PRC Economy and Industry: News and Discussions

nandakumar · Post by **nandakumar** » 27 Jun 2011 18:02

A the height of the global financial crisis the Chinese unleashed a stimulus spending with provinces and municipal corporations joining in the fray. It was always speculated that the municipal corporations had borrowed extensively but the quantum was always a mystery. Now a Financial Times story puts the number at $1.7 trillion quoting Government audit findings. Of course the audit report probably put a spin on it saying it is a manageable debt level.

http://www.ft.com/cms/s/0/1e47d528-a092 ... z1QTdzIVCb

Singha · Post by **Singha** » 27 Jun 2011 20:42

pakistan has a young population and huge nos of unemployed. china could either import and settle millions of pakis or move factories there.

svinayak · Post by **svinayak** » 28 Jun 2011 21:27

http://www.bloomberg.com/news/2011-06-2 ... lling.html

I tend to agree with the author on China's future from an economic standpoint.

China presents today as a primarily agrarian country of 1300 million people. Claims that it manufactures most of America's goods, or is the principal manufacturing country of the world, are false: that title rests with the United States and her heavily mechanized factories.

Fearmongers in the USA point to China and in shrill tones proclaim she is sweatshopping us to death; but, in reality, this is nonsense. Such a plot needs two acts -- in Act I, the country sells so many goods so cheaply as to wreck the production and capacity of its buyers (check the books: this is not happening. The USA produces more goods today than it did in the heyday of 1970 but with far fewer workers). In Act II, the country breaks off exports and turns against its former customer.

My friends, there is no such Act II on the horizon. China's industrial rise of the past 40 years has lifted it from Afghanistan-poverty into Mexico-poverty, and there it shall stay. Assembly workers building plastic toys or steel tools do not generate USA-style wealth and they never will.

Americans make toys, but they are more than manufacturers. Americans are designers. In this category, China lags far, far behind and their pitiful gains are not enough. "Hello Kitty" is not going to eclipse Disney or even Ronald McDonald.

Ladies and gentlemen, China saw a world where she was too big to fail and has simply become too big to succeed.

China's military buildup is cause for concern, yes, but they are pushing a bamboo ceiling they won't be able to crack. Could China invade its neighbors -- India, Russia, Japan, steal their wealth, and become the new superpower? No. Any such plan is foolish, self-defeating, and insufficient. China can field millions of soldiers but it cannot feed them. To war with her customers is to lose them, and she certainly cannot afford to do that. America doesn't relish a war with China but it will not shrink from one and it is prepared for one.

We should worry about China joining with Muslim terror groups. We should worry about China trading nuclear technology with less visible actors who believe in national suicide (China doesn't). We should worry about Chinese spies.

We shouldn't worry about 21st century capitalism breaking down before 19th century communism, because that is not going to happen. Everything they steal, we'll make 10 times better in the next generation.

To sum-up, China makes 10 percent of our stuff. We buy it because it's cheap. That, my friends, is an arrangement made in hell. They'll never get rich from it, and their power over us is centered on the idea that Americans need more and more cheap stuff... but the dynamic is, people who have cheap stuff want good stuff, and those goods are not Chinese. So.. bamboo ceiling.

Prem · Post by **Prem** » 28 Jun 2011 23:54

http://online.wsj.com/article/SB1000142 ... 86262.html
The Cost of Chinese Auditors
A move by China's Ministry of Finance to favor domestic firms in the audit of Chinese companies risks turning the dog that didn't bark to the dog that cannot bark.

Chinese firms listed overseas have been struck by a wave of accounting scandals. In some cases, possible fraud appears to have passed unnoticed by auditors, often Western firms, for many years. Deloitte Touche Tohmatsu cheerfully signed off on the records of financial-services firm Longtop Financial Technologies for six years before quitting, saying it could no longer rely on management representations.Western auditors haven't covered themselves in glory. But the alternative could be even worse. The Ministry of Finance now is encouraging big hitters in China's telecom, finance and energy sectors to choose domestic auditors. The result could be index heavyweights like China Mobile, Industrial & Commercial Bank of China and PetroChina switching to domestic auditing firms from the big four. This could weaken both the quality of auditing and legal recourse for investors. Reputational risk for international accountants helps keep them on the straight and narrow. Guilt by association from auditing Chinese small-cap companies already is taking a toll on the reputation of the big four, some more than others. Chinese auditing firms, most of which have yet to venture beyond the mainland, don't face the same pressures.

