PRC Economy and Industry: News and Discussions

[ashi]

Wig, this is the power of a open society. It brings out the ills that plague the society and force the govts to act on them.

Hope this opens few eyes and make them see the perfidy of Communist Party of China.

Chicoms party has done far more for his people than the India government for his own.

[svinayak]

Chicoms party has done far more to his people than the India government to his own.

Liek suppression of Tibetians and killing of monks

[rsingh]

Oooops you were not supose to see this

[ajaytripathi]

'Lazy' China civil servant Jiang Jinxiang back at work

Mr Jiang was reportedly paid 150,000 yuan (£14,200) during his eight-year absence
A Chinese civil servant who did not do a day's work for eight years has returned to his job.

Jiang Jinxiang had been dubbed the most arrogant civil servant in the history of China, and his case has ignited fury in China's blogosphere.

However, Mr Jiang explained his long absence, saying he had been suspended after raising concerns about a local construction project.

He was reportedly paid 150,000 yuan (£14,200) during his absence.

The BBC's Martin Patience in Beijing says the case of the civil servant who never showed up was seen as an extreme example of a service considered by many in China to be bloated and inefficient.

Shunned
Mr Jiang returned to his job in the eastern province of Fujian saying that it had all been a misunderstanding.

The 55-year-old says he was suspended in May 2002 after raising concerns about the poor quality of a local construction project.

"I was shocked because they did nothing about the problem I reported but instead went after me," Mr Jiang was quoted by Chinese media as saying.

Mr Jiang says he was not told that he had been moved to a new department, which continued paying his salary.

His employer told the China Daily that his salary was paid on "humanitarian grounds" as Mr Jiang was experiencing domestic troubles.

Despite returning to work, Mr Jiang hasn't received a warm reception.

"It seemed as if all my colleagues are still shunning me as if I'm some kind of alien," he said.

http://www.bbc.co.uk/news/world-asia-pacific-12461926

[ashi]

India, China growth race 'silly', says Nobel winner

http://news.yahoo.com/s/afp/20110214/wl ... nomygrowth

India's leading economist, Nobel Prize winner Amartya Sen, dismissed on Monday the "silly" obsession of comparing the economic growth rates of China and India.

In a lengthy critique of the practice, Sen argued that New Delhi was far behind in the growth race, but more importantly it lagged in other criteria that showed real living standards were far inferior in India.

"Almost half of our children are undernourished compared with a very tiny proportion in China," Sen added.

[Prem]

http://blogs.wsj.com/chinarealtime/2011 ... 2-economy/
WSJ’s Chinese Readers Not Proud to Be No. 2

How happy were Chinese people to hear that they now live in the world’s second-largest economy?
If a reader poll on WSJ’s Chinese-language website is any indication, the answer is: Not at all.
After getting ambivalent reactions to China’s new status as No. 2 from a range of Chinese people, including Baidu CEO Robin Li, we knew not to expect much chest-thumping. But the results of the poll cast the news in a new light. Among the more than 3,000 readers who responded to the question (“Are you proud China has become the world’s No. 2 economy?”), only 443, or 14%, answered in the affirmative. More than 560 said they were undecided, while a full 2,059—or 67%—said they were not proud.While the poll is by no means scientific, the results nevertheless suggest Chinese people are taking news of their new global position in stride.In the comments section , readers gave a variety of reasons for feeling less than enthusiastic about the milestone. Like the people we interviewed earlier, a number pointed out that China still lags behind many countries in per capita GDP. Others suggested that too much of the country’s wealth goes into the pockets of corrupt officials.One particularly unimpressed reader made an appeal for humility based on history: “There’s no reason to feel proud. Over the last few thousand years, the vast majority of the time China has been No. 1. Now we’re No. 2 in total GDP and in the lower half in per capita terms. What’s there to be proud of?”

( Check the remarks , Yindi veni, Indi Vidi Vici )

[vina]

Yawn.. Chinese took some $750b in debt and built a railway system that goes Paki in 5 years!

Well, discover the wonders of the world. No break even for atleast 20 years and Pakiness all around . And all the while we have Droneacharyas reminding us about Piss and Plogress in PRC.

China Rail Chiefs' firing hints at trouble

China Rail Chief’s Firing Hints at Trouble
By MICHAEL WINES and KEITH BRADSHER

BEIJING — In his seven years as chief of the Chinese Railways Ministry, Liu Zhijun built a commercial and political colossus that spanned continents and elevated the lowly train to a national symbol of pride and technological prowess.

His abrupt sacking by the Communist Party is casting that empire in a decidedly different light, raising doubts not only about Mr. Liu’s stewardship and the corruption that dogs China’s vast public-works projects, but also, perhaps, the safety, financial soundness and long-term viability of a rail system that has captured the world’s attention.

Mr. Liu, 58, was fired Saturday and is being investigated by the party’s disciplinary committee for “severe violations of discipline,” a euphemism for corruption. His high government rank — minister-level officials are rarely fired under such a cloud — hints at far deeper dissatisfaction with one of China’s most publicized and sweeping domestic initiatives.

