PRC Economy and Industry: News and Discussions

[Satya_anveshi]

^^+1

[Theo_Fidel]

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

'Tea bubble' brews in China

Prices for the Dahongpao tea, which is only grown in a small mountainous area of east coast province of Fujian, have increased tenfold since the middle of last year with online tea traders selling a single kilo for more than £1,000, the country's state media has reported.

"I never thought it would get so expensive," a tea producer, Wu Zongyan said. "It's one price one day, another price another day. Between when we pick the leaves and when it's ready to sell, the price has already gone up."

In the past year auction houses in China and Hong Kong have all reported fetching record prices for everything from Imperial artwork to French claret and, most recently, Communist-era stamps as speculators search for an outlet for their money.

[abhischekcc]

I don't understand why Warren Buffet has still not 'discovered' India.

No Indian member in NWO yet

Indra Nooyi is a member of the most famous seret society in NWO - Bilderberg Conferece.

I wonder what kind of mind altering drugs Pepsi pushes in its foods.

I guess any person who drinks pepsi and other such sh!t will devolve into apes by 2012.

[Shankas]

Happy to see this and sad to see the US slide...

Didn't get what you meant !!!

Sorry was not clear...
Happy to see US starting to manufacture things.
Sad to see wages declining in US

[svinayak]

Indra Nooyi is a member of the most famous seret society in NWO - Bilderberg Conferece.

Food business is a global Bilderberg control business

[Theo_Fidel]

Sorry was not clear...
Happy to see US starting to manufacture things.
Sad to see wages declining in US

US is still the worlds largest manufacturer.
Has total dollar value twice the size of Panda.

An average US worker is 12-15 times as productive
as a Chinese worker in dollar terms.

[Shankas]

Sorry was not clear...
Happy to see US starting to manufacture things.
Sad to see wages declining in US

US is still the worlds largest manufacturer.
Has total dollar value twice the size of Panda.

An average US worker is 12-15 times as productive
as a Chinese worker in dollar terms.

Yes I know, but when you revert back to making toys and buckets, its a sign of things to come. I do not subscribe to the theory the US is finished. I believe at the end of this century it will still be the top dog. It would be interesting to see who all the pack is made of.

[wrdos]

US is still the worlds largest manufacturer.
Has total dollar value twice the size of Panda.

An average US worker is 12-15 times as productive
as a Chinese worker in dollar terms.

In 2009, the US manufacturing sector was US$1.717 trillion, and the Chinese was US$1.608 trillion. And it is widely predicted that the Chinese manufacturing sector will surpass the US, right in this year.

Source: FT times

I personally believe the Chinese GDP will surpass the US between 2015 and 2020.

It will be not very far from now, let's wait and see.

[svinayak]

According to economic historian Angus Maddison in his book The World Economy: A Millennial Perspective, India had the world's largest economy from the first to eleventh century, and in the eighteenth century, with a (32.9%) share of world GDP in the first century to (28.9%) in 1000 AD, and in 1700 AD with (24.4%).so India was superpower along with china. in 15th-17th century Indias economic share was 24.4% where MIng dynastys was 25%,so why they can be superpower together now?

[shyam]

Q: Why did India's GDP share start going down from 1000AD onwards?
A: Brutal Islamic invasions

Q: How did it start rising in 1700 AD?
A: Last Islamic ruler of India, Aurangazeb, died in 1707. Indics started taking control of India again.

[naren]

"super power" is somewhat poorly defined in Indian context. Not very relevant to us. When I hear "super power", what comes to mind is an aggressive state, which controls foreign lands and resources and has its way with everyone. Something which we will never ever do. May be India could be "super soft power" and "defensive super power", but not the British empire kind of "super power". Historically, China wasn't a "super power" either.

JMHT

[svinayak]

Meanwhile, the country from which our Lefties, Liberals and Maoists get inspiration, has moved with spectacular success towards a market economy. When I twittered about this, someone twittered back that perhaps we should lease India to the Chinese for the next 200 years. It might come to that if we do not buck up.

