PRC Economy and Industry: News and Discussions

[vsudhir]

MaoA biraders, more PRC positive news flooding in

35% fresh grads employed: survey China Perspective

Notice how it does not say "65% fresh grads unemployed". That would be negative and detrimental to China's pristine shiny image. O no.

BTW, standard disclaimer:
However bad china's graduates may have it in this horrible job mkt, they're still faaar better than Indian grads. There, with that out of the way, moi feels relieved onlee.

[Raghav K]

MaoA biraders, more PRC positive news flooding in

35% fresh grads employed: survey China Perspective

Notice how it does not say "65% fresh grads unemployed". That would be negative and detrimental to China's pristine shiny image. O no.

BTW, standard disclaimer:
However bad china's graduates may have it in this horrible job mkt, they're still faaar better than Indian grads. There, with that out of the way, moi feels relieved onlee.

some of the 35% are already employed to PR on BR.

[Liu]

real estimate in CHina does have bubble,but how big is the bubble ?
Noboday can tell it.

For example, in the city where I live ,the avereage price of a house was about 3000-4000 RMB/square.

although the maket of real estimate is in a deep depress,the seller of real estimate would rather never decrease the price.

In fact, the buyers and sellers are in stalemate.nether of the two would rather make a concession.

[derkonig]

Liu,
Have a look at the figures for sale/rental of new property to understand the extent of downturn.

Here is some news about the falling occupancy rates across thr major cities in China.

Occupancy low in Beijing CBD buildings

Vacancy ratio at Beijing's CBD office buildings hit 35% in the fourth quarter of 2008 after supply increased dramatically since the third quarte

Tomson Riviera occupancy at 20%, called a success…
This is about some prime real estate in Shanghai, which too is badly hit.

Beijing's Olympic building boom becomes a bust


70% decline in Asian real estate transactions in Q4 2008
The doom & gloom is spread all over Asia, but note as the report says, India might just buck the trend.


Market in China likely to slip further


As you have metioned about sellers not reducing prices, by doing so they are only contributing to unoccupied build up space. The buildings need maintenance, etc. regardless of whether they are occupied or not. If the sellers try to cut costs there, even if there is an upturn in the markets soon, these buildings wont fetch much on account of them being older & ofcourse the poor maintenance. So, either ways it shall hurt no matter what steps are taken by the stakeholders in Chinese real estate, be it the govt., the developers, financiers, etc.

[rundstedt]

Vacancy ratio is the hotspot of chinese media now. all of them tell chinese ppl the vacancy ratio is above 30% through whole urban china. the data based on about 200 million sq m vacancy dividing 600 million sq m new buildding in 2008. the media take advantage of ppl's hatting emotion of latifundist.

what's the definition of "vacancy ratio" in India?

[Liu]

well, really interesting. what I want to say to Yankee is that " to rise together is ok,but Please fall down by yourself!"

http://www.indianexpress.com/news/us-ch ... on/427015/
US, China going to 'rise or fall together': Clinton
Font Size Agencies
Posted: Feb 23, 2009 at 0848 hrs IST
Print Email Feedback Discuss

US Secretary of State Hillary Clinton said economies of US and China are so 'intertwined' that they are 'truly going to rise or fall together.'

........

[vsudhir]

China warns of unemployment risk

Beeb peddling propaganda, was my first reaction. Then I saw that since the subject matter was china. Notice how unemployment is a possible 'risk' in shiny china, not a plain 'reality' like in SDRE yindia. Truly great is the people's lepublic. Jai Ho..

[Yogi_G]

well, really interesting. what I want to say to Yankee is that " to rise together is ok,but Please fall down by yourself!"

See, another statement made impossible by the hypocrisy of the Chinese Communist Govt, they tell their people that the Americans are capitalist bourgeoisie and are bad, the poison of the West but under the table they make secret dealings with the West!!! For all the talk of Sovirginity and Self-reliance by the Chinese Communist leadership, the Chinese economy is tightly coupled with the Western economies, if that is not enough to make Marx turn in his grave I am not sure what else will!!

Clinton is right, both China and US will go down together, good riddance many will say!!

So stop dreaming about US going down alone and ask your "Dear" leaders to buy more American bonds!!! Same message to the hypocrite Arab folks who entertain such wet dreams...

[Nayak]

some of the 35% are already employed to PR on BR.

We need some gyaanis to check the unmentionables for their brains in the musharraf. BJKootie and PRC thread is slowly turning to sewage pit collecting chicom plopahganda.

Any volunteers to do the 'dirty' job ?

[shyamd]

Will China be strengthened by adversity?

* Robert Peston
* 2 Mar 09, 08:20 AM

A year ago, the leaders of the developed and developing world were optimistic that the momentum behind the Chinese, Indian and Brazilian economies - plus the other faster growing younger economies - would prevent the credit crunch from precipitating a global slump.

That was also the naive consensus of the business and political grandees at the 2008 World Economic Forum.

More or less the opposite has transpired.

China and the rest are being dragged down by problems that started thousands of miles away, on Wall Street and in the City of London (although the most severe impact has been on the more mature exporting nations, such as Japan and Germany).

The recession in the great consuming countries of North America and Europe has savaged demand for the goods made by exporters, who've also been squeezed by the drying up of trade finance.