Until last week, Mr. Liu had led China’s program to lace the nation with nearly 8,100 miles of high-speed rail lines and to build more than 11,000 miles of traditional railroad lines. The sheer size and cost of the endeavor — the investment has been estimated at $750 billion, some $395 billion for high-speed rail alone — has led experts to compare it to the transcontinental railroad that opened the American West.

President Obama hailed China’s program in his State of the Union address and called for the United States to move quickly on high-speed rail plans that had been repeatedly delayed by budget concerns and political infighting.

Whatever their problems with Mr. Liu, Chinese officials indicated this week that the high-speed rail project would proceed with the government’s full support. But they have not explained why they summarily fired the leader of one of their signature projects.

There are some clues in top officials’ public statements since the scandal broke. Speaking on Monday in Beijing, the official who is believed to be the country’s new railways chief, Sheng Guangzu, said the ministry would “place quality and safety at the center of construction projects.” For good measure, he added that safety was his highest priority.

The statement underscored concerns in some quarters that Mr. Liu cut corners in his all-out push to extend the rail system and to keep the project on schedule and within its budget. No accidents have been reported on the high-speed rail network, but reports suggest that construction quality may at times have been shoddy.

A person with ties to the ministry said that the concrete bases for the system’s tracks were so cheaply made, with inadequate use of chemical hardening agents, that trains would be unable to maintain their current speeds of about 217 miles per hour for more than a few years. In as little as five years, lower speeds, possibly below about 186 miles per hour, could be required as the rails become less straight, the expert said.

Strong concrete pillars require a large dose of high-quality fly ash, the byproduct of burning coal. But the speed of construction has far exceeded the available supply, according to a 2008 study by a Chinese railway design institute.

Such problems, the expert said, are caused by a combination of tight controls that have kept China’s costs far below Western levels and a strong aversion to buying higher-quality but more expensive equipment from foreign suppliers.

As expensive as it is, China’s high-speed rail network has been built far more cheaply than similar projects in the West and in Japan. A mile of rail here costs roughly $15 million; in the United States, estimates peg the price at anywhere between $40 million to $80 million.

Japanese officials have already made an issue of the potential safety problems in the Chinese high-speed rail network. Yoshiyuki Kasai, the chairman of the Central Japan Railway Company, which runs Japan’s fastest bullet train, told The Financial Times last year that the Chinese were running trains based on Japan’s designs, but at speeds 25 percent faster.

“I don’t think they are paying the same attention to safety that we are,” he said. “Pushing it that close to the limit is something we would absolutely never do.”

Some of the criticism may be signs of envy that China has achieved so much at a speed and cost that other countries cannot match. Many multinational companies also resent China for tweaking foreign designs and building the equipment itself rather than importing it.

China’s high-speed rail network is already the world’s largest and among its fastest, and more lines are being built. Passenger rail traffic leapt to 1.68 billion trips last year, up 9.9 percent from 2009.

A new line from Beijing to Shanghai is scheduled to be finished by year’s end. It will whisk passengers across a distance equal to a trip between New York and Atlanta in less than five hours. Amtrak trains require 18 hours for the journey.

The effort’s success has earned admiration worldwide and had turned Mr. Liu into a global salesman for Chinese rail technology. In recent years he and others have sealed deals or opened talks for rail projects in Iran, Russia, Bulgaria, Turkey and elsewhere, including in California.

But projects of this scale in China inevitably involve corruption, and Mr. Liu’s downfall suggests that the Railways Ministry is by no means an exception.

Reports in the Chinese press suggest that a broad inquiry into ministry corruption is under way. The business journal Caixin reported that Ding Shumiao, who leads a conglomerate in Shanxi Province, was being investigated in connection with a contract to supply noise barriers along high-speed rail lines.

The Economic Observer reported last month that Communist Party disciplinary officials had detained Luo Jinbao, a former Railways Ministry official who also had led two state-controlled companies involved in rail logistics. The ministry is building 18 modern rail-shipping centers across China.

Neither case has been officially linked to Mr. Liu’s dismissal. But The Economic Observer, citing an unnamed Shanxi coal-mining executive, said that Mr. Luo had brought Ms. Ding and Mr. Liu together in 2000.

Two people with ties to the ministry said this week that the inquiry into Mr. Liu involved the ministry’s purchase of noise-reduction barriers for high-speed rail, which could point to Ms. Ding’s company. Both people refused to be identified out of fear that they would damage their access to ministry officials.

Railroad finances are yet another worry. Analysts have warned that the construction schedule ordered by Mr. Liu threatens to push the ministry’s debt — already $170 billion last fall — to an unsustainable level.

A 2010 analysis by China Minsheng Bank, reported this week by Caijing, found that the ministry’s debts equaled 56 percent of its assets and could reach $455 billion, or 70 percent of its assets, by 2020. In his last months on the job, Mr. Liu had begun an aggressive program to deal with the debt by selling stakes in the railway to investors like large state-controlled banks.

