PRC Economy and Industry: News and Discussions

[Raja Bose]

Let me haha you back.
Whenever people see a set of mathematics squiggles they got impressed and accept it as an ultimate arbiter of truth, including the mathematically messy areas like human behavior, especially economic behavior. How could everybody on this earth can be duped into believing mathematics can predict human behavior is beyond me. True hard science's ultimate test is falsifiability through experiment of a theory. Did anybody test the validity of rational man and his utilitarian decision making process? Is there a random walk in the park? If there is a rational man, why all the guys here are wasting time typing away nonsense while they could use it somewhere else more productively? Did anybody test if there is that thing called invisible hand indeed? Then why we have to assume perfect information to make it work when real life situations say otherwise. Yes, haha indeed. US housing crisis didn't happen because they forgot Econ 101. It happened because Econ 101 is bullsh*t. There is a ton of bullsh*t in there and people will buy it line hook and sinker no matter what.
Haha you back, big time.

Man, do you even realize how illiterate you sound coz it is apparent you have not studied science and especially mathematics (For all I know, you may have a degree in it but you definitely don't understand it). There is no model (mathematical, ideological or otherwise) which can predict something perfectly all the time. Every model has inherent strengths and weaknesses and hence, needs to be used only under certain specific conditions (which in turn power its assumptions). A model is a formalization of some behavior with certain aspects of it inherently simplified. What happened wrong in US is not that they applied Econ 101 but rather they applied models without understanding when and where should they be applied and most importantly, not applied. And this is what China is doing too. It is the equivalent of a gambler on a winning streak not knowing why he is winning at present and hence, not knowing why and when he will start losing in the future.

[Masaru]

Limits to the Banking Shell Game

Excellent example of the ponzi scheme that oils the financial system in PRC.

China’s state-run financial system sometimes resembles a sort of shell game, with assets shifted between institutions to give the impression of systemic health but obscuring who is ultimately responsible if things go wrong.

China Construction Bank, Industrial & Commercial Bank of China and Bank of China are planning to replenish their capital by raising billions of dollars via rights issues. Central Huijin Investment, the domestic investment arm of China’s sovereign wealth fund and a major shareholder in China’s biggest banks, has agreed to subscribe to those rights issues.

The problem is that Huijin currently doesn’t have any free capital, so between now and the end of next year Huijin plans to sell 182.5 billion yuan (about $26.84 billion) worth of bonds to raise the necessary funds. And since China still has a fairly shallow pool of bond market investors — or at least investors that can subscribe in large volume — a very large chunk of those bonds are likely to be sold to China’s major banks.

As we’ve noted before, this can start to look a little curious: CCB, ICBC and BOC need capital so they’re selling shares to Huijin, which is raising funds to buy the shares by selling bonds, which are being sold primarily to CCB, ICBC and BOC. So the banks are funding their own recapitalization. (The ball’s under shell No. 3, see?)

The collapse predicted will come when the whole banking and financial system built upon assumption of breakneck economic growth in perpetuity starts coming off at the seams as growth rate tapers off to middle income country levels.
One scenario is outlined below.

China’s banks currently look quite solid financially. But say, for instance, their financial performance were to deteriorate to a point where they had to stop paying dividends. Then Huijin — whose income comes from those dividends — would struggle to repay the interest on the bonds. And that, in turn, could result in a decline in the value of the Huijin bonds that the banks hold — which would lead to a further deterioration of their capital, possibly requiring them to raise more funds. All that is true whether or not the amount of Huijin debt the banks can buy is capped.

Ultimately the health of China’s financial institutions can’t be measured by how much capital they hold on their books, but rather is contingent on the government’s own fiscal health. It’s the government’s implicit guarantee of the major banks that imbues the to-and-fro of capital between the banks and Huijin with its own logic.

[vina]

Every model has inherent strengths and weaknesses and hence, needs to be used only under certain specific conditions (which in turn power its assumptions). A model is a formalization of some behavior with certain aspects of it inherently simplified

. You answered in haste. I was waiting for the dude the answer the questions I asked and then ask the following!

