PRC Economy - New Reflections : Dec 15 2011

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Sri » 10 Apr 2013 15:25

jamwal wrote:A friend is going to attend Canton fair and will spend 1-2 days in Hong Kong as well. Anything worth buying there ? :oops:


Mangkok and Stanley will be interesting for him in hong kong... Ask him to bargain hard.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby jamwal » 10 Apr 2013 15:39

I am only interested in electronics stuff like lenses for camera kind of things that he can carry back. He on the other hand, wants to get some machinery and raw material imported.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Rishirishi » 11 Apr 2013 02:11

there is a place called Chung King Mansion in TST, kowloon (Everyone knows about it). There are many Indian shops there, and they all sell stuff that is relevant to Indians.

I do not think there is much interesting, as everything is availalbe in India now.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 12 Apr 2013 09:45

The national debt of the People's Republic of China is at acceptable level

The national debt of China is at acceptable level. Such a statement was made today by the ex-Minister of Finance of the People's Republic of China Sheung Huaychen at an economic forum in Boao.

Now the volume of the Chinese national debt consists of about 30 trillion Yuans/4.83 trillion dollars/. “However about 95 percent of this amount is borrowed in the domestic market”, reports Xinhua agency quoting the statement of the ex-minister.

“Low level of interest rates and use by the government of China of the principle of stability when granting new loans allow the state to fulfill obligations in time”, Sheung Huaychen noted.

According to him, in 2012 the size of national debt made 40 percent of the country’s gross domestic product which last year increased to 8.28 trillion dollars. However, estimates of the western experts show this indicator as being much higher levels.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 12 Apr 2013 10:11

Austin wrote:The national debt of the People's Republic of China is at acceptable level

Now the volume of the Chinese national debt consists of about 30 trillion Yuans/4.83 trillion dollars/. “However about 95 percent of this amount is borrowed in the domestic market”, reports Xinhua agency quoting the statement of the ex-minister.
Yes Yes, we have heard the same argument before on this forum that borrowing from self does not lead to any default crisis. One has to wonder what the Japanese are smoking when exactly under similar conditions they state that such *internal* borrowing is unsustainable.

All it means is when such a crisis hits China the haircut will be fully borne by the ordinary Chinese who will have to bail-out their Government and in the process see much of their deposits evaporate. In Greece and other such places such haircuts was shared by lenders from outside.

According to him, in 2012 the size of national debt made 40 percent of the country’s gross domestic product which last year increased to 8.28 trillion dollars. However, estimates of the western experts show this indicator as being much higher levels.
The figure quoted by Satyajit Das was 150% of GDP.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby wong » 12 Apr 2013 10:46

^^^^

The big difference between China and Japan is that Japan's economy has been deflationary for 10 to 20 years now. Deflation makes debt servicing twice as difficult. What the Japanese have decided to do now (finally!) is print massive amounts of money and devalue the Yen. That should solve the problem, because you really can't go bankrupt owing money to yourself.

To Das and the other non-believers who think it's all Shanghai stats and there's no real wealth being created in China. I spent the last two weeks helping get a family friend's kid into American boarding school. They are all completely full and turning away mainland Chinese students. These schools are $50,000+ per year with zero financial aid for international students. On campus visits, I saw Chinese and South Korean kids everywhere and zero South Asians. If that's fake wealth, I'll take that over your 'real' super-duper service economy wealth any day.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Singha » 12 Apr 2013 10:51

gee I thought only rich ASEANs centered on singapore used to send their kids to english/usa/swiss boarding schools + the ghandy family ofcourse :D

why this craze for american boarding schools even in Soko? the ones on the mainland ought to be good enough ..... or are these kids expected to return with a british accent and lord over the natives like the ghandy family does?

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 12 Apr 2013 12:41

wong wrote:^^^^

The big difference between China and Japan is that Japan's economy has been deflationary for 10 to 20 years now. Deflation makes debt servicing twice as difficult. What the Japanese have decided to do now (finally!) is print massive amounts of money and devalue the Yen. That should solve the problem, because you really can't go bankrupt owing money to yourself.

There are 5 routes out of any debt crisis.
1. Growth in the economy will spur additional tax collection to pay debt.
2. Additional Taxes to pay the debt.
3. Print money to pay the debt.
4. Confiscate assets to pay debt.
5. Default by declaring bankruptcy.

