PRC Economy and Industry: News and Discussions

ashi · Post by **ashi** » 17 Oct 2011 09:51

China’s GDP will slow below 10% this year to 9.4%, but that’s still on par with the country’s average over the last five years.

The China Daily reported on Monday that Fan Jianping, a government economist, said over the weekend in Beijing that China will undoubtedly grow single digits this year and likely by just 8.7% next year. However, a look at China’s GDP over the last five years shows that despite the engineered slowdown from Beijing policy makers, China’s growth is still fairly even keel.

China grew a massive 14.7% in 2007. However, government officials have said that kind of growth was unsustainable and has introduced a series of new policies focused on the domestic economy instead of China’s behemoth export economy. Beijing essentially wants China to see average growth between 7% and 8% for years to come, instead of wild swings in GDP.

Neshant · Post by **Neshant** » 17 Oct 2011 10:17

They cooking the GDP numbers for sure.

ashi · Post by **ashi** » 17 Oct 2011 10:28

Neshant wrote:They cooking the GDP numbers for sure.

Some people have been saying that for the last 30 years, and they have been proven wrong.

abhischekcc · Post by **abhischekcc** » 17 Oct 2011 12:05

Chinese economic numbers that can be veried by independent third party sources are trustworthy, others are not.

Hari Seldon · Post by **Hari Seldon** » 17 Oct 2011 15:33

China is truly a miracle economy and all that. Having hardly sung its praises enough, I'm already disappointed that the great mandarins in the CPC now want to emulate SDRE Yindia's pathetic growth rate of ~8% p.a.....tch tch, what's the world coming to, I say?!

I'd be watching PRC keenly over the next decade. I certainly hope the PRC reaches parity with khan unkil in GDP (non PPP) terms and slugs it out mightily for prima dominance only. Let the two fight it out, its not our fight anyway. We should actively cheer both sides on.

RamaY · Post by **RamaY** » 17 Oct 2011 16:28

Could Foxcon moving to Brazil mean the beginning of separation of rashtra and mercantile interests as Bji postulated in Strategy threads?

Prem · Post by **Prem** » 18 Oct 2011 08:11

http://micgadget.com/16699/shanghai-sub ... oors-open/
http://www.youtube.com/watch?feature=pl ... Ef_xfHBIJg

passengers looking shockingly calm while the Shanghai subway train zips through the underground with one of its doors open. By the time the train arrived at the next station, one of the passengers called the metro staff to inspect the “broken” door. The staff fixed it, and the subway train continues to travel. Video after the break.

sum · Post by **sum** » 18 Oct 2011 09:01

Is this the right thread? Was

on reading this story where people who help accident victims are prosecuted by law in China!!
Anger as bleeding girl left on street

More than a dozen passersby ignored a two-year-old girl as she lay critically injured on a street in southern China after being run over twice, the official Xinhua news agency said on Monday.

The incident has sparked outrage on China’s hugely popular social media sites.Surveillance cameras showed a series of people walk past the girl, named Yue Yue, after she was hit first by a van and then a truck outside her family’s shop in the southern Chinese city of Foshan.

Xinhua said a rubbish collector who finally came to the girl’s aid, moving her to the curb and shouting for help, was ignored by several shopkeepers before he finally tracked down her mother who took her to hospital.

In response, one netizen on Sina Weibo, a Chinese micro-blog similar to Twitter, wrote: “This society is seriously ill. Even cats and dogs shouldn’t be treated so heartlessly.”

But others linked the incident to an earlier case in which a man who tried to help an elderly woman after she fell over was prosecuted, apparently because his intervention broke government rules on dealing with accident victims.

ArmenT · Post by **ArmenT** » 18 Oct 2011 10:34

RamaY wrote:Could Foxcon moving to Brazil mean the beginning of separation of rashtra and mercantile interests as Bji postulated in Strategy threads?

Foxconn is owned by a Taiwanese gentleman, not a mainland Chinese. He simply goes to where he can manufacture cheaply. Foxconn also announced plans to replace a lot of Chinese workers with robots.

ashi · Post by **ashi** » 18 Oct 2011 12:00

China's economy grows at 9.1%

NEW YORK (CNNMoney) -- China's red hot economic growth cooled slightly from July through September, but remains the envy of many western countries still struggling to recover from the global economic meltdown.