• PV = const (true or false)
  F = ma (true or false)
  V/I = R (true or false)
  law of conservation of mass (ie total mass is constant) - True or false

If true,for which measure? . If False, why , given that these are standard models from the physical sciences world that are dinned into the head of even school kids!

[Purush]

http://www.telegraph.co.uk/news/worldne ... ewers.html

China goes organic after scandal of cooking oil from sewers
Organic food sales have taken off in China after a series of safety scares, including the disclosure that one in 10 meals is cooked using oil dredged from the sewer.

The Chinese now consume more than twice as much organic food as health-conscious Japan.

The market is worth an annual 10billion yuan (£1billion) having quadrupled in the past five years. For comparison, the British organic market is worth roughly £2billion. Interest has been promoted by a series of scares including toxic beans, contaminated milk and pork, pesticide-laced dumplings, chemically-tainted chicken, and the growing presence of what is known as “sewage oil”.

Night soil collectors typically visit the drains behind restaurants late at night to scoop up dregs of oil, which they filter and resell.

The government, which released the figures, has promised to take action against the practice. But since there are no laws against skimming oil from drains, police have had to release any suspects.

In April, a man was caught in broad daylight collecting oil at a sewer in Zhengzhou, Henan province, which he admitted intending to sell to street food vendors for 300 yuan a barrel.

“There is no way to prevent this oil from returning to the food chain,” said Zhen Zhiquan, 32, the manager of a company in Qingdao that turns sewage oil into biofuel.

“Companies like us buy around 10 to 20 per cent of the oil that is dredged from the sewers, but at least 80 per cent is recycled,” he said.

UGH!!! Disgusting in the extreme.
-----------

More oily news from Cheen.
http://www.google.com/hostednews/afp/ar ... E_2gHEUV-g
Chinese officials suppressed tainted oil recall

BEIJING — Authorities in central China waited five months before notifying the public that a brand of cooking oil contained excessive carcinogens, a state-run newspaper reported Friday.

Officials in central China's Hunan province were trying to "maintain social stability" by not announcing they had recalled Hunan Jinhao Camellia Oil Co Ltd's products in March and April, the China Daily reported.

The company published an apology this week for failing to inform consumers its products contained excessive amounts of benzoapyrene, a chemical that can cause cancer and other health problems.

It admitted it "did not inform the public about the substandard products in time and did not inform people thoroughly about the recall process."

Camellia oil is widely used for cooking in China.

Nine batches of the oil totalling 42 tonnes produced between December 2009 and March were recalled, the company has said.

But the China Daily said the company earlier announced last month that there was nothing wrong with its products and that Hunan's Bureau of Quality and Technical Supervision also publicly denied any problems.

However, a groundswell of rumours and reports about possible risks snowballed on the Chinese Internet, forcing the company and officials to come clean, it said.

The report made no mention of any punishments planned over the scandal.

China's government has repeatedly pledged to notify the public in a timely and transparent manner of any health risks from product safety scandals, which are common and widely blamed on lax supervision of its giant food industry.

In one of the biggest cases, huge amounts of the industrial chemical melamine were found in 2008 to have been illegally added to dairy products to give the appearance of higher protein content.

The massive scandal was blamed for the deaths of at least six infants and for making 300,000 others ill in China

But..but... this happens in Uttar Pradesh on a daily basis anyway, and posting such news will lower the quality of discussion here ; so equal-equal onlee....carry on as usual..the authorities in cheen have nothing to do with tainted food.

[Singha]

"australia gets money, china gets australia"

http://www.businessweek.com/magazine/co ... ries_ssi_5

one nugget among many: a mining truck driver makes $130k USD !!

[krisna]

China Orders More Food Production to Counter Inflation

Rising food prices have led China's government to order an increase in vegetable production to ward off inflation and the threat of a public backlash.

China's government is acutely aware nothing angers its people more than the soaring price of food.
With food prices rising 6.8 percent in July, it has been quick to act to secure price stability.
The State Council this week ordered provincial officials to increase vegetable production to maintain supplies and keep prices low.
It has also told state banks to lend to producers so they can increase output.

Shortages have been reported in several areas, in part because of heavy flooding in many parts of the country and drought in other areas over the past few months. Those shortages are helping drive up prices.