Prem · Post by **Prem** » 29 Jun 2011 00:08

Edited.

svinayak · Post by **svinayak** » 29 Jun 2011 00:13

Comment on the FP article

Dear Munshi,

Islamists in the sub-continent believe in the two nation theory which is one of the most bigoted propositions of the 20th century. And one of the greatest bigots who believed in this theory was Hussain Saheed Surawardy, the hero of Bengali muslims, who after directly inciting riots during partition as the Chief Minister of Bengal (killing thousands of Hindus and Muslims) had to finally plead with Gandhi to save muslims.

When the supreme moment came (prime minister of Pakistan) the anti-bengali racist Ayub Khan expelled him to Lebanon and poisoned him.

This is the gold standard for bigots AND inciter to religious hatred AND an useful idiot. But as a famous historian you already knew that.

Good day to you.

regards
------------------------
Who is a bigot?
@GOLDENMIDDLE:

Actually my comment was meant for SHAN94 but for some reason it appeared after your remarks.

Anyway,
You are speaking of events that happened 40-50 years ago and without any background or proof. The Two Nation Theory is still relevant today and can be adapted to fit the new situation. I believe it should not have been a two nation theory but a several nation theory. The British Raj should have been broken up into 15-20 new countries based on religion, ethnicity, culture and language

sukhish · Post by **sukhish** » 29 Jun 2011 07:42

Acharya,
I agree with your assessment 100%. On the other hand I see India slowly but surely building it's expertise in enterprenuership

Singha · Post by **Singha** » 29 Jun 2011 08:17

there were scandals about auditors from big MNC cos being pressurized or paid off to overlook bad stuff in China in the past.

but bringing in domestic cos with the sage blessings of the chief panda is truly closing the loop

ashashi · Post by **ashashi** » 29 Jun 2011 16:39

http://finance.fortune.cnn.com/2011/06/ ... =H_TS_News

China's debt bomb
Most recently, China's top auditor said that loose lending standards and a sharp rise in local government borrowing (for building projects, of course) may have created a mountain of debt that cannot be repaid, reports the New York Times. All it will take is a fall in housing, or some sort of economic slowdown, to reveal an untold number of bad loans.

In a speech that coincided with the release of the government report, the head of China's national audit office Liu Jiayi said Monday: "The management of some local government financing platforms is irregular, and their profitability and ability to pay their debts is quite weak." Audit officials and Chinese central bankers say that local government debt accounts for between 27% and 30% of China's GDP, and totals $1.7 trillion to $2.2 trillion. Those numbers come in higher than estimated. The Times notes that borrowed money has been used to finance not only real estate construction, but also low-return infrastructure projects like bridges, tunnels, subways, and roads.

The estimated 6,500 to 10,000 local government investment companies created to borrow money have made a construction boom that has kept China's export-reliant economy from feeling the extreme pain of the global economic slowdown

ashashi · Post by **ashashi** » 29 Jun 2011 16:50

http://www.businessinsider.com/china821 ... bts-2011-6

China's Local Governments Really Want To Default On Their Debts

After we mentioned the first case of attempted default by a local government financing vehicle (LGFV) in Yunnan, the latest casualty appears to be an LGFV of the Shanghai local government according to Hong Kong Economic Journal. According to the report, one investment company under the Shanghai government, which focuses on real estate and highways developments, appears to be unable to repay its short-term loan to the bank since earlier this month. This LGFV has requested their banks to extend the maturity of the loan into long-term loans with fixed-asset collaterals, effectively defaulting on its debt. The proposed collaterals, curiously enough, are government buildings and highways, which are pretty worthless as far as the banks are concerned.

...

As a reminder, the highest estimate available for the LGFV debt was produced by the People’s Bank of China, which says the LGFVs debt can get as high as 14.4 trillion Yuan. Using the method recommended by Professor Victor Shih, the total local government debts can get to 20 trillion Yuan or more, which would be roughly 50% of China’s GDP. Please also be reminded that if we add other government debts, the total debt-to-GDP ratio will get very close to 90% of China’s GDP. Worse still, no one can be confident about any numbers at all.