The Minsheng report suggested that the high-speed network may remain a money-loser for the next 20 years, despite heavy use. Ticket prices — several times those for a conventional train — have led to a backlash among some Chinese.

The timing of Mr. Liu’s dismissal may be significant: He was fired at the end of China’s Lunar New Year holiday, when trains are jammed, tickets are scalped at exorbitant prices and passengers are angriest.

The Communist Party has long worried that corruption may undermine its credibility with the public. But outside analysts agree that high-level officials are seldom sacked for corruption alone, in part because kickbacks, favoritism and other below-board activities are so common.

Russell Leigh Moses, a scholar of the Chinese leadership, said that Mr. Liu’s dismissal could signal disquiet over whether expansion of the rail system had gone too far, too fast.

“You don’t take someone down at that level of status unless they’ve done something really egregious,” said Mr. Moses, who works in Beijing. “I don’t know whether it’s politics or policy. But I wouldn’t rule out the second.”

Keith Bradsher contributed reporting from Hong Kong. Jonathan Kaiman contributed research from Beijing.

[ashi]

^^^^^

Another spin out of nothing. The decision of making HSR is not coming from this guy's level, and it is all the way up from comrade Hu.

He is sacked and investigated because he is corrupted, as simple as that. It doesn't matter what you have done before, the party will sack you and destroy you if you are corrupted, and exposed.

[Christopher Sidor]

^^^
Vina can you please cross post, the same article into the indian railways thread. If possible please highlight the debt concerns mentioned in the article.

[hnair]

You learn new stuff everyday!!

So they hang the highest hung-able dude, because he did not make Comrade Hu's vision successful. of course he has to be corrupt. Nothing wrong with Comrade Hu or his marvelous ideas of imperial grandeur. Sound strong leader.

Repeat a few times "Comrade Hu cannot do wrong or corrupt" and I believe it too.

[Christopher Sidor]

Decade to shift Chinese economy away from exports: bank

AFP is reporting that China's central banker, Zhou Xiaochuan, said on Friday "it would take at least a decade to shift the country's economy away from its export-based model"

And what is the reason for this long time required

He (i.e. China's central banker, Zhou Xiaochuan) said it involved not only retooling factories, but changing whole supply chains and retraining workers.
"This kind of cycle is over a period of 10 years," said the Chinese central banker.
....
....
He (i.e. China's central banker, Zhou Xiaochuan) said Chinese exporters have told the central bank that even with a rising yuan they would only shift around up to 20 percent output.
"They say exports are still more profitable than the domestic market," said Zhou.

But the silver lining is that the shift is under way

He (i.e. China's central banker, Zhou Xiaochuan) said the country's economy is already shifting more towards the service sector, saying that according to the most recent data only 10 percent of loans went to manufacturing compared to levels of over 50 percent in the 1990s.

Now here is the kicker, there is a growing feeling that a significant portion of the Chinese bank loans, if not a majority of it, has gone into property/real estate market and/or to speculation. Now it appears that we have an indirect confirmation, from the Peoples Bank of China's Official about the same.

[wig]

the chinese govt is scared stiff of any response in china to civil unrest in the middle ease. the new york times has an interesting article

Skittish domestic security officials responded with a mass show of force across China on Sunday after anonymous calls for protesters to stage a Chinese “Jasmine Revolution” went out over social media and microblogging outlets.

Although there were no reports of large demonstrations, the outsize government response highlighted China’s nervousness at a time of spreading unrest in the Middle East aimed at overthrowing authoritarian governments.

The words “Jasmine Revolution,” borrowed from the successful Tunisian revolt, were blocked on sites similar to Twitter and on Internet search engines, while cellphone users were unable to send out text messages to multiple recipients. A heavy police presence was reported in several Chinese cities.

In recent days, more than a dozen lawyers and rights activists have been rounded up, and scores of dissidents have reportedly been placed under varying forms of house arrest. At least two lawyers are still missing, family members and human rights advocates said Sunday.

In Beijing, a huge crowd formed outside a McDonald’s in the heart of the capital on Sunday after messages went out listing it as one of 13 protest sites across the country. It is not clear who organized the campaign, but it first appeared Thursday on Boxun, a Chinese-language Web site based in the United States, and then spread through Twitter and other microblogging services.

By 2 p.m., the planned start of the protests, hundreds of police officers had swarmed the area, a major shopping district popular with tourists.

At one point, the police surrounded a young man who had placed a jasmine flower on a planter outside the McDonald’s, but he was released after the clamor drew journalists and photographers.

http://www.nytimes.com/2011/02/21/world ... ml?_r=1&hp

[shyam]

HUGE FRAUD AT CHINA ECOMMERCE GIANT ALIBABA.COM: Management Out, 100+ Employees Dismissed

[vina]

Cross Post.

Paging Comrade Wrdos

A great and pragmatic budget. Keeps the growth rate intact, gets the fiscal deficit under control (I think Pranab Da said that the claims of the govt borrowing as a percent of total will come down to 44% from the 52% recommended under something..) .