Why do CCP fears rising food prices-

In China, people on average spend half their incomes on what they eat, and the price of food is a political hot potato.
Inflation contributed to political pressures in the late 1980s, which eventually ended in a massive pro-democracy demonstration in Beijing's Tiananmen Square, which China's army crushed.

[krisna]

Heavy in dollars, China warns of depreciation

The Chinese government's currency reserves, the world's largest such stockpile at $2.45 trillion, are held roughly in line with what was described as the global average: 65 percent in dollars, 26 percent in euros, 5 percent in pounds and 3 percent in yen.

Hu Xiaolian, a vice governor with the People's Bank of China, reiterated China's long-standing discomfort with a global financial system dominated by a single currency in the dollar.
"The outbreak and spread of the global financial crisis has highlighted the inherent deficiencies and systemic risks in the current international currency system," she said.
"A diversified international currency system will be more conducive to international economic and financial stability," she added.
To that end, developing countries must speed up reform of their financial markets, and China would work to promote greater cross-border use of the yuan, she said.

[krisna]

China to create blacklist as it targets poorly made goods

# The country is out to counter negative impressions of "Made in China"
# Chinese products have taken a beating with scandals in recent years
# The blacklist would follow a 2009 ad campaign about quality-made Chinese goods

[Theo_Fidel]

http://www.eeo.com.cn/ens/observations/ ... 8668.shtml

Lights on or off?

China is in the midst of a property bubble. Minxin Pei, an adjunct senior associate at the Carnegie Endowment for International Peace, believes two main culprits are to blame, local governments who intentionally drive up land prices because they depend on the real estate sector for over 40 percent of their financial revenue and greedy state-owned enterprises who use cheap credit from China’s banking system to purchase high-priced land and invest in luxury housing units.

A third factor expanding the bubble is speculation; property is the de facto investment choice for rich Chinese. Former Morgan Stanley star chief Asia-Pacific economist attributes this choice to the fact that many investors in China have never experienced a housing bubble and trust that the government will not allow property prices to fall. He also writes that property has become a “safe haven” for speculators because they no longer trust a depreciating dollar and are nervous about rising inflation.

Middle-class and low-income citizens are dealing with the results of these actions. Unable to afford a home of their own and egged on by rumors circulating such as the purchasing of an entire block of south-facing apartments in central Beijing by a coal boss from Shanxi province, citizens have begun to take action.

Despite these policy actions, real estate investment continues to climb and in the first seven months of this year, real estate construction investment was up 37.2 percent from the same period last year, totaling 2.38 trillion yuan. The government is not blind to the actions of local governments; four government ministries issued a notice last week stating that they planned to conduct a joint-audit of the debt owed by local government financing vehicles. A local banking supervisory agency official stated, “The purpose of the new investigation is to let central ministries, bankers and local governments get together to address the risk of the bad debts.” While this is a step in the right direction, the government needs to take bold steps to alter local government dependency on the property market for financial revenue, or else real estate investment will continue to increase which means the construction of more empty apartments mocking the citizens who cannot afford them.

The tallest building in Beijing opened its doors this week. Perhaps officials will stop and think about how many empty apartment buildings they are looking down upon while they are up there enjoying the view.

http://blogs.telegraph.co.uk/news/peter ... erty-boom/

China's perplexing property boom

All around along the roadsides, however, were multiple building sites – I counted 33 before I stopped – with the atypical concrete skeletons rising 20 or 30 storeys into the sky, topped by the arms of countless yellow construction cranes.

There are many places like this all over China, so it took me a while to work out what was so different about Linyi’s new town’s construction, and then it dawned on me: hardly anybody was working on these buildings.

I looked up at the cranes. They were not moving, their cables dangling limply from their beams. I looked at the cage-elevators that run up and down the sides of the buildings sites, but they didn’t seem to be moving either.

[shyam]

Hmm... lots of negative coverage on China in British media. This reminds me of similar coverage that happened in the past about Dubai in British papers. I suspect that something big is on the way...