So, far from sanitising the credit crunch, the new economic powerhouses such as China, Singapore and India have been infected.

I am in China for a week to assess the implications - both short-term and long-term - of what is now a global recession for the nation that was well on its way to becoming an economic superpower.

I'll look at what it means for Chinese living standards - will they continue to rise, and at what kind of pace?

What's the risk that rising unemployment will lead to serious social unrest?

What of the longer term? Will China reduce its reliance on low-cost, low-skills industry and will the government put in place a social security and tax system that delivers a less unequal distribution of the fruits of growth?

Will there be meaningful changes to China's unique combination of a one-party state and market economy (albeit an economy still characterised by massive public-sector ownership and influence)?

In the global distribution of economic and political power, will China emerge from the current crisis higher or lower in the rankings?

And in respect of the challenges we all face, will China turn inward and concentrate on fixing its own problems - or as the summit looms in London of the leading 20 nations on how to solve this worldwide mess, will China play a more confident, leading role on the global stage.

For me, the biggest question is whether China will emerge stronger or weaker from the downturn?

None of these questions is simple.

Even assessing the state of the Chinese economy right now is tricky, partly because official statistics are notoriously unreliable and far from comprehensive - but also because China can no more be described as a homogeneous economy than can Europe.

It's a vast country, with a population well over 1.3bn (again the official numbers aren't robust). And there are huge regional variations between the structure and health of the economy in different parts of China.

The official statistics tell of a fall of a few percentage points in the annualised growth rate.

Chinese Trade Minister Chen Deming addresses German and Chinese businessmen, as seen through the viewfinder of a video camera, prior to a signing ceremony in Berlin February 25, 2009 JOHN MACDOUGALL/AFP/Getty ImagesThe Chinese government's 2009 "target" is 8%, although its Commerce Minister, Chen Deming, said to me that there could be a downward revision later this year (the IMF recently forecast 6.9%).

By western standards, that looks like an unsustainable boom. But it's well down on the double-digit growth of the past few years - and well below the growth rate that's needed to prevent a rise in unemployment.

What's been most disturbing has been the precipitous fall in China's overseas trade over the past few months (there was a 17.5% year-on-year fall in exports in January).

This has already caused the closure of many thousands of factories and millions of redundancies, notably in Guangdong and the manufacturing centres of southern China.

Migrants from rural areas who peopled these factories in the boom years have gone home - and their long-term economic prospects are uncertain.

Tomorrow, I'll be in Guandong to evaluate the damage for myself.

But I've started my all-too-short tour in Shanghai.

As I write, I'm standing in the middle of the eighteenth annual East China Trade Fair - which looks mobbed by London standards but is in fact fairly sparsely attended by Chinese.

So far, I've had my back electronically massaged in a truly horrible way by a gizmo that sells for just over $100. And I've been run over by a robotic lawn-mower that goes for $400.

Believe it or not, these gizmos may well represent China's economic future - because they contain a bit of Chinese intellectual property. They are therefore a little less vulnerable to the intense price competition from other ever-lower-cost economies that's an unavoidable challenge for many of the other 3500 exhibitors.

But for most of the companies here - which make stuffed cuddly tigers, glittery fairy stickers for little girls, non-stick pans and hand-made cuckoo clocks - the big fact of life right now is the shrinkage of the US and European markets.

The exhibition's organiser, Wang Qing Jiang, tells me that orders so far are about 20% down.

The cannier exhibitors are trying to find new buyers in South America, and Africa and the Middle East.

But China is now too big a part of the global economy to avoid pain when the world's richest economies contract.

For hundreds of years, China ran itself as though divorced from the planet, both economically and intellectually. No longer.

Today, it's learning the costs of becoming so dependent on the health of the rich developed world, following the years of profit.

How it responds to these lean times matters to all of us.

[KarthikSan]

Will China be strengthened by adversity?

* Robert Peston
* 2 Mar 09, 08:20 AM

What's been most disturbing has been the precipitous fall in China's overseas trade over the past few months (there was a 17.5% year-on-year fall in exports in January).

You and other in-pee-rear Western experts don't understand the gleat soup-e-rear Chinese rogic. January had 5 less working days than last year. Apparently China's productivity is so great that the 5 days made a difference of 17.5% in trade. I guess the Panda's that go into hibernation for the winter all wake up in January to start working to "make face" for Peopre's Lepubric.

[Ameet]

Facing counterfeiting Crackdown, Beijing Vendors Fight Back

http://www.nytimes.com/2009/03/02/world ... iracy.html

[anishns]

Comlade Nayakuddin!!!

Do you know of any BJUGLY from India who has tlavelled the length and bleadth of China?
We need to find someone quick....so that he/she can show the chinese in 400% tlue light like "Tarrel Than Mountain and Deepel than Ocean fliends"

Thanks

some of the 35% are already employed to PR on BR.

We need some gyaanis to check the unmentionables for their brains in the musharraf. BJKootie and PRC thread is slowly turning to sewage pit collecting chicom plopahganda.

Any volunteers to do the 'dirty' job ?

[Avinash R]

Comlade Nayakuddin!!!