Good focus on infra, strong focus on the minutia and clean up in terms of delivery of subsidy and a push towards direct payments and not indirect subsidies etc.

I think finally we will see the appearance of modern US/Canada/Australia style of grain silos with cutting edge material handling equipment and not the grungy FCI kind of Godowns /Mandis with grains stored in the open and rats feasting on foodgrains , all this moved with sweaty laborers heaving sacks of grain on their backs , a scene straight from the time of the Pharaohs and the Pyramids and a beloved of the Commies and their labor /dockyard/ union /dignity of man kind of thing in their endless Propah-Gandha fillums.

A large part of his speech and focus was in getting the farm to fork linkages and handling and leakages . I think the Kangress learned it's lesson from the recent food price inflation and the political costs of holding back on the reforms while being beholden to the small time subzi mandi and street corner folks enjoying political patronage from the local goondas and politicos and kickbacks kind of policies .

Jai Ho. All Piss, Plogress and Plospelity onree!

On another note, Glandpa Hu, per reports, came on national internet chat and said that China is going to aim for a lower growth rate in the next five years (around 7% or so) , with the focus being firmly on the "quality" and "equity" of that growth and moving away from export oriented low value slave labor oriented stuff and towards domestic consumption.

Err. I had taken a bet with the ChiPanda posters here on that same topic and said that in the next 5 years, India's growth rates are going to surpass China's (this was before that kind of talk from Kaushik Basu etc) , and talked about the inevitability of the export led model reaching it's limits and China having to grow by conumption and that will by it's inherent nature will lead to slower growth.

Well, looks like that the Chinese are going to adopt the Yindoo growth model!. Welcome on board folks. .

Psst. Can the person, I think it was wrdos get ready to sign and mail the $10 check please ?. You can mail it to the charity I will let you know once you acknowledge it.

After all, when Grandpa Wen says something, it always happens in China, doesn't it, or are you going to sign that check after 5 years from now?

[ashi]

^^^^^^^^

Geez, Vina. Don't count your chicken before they hatch. CCP always sets a growth goal and then over shoots it.

But who knows, a bad clock is correct twice a day. You could be finally right this time, but you are still wrong ... Are you going to sent a thank you note to "Glandpa Hu" when you collect the $10 check one day?

http://www.economist.com/node/17493348? ... d=17493348

India still has massive catching up to do in infrastructure (see article). It is not yet clear, with due respect to Indian nationalists, whether India will become the world’s fastest-growing big economy in 2011. But one thing is certain. If it does so, it will have China’s leaders to thank more than its own.

India may also outpace China this decade for the simple reason that it is poorer, giving it more scope to catch up. India’s income per head would have to grow at 8% a year for 17 years to match the level China enjoys today. One year of faster growth does not, then, mean that India is somehow overtaking China. Rather, it is like a 5,000-metre runner doing a faster lap than the frontrunner, who is five laps ahead.

[vina]

^^^^^^^^

Geez, Vina. Don't count your chicken before they hatch. CCP always sets a growth goal and then over shoots it.

Dear Comrade Ashi,

When the question is asked ,

"Millol, Millol, on the warr, who is the failest of 'em arr ?"

and the mirror replies, Yindia Snow White my queen is the fairest of the all, the CCP is sure as hell going to be very very angry.

So , that apart comrade, why don't you put your money where your mouth is and take up the bet in place of the missing in action wrdos ?

[abhischekcc]

The Econo-missed is a racist rag whose editors get wet dreams about shouldering white man's burden. They remain especially pissed off with India for destroying the British empire. Quoting that rag is like quoting Mein Kampf on Judaism.

[PrasadZ]

Geez, Vina. Don't count your chicken before they hatch. CCP always sets a growth goal and then over shoots it

Geez, ashi .. that is a problem with fiscal management, statistics and prioritisation, is it not?
And about those chickens and the race, yep .. this is a 5000 year race and we can wait 17 years. question is, can the CCP?

[amit]

^^^^^^^^

Geez, Vina. Don't count your chicken before they hatch. CCP always sets a growth goal and then over shoots it.

But who knows, a bad clock is correct twice a day. You could be finally right this time, but you are still wrong ... Are you going to sent a thank you note to "Glandpa Hu" when you collect the $10 check one day?

http://www.economist.com/node/17493348? ... d=17493348

India still has massive catching up to do in infrastructure (see article). It is not yet clear, with due respect to Indian nationalists, whether India will become the world’s fastest-growing big economy in 2011. But one thing is certain. If it does so, it will have China’s leaders to thank more than its own.

India may also outpace China this decade for the simple reason that it is poorer, giving it more scope to catch up. India’s income per head would have to grow at 8% a year for 17 years to match the level China enjoys today. One year of faster growth does not, then, mean that India is somehow overtaking China. Rather, it is like a 5,000-metre runner doing a faster lap than the frontrunner, who is five laps ahead.

It's interesting how CCP drones desperately seek out Western approval for the "great" work the Party is doing. Reversely they get into a tizzy when the same western media criticizes them despite their huge "surplus" which is almost a phallic symbol.