Of the above the 1st one is the most desirable even for the most totalitarian regimes. The rest of the options involves taking money from ordinary citizens in one way or another.

Even when 2,3 and 4 lead to the same end result in the long term for ordinary citizens, people in power preferable some over others given the optics and the speed of impact. What I mean is that a tax increase is immediately obvious and the impact is felt right from day one. Printing money is not viewed as tax by a majority of people even when most economist accept it as such. Also the impact of rising prices is not felt immediately but there is a slow creep upwards and the above two factors make it far more acceptable. Confiscating assets is very visible and highly undesirable.

So while printing money may be more acceptable it is no less harmful for the ordinary citizens. It is leads to the destruction of wealth not different from what I had stated before.
pankajs wrote:All it means is when such a crisis hits China the haircut will be fully borne by the ordinary Chinese who will have to bail-out their Government and in the process see much of their deposits evaporate. In Greece and other such places such haircuts was shared by lenders from outside.

The Japanese know that printing money will not solve their problem. They have in fact gambled in the hope of igniting growth that would solve their debt problem. I call it a gamble because there is no guarantee and if it fails it will have other unintended consequences.

So wrt the original statement, *domestic* debt does lead to problems even when the government has the capacity to print its way out of debt. It will lead to the destruction of wealth for the ordinary citizens and that is a haircut no matter how you impose it or view it or talk about it.

wong wrote:To Das and the other non-believers who think it's all Shanghai stats and there's no real wealth being created in China. I spent the last two weeks helping get a family friend's kid into American boarding school. They are all completely full and turning away mainland Chinese students. These schools are $50,000+ per year with zero financial aid for international students. On campus visits, I saw Chinese and South Korean kids everywhere and zero South Asians. If that's fake wealth, I'll take that over your 'real' super-duper service economy wealth any day.
No No friend...I am not talking of Shanghai stats at all. The comrade explicitly stated the *Chinese national debt* figures. Anyone who is not familiar with the local politics and procedures will get the false impression and it is not the comrades fault.

The *Chinese national debt* is just that i.e. the debt taken on by the Chinese national government. It is the fault of the readers when they do not realize that most of the building/spending and hence the borrowings in China is done at the local level. So the figure quoted may be correct as far as *Chinese national debt* is concerned but does not give the total debt levels.

To give another example, the Chinese big 4 banks have very little NPA's and are healthy will also be a true statement as far as it goes. What it does not tell you is the NPA's of the big 4 are periodically taken out and put into another SPV. So if you do not understand the local background and procedures you will miss out on this very vital information.

It is not Chinese who are lying it is outsiders who draw the wrong conclusion given the limited set of data and an incomplete picture.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 12 Apr 2013 14:05

why this craze for american boarding schools even in Soko

The craze is to learn Inglees! There are SoKo boarders in a couple of schools here in Bangalore , Kerala as well! They pay top dollar for board and lodge and the "International School" I know of in Sarjapur loves having them.

Maybe the Chinese drone doesn't get it. Most Indian families will not send their kids to US/UK to boarding school. If at all they do, they will send them to Ooty/Dehra Dun/Kodai/ (the Lawrence Lovedale, Doon School, Mayo College Ajmer) set. And they don't need to go outside India to learn English! In fact, it attracts students from all over the world here (for eg,the SoKo kids in some not so pedigreed place in Bangalore!).

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Singha » 12 Apr 2013 14:16

singapore seems to have a good number of more-eton-than-eton kind of english private schools complete with teaching staff imported from bartania. the native sinic singaporean elite still seem to be in favour of a pukka engrish public school education for their future elite. the high number of anglosphere expats there also likely drive demand...also wealthy indonesians, malays, filipinos and thais might send their kids there.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Sri » 12 Apr 2013 15:54

I don't think Indian families even super rich ones prefer American Boarding schools. There are excellent ones in India (IPSC system) and of course Indians will easily make the biggest country outside british nobility contributing to british private schools like Eton and Winchester.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 12 Apr 2013 18:45

wong wrote:^^^^

The big difference between China and Japan is that Japan's economy has been deflationary for 10 to 20 years now. Deflation makes debt servicing twice as difficult. What the Japanese have decided to do now (finally!) is print massive amounts of money and devalue the Yen. That should solve the problem, because you really can't go bankrupt owing money to yourself.