Do you know of any BJUGLY from India who has tlavelled the length and bleadth of China?
We need to find someone quick....so that he/she can show the chinese in 400% tlue light like "Tarrel Than Mountain and Deepel than Ocean fliends"

Thanks

raghav has already opened the reeducation camp for chinis.

Check here.
http://forums.bharat-rakshak.com/viewto ... &start=200

And dont forgot to add to the syllabus of the reeducation camp.

[anishns]

Thank you comlade Avinash L

I need some le-educashun myself

Comlade Nayakuddin!!!

Do you know of any BJUGLY from India who has tlavelled the length and bleadth of China?
We need to find someone quick....so that he/she can show the chinese in 400% tlue light like "Tarrel Than Mountain and Deepel than Ocean fliends"

Thanks

raghav has already opened the reeducation camp for chinis.

Check here.
http://forums.bharat-rakshak.com/viewto ... &start=200

And dont forgot to add to the syllabus of the reeducation camp.

[archan]

Allright folks, no more pinglish, or even hints of it in this thread. Since there are 2-3 offenders, I am not warning anyone but please be careful.

[Sanjay M]

China on a Buying Binge

http://www.time.com/time/world/article/ ... 94,00.html

[Raghav K]

Will China's New Food Safety Laws Work?

After a series of safety scandals that have killed Chinese citizens and degraded the international reputation of the country's exports, Beijing has approved a broad series of tougher food safety laws. But, given the difficulty in implementing laws in China, it's unclear if the new legislation will make China's food safer to eat.

The new regulations, which were approved by the Standing Committee of the National People's Congress, will raise safety standards, increase punishments and implement a system of risk evaluation that includes monitoring 500,000 companies, the state-run Xinhua news service reported on Feb. 28. Responsibility for food safety will be divided among the General Administration of Quality Supervision, Inspection and Quarantine, the State Food and Drug Administration and the ministries of health, agriculture, commerce and industry. Responsibility for food safety will be divided among several government bureaus, which has long been considered a shortcoming of the Chinese safety system as various agencies have battled for control and potential revenue from fines. "It's a problem," says Hu Dinghuan, a researcher with the Chinese Academy of Agricultural Sciences. "There are too many responsible departments." He advocates putting more of the burden on the private sector. (Read "China's Melamine Woes Likely to Get Worse".)

http://news.yahoo.com/s/time/20090303/w ... 9188271100

[Raghav K]

China's Melamine Woes Likely to Get Worse.

First, a tainted product emerges, killing some and sickening many more. Its origin is traced to China, where a combination of greed and negligence allow the danger to slip into the food chain. The government downplays or ignores the risks. When the problem becomes so big it can't be denied, leadership orders inspections and promises to punish wrongdoers. The new vigilance leads to other risky products being identified, but officials suggest the problems aren't systemic — just the work of a few bad eggs. The state tightens inspections on imports and finds a few tainted products from overseas, as if to say, "See, everyone has problems with food safety."

That, in brief, could describe the Chinese Product Safety Scandal of 2008. As early as January, infants in China raised on Sanlu brand baby formula began developing kidney problems, and parents raised complaints that were ignored by company and local government officials. When the news finally broke in September, tests found four infants had died and more than 60,000 were sickened from formula tainted with melamine, a chemical used in plastics that can make the protein content of milk — and many other food products — appear higher, and, when consumed, can also cause kidney failure. Expanded inspections found traces of melamine in milk powder from 22 of the country's 109 producers. The substance also showed up in whole milk and dairy products ranging from White Rabbit candies to chocolate used in sex toys in the U.K.

http://www.time.com/time/world/article/ ... 68,00.html

[derkonig]

Like the Pakis inbreed, looks like the chicoms shall poison themselves to death.

[Singha]

http://www.theaustralian.news.com.au/bu ... 18,00.html

China taps its rural consumer base

Mei Fong and Jason Leow | February 10, 2009
Article from: The Wall Street Journal

CHINA is turning to its poorer residents to help revive growth in the world's third-largest economy, as demand flags among the wealthy Western consumers who have long gobbled up its exports
In the latest of a series of recent measures to spur domestic consumption, China's government announced new plans to create jobs, lower distribution costs and improve product quality and availability in the rural retail sector. As part of the effort, a Ministry of Commerce official told a news conference, the government aims to help establish 150,000 stores in the Chinese countryside this year to offer rural residents easy access to safe consumer goods. Such stores could create 775,000 new jobs by 2010, the official estimated.

The new plans, while vague, highlight Chinese economic planners' growing focus on helping the country's roughly 700 million rural residents to spend more. The planned moves follow related measures announced in recent months, including expanding state subsidies for farmers to buy electrical appliances. The government hopes these efforts will help rejuvenate flagging economic growth and improve prosperity among rural residents, at a time when increasing unemployment has raised concerns about potential social unrest.

For the first time, the Chinese government and manufacturers are "turning to Chinese villagers rather than American consumers" to solve their economic woes, said Royal Bank of Scotland's chief China economist Ben Simpfendorfer. "It won't save the global economy, but it could help shape it over the next decade," he said.