So far, the Yunnan and Shanghai cases of attempted default are described as “not the worst ones”. As the local government debts drama unfolds, together with the continuous economic slowdown and monetary tightening, be prepared to see more of these cases emerging in the next few months

wong · Post by **wong** » 29 Jun 2011 18:14

^^^^^
How is 90% domestic debt to GDP even a problem for the world's largest creditor nation?? Japan is running at over 220% debt/GDP this year. China will create a SPV to buy up all these bad debts, print RMB like QE1 & QE2 to pay for it, bad balance sheets will be wiped clean and everybody will forget about it.

In its place will be world class infrastructure and high speed trains that improve productivity, generate public good and make the country more competitive. I don't see a problem. This was tried successfully before with the re-capitalization of large state banks and not even Warren Buffett had a problem with it.

vina · Post by **vina** » 29 Jun 2011 19:45

wong wrote:^^^^^
How is 90% domestic debt to GDP even a problem for the world's largest creditor nation?? Japan is running at over 220% debt/GDP this year. China will create a SPV to buy up all these bad debts, print RMB like QE1 & QE2 to pay for it, bad balance sheets will be wiped clean and everybody will forget about it.

Nope. If printing paper was the way out of fiscal crisis, everyone would do it. The price you will pay for that is heavy inflation that will beggar everyone. Sure, you will end up holding a lot of paper, but it will be essentially worthless.

Hari Seldon · Post by **Hari Seldon** » 29 Jun 2011 20:38

^^^Vina saar,

"When your foe is busy self-destructing, do not intervene." - Old Jungle saying.

wong · Post by **wong** » 29 Jun 2011 20:54

vina wrote:
Nope. If printing paper was the way out of fiscal crisis, everyone would do it. The price you will pay for that is heavy inflation that will beggar everyone. Sure, you will end up holding a lot of paper, but it will be essentially worthless.

Not the same. First, there's no fiscal crisis. It's hard for the largest creditor nation to be in a fiscal crisis. Internal debt is internal and yuan denominated. There would be no actual monetary injection (the money is already lent out to local govt.) and hence no inflation impact.

Think of it as more a balance sheet slight of hand (like all the SIV and CDO deals the last 10 years). Offloading bad loans to a SPV that everybody forgets about has already worked successfully before in the last Chinese bank recapitalization. In fact, they are talking about the same thing for Greece, only China is in A LOT better position than Greece.

SaiK · Post by **SaiK** » 29 Jun 2011 21:05

china and brazil are really going on an interesting economic friendship.

Theo_Fidel · Post by **Theo_Fidel** » 29 Jun 2011 22:56

If you want to know what Pandalands growth is built on this one chart should demonstrate it.

Pandaland consumes 54% of the worlds coal production right now, thats right more than everyone else combined. About 4 Billion tonnes this year alone. This with an economy less than 1/10th of world GDP.
They intend to triple this by 2020 to 12 Billion tonnes. Every year. Or 80% of world consumption. I'm sure they feel very proud of this achievement.

-------------------------------------------------------------------------------------

China has essentially shot its load in one go in 2-3 years. Similar to Japan it has no answer to economic problems other than spend more money which creates inflation destroying wealth. Despite the newest 'ding-dongs' (hat tip Vina) assertion, all that investment requires upkeep, maintenance, capital expenditure, etc which becomes impossible when said investment is non-profit making. All reports indicate that this infrastructure is not being maintained and is deteriorating rapidly.

Contrary to what was stated last time around Panda spun off the bad debts of around $600 Billion into a special agency that would work on recovering that money. So far very little has been recovered and the debt continues to remain on the books of the restructuring company. At some point the government will have to pay for it with tax yuans. At which point it will print money.

The Panda economy is now addicted to this ocean of cash. There is nothing to replace this spending of $1.5 Trillion per year and the government can not turn off the tap without collapsing the economy.

Its just a giant ponzi scheme right now. As long as the suckers keep coming in everything looks fine. When a down turn happens and the interest rate rises all these $ Trillions will become a mill around panda's neck. In Beffet's memorable words, you don't know who is swimming naked until the tide goes out.

But apparently this time it is different only...

Prem · Post by **Prem** » 30 Jun 2011 05:56

http://www.businessinsider.com/china-mi ... ion-2011-6
China Just Issued A Warning To Anyone Worried About Inflation

China's government has announced that it will boost the country's minimum wage by an average annual rate of 13% over the next 5 years, according to China Daily.
According to the Ministry of Human Resources and Social Security, minimum wages in most parts of the country will reach more than 40 percent of the average income of local urban residents by 2015.In other words, China is at least trying to show that its working on filling the gap between rich and poor- or as Premier Wen Jibao once said, creating “harmonious employment relations.”
Not only that, but this speaks to China bears who think the country's economy will hit a wall because of its dependence on investors over consumers. This move will give the masses more purchasing power and boost domestic demand. Its good to remember, though, that the highest minimum wage in China (Senzen province, specifically) is only $203 a month.

