Bharat Rakshak Forum Announcement

Hello Everyone,

A warm welcome back to the Bharat Rakshak Forum.

Important Notice: Due to a corruption in the BR forum database we regret to announce that data records relating to some of our registered users have been lost. We estimate approx. 500 user details are deleted.

To ease the process of recreating the user IDs we request members that have previously posted on the BR forums to recognise and identify their posts, once the posts are identified please contact the BRF moderator team by emailing BRF Mod Team with your post details.

The mod team will be able to update your username, email etc. so that the user history can be maintained.

Unfortunately for members that have never posted or have had all their posts deleted i.e. users that have 0 posts, we will be unable to recreate your account hence we request that you re-register again.

We apologise for any inconvenience caused and thank you for your understanding.

Regards,
Seetal

PRC Economy - New Reflections : April 20 2015

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
NRao
BRF Oldie
Posts: 15709
Joined: 01 Jan 1970 05:30
Location: Illini Nation

Re: PRC Economy - New Reflections : April 20 2015

Postby NRao » 30 Sep 2016 02:10


Atmavik
BRFite
Posts: 452
Joined: 24 Aug 2016 04:43

Re: PRC Economy - New Reflections : April 20 2015

Postby Atmavik » 30 Sep 2016 02:15



this is the secret to CPEC. donkeys!!!!

http://www.dawn.com/news/1215529

Badin hosts Pakistan's largest donkey festival

Image

Singha
BRF Oldie
Posts: 60187
Joined: 13 Aug 2004 19:42
Location: Lupine but moderately dharmic

Re: PRC Economy - New Reflections : April 20 2015

Postby Singha » 01 Oct 2016 17:13

Yuan joins the basked of imf reserve currencies dollar euro pound and yen.

Austin
BRF Oldie
Posts: 19465
Joined: 23 Jul 2000 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Austin » 01 Oct 2016 21:13

I am not sure if Japanese Yen and UK Pound even deserves to be inside SDR basket by any yard stick , probably 20 years back yes but today they dont deserve to be in SDR basket.

May be in next 10 years Rupee can make to SDR basket.

DavidD
BRFite
Posts: 854
Joined: 23 Jun 2010 04:08

Re: PRC Economy - New Reflections : April 20 2015

Postby DavidD » 02 Oct 2016 03:21

Austin wrote:I am not sure if Japanese Yen and UK Pound even deserves to be inside SDR basket by any yard stick , probably 20 years back yes but today they dont deserve to be in SDR basket.

May be in next 10 years Rupee can make to SDR basket.


That would be a welcoming change to the world order.

Christopher Sidor
BRFite
Posts: 1436
Joined: 13 Jul 2010 11:02

Re: PRC Economy - New Reflections : April 20 2015

Postby Christopher Sidor » 02 Oct 2016 11:09

Keynes and Hayek in China’s Property Markets --- Project Syndicate dated 26-Sept-2016

Recently there has been concerns that the PRC's economy especially its property market are in a bubble territory. This is in light of the recent growth figures which showed the old economy I.e. Infra, steel, etc showed a rebound while the new economy, I.e. Services, IT, etc slowed down in comparison to the old economy. The article above is a counter view. It holds the view that there is a scarcity in Property market in the big Tier market which is causing the rise in property prices. And it claims the following figures to bolster its claim
In 42 of the cities surveyed by the NBS – those with industrial overcapacity and excessive property inventories – price increases amounted to less than 5%, with eight cities recording falling or stagnant property prices.
....
....
A study by China Securities International showed that, in 2000-2010, cities in eastern China received 82.4% of total migrant inflows. By 2010, the migrant population in Beijing, Shanghai, and Tianjin had more than doubled, to 34.5%, 37.9%, and 21%, respectively.
....
....
According to a study by China International Capital Corp, the urban built-up area in Shanghai is only 16%, compared to 44% in Tokyo and 60% in New York City. Within that area, only 36% is used for residential functions in Shanghai, compared to 60% in Tokyo and 44% in New York City.
In other words, the available residential land for sale in Shanghai is considerably smaller than that available in New York City or even Tokyo, which is a major reason for surging property prices in these cities.
....
....

Please read the 2nd statement quoted above. It is about a period of previous decade, i.e. 1st decade of 21st century. We are in the 2nd decade of 21st century. Further PRC's working age population started declining either 1 year ago or 2 years ago based on different calculations. So whether that is a valid reason for price increase in Residential Property it not so much clear cut.

There is a word of caution mixed with complacency
At a time of slowing economic growth, some are advocating more Keynesian macro-stabilization measures, much like those China used to sustain growth after the global economic crisis of 2008. But in many areas, particularly in the northeast, central, and western parts of the country, the slowdown cannot be resolved through more stimulus.
....
....
The recent increase in demand for housing may reflect households’ desire to hedge their high savings against inflation or, more fundamentally, the sense that they must secure housing urgently, given limited supply. Either way, they now seem convinced that investment in housing is a relatively safe bet.

If that is the case, the risk of a property bubble in China is probably being overstated. But that does not mean that all is well in China’s property sector. If the government ignores market price signals, mismatches between supply and demand could build up, undermining growth in dynamic regions, while leaving low-growth regions weighed down by excess capacity and bad assets.

The good news is that there is still considerable room for policy maneuver.