China's exports have begun declining in recent months, after years of growing at double-digit rates. Economists and officials say China needs to stimulate greater consumption to compensate for the slowdown, not only for its own economic health but to help rebalance a global economy whose biggest consumer - the U.S. - is in recession. Domestic consumption contributed about 39 per cent of China's gross domestic product for the first nine months of last year, according to official Chinese statistics, compared to about 69 per cent of GDP in the U.S.

Rural residents, while still relatively poor, have seen their incomes grow steadily during China's three decades of market-oriented reforms. Foreign companies including mobile-phone giant Nokia and drug maker AstraZeneca have moved in recent years to tap that demand by building extensive distribution networks in smaller Chinese cities and towns.

In recent months, Beijing has expanded a program to provide 13 per cent subsidies to rural residents for purchases of electronic goods such as mobile phones, washing machines and personal computers. The program, which began in three provinces in 2007, was taken nation-wide this month. The government has designated more than 120 companies as suppliers, including foreign companies such as Nokia and Samsung Electronics. The subsidies could cost the government 30 billion yuan ($6.4 billion) a year, according to Li Guoxiang, a researcher at the Chinese Academy of Social Sciences, a government think tank.

Authorities face some obvious challenges cracking the rural market. Rural residents, who have an average annual income of about $US700 a person in China, tend to save much of their income for rainy days because of the weakness of health care and other social services in the countryside. They often don't have easy access to well-stocked stores.

And some aspects of the government efforts seem ill-conceived. Hu Erhe, a 56-year-old farmer in Hohhot in the northern Chinese territory of Inner Mongolia, last month paid 598 yuan, nearly half a month's income, to buy his first washing machine, using the government subsidy. He and his wife, He Cuifeng, had to lug it home to their remote village on a public bus. After the bumpy, two-hour ride, they confronted another complication: no running water. To do wash, Ms He pumped water from their nearby well into large earthenware jugs to transport to the house.

The washing machine has become a status symbol in the village, said Ms He. "After buying this, lots of neighbours came around to look."

Lenovo, China's largest PC maker, estimates the subsidy plan could boost industry sales in China by 10 billion yuan, or about 5 per cent percent of the annual total. Lenovo last week said it plans to refocus on the Chinese market amid weak demand in the US and Europe.

Companies involved say selling to rural residents can have real financial rewards. Haier, China's largest maker of home appliances, reported an 8 per cent increase in revenue in 2008 to $US17.8 billion, which executives attributed in part to the subsidy program. Rural sales overtook urban sales for the first time in the company's history, said Li Chuan, a Haier manager.

Haier and other companies including Panasonic are even modifying products to suit rural conditions, such as by compensating for uneven electricity supplies. Participating in the subsidy plan is "a way for a global brand to sink roots in the China market," Panasonic said. The company expects to sell about three million washing machines in China next year, up from an estimated 2.5 million this year and about one million in previous years.

Some analysts doubt the long-term benefits of targeting China's rural markets. Rattan Malli, a strategic planner for advertising agency J Walter Thompson, said China's rural markets appear to be attractive, but cost efficiencies are "extremely difficult to achieve," because the farming population is so widely dispersed.

The new measures aim to promote consolidation in China's fragmented distribution network to improve its ability to deliver goods at low cost to countryside consumers. The commerce ministry offered few details on that plan, or on its plan to help create new rural stores.

"Central to our policies should be increasing the consumption of low-income households," Jiang Zengwei, vice-minister of commerce, told reporters.

Mr Jiang pledged that Beijing's stimulus efforts won't include "Buy China" policies akin to the "Buy American" provision in the US stimulus package. The Chinese government has warned in recent months of foreign governments becoming protectionist, and Mr Jiang repeated the need for international trade to continue. "One country cannot satisfy its own demand simply by depending on its own production," he said.

—Gao Sen in Beijing contributed to this article.

[negi]

I have always admired Chipanda's resolve and the commitment to bring to practice whatever they decide or pen down as their government policy .

[svinayak]

China Lawmakers Prioritize Welfare as Slowdown Threatens Unrest
Email | Print | A A A
http://www.bloomberg.com/apps/news?pid= ... er=economy

By Dune Lawrence and Li Yanping

March 4 (Bloomberg) -- China’s parliament convenes its annual meeting tomorrow, seeking solutions to an economic slump that is fueling pockets of social unrest after 20 million workers lost their jobs.

Premier Wen Jiabao, who’ll kick off proceedings with China’s equivalent of the U.S. State of the Union address, may shed more light on a 4 trillion yuan ($585 billion) stimulus package and a campaign to expand health and welfare coverage.

“Circumstances this year are so different from any other year,” “Despite the stimulus measures, most companies have to prepare to endure a long economic winter.”

Wen and President Hu Jintao, who are both 66, have called 2009 the toughest of the new millennium. Economic expansion in the world’s fastest-growing major economy has slid from 13 percent in 2007 to 6.8 percent last quarter, below the minimum 8 percent the government estimates is needed to create jobs.

The slowdown has rattled the Communist Party, which has ruled China since 1949 and bolstered its legitimacy in the past two decades by delivering greater prosperity. The global economy, mired in the biggest recession since the Great Depression, is also counting on China meeting the 8 percent growth target to help stoke a worldwide recovery.