[starek]

Hmm... lots of negative coverage on China in British media. This reminds me of similar coverage that happened in the past about Dubai in British papers. I suspect that something big is on the way...

I've seen those news for 20 years, but Chinese economic had been collapsed from No.9 of the world to No.2

[anishns]

Hmm... lots of negative coverage on China in British media. This reminds me of similar coverage that happened in the past about Dubai in British papers. I suspect that something big is on the way...

I've seen those news for 20 years, but Chinese economic had been collapsed from No.9 of the world to No.2

That is awesome comlade!!......now, can you go back in your cave and come here when you are no. 1
Cheers! oops! cheels!

[zlin]

Shenzhen SEZ is 30 year old yesterday.

[krisna]

New Chinese labour laws may force flight of foreign investment

Overseas companies may no longer find China a lucrative country to set up manufacturing units after the newly-drafted labour laws in southern China's Shenzhen special economic zone (SEZ) wer e introduced, aimed at empowering workers to collectively negotiate higher wages.

The average monthly wages for factory workers in the city are about 3,900 yuan ($560), while workers at most of the manufacturing units at Shenzhen SEZ are paid between 1,100 yuan ($146) to 1,500 yuan ($220).

The new laws would allow workers at Shenzhen SEZ demand wage hikes of as much as 70 per cent in order to bring their salary level to that of city workers.

The workers have a right to get the average wages prevailing in their areas, how will this impact the overall prices of the goods remains to be seen.

[vina]

Overseas companies may no longer find China a lucrative country to set up manufacturing units after the newly-drafted labour laws in southern China's Shenzhen special economic zone (SEZ) wer e introduced, aimed at empowering workers to collectively negotiate higher wages.

WHAT ?. How shocking ! Are you telling me that in the communist paradise created by Mao Tse Dong and ruled by the CPC, a party of the "people" and the "proletariat" and those who were inspired by "workers of the world unite,you have nothing to lose but your shackles" , bans workers from organizing into unions, enter into collective wage agreements , collective bargaining and cannot enter into industrial action to force their demands ?.

Why in every other liberal democracy in the world, such kind of rights are fully enshrined and protected. Why just yesterday in India, 8 trade unions called for a strike and West Bengal and Kerala which is communist dominated was brought to a stand still!

Now the commies in India claim that the "right to strike" is a fundamental right that cannot be abridged, but then CPI-M which looks up to Beijing and CPC for ideological direction does not somehow go to organize workers in Shenzen! After all, didn't Karl Marx tell the workers to unite?.

Why is that there are free and independent unions in liberal democracies, with right to collective bargaining and right to strike, but all such strikes are totally and fully banned the moment the state becomes communist (Soviet Russia, eastern bloc, China), the "ideal end state" of all human civilization? Is it because the state is the "Capitarist Exproiter" when it becomes Communist and also the "lunning dogs of the impeliarists?"

[starek]

Overseas companies may no longer find China a lucrative country to set up manufacturing units after the newly-drafted labour laws in southern China's Shenzhen special economic zone (SEZ) wer e introduced, aimed at empowering workers to collectively negotiate higher wages.

WHAT ?. How shocking ! Are you telling me that in the communist paradise created by Mao Tse Dong and ruled by the CPC, a party of the "people" and the "proletariat" and those who were inspired by "workers of the world unite,you have nothing to lose but your shackles" , bans workers from organizing into unions, enter into collective wage agreements , collective bargaining and cannot enter into industrial action to force their demands ?.

Why in every other liberal democracy in the world, such kind of rights are fully enshrined and protected. Why just yesterday in India, 8 trade unions called for a strike and West Bengal and Kerala which is communist dominated was brought to a stand still!

Now the commies in India claim that the "right to strike" is a fundamental right that cannot be abridged, but then CPI-M which looks up to Beijing and CPC for ideological direction does not somehow go to organize workers in Shenzen! After all, didn't Karl Marx tell the workers to unite?.

Why is that there are free and independent unions in liberal democracies, with right to collective bargaining and right to strike, but all such strikes are totally and fully banned the moment the state becomes communist (Soviet Russia, eastern bloc, China), the "ideal end state" of all human civilization? Is it because the state is the "Capitarist Exproiter" when it becomes Communist and also the "lunning dogs of the impeliarists?"

i tell you second time, cpc = capitalism party of china.
and chinese labor wages are higher than indian's obviously.