Everybody knows buddhism was from india.we have a famous TV series known by chinese aged 4-100.its about a monk going to indian for the purpose of learning buddhism.india has long civilization that indicates the high intelligence of indian people.thats why indians are very sucessful outside india.the domestic economy has been booming fast recently.obviously,indians will come back for sure in the near future.its not moving forward.its about coming back

we chinese have very strong communities and we are helpful to each other.there are countless chinese towns everywhere .indians people cannot come together because they hate each other.chinese are very smart and nice while indians are very smart but dishonest.

[naren]

Whoa. Who stole Acharya jis ID ?

[shynee]

Rampant Fraud Threat to China’s Brisk Ascent - Nytimes

Currency War Threats Escalating

[wig]

http://www.bbc.co.uk/news/world-asia-pacific-11548789

China's leaders meet to plan economic future

China's ruling Communist Party is meeting in Beijing to draw up its next five-year plan for the economy.
The agenda is secret but analysts say that instead of seeking a high rate of economic growth, China's leaders want to close the gap between rich and poor and between coastal and inland areas.
Analysts will also be watching for signs of who will be China's next leader - due to take office in 2012. State media said President Hu Jintao and Mr Wen are expected to attend the gathering "to discuss proposals for the nation's next five-year development plan" from 2011 to 2015.
China has seen remarkable economic growth in recent years - largely driven by exports.
The BBC's Martin Patience in Beijing says China wants to reduce the gap between the rich and the poor, which has grown in order to prevent strikes and disputes over pay, which have led to social unrest in the past.
Any instability worries the party because it challenges their authority across the country, our correspondent says.
Analysts will also be watching for signs that Vice-President Xi Jinping and Vice-Premier Li Keqiang - the presumed successors to Mr Hu and Mr Wen - will move closer to power in a reshuffle.

[Theo_Fidel]

Anyone interested should see this presentation. Opened my eyes to how insane Panda's situation is.

http://dl.dropbox.com/u/6010227/Webshar ... nelson.pdf

Some notes..

- South China Mall worlds largest has occupancy rate of 1%. That is correct 1%. 7 million sqft of space.
- There is 30 Billion sqft of real estate coming online in China every 2-3 years. Enough to give every man woman and child a cubicle space.
- 200 million workers are migrants who can't live in cities they build. Talk about a scary bunch of revolutionaries.
- China definition of urban is cities over 1500 person/sqkm density. By this definition Dallas is a village. People are NOT going to be moving to 'cities'.

Also read the transcript below. Very interesting read. These are people who actually manage money.

http://www.businessinsider.com/china-gr ... ke-2010-10

Today the conventional wisdom is that somehow the Chinese economy is better managed than its competitors, very similar to how people viewed Japan in the 1970s and 1980s. Back then people were absolutely convinced that Japan was the superior country with superior policies and that its economy was unstoppable. We all know how that ended.

So, let’s start there. Is China’s system better than everyone else’s? Is it really possible the Chinese economy can keep steamrolling along?

VK: A few months ago, I watched a movie about Ayn Rand and it talked about how Americans in the 1930s looked at the Soviet Union’s flavor of managed economy as being superior to the American version of capitalism. At the time America was just coming out of the Great Depression, so that view made a lot of sense. So in the short run, and especially after the ugly side of creative destruction has paid us a visit, the grass of managed economy may look greener.

So when we look at China, the conventional wisdom says that the government is very, very smart, and therefore they can do a very good job in steering the economy in the right way. Chinese government may have the best intentions, its leaders may have IQs of 250 each on a bad day, but it is impossible to centrally manage an economy of China’s size.

I am a big believer that in the boxing match between a visible and an invisible hand, though the invisible hand may lose a few rounds, it will win the match every time. Last century we had the most amazing economic experiment take place when after World War II, Germany was split into two countries with different economic and political systems. But they were the same people, with the same language and culture, separated by a wall. We know how that story ended.

Of course, for a time, having government control over the levers of the economy can have advantages. For example, by taking prompt action, the Chinese government was able to pull the economy out of the recession remarkably fast, basically by fire-housing the stimulus package that was equivalent to 12% GDP. That’s the advantage. The only problem is that these kinds of short-term advantages come with long-term, painful consequences.