Hari Seldon · Post by **Hari Seldon** » 30 Jun 2011 07:08

^^^ wow. $203 p.m. == $2436 p.a.. PRC's per capita itself is some $3500, IIRC. Interesting. Gini must be quite low in PRC then.

Virupaksha · Post by **Virupaksha** » 30 Jun 2011 07:23

official minimum wage.

ashashi · Post by **ashashi** » 30 Jun 2011 08:16

wong wrote:
Think of it as more a balance sheet slight of hand (like all the SIV and CDO deals the last 10 years). Offloading bad loans to a SPV that everybody forgets about has already worked successfully before in the last Chinese bank recapitalization. In fact, they are talking about the same thing for Greece, only China is in A LOT better position than Greece.

One would need good securities for CDOs. The two articles I posted claim that the underlined securities are worthless (as of now). Those "loans" have to be written off which means the GDP goes down triggering the ripple effect. On top of that, China have to cut spending on massive public works projects bringing the growth rate and GDP even more.

27% of GDP is public works projects?

wong · Post by **wong** » 30 Jun 2011 17:56

^^^^^
Widows, orphans and hedge funds don't own this paper. How it worked last time was the MoF purchased the NPLs from the banks at face value and issued longer dated bonds. These bonds had the implicit/inherent backing of the full faith and credit of the PRC (Single A, 87bps 5yr spread). Bury and forget. This works fine if your are the world's largest creditor nation. Historical examples would be UK WWI bonds and US WWII bonds (only difference is unlike war, China is left with the infra) Besides the longer term interest outlook for Yuan bonds is pretty stable (a flat 4% from 12M out to 10Y).

To the person calling China (Panda) a giant ponzi scheme. I couldn't agree more. All fiat money is a giant ponzi for the elites in each country.

Shankas · Post by **Shankas** » 01 Jul 2011 09:32

Is The Chinese Bubble Ready to Burst?

'Mutton fat jade,' a marbled jade variant once used to pack sandbags to hold back flood rivers, is today selling in China for more than twice the US dollar price for gold. According to Vikram Mansharamani, this is just one of a number of signs of a country in a bubble.

Very interesting read. A lot of it has already been said by BR Gurus over the past months.

Singha · Post by **Singha** » 01 Jul 2011 09:36

some milestones on the 90th anniv of the chinese revolution.

worlds longest gas pipeline 8500km from east coast to turkmenistan started. expected to supply gas for 30 yrs to fuel growth in east.
worlds longest bullet train service beijing to shanghai has started @ 300kmph - travel time down to 5 hrs
worlds longest over sea bridge 42km (built in 4 yrs @ $1.5b) started between Quindao and a offshore island..I guess prev longest was the asashi kaikyo in japan.

ashashi · Post by **ashashi** » 01 Jul 2011 18:08

Shankas wrote:Is The Chinese Bubble Ready to Burst?

'Mutton fat jade,' a marbled jade variant once used to pack sandbags to hold back flood rivers, is today selling in China for more than twice the US dollar price for gold. According to Vikram Mansharamani, this is just one of a number of signs of a country in a bubble.

Lens 1 finds that we have residential mortgages and loans to developers growing at the same time that property prices are rising. This is a tell-tale indicator of a reflexive, self-fulfilling dynamic at work. Bankers are lending money to buyers (and therefore creating demand) who are driving prices up (and making the bankers therefore more secure). The bankers fail to realize that they are the ultimate source of the rising prices.

Irrational exuberance!!
Thats exactly what happened in the late 90s that lead to tech bubble and early 21 century that lead to real estate bubble in US. Chinese thing seems to be much much larger than US bubbles.

The idea of sustainable growth is not part of the vocabulary at the provincial level. The way you rise in the communist party is by putting up good GDP numbers and creating lots of jobs. And so you have all sorts of irrational behavior that comes about when GDP is the target rather than the outcome measuring normal economic activity.

One contrast between China and India. China GDP growth is lead by the govt spending. India's GDP growth is inspite of govt.