Please read the last statement again. It is assuming that PRC has the fiscal as well as monetary capacity to counteract any slowing down of the economy. Fiscally PRC's revenues are pinned by the revenues of its SoE, it's export sector and its growing New economy. The first sector looks wobbly. The second sector is weak. Will PRC have the capacity when it's Property Prices stops increasing.

panduranghari
BRF Oldie
Posts: 3529
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : April 20 2015

Postby panduranghari » 03 Oct 2016 18:40

Christopher Sidor wrote:It is assuming that PRC has the fiscal as well as monetary capacity to counteract any slowing down of the economy. Fiscally PRC's revenues are pinned by the revenues of its SoE, it's export sector and its growing New economy. The first sector looks wobbly. The second sector is weak. Will PRC have the capacity when it's Property Prices stops increasing.


Do you agree? I don't. Its wishful thinking.

Christopher Sidor
BRFite
Posts: 1436
Joined: 13 Jul 2010 11:02

Re: PRC Economy - New Reflections : April 20 2015

Postby Christopher Sidor » 04 Oct 2016 17:48

Road to stagnation? China Inc gets a break from lenders --- Reuters Dated 04-Oct-2016

Main takeaway from the article
This is evidence that China may be in for a long period of Japan-like stagnation rather than a single event triggering a crisis - what some economists call a "Lehman moment" after the collapse of Lehman Brothers in 2008, which touched off the global financial crisis.

"They are kicking the can down the road for stability in the short term," said Roland Mieth, Singapore-based emerging markets portfolio manager for U.S. fund manager PIMCO. "China can maintain status quo for many years to come, like Japan did with their leverage, without triggering a financial crisis."


Now for some figures as quoted in the article
  • Corporate China sits on $18 trillion in debt, equivalent to about 169 percent of China's GDP
  • Lenders are heeding Beijing's call to support the real economy and so are rolling over company debt or granting repayment waivers, sometimes for years.
  • Rating agency S&P Global says the credit quality of about 240 Chinese companies it rates is deteriorating more quickly than at any time since 2009.
  • profit in the first half of 2016 fell a median 0.8 percent for 527 mainland listed firms and grew just 0.3 percent for a group of 93 Hong Kong-listed Chinese companies.
  • Almost half [of the 93 Largest Hong Kong's Chinese firms] have operating profit less than three times their interest payments - heading towards an unhealthy balance.
  • The impact of growing debt has been, for many, lower profitability and less long-term investment. Increasingly, debt is being used to pay back other debt and not to fund growth.
  • Profitability, as measured by return on equity (ROE), is the lowest in at least five years for the 93 Hong Kong-listed companies surveyed by Reuters, standing at 7.32 percent. For 527 mainland listed companies, the median ROE stands at 5.07 percent, also the lowest in at least five years.

Where are our friends from PRC? I would love to listen to what they would have to say. I hope we have not banned them all.

Christopher Sidor
BRFite
Posts: 1436
Joined: 13 Jul 2010 11:02

Re: PRC Economy - New Reflections : April 20 2015

Postby Christopher Sidor » 04 Oct 2016 18:59

^^^^
As a comparison The RoE of Sensex, which is a basket of 30 big companies has been 15 or more than 15 for most of the 21st century. Only thrice or four times including 2016 has it gone down below 15. Please refer to the image given below.

Image

Now compare this with the RoE of PRC companies.

asgkhan
BRFite
Posts: 1639
Joined: 16 Apr 2009 17:19
Location: Helping BRF research how to seduce somali women

Re: PRC Economy - New Reflections : April 20 2015

Postby asgkhan » 12 Oct 2016 13:53

Here is how lizard brazenly steals technology

Mysterious factory break-in raises suspicions about Chinese visit

It was an unusual burglary, in which four or five laptops were stolen from a Scottish renewable energy manufacturer in the dead of a March night in 2011. So innovative was the company that it had been been visited by a 60-strong delegation led by China’s then vice-premier only two months before.

Nothing else was taken from the company and the crime, while irritating, went unsolved and forgotten – until a few years later pictures began emerging that showed a remarkably similar project manufactured in the world’s most populous country.

Then some people who were involved in the Scottish company, Pelamis Wave Power, started making a connection between the break-in and the politician’s visit, which was rounded off with dinner and whisky tasting at Edinburgh Castle hosted by the then Scottish secretary, Michael Moore.

Max Carcas, who was business development director at Pelamis until 2012, said the similarities between the Scottish and Chinese products were striking. Speaking publicly for the first time, he said: “Some of the details may be different but they are clearly testing a Pelamis concept.”

The presentation of the Pelamis wave device in 2011
Facebook Twitter Pinterest
The Scottish Pelamis wave-power device.
Chinese wave-power device that is similar to the Scottish Pelamis wave device
Facebook Twitter Pinterest
The Chinese device.
It might be that China’s engineers had been working along roughly the same lines as the UK engineers. Or it may be that China attempted to replicate the design based on pictures of the Pelamis project freely available on the web.


The stories you need to read, in one handy email
Read more
Or there could be a darker explanation: that Pelamis was targeted by China, which has been repeatedly accused of pursuing an aggressive industrial espionage strategy. The answer matters, given security concerns raised by the government’s award of the Hinkley Point nuclear contract to China.

“It was a tremendous feather in our cap to be the only place in the UK outside of London that the Chinese vice-premier visited,” Carcas said. “We did have a break-in about 10 weeks after, when a number of laptops were stolen. It was curious that whoever broke in went straight to our office on the second floor rather than the other company on the first floor or the ground floor.”

Carcas, who is now managing director of the renewable energy consultancy Caelulum, added: “I could infer all sorts of things but I do not want to say.”