For example, when you have a huge government presence in the economy, you also have a huge bureaucracy, and bureaucracy brings corruption. This is one of the reasons why China is rated so poorly on Transparency International’s annual corruption rating. Corruption breeds misallocation of capital, because the capital flows not to the best use, but it basically flows to whatever the political connection or whatever the bribe is directed to.

In addition, when you have a government-managed economy, it creates excesses. China has huge excesses in the industrial sector, as well as in commercial and residential real estate. We see plenty of evidence of these excesses, but they are likely to be much greater than we can measure today as they are covered up by robust economic growth. The true magnitude of these excesses will come to the surface once the economy slows down.

TCR: In essence, you’ve got a relatively small group of individuals who are making big decisions about China’s economy and where production should be, in what sectors, etc. If history is any guide, that really can’t last, yet many people seem to think it can. That said, China’s economy has certainly done remarkably well in the global economic crisis. In fact, according to their government, their GDP is almost back to where it was pre-crash. Why?

VK: In the same way that everyone in the United States decided they “must” own a house, this belief was reinforced by continuously rising house prices. You can see how big a problem this became in big cities such as Beijing and Shanghai where the affordability ratio is horrible, so the property-value-to-income ratio in Beijing is pushing 15. In Shanghai it is over 12. If you look at the national average, it is over eight times.

TCR: Can you explain that ratio to our readers?

VK: You get the ratio by taking the property value and dividing it by annual disposable income.

Basically, if you spent all your money, after you paid your taxes, just to pay off the mortgage, it would take you 14 years – which means you didn’t pay for food, electricity, etc.

This ratio is important because it helps put the scale of the Chinese real estate bubble in its proper context. In Tokyo, at the peak of the massive Japanese bubble, the ratio stood at nine times. In Beijing it’s already 14 times. In Shanghai it’s over 12 times. The national average for China is pushing 8.2 times right now. So housing affordability is very, very low, and the housing prices are extremely high.

Here is another interesting piece of data: property investment in China in 2009 was 10% of GDP, up from 8% in 2007. In Japan, at the peak of its bubble, it did not exceed 9%; in the U.S. it never exceeded 6%.

As you can tell from my accent, I was born in Russia and spent half of my life in Soviet Russia. From my direct experience, the Russian propaganda machine was very, very powerful, and so many people believed how smart the leaders were and that they could do nothing wrong.

China is not that much different from Russia in that respect. Due to the government’s control of the media, the average citizen has been brainwashed into thinking of the government with respect. They has led to an unconditional belief that the Chinese government walks on water, that the laws of economics are somehow suspended when they touch things (except they also did a fine job convincing not just their own citizens but the West as well). Sure, they have a greater control of the economy, but at the long-term cost we talked about earlier. That’s point number one.

[Singha]

http://www.nytimes.com/2010/10/20/busin ... ghost.html

some kinda ghost town in inner mongolia with spanish villas...I suppose those who took huge loans to buy such properties will need very robust incomes for 20 yrs to pay it all off.

[Theo_Fidel]

..I suppose those who took huge loans to buy such properties will need very robust incomes for 20 yrs to pay it all off.

Ah! don't you know property prices go up only. Get with the program comrade.

[ArmenT]

Looks like the Chinese are beginning to throw their weight around a bit.
China Halts Shipments to U.S. of Tech-Crucial Minerals

This one seems to be in response to US trade disputes with China.

[Hari Seldon]

^^^ I think its important to egg cheena on. Not that what we think or say has any real influence but hey, let's do our bit.

A resurgent cheena is taking on the hated imperialist exploiters in defense of us hapless turd worlders only. Go, cheena, go!

Meanwhile, the more massa and its minions get skewered, the better for 'world realism' and the limits of bestern influence. Good.

[naren]

^^^ A picture is worth thousand words.



In case you didnt get it, its the new meme - "watch the fires burning across the river"

[ashi]

China's economy cools in third quarter
http://money.cnn.com/2010/10/20/news/ec ... n&hpt=Sbin

NEW YORK (CNNMoney.com) -- China's economic growth slowed for the second quarter in a row, cooling fears that its economy is growing at an unsustainable pace.

