PRC Economy and Industry: News and Discussions

[wrdos]

"This October was the third straight month Chinese exports decreased. "

Hehe, they can not even tell the difference between "Chinese exports decreased" and "Chinese export growth decreased."
BTW, the October Chinese export increased by about 17.5%.

[krishnan]

export increase = growth increase...NO

[wong]

What I find funny is the name Hilead.

There is a US Biotech named Gilead. The CCP decides to be one-up and names their shop Hilead, since H follows G.

It could also be read as Hi-Lead, which might be closer to the truth.

wong: UW-Milwaukee is a big enough campus in its own right. BTW, why do you defend the CCP so much. It is one thing to be proud of being Chinese and Chinese people; but why defend the CCP even when it indulges in such a blatant theft. We have had many proud posters from China before, but your single-minded devotion to the CCP is rather unique.

Where does this article implicate the CCP of any wrongdoing? This is a trade secret case. It looks like some underpaid, disgruntled employees stole some trade secrets (innocent until proven guilty) and started a competitor. Hardly unique to China. This happens a lot in the US, especially with the H1Bs since they think they can always flee home. There was the high frequency trading code theft at SocGen and the logic bomb at Fannie.

[Theo_Fidel]

Everyone else's imports declining = Chinese exports increase.

[VikramS]

Where does this article implicate the CCP of any wrongdoing? This is a trade secret case. It looks like some underpaid, disgruntled employees stole some trade secrets (innocent until proven guilty) and started a competitor. Hardly unique to China. This happens a lot in the US, especially with the H1Bs since they think they can always flee home. There was the high frequency trading code theft at SocGen and the logic bomb at Fannie.

Court documents show that Hilead was set up with the help of the state-run Chinese Academy of Sciences. And because the project fit national and local government policy goals, Hilead received a $300 million loan from the national government’s China Development Bank. The loan came after the company won the approval of the party secretary of Shandong Province, one of the country’s highest-ranking public officials.

[krisna]

Chinese TV Host Says Regime Nearly Bankrupt

China’s economy has a reputation for being strong and prosperous, but according to a well-known Chinese television personality the country’s Gross Domestic Product is going in reverse.

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. He coined the phrase: “In China, every province is a Greece.”

The restrictions Lang placed on the Oct. 22 speech in Shenyang City, in northern China’s Liaoning Province, included no audio or video recording, and no media. He can be heard saying that people should not post his speech online, or “everyone will look bad,” in the audio that is now on Youtube.
In the unusual, closed-door lecture, Lang gave a frank analysis of the Chinese economy and the censorship that is placed on intellectuals and public figures. “What I’m about to say is all true. But under this system, we are not allowed to speak the truth,” he said.

Lang’s assessment that the regime is bankrupt was based on five conjectures.

Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.

Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang.

Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.

Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010).

Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 51.6 percent, Lang said.

Once the “economic tsunami” starts, the regime will lose credibility and China will become the poorest country in the world, Lang said.

Few scholars inside the country dare to speak as Lang has, Cheng said. And that’s probably because he has a professorship in Hong Kong.

[krisna]

^^^^
continuation of above--
Economist Starts ‘Cyclone’ on China’s Internet

Larry Lang inspires people in China to seek the truth

Most recently, on Oct. 22 in Shenyang, China, Lang told a closed-door seminar that China’s economy was already bankrupt. His remarks set off a “Lang cyclone” on Internet forums in mainland China, and netizens speculated on what the secret of the Lang phenomenon might be. Why did his remarks have such an impact?
Lang earned a Ph.D. in finance from the Wharton School at the University of Pennsylvania in 1986. In the last 10 years, Lang has published in-depth analyses of China’s economy.
In 2006, China Youth conducted an online survey titled “Which mainstream economist do you trust?” Lang was voted as the most trusted Chinese economist by the public and gained many more votes than the second-place Wu Jinglian.
At that time, though, other mainstream Chinese economists blamed him for arousing public sentiment against the loss of state assets, acting, the other economists said, like a bull in a china shop.
But even if some economists have sometimes disapproved of Lang, they can’t dismiss him. Lang has often written in narrow and difficult financial fields, and his publications are among the most frequently cited of all Chinese economists.

Lang’s reputation is of a scholar with a conscience, and he stands apart from those intellectuals who choose to safeguard the Beijing regime.

Lang is often referred to as a new-left-socialist economist. In judging the results of the reforms of state-owned enterprises, whether the analysis is based on GDP or the Gini Index (a measure of the economic inequality in a society), Lang believes that while the reforms have improved efficiency through layoffs, buyouts that terminate the employee’s service, and shifting the costs of retirees to the whole society, the method cannot be called successful because it’s not a fair and harmonious solution.

Lang attributed all the problems of the Chinese economy to a conspiracy theory that blames the United States. Some people think that only by doing so could he see his statements spread in China. Saying that the source of disaster is the communist regime’s totalitarian rule is not allowed .

[Christopher Sidor]

Chinas descent into poverty and chaos will not be in anybody's interest. If we want the world economy in a high growth trajectory, then we need a economically healthy china.

China's debt has one aspect like Japan's, which is lost to many. It is all internally held. Greece is in a mess because its debt is held by outsiders. Due to its internally held debt, Japan can have a debt load of excess of 200% of GDP. China can continue down the same path, as long as it wants to. The price that the average chinese might end up paying can be high, but I dont see them complaining either.