The new wave-power machine, the Vagr Atferd, built by Leith-based Pelamis for energy firm E.ON, in a photograph first presented in 2010.
Facebook Twitter Pinterest
The Pelamis device in the sea. Photograph: E.ON/PA
Ironically, Pelamis is now defunct but the Chinese product, Hailong (Dragon) 1, still appears to be under development.

Scotland has been at the forefront of the development of wave technology for decades. Pelamis was one of the cutting-edge companies, originally named the Ocean Power Delivery company when founded in 1998 and renamed Pelamis Wave Power in 2007.

The company, which employed a staff of 50, developed a giant energy wave machine, which it named Pelamis. It looked like a metal snake, facing directly into the waves, harnessing the power of the sea. It had a unique hinged joint system that helped regulate energy flow as waves ran down its length.

Other revolutionary features included a sophisticated control system and a quick mechanism for releasing it into the sea and recovering it. In 2004, it became the first wave-energy machine to generate electricity into the grid.

China expressed interest in December 2010 in an email to Pelamis: “It is decided that His Excellency, Mr Li Keqiang, vice-premier of the state council of China, and the delegation (60 people) headed by him will pay a visit to the Pelamis Sea Energy Converter between 16.40 and 17.00 on Sunday 9 January.”

China’s Vice Premier Li Keqiang (C) is escorted on a tour of the Pelamis Wave Power factory on January 9, 2011 in Edinburgh, Scotland.
Facebook Twitter Pinterest
Li Keqiang (centre) is escorted on a tour of the Pelamis factory on 9 January 2011 in Edinburgh. Photograph: WPA Pool/Getty Images
Li, who is now premier of China, was accompanied by other senior Chinese government officials and was shown round the key stages in the construction of Pelamis at the site in Leith, Edinburgh.

Moore was his host for the visit and recalled the Chinese had been very impressed. Asked about the coincidence of the visit, the break-in and emergence of a similar Chinese project, Moore said: “I am afraid I am not going to speculate. It is intriguing.”

The day was rounded off with the dinner at the castle. A Scottish government memo setting out the itinerary said: “Evening dinner at castle with whisky tasting, Scottish dancing, crown jewels.”

Any faint hopes that the Chinese might invest in the Pelamis project proved fruitless however. Three years later, in November 2014, Pelamis went into administration, having run out of funding after 17 years developing the project at a cost of £95m.

Two months after the Chinese visit, on the night of Monday 22 March 2011, the Pelamis office was broken into. The burglar – or burglars – managed to get through a perimeter fence and then the front door. They skipped the first-floor office of the German engineering giant Siemens and continued to Pelamis on the second floor.

Police Scotland, in a statement confirming the break-in, said no one had ever been caught. “Entry was forced to a business premises on Bath Road in Edinburgh between 11pm 21 March and 6.45 am on 22 March 2011,” the police said.

“A number of laptops, collectively worth a four-figure sum, were stolen from within. Officers conducted extensive inquiries at the time and any new information received will be thoroughly investigated.”

Break-ins at dockyards are not unusual. Pelamis had suffered before when copper cables were stolen from its site. But theft of laptops from its office was a first.

The pictures from China, show that the product, as well as looking roughly the same, also seems to have specific features such as a similar-looking hinged joint system and a similar system for placing in and recovering the project from the sea. Tests on the Hailong 1 were carried out in in 2014 and again in 2015 but on both occasions the tests had to be suspended because of rough seas.

Chinese wave power device in the sea.
Facebook Twitter Pinterest
The Chinese wave-power device in the sea.
The Hailong 1 appears to have been built at the No 710 Research Institute, part of the Chinese Shipbuilding Industry Corporation, a commercial operation. The institute is also involved in developing military projects.

The Guardian sent a series of questions to the Chinese government asking for details about the origins of the Hailong 1 project but has had no reply. There is no suggestion that the Chinese premier is connected with the company or that he knows anything about the burglary.

Despite the similarities, neither the UK nor Scottish governments has any plans to challenge China over the patent. Calum Macfarlane, a spokesman for Wave Energy Scotland, said: “The IP [intellectual property] is not protected in China.”

Carn Gibson, who spent 15 years at Pelamis, where he was engineering manager, is disappointed that funding for the Pelamis project could not be found in the UK and appeared sanguine about the Chinese design.

Gibson, who is now senior consulting engineer at Quoceant, a new company that grew out of Pelamis, said he regarded it as a compliment that the Chinese may have thought it was an idea worth copying, especially if they were able to turn it into a viable commercial proposition. He was rueful though that it was being developed in the South China Sea rather than the Atlantic.

asgkhan
BRFite
Posts: 1639
Joined: 16 Apr 2009 17:19
Location: Helping BRF research how to seduce somali women

Re: PRC Economy - New Reflections : April 20 2015

Postby asgkhan » 12 Oct 2016 13:53


tandav
BRFite
Posts: 215
Joined: 26 Aug 2016 08:24

Re: PRC Economy - New Reflections : April 20 2015

Postby tandav » 12 Oct 2016 16:20

asgkhan wrote:https://www.theguardian.com/world/2016/oct/10/mysterious-factory-break-in-raises-suspicions-about-chinese-visit


In China no one depends on IP protection and patents are only fig leafs even internally. Chinese typically take any ideas globally they find worthwhile and work on commercializing on a massive scale using their highly trained and productive manpower, integrated manufacturing systems and logistics dominance and large internal markets to showcase innovations and then taking it global becomes much easier... its no longer good enough to generate ideas in a lab or even patent or show pilots, as an inventor you need to be ready to go the whole hog.