This makes a lot of sense: GDP is the target now, and it doesn't matter what you are doing, driving GDP is the sole goal – as opposed to "well we need to get higher return projects and lets add them all up and see what they generated."

Some things that have happened there make sense in light of this dynamic. You have a bridge that is seven years old – with a useful life of fifty (with proper maintenance) – [and it is] blown up and recreated. Why? Well the explosives and the clearing generate GDP, and of course the construction of the new bridge generates GDP so you get to double dip on that project while accomplishing nothing!

Interesting.

I will leave you with one thought that I think captures the essence of my concern. Today the largest buyers of land in auctions taking place on the municipal level are state-owned enterprises. So what does that mean? If we just pause for one second to think about this we realize that we have state owned banks lending money to state owned enterprises, to buy land from the state. And somehow we think there is a price mechanism at work. This is a spectacular self-dealing situation, very prone to accounting irregularities so common in transfer pricing or revenue recognition. That's not a dynamic that gives me great comfort; it indicates to me that private developers have been squeezed out, the private amateurs have been squeezed out and now we are left with professional amateurs being financed by the seller of the land. This is a 7th, 8th, or 9th inning phenomenon. We’re not at the start of the ballgam

Govt. of the communist party officials, for the communist party officials, by the communist party officials!!

It's conceivable that there is a political game of sorts going on where the US effectively says "look, we need the jobs over here and we are going to take our currency and debase it through QE and, if you stay pegged to the dollar at the current rate we are going to create the inflation that you so desperately want to avoid because it is instability inducing – so you will be forced to appreciate your currency." If that were to happen, it would take the razor thin manufacturing margins that have existed for a long time and push them from the black into the red. In that scenario China will find itself between a rock and a hard place –between potential social instability and potential economic instability and they are not going to want either. They will eventually find that raising interest rates causes economic slowdown and hurts the growth story and possibly undermines the economic opportunity that has been the foundation of Beijing’s legitimacy in recent years.

Is that why China is buying US debt - Mutually Assured Destruction?
http://www.reuters.com/article/2011/06/ ... MI20110630

U.S. caught China buying more debt than disclosed

RamaY · Post by **RamaY** » 01 Jul 2011 20:21

Christopher Sidor wrote: As foreign money enters China, the central bank of China, i.e. PBC, buys the dollars and gives Yuan in return. This creates a parallel money supply to the economy, thus pushing up the liquidity in the system, which the PBC is trying its utmost to control. While the Chinese central bank has control over the banks, it has zero or nil control over other companies paying dollars and buying yuan in return. These other companies are free to do what they want with their money. These companies need not maintain SLR. They are free to slosh around this money in the economy, thus increasing the money supply.

Another important factiod in China the exchange rate is not set by the central bank, i.e. PBC.

What this means is that China has to balance two things. One to maintain the peg which its currency has with dollar so as to sustain the export-led economy that it has built up. Second to make sure that inflation does not go too high, as the salary of the workers has been kept ruthlessly low. One of these will have to give. Wonder what will give in first ?

Good summary. This also explains (indirectly) the humongous $$$ reserves PRC collects. In order to maintain its (artificially controlled) conversion rates, it has to buy all the $$$ that is pumped into its economy. A two-way trap laid by massa for PRC. The dragon is going get trapped without firing a single bullet...

RamaY · Post by **RamaY** » 01 Jul 2011 20:25

Singha wrote:pakistan has a young population and huge nos of unemployed. china could either import and settle millions of pakis or move factories there.

Since China cannot move factories and roads to Pakistan, I recommend they take all Paki males to China and make them work and fK China. The new Chinese race could be TYTA (Tall-Yellow-Tight-A**ed).

Klaus · Post by **Klaus** » 02 Jul 2011 07:34

China opens world's longest over-water bridge. Supposed to halve travelling time between Qingdao and the island of Huangdao.

Singha · Post by **Singha** » 02 Jul 2011 07:40

looking at google earth, quindao and huangdao seem to be two urban areas at the mouth of a enclosed bay, separated by around 12km of water at the mouth. this seems to be the location where the bridge is connecting. so kind of like the verrazano narrows bridge in NYC for the concept. maybe it will make life easier for business and commuters than having to drive around the margin of the bay.

zlin · Post by **zlin** » 02 Jul 2011 08:21

Singha wrote:looking at google earth, quindao and huangdao seem to be two urban areas at the mouth of a enclosed bay, separated by around 12km of water at the mouth. this seems to be the location where the bridge is connecting. so kind of like the verrazano narrows bridge in NYC for the concept. maybe it will make life easier for business and commuters than having to drive around the margin of the bay.

