Bharat Rakshak

The reason is a lot of people never been to China. So their source depends on West media. Why suddenly China auto market become something like this. There are a couple of reasons.

First, is average Chinese people’s income is about the same level. So if one average Chinese can afford the car, it means hundred millions people can afford it, then you see the market explosion. All Chinese have witnessed this before, like for bikes, TV, cell phones etc, anything you named it. On year 0, no body can afford it. On year 4, some one can afford it. Then come to year 8, suddenly all middle income household can afford it, then you have the explosion.

Second, the car price down a lot of. The car price was very expensive before because the car is not supposed to own by average people. When I grow up, I never dreamed I can own a car myself in my lifetime. The same thing happened to everyone. You can asked every Chinese you meet for this question. If he said he did, either he is from upper class family or he is too young. The Honda Accord cost 280K RMB 2005, that is 5 years back. That is about 40K USD at that time. 10 years back, the model is even not available in China. 10 years ago, it all Volkswagen. The Santana model sold around 200K RMB, 25K USD which is 70s model. Well everybody knows this, so everyone hold their cash waiting to the price to go down. At that time, people believed entering WTO will bring down the price. But the change is they bring in the 90s model of Passat and price remains the same.

Thanks to Cheery and Geely and other domestic vendors, they joined the market and sell the so-called copy cat like Raghav ‘s post about China's iClone joked about. It has brought the car price dramatically down. Now Honda accord is at 180K, which is still high about 26K USD. But a middle class can afford it. If you want domestic car, it is even cheaper. A Cheery 4 door, Accord size, sold around 100K RMB, which about 14K USD. A Cheey A3 4 door Civic size, about 60K, lower than 10K USD. Cheery QQ, which also be mentioned in that article, sold at 40K RMB, which is about 6KUSD. I can assure you it is much better than the original model. Thousands of people drive it to Lahsa, and it becomes someting you can boast about. Every Chinese car forum has someone post their QQ journey to Tibet and Xinjiang, Yunnan. A migrant worker with a couple years of experience, can earn around 3K RMB per month for being a factory worker, 5K RMB per month being in construction. So if a migrant working couple can buy QQ with one year’s saving and drove back to their home for spring festival.

The third reason, the government used to collect a lot of tax against cars because it is supposed rich people buying car. Because this recession, government reduce the tax. I think the rebate is 50%.

There is also one reason is if your neighbor brought a car, you tenderly to buy one also. We saw this thing in TVs, cell phones etc. So this is the car’s turn. China can easily sold 20-30 millions car in the 3 to 5 years. If RMB exchange rise, the car price will be go down even further. BTW: as far as I know, there is no bank loan for selling car. People pay it with cash

The high speed rail and car will change China in the foreseeable future.

Katare wrote:At such a high base these kind of growth figures are nothing short of scarily astonishing......

Pre global financial meltdown, No one, absolutely no one forecasted that China would overtake US as largest auto market as early as 2009. The growth is simply amazing, no wonder so many people have hard time believing Chinese numbers. They persistently defy logic and empirical evidence

China passenger car sales up 63 pct in Mar

WLIN,

could you find and post automobile sales data in China for last 5 or 10 years?

It seems China has digested and produced its own maglev train which runs at 500KM/hr speed. Old timers would remember how much china was rediculed in 2002 when it got its first meglav train from Germany. It was compared with Enron/Dabhol in India etc.......

Video-China produces first home-grown maglev train

Shanghai has China's longest metro lines in service

The new line made the city China's first to have more than 420 kilometers of metro routes in service.

Shanghai Metro

Microsoft says committed to China despite Google pull-back

* Microsoft says in the midst of major China R&D push

Stocks | Media

* Shanghai, Beijing R&D centres could house up to 15,000

* Expending efforts to develop Bing search in China

By Chen Min and Melanie Lee

BOAO, China, April 10 (Reuters) - Microsoft (MSFT.O) remains strongly committed to China, even after Google's (GOOG.O) recent decision to shutter the China-based version of its search engine over censorship issues, a top executive said.

The U.S. software giant is planning to spend $500 million this year alone on its fast-growing research and development complex in China, said Zhang Yaqin, corporate vice-president in charge of the company's R&D activities in China.

"Microsoft puts great importance on China's development," Zhang told Reuters on the sidelines of the Boao Forum on southern China's tropical Hainan island. "China has been a sales center for Microsoft from early on, and later became an R&D center. Now it is a strategic center."