Hitesh
BRFite
Posts: 793
Joined: 04 Jul 1999 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Hitesh » 14 Oct 2016 05:17

There should be a law that if China copies the design China is not allowed to sell the stuff abroad. There should be massive or triple tariffs on any goods that violate IP rights coming into any country.

DavidD
BRFite
Posts: 854
Joined: 23 Jun 2010 04:08

Re: PRC Economy - New Reflections : April 20 2015

Postby DavidD » 14 Oct 2016 05:53

Hitesh wrote:There should be a law that if China copies the design China is not allowed to sell the stuff abroad. There should be massive or triple tariffs on any goods that violate IP rights coming into any country.


You mean like some sort of international law? Most countries have some sort of IP law already and they're all free to enforce them on Chinese imports, which many of them do.

Hitesh
BRFite
Posts: 793
Joined: 04 Jul 1999 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Hitesh » 14 Oct 2016 05:55

Yes because if they tried to enforce their own laws China make WTO complaints about trade violations. We need to make sure that China doesn't get to have the cake and eat it.

DavidD
BRFite
Posts: 854
Joined: 23 Jun 2010 04:08

Re: PRC Economy - New Reflections : April 20 2015

Postby DavidD » 14 Oct 2016 21:27

I think that's what the TTP is trying to accomplish, because right now every country has a different set of IP laws which would preclude this type of standardized international I enforcement. With that said, recent report indicates that corporate espionage from China on the US is down by a whopping 90% already since 2014, so individual enforcement can work.

asgkhan
BRFite
Posts: 1639
Joined: 16 Apr 2009 17:19
Location: Helping BRF research how to seduce somali women

Re: PRC Economy - New Reflections : April 20 2015

Postby asgkhan » 28 Oct 2016 11:37

http://www.bbc.com/news/world-asia-pacific-37788670

China 'fake sanitary pads' scam sparks health concerns

The Nanchang Public Security Bureau says it seized fake sanitary towels with a resale value of more than 40m yuan ($5.9m; £4.8m) in a factory with no disinfection facilities.
The fakes were then sold in supermarkets under the trademarks of leading Chinese brands such as ABC or Whisper, the Nanchang News reported.
It is not yet clear whether they were distributed internationally.
Consumers have been urged to check the packaging before buying because the colouring of the fake products is reportedly slightly darker.

asgkhan
BRFite
Posts: 1639
Joined: 16 Apr 2009 17:19
Location: Helping BRF research how to seduce somali women

Re: PRC Economy - New Reflections : April 20 2015

Postby asgkhan » 28 Oct 2016 11:55

Three Xi’an officials detained after stuffing cotton into air quality monitor to alter data

https://www.hongkongfp.com/2016/10/26/t ... lter-data/

Three Xi’an officials have been detained by police after it was found that an air quality monitoring station sampling unit in Central China had been stuffed with cotton material in an effort to cheat the sensors.

An official at the Chang’an branch of the Xi’an Environmental Protection Bureau reportedly made a copy of the key to the monitoring station and memorised the passcode to the restricted area, reported Xi’an newspaper Huashangbao. Staff then repeatedly snuck into the station to stuff cotton into the sampling unit

ArmenT
BR Mainsite Crew
Posts: 4239
Joined: 10 Sep 2007 05:57
Location: Loud, Proud, Ugly American

Re: PRC Economy - New Reflections : April 20 2015

Postby ArmenT » 07 Nov 2016 21:25

Sounds like LeEco is in trouble.
LeEco's CEO Jia Yueting Says Company Overstretched, Now Running Out of Cash
The billionaire chairman of China’s LeEco has admitted his technology empire is running out of cash to sustain a headlong rush into businesses from electric cars to smartphones.

Vinu
BRFite -Trainee
Posts: 85
Joined: 10 May 2008 10:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Vinu » 07 Nov 2016 22:53

Foreign Reserves Plunged.
http://fortune.com/2016/11/07/china-foreign-reserves-yuan-depreciation/

Coupled with worries about China’s economy and its rapidly rising debt, that has stoked capital outflows and weighed on the yuan, analysts say.


With looming debt crisis, How long PRC can manage high growth by Govt induced Infrastructure spending?

Suraj
Forum Moderator
Posts: 10806
Joined: 20 Jan 2002 12:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Suraj » 08 Nov 2016 01:09

China replaces Finance Minister amid surprise reshuffle
China removed its high-profile, reformist finance minister from the post in a shuffle that comes as President Xi Jinping positions trusted allies in key roles and Beijing prioritizes short-term growth over major overhauls.

The shuffle put more senior government posts in the hands of Xi loyalists ahead of a twice-a-decade Communist Party Congress next fall that will shape policy for years to come.

Mr. Xi’s supporters say he still faces pockets of political resistance and needs to consolidate power further to enact meaningful economic restructuring in his second five-year term.

Within China’s political, academic and business elite, however, there are concerns that Mr. Xi is increasingly focused on hitting growth targets and suppressing dissent rather than restructuring the economy and tackling other urgent problems. The latest moves on Monday include a rare intervention in the politics of Hong Kong and a plan to boost coal power despite a pledge to battle China’s severe air pollution.

Lou Jiwei, the ousted finance minister, was an outspoken Communist Party veteran picked for the job for his competence rather than a close relationship with Mr. Xi in the early days of the Xi administration.