[paramu]

i tell you second time, cpc = capitalism party of china.
and chinese labor wages are higher than indian's obviously.

What is capitalism?

[pgbhat]

Overseas companies may no longer find China a lucrative country to set up manufacturing units after the newly-drafted labour laws in southern China's Shenzhen special economic zone (SEZ) were introduced, aimed at empowering workers to collectively negotiate higher wages.

This will all be for furrin companies onlee. CCP is trying its best to make the mango cheeni spend domestically.

[abhishek_sharma]

On Clean Energy, China Skirts Rules

http://www.nytimes.com/2010/09/09/busin ... trade.html

[vina]

On Clean Energy, China Skirts Rules

http://www.nytimes.com/2010/09/09/busin ... trade.html

Yawn.. China giving unfair subsidies of land, power, water, finance and exporting energy equipment?.. Haven't we heard that before ?

Well, anyway, now Steelworkers plan to file a case with the Obama admin. In an election year and with Demc' rats in trouble and the union base wanting their pound of flesh and the need for Obama to be SEEN addressing the job losses etc, expect mucho pow-pow and dishum-dishum with PRC on the trade and other issues. Also expect pressure to ratchet up on PRC to let the currency float.

Awwright folks. Get the pop corn and the beer and a nice LazyBoy chair to lounge around in and watch the fight.

[vina]

On Clean Energy, China Skirts Rules

http://www.nytimes.com/2010/09/09/busin ... trade.html

Yawn.. China giving unfair subsidies of land, power, water, finance and exporting energy equipment?.. Haven't we heard that before ?

Well, anyway, now Steelworkers plan to file a case with the Obama admin. In an election year and with Demc' rats in trouble and the union base wanting their pound of flesh and the need for Obama to be SEEN addressing the job losses etc, expect mucho pow-pow and dishum-dishum with PRC on the trade and other issues. Also expect pressure to ratchet up on PRC to let the currency float.

Awwright folks. Get the pop corn and the beer and a nice LazyBoy chair to lounge around in and watch the fight.

One of the world’s largest manufacturers of solar panels, SolarWorld of Germany, is an exception in that it is willing to criticize China. It has not moved its European or American operations to China — at least not yet — because the company has a corporate philosophy of manufacturing solar panels in the markets where it sells them.

“China is cordoning off its own solar market to fend off international competition while arming its industry with bottomless piles of subsidies and boundless lines of credit,” said Frank A. Asbeck, the chairman and chief executive of SolarWorld.

Barely a player in the solar industry five years ago, China is on track to produce more than half the world’s solar panels this year. More than 95 percent of them will be exported to countries like the United States and Germany that offer generous subsidies for consumers who buy solar panels.

By contrast, the Chinese government has relatively modest solar subsidies for its citizens. Instead it has devoted more money to helping manufacturers, allowing them to cash in on other countries’ consumer subsidy programs.

Nice .. Nice. Suckers elsewhere subsidize their citizens to use solar power, while Chinese subsidize exporters big time while shipping in 3.5Billion or whatever Billion tons of coals to dirty, inefficient coal fired plants and creates massive pollution!. Very nice.

Problem is now the suckers outside have woken up to the game. Expect big problems for the Chinese "predatory follow the money" growth model.

[vina]

Hmm. The Chinese Babus - aka Mandarins , seem to be even bigger clueless idiots than their Indian babu counterparts.
China U Turn on enforced power cuts in Heibei
Imagine enforcing blackouts for domestic power to reduce pollution in India. Why any nitwit doing that will have an irate citizenry out on the streets looking to riot and a sure shot kicked out by the butt in the next election scenario.

Not so in China. Babu-Politicos can seem to do anything they want, including a "Pakistanesque scenario of : Flood waters coming ?. Why divert it to the villages and fields of the poor and wretched while saving your farms and orchards and holdings". Beijing says, save power and cut pollution, well don't close the polluting industries and dont install scrubbers and precipitators in your power plants and other industries where the CPC bosses and cronies have poured in money and capital, but rather shut down electric supply for domestic use! .