“If you have one major economy, which is the third largest, that can hold up, that’s an achievement, that’s confidence boosting for the rest of the world,” said Bo Zhiyue, senior research fellow at the National University of Singapore’s East Asian Institute. “It is quite significant to look at China, because the worst scenario is that China’s economy collapses.”

Politburo Priorities

The Politburo, the party’s top decision-making body, said last week that China would counter the slowdown by “massively” increasing government investment and “greatly enhancing” social security in confronting an “austere and complicated” year.

Growth is collapsing as the fastest contraction in the U.S. since 1982 takes its toll on Chinese exporters including Lenovo Group Ltd., the world’s fourth-biggest personal-computer maker, which reported its first quarterly loss in three years and announced thousands of layoffs. Profit at the publicly traded unit of textile maker Furun Group, which NPC delegate Zhao chairs, plunged 80 percent last year.

With 20 million rural laborers who previously found jobs in cities now unemployed, and 7.1 million college graduates seeking work, authorities are alert to the danger of social unrest.

[vina]

Yawn.. The Chicom Pandas are in for a rough transition . "Tailoring" products for rural markets and catering for "uneven" electricity aye? . The Indian guys have been doing it forever!. Only in India an you find washing machines that dont assume 100% running water all the time, power goes off and comes on again, the washing machine just shrugs and starts off at the same point of wash cycle where power cut out.

Why, for my Beetel phone at home with wireless handset (really good one), I originally had a GE phone lugged all the way from Massa, with answering machine and callerid and 900Mhz built in. But , power goes off in apt and before the generator kicks in, the GE phone loses settings , phone wont work, etc. etc.. Phone went kaput, moi went to MK Ahmed and picked up a 1.2 GHZ beetel phone with , that comes with 4 NiCd batteries in the power adapter , so that even when power goes, I have 1 hr of talk time, no irritating loss of settings, no damage to phone due to power outages, and far higher features and sleeker form factor than the GE phone. Truth be said, the GE was an older phone and the Beetel newer model, but then, BEETEL is a major OEM supplier to GE!

[Raghav K]

This may not belong here but is interesting.

Gymnastics world body chief suspects cheating by China.

In Beijing, rumours surfaced that Chinese gymnasts He Kexin, Jiang Yuyan and Yang Yilin had not yet obtained the Olympic minimum age of 16 after reports showed the age of the gymnasts as just 13 in 2007.

The president of the world body of gymnastics (FIG) Bruno Grandi has said there were believable indications that China had cheated over the age of some of their gymnasts at the Beijing Olympics last year.
"There were strong indications, but I did not handle the investigation. I had to accept the official documents that I was shown at face-value, I am not a policeman or Interpol," he told the German gymnastics magazine Leon.
"If I find out that there was cheating, I can act. I gave everything to the IOC and they investigated the issue. They gave us their findings and we looked at them, but there was nothing."
He said that if people found forged documents on the internet they would have to have legal proof that they were forged. "I have to respect the documents that the Chinese state gives me. What else should I do - declare war on China?"
In Beijing, rumours surfaced that Chinese gymnasts He Kexin, Jiang Yuyan and Yang Yilin had not yet obtained the Olympic minimum age of 16 after reports showed the age of the gymnasts as just 13 in 2007.
But nobody could provide proof that the documents used for Olympic registration had been forged.
The former US gymnastics coach Bela Karolyi said at the time that age-cheating was like doping. "Official documents from a totalitarian system are meaningless," he said.
http://deccanherald.com/DeccanHerald.co ... updatenews

[Avinash R]

And some aspects of the government efforts seem ill-conceived. Hu Erhe, a 56-year-old farmer in Hohhot in the northern Chinese territory of Inner Mongolia, last month paid 598 yuan, nearly half a month's income, to buy his first washing machine, using the government subsidy. He and his wife, He Cuifeng, had to lug it home to their remote village on a public bus. After the bumpy, two-hour ride, they confronted another complication: no running water. To do wash, Ms He pumped water from their nearby well into large earthenware jugs to transport to the house.

The washing machine has become a status symbol in the village, said Ms He. "After buying this, lots of neighbours came around to look."

Is this return to old ways of solving economic problems in communist china?

During mao's rule he forced rural farmers to construct small village furnaces and melt their farm implements so that he could industrialize rural china.
And what was the result?
Starvation, death of millions and rise of rampant cannabalism since they lost the tools and couldn't farm and grow food on their land.

Now following mao's footsteps another similar mistake is being carried out with official sanction.
People in urban areas have the necessity for things like washing machines since they lack time, while rural people have enough time and dont need these things.And now due to such foolish and ill thought scheme millions of taxpayers money will be wasted as 'subsidies' and the rural people will end up more poorer and with products which they dont really need. It would have made sense if the 'subisdies' was for food or education but things like washing machines.

Mao and his way of solving problems live on in china.

[Liu]

two news:

1. Chinese defence budget in 2009 is 480.6 billion RMB(about 70 billion USD), about 6.29% of china's totol budget 7.63 trillion RMB(about 1.11 trillion USD).

