central government’s reaction is pretty quick.

About Tianjin, they got so many huge projects right now. So they will become something in next 5 years.

Theo_Fidel wrote:This sort of weak minded journalism always annoys me, esp. as it is rarely dissected for what it is in this forum. Foolishtess.
If Panda be such a wonderful place, how come Tavleen Singh and her ilk don't move there permanently? I didn't think so.

Panda grows and builds because its governments are enjoying a one time land sale & debt dividend.

See report below on the actual situation.se

That is an incredible debt fueled construction investment of $40 Billion every year.
2/3 of all loans go towards building instruments.

If we did that we too could grow like that.

Total Delhi budget 2010 - $4.5 Billion dollars. Yes all inclusive.
This is the highest in India too. Bangalore is $700 Million 2009 & Chennai is $500 Million 2010.

So Ms Tavleen how about ponying up and diverting 2/3 of your savings to putting up building?

http://blogs.wsj.com/chinarealtime/2010 ... n-tianjin/

According to the survey, financial institutions in Tianjin had 432.5 billion yuan in loans to local-government fundraising platforms on their books at the end of 2009, double the amount a year earlier. New lending to the local-government vehicles totaled 217.1 billion yuan in 2009, accounting for a majority – 62.5% — of all new loans that year.

So why the explosion of off-budget borrowing in Tianjin? It is not a particularly poor city: Its fiscal revenue more than doubled in 2009, and average incomes are 18% above the national average. Rather, a high level of local-government debt seems to be the flip side of an over-reliance on investment-driven growth.

Tianjin’s economy expanded 16.5% in 2009, making it the second-fastest-growing of all of China’s provinces. Top of the list was resource-rich Inner Mongolia, which benefited from a surge in commodity prices. But Tianjin’s economic growth was almost freakishly dependent on government investment projects: Its fixed-asset investment jumped 47.1% in 2009, the fastest growth rate in 18 years.

Much of that is associated with the Binhai New Area, a massive development zone. The high level of loans to local-government vehicles helps explain how that investment boom was financed: The platform companies used the loans primarily to build infrastructure and transportation projects, according to the report.

zlin wrote:http://www.indianexpress.com/news/Don-t ... nce/683662

Tavleen Singh
Tags : tavleensingh, column

This is a week when I feel especially hopeless about India’s future. A week in China has caused this gloomy mood. I have just returned from the World Economic Forum’s ‘Summer Davos’ in the city of Tianjin. I had not heard of Tianjin till two weeks ago and, because I was told that it was near Beijing, expected an obscure dormitory town. So when I found myself in a magnificent, modern city of shiny skyscrapers, spectacular bridges and fine boulevards, I was stunned. Even more so when I heard that the city has been built in the past decade and then I found myself reduced to speechless wonder when I heard that Tianjin’s amazing, futuristic Convention Centre took just nine months to build. There were Indian officials and businessmen at the meeting whose mouths fell open when they heard.

Follow Tavleen Singh on Twitter@ tavleen_singh

wlin · Post by **wlin** » 30 Sep 2010 21:19

Normally, I try not to involve into topics other than Chinese Economy. But why you think Employment guarantee scheme and Farm Subsidies are wrong projects？Especially farm subsidies. I do not know the detail of Employment guarantee scheme but if it is used on social development then it would be even better.

RamaY wrote:
These two are interrelated TF-ji.

The nationalistic thought process will ensure that the money/governance is focused on RIGHT THINGS and that they are EXECUTED RIGHT.