[somnath]

Vina-ji,

China's growth is nothing to be sneered at..Discounting through any measure, and there ARE substantial chunks to be discounted, chinese economic (and HDI) achievements are still amazing...They provide India with the right benchmark to aspire for in many ways...In terms of a potential adversary, let us not kid ourselves that they are all faked - they are not, not by a wide margin...

But we have gotten some aspects better, not just the oft repeated demographic story (which frankly, I am a little bored by)...Our running of a small, manageable current account deficit, as opposed to the massive surplus that China runs..It allows us to suck in resources of the world, and use capital much moe efficiently...Our companies are used not just to frugal engineering, but also frugal financial engineering...The day of reckoning isnt far when capital will become more expensive for all, and Chinese companies are not prepared for that...Our banking sector, led by its regulator, is world class - best in class, can stand up to the best there is anywhere in quality...Just the opposite for China - large banks, but suspect quality...Hugely suspect in fact...One more point, China's massive consumption of natural resources are not just a question of demand..It is also a question of inefficiency - china has very high energy intensity of GDP..Which is why it is the most defensive negotiator in climate change talks..This will prove to be the real long run issue for them....

[Theo_Fidel]

Yes, they have somethings over us. But this has gone to the panda over-lords heads and they think it will be a permanent situation. Somewhere in the Han chinese world view is the idea that Asia belongs to them and their culture.

What we argue is that the only thing they have over us is time. We are 10-15 years behind. A blink of an eye. It is not sneering as much as failure to be impressed.

Hence people should not get razzle-dazzled over the investment style going on there. Its all maya, panda version of shock and awe to strike fear into our hearts. Sad thing is many get seduced and want panda style overlords over here as well to kick 'other peoples asses'. You know, the democracy is keeping us poor argument.

[RamaY]

On another note, Glandpa Hu, per reports, came on national internet chat and said that China is going to aim for a lower growth rate in the next five years (around 7% or so) , with the focus being firmly on the "quality" and "equity" of that growth and moving away from export oriented low value slave labor oriented stuff and towards domestic consumption.

Err. I had taken a bet with the ChiPanda posters here on that same topic and said that in the next 5 years, India's growth rates are going to surpass China's (this was before that kind of talk from Kaushik Basu etc) , and talked about the inevitability of the export led model reaching it's limits and China having to grow by conumption and that will by it's inherent nature will lead to slower growth.

I guess you lost the bet because Hu himself reduced the growth prospect; implying they could have achieved 18% growth if they wanted to

[RamaY]

Vina-ji,

China's growth is nothing to be sneered at..Discounting through any measure, and there ARE substantial chunks to be discounted, chinese economic (and HDI) achievements are still amazing...They provide India with the right benchmark to aspire for in many ways...In terms of a potential adversary, let us not kid ourselves that they are all faked - they are not, not by a wide margin...

That is true. We need to see how these capital investments pay off in their life times (25-40 years). It may appear good to see the increased production capacity and the employment opportunities that come with that. What happens when the world's consumption reaches the plateau?

Assuming there is a gap of 30% (that's what PRC statistics say) between infrastructural need and supply; and PRC is growing at 8-10% rate (all infra projects) how long will it take for PRC to reach that 100% coverage.

For example - PRC needs say 50,000 mile High-speed railway lines. How long will it take to reach that goal given a 8-10K new railway line construction per year, and what happens to that industry when that goal is reached? Extend this logic to their steel, electricity, and other industries...

[somnath]

^^^RamaY-ji, the asumption is that once the massive investment binge reaches tipping points, consumption will take over...Of course, consumption has much lesser multiplier effect than investment on GDP...Which is part of the reason everyone, the Chinese leaders themsleves included are talking about growth slowing down...The key question really is whether China manages to become "rich", ie, have a PCI of USD 10k before that happens...A lot of countries did a quick march towards middle income status (5-6k PCI), but found the going tough after that...

[wrdos]

Take it easy vina-ji.

I have no memory that I've ever bet with you for the following issue. Economy growth fluctuates every year in every country, only a fool would make such a bet.

And I just find it strange, a single year's growth rate is really that important for you? And especially when it is still an assumption rather than a fact.

Cross Post.

Paging Comrade Wrdos

A great and pragmatic budget. Keeps the growth rate intact, gets the fiscal deficit under control (I think Pranab Da said that the claims of the govt borrowing as a percent of total will come down to 44% from the 52% recommended under something..) .

Good focus on infra, strong focus on the minutia and clean up in terms of delivery of subsidy and a push towards direct payments and not indirect subsidies etc.

I think finally we will see the appearance of modern US/Canada/Australia style of grain silos with cutting edge material handling equipment and not the grungy FCI kind of Godowns /Mandis with grains stored in the open and rats feasting on foodgrains , all this moved with sweaty laborers heaving sacks of grain on their backs , a scene straight from the time of the Pharaohs and the Pyramids and a beloved of the Commies and their labor /dockyard/ union /dignity of man kind of thing in their endless Propah-Gandha fillums.