2009全国财政预算为76300亿元，国防预算为4806亿元！
新华网3月4日报道 十一届全国人大二次会议于3月4日上午11时在人民大会堂一楼新闻发布厅举行新闻发布会，由大会发言人就会议议程和人大工作相关的问题回答中外记者的提问。

[俄罗斯通讯社记者]谢谢。我是俄罗斯通讯社的记者，我想请问您，您能否向我们透露2009年中国国防费预算的一些细节，包括向我们提供一些具体的数字。
........http://bbs.cjdby.net/viewthread.php?tid ... a=page%3D1

2.AICC(Aviation Industry Corporation of China) succeeded in borrowing 176 billion RMB(about 25.7 billion USD) from 9 banks in CHina,to develop Chinese indigenious big commerical jet.

2009年1月8日，我国授信额度最大的一次银企合作支持我国航空工业发展拉开序幕。此前，成立不久的中国航空工业集团公司（Aviation Industry Corporation of China，简称“中航工业”）是此次授信的最大受益者。

按照双方约定，工行、建行、中信将分别为中航工业提供300亿元意向性授信额度，交行提供220亿元，浦发提供200亿元，光大，招行，北京银行分别提供100亿元，民生提供90亿元，兴业提供50亿元。共十家银行提供1760亿。
http://www.ccthere.com/thread/2057408

[wrdos]

And some aspects of the government efforts seem ill-conceived. Hu Erhe, a 56-year-old farmer in Hohhot in the northern Chinese territory of Inner Mongolia, last month paid 598 yuan, nearly half a month's income, to buy his first washing machine, using the government subsidy. He and his wife, He Cuifeng, had to lug it home to their remote village on a public bus. After the bumpy, two-hour ride, they confronted another complication: no running water. To do wash, Ms He pumped water from their nearby well into large earthenware jugs to transport to the house.

The washing machine has become a status symbol in the village, said Ms He. "After buying this, lots of neighbours came around to look."

Is this return to old ways of solving economic problems in communist china?

During mao's rule he forced rural farmers to construct small village furnaces and melt their farm implements so that he could industrialize rural china.
And what was the result?
Starvation, death of millions and rise of rampant cannabalism since they lost the tools and couldn't farm and grow food on their land.

Now following mao's footsteps another similar mistake is being carried out with official sanction.
People in urban areas have the necessity for things like washing machines since they lack time, while rural people have enough time and dont need these things.And now due to such foolish and ill thought scheme millions of taxpayers money will be wasted as 'subsidies' and the rural people will end up more poorer and with products which they dont really need. It would have made sense if the 'subisdies' was for food or education but things like washing machines.

Mao and his way of solving problems live on in china.

You know in China, as in most other countries, the government would return part of the consumption tax if you export your products outside the country. So somebody argued, why can not we do it similar to our own rural areas? Instead of exporting, if you can sell your products to the poor peasants in rural area, you can also get part of your tax back. Doing so we can increas the employment of our manufacture industry by subsiding our own citizens instead of the foreingers.

As a result, we have the "eletrical product going rural" project. For a range of relatively low end electrical products like mobile phones, TV sets, refrigerators, ACs and washing machines as well, a peasant can get a taxback when buying them. And recently, low end cars and trucks are also included.

Personally I think it is a great idea although we still need time to see its full effects.

Finally, wasing machine is not regarded a luxury in even rural China. I don't have data around my hand but I guess more than half of rural Chinese families already have at least one in their homes.

[Liu]

I find that yankees have some soup grape here ....

http://www.freerepublic.com/focus/f-news/2199026/posts
Wall Street moves higher; markets await new stimulus in China [World picks ChiComs over Obama]

Stocks rose around the world on Wednesday, as investors reacted to speculation that China may expand its stimulus measures.

Shares increased on reports that Premier Wen Jiabao of China was considering new stimulus measures on top of the $585 billion spending plan already proposed. An announcement could come as early as Thursday in China.

......

[Vipul]

China's budget records highest fiscal deficit in six decades.

China has announced a record budget deficit of 950 billion yuan (US $139 billion) for 2009 - the highst in six decades - as the impact of the global financial crisis eats into the country's revenues, forcing it to resort to deficit financing that is nine times higher than last year's deficit of 111 billion yuan.

[Raghav K]

Finally, wasing machine is not regarded a luxury in even rural China. I don't have data around my hand but I guess more than half of rural Chinese families already have at least one in their homes.

How about tooth brushes? I am not joking and I have previously mentioned that Chinese never brush their teeth(50%) and are very fond of sweets.From the boom years both rural India and China have benefited a lot. The future will be interesting.

[Katare]

Raghav,

Why are so you angry my friend? Have some faith in intelligence of your fellow indian BRFites. Some of us have been here for almost a decade and seen a lot of this over the years. In the end we all come out with better understanding and more information. People can see through things without a jingo Rakshak like you getting on offensive to protect us from manipulation by Red PR machine or whatever.

Hope you'll understand what I am trying to say and take it in positive vibe.

Raj

[Raghav K]

Raghav,

Why are so you angry my friend? Have some faith in intelligence of your fellow indian BRFites. Some of us have been here for almost a decade and seen a lot of this over the years. In the end we all come out with better understanding and more information. People can see through things without a jingo Rakshak like you getting on offensive to protect us from manipulation by Red PR machine or whatever.

Hope you'll understand what I am trying to say and take it in positive vibe.