China's gross domestic product grew at an annual pace of 9.1% during the third quarter, down from 9.5% growth in the second quarter and 9.7% growth in the first three months of the year.

Economists are expecting demand for Chinese exports to weaken in coming months, as the U.S. and European economies struggle to grow at even a modest pace.

At the same time, they don't expect weaker exports to pose a significant threat to China's overall economy, since the government there is also focused on promoting more domestic demand. To top of page

Theo_Fidel · Post by **Theo_Fidel** » 18 Oct 2011 19:17

If there is one blog you should read on Pandaland it is Patrick Chenovec.

One of the odd things he mentions is that the Chinese savers are still being taken to the cleaners by the banks for the loan busts in 1999. Those losses are the prime reason for the low returns on savings today and in turn forcing the cash to be diverted to ever more risky 'plays'.

Milk company investing in loan business to more building developers.

Also read the note on how China has already monetized the entire $3 Trillion forex hoard, which is the source of the present boom / out of control lending.

http://chovanec.wordpress.com/2011/10/0 ... /#comments

The story, in a nutshell: Hong Kong-listed Ausnutria Dairy Corp. (HK:1717), based in Changsha, is China’s 13th largest producer of baby formula, using quality-ensured milk imported from Australia. In April, it invested RMB 200 million (US$31 million) — roughly two years’ worth of profits – in Yunnan International Trust Co., which used the money to buy four loans from China Merchants Bank: two loans to Hunan Nonferrous Metals (HK:2626), which mines and refines zinc, lead, tungsten, and antimony, and one each to Chenzhou Diamond Tungsten Products Co. and Hunan Bismuth Industry Co. After fees, Ausnutria hopes to earn at least RMB 11 million ($1.7 million) in interest on the loans, and says that it already earned RMB 10 million on loans to a Hunan highway company it bought in a similar transaction with Hunan Trust and Investment Co.

The result has been an explosion in trusts and similar investment vehicles (see my previous post on this subject). As Shai notes, non-bank lending has grown from just 4% of loans in China in 2002, to an estimated 55% this year — which means that the supply of credit in China is more than double the official reported figures. This is actually the second ”trust boom” that China has seen in recent years. The first one came to an ugly end in the late 1990s, when numerous trusts imploded, including the Guangdong International Trust and Investment Co. (GITIC) which defaulted on $200 million in bonds, many of them held by foreign investors — the largest bankruptcy China has seen to date. The current one, which really only gathered steam at the beginning of this year, is being driven by the pressure to find ways around tighter bank lending controls in an economy that has become dependent on cheap and unlimited credit to drive investment-led growth:

Shankas · Post by **Shankas** » 19 Oct 2011 17:58

China railway, road projects face cash crunch, slowing payments to suppliers, workers

Many of the 6 million migrant workers employed in China's massive railway buildup have not been paid for months, with some 10,000 kilometres (6,200 miles) of projects halted due to a lack of money, reports said Wednesday.

Contractors also owe huge sums to cement and steel suppliers, the China Daily newspaper reported, citing Wang Mengshu, a member of the Chinese Academy of Engineering.

"If efficiency is low there will be a gap between revenues and costs, and the only one who can help the situation is the government," he said.
The ministry held 2 trillion yuan ($315 billion) in debt as of the end of June and is due to issue about 100 billion yuan (nearly $16 billion) in bonds this year to help fund construction.

chola · Post by **chola** » 19 Oct 2011 18:49

Theo_Fidel wrote:If there is one blog you should read on Pandaland it is Patrick Chenovec.

One of the odd things he mentions is that the Chinese savers are still being taken to the cleaners by the banks for the loan busts in 1999. Those losses are the prime reason for the low returns on savings today and in turn forcing the cash to be diverted to ever more risky 'plays'.

Not odd at all and it's one of the things that researchers supporting the MNCs' charge into the China market point out. I've written about that in this thread.