On the other hand, economists have worried lately that tighter policies could result in a so-called hard landing, bringing the Chinese economy to a halt.

But Thursday's report shows the Chinese economy is still expanding rapidly.

While annual growth near 10% is not unusual for China, it's still far faster than the 7.5% rate the Chinese government aimed for when it set its 5-year goal back in 2006, said Damien Ma, China analyst with the Eurasia Group.

"China has consistently overshot its plan for the past decade, so it's no surprise there are strong voices advocating for slower growth," he said.

[Prem]

http://www.marketwatch.com/story/china- ... 2010-10-22

China launches Google-like mapping service

HONG KONG (MarketWatch) -- China's government unveiled a free online mapping service, filling the void in the absence of offerings from Google Inc. /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 611.96, -0.03, -0.01%) , as the U.S. Internet giant has yet to apply for a license to operate its service in China, according to a report Friday by the state-run China Daily. The State Bureau of Surveying and Mapping officially unveiled its service, known as Map World, on Thursday, describing it as providing "comprehensive geological data", the report cited government spokesman as saying. The China service which can be accessed at www.tianditu.cn or www.chinaonmap.cn

[DavidD]

Good article on what the Chinese thinks of some of the world's major economies:

http://seekingalpha.com/article/228352- ... s-thinking

Insofar as Japan was concerned, the evaluation said — literally — “We approve.” They considered Japanese sovereign debt risk “negligible in the short-term,” and generally lauded the Japanese government’s efforts to prop up internal demand; their only concern was that these efforts not be withdrawn too quickly, in case such a hasty withdrawal kills what they see as a nascent Japanese recovery.

As to the European Union, the evaluation makes it clear how nervous the Chinese were at the ad hoc approach Europe used when dealing with the Greek crisis. They want the EU to strengthen its Stability and Growth Pact so as to “prevent and resolve fiscal imbalances.” At the same time, they see an “urgent need” to set up a whole host of mechanisms to assure “financial stability” — id est, prevent another Greece, or at least to have the mechanisms and structure in place to efficiently handle another Greece.

Regarding the United States, the Big Kahuna: The Chinese are very worried — but they also view America with a bit of contempt.

In their very first sentence, the Chinese state that US fiscal deficit reduction is based on “over-optimistic and unrealistic growth assumptions” — that’s diplomat-speak for “Are you outta your f***ing mind?” The second sentence tears apart US GDP growth projections for 2010 and 2011, both the US government’s, and that of leading US economists.

As to themselves, the Chinese’s self-evaluation is rather interesting: First of all, they see their own easy money policy as having been a great thing. They consider it to have been the reason for sustained rapid growth during the last two-three years. Unlike Jim Chanos’ very smart evaluation — he thinks they are in a bubble, overheating and heading for a fall — the Chinese see their easy money policy as having been essential to keeping their economy going. They have no intention of tightening money anytime soon.

[RamaT]

Good view on the steps the Chinese can take to unwind their asset bubble and what each options consequences will be.

As the table implies, the discussion about the timing and sequencing of the necessary adjustment policies depends heavily on political considerations and on the relative ability of the expected losers and winners to influence the outcome. That is why I always argue that this is a political discussion more than an economic discussion.

http://mpettis.com/2010/09/the-politics ... djustment/

[Theo_Fidel]

Good view on the steps the Chinese can take to unwind their asset bubble and what each options consequences will be.

As the table implies, the discussion about the timing and sequencing of the necessary adjustment policies depends heavily on political considerations and on the relative ability of the expected losers and winners to influence the outcome. That is why I always argue that this is a political discussion more than an economic discussion.

http://mpettis.com/2010/09/the-politics ... djustment/

Every one of those prescriptions would cause GDP growth to slow down. Simply unacceptable to the 9 wise mandarins with IQ's of 250 who lead Panda flawlessly.

As far as the "What China is thinking" article this is merely a policy paper. The real zinger is the Chanos presentation on the Panda economy.

http://www.youtube.com/watch?v=99HNFCn5RP8

Worth a full listen for those interested.