Raj

sorry Katare bhai. You have a point. Just cant take anything against Desh and am only now fine tuning my skills.

[vsudhir]

Some more 'running dogs of western capitalist imperialism' tumble out of the woodwork in a determined attempt to stain china's fair image.... caste-ing doubt on premier Wen's pious utterances.

China Says 8% Growth Within Reach Using $585 Billion Stimulus

Premier Wen Jiabao said China’s 8 percent growth target for this year is within reach, indicating the government doesn’t see the need to increase a 4 trillion yuan ($585 billion) economic stimulus.

It’s “possible for us to meet this target,” Wen told delegates in his annual speech to China’s parliament in Beijing today. The nation needs to “reverse the economic slide as soon as possible.”

Wen’s prediction that China will ride out a global recession and his pledge to “significantly increase” investment helped extend a rally in Asian shares. Collapsing exports have dragged the world’s third-largest economy to its weakest growth in seven years and cost the jobs of 20 million migrant workers, adding to the risk of social unrest.

“They are keeping ammunition in reserve,” said Stephen Green, head of China research at Standard Chartered Plc in Shanghai. “Every day the world economy gets worse and they’ve probably got two years of very slow global growth to get through.”

But what I found amusing was one posters' comment there:

China will most assuredly announce 8% growth, perhaps even 8.88%. And they can announce it now, or go through the motions of actually waiting until the end of the quarter.

In the past there have been occasions when they announced before the quarter ended, proving just how 'efficient' their infrastructure and bureaucracy are. Indeed, with these systems already up and running, one wonders what they will spend their stimulus on.

Ouch!

[wrdos]

Finally, wasing machine is not regarded a luxury in even rural China. I don't have data around my hand but I guess more than half of rural Chinese families already have at least one in their homes.

How about tooth brushes? I am not joking and I have previously mentioned that Chinese never brush their teeth(50%) and are very fond of sweets.From the boom years both rural India and China have benefited a lot. The future will be interesting.

Sure. Quite a lot of rural inhabitants and even some of urban inhabitant still have very poor hygienic　habits in China. And some of them even think brush may hurt their teeth.

Hopefully things will be improved with better education.

[Liu]

China's budget records highest fiscal deficit in six decades.

China has announced a record budget deficit of 950 billion yuan (US $139 billion) for 2009 - the highst in six decades - as the impact of the global financial crisis eats into the country's revenues, forcing it to resort to deficit financing that is nine times higher than last year's deficit of 111 billion yuan.

before 2008, CHinese government had enormous fisical surplus.
in 2006, CHinese government had a fisical surplus of 2 trillion RMB.

[Vipul]

We will have to look how the cookie stays in place now that the going is getting tough.With exports facing pressure and the inability to absorb the massive production surpluses domestically, its going to be interesting to see how the deficit is managed.Stimulus spending has its own downside as after it runs off its course if the demand world over is still weak then the impending pain would have been only postponed and not avoided.

[Raghav K]

China Showing Signs of Recovery?

It is risky indeed for someone like me, on the other side of the world, commenting on a country with spotty economic data (a function of size and maturity of its information gathering apparatus, as well as possible intent to put lipstick on pigs ) to take issue with an emerging consensus. Nevertheless, I will stick out my neck a tad.

Reports of China being on the mend, such as "China’s Economy Shows Signs of Recovery on Stimulus," on Bloomberg are overdone. I suspect way overdone.

Consider some basics. China's economy is not as export dependent as many believe, but exports have made a significant contribution to growth. Commercial real estate development has been another big driver. Those two have gone into reverse.

Let's deal with the notion of "stimulus" making up for the slack. The famed half trillion dollar plus package announced some months ago was largely spending already budgeted and planned. Analyst views vary (and further input welcomed) but from what I have seen, only 1/6 to 1/3 was new spending, and most of that occurred in the second year of this two-year program.

The latest bit of news that the markets have seized upon is that China has been pushing its banks to lend, and loan growth has been impressive. However, Michael Pettis tells us that appearances are deceiving:

I have three very serious problems with the optimism associated with the latest numbers on credit expansion.

First, this credit expansion is not all that it may seem. Aside from the fact that a lot of this new credit has consisted of an increase in bill discounting, in order to understand what is really happening to total credit in the Chinese economy we need much better data. There are persistent rumors that part of the increase in bank lending consisted of putting back on balance sheet loans that were taken off balance sheets in 2007 and 2008 when the PBoC was trying to constrain bank lending. It isn’t really new credit...

What is more, there is clearly an increase in lending games aimed at making policymakers happy by showing fat loan books. One of my students just visited me today with an example that involved his father. I don’t want to get into too much detail, for obvious reasons, but the net effect of the transaction involving his father was that an entity was created to borrow money from a bank, the proceeds of which were deposited in a CD, which was then assigned in ownership to the real borrowing entity, which then used the CD as collateral for the “real” loan. Aside from the complications used probably to get around credit restrictions, one single loan was recorded as two loans plus a CD deposit. Apparently the lending bank knew about all the intermediate steps. Surprise, surprise! It turns out that if your career prospects depend on increasing the total amount of loans outstanding, with less focus on the quality or structure of the loans, in fact it isn’t hard to show very nice, fat loan book.