The current Tamas-Leadership fails on both counts. They can't even execute the WRONG projects/programs EFFICIENTLY. Few examples are -

* Employment guarantee scheme (Wrong project, inefficient execution)
* Farm Subsidies (Wrong project, inefficient execution)
* Infrastructure development (Right project, inefficient execution)
* CWG (wrong project, inefficient execution) {The wrong part of this project is interlinking Delhi infra development with a single games event)
* Rs 100,000 Crore Urban Development plan started by UPA I (Right project, inefficient execution)
... and so on...

wlin · Post by **wlin** » 30 Sep 2010 21:36

About the China's tree planting project, are you sure about what you are talking about. This is a 100% positive project for China. You can even argue about the project like high speed rail project. But no doubt about this one. You need come to see it. In year 1982, the Forest cover in China was about 12%, now 20%. That is the result of 30 years of hard working. You may think it is silly, but we made it. You can go to any source as you wish, they will say China had by far the largest increase in forest cover in the world. A lot of this came from the project you are laughing at. After 30 years, the program area forest cover raise from 5% to 10%. You do not think it worth it?

I do not know where you got the image of expending desert in China right now. The desert expending in fact reversed. The argument is on why it happened. Government said it because of the trees. Some may argue it may because of global warming cause more rain fall. So we do not think global warming a bad thing.

Theo_Fidel wrote:Nationalism rarely ever gets things right.
If anything is executed it is usually people.

Just about everyone of those projects you point out would have been started under
a nationalistic govt too. As you have pointed out the problem usually is execution.
I fail to see how a bunch of nationalist jingo's will do better. All evidence indicates
they will do much much worse. Then find a fall guy and execute him.

The NREGS is very similar to the Panda Nationalistic Roots and Shoots tree
planting scheme in the Mongolian desert running now for 32 years.
The desert has instead expanded phenomenally.

As nation we have to give up this emotional panting after Utopian dreams.

A nation is built through hard work and investment in its people.
Every thing else is intellectual masturbation.

Theo_Fidel · Post by **Theo_Fidel** » 30 Sep 2010 22:50

wlin wrote:The desert expending in fact reversed.

Satellite pictures don't lie.

svinayak · Post by **svinayak** » 30 Sep 2010 23:42

Abhijeet wrote:There's no doubt that China is overspending on infrastructure. But whatever the cost, at least the infrastructure is world-class and should last several decades with low maintenance.

I think infrastructure -- especially public infrastructure like roads and railways -- is a place where there are so many positive externalities, and payback over so many decades, that over-spending may not be as much of a disaster as it is made out to be.

Overspending on infrastructure is what the west does when they have easy credit and money investment.
The logic is that it is permanent and will not vanish if the paper money goes down.

India does not do it this way.

wlin · Post by **wlin** » 01 Oct 2010 00:25

A joke?　show me then, do not tell me that someone can view 9.6 million sq kilos. And you'd better present two to compare.

Theo_Fidel wrote:
wlin wrote:The desert expending in fact reversed.
Satellite pictures don't lie.

RamaY · Post by **RamaY** » 01 Oct 2010 00:53

wlin wrote:Normally, I try not to involve into topics other than Chinese Economy. But why you think Employment guarantee scheme and Farm Subsidies are wrong projects？Especially farm subsidies. I do not know the detail of Employment guarantee scheme but if it is used on social development then it would be even better.

A project becomes a wrong choice when the project goal itself is useless and untenable w.r.t national vision. Add that to the opportunity costs and you will have a "wrong project".

On the other hand, a Right Project is something that is mean to achieve a specific objective and have high congruence with national vision. IMO, this is where nationalistic leadership comes into play in selecting the "right project".

When a "Right project" is selected for right reasons (and resonates with national vision) it will have high probability of success. That is how right leadership influences the "project execution" aspect.

JMT.

Theo_Fidel · Post by **Theo_Fidel** » 01 Oct 2010 01:17

RamaY wrote:When a "Right project" is selected for right reasons (and resonates with national vision) it will have high probability of success. That is how right leadership influences the "project execution" aspect.

Rama

I'm sure the present leadership believes itself nationalistic and all these projects to be the 'right projects' with a 'high probability of success'.
If you or I were in charge I have no doubt we would say the same about our pet projects.

I repeat that there is no alternative to 'everyone' men/women young/old working long hours and investing in the quality of our people.
Everything else is skirting the issue.