A large part of his speech and focus was in getting the farm to fork linkages and handling and leakages . I think the Kangress learned it's lesson from the recent food price inflation and the political costs of holding back on the reforms while being beholden to the small time subzi mandi and street corner folks enjoying political patronage from the local goondas and politicos and kickbacks kind of policies .

Jai Ho. All Piss, Plogress and Plospelity onree!

On another note, Glandpa Hu, per reports, came on national internet chat and said that China is going to aim for a lower growth rate in the next five years (around 7% or so) , with the focus being firmly on the "quality" and "equity" of that growth and moving away from export oriented low value slave labor oriented stuff and towards domestic consumption.

Err. I had taken a bet with the ChiPanda posters here on that same topic and said that in the next 5 years, India's growth rates are going to surpass China's (this was before that kind of talk from Kaushik Basu etc) , and talked about the inevitability of the export led model reaching it's limits and China having to grow by conumption and that will by it's inherent nature will lead to slower growth.

Well, looks like that the Chinese are going to adopt the Yindoo growth model!. Welcome on board folks. .

Psst. Can the person, I think it was wrdos get ready to sign and mail the $10 check please ?. You can mail it to the charity I will let you know once you acknowledge it.

After all, when Grandpa Wen says something, it always happens in China, doesn't it, or are you going to sign that check after 5 years from now?

[somnath]

^^^wrdos-ji, relax...I dont think anyone's saying that everything about China is fake..But your leaders themselves are now realising the pitfalls of your current model of development...especially the terrible inefficiency of using both capital as well as natural resources..

[shynee]

China’s Highly Unequal Economy - By Victor Shih

[RamaT]

http://online.wsj.com/article/SB1000142 ... 58442.html

To the extent that we can gauge Chinese public opinion through surveys like Asia Barometer, a very large majority of Chinese feel that their lives have gotten better economically in recent years. A majority of Chinese also believe that democracy is the best form of government, but in a curious twist, they think that China is already democratic and profess to be satisfied with this state of affairs. This translates into a relatively low degree of support for any short-term transition to genuine liberal democracy.

The fact is that authoritarianism in China is of a far higher quality than in the Middle East. Though not formally accountable to its people through elections, the Chinese government keeps careful track of popular discontents and often responds through appeasement rather than repression. Beijing is forthright, for example, in acknowledging the country's growing income disparities and for the past few years has sought to mitigate the problem by shifting new investments to the poor interior of the country. When flagrant cases of corruption or abuse appear, like melamine-tainted baby formula or the shoddy school construction revealed by the Sichuan earthquake, the government holds local officials brutally accountable—sometimes by executing them.

The bottom line is that China will not catch the Middle Eastern contagion anytime soon. But it could easily face problems down the road. China has not experienced a major recession or economic setback since it set out on its course of economic reform in 1978. If the country's current property bubble bursts and tens of millions of people are thrown out of work, the government's legitimacy, which rests on its management of the economy, would be seriously undermined.

There is also what the Chinese themselves call the "bad emperor" problem. China's historical achievement over the centuries has been the creation of high-quality centralized bureaucratic government. When authoritarian rulers are competent and reasonably responsible, things can go very well. Indeed, such decision-making is often more efficient than in a democracy. But there is no guarantee that the system will always produce good rulers, and in the absence of the rule of law and electoral checks on executive power, there is no way to get rid of a bad emperor. The last bad emperor, commonly (if quietly) acknowledged as such, was Mao. We can't know what future tyrant, or corrupt kleptocrat, may be waiting in the wings in China's future.

The central moral imponderable with regard to China is the middle class, which up to now has seemed content to trade political freedom for rising incomes and stability. But at some point this trade-off is likely to fail; the regime will find itself unable to deliver the goods, or the insult to the dignity of the Chinese people will become too great to tolerate. We shouldn't pretend that we can predict when this tipping point will occur, but its eventual arrival, as Samuel Huntington might have suggested, is bound up with the very logic of modernization itself.

[Chinmayanand]

China companies on US taint list, govt upset

BEIJING: China is upset about the United States including Chinese companies in its list of notorious markets. The list will damage the reputation{reminds of paki echendee} of Chinese firms, including the most popular portal, baidu, the Chinese commerce ministry said.

"We have studied the report thoroughly," Li Chenggang, head of the department of treaty and law under the ministry of commerce, said. "Such move might have negative impacts on the reputation of the involved companies and we are concerned about it," he said.

It is not clear if China would counter this by releasing its own list of foreign companies that violate copyright laws and standards. The Chinese government has made it a practice to release its own human rights report showing violations in the US immediately after Washington releases its list every year.

The list of companies allegedly involved in selling counterfeit and pirated goods was released by the Office of the United States Trade Representative last month. It includes Chinese e-commerce firm Taobao. TVAnts and 91.com. Li said it is not proper to issue a list without providing detailed information. {just like pakis always asking for more evidence}

At the same time, China has assured the international community that it will continue to fight against copyright violations. {just like pakis are fighting against terror}Chinese authorities have arrested 3,001 people in their latest crackdown on rampant product piracy and seized fake or counterfeit medicines, liquor, mobile phones and other goods, officials said.