One of the readers of this blog, yesterday gave another very interesting example of what might be included in this new lending. He says:

As for the sudden surge in lending, this looks to me to be an accounting exercise, clearing or otherwise funding non-bank debts piled up by SOEs. Many large SOEs (not central ones, regional/local ones, though the central ones win no prize themselves) are behind on paying wages, suppliers etc, and the stimulus provided by this lending surge is really just to ease the log-jam of triangular debts. This implies that there will not be much “bang” for all of this lending

Second, exploding credit may provide a fillip to growth in the short term, but if it leads to a future increase in bad loans, it will have exactly the opposite effect in the near future. As I discuss in my previous blog entry, this represents a big bet on the duration of the slowdown.

Third, the biggest problem has to do with how much credit expansion will make a difference. Andrew Batson at the Wall Street Journal (sorry, I don’t have the link) makes this point when he discusses the “string of dire profit warnings has signaled a rapid deterioration in the financial health of Chinese companies.” His relevant paragraphs

Corporate investment is hugely important to China’s economy, where capital spending accounts for more than 40% of annual output, one of the highest ratios in the world. The profit decline will have major effects across the economy as companies have less money to buy new equipment or expand their businesses.

…Economists have long warned that Chinese companies’ heavy reliance on retained profits would tend to exaggerate swings in the nation’s investment cycle. Official statistics show that 63% of investment in China last year was financed by what are called “internally generated” funds, which include retained profits. That’s up from just below 50% a decade ago.



Basically Chinese corporate profitability in China is dropping sharply, and nearly everyone expects the trend to continue over the rest of 2009. If nearly two-thirds of investment in China was funded by retained earnings, a sharp drop in profitability should result in an equally sharp drop in investment funded by retained earnings. I don’t know the magnitude, but I would guess that a very large increase in real bank lending aimed at real investment, far more than has been reported, would be needed just to make up for the decline in investment out of retained earnings


Pettis also took issue with the rosy spin Xinhua tried to put on the wretched January trade numbers.

Now that's merely one man's opinion, albeit a well informed one who is also on the ground.

Yes, the Chinese stock markets have rallied, but the US in the Great Depression had six rallies of over 20% on the way to its bottom. Some perkiness on the investment front isn't conclusive.

If we look at the Great Depression for analogies, it was the manufacturing power and big FX reserve (in this case gold) accumulator, the US, that was one of the very worst hit by the Great Depression and had one of the hardest roads out. Admittedly, that was in part due to it being comparatively late to depreciate its currency. Trade deficit countries that defaulted on sovereign debts had much shallower downturns.

Perhaps most important, economic downdrafts are not linear affairs. There are upticks and down moves within an overall trend. But the optimists are eager to find signs of improvement and declare it a recovery.

From Bloomberg:

China’s economy is showing signs that a 4 trillion yuan ($585 billion) stimulus package is taking effect.

The world’s third-biggest economy may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimates of 14 economists surveyed by Bloomberg News...

“China looks set to be the first major economy to recover from the current global meltdown,” said Lu Ting, an economist with Merrill Lynch & Co. in Hong Kong. “China is the only economy in the world to see significant growth in credit to corporate and household sectors after September 2008, when the financial crisis worsened to a near collapse.”

The government’s stimulus plan, announced in November, is beginning to gather momentum. Projects such as the building of 3.5 billion yuan of public houses in Shaanxi province and Shanghai began in December, while Shandong province started work on three new railway lines the same month....

Even if the global recession is protracted, China has the ammunition to maintain growth, said Merrill Lynch’s Lu. It has public debt of only 18.5 percent of gross domestic product -- compared with 75 percent in India -- foreign currency reserves of $1.95 trillion, and a balanced budget.

“China has perhaps the deepest pockets in the world,” said Lu. “It can relentlessly ramp up spending to create jobs and meet its growth target.”...

“The economy is bottoming,” said Tao Dong, chief Asia economist at Credit Suisse AG in Hong Kong, citing the PMI, the surge in bank lending, and spending on construction and machinery because of the infrastructure projects....

Companies fired workers at a faster pace in January than in December and most businesses faced tougher conditions, said Stephen Green, a Shanghai-based economist at Standard Chartered Bank. “Less bad news is not good news,” he said.

Even if stimulus spending creates 8 percent growth this year, meeting the government’s target, “it will unlikely be healthy, job-creating growth” because mostly it will boost demand for steel and cement and provide little support for consumption, said Green.

http://www.nakedcapitalism.com/2009/02/ ... overy.html

[ashi]

China Showing Signs of Recovery?

It is risky indeed for someone like me, on the other side of the world, commenting on a country with spotty economic data (a function of size and maturity of its information gathering apparatus, as well as possible intent to put lipstick on pigs ) to take issue with an emerging consensus. Nevertheless, I will stick out my neck a tad.

Reports of China being on the mend, such as "China’s Economy Shows Signs of Recovery on Stimulus," on Bloomberg are overdone. I suspect way overdone.

http://www.nakedcapitalism.com/2009/02/ ... overy.html

Another ridiculous overdone China praising article.

http://www.newsweek.com/id/178810

[Mahendra]

China gears up for heavy unemployment as it more than halves export target