This is simply a input led growth. There is no more efficient economy here. His estimation is that all the office space China needs for essentially the next hundred years has been built.

The odd thing is Chanos is not really shorting China. He is shorting all the economies dependent on it. Namely Australia, Brazil, Canada even Russia. Note the one country not on that list, India. When China falls he predicts real armageddon in these countries.

[abhischekcc]

Australia would be the worst effected in a Chinese fall, they would then come to us with a begging bowl in hand.

Russia has an alternative market - EU, although its negotiating position vis a vis the latter would be weakened, which is not bad or good for India.

Brazil would:
1. fall into a stupor
2. experience civil disturbance, as there would be less money to distribute
3. become dependant on US again.


All in all, a Chinese fall would be great for status quo powers - India, US, and EU (although Germany would probably be shafted).

[RamaT]

The Chanos presentation is from January.. I've watched it, everyone's watched it.. that doesn't change the fact that the Chinese have managed it, so far.. the possibility of a 'soft landing' increases daily. I think they wil be able to extend the landing, a-la the Japanese except they have the fundamental growth to survive their real estate mess. This will mean a 5 year stagnation of their real estate market, and a part of their GDP will evaporate as the need to build new buildings will wane.

The question as you said is, how will it affect India.. and just saying we'll be 'fine' is too short-sighted. India will have some positives in that as we are starting our infrastructure buildout commodity prices will ease so there will be greater results for less expense. The question is, what will the oversupply of infrastructure services in China do? They are already building roadways in India.. and they'll get more contracts, thereby stunting the growth of the indigenous construction industry.

Also, the question is how much do we want to trust the Chinese firms on critical infrastructure projects?

Every one of those prescriptions would cause GDP growth to slow down. Simply unacceptable to the 9 wise mandarins with IQ's of 250 who lead Panda flawlessly.

As far as the "What China is thinking" article this is merely a policy paper. The real zinger is the Chanos presentation on the Panda economy.

http://www.youtube.com/watch?v=99HNFCn5RP8

Worth a full listen for those interested.

This is simply a input led growth. There is no more efficient economy here. His estimation is that all the office space China needs for essentially the next hundred years has been built.

The odd thing is Chanos is not really shorting China. He is shorting all the economies dependent on it. Namely Australia, Brazil, Canada even Russia. Note the one country not on that list, India. When China falls he predicts real armageddon in these countries.

[Hari Seldon]

^^^IMO, RamaT has a point.

The cheenis are probably going to manage a soft landing short of a real crash. One can't help but admire the whole darn thing. Only.

[SaiK]

http://news.yahoo.com/nphotos/China-ope ... hinatrains

[paramu]

^^^
Do the sharp rocket tip of those trains need to be so long, or is that to make it look so futuristic?

[wrdos]

When you want it to run as fast as 400km/hr, it has to be that long.

BTW, it is a picture of CRH380A, the 380 means its operating speed would be as high as 380km/hr. This train will become one of the major trains running on the Beijing-Shanghai high speed railway which will be opened before the end of next year.

This train ran as fast as 416km/hr during its latest test on the Shanghai-Hangzhou high speed railway several weeks ago. Its current highest operating speed is 356km/hr on the railway opened yesterday.

^^^
Do the sharp rocket tip of those trains need to be so long, or is that to make it look so futuristic?

[Raghavendra]

Million-dollar beds fuel Madagascar timber crisis http://www.bbc.co.uk/news/science-environment-11626412

[amit]

http://news.yahoo.com/nphotos/China-ope ... hinatrains

Do those trains run on metre gauge or broad gauge tracks? Taking the perspective of the two guys in the picture, the rail tracks look a bit narrower than standard broad gauge. If that's the case the train compartments would be quite narrow I'd reckon.

However, that picture was taken with fish eye lens so it could be the perspective was distorted - which also could have resulted in the TFTA looking noses.

Maybe Wrdos can clarify?