These are the real reasons for Panda success. Its is build on the bones of its people who have 'eaten bitter tears'. Don't let the Panda trolls here confuse us.

RamaY · Post by **RamaY** » 01 Oct 2010 01:22

^

I am not questioning the need for "everyone" working long hours. I just want them to work towards a right objective (In your case = developing quality of life for Indians). This is a national vision not a project.

But then how can one explain the success stories like NHDP Phases I & 2, Construction of Intl. Airports, Success of Election commission etc?

For all we know; all this brilliant project execution of PRC might not bring the value that society is expecting in the long term if we take the "Total Social Costs" into consideration (this includes environmental costs, social costs such as GHI etc).

paramu · Post by **paramu** » 01 Oct 2010 03:35

Nationalism != jingoism

Theo_Fidel · Post by **Theo_Fidel** » 01 Oct 2010 05:54

RamaY wrote:^

I am not questioning the need for "everyone" working long hours. I just want them to work towards a right objective (In your case = developing quality of life for Indians). This is a national vision not a project.

But then how can one explain the success stories like NHDP Phases I & 2, Construction of Intl. Airports, Success of Election commission etc?

For all we know; all this brilliant project execution of PRC might not bring the value that society is expecting in the long term if we take the "Total Social Costs" into consideration (this includes environmental costs, social costs such as GHI etc).

You are correct that the jury is still out on 'quality of life' question WRT to Panda economy. My personal opinion is that the Chinese people have been forced to sell their soul.This is what allows their CPC Oligarchs to essentially control the savings of an entire nation and splurge it on H&D stuff with nary a question from the proles. There will be payment due at a certain point on that debt, both financial and social.

But that was not the issue under discussion.The question is how to build a nation? You can not look at 'quality of life' at this point. This how it has always been done. Once our per capita income hits $10,000 (yes that is the correct no. of zeros)we can start worrying about the quality of life question. This is not to say that environmental considerations and safety don't matter.

To build our nation we need to work 16 hour days, all of us, including Mami and Mousi yakking on the street. I can tell you from personal experience that this is the number 1 reason projects don't complete on time in India, include the CWG games stuff. The people involved are often not willing to do what it takes to get the project done on time overcoming obstacles that they are paid to deal with.

As far as the direction question, who knows what the correct project or program is. No one can predict the future. Micro Credit was laughed at in the beginning, the Delhi Metro was called all kinds of unkind names, the NHDP was called a waste and uneconomic because it was estimated to cost Rs 58,000 crores back then (quite a steal now), I could go on. In the West for instance it is considered normal for 90% of business enterprises to fail within 3-5 years. Why must government programs alone have no failures. It is part of the learning process.

The Panda trolls here like to pretend that they have found some miraculous nirvana of growth where no mistakes are made. The truth is when you spend $1.5 Trillion in investment every year, with ever increasing and wasteful inputs this sort of growth is a bare minimum. Nothing new here. If we divert all our resources in a similar manner we too would see such construction.

abhischekcc · Post by **abhischekcc** » 01 Oct 2010 12:47

It is wrong to allow such margin of error for government projects, because they are spending our money. Private firms can fail because they spend the owners' money.

abhischekcc · Post by **abhischekcc** » 01 Oct 2010 12:54

Nationalism = Jingoism + Common sense + Fun + Community

nandakumar · Post by **nandakumar** » 01 Oct 2010 14:36

Theo_Fidel wrote:
RamaY wrote:^

The Panda trolls here like to pretend that they have found some miraculous nirvana of growth where no mistakes are made. The truth is when you spend $1.5 Trillion in investment every year, with ever increasing and wasteful inputs this sort of growth is a bare minimum. Nothing new here. If we divert all our resources in a similar manner we too would see such construction.