Yeah, all for the people onree. We will cut off your electric supply because it is good for you!

[wig]

http://www.time.com/time/world/article/ ... 24,00.html
Foreign businesses in China are voicing growing frustration about the country's heavily regulated market — a bureaucratic maze many say is deliberately designed to hamstring non-Chinese players to the advantage of their local competitors. Last week, the European Union Chamber of Commerce in China joined the chorus
Direct foreign investment in China has been growing in step with the nation's booming economy, but not as quickly as many would like. Europe's exports to China totaled € 78.4 billion in 2008, a rise of 9% from 2007. But, says the European Chamber, which
represents 1,400 international businesses, trade with the small nation of Switzerland is still three times higher. Despite the 30 years that have passed since the Beijing swung open the doors to foreign investment, "China still remains excessively regulated and less open to competition compared to other major economies," the paper reads.
In early 2009, a set of policy proposals known as "Indigenous Innovation Accreditation" caused alarm among international businesses when early drafts appeared to shut the door to foreign products across the high-tech industry through a complicated licensing system that required companies to register their IPR in China before registering elsewhere in order to qualify. In a report this June, the Washington-based U.S. Chamber of Commerce said the policies were "considered by many international technology companies to be a blueprint for technology theft on a scale the world has never seen before."

[ArmenT]

Business week interviews Terry Gou, founder of Foxconn
It is a very interesting read.

[Hari Seldon]

On how China's stellar economy has achieved escape velocity only

In response to Beijing’s mind boggling increase in real credit in the first half of 2009,\Chinese fixed investment in industrial tradables rose dramatically . In the first phase of such an investment boom China’s imports had to rise, as the country needed capital goods and inputs for planned new industrial capacity. It takes many quarters to go from credit disbursements to the completion of new capacity and the initiation of new production. By the second quarter of this year some – but only some – of this new capacity began to come on stream. Further production responses to this new round of Chinese overinvestment lie ahead. When such capacity comes on stream there is a lesser need for imported capital goods and for the import and stock piling of inputs for planned future production. Instead, there is an onslaught of new production which targets export markets and which substitutes for prior imports.

The build-up of new production is undoubtedly a key factor behind China’s prominent rise to the world’s number 2 economic power. But because of the potential protectionist threat and the underlying fragility at the heart of China’s capex boom (along with the corruption of its political class), the change in status might prove to be ephemeral, much as Japan’s vaunted rise to number 2 ultimately gave way to a post-bubble morass which exists to this day in “The Land of the Setting Sun”.

Wow. Like I said, only the word 'invincible' comes to mind.

More recently, China has reported some disappointing economic numbers. They have been more negative than they look. ... Based on calculations done by Lombard Street Research it appears that in July Chinese domestic demand may have gone negative in real terms. It was only a huge improvement in net trade that kept production growth significantly positive on a sequential basis.

Oh, read it all. And be very afraid.

[RamaT]

http://nextbigfuture.com/2010/09/chinas ... onomy.html

China has become the country with the fastest development, most complete systematic technologies, strongest assembly capacity, the greatest length of track, highest operational speed and the largest project scale of high-speed railways in the world. High speed rail seems to be providing a 1.0 to 1.5% annual GDP boost to regional economies. China could use low pressure maglev to create a 1 to 1.2 billion person megacity by 2040 and a 1.4 billion person megacity by 2050.

Take some proclamations with large grains of salt as the writer is a Cheeni American.. the premise is interesting. He is arguing that HSR can have a multiplier effect on regional economies similar to the boost gotten when rural people move to cities.

Also, has a decent heat map of Cheeni population.

[vina]

Yawn.. Our "tarrel than the mountain and deepel than the oceans" friend goes deepest!

China Explores a Frontier 2 miles deep

[RamaT]

Hopefully after the US works up the backbone to do something about this those in Delhi will as well.

Some background: If discussion of Chinese currency policy seems confusing, it’s only because many people don’t want to face up to the stark, simple reality — namely, that China is deliberately keeping its currency artificially weak.