[Raghavendra]

Faked in China: Inside the pirates' web http://in.news.yahoo.com/137/20101026/7 ... -we_1.html

[Theo_Fidel]

http://www.ft.com/cms/s/0/2b843e4c-c745 ... ab49a.html

China: A future on track

Having transferred high-speed rail technology to state-backed groups in exchange for access to a vast market, multinationals find they have created their own low-cost competitors

But for the European, Japanese and North American companies that have provided much of the technology for the country’s programme, the visit put the spotlight on a worrying trend.

In what many international executives see as a warning for other industries, these companies have spent years “transferring”, or selling, technology to state-backed partners in exchange for market access – only to be rewarded with shrinking market share in China as a result of state policies that favour local industry.

Now these companies find their high-speed technology has been “digested” – defined by the government as a multistep process of buying foreign technology, innovating on that existing platform then selling it under a domestic brand – by former Chinese partners. Furthermore, the foreigners find themselves competing head-to-head for tenders all over the world with Chinese companies selling digested high-speed technology at discount prices, often with cheap state bank financing thrown in.

In 2002, to challenge foreign dominance, the railway ministry unveiled the China Star, a home-grown high-speed system developed at a cost of Rmb140m by state-controlled manufacturers using only Chinese intellectual property. But less than two years later, the ministry announced that the core technology was “immature”.

The China Star was quietly shunted into a siding and forgotten as the Chinese companies were encouraged to ramp up digestion of foreign technology instead. As they did so, the ministry continually raised its “local content” requirements.

“This high-speed programme is a political project with little economic value,” says Zhao Jian, a professor at Beijing Jiaotong University who favours conventional rail rather than high-speed projects. “The government just wants to have the biggest and fastest number one train set in the world.”

While the two agree that individual high-speed rail lines will not be able to cover their costs, Mr Scales thinks that by removing passenger traffic from existing tracks, the high-speed lines will make way for more freight, which could provide the railway ministry with enough new revenues to pay for all the new lines.

Mr Zhao argues that few passenger trains will actually be taken off existing tracks, because they cannot run on the new high-speed lines and the government is not going to scrap all those old carriages.

The railway ministry accounts for as much as 10 per cent of all outstanding debt in the country, according to World Bank estimates. Chinese analysts say the proportion of railway construction funded by debt has increased from under 50 per cent in 2005 to more than 70 per cent last year.

“This is a real debt crisis building up for the government and it is going to break at some point,” Mr Zhao says.

[Suraj]

Credit needs to be given where it's due for these new trains - to Bombardier Transportation:
Bombardier Zefiro
Bombardier Zefiro 380, a.k.a CRH380

[Ambar]

http://news.yahoo.com/nphotos/China-ope ... hinatrains


Do those trains run on metre gauge or broad gauge tracks? Taking the perspective of the two guys in the picture, the rail tracks look a bit narrower than standard broad gauge. If that's the case the train compartments would be quite narrow I'd reckon.

However, that picture was taken with fish eye lens so it could be the perspective was distorted - which also could have resulted in the TFTA looking noses.

Maybe Wrdos can clarify?

Love them or hate them, we can surely use such trains in India to take some pressure off our already over crowded highways.

[wrdos]

Of course standard gauge at 1435mm. In fact almost 99% of Chinese railways are of standard gauge, with only a few and unimportant exceptions in remote areas.

http://news.yahoo.com/nphotos/China-ope ... hinatrains

Do those trains run on metre gauge or broad gauge tracks? Taking the perspective of the two guys in the picture, the rail tracks look a bit narrower than standard broad gauge. If that's the case the train compartments would be quite narrow I'd reckon.

However, that picture was taken with fish eye lens so it could be the perspective was distorted - which also could have resulted in the TFTA looking noses.

Maybe Wrdos can clarify?

[wrdos]

Sure Bombardier has such a project at a joint company in China. But what was shown in the picture and is running on the recently opened Shanghai-Hangzhou high speed railways is CRH380A, which was developed by Sifang, CSR on the basis of a type of Japanese trains imported about 4 or 5 years ago.

Credit needs to be given where it's due for these new trains - to Bombardier Transportation:
Bombardier Zefiro
Bombardier Zefiro 380, a.k.a CRH380