Jiaozhou Bay Tunnel, which links Qingdao and Huangdao through the mouth of the bay, is opened at the same day as this bridge. It is the longest under-sea tunnel in China, 9.47km long.

Hari Seldon · Post by **Hari Seldon** » 02 Jul 2011 08:32

Spence doesn;t quite articulate it that way but the basic point in the cheena-Yindia model debate remains this:

It is easy to secure a fairly broad consensus on the need and desirability of economic growth and rising living standards, even within democracies. So progress, even if slow, gets made.

However, it is far more difficult to get any sort of consensus among the ruling elite in a non-democratic dispensations on the need to devolve (or, essentially, give up) power. Which is the root cause of instability and uncertainty both in policy and in performance in the years going forward.

Something like that.

ashish raval · Post by **ashish raval** » 02 Jul 2011 13:13

^^ A similar situation exists in Gujarat, where distance between bhavnagar and bharuch which is 18 km by sea are separated by 200 km by land. The whole dam+transportbridge link based on Kalapsar project is lost in bureocracy. Every bugger wants a share of pie. Chinese are making infrastructure at a break-neck speed and I can forsee, Indian infrastructure mostly on par with African nations and not going anywhere. Is is feasible that every dam department takes 6 months to read a proposal and 6 more months to sit and think over what to reply ?

Singha · Post by **Singha** » 02 Jul 2011 13:15

yes the PRC is a world leader in civil engg projects now and undercutting the EU/US/Japan consulting firms who used to 'teach' them in a earlier gen. They have delivered domestic projects on a vast scale and are ready for a international move. whether its 'efficient' or not is not the question but some of their new infra makes europe/US look like a seedy 60s era colony...just compare some of the big railway stns to what passes for these in US - dirty, dusty, undermanned, unsafe, weak , rife with drug addicts

I would not be surprised if they start landing deals by the dozen worldwide for large scale civil engg work incl in India. they seem to be already supplying lot of modules for US projects which are shipped in oceanic barges.

4-6 yrs for a bridge of this nature is the norm in effective countries. here we drink tea and squabble for that period before getting down to work

china has its share of bad things, but on infra front lots of good things about planning and execution we should learn.

ashashi · Post by **ashashi** » 02 Jul 2011 18:27

Autocracy is efficient in certain areas, but they are usually overthrown. I cannot envision Chinese people letting the communist party rule over them in 20 years. Can anyone?
Once people gain power in China, it will not be any less chaotic than Indian democracy. With one group of people total domination, it would be much worse. Think Pakistan.

I would not be surprised if they start landing deals by the dozen worldwide for large scale civil engg work incl in India.

Problem with India is not democracy but the welfare oriented govt. India had progress oriented govt. before and it will have again. Elections between progress and welfare may not be a bad thing.

Dont think Chinese civil engineering technology is any superior to India's. The African projects are negotiated and funded by PRC govt. Chinese contractors have total autonomy over the project. India never went that route.

Theo_Fidel · Post by **Theo_Fidel** » 02 Jul 2011 20:29

The first section of the Bangalore metro is going to open this Month. About 31 month by my count from when it first started. Delhi projects have delivered even faster.

Even in Massaland the Minnesota Bridge bridge was finished in 7 months.

It is all a question of money and land acquisition. The Chinese do well when they use Chinese managers and workers. Not so much when other workers are involved.

Singha · Post by **Singha** » 02 Jul 2011 20:56

true - political games, environmental objections and land acquisition slows down indic projects. once the work actually starts , usually it finishes without much delay.

ashashi · Post by **ashashi** » 03 Jul 2011 03:12

Singha wrote:true - political games, environmental objections and land acquisition slows down indic projects. once the work actually starts , usually it finishes without much delay.

They are not slow downs. They are the necessary checks and balances of any society that respects individual rights and collective concerns.