Shortly before his appointment in the spring of 2013, according to people with knowledge of the matter, Mr. Lou expressed a wish to Premier Li Keqiang to allow him to serve his full five-year term. Mr. Lou’s pitch, these people said, was that he had a plan to overhaul the country’s creaky fiscal system and tax code and needed time to carry it out. The chat with Mr. Li helped launch him as a major voice for market-oriented changes in China.

On Monday, with nearly two more years to go before his term ends, the 65-year-old Mr. Lou—weakened in part by his loss of Mr. Li’s backing and at odds with senior officials bent on sparing no effort to prop up the economy—was succeeded by a relatively low-profile bureaucrat.

“Lou Jiwei’s abrupt ouster sends a strong signal that any prospects of even limited economic reforms are falling prey to President Xi’s focus on consolidating his power,” said Eswar Prasad, a Cornell University professor and former China head of the International Monetary Fund.

DavidD
BRFite
Posts: 854
Joined: 23 Jun 2010 04:08

Re: PRC Economy - New Reflections : April 20 2015

Postby DavidD » 08 Nov 2016 05:44

Vinu wrote:Foreign Reserves Plunged.
http://fortune.com/2016/11/07/china-foreign-reserves-yuan-depreciation/

Coupled with worries about China’s economy and its rapidly rising debt, that has stoked capital outflows and weighed on the yuan, analysts say.


With looming debt crisis, How long PRC can manage high growth by Govt induced Infrastructure spending?


It's always tough to get timing right, if you can pull it off you could make a lot of money. The important thing is that it cannot continue forever, so we'll see how the Chinese government will deal with it. Judging by current pattern, they seem to be taking a 2 steps forward 1 step back approach, causing intermittent mini-crisis with some months of stabilization following it.

They're clearly taking a 2 big steps right now, and if turmoil follows which it probably will then you'll see another step back to follow. The big steps forward are:

1) Control of the housing bubble. Stricter rules were enforced and housing sales growth is down big time in October, and it looks like they're about to follow it up with some property tax reforms. Just a few posts up you see the news of the finance minister being eased into retirement (which is usual BTW when an official in China reaches the age limit), and his replacement will be one well-versed in tax reforms.
http://www.rfa.org/english/commentaries ... 02803.html
http://www.scmp.com/news/china/economy/ ... -tax-chief

2) Stop guaranteed support to most SOEs, especially in sectors with overcapacity. Just a month ago a very large, century-old steelmaker went bankrupt, shattering the belief that China won't let SOEs fail. A few days ago the Ministry of Finance made it crystal clear that there will be no bail outs for zombie firms.
http://www.reuters.com/article/us-china ... SKCN12A0VQ
http://www.atimes.com/article/youre-fin ... ndholders/

My view is that the Chinese leadership probably sees an opportunity here to make some moves as the recent slew of good news gives them some room to maneuver. They're going for a double whammy on the steel industry, clamping down on property prices which decreases demand, and forcing zombie firms to liquidate, consolidate, or restructure.

Suraj
Forum Moderator
Posts: 10806
Joined: 20 Jan 2002 12:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Suraj » 08 Nov 2016 08:34

I have been hearing 'stricter rules to control the housing bubble' for about 1-1.5 years now. I've a professional colleague from Shenzhen who essentially states that all these rules are transient band aids that speculators easily find workarounds for, with the housing bubble continuing relentlessly, leaving a lot of people priced out, affecting their ability to do the basics of Chinese matchmaking, i.e. the guys got to have a job and a house.

DavidD
BRFite
Posts: 854
Joined: 23 Jun 2010 04:08

Re: PRC Economy - New Reflections : April 20 2015

Postby DavidD » 08 Nov 2016 08:55

IMO, everyone knows that the real only way to stop the ridiculous rise in property prices is to levy a property tax, the question is whether the CPC can push it past the vested interest. Even more fundamental is the problem that Chinese people simply don't have a good place to invest their money. Shutting down the property market will only result in propping up another bubble eventually. I think the CPC realizes that, and they'll need to reform the banking and financial sector after this. These things will take time, only with a lot of foresight and continuity of governance can they hope to achieve this.

Suraj
Forum Moderator
Posts: 10806
Joined: 20 Jan 2002 12:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Suraj » 08 Nov 2016 09:02

There's no property tax in PRC ??? For real ?? How on earth does the government accrue regular revenues from real estate then ?

nandakumar
BRFite
Posts: 719
Joined: 10 May 2010 13:37

Re: PRC Economy - New Reflections : April 20 2015

Postby nandakumar » 08 Nov 2016 10:31

Suraj wrote:There's no property tax in PRC ??? For real ?? How on earth does the government accrue regular revenues from real estate then ?

As I understand, the municipalities earn revenue from the sale of land. It is a one-time cash flow. But that shouldn't matter as there is always another parcel of land to be sold. In a situation where the local party officials mandate sale of public lands and additionally also commandeer banks to lend money to real estate promoters and easy credit to speculator investors to buy property closing the loop in this manner is the public finance equivalent of perpetual motion machines.

JayS
BRF Oldie
Posts: 2292
Joined: 11 Aug 2016 06:14

Re: PRC Economy - New Reflections : April 20 2015

Postby JayS » 08 Nov 2016 16:44

nandakumar wrote:
Suraj wrote:There's no property tax in PRC ??? For real ?? How on earth does the government accrue regular revenues from real estate then ?