To Das and the other non-believers who think it's all Shanghai stats and there's no real wealth being created in China. I spent the last two weeks helping get a family friend's kid into American boarding school. They are all completely full and turning away mainland Chinese students. These schools are $50,000+ per year with zero financial aid for international students. On campus visits, I saw Chinese and South Korean kids everywhere and zero South Asians. If that's fake wealth, I'll take that over your 'real' super-duper service economy wealth any day.


wrdos and some Indian admirers of CHINESE consumption level always make the same mistake and looks at the absolute consumption and not the consumption per capita which is the REAL measure of wealth of a country. Please come back with this stat for CHINA : number of students going to $50,000 school / total number of children in school going age and then let us see if wealth has tricked to citizens or accumulated in the hands of CPC elits.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 12 Apr 2013 18:58

http://www.mineweb.com/mineweb/content/ ... &sn=Detail

Anybody consuming a lot of gold is considered weathly. So should we consider India to be more wealthier than CHINA as it consumer more gold than CHINA ? The answer would be yes unless the CHINESE does not have an apetite for gold. The same way IPHONE sales and $50,000 schools cannot be the barometer of weatlh because INDIAN consumers may not prefer these and puts there money some where else like SAMSUNG GALAXY and local boarding schools.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby pankajs » 12 Apr 2013 19:33

pankajs wrote:The figure quoted by Satyajit Das was 150% of GDP.

I found an old post here from Nov 2012.
Image

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby harbans » 12 Apr 2013 20:18

Das Ji, many thanks for the link you posted earlier that i had requested. Will go through that.

PS: I don't think there is much of a craze for American boarding type education in India. It is there in some pockets, but in INdia a large section of the well to do also send their children to pretty humble kinds like Mothers International, RK mission etc. So i don't think that is a good measure really.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby member_20292 » 13 Apr 2013 00:05

^^^
pathways. gd goenka.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby vina » 18 Apr 2013 09:32

PS: I don't think there is much of a craze for American boarding type education in India

This "boarding school" / "public school" (which really means very expensive exclusive private school) is a Brit thing largely, with a Swiss Finishing school thrown in as an extra.

American is largely local district school (which is a true public school, taxpayer funded and free) primary education system. In fact, if you go to one of those "posh" private schools , you are referred to as a "Preppie" , which is borderline pejorative.

Don't confuse Brit with America. What the Chinese are trying to ape is the Brit "Public" school system (the likes of Eton , Harrow etc) and our pale imitations / copies (Doon, Lawrence Lovedale ) etc , which the Burra Sahibs in pre independence and the first 20 years after Independence sent their kids to for preliminary mind f**king, to be completed fully at Oxbridge and become proper Gungadin Brown Sahibs.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 18 Apr 2013 10:44

Wonder whats stopping US declaring China has currency manipulator when they have done that before ?

China escapes US 'currency manipulator' label
The Obama administration said on Friday that China's currency remained "significantly undervalued," but again stopped short of labeling the world's second-biggest economy a currency manipulator.

Although Beijing controls the pace at which the yuan can rise by intervening in foreign exchange markets, the U.S. Treasury said in a congressionally mandated semi-annual report that China did not meet the legal requirements to be deemed a currency manipulator.

The label is largely symbolic, but would require Washington to open discussions with Beijing on adjusting the yuan's value. Many U.S. lawmakers have accused China of deliberately keeping the yuan undervalued to gain a trade advantage.

As in other reports over the last several years, the analysis on China reflected both the administration's desire to maintain good relations with its top creditor and an attempt to keep up pressure for changes in China that could benefit the U.S. economy and mollify domestic critics.

The report, which surveys the foreign exchange practices of major U.S. trading partners, said China had allowed the yuan to rise 16.2 percent against the dollar in inflation-adjusted terms since June 2010, when China moved off its exchange rate peg.

The yuan, also known as the renminbi, hit a record high against the dollar on Friday as China's central bank fixed its official midpoint for the currency at the strongest level yet ahead of a Beijing visit by U.S. Secretary of State John Kerry.