The Big Four banks of China were all technically insolvent in the 1990s. In any other country it would have meant bankruptcy or runaway inflation (if the government tries to print money to cover debt.) In China, neither happened because the state can make its people eat losses at the point of the gun.

The PRC has perfected funny money in a way that no other third world nation had done. The Yuan cannot be used anywhere in the world but it can be converted into infrastructure on a massive scale in China itself because there is a $3.2 trillion cache of hard currency that backs the Yuan.

All the Western and Asian brands raking in profits inside the chini market -- BMW, Apple, GM, Samsung, Komatsu, etc. -- make use of this fundamental reality of the chini financial system.

The Yuan is all powerful inside China -- as a MNC you can build factories and hire armies at a rate you can't anywhere else in the world, you are also supported by infrastructure built by the chini state at a rate you can't find anywhere in the world and you can repatriate your profits from the largest pile of US dollars, Euros and Yen known to mankind.

This system will break the second you internationalize the Yuan. That's why the chinis fight tooth and nail to keep the Yuan from being determined by the market.

All of this is created on the backs of the chini population and their savings.

chola · Post by **chola** » 19 Oct 2011 19:00

Shankas wrote:China railway, road projects face cash crunch, slowing payments to suppliers, workers
Many of the 6 million migrant workers employed in China's massive railway buildup have not been paid for months, with some 10,000 kilometres (6,200 miles) of projects halted due to a lack of money, reports said Wednesday.

Contractors also owe huge sums to cement and steel suppliers, the China Daily newspaper reported, citing Wang Mengshu, a member of the Chinese Academy of Engineering.

"If efficiency is low there will be a gap between revenues and costs, and the only one who can help the situation is the government," he said.
The ministry held 2 trillion yuan ($315 billion) in debt as of the end of June and is due to issue about 100 billion yuan (nearly $16 billion) in bonds this year to help fund construction.

A prime example of how China can make its population eat losses. As I stated in the previous post, in any other country this would either result in bankruptcy or massive inflation as the government tries to print itself out of debt.

The chini railway authority won't go bankrupt and inflation won't go up because China can solve it by not paying its workers and the cement and steel suppliers. The losses are offloaded to the population. In any other countries this would create massive protests. In China, the protesters would be shot.

If you read the story of the little girl being run over in China and ignored by everyone, that is Pandaland writ small. Financial crisises are not hard to solve if you have no humanity. You can solve Greece, Portugal and Ireland overnight if you cut spending and offload losses and suffering to the general population.

Theo_Fidel · Post by **Theo_Fidel** » 19 Oct 2011 20:05

Is that right, 6 million are working on the Rail lines.

Where do they go after the project goes bankrupt as seems likely soon.

As the system runs out of free money expects standards & maintenance to drop. More and worse accidents are in the future.

Shankas · Post by **Shankas** » 20 Oct 2011 03:54

Theo_Fidel wrote:Is that right, 6 million are working on the Rail lines.
Where do they go after the project goes bankrupt as seems likely soon.

As the system runs out of free money expects standards & maintenance to drop. More and worse accidents are in the future.

My thoughts exactly. Also if 6 million are engaged in building rail line what's the number for roads and other infrastructure? Where do they go once the money runs dry?

Interesting times ahead.

Marut · Post by **Marut** » 20 Oct 2011 14:53

^ There has been a very concerted effort to get chinese labour into India for various powerplant, refinery and infra projects. MHA has put the foot down so far on grounds of security threat. Watch out for some interesting developments from the Chinese sides. Their banks have offered to sweeten the loans if labour also gets in! Lot of backdoor diplomacy and chai biskoot going on in Dilli...

abhischekcc · Post by **abhischekcc** » 20 Oct 2011 17:37

Anil Ambani let this happen for his telecom ventures sometime back.

He had lost USD 27 billion in the stock market plunge of 2009 (making him the biggest loser in the world, according to Forbes

). He needed financial support for all of his ventures. The Chinese offered to have his telecom infrstructure built by Huawei, and backed it with a loan from one of the Chinese big banks. Win win all around.

Huawei got a big contract, Chinese bank entered Indian market, Anil got a really large financial breather, Chinese labourers got jobs in India.

Make that - win win win win all around.