As I understand, the municipalities earn revenue from the sale of land. It is a one-time cash flow. But that shouldn't matter as there is always another parcel of land to be sold. In a situation where the local party officials mandate sale of public lands and additionally also commandeer banks to lend money to real estate promoters and easy credit to speculator investors to buy property closing the loop in this manner is the public finance equivalent of perpetual motion machines.


True. And *probably* this is one of the reasons why Chinese local govts are very aggressive on removing old settlements and sale the land to new developers.

pankajs
BRF Oldie
Posts: 9444
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : April 20 2015

Postby pankajs » 08 Nov 2016 19:03

I don't see any video of Michael Pettis, Professor of Finance, Guanghua School of Management, Peking University

So here is one from around Feb 2016. You can find many more on youtube



He says that the best case is 3-4% average growth for a decade IF China is able to manage the transition successfully. He points to the two models of transition as the American great depression and the Japanese stagnation.

Hitesh
BRFite
Posts: 793
Joined: 04 Jul 1999 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Hitesh » 09 Nov 2016 06:14

Suraj wrote:There's no property tax in PRC ??? For real ?? How on earth does the government accrue regular revenues from real estate then ?


No, the PRC collects "rent" from the people holding the land. They do not consider landowners rights in China. However they do recognize long term leases such as 50 or 99 year leases.

tandav
BRFite
Posts: 215
Joined: 26 Aug 2016 08:24

Re: PRC Economy - New Reflections : April 20 2015

Postby tandav » 09 Nov 2016 22:11

Hitesh wrote:
Suraj wrote:There's no property tax in PRC ??? For real ?? How on earth does the government accrue regular revenues from real estate then ?


No, the PRC collects "rent" from the people holding the land. They do not consider landowners rights in China. However they do recognize long term leases such as 50 or 99 year leases.


I think this is a superior system than outright sale of land. People who own the land have done nothing to create it so why should they "own" it at best they can get right to use it by paying rent

Hitesh
BRFite
Posts: 793
Joined: 04 Jul 1999 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Hitesh » 09 Nov 2016 22:22

You will see a revolt by the land owners in India if that concept was ever brought into India. To most people, land is a form of security or basis that gives them rights. Landless people feel more powerless. It is just human psyche. That's why there was great land reform in the 50s and forced land redistribution from wealthy large land owners to people that worked on the land for many years. Land is a vehicle, for better or worse, of wealth.

tandav
BRFite
Posts: 215
Joined: 26 Aug 2016 08:24

Re: PRC Economy - New Reflections : April 20 2015

Postby tandav » 10 Nov 2016 13:13

Agree with human psychology aspect and that Land is a form of wealth. However a significant percentage of India's productive land is owned by absentee owners and therefore today is lying idle and there is no incentive to make it productive. Farmers pay no land use tax on it or pay very small taxes perhaps Rs 100/acre/yr. China on the other hand can flip over the land to people who will utilize it better and give GoPRC more revenue for infrastructure works. How do we unlock the productivity of land wealth?

Hitesh
BRFite
Posts: 793
Joined: 04 Jul 1999 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Hitesh » 10 Nov 2016 19:42

Taxes. Right now property taxes are extremely low and that encourage unproductivity. You impose taxes of 1-2% of the market value declared at purchase for buyer and capped at 3% annual increases for primary residential properties. The rest are subject to 1-2% of the current market value capped at a certain price as long as that property generate some form of sales or service tax. This will encourage owners to be more productive with their land and discourage landholding and letting them lay idle. If they don't do something with their land, they will see their wealth in the land get eroded.

But that should only happen when there is another reform of the landlord tenant laws. Right now landlords take an enormous risk of leasing the land because tenants have tremendous power and rights and can ruin the landlord's wealth or right to the property. For example, if you lease a land to the tenant, and the tenant moves in and doesn't pay rent after the 1st month or so, it takes years to evict him out. Here in Florida, it takes 5-10 days to evict the tenant. That protects the landlord's property and rights because he can recover from non-payment of rent in days, especially when you have mortgages encumbering the land. In India, you have no such recourse. You have a very high chance of losing your land when you lease to tenants.

So unless the court system and the landlord-tenant laws are reformed to allow landlord recourse when tenants don't pay up rent or abuse the land at landlord's peril, you will not see much productivity out of the land even if you impose higher taxes. Higher taxes and landlord tenant reform go hand to hand.

g.sarkar
BRFite
Posts: 1322
Joined: 09 Jul 2005 12:22
Location: MERCED, California

Re: PRC Economy - New Reflections : April 20 2015

Postby g.sarkar » 21 Nov 2016 01:14

http://thediplomat.com/2016/11/evaluati ... s-economy/
Evaluating China's Economy
Can China keep up its growth and deliver on its “harmony” pact with the Chinese people?