"Nonetheless, the available evidence suggests the renminbi remains significantly undervalued, intervention appears to have resumed, and further appreciation of the renminbi against the dollar is warranted," Treasury said in a statement.

The Treasury also said it was closely monitoring policies in Japan meant to support the growth of domestic demand. Japan's aggressive monetary policy, which has sharply undercut the value of the yen, has refueled a debate about competitive devaluations.

It has been more than 18 years since the U.S. Treasury has designated any country a manipulator. China was labeled a manipulator between 1992 and 1994.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby svinayak » 18 Apr 2013 21:04

http://www.cnbc.com/id/100651692


New Study Finds China Manufacturing Costs Rising to US Level
Text Size

Published: Thursday, 18 Apr 2013 | 3:14 AM ET
By: Philip LeBeau
CNBC Auto and Airline Industry Reporter
Walk onto the shop floor at Prince Industries in Shanghai, China and it looks like most other manufacturing plants in this country. It's busy running two shifts, cranking out components that will be shipped to major manufacturers like Caterpillar, Siemens, and Honeywell.

But change is in the air.

The cost of manufacturing in China is going up and rising quickly.

"It's something that we anticipated when we went to China, we just didn't know how quick it would happen," said Mark Miller, CEO of Prince Industries.
China is no longer a slam dunk for manufacturers looking for the lowest cost for operations.

In fact, a new study by the consulting firm AlixPartners estimates by 2015 the cost of outsourcing manufacturing to China will be equal to the cost of manufacturing in the U.S.

"The Chinese manufacturing cost advantage has eroded dramatically in the last few years," said Steve Maurer, AlixPartners managing director. "If you go back to 2005, it was pretty common for landed cost from China to be 25 to 30 percent less than the cost of manufacturing in the United States. Based on our analysis, two-thirds of that gap has closed."
Maurer said higher labor wages, the rising value of China's currency, and the cost of shipping goods from China to points around the world have made manufacturing in China more expensive.

"If trends continue, the China cost is going to be on par with U.S. cost in the next four to five years," said Maurer.





Chinese manufacturing is already moving inland to where they can hire migrant farmers at much lower rates than the coastal cities.

There are also 100 million people in Vietnam, just as capable and willing to work for lower wages. Plus 250 million people in Indonesia. There is already small amounts of manufacturing leaving China for those places.

If sub-Saharan Africa ever gets it's political act together, that will be the next hot spot.

Labor intensive manufacturing is not coming back to the US. Wages are high, skills are no better than elsewhere, regulation is over-the-top, and now add ObamaCare as another reason.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Prem » 19 Apr 2013 07:59

http://www.theverge.com/2013/4/18/42397 ... than-birds
New strain of avian flu in China is deadlier to humans than birds, researchers report

Researchers in Japan and the US have analyzed the genes of a new strain of avian (bird) flu that's killed at least 17 people in China in recent weeks, and discovered that some of the new H7N9 viruses have mutated to be more effective and deadlier in humans than they are in birds. The findings "raise concerns regarding their [the virsues'] pandemic potential," according to the researchers, who published their findings in a paper in the journal Eurosurveillance last week.
VIRUSES "RAISE CONCERNS REGARDING...PANDEMIC POTENTIAL"
Specifically, the researchers examined genes from four infected people in China and found that in all cases, the viruses in their bodies lacked certain genes of H7N9 in birds and that "this deletion is associated with increased virulence in mammals," or increased ability to cause illness, and eventually death. By contrast, in birds, the illness caused by these viruses is only relatively mild. Other mutations found from the human virus samples indicated that they preferred to bind with human genes. The research didn't reveal that virus was capable of transmitting between humans directly, which would be major cause for alarm, since avian flu usually only passes from infected birds directly to humans who handle or are in close contact with them. But in China, up to 40 percent of the people infected so far had no direct contact with birds, worrying the World Health Organization.Still, it's too early to say whether the new viruses will lead to a pandemic, according to the US National Institute of Allergy and Infectious Diseases (NIAID), which funded the new research. “The H7N9 influenza virus is a new concern that the public health and scientific communities will continue to track closely, including watching for any genetic mutations that might enable the virus to become transmissible from person to person or to cause more severe disease,” said NIAID Director Anthony Fauci, M.D. in a statement published online today.
"THE H7N9 INFLUENZA VIRUS IS A NEW CONCERN."
No human cases of the H7N9 bird flu strain have been reported outside of China yet, according to the World Health Organization. Nonetheless, the US Centers for Disease Control and Prevention has ordered a vaccine that's now in development, and several other countries are reported to be making preparations to produce their own, including China and Taiwan, though no official production has begun.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Austin » 19 Apr 2013 09:30