He said a Microsoft R&D center in Shanghai would be able to house up to 1,500 people in its first stage, eventually expandable to 7,000. The company was also putting its Asia R&D headquarters in Beijing, he added, at a centre now under construction that will be able to accommodate 8,000 researchers.

Microsoft is active on a number of fronts in China. Apart from software sales and R&D, the company also operates instant messaging and other Web services in China, including a Chinese version of its highly-hyped Bing search engine that it hopes will someday take on Google.

Last month, Google announced that it would close its Google.cn search engine following a hacking attack that it believes originated in the country. The move was also a protest over China's heavy-handed policies that require all website operators to filter results on sensitive topics like Tibetan independence and the banned Falun Gong spiritual movement.

Despite closing its search site, Google still operates its own R&D center in China, and sells advertising there for its Chinese language search sites.

Microsoft launched a beta version of its Bing search engine in China last June, but has yet to pick up any major share from market leaders Google and homegrown search engine Baidu (BIDU.O), which collectively control more than 90 percent of the market.

"Bing's technology and markets have just started to develop," Zhang said. "In China we are already expending a big effort in this. Even though we are still well behind the market leaders, we need to become even more committed and be patient."

"Bing has huge potential, so we are very optimistic about the future," he said.

China has the world's largest Internet market by users, with 384 million at the end of last year, according to government statistics.

The value of China's search market rose 38.8 percent in 2009 to 7.15 billion yuan ($1 billion), on the back of greater Internet penetration, said research firm Analysys International. Baidu had 60.9 percent of the market by revenue, while Google (GOOG.O) had 31.8 percent.

Here are the manufacturing data. They may vary from the sales data. Prior 2008, there are some net export of automobiles. After 08, China becomes Net importer. The rising of import cars is one reason why March trade turn from black to red. China import 170K autos in March. Most of them luxury cars. The numbers are in thousand.

00 Total 2,070 Truck 862.9 Bus &Van 577.9 Car 607
01 Total 2,341.7 Truck 890.1 Bus &Van 720.7 Car 703.6
02 Total 3,251.1 Truck 1,092 Bus &Van 864.7 Car 1092
03 Total 4,443.9 Truck 1,124.4 Bus &Van 946.6 Car 2,070.8
04 Total 5,091.1 Truck 1,115.6 Bus &Van 4817 Car 2,276.3
05 Total 5,404.9 Truck 1,494.6 Bus &Van 1,282 Car 2,770.1
06 Total 7,278.9 Truck 1,797.6 Bus &Van 1,524.1 Car 3,869.4
07 Total 8,888.9 Truck 2,183.1 Bus &Van 1,891.7 Car 4,797.8
08 Total 9,345.5 Truck 2,349.7 Bus &Van 1,779.7 Car 5,037.4
09 Total 13,826.8

Katare wrote:WLIN,

could you find and post automobile sales data in China for last 5 or 10 years?

It seems China has digested and produced its own maglev train which runs at 500KM/hr speed. Old timers would remember how much china was rediculed in 2002 when it got its first meglav train from Germany. It was compared with Enron/Dabhol in India etc.......

Video-China produces first home-grown maglev train

Katare wrote:WLIN,

could you find and post automobile sales data in China for last 5 or 10 years?

It seems China has digested and produced its own maglev train which runs at 500KM/hr speed. Old timers would remember how much china was rediculed in 2002 when it got its first meglav train from Germany. It was compared with Enron/Dabhol in India etc.......

Video-China produces first home-grown maglev train

Well done China!

Vishwamitra wrote:Well done China!

For once I agree, my mistrust of PRC notwithstanding.

Its important, nay critical to break western tech monopolies and cash cows using every buy/borrow/steal trick in the book and to mass-produce cheap clones enough to raise emerging world consumption thereafter. PRC alone can play this game and get away with it.

Watch this ripoff of western IP take off in pharma next, or so I hope only for the sake of many 1000s of poor afreeki patients. Only.

Indi-cheeni collab in the climate talks derailed some ambitious US plans and oiropean pretensions to moral leadership or something like that. No more world structures built and run by the old order I guess was the mantra. Good only.

Jai ho.

/sad to see chargers exit ipl3 ignomonously onlee....

Katare wrote:At such a high base these kind of growth figures are nothing short of scarily astonishing......