By Fatima-Zohra Er-Rafia
.....
One of the factors analysts are keen to understand is the Chinese employment market. From 1980 until 2014, China’s long-term average unemployment rate was around 3.86 percent. It reached a low of 1.8 percent in 1985 and a high of 4.9 percent (both in 1980 and 1991, during global recessions). The projections for 2015-2017 are showing an unprecedented high unemployment rate.
At first, the unemployment rate seems relatively constant, but we know that China’s official statistics are just that: Official. The real numbers are probably both higher and more volatile than what it is presented.
The ‘traditional’ equation used to calculate the unemployment rate has its limitations when applied China. Both the informal economy, as well as the vestiges of communism and its social safety nets, cloud the economic landscape.
The problem for China is that while maintaining an upward trend in wealth, salaries are expected to rise as well. This is where the CCP’s headache grows. Moreover, there is the famous “harmony” pact between the CCP and the Chinese that must be kept in mind: As long as the state continues to hire millions of young people in its SOEs, as well as allowing the emergence of a middle class that is getting wealthier over time, the Chinese agree to accept limitations on their freedoms. With millions of young people joining the labor market annually, and salaries increasing, the situation is unsustainable in the long term, especially with the burden of the informal economy getting out of hand.
Moreover, the foreign companies that came to China for its cheap labor (around 20,000 companies per year since 1979) have started to leave for neighboring countries, where the lower costs are becoming more attractive each day. For example, during the period from 2010-2013, Nike production shares in China dropped from 40 percent to 30 percent while Vietnam’s shares increased from 13 percent to 42 percent. What is more worrying for China’s economy is that even some Chinese companies have started outsourcing part of their production to other countries, including Vietnam and Bangladesh, which is unprecedented.
With a labor force of around 804 million people of working age (between 15-64 years old), China cannot afford a domestic crisis because of outsourcing. That’s especially true at a time when external factors, such as the worldwide economic slowdown, oscillating stock markets, tumbling oil prices, and intense competition from other countries, including India, are complicating matters for the CCP.
That said, China continues to export its labor force overcapacity around the world, especially to Africa, through various projects. China has extended more loans to African countries than the usual Western organizations such as the World Bank; Beijing then signs infrastructure contracts that allow Chinese companies to work onsite, bringing with them the labor force and machinery. This is a rising trend in Africa, although a few African countries (e.g. Morocco) now ask for the participation of their local labor force, in order to stimulate their own economies. The infrastructure projects of the new Silk Road in Eurasia, Oceania, and Africa help as well, and China has kept on pushing them, and developing them at a good pace.
China’s GDP growth trend follows a reverse trend with regards to China’s unemployment rate — as unemployment rises, GDP growth falls. In general, China has followed the same pattern as the world’s GDP growth, albeit at much higher rates. While the world’s average growth maxed out at 4.6 percent in 1983, China’s growth was then over three times higher, at 15.2 percent. China’s entry into the World Trade Organization in 2001 had a positive impact on the rise of the GDP, while the worldwide financial crisis in 2007-08 had a negative one.Projected GDP growth for 2016 and 2017 shows a decline. Despite this slowdown, China’s economy is in relatively good shape compared to many other Western countries.
However, the question of the comparison reaches its limits when China enters the equation: While Western countries are capitalist, China is not (for now). China abides by a different set of rules, and its domestic functioning is different as well: more complex, tangled, and less clear for Westerners.
This said, China’s economic slowdown is due to both external factors such as the worldwide economic slowdown (leaving China’s trading partners in bad shape) and to internal factors such as the inefficient allocation of capital by state-owned Banks, industrial overcapacity and well-known ticking debt-bomb that nobody can evaluate accurately. This year, the Institute of International Finance estimated that the total payload debt-to-GDP ratio is 295 percent. With the gloomy global economic climate, China’s debt problem is not reassuring — mostly because nobody knows the real extent of it. The uncertainty leads to speculations of all sorts, ranging from descriptions of China’s debt as “wet powder” (i.e., a situation that will be defused by the government as usual) by some optimistic investors to predictions of an unprecedented “global financial cataclysm” by other, more pessimistic hedge fund managers.
....
Beijing’s aim is reaching the perfect balance to keep its side of the “harmony” pact. In order to do so, the CCP, with Xi Jinping at the helm, must pull different strings like a master puppeteer. First, the government should have a clear and well-thought-out vision about China’s economic future. They can do this by focusing on future-oriented industries — for example, investing in renewable and green energy to avoid an environmental and social catastrophe whose consequences may be devastating on a very large scale. China must avoid short-term strategies and work on long-term ones that will strengthen China’s economy over time, instead of patching it up whenever a crisis arises.
Second, China must take steps abroad as well. This would include exporting its labor force overcapacity to work on the many infrastructure projects under the umbrella of the new “One Belt, One Road” initiative sweeping through Central Asia, as well as projects won through international bidding, mainly in Africa. This would increase opportunities in the Chinese employment market. Meanwhile, attracting Foreign Direct Investment (FDI) must stay a priority, not only for coastal China, but more importantly for mainland China’s poorer western provinces. Typically, FDI come from businesses. As a bonus, this time, new groups (such as cooperatives or fair trade organizations) may enter the FDI picture to make investment sustainable and keep it in line with communism’s fundamental principle of economic equality. This will work to China’s benefit in both the economic and social spheres and will lift the economy of the poor provinces out of their current downturn.
...

Gautam

Suraj
Forum Moderator
Posts: 10806
Joined: 20 Jan 2002 12:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Suraj » 05 Dec 2016 11:29

Speculators smell blood in the water in China:
Market bears smell blood as China scrambles to plug capital outflows
China's increasingly aggressive measures to clampdown on capital outflows will not have gone unnoticed by U.S. hedge-fund manager Kyle Bass.

Bass is famed for his successful bet against the U.S. housing market in the global financial crisis, so markets monitor his comments closely. He has long argued the yuan, or renminbi (RMB), is set to fall 30 percent against the dollar and he sees capital outflows as backing his view.

"China's capital outflows are worse than they appear, which is why the government has allowed the RMB to depreciate over the last two months," Bass told Reuters.