IF a country say like China has large debt and most of it is owned by the public , Cant they print more money and pay off their debt ? What are the consequences of it , they cant print dollars to pay outside debt but internal debt can be paid printing more money atleast to some extent ?

For eg US prints more dollar than what it should to pay off their external creditors since USD is reserve currency.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 20 Apr 2013 16:02

Common sense would say that the value of money will drop and inflation rise adding to social unrest.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 20 Apr 2013 16:22

Acharya wrote:http://www.cnbc.com/id/100651692


New Study Finds China Manufacturing Costs Rising to US Level
Text Size

Published: Thursday, 18 Apr 2013 | 3:14 AM ET
By: Philip LeBeau
CNBC Auto and Airline Industry Reporter
Walk onto the shop floor at Prince Industries in Shanghai, China and it looks like most other manufacturing plants in this country. It's busy running two shifts, cranking out components that will be shipped to major manufacturers like Caterpillar, Siemens, and Honeywell.

But change is in the air.

The cost of manufacturing in China is going up and rising quickly.

"It's something that we anticipated when we went to China, we just didn't know how quick it would happen," said Mark Miller, CEO of Prince Industries.
China is no longer a slam dunk for manufacturers looking for the lowest cost for operations.

In fact, a new study by the consulting firm AlixPartners estimates by 2015 the cost of outsourcing manufacturing to China will be equal to the cost of manufacturing in the U.S.

"The Chinese manufacturing cost advantage has eroded dramatically in the last few years," said Steve Maurer, AlixPartners managing director. "If you go back to 2005, it was pretty common for landed cost from China to be 25 to 30 percent less than the cost of manufacturing in the United States. Based on our analysis, two-thirds of that gap has closed."
Maurer said higher labor wages, the rising value of China's currency, and the cost of shipping goods from China to points around the world have made manufacturing in China more expensive.

"If trends continue, the China cost is going to be on par with U.S. cost in the next four to five years," said Maurer.





Chinese manufacturing is already moving inland to where they can hire migrant farmers at much lower rates than the coastal cities.

There are also 100 million people in Vietnam, just as capable and willing to work for lower wages. Plus 250 million people in Indonesia. There is already small amounts of manufacturing leaving China for those places.

If sub-Saharan Africa ever gets it's political act together, that will be the next hot spot.

Labor intensive manufacturing is not coming back to the US. Wages are high, skills are no better than elsewhere, regulation is over-the-top, and now add ObamaCare as another reason.


I wish this was posted in the "service vs manufacturing" thread. The cost is already on par as several other papers had pointed out before. But the thing to note here is the difference between outsource manufacturing and outsource service.

First is the skill and education level of the work force is at lower levels is manufacturing and hence the reference to a ready work force of 350m in the neighbours of CHINA and all they need to do is put the physical infra in place which is a function of money. But in outsource service, yes there are competition, but it is much hard to find a 100m work force with degrees in maths and science and other areas and enabled in IT and has sharp problem solving mind set. It is this skill gap which Obama has made his mission and it is this skill gap which makes outsoruce service less vunerable to moving out.

The second difference is the mode of shipping. Outsource manufacturing is more and more making less economic sense as the cost of shipment is rising. But outsourced service ships over the wire and while network charges has risen, but we simply donot think twice about sending out that 5mb file (service delivery item ) to the customer. Now as outsourced manufacturing moves inland to CHINA, the cost of shipping will still remain high and this will ensure that only small sized items are manufactured in CHINA thus lowering shipment cost per unit -> means widgets will be made in CHINA and exported.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Christopher Sidor » 21 Apr 2013 16:41

^^^
It is true that PRC will loose its edge in manufacturing in the next decade. Manufacturing will chase the lowest cost destination. What the PRC will bank on in the coming decade will be the massive sunk in infrastructure cost. It will not be easy to replicate the same. But within the next decade if some country wants to steal jobs from china, the variety which includes low paying, long working and monotonous to the core, then it is possible.