Pre global financial meltdown, No one, absolutely no one forecasted that China would overtake US as largest auto market as early as 2009. The growth is simply amazing, no wonder so many people have hard time believing Chinese numbers. They persistently defy logic and empirical evidence

Empirical evidence? Chinese numbers?

GM reported earlier that its sales in China jumped 68 percent in March over a year earlier to a new monthly record of 230,048 vehicles. First quarter sales surged 71 percent to 623,546 units.

We might not know for sure how much local governments are borrowing/wasting on local construction... but come on. Much of the Chinese economy in this globalized era is extremely transparent. Foreign auto manufacturers report sales numbers from the Chinese market. Foreign iron ore exporters report Chinese import numbers.

Only the emotionally invested can manage to deny these obvious trends.

heech,

You misunderstood my post. I know that GM, Ford, Honda, Toyota etc have announced growth figures between 50 and 100% for March so there is no scope/question for fudging the data. Empirical evidence in sense in any other market other than China I haven't seen such growth in scale (not talking about growth rates). Last year Chinese have manufactured 4.4MM more cars/trucks/buses than a year before that. That's almost 2x of entire Indian Auto industry or what China produced in 2003. They are predicting sales of 17MM in 2010 that’s additional 4MM vehicles.

It's unbelievable that so many additional factories, trained manpower, capital, technical manpower, raw material, transportation, energy, management etc can be successfully assembled in a recession year!!! In most other countries factories would hit capacity constraints and huge waitlists will be created for consumers.

My post was more of a compliment than anything else!

wlin wrote:Here are the manufacturing data. They may vary from the sales data. Prior 2008, there are some net export of automobiles. After 08, China becomes Net importer. The rising of import cars is one reason why March trade turn from black to red. China import 170K autos in March. Most of them luxury cars. The numbers are in thousand.

00 Total 2,070 Truck 862.9 Bus &Van 577.9 Car 607
01 Total 2,341.7 Truck 890.1 Bus &Van 720.7 Car 703.6
02 Total 3,251.1 Truck 1,092 Bus &Van 864.7 Car 1092
03 Total 4,443.9 Truck 1,124.4 Bus &Van 946.6 Car 2,070.8
04 Total 5,091.1 Truck 1,115.6 Bus &Van 4817 Car 2,276.3
05 Total 5,404.9 Truck 1,494.6 Bus &Van 1,282 Car 2,770.1
06 Total 7,278.9 Truck 1,797.6 Bus &Van 1,524.1 Car 3,869.4
07 Total 8,888.9 Truck 2,183.1 Bus &Van 1,891.7 Car 4,797.8
08 Total 9,345.5 Truck 2,349.7 Bus &Van 1,779.7 Car 5,037.4
09 Total 13,826.8

Katare wrote:WLIN,

could you find and post automobile sales data in China for last 5 or 10 years?

It seems China has digested and produced its own maglev train which runs at 500KM/hr speed. Old timers would remember how much china was rediculed in 2002 when it got its first meglav train from Germany. It was compared with Enron/Dabhol in India etc.......

Video-China produces first home-grown maglev train

Thanks wlin!

Watched out this summer. The oil price may be up. Because of traffic jam and relatively good public transportation few people drive for daily commute. Shanghai Metro got 400 kilos but still very crowded. The planner made a mistake when design the metro station. Though it was long enough at that time but too short now. My friend in Beijing used to drive to work but now with 3 million cars in Beijing it is almost like suicide when driving in commute. So maybe one lesson for India is it is cheaper to build big. With the size of population, the design capacity will met very quickly.

But Chinese do drive out for vocation. The peak will be May 1st and Oct 1st holiday season and expect a busy summer. If US come back, it is very easy to pass 100 dollar a barrel.

Katare wrote:heech,

You misunderstood my post. I know that GM, Ford, Honda, Toyota etc have announced growth figures between 50 and 100% for March so there is no scope/question for fudging the data. Empirical evidence in sense in any other market other than China I haven't seen such growth in scale (not talking about growth rates). Last year Chinese have manufactured 4.4MM more cars/trucks/buses than a year before that. That's almost 2x of entire Indian Auto industry or what China produced in 2003. They are predicting sales of 17MM in 2010 that’s additional 4MM vehicles.

It's unbelievable that so many additional factories, trained manpower, capital, technical manpower, raw material, transportation, energy, management etc can be successfully assembled in a recession year!!! In most other countries factories would hit capacity constraints and huge waitlists will be created for consumers.

My post was more of a compliment than anything else!