We would rather study and debate the environmental impact for a year or two before embarking on large projects.

ashish raval · Post by **ashish raval** » 03 Jul 2011 12:30

^^ Everybody does those simple impact calculations but not a single country in the world delays projects endlessly. Next checks and balances work smoothly in a society which is educated, self-enlightened, disciplined and intelligent. It does not work in a developing, currupt, poor, feckless and undisciplined society. The only thing that works is a iron handed will power of few hundred nationalist individuals who wants to make a nation developed and on par with the world. People need power when they become richer which is true and the same thing will happen in China but the way I see it will be a gradual transition over 20-30 years period and not a sudden violent turnaround as people comment. This is because China is much more educated and intelligent society when it comes to knowing what is good for their nation irrespective of what world around them wants. Whatever they have achieved by beg, borrow or steal is a different subject.
The way I see it is traditional west strong holds like Aerospace, Drilling, Precision manufacturing and Automobiles will be lagging behind China in next 20 years and I dont see anything that China will not be self-sufficient by then (This includes English language teachers too). The only strong point of the west will be financial IT sector where China is lagging (which is sometimes good because it is sheilded from its collapse risk too). I pity people who see Chinese collapse unless it is forced upon by rest of the world with deadly mix of wars, financial sqeeze, internal dissent, speculative collapse, and reversing trade imbalance yada yada and I cant forsee any of them in next 20 years. China will have a reserve of $4 trillion by next year. One trillion can buy entire Manhatten skyline valued at $900 billion and make China landlord.
Way for India is to educate the children about where the rest of the world is and what our nation needs to do catch them up (forget about being a super power by the way we function even as democracy, I believe even nature/God will not want us to be as he/she will help only those who help themselves) and we need to constanly remind ourselves that someone is growing much faster and stronger in ourbackyard in every discipline and we need to sprint even faster to catch up because from now on Chinese GDP will quickly catch up America growing at rate of 10% because they have reached a phase where even a smaller multiple will be a big increase in size(quiet simply 1*1.1 = 1.1 while 5*1.1 = 5.5)
We have to beat or compete with china in manufacturing because if we dont they will beat us in IT too (very soon) and we will be sitting idle talking endlessly how good we are getting pat from rest of the world (laugh privately on how stupid we are) while this rest of the world will go with a begging ball at chinese doorstep and ask permission to sit beside them.
Science, humbleness, discipline and innovation are the things which we need to cultivate in every childrens of India in a hard way and success will follow automatically.

Abhijeet · Post by **Abhijeet** » 03 Jul 2011 14:22

ashashi wrote:They are not slow downs. They are the necessary checks and balances of any society that respects individual rights and collective concerns.

This sounds very high minded. However, attributing Indian lethargy in executing essential projects to the natural checks and balances of a democratic society is ridiculous. There are plenty of democratic societies with a high level of protection for human rights which are also efficient.

India's delays are the result of corruption and poor governance. Let's not try to feel better about them by giving them a positive spin (polishing a turd, etc).

Singha · Post by **Singha** » 03 Jul 2011 15:07

indeed. we should compare how long the worli sealink took vs comparable projects in non-chinese democratic places like japan or denmark. the result will not be pretty.

ashashi · Post by **ashashi** » 03 Jul 2011 18:13

ashish raval wrote:^^ Everybody does those simple impact calculations but not a single country in the world delays projects endlessly. Next checks and balances work smoothly in a society which is educated, self-enlightened, disciplined and intelligent. It does not work in a developing, currupt, poor, feckless and undisciplined society. The only thing that works is a iron handed will power of few hundred nationalist individuals who wants to make a nation developed and on par with the world.

This thread is going off topic fast. I will try to keep it short and to the point.

Checks and balances are the laws and procedures which India has. How those laws and procedures are implemented are up to the govt in power and intimately the people. India had progress oriented govt. in the past when things moved fast. AP had a progress oriented govt in the past. Bihar and Gujarat has progress govts now.

I refuse to identify India with a few political parties.

Chinese GDP will quickly catch up America growing at rate of 10% because they have reached a phase where even a smaller multiple will be a big increase in size(quiet simply 1*1.1 = 1.1 while 5*1.1 = 5.5)

We should not be comparing ourselves with China and beating ourselves.
India became IT hub buy Indians doing what they do best. Not by emulating China or a the actions of a govt.

We need to do what is best for India as Indians do. We dont need to emulate Chinese Communist Party's policies , to achieve progress.

Our Manufacturing will catch up.... once it becomes profitable. Thats the problem the entire world is facing now, because of under valued Chinese currency.

Things will change. Parity and fairness will come.

MMS made a profound statement recently, I paraphrase, "No body has problems with India's development". Implications of that fact are huge. It will shape our future.

Do we really want to emulate a country whose best buddies are the scumbags of the earth, NK and Pakistan. We are better than that.