PRC is already moving up the value chain. In Telecom, its companies are beating all the competition. They have beaten all their north Atlantic competitors in each and every fair auction taken place, including India. In FMCG their companies are moving ahead. The future competitor to Samsung/LG/Toshiba will be Chinese firms. Also the talk that true innovation cannot take place in a regulated environment, like PRC, plainly ignore the scale of innovation that happened in Soviet Union prior to its collapse. Guess which aircraft programme helped out F-35 most, initially in its formative years? A hint it was not sea harier.

What PRC truly lacks is a fully functioning market economy. The economy of PRC is still a hybrid one. Neither fully capitalist and neither state controlled. That will be weakest link in PRC's economy and possibly the cause of its downfall just as was the case of Soviet Union. It was the massive mismanagement of the economy which doomed Soviet Union. Not Afghanistan. Not Perestroika. Not the single party rule of CCCP.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby wong » 22 Apr 2013 02:07

^^^^

China is as capitalist as it gets. All countries have government intervention. Think GM bailout or the billion the French spent on the Concorde/Airbus. What can cause instability for China is official corruption, but they are already addressing that. Bloomberg reports that government officials cutting back on their expense accounts was responsible for a 0.2% drop in GDP growth last quarter alone.

Just got back from a weekend in Paris. Near the large LG and Samsung building on the outskirts of Paris is a smaller TCL building. The Chinese companies are coming to France. In the high-end boutiques, it's all Chinese customers. Walking into any French boutique and the sales people want to practice their Mandarin with me and I don't even look Chinese. Thank god the mainlanders haven't discovered Charvet Place Vendome or I would never have a gotten a fitting yesterday.

And this is for Das, the 100 million super talented Indian knowledge workers you dream about I don't even think your fellow Indians believe in that adolescent fantasy. 13 years ago, the Indian talent I saw at GE was simply AMAZING. The American firms were grabbing the cream of the cream of the crop. The very best of the best of Indian talent was working for top American firms. Now 13 years later, some of the H1-Bs we see in America are barely functionally literate and we're only talking 80,000 H1-B's a year. Your talent bench isn't really that deep, not even 10 million functional knowledge worker, forget that 100 million talented knowledge worker fantasy (not in your lifetime!!).

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby KrishnaK » 22 Apr 2013 08:40

Wong,
Christopher Sidor is talking about a functioning market economy, not one where a bunch of old idiots decide what's best for the rest. That would include deciding they're capitalists now. BTW who says corruption is the problem. The Japanese are famously corrupt. That hasn't stopped them from having a per capita many times the Chinese. Unless you have a system when I can make up my mind that somebody's expert commentary on what the problem is, can be backed by freely available and credible data, your commentary isn't credible either.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby subhamoy.das » 22 Apr 2013 14:28

wong,

I will let the folks who hire the talent pool - CEOs of FaceBook, Google, Microsoft, Oracle, GE, HP, yada yada... be the judge of the effectiveness of indian talent pool and they are all up in their arms trying to lobby their GOVT to open the flood gates or else the american dream will be at stake. And for those who can afford to setup offices in India, 50% of fortune 500 will by 2015 - they can tap the pool right in India so the h1b cap is nothing to worry about. In fact the H1b folks that u see these days are the account managers ( customer care folks ) and the real work is getting done inside India and hence u are not looking at the talents any more.

And to that fact that there are Indians who does not buy this knowledge driven economy model, it is natural to have divergent views in a democracy which is something probably u cannot fathom coming from a top down authority model where divergent view is taken as proof of rebellion and crushed with iron hands.


Regarding CHINESE companies moving up the value chain, no big deal, there will be some. But where is the list of the CHINESE product companies. I am still waiting for it. And to the point that Sidor was making that CHINESE telecom compaies winning in fair competion - are u joking, CHINA and fair competion - when u steal every IP on the earth and subsidize your companies with public money - and asking for fair and since when did CHINA started to deserver fair, it will always have to deal with unfair competetion and deal with it?

heech
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Re: PRC Economy - New Reflections : Dec 15 2011

Postby heech » 30 Apr 2013 18:23

I am planning to relocate my family back to mainland China for the next few years. We have spent in China every year, but this is the first time we will be residing there for such an extended amount of time. I think the quality of life there is almost as good as it is in the United States (other than air quality), and I'm very excited to have my kids spend time with their extended family.