So maybe one lesson for India is it is cheaper to build big. With the size of population, the design capacity will met very quickly.

That I totally agree with. India needs to build big. Often too many times Indian government agencies or pvt companies skimp on the size and later rue their decisions to go small. With its exploding population, everything has to be big to accommodate the demand and population crush.

Understood, Katare.

I personally think the driving situation in China is horrible, horrible, horrible. They are of course improving the roads as well, but I think it will ultimately be a losing battle. The "quality" of driving will just continue to drop. Mass transit is the only solution. I am still ahead of the time, but really think my preference will be to buy homes in "commuter towns" alongside the high-speed rails... instead of inside city centers.

The other major problem is parking. Still only a tiny percentage of the population are driving on a daily basis, but it's already very difficult. It will eventually become an absolute nightmare.

China Is Eager to Bring High-Speed Rail Expertise to the U.S.

http://www.nytimes.com/2010/04/08/busin ... =cse&scp=1

BEIJING — Nearly 150 years after American railroads brought in thousands of Chinese laborers to build rail lines across the West, China is poised once again to play a role in American rail construction. But this time, it would be an entirely different role: supplying the technology, equipment and engineers to build high-speed rail lines.

wrdos wrote:China Is Eager to Bring High-Speed Rail Expertise to the U.S.

http://www.nytimes.com/2010/04/08/busin ... =cse&scp=1

BEIJING — Nearly 150 years after American railroads brought in thousands of Chinese laborers to build rail lines across the West, China is poised once again to play a role in American rail construction. But this time, it would be an entirely different role: supplying the technology, equipment and engineers to build high-speed rail lines.

This will be serious Ech and Dee loss, Unkil will never allow it.

This kinda reads upside down..........Its usually a western private company that signs a framework agreement with a ministry in developing country for licensing its technology where developing county negotiates for maximum local content and maximum financing.

The railways ministry has concluded a framework agreement to license its technology to G.E., which is a world leader in diesel locomotives but has little experience with the electric locomotives needed for high speeds.

According to G.E., the agreement calls for at least 80 percent of the components of any locomotives and system control gear to come from American suppliers, and labor-intensive final assembly would be done in the United States for the American market. China would license its technology and supply engineers as well as up to 20 percent of the components.

China signs deals to buy cotton from India

http://economictimes.indiatimes.com/new ... 801662.cms

China, the world's largest cotton importer, has signed deals to import 100,000 tonnes of cotton as well as cottonseed and cotton yarn from India this year.

The two countries also agreed to look into the establishment of joint venture cotton mills and sales agents in both countries to help boost Indian exports to China, according to the report.

China, the world's top cotton consumer, imported 265,460 tonnes from India in the first two months of the year, a rise of 1,694 percent from a year earlier, replacing the United States as the largest exporter to China.

Frankly speaking, I do not see this happening. I do not think US will allow Chinese labor into US. Even with Chinese low labor cost, the cost of Chinese high speed rail costs more than 100 million RMB per kilometer. That is about 20M USD per kilometer. If consider the land cost and high labor cost in US, it does not make any economic sense for California to build it. It is not even the salary wise, it is productivity. It would take US one or two year to finish one short ramp. So it can only be build with Chinese labor to make some economic sense. But it is impossible in this greatest socialist country.

Katare wrote:This kinda reads upside down..........Its usually a western private company that signs a framework agreement with a ministry in developing country for licensing its technology where developing county negotiates for maximum local content and maximum financing.

The railways ministry has concluded a framework agreement to license its technology to G.E., which is a world leader in diesel locomotives but has little experience with the electric locomotives needed for high speeds.

According to G.E., the agreement calls for at least 80 percent of the components of any locomotives and system control gear to come from American suppliers, and labor-intensive final assembly would be done in the United States for the American market. China would license its technology and supply engineers as well as up to 20 percent of the components.

Gurus,

Does it mean that PRC developed the industrial infra to support majority of world's consumption and so is well set to continue this trend (of being world's factory)?. It may not make sense for the world economy to setup industrial capacity in other places as majority of capital is already sunk in PRC, right?