The consequences of this policy are also stark and simple: in effect, China is taxing imports while subsidizing exports, feeding a huge trade surplus. You may see claims that China’s trade surplus has nothing to do with its currency policy; if so, that would be a first in world economic history. An undervalued currency always promotes trade surpluses, and China is no different.

And in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs. Again, anyone who asserts otherwise is claiming that China is somehow exempt from the economic logic that has always applied to everyone else.

http://www.nytimes.com/2010/09/13/opini ... ef=general

[krisna]

Indian model of growth wins praise over its Chinese rival

While Indian economic growth was more fuelled by high domestic consumption and services, the Chinese model relied heavily on manufacturing and exports, said Western and Chinese experts at the state TV debate, on the sidelines of of the World Economic Forum being held here.

Besides, India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages, said Fu Jun, professor of the Political Economy of the Peking University.

What India will do next is to continue the strategy and move into other areas. By comparison we (China) have to readjust our strategy into manufacturing. I do not see reasonable balance between supply and demand," he added.

Human resources development minister Kapil Sibal, who was participating in the debate, said, "Because our economy is based on domestic demand, there is much greater innovation and ability of the entrepreneurs to actually produce wealth. In the long run a lot of innovation and lot of wealth production is going to come from our part of the world."
Martin Wolf, associate editor of the Financial Times, who was critical of the Indian growth model said, however, "Indian development is working despite failure of organisation and poor infrastructure. It is clear that lot of successful multinational companies have good assets in India."

[krisna]

China signals who’s the boss in BRIC

Themed ‘rise of the rest,’ the show opened on China Central
Television with Chinese children on a racetrack, wearing T-shirts bearing the flags of China, Brazil and India. A Chinese boy enters the scene as the American bully, shoving China aside with the words ‘get out’ and ‘I don’t care what you think’. China exhorts India and Brazil to run faster and outpace the boy named Mike with the American stripes. “Wait for me,’’ Mike is left panting.

[Prem]

http://seekingalpha.com/article/225133- ... ing-engine
China's Sputtering Engine

Looking at the latest release of the OECD economic indicators for China, it appears that the massive jump in economic activity seen since the panicky period of late 2008 has drawing to a close.China’s leading economic indicator has now declined for eight consecutive months with the latest July period showing a notable month-to-month decline of 0.18% bringing the latest level 0.03% below the level seen in July 2009.Looking at past recessionary periods, it’s important to note that while China’s economy is clearly slowing, it will take some time to determine the severity.We may be seeing the beginnings of an abrupt pullback of equal and opposite force to that of the government sponsored propping applied during 2009 or simply a slowing of a more durable overall recovery as was seen during the periods following the 1990s and early 2000s recessionary periods.

[abhishek_sharma]

World Bank's Zoellick says stronger Chinese yuan 'appropriate,' would help boost consumption

http://www.todayonline.com/BreakingNews ... onsumption

[naren]

Indian model of growth wins praise over its Chinese rival

While Indian economic growth was more fuelled by high domestic consumption and services, the Chinese model relied heavily on manufacturing and exports, said Western and Chinese experts at the state TV debate, on the sidelines of of the World Economic Forum being held here.

Besides, India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages, said Fu Jun, professor of the Political Economy of the Peking University.

What India will do next is to continue the strategy and move into other areas. By comparison we (China) have to readjust our strategy into manufacturing. I do not see reasonable balance between supply and demand," he added.

Human resources development minister Kapil Sibal, who was participating in the debate, said, "Because our economy is based on domestic demand, there is much greater innovation and ability of the entrepreneurs to actually produce wealth. In the long run a lot of innovation and lot of wealth production is going to come from our part of the world."
Martin Wolf, associate editor of the Financial Times, who was critical of the Indian growth model said, however, "Indian development is working despite failure of organisation and poor infrastructure. It is clear that lot of successful multinational companies have good assets in India."