A few recent observations from China:

- next time you're in Beijing, Shanghai, or any of the other first-tier cities... realize that many (most?) of the people you see walking down the street, including blue-collar workers / taxi drivers, are millionaires in US dollar terms, on paper at least. That's quite simply what their homes are worth. All Chinese with urban hukou own at least one home (product of the communist age), and in the front-line cities, those homes are worth unbelievable amounts.

In Beijing for example, homes within 5-10 km of the urban core is going for 40,000 RMB/sq m (roughly $7000 USD / sq m). A single, fairly sized 90 meter home is therefore $630,000 USD. These are not speculators buying new construction, and there is no debt on these homes. They might be earning only $10,000 USD a year through work, but their net worth (especially for younger generations inheriting multiple homes) is nearing the millions.

Of course, these Beijing'ers would tell you paper wealth isn't worth much since they still need a place to live. They can't cash out and still afford to live in Beijing. I think the next trend that will come (at least I *hope* it will come), is that these people will realize they can cash out... and just move into the suburbs. High-speed rail makes the "suburbs" a very large area.

Doing the math in my head... I can sell my $630,000 USD home, buy another one in the suburbs for $150,000, and pocket $500,000 USD. Isn't that a pretty damn nice alternative, when I'm just making $10,000/year in my day job? If this happens, I can see the real estate bubble in mainland China gradually deflating rather than imploding.

- Cost of living is so much higher in China today than it used to be just a few years ago. Across the board, for everything from food to clothing to toys.

- High speed rail is just incredible. In practice, it's everything the designers hoped it would be. All of the central regions of China are now connected to an unbelievable degree. Going from Shanghai to Beijing is something that can just "happen" without planning... if you have business or family reasons to go, you just go. There are trains every 15 minutes or so, and a 1000 km trip takes about 4 hours and costs roughly $100 USD. On any random day (not a holiday, not weekend), the high-speed trains were VERY popular. I took a mid-day Monday trip: I just showed up, bought tickets on the next train, and left... took about 30 minutes, including the time I stood in line. Second-class seats from Shanghai to Beijing were probably 90% full for the entire trip. First-class seats were probably 75% full.

From an investment point of view, I think the opportunity over the next 10 years will be in these high-speed rail connected suburbs around the major urban centers. Commuting for 20 minutes by high-speed rail (which takes you 50 km from the city core) is no worse than commuting 20 minutes by subway. I think increasingly Chinese will be happy to deal with that commute, then perhaps switch to the subway for another 20 minute ride to work.

Theo_Fidel

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Theo_Fidel » 30 Apr 2013 19:39

Well heech it will be sad to lose you on this web site.
Returning as you are to the information cocoon where this website is a threat to China.

BTW High speed rail can not be commuter rail. Does not have the capacity .

heech
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Re: PRC Economy - New Reflections : Dec 15 2011

Postby heech » 30 Apr 2013 20:43

Appreciate your concern. :) I'm not sure BR really is blocked, but in any case, I'll have VPN access.

How much more carrying capacity is needed for realistic "commuter" use? Again, with trains every 10-15 minutes, I would (at least naively) think it would be an attractive option. Not even sure how to google these statistics... but it looks like the Beijing-Shanghai line carried a total of 220,000 passengers on April 1st of this year. There are also other higher-speed options in the area that should add to the potential flow.

Looks like Shanghai daily subway traffic use is about 8 million. Seems like it can help alleviate some pressure, but not sure how much.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 30 Apr 2013 21:06

heech wrote:- next time you're in Beijing, Shanghai, or any of the other first-tier cities... realize that many (most?) of the people you see walking down the street, including blue-collar workers / taxi drivers, are millionaires in US dollar terms, on paper at least. That's quite simply what their homes are worth.

This sounds like deja vu all over again. Go back to the late 1980s and they were saying this about Tokyo :)

Chinasmack had a recent article where someone made a very interesting comment: China has done very well in things others can see - physical infrastructure, organization etc. However, it's getting worse and worse to residents in other ways - people are much more shallow, less social cohesion, more corruption and other concerns. Some of these are transitional issues, but it was an interesting comment from a local.