How does it impact India's plans to evolve into an industrial economy?

http://www.businessweek.com/magazine/co ... 646611.htm

Short-Seller Jim Chanos: Red Flag Over China

The perception seems to be that China will grow out of this situation. But the problem with that argument is the real estate being built is not for the masses. This is not affordable housing for the middle class. This is high-end condos in major urban areas and high-end office buildings. Just to give you an idea, right now construction costs in China are starting to hit $100 to $150 per square foot in some cities. That doesn't sound like a lot by Western standards, but it means a condominium basically presented to you with no floors, no walls, no appliances costs the average Chinese two-income couple $100,000 to $150,000 U.S. That Chinese two-income couple in their 30s probably makes combined $7,000 or $8,000 a year. You do the math. Even if they were making $10,000 to $15,000 a year, they couldn't carry a $150,000 condo. This is very similar to someone making $40,000 in the U.S. at the height of our bubble buying a $600,000 or $800,000 house. We know how that ended.

http://www.chinadaily.com.cn/metro/2010 ... 715734.htm

Poor construction quality keeps foreign property buyers away

I'm not trying to criticize, but it's just where China is at the moment. I think in the future people in China will become more discerning about this.

Chinese contractors are not used to building high-quality stuff, because there's no demand for it. Things go up extremely quickly, but the quality is often not good.

I won't buy an apartment in China, because I've looked at the construction quality here.

Many buildings in Beijing are built with the cheapest materials available, which tend to degrade quickly. This is a worryingly common phenomenon. There are many buildings here that appear as if they are 10 or 15 years old, but are really just five years old. That's a little bit sad.

Theo_Fidel wrote:http://www.businessweek.com/magazine/co ... 646611.htm

Short-Seller Jim Chanos: Red Flag Over China

This is what our resident gurus have been saying

They've already begun to take some steps. We're seeing jawboning—attempts to talk the market down. That's not having much of an effect according to the latest prices. They've also begun to take some steps such as requiring higher down payments for second homes. But the fact is the game has to keep going. They're on this treadmill to hell because 50% to 60% of GDP is construction. And if they stop construction, you'll see GDP growth go negative quickly. That's not going to happen because in China, people are rewarded at almost every level of government for making their economic growth numbers. The easiest way to do this: put up another building. So they're really hooked on this sort of heroin of real estate development

Beijing Is Key to Creating More U.S. Jobs

How China's unfair currency policies are exporting unemployment all over the world -- and why baby steps won't solve the problem.

http://www.foreignpolicy.com/articles/2 ... job_killer

China Housing Not a Bubble
http://seekingalpha.com/article/198249- ... t-a-bubble

China’s housing market is hot, but it’s not a bubble on the verge of bursting, as many contend.

Katare wrote:China’s economy logs 11.9% growth in Q1

Katare, weren't you the one who called me "vina the bear" , when I was singing like a Cassandra when the sensex shot up to 21K and the boosters were going raah. raah.. for Sensex at 25K and I said, buy Goog over L&T ? But then ol' vina was proven right , wasn't he.. After all, Jo Jeeta, Woh Sikandar !.

Point is, I am sort of bearish on the Chinese over the next 5 years. It is a powder keg waiting to blow up. Just like the seeds of the mortgage /structured finance meltdown were inherent, so I think are the seeds of the Chinese.

The problem is that Govt's are inherently poor allocators of capital. It can safely be said, that the bulk of the "stimulus" ($600b was it) that the Chinese have spent must have been singularly wasted!

Take for instance the high speed train service. We have glowing posts by Chinese boosters here who sing hosannas over it and how it is running at 150% (Pakis would claim 400% capacity) and offers to build it out in California and how China will have the "largest, greatest and most sophisticated high speed network by 2015" .Let me point you to this reality check.

China's Growth Surges

In all that rah rah stuff, hidden away in the bottom is these two paragraphs.

Regulators have renewed efforts to assess risks from loans and each day brings fresh reports of projects found to be unprofitable or ill-conceived.

A high-speed rail service from Beijing to southeastern China's Fujian province was shut down after just two months because passengers shunned it in favor of cheaper air fares.

Oh well, if misallocations happen on that scale, the blow up will even harder. The Chinese of course will raid the savings of their ordinary citizens, but when they do that, there go any hope of China turning into a consumer led economy and letting go of exports as a growth driver.

In 5 years from now when the dust settles and people look back, I think people will say that one of triggers people will recognize is the massive waste in these state directed projects.

The only hope the Chinese have is to think exports will fire again in all cylinders and that they export their way out of trouble like the could do earlier.

Problem is , you can export your way out of trouble when you are the 10 or 20th largest economy, but cant when you are the 2nd largest.