I've come across many Chinese netizens who react more strongly than RoPers reacting for Quran burning, if anyone compared "third world" India with "supah powah" China. I'd like to see their reactions now

[Raghavendra]

Visa ceiling lifted; easier for Chinese to work in India http://www.hindustantimes.com/News-Feed ... 00644.aspx

[Lisa]

http://www.telegraph.co.uk/finance/curr ... e-war.html

"Ding Yifan, a policy guru at the Development Research Centre, said China could respond by selling holdings of US debt, estimated at over $1.5 trillion (£963bn)."

Curious, China will sell who will be buying a depreciating asset.US has
them by the proverbial short and curlies. China may own US Dollars but
uncle will determine their value not current owner!

[DavidD]

http://www.telegraph.co.uk/finance/curr ... e-war.html

"Ding Yifan, a policy guru at the Development Research Centre, said China could respond by selling holdings of US debt, estimated at over $1.5 trillion (£963bn)."

Curious, China will sell who will be buying a depreciating asset.US has
them by the proverbial short and curlies. China may own US Dollars but
uncle will determine their value not current owner!

What do you think would happen to China if they lose most of that foreign reserve?

[Lisa]

http://www.telegraph.co.uk/finance/curr ... e-war.html

"Ding Yifan, a policy guru at the Development Research Centre, said China could respond by selling holdings of US debt, estimated at over $1.5 trillion (£963bn)."

Curious, China will sell who will be buying a depreciating asset.US has
them by the proverbial short and curlies. China may own US Dollars but
uncle will determine their value not current owner!

What do you think would happen to China if they lose most of that foreign reserve?

The same that happens to anyone who loses their hard earned savings.

Will carry on in http://forums.bharat-rakshak.com/viewto ... start=3000 where discussion is on going

[Prem]

China Is Set to Lose 2% of GDP Cleaning Up Decades of Pollution
http://www.bloomberg.com/news/2010-09-1 ... -more.html

Li Pingri remembers swimming with fish and shrimp as a boy in Guangdong’s Chigang waterway in China. Today, even after the city spent 48.6 billion yuan ($7.2 billion) on a cleanup, he can’t stand the canal’s smell.
“We are surrounded by black and smelly waterways, breathing the foul air every day and paying the price at the cost of our health,” said Li, 79, a former researcher at the Guangzhou Institute of Geography. “If we can’t breathe clean air or drink clean water, high economic growth is meaningless.” China, the world’s worst polluter, needs to spend at least 2 percent of gross domestic product a year -- 680 billion yuan at 2009 figures -- to clean up 30 years of industrial waste, said He Ping, chairman of the Washington-based International Fund for China’s Environment. Mun Sing Ho, a senior economist at Dale W. Jorgenson Associates and a visiting scholar at Harvard University in Cambridge, Massachusetts, put the range at 2 percent to 4 percent of GDP

[DavidD]

What do you think would happen to China if they lose most of that foreign reserve?

The same that happens to anyone who loses their hard earned savings.

Will carry on in http://forums.bharat-rakshak.com/viewto ... start=3000 where discussion is on going

And what happens to the U.S. when China comes calling for the debt? The same that happens to anyone who owes a ton of money and has to pay it back? Not quite, right? I think your view is a bit too simplistic.

[Lisa]

And what happens to the U.S. when China comes calling for the debt? The same that happens to anyone who owes a ton of money and has to pay it back? Not quite, right? I think your view is a bit too simplistic.

Simplistic, probably yes but practical. How exactly will China come calling
for the debt. I would be grateful if you could go through the modalities so I
could better understand.

If supply and demand was allowed to take their normal course, China's
RMB would have naturally revalued itself and relative to it US Dollar would
have devalued itself. China for purposes of 'competitiveness' manipulated
the system by artificially supporting the Dollars value and then had the
stupidity to buy the very asset they were artificially supporting!

Now they are in a bind, sell the Dollar and devalue the majority of the
assets they have worked so hard for or carry on supporting an asset which
everyone including them knows full well is not really worth its current value.

I have watched this for some 5-7 years and constantly asked myself 'how
can this carry on'. For those better informed then myself, what would have
been the effect of a free market where RMB revalued itself and Dollar
depreciated to compensate for US excesses and uncompetitiveness. I
think US rates would have risen curtailing both easy credit and the
excesses that we recently saw. Who knows probably a simplistic thought.