I cannot imagine what the debt burden of Chinese National Railways must be like. It's illustrative to again look at the example of Japan - the Japan National Railways was broken up in 1987 after running a debt burden of $230-240 billion in 1987 money, due to accumulated construction and particularly operating/maintenance costs. That's a railway company holding debt that's equal to or more than India's GDP at that time :eek: And this for a smaller network . CNR would be probably dealing with a $1T debt burden in a few years. That debt burden, even if restructured out of CNR books, will hang upon something else.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby sanjaykumar » 30 Apr 2013 22:47

I do not see how anyone would be eager to raise kids in a polluted, censorship prone and repressive state because the railways run on time.

Most of China remains poor and disadvantaged with low health and education indices. Perhaps the above post reveals more about the China bandwagon than it does about China.

Theo_Fidel

Re: PRC Economy - New Reflections : Dec 15 2011

Postby Theo_Fidel » 30 Apr 2013 22:52

Or perhaps it indicates a lack of green card.....

heech
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Re: PRC Economy - New Reflections : Dec 15 2011

Postby heech » 01 May 2013 03:24

Theo_Fidel wrote:Or perhaps it indicates a lack of green card.....

Or, perhaps it indicates a belief that for my children's generation, gdp per capita in urban China will catch up to that of the United States. We have the legal right to live and work in both places, but I'll let them decide where they ultimately want to be. I think the best I can do for them is make sure they'll be equally comfortable and likely to succeed in both countries.

And since I suspect sanjaykumar hasn't lived in China (and I wonder if he's lived in the United States)... he doesn't have the background for an informed opinion. Ultimately though, my wife and I are fortunate in that our careers allow us to literally work anywhere. She's a US-educated/trained physician, and I run an asset management firm. Both of us enjoy being in China very much (at least away from the crowds of Beijing/Shanghai), and we are both very excited about the next two years.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Rahul M » 01 May 2013 03:57

I know of quite a few furrin kids in kolkata colleges studying english. including from SE asia.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby sanjaykumar » 01 May 2013 04:19

I do live in the west and have worked in the US. Next time you are in China, please hold up a placard for me- let it read something simplistic like 'one man one vote'. To make it fairer, do so on the bullet train. You don't have to say anything.

Then post here.

heech
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Re: PRC Economy - New Reflections : Dec 15 2011

Postby heech » 01 May 2013 04:56

sanjaykumar wrote:I do live in the west and have worked in the US. Next time you are in China, please hold up a placard for me- let it read something simplistic like 'one man one vote'. To make it fairer, do so on the bullet train. You don't have to say anything.

Then post here.

Sure, but only if you return the favor and hold up a simplistic sign that reads "jihad - you are all heretics" while repeatedly chanting "allahu akbar" next time you board a plane in the US. I suspect Chinese public security would be done with me before the FBI finished with you.

But just to clarify, I'm not suggesting China has greater political freedom than the United States. But considering the millions of people willing to live illegally (and thus denied of political rights) in the West (not to mention un-democratic states like Hong Kong or Dubai)... I'm not alone in placing political freedom lower on my list of priorities. Indeed, I have to wonder... are you a citizen of where you live, in the West? And if not, why would you abandon a country in which you have the right to vote (India) for a country where you dont?

You can be a freedom fighter for political rights. I choose not to be.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby sanjaykumar » 01 May 2013 09:09

Heech, I don't think you understand open societies like India, US, Canada. In fact I have seen an Arab punk driving a flashy car with blaring music. He had Osama bin laden on the front license plate.

When China allows the Dalai Lama's picture on a license, then you may wish to pose your question again. Open societies means we are willing to take a lot of pain not just inflict it.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Suraj » 01 May 2013 09:20

Folks, enough of open vs closed societies please. The debate has been done n+1 times. It results in a flamewar everytime. Not worth the mod overload. Move on.

Added later: R2C accounts are welcome. Ideological flamewars are not.

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Re: PRC Economy - New Reflections : Dec 15 2011

Postby Gus » 01 May 2013 09:36

we haven't had any r2c (return to china) account....so heech please post your experiences here


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