"Intellectual property protection is essential for building an innovation-oriented country and achieving a shift from 'China-manufactured' to 'China-innovated'," Li said. Chinese leaders have said they want the industry to change its focus from low-cost imitations to creation of profitable technologies. The country's own software, music and other creative companies have been devastated by unlicensed copying. {just like pakis are victims of terror}
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This news item shows the paki syndrome in the chinese.

[Theo_Fidel]

Interesting watch. Sad how the people of Beijing really live!! $250/month for 1 room rental unit.

And the staggering thing is, if you take out construction from manufacturing, China's manufacturing sector drops to 28% .

http://www.sbs.com.au/dateline/story/wa ... ost-Cities

China's Ghost Cities

A two-hour drive from Beijing, I'm being shown a duplex with an asking price of almost $300,000. It's a development called Green Island, though it is anything but outside. From the window, a smoggy view of another old neighbourhood developers have earmarked for demolition.

REPORTER: So this will go next?

WOMAN: Yes. (And those people will move into here)

An unlikely prediction, considering buyers are required to pay 50% of the asking price upfront and the balance within three years. Such stringent terms, which keeps so many workers out of the market, are also the reason why China has yet to experience a US-style credit implosion.

AGENT (Translation): This is a good place for you high-income earners, it’s quite and the environment is good.

REPORTER: Who will come to live here?

WOMAN: People who can afford a house in Beijing.

REPORTER: But they haven't come yet?

WOMAN: No.

And only months after the first tenants moved in here, the For Sale signs and For Rent signs are already appearing. China's authorities are trying to cool their overheated economy with a series of financial controls. But there are dangers.

http://www.marketwatch.com/story/beijin ... 2011-03-13

Some economists argue that if you examine the sheer size and amount of investment in mainland Chinese property, it illustrates that supply is not the problem. According to Wang Tao, an economist at UBS, the value of China’s urban housing inventory is estimated to be equivalent to 75% of the country’s gross domestic product in 2010. Further, if you use market prices of new residential housing in 2010, this figure would rise to 120%.

So far this year, property investment is continuing apace despite China’s recent interest-rate rises and property-cooling measures. Fixed-asset investment in real estate rose 24.9% in the first two months of this year to reach 1.74 trillion yuan, according to the National Bureau of Statistics.

http://blogs.wsj.com/chinarealtime/2011 ... the-world/

The numbers tell much of the story. China is the world’s largest consumer of steel, and Mr. Anderson notes that real estate directly accounts for 40% of Chinese steel usage. Add home appliances and automobiles—which he notes tend to directly follow new housing purchases in China–the share is more than 50%. Similar logic applies to other products like cement, iron ore, coal, and construction equipment.

Property construction—75% of which in China is housing–accounted for more than 13% of China’s gross domestic product last year, UBS estimates—more than double the average of 6% in the 1990s. Mr. Anderson says that explains why investment overall accounts for such a large share of China’s economy—an estimated 47% to 48% of GDP last year, which “is an absolute record for any economy of significant size in the post-war era, and almost single-handedly explains China’s explosive real growth over the same period.”

[Christopher Sidor]

^^^^
Many commentators, have suggested that China is not in an asset bubble phase. They point to two facts
1) Many of the real estate buyers give 40-50% down-payment and finance the rest.
2) China has the demand and growth to absorb the generated real-estate.

Well fair enough on both the points. In US the recent economic recession was caused due to sub-prime loans and not prime loans. And on first look it does appear that Chinese are not creating any sub-prime mess.

But it misses another point. If a Chinese is more interested in investing in real-estate then he/she will be less interested in spending. You see even with 60-50% financing, a Chinese will have to put away quite a significant amount of his earnings to pay off the debt. Moreover most of the Chinese are buying real-estate for its appreciating value. Value which they might unlock in the future, by selling or mortgage or by rent. What if the prices don't drop but do not appreciate that much or do not appreciate at all. This would mean that Chinese households would be saddled with investments that do not grow that much. How would this impact the consumption of the chinese?

I remember in early 1990s, rows of apartment blocks in Ahmedabad suburbs of satellite, vastrapur, drive-in, lying vacant. It was not till early 2000s and after 1999 that these apartment blocks got filled up with residents. But in 1990s lot of real-estate builders went bust. And the funny part was that, the prices did not drop that much only very little. It was just that they did not appreciate to an extent that was expected.

[RamaT]

Australian 60 minutes take tour of China ghost towns.(original air date 3/20/11)

http://www.sbs.com.au/dateline/story/wa ... ost-Cities

Roubini On China's Unsustainable Growth Model -- And Why The Rate Hike Looks Desperate

Premier Wen last month described inflation as “a tiger” that once set free will be difficult to cage, and also as a potential threat to social stability. “Exorbitant” house price increases in some cities are a top public concern, he said.