JMT and all the rest of the usual safe harbors. Jai Ho. err. Jai Hu.

Although I am new to the forum, but it is so easy to find out who is the CBO (Chief Bearish Officer) against China on this forum. I would blame it to the media. Noramlly when they report some postive thing about China they will use some negative stuff as the “balancer”. It is amusing for you to spot this last pargragh. But it is more amusing for the reporter to choose this news as the “balancer” because with 1.3 Billion people, if you want report negative thing there are plenty of them. Why choose this news? The inconvinent thing for this news is if you want to stop high speed rail service, you need to start it first. And currernly there is no high speed rail service from Beijing to Fuzhou. Normally the rail ministry reagrds the service with average operating speed above 250 kilometere per hour as high speed rail service. For mighty planning committee, there is no high speed rail service in China currently. The only high speed railway is Beijing/Shanghai line and still in construction. For all others, they called them Dedicated Passenger line. Anyway one tip for telling which line service is high speed, every high speed rail service started with G. Every EMU service started with D, every direct express service started with Z.

I guess what the news talk about is Rail ministry stopped the service of D371/D372 train from Beijing to Fuzhou. But it is not high speed rail, it is Electric multiple unit or EMU sleeper service. It had 13 soft sleeper carriage and two second class sitting carriage. The reason to stop it is simple, the price/benefit is not good. If compare to airline, the price is about the same but much longer travel time for this sleeper train. Compare to other train, the price is much higher and only 3 hours faster than the old train service. Here is the fact:

The price for D371/D372 is RMB 1055, 1185 for soft sleeper. It took 16 hours from Beijing to Fuzhou.
The price for old train service Z59/60, the price is about 600-700 RMB for soft sleeper. The travel time is 19 hours from Beijing to Fuzhou. The compare result is you can save 3 hours by spending 400 RMB more.

The price for airline is about the same and the travel is about 3 hours. The compare result is airline save more that 10 hours travel time with no more money spent. And there is one flight from Beijing to Fuzhou every 15-20 minutes.

So if it were you, which one you pick. If you are busy go by airline, if you have time, take the softsleeper of Z59/Z60. The choice may not that difficult to make. The rail ministry wanted to see if people would prefer to travel 16 hours with sleeper or 5 or 6 hours totally by airline. The test failed and airline wins. No big deal of it.

Especially when you consider that China opened so many EMU service on her existing rail and you have so many high speed rails building currently. So the demand for vehicle is huge. Rail ministry stopped this service and transfer the vehicles to Beijing/Shanghai line which is very reasonable to me.

The current high speed rail from Beijing to Fuzhou is still in construction.and will be completed in 2013. The travel time would be cut to 7 hours from D371’s 16 hours. So the advantage would be huge when the highspeed rail compelte. I would expect a lot of peole would take high speed rail, basically you can leave Fuzhou at 11pm, get a nice sleep in travel and wake up in Beijing 6am next day. Not bad to me.

vina wrote:

Katare wrote:China’s economy logs 11.9% growth in Q1

Katare, weren't you the one who called me "vina the bear" , when I was singing like a Cassandra when the sensex shot up to 21K and the boosters were going raah. raah.. for Sensex at 25K and I said, buy Goog over L&T ? But then ol' vina was proven right , wasn't he.. After all, Jo Jeeta, Woh Sikandar !.

Point is, I am sort of bearish on the Chinese over the next 5 years. It is a powder keg waiting to blow up. Just like the seeds of the mortgage /structured finance meltdown were inherent, so I think are the seeds of the Chinese.

The problem is that Govt's are inherently poor allocators of capital. It can safely be said, that the bulk of the "stimulus" ($600b was it) that the Chinese have spent must have been singularly wasted!

Take for instance the high speed train service. We have glowing posts by Chinese boosters here who sing hosannas over it and how it is running at 150% (Pakis would claim 400% capacity) and offers to build it out in California and how China will have the "largest, greatest and most sophisticated high speed network by 2015" .Let me point you to this reality check.

China's Growth Surges

In all that rah rah stuff, hidden away in the bottom is these two paragraphs.

Regulators have renewed efforts to assess risks from loans and each day brings fresh reports of projects found to be unprofitable or ill-conceived.

A high-speed rail service from Beijing to southeastern China's Fujian province was shut down after just two months because passengers shunned it in favor of cheaper air fares.