Theo_Fidel · Post by **Theo_Fidel** » 20 Oct 2011 20:33

Yup, and when that tamasha in Libya happened, something like 40,000 Chinese construction laborers turned up at the docks for transport. Who knew. They were shipped to Europe for Chinese company projects there.

Done some quick math. The Railway projects are about $50-60 Billion per year and reports are that Panda land is spending $1.5-2 Trillion just on construction/fixed investment. So if we extrapolate 1,500/50 = 30. Then 30 x 6 million workers works out to a cool 180 million employed in construction.

Add to that the 120 million in manufacturing and we get a total of 300 million workers. Everyone else spends their time catering to these folk.

Pandaland is a play of 2 sectors, manufacturing and construction. That is it. There is no space for anything else.

P.S. If this entire gravity defying spectacle should stop that army of 200 million+ will be quite spectacular. It must be remembered that the SKorean generals learnt this the hard way when there dock worker went unemployed in the 80's.

vina · Post by **vina** » 21 Oct 2011 13:01

China urges "Inclusive Political transition" in Libya!

.

How about "Inclusive" political transition in China itself! .

But, if you notice, the big big oil investments that China made in Libya just went up in smoke and got confirmed with Gaddhafi's "lamp post" treatment!

Congratulations!. And oh, now the Pakis will have to follow their "tarrel than mountain and sweeter than honey and stronger than steel" friends and rename the cricket stadium in Lahore from Gaddhafi stadium to "Gaddafi Al-Lamb Bosti" stadium.

ashi · Post by **ashi** » 21 Oct 2011 21:30

Yawn, yawn ...

Mr. Vina, your bet that India's GDP growth will exceed China in the next five year doesn't look too good now.

India Loses More Ground on China

here were only a few people to begin with who really thought India’s economic growth rate would outpace China’s – at least anytime soon.

Now, those voices are likely to be fewer and weaker.

Those observers would appear to include the World Bank, which in a report released Wednesday echoed Mr. Mukherjee’s fears: it said that India’s economic growth is likely to slow from 8.5% last year to between 7% and 8% over the next two years. In other words, all those GDP headlines are likely to include a 7, or 7 point something, not the 8 or 9 or even 10 of the government’s dreams.

abhischekcc · Post by **abhischekcc** » 22 Oct 2011 01:18

After Sudan, this is the second African country that China has lost to the west.

wrdos · Post by **wrdos** » 22 Oct 2011 07:59

abhischekcc wrote:After Sudan, this is the second African country that China has lost to the west.

You mean the country of Libya?

The country turned and surrendered to the west totally after 2003. They invited the by then Taiwanese President, Mr. Chen, to visit their capital as late as in 2006. No other country with a population more than 1milliion dared to do it nowadays.

vina · Post by **vina** » 24 Oct 2011 15:04

ashi wrote:Yawn, yawn ...

Mr. Vina, your bet that India's GDP growth will exceed China in the next five year doesn't look too good now.

India Loses More Ground on China

here were only a few people to begin with who really thought India’s economic growth rate would outpace China’s – at least anytime soon.

Now, those voices are likely to be fewer and weaker.

Those observers would appear to include the World Bank, which in a report released Wednesday echoed Mr. Mukherjee’s fears: it said that India’s economic growth is likely to slow from 8.5% last year to between 7% and 8% over the next two years. In other words, all those GDP headlines are likely to include a 7, or 7 point something, not the 8 or 9 or even 10 of the government’s dreams.

Yawwnnnnnn.. Haww. How boring. If you want to paste (f)articles from the Times Of India [TOI (let)] and others like blogs from WSJ or various Con-sultan(t)s and drink their cool aid, be my guest

As always , here is another one for you to chew on.

India to grow faster than China in 2013

Take it for what it is worth. But the trend is unmistakeable. India is poised to outperform China. I am willing to bet on it.. come on, I thought you Chinese were betting men. How come I dont see you and wrdos put your money where your mouths are. Go on, bet on it.

wong · Post by **wong** » 24 Oct 2011 20:11

^^^^
Yawn. Higher growth from 1/3rd the base.