Today’s announcement contrasted with central bank Deputy Governor Yi Gang saying March 23 that interest rates were at a “comfortable” level and that he was “not too worried” by inflation because price increases will slow in the second half of the year.

Via Email update, Nouriel Roubini sent out a note regarding China's growth.
I’m writing on the heels of two trips to China during which I met with senior policy makers, bank executives and academics, just as the government launched its 12th Five-Year Plan, intended to rebalance the long-term growth model. My meetings deepened my own impression and RGE’s long-standing house view of a potentially destabilizing contradiction between short- and medium-term economic performance: The economy is overheating here and now, but I’m convinced that in the medium term China’s overinvestment will prove deflationary both domestically and globally.

Once increasing fixed investment becomes impossible—most likely after 2013—China is poised for a sharp slowdown. Continuing down the investment-led growth path will exacerbate the visible glut of capacity in manufacturing, real estate and infrastructure. I think this dichotomy between the high-growth/inflation pressures of the next couple of years and growth hitting a brick wall in the second half of the quinquennium is far more important than the current focus on a “soft landing” amid double-digit growth. A number of local scholars close to policy circles agree that this is the biggest challenge of the next few years, as we’ve been saying for months.

http://www.businessinsider.com/china-ja ... ths-2011-4

[Advait]

http://www.youtube.com/watch?v=rnw5BvxS ... e=youtu.be

This is the banned bunny cartoon video. Banned cause it will disrupt the harmony in China

we should post this video on as many sites as possible whenever there is any positive article on China.

Check out my thread:
http://forums.bharat-rakshak.com/viewto ... =24&t=5884

[vina]

Cross Post.

Finally, India beats China in growth sweepstakes

It’s official! India’s growth in 2010 was a notch higher than that of China. According to data from the IMF, India’s GDP grew 10.4 per cent in 2010 versus China’s 10.3 per cent. And if projections by official agencies are anything to go by, China is looking at a 7 per cent growth in the Twelfth Plan period (2011-15) compared with India’s 9 per cent. This is the first time that India’s growth has overtaken that of China, since the latter initiated reforms in the 1980s, a decade ahead of India.

BRRRRR.. Paging Wrdos! Paging Wrdos.

Now that it has happened just as I predicted , India is growing FASTER than China, I suppose it is time for you to pull out that checkbook and write a check to the charity of my choice!

[Chinmayanand]

IMF warns China of credit and asset bubbles in economy

[ashi]

How Much Does Foxconn Like Brazil?

Mr. Gou’s conclusion: “India, Brazil, Russia, factories there are all good for domestic consumption,” but “I think in China in the next 20 years won’t have a competitor” as the world’s main manufacturing center.

[manish]

Well well well

Motorola Accuses Huawei of Stealing Mobile-Phone Trade Secrets

Huawei won't be/can't be touched. Netzilla tried in 2003. Many others have tried before and failed. First off, the co doesn't seem to care much about bad PR, esp in NA. They seem a lot more sensitive to bad press in India than in NA. The scene in 2010 is slightly different from 2003 in the sense that Huawei has a a bit more at stake in the NA market now compared to the near zero levels of exposure it had earlier. But the levels are still a mere drop in the ocean when Huawei's total sales are concerned.

Plus, and most importantly, Huawei is one of the 800 pound gorillas in PRC's pantheon of National Champions, and a feel-good 'Privately owned' one at that. Many believe netzilla was arm-twisted into 'settling' its lawsuit out of court by the CCP. This is a key thing to consider.

And history seems to repeat itself, as expected
Motorola and Huawei drop pending lawsuits, enter into new info-sharing agreement

After months of fighting on the playground, Motorola and Huawei have finally come to an agreement to settle their differences once and for all. Both parties have now dropped their pending lawsuits, with Motorola originally accusing Huawei of stealing trade secrets from its former employees, and later on Huawei getting all worried about Motorola leaking confidential information over their partnership to the rivaling Nokia Siemens Networks.

[Advait]

ashi you beat me to it. I was going to post the WSJ article extract too.

Here is what he has to say about India:

India – is that a good place to put a factory?… India has its problems… Its wealth gap is bigger than China’s. It has a higher Gini index than China. Can you say India is a country? Every region has its own tax laws. It’s like the U.S. before the republic was established… So if India wanted to become a factory for the world, the software is okay, [but] the hardware will take time. I think at least 20 years… And India’s wages are also rising fast. Now everyone has the Internet. Whatever money Chinese workers make, Indian workers want to make the same amount. So what does China have to fear?

[Suraj]

That poorly argued nonsense does not deserve the extra eyeballs. Yes indeed, all those constraints don't apply to software and any other business field because the author says so, but magically become an impediment to hardware development. The author hasn't been to Chakan or Sriperumbudur, that's for sure.

[Hari Seldon]

^^^ Or Gujarat, of course, which has quite openly declared intent to compete not with the rest of Yindia but benchmark with Guangzhong instead.

They've already done a PRC x10 in the diamond trade, rumor says.