Oh well, if misallocations happen on that scale, the blow up will even harder. The Chinese of course will raid the savings of their ordinary citizens, but when they do that, there go any hope of China turning into a consumer led economy and letting go of exports as a growth driver.

In 5 years from now when the dust settles and people look back, I think people will say that one of triggers people will recognize is the massive waste in these state directed projects.

The only hope the Chinese have is to think exports will fire again in all cylinders and that they export their way out of trouble like the could do earlier.

Problem is , you can export your way out of trouble when you are the 10 or 20th largest economy, but cant when you are the 2nd largest.

JMT and all the rest of the usual safe harbors. Jai Ho. err. Jai Hu.

wlin wrote:Although I am new to the forum, but it is so easy to find out who is the CBO (Chief Bearish Officer) against China on this forum.

Maybe the entire forum is bearish on Chinese economy

The market will certainly correct, but to say that it will be an extended downturn is probably excessive.

I'm bullish on China for the next 10-15 years.

Maybe instead of raising interest rates they can appreciate their currency to have a similar effect on cooling inflation.. I think it effectively works like a subsidy and thus there might be some "dead-weight loss" due to it, and will hurt them in the long run.

Acharya wrote:Maybe the entire forum is bearish on Chinese economy

Shh! Don't give away our secret.

Honestly the Chinese system is so far out of our mainstream that you can never expect us to cheer it on.

We hope it will end and soon, for the good of both the Chinese themselves and the world.

Beijing Is Key to Creating More U.S. Jobs

Wouldn't wages in the US have to fall literally off a cliff in order for manufacturing jobs in China to shift back to that country?

Sadly this is what I think the federal reserve crooks have in mind - destroying the standard of living and devaluing currency as a quick fix to the politically dangerous unemployment situation.

The 'China ate my jobs' fallacy

http://shadow.foreignpolicy.com/posts/2 ... bs_fallacy

Neshant wrote:

Beijing Is Key to Creating More U.S. Jobs

Wouldn't wages in the US have to fall literally off a cliff in order for manufacturing jobs in China to shift back to that country?

Not only wages, you'd have to make them work like this in order to be compete with your competition who is abusing human rights of the poor Chinese while turning profit.


Link to original article: We are like prisoners... We do not have a life, only work.


And you'd have to employ little children, take away their play time..

http://www.youtube.com/watch?v=WfWjQZVNd4o

We Need China's What?

Why do we need China

There is a hue and cry about Chinese use of child labour. I have not seen how bad their working conditions are. But, I have seen really bad working conditions in India, where children (aged 10~15) are exploited. It is so sad seeing such conditions. If you have time and contacts please visit any of the SEZ and Industrial develoment area across many states like Karnataka, Maharashtra, Gujarat, Andhra, Tamilnadu. I personally seen child labor in all these states. It is so sad. But that's how manufacturing is done in small industries which supply to big companies, where due to trade unions or due to visibility I did not see exploitation.

Thank you sri sivabala. Your bringing in Indian child labor into a PRC discussion thread is so brilliant, so tactical, so far-sighted, so compassionately stirring and so honest and noble that it easily ranks as among the most valuable contributions around here.

Kindly spill more light on how this evil menace in Yindia can be stopped. Take it to Nukkad on the GD forum, pls. Thank you. Thank you Sri sri sivabala.

sivabala wrote:There is a hue and cry about Chinese use of child labour. I have not seen how bad their working conditions are. But, I have seen really bad working conditions in India, where children (aged 10~15) are exploited. It is so sad seeing such conditions. If you have time and contacts please visit any of the SEZ and Industrial develoment area across many states like Karnataka, Maharashtra, Gujarat, Andhra, Tamilnadu. I personally seen child labor in all these states. It is so sad. But that's how manufacturing is done in small industries which supply to big companies, where due to trade unions or due to visibility I did not see exploitation.

No doubt, child labour will probably be a reality for a long time. I don't think it is bad in itself, but there has to be some way of balancing that with an education.

^^^

Oh come on, there's no reason to tolerate this. Threaten the concerned ministers with jail time and this will stop in no time.

I don't know, I think child labor is a consequence of poverty. I would imagine if the children had means to go to school, coupled with parents who valued education, they would have. I don't know if this is something that can/should be regulated out of existence.

It has been regulated out of existence in much of the civilised world. The state must provide education and whoever gets in the way, whether state actors or the parents have to be punished. The cycle of uneducated parents leading to uneducated children has to be broken somewhere, and this is the only way to do it.