10% of 2 <<< 8% of 6

Singha · Post by **Singha** » 24 Oct 2011 20:17

the biggest problem is even if china grows at 25% / annum India will not pay tribute. and seeing India, others like vietnam also will not.

deal with it. you can parade your growth rate all you want, but no tribute.

you are going to have to go to war to prove your point. if you want...bring it on.

all these attempts to parade growth rate, maglevs, skyscrapers to win the 'war' without a shot being fired elicit just bored yawns from the collective here.

if you are prepared to put some meat behind the issue and risk blood and treasure against India, come forward, else well go live in your skyscraper....we will go live in bamboo huts, catch some fish, harvest some rice and sharpen our knives still further.

ramana · Post by **ramana** » 25 Oct 2011 07:28

The cover of Time magazine this week is about China and its bubble economy!!!

Again BRF ahead of the curve.

A few years ago some of us chipped funds and sent our own research person to visit PRC and see the facts. The report came back about empty towns, rural migrations on vast scale and high corruption.

Finally its now mainstream!

ashi · Post by **ashi** » 25 Oct 2011 08:49

Singha wrote:the biggest problem is even if china grows at 25% / annum India will not pay tribute. and seeing India, others like vietnam also will not.

deal with it. you can parade your growth rate all you want, but no tribute.

you are going to have to go to war to prove your point. if you want...bring it on.

all these attempts to parade growth rate, maglevs, skyscrapers to win the 'war' without a shot being fired elicit just bored yawns from the collective here.

if you are prepared to put some meat behind the issue and risk blood and treasure against India, come forward, else well go live in your skyscraper....we will go live in bamboo huts, catch some fish, harvest some rice and sharpen our knives still further.

What is all these "meat", "blood" and "war" talk? How about some good old competition in terms of economy and development?

ashi · Post by **ashi** » 25 Oct 2011 09:10

vina wrote: India to grow faster than China in 2013

Take it for what it is worth. But the trend is unmistakeable. India is poised to outperform China. I am willing to bet on it.. come on, I thought you Chinese were betting men. How come I dont see you and wrdos put your money where your mouths are. Go on, bet on it.

What is the significance of your $1 or $10 bet while myself just bought hundreds shares of Chinese ETF? I am still waiting to see the export crash in China you have predicted two years ago.

ashi · Post by **ashi** » 25 Oct 2011 09:17

Deleted

Pratyush · Post by **Pratyush** » 25 Oct 2011 09:54

Dragon tail risk: The cost of a China crash

The chorus just keeps getting louder folks. Panda is too big to be allowed to fail.

Yagnasri · Post by **Yagnasri** » 25 Oct 2011 11:05

We are all hearing about the China babble for years. China can do what ever it wants with its economy and normal rules do not apply. So this bad things like on paper bank loans, empty towns are being " managed' for a long long time. USSR was a S**th**l for a long long time before it fell not because there was some problem with its economy because they changed political system. In china it is not going to happen. As for as exports from china concerned they have a huge pool of workers who can be employed with low wages there will be huge exports and some peanuts to people and lot of nationalist bullshit about great economy, new super power status to keep people happy.

Further if there is some serious problem with China economy are we going to hear it? I wonder.

abhischekcc · Post by **abhischekcc** » 25 Oct 2011 12:35

I take full credit because I was the first China bear on this forum

abhischekcc · Post by **abhischekcc** » 25 Oct 2011 12:39

wong wrote:^^^^
Yawn. Higher growth from 1/3rd the base.

10% of 2 <<< 8% of 6

The same thing was said about Indian telecom growth until we overtook China in actual numbers (not %age) in September 2009.

Chinese economy is at least 40% smaller than the numbers show, and Indian economy is at least 20% larger, there is very little difference in the actual sizes (more to do with the fact that China has 200 million more people than India).

chola · Post by **chola** » 25 Oct 2011 16:58

abhischekcc wrote:I take full credit because I was the first China bear on this forum

The whole forum were China bears seven years ago before I left for my hiatus and I don't we have ever stopped being bears. The phony statistics and potempkim villages being our battle cries then as the empty cities and phony statistics are now.

You are nowhere near the first.