On the question of how much of the infrastructure investment is contributing to the Chinese GDP growth, a recent McKinsey analysis came up with an interest finding.
https://www.mckinseyquarterly.com/Strat ... chine_2676
Of course the McKinsey analysis started with a somewhat different objective. That is, how much of the growth in Chinese economy came from exporting to the rest of the world. They make the point that the traditional frameworks employed by economists to answer this question are wrong.
For instance, there is one school of thought which looks at incremental exports and compares it with the incremental output of goods and services in the economy to say how much exports contribute to the economic growth. If that percentage seems very large then the conclusion is that the growth excessively reliant on the global demand. In China's case this number was as high as 60 per cent in the post years post 2000!
But McKinsey argues that approach this flawed. The problem with this approach is that this does not take into account the imports that go into the export value of manufactured goods. The low-cost manufacturing hub approach adopted by MNCs/large corporations from Taiwan, Japan, Europe and the US involved a certain quantum of components and key aggregates in the final product being sourced from elsewhere. Not taking the purely domestic value addition in computing export dependency does disservice to a truer understanding of the actual phenomenon that is at work.
One can give a parallel from the Indian experience. Let us for the sake of argument assume that the Indian economy consists solely of gem and jewellery industry. Two things about this industry. It is a high profile export oriented activity. Secondly, it involves the importation of rough uncut and unpolished diamonds besides of course gold into which more often than not diamonds are studded. Now if take the output of this industry ( the GDP of the Indian economy as we assumed initially in the argument) and relate it to the value of gem and jewellery export we might come to an absurd conclusion that the indian economy is dependent on exports to the point that they account for 200 or 300 per cent!
But the alternative of taking incremental net exports (that is, total exports substracted by the gross value of imports) for comparison with incremental GDP is equally flawed for a similar reason. It does not take into the imports that has nothing at all to do with export activity. It is used in purely domestic consumption.
McKinsey thrrefore argues for a net domestic value added approach computing the export dependency of a national economy. While they haven't spelt out in any detail as to how they arrived at the domestic value added element in export they have arrived at some number of each of the years in the recent past. It was 33 per cent in 2002 ( fairly high, one must admit) but is now down to 19 per cent in 2008.
Then they have gone on to dissect the growth in the Chinese economy in recent years under different component parts such as private consumption, investment, government consumption, exports, imports not used in exports invenmtory changes.
The findings are quite revealing. They argue that exports accounted for only 3.3 percentage points of the average of 11.9 per cent growth that they achieved in the period between 2002-2007.
Exports contributed 1.3 per centage point to the 8.9 per cent growth that the economy posted in 2008. Their numbers for 2009 is by far the most explosive yet. Their export activity in that year actually pulled down their economy (through negative value addition) by - 3.2 percentage points to the 8.1 per cent growth that they recorded in 2009.
What the last number means is that the selling price of of their exported goods were below the 'variable' or 'direct' cost of production whose aggregate negative value added brought down the GDP growth rate by a negative 3.2 per cent!
The same study also notes that Investments contributed 42 per cent of the growth in the economy (5 per cent of the 11.9 per cent) during 2002-07. But that figure has jumped to 57 per cent (4.6 per cent of the total 8.1 per cent growth in GDP) in 2009.

Raghavendra · Post by **Raghavendra** » 01 Oct 2010 22:40

Manu wrote:I don't understand why Warren Buffet has still not 'discovered' India.

No Indian member in NWO yet

Sanjay M · Post by **Sanjay M** » 03 Oct 2010 00:41

China offers to buy Greek debt; vows double trade in 5 yrs

Singha · Post by **Singha** » 03 Oct 2010 11:16

so the gnawing away at the weak underbelly of EU/NATO like greece, turkey and east europe has started. is the chinese premier visiting a few other states on
this trip?

portugal would also make a nice port of call.

good...very good.

Shankas · Post by **Shankas** » 03 Oct 2010 23:29

Spoke to HQ, she just brought a plastic toy from Wal-Mart for the kid. She is a label reader and buy any toys or food made in China. Toy cost $10, made in USA. The toy has many parts, some were assembled in US and rest she had to do it.

This is a first for me in 20 years. Happy to see this and sad to see the US slide...