"We believe this pressure will continue with the prospect for higher interest rates in the U.S."

China is trying to tighten its grip on capital outflows after a slide in the yuan this year of almost 6 percent, which has pushed the currency down to levels last seen more than eight years ago and revived memories of a wave of capital flight late last year and in January.

China's Vice Finance Minister Zhu Guangyao was quoted on Saturday as saying policymakers were watching capital outflows closely.

Bank of China, the country's biggest currency trading bank, has begun to sharply limit corporate customers' ability to purchase foreign exchange in Shanghai, sources said on Friday. Customers who insist on buying foreign currency are being restricted to $1 million, compared with no caps previously.

Among other moves, the State Administration of Foreign Exchange (SAFE) is vetting transfers abroad of $5 million or more, down from $50 million previously, and is stepping up scrutiny of major outbound deals, sources said.


GShankar
BRFite
Posts: 868
Joined: 16 Sep 2016 20:20

Re: PRC Economy - New Reflections : April 20 2015

Postby GShankar » 07 Dec 2016 01:41

^^so by financing (and building the reactors using chinese personnel) the project, china gets free KT?

We need to wise up to these kind of dealmaking. I mean it must be a few billion euros or pounds and nothing that we can't afford for this kind of knowhow.

pankajs
BRF Oldie
Posts: 9444
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : April 20 2015

Postby pankajs » 07 Dec 2016 01:56

China is chasing its dream of internationalizing its currency. CPEC & OROB are all part of that plan. We are not in that game being a net importer of capital for the past 15 years where as China has been a net exporter of capital.

Direct quote from the book "Exorbitant Previliges" (https://www.amazon.com/Exorbitant-Privi ... 0199931097)

China today, like the United States in the 1940s, is running trade surpluses but also seeking to encourage wider international use of its currency. For other countries to get their hands on renminbi, China will therefore have to lend and invest abroad. That this lending and investment is something we are now beginning to see is an indication that Chinese officials know what’s up.

Austin
BRF Oldie
Posts: 19465
Joined: 23 Jul 2000 11:31

Re: PRC Economy - New Reflections : April 20 2015

Postby Austin » 07 Dec 2016 15:05

China's currency reserves fell in November to its lowest level since 2011
BEIJING, December 7th. / Corr. TASS Aleksey Selishchev /. The volume of China's foreign exchange reserves shrinking the fifth consecutive month in November of this year it amounted to $ 3.05 trillion from $ 3.121 trillion in October. This is stated in the report released by the People's Bank of China (central bank). Thus, foreign exchange reserves have decreased over the month by 2.3% and reached the lowest level since 2011.

The paper reported that the volume of gold reserves in China has decreased by 7.37% last month and amounted to $ 69.785 billion in monetary terms.
Over the past ten years, China's foreign exchange reserves soared thanks to the export of Chinese goods. Since 2014 the volume of reserves began to decline due to reduced demand for Chinese goods abroad, as well as the slowdown of the economy and changes in the international financial market.


Подробнее на ТАСС:
http://tass.ru/ekonomika/3848736

pankajs
BRF Oldie
Posts: 9444
Joined: 13 Aug 2009 20:56

Re: PRC Economy - New Reflections : April 20 2015

Postby pankajs » 10 Dec 2016 21:58

http://www.wsj.com/articles/chinas-bank ... 1481130392
China’s Banks Are Hiding More Than $2 Trillion in Loans
In 2014, the Chinese city of Haimen on the mouth of the Yangtze River set out to build a large apartment complex and turned to Bank of Nanjing Co. for about $29 million in financing.

The bank was happy to oblige but it didn’t call the money a loan, according to people familiar with the matter. It was added to Bank of Nanjing’s balance sheet as an “investment receivable,” a loosely regulated category of assets that allows bank officials to set aside little or nothing for potential losses.

Bank officials aren’t shy about the accounting sleight of hand, which is rampant across China. The bank had about $39 billion in investment receivables in the third quarter, nearly as big as its loan portfolio, and profits have climbed by more than 20% a year.

As of June, 32 publicly traded Chinese banks had a total of $2 trillion in investment receivables as of June, up from $334 billion at the end of 2011, according to a tally by The Wall Street Journal of the latest available information from data provider Wind Information Co.

<snip>

The epidemic of investment receivables has created a parallel buildup of debt in addition to China’s rising official debt levels, now 2½ times gross domestic product. “The rapid growth in banks’ off-balance-sheet and investment activities, in essence, means hidden credit risks and could threaten financial safety,” said Shang Fulin, China’s top banking regulator, in an unusually blunt speech in September.

<snip>

Last year, nearly 90% of the loan-like investments created by Bank of Luoyang Co. and shadow lenders were used to finance real-estate developments, according to a June report by China Chengxin International Credit Rating Co., one of China’s top ratings firms.

Most of the projects were concentrated in Zhengzhou, a city that symbolizes China’s housing glut. Bank officials didn’t respond to requests for comment.

<snip>

The lender isn’t worried about its funding for the apartment complex in Haimen or the industrial park in Nanjing, according to people close to the bank. The reason: Whether the projects make economic sense or not, bank officials expect to be repaid because of the projects’ government ties.

“All banks are trying to move [loans] off balance sheets,” said an official at Bank of Nanjing, nodding to a common belief in China that Beijing always will stand behind the country’s banks. “The only risk we have is sovereign risk.”


Return to “Technology & Economic Forum”

Who is online

Users browsing this forum: kmoksha and 13 guests