Theo_Fidel · Post by **Theo_Fidel** » 25 Oct 2011 20:53

abhischekcc wrote:more to do with the fact that China has 200 million more people than India

Abhi saab,

The real data point to keep in mind is this one.

Pandaland - 750 Million workers
India - 400 Million workers

Note that far far fewer Indian women work for cash economy as well.

All else is Maya.

Christopher Sidor · Post by **Christopher Sidor** » 25 Oct 2011 21:03

It is not the quantum of growth, i.e. 7% or 8% or 9% or 10% and so on, which matters. What matters is the quality of growth. Are we creating opportunities for the left behind to catch up. Is the Indian growth transforming the economic space to a more open and inclusive growth? Or is this growth limited to some some segments of society only? That should be our aim.

To be prosperous not rich. To create a happy and more noble India.

zlin · Post by **zlin** » 29 Oct 2011 08:49

China Has Homemade Supercomputer Gain

China Has Homemade Supercomputer Gain

By JOHN MARKOFF

China has made its first supercomputer based on Chinese microprocessor chips, an advance that surprised high-performance computing specialists in the United States.

The announcement was made this week at a technical meeting held in Jinan, China, organized by industry and government organizations. The new machine, the Sunway BlueLight MPP, was installed in September at the National Supercomputer Center in Jinan, the capital of Shandong Province in eastern China.

The Sunway system, which can perform about 1,000 trillion calculations per second — a petaflop — will probably rank among the 20 fastest computers in the world. More significantly, it is composed of 8,700 ShenWei SW1600 microprocessors, designed at a Chinese computer institute and manufactured in Shanghai.

Currently, the Chinese are about three generations behind the state-of-art chip making technologies used by world leaders such as the United States, South Korea, Japan and Taiwan.

“This is a bit of a surprise,” said Jack Dongarra, a computer scientist at the University of Tennessee and a leader of the Top500 project, a list of the world’s fastest computers.

Last fall, another Chinese-based supercomputer, the Tianhe-1A, created an international sensation when it was briefly ranked as the world’s fastest, before it was displaced in the spring by a rival Japanese machine, the K Computer, designed by Fujitsu. But the Tianhe was built from processor chips made by American companies, Intel and Nvidia, though its internal switching system was designed by Chinese engineers. Similarly, the K computer was based on Sparc chips, originally designed at Sun Microsystems in Silicon Valley.

Dr. Dongarra said the Sunway’s theoretical peak performance was about 74 percent as fast as the fastest United States computer — the Jaguar supercomputer at the Department of Energy facility at Oak Ridge National Laboratory, made by Cray Inc. That machine is currently the third fastest on the list.

The Energy Department is planning three supercomputers that would run at 10 to 20 petaflops. And the United States is embarking on an effort to reach an exaflop, or one million trillion mathematical operations in a second, sometime before the end of the decade, though most computer scientists say the necessary technologies do not yet exist.

To build such a computer from existing components would require immense amounts of electricity — roughly the amount produced by a medium-size nuclear power plant. In contrast, Dr. Dongarra said it was intriguing that the power requirements of the new Chinese supercomputer were relatively modest — about one megawatt, according to reports from the technical conference. The Tianhe supercomputer consumes about four megawatts and the Jaguar about seven.

The ShenWei microprocessor appears to be based on some of the same design principles that are favored by Intel’s most advanced microprocessors, according to several supercomputer experts in the United States.

But there is disagreement over whether the machine’s cooling technology is appropriate for designs that will be required by the exaflop-class supercomputers of the future.

Photos of the new Sunway supercomputer reveal an elaborate water-cooling system that may be a significant advance in the design of the very fastest machines. “Getting this cooling technology correct is very, very difficult,” said Steven Wallach, chief scientist at Convey Computer, a Richardson, Tex., supercomputer firm. “This tells me that this is a serious design. This cooling technology could scale to exaflop. They are in the hunt to win.”

Raja Bose · Post by **Raja Bose** » 29 Oct 2011 09:10

^^^So which design did they steal now? - Intel's, IBM's or Sun's?

Gus · Post by **Gus** » 29 Oct 2011 09:41

zlin is a bot that periodically posts some warm and fuzzy achievement by china. don't expect replies.