The question is that when china slows down, will we have the capability to zoom ahead? And more importantly, like China will we chase growth as an end to itself or will we be choose our own path and chase growth as a means to a loftier goal ?

[RamaY]

^ Is this VasudhaikaKutumbam at Indian cost?

[VikramS]

CS:

Very well said about ownership of Chinese debt. It is all local.

However when a nation gets saddled with too much bad debt, it is tougher to grow at a breakneck speed. Japan asset prices are in a perennial decline and no amount of money printing has helped. The situation is worsened by the demographic pressures, and we have had these lost decades.

Amazingly, the one-child policy might also result in the same pressures on the Chinese economy. I do not how long it will take, but eventually too much bad debt + aging population is not a good combination.

I sincerely hope that when that stage is reached that China has enough vents to allow the anguish to be limited inside China. Knowing the histories of autocratic societies, the easy way out would be to focus the angst externally. For the time being they have decided to reverse the tightening steps taken earlier, which should help speed things up.

[Theo_Fidel]

There is some uncertainity but it is thought that the working age population has very gradually dipped into decline from 2010 onwards. The decline will become very clear by 2015. Already the number of 20-24 year olds is in freefall. Down 30% from a decade ago as a percentage of population, 16% now compared to 23% 10 years ago. Now the total number of workers will temporarily keep rising as the younger population has a higher working percentage. But it is just Maya.

The key question is what happens to the 200 million males who will never marry over the next 30 years. The sex imbalance is getting really really bad and is uniform across China.

From 2015 atleast 400,000 people will be permanently lost from the working pool every year, accelarating rapidly as China loses about 150 million workers by 2050. At that point they will be losing 5 million workers from the pool every year.

[VikramS]

TF:

Those 200 million women less males is what worries me too. It was not very long ago that Mao offered to ship Chinese women to the West, as if they are cattle to be traded. What if the CCP decides that the best way to keep the angst is to create a situation where these millions can find land (and wives) in the rest of the world; very much like the Ghazis who plundered the sub-continent during the past millenium.

[Theo_Fidel]

TF:

Those 200 million women less males is what worries me too. It was not very long ago that Mao offered to ship Chinese women to the West, as if they are cattle to be traded. What if the CCP decides that the best way to keep the angst is to create a situation where these millions can find land (and wives) in the rest of the world; very much like the Ghazis who plundered the sub-continent during the past millenium.

Vikram they are doing that already.

CPC single male drones are being shipped around the world as cheap labor for Chinese company projects abroad. There was a report a while back that GOI was startled to find an small army of 50,000 drones working on projects in Odisha/Jharkhand/WB. When the hungama in Libya happened people were startled to find 40,000 single male Chinese drones show up at the docks for transport. None of them went back to Pandaland IIRC. They were shipped of to projects in Europe. In Africa there was mine in Zimbabwe that shocked its workers by revealing 10,000 drones had arrived and the locals were no longer needed.

If one looks at the scale of Panda activity abroad and their refusal to use locals, there is a good 10 million drones already abroad. They are never going back. Several are finding gainful employment posting to this board from foreign places.

[wrdos]

http://news.yahoo.com/chinas-exports-we ... 3QD;_ylv=3

SHANGHAI (AP) — China's exports rose 13.8 percent to $174.5 billion in November, a decline from 15.9 percent growth in October, while China's overall trade surplus plunged 35 percent from a year earlier, to $14.5 billion, Customs statistics said. Imports gained 22.1 percent to $159.9 billion, down from the previous month's 28.7 percent rise.

[Christopher Sidor]

^^^^
What is more significant is the fact that "overall trade surplus plunged 35% from a year earlier, to 14.5 billion." Assuming that this figure is only for a quarter, then a year earlier in the same quarter the trade surplus was 22.3 billion. This is what happens when one has demand destruction. For an export led country like China, Taiwan, Korea and Japan this is more than acute, it is devastating.

Now continuing this line of reasoning, if China has to grow it has to stimulate internal consumption. Even growth in residential/commercial construction can be seen as a form of consumption. If this is stimulated, then the trade balance/surplus will shrink even more as the exports might not take up for the slack. China will import massive amounts of copper, iron ore, cement etc to construct residential/commercial property. Will China get any output out of these things? While these properties are being constructed yes, China will get employment figures which are good. But after the construction stops then? Also will these residential/commercial properties produce anything, doubtful. And this bring us to the crux of the matter. Items like Roads/Housing/Office/Retail Commercial/etc enhance real growth. They cannot supplant real growth. They can assist real growth.

The above reasoning is based on the assumption that the major markets of North Atlantic region will not be humming at their most optimal rate.

[wong]

Of course you left out this paragraph.

"It is unclear whether the government at this point knew about Cathay’s patent or that Mr. Wang had come from Cathay. Analysts say that rather than being a target of government animus, Cathay may have simply been an unintended victim — collateral damage — of the Chinese government’s drive to bolster state partners like Hilead."

Where does this article implicate the CCP of any wrongdoing? This is a trade secret case. It looks like some underpaid, disgruntled employees stole some trade secrets (innocent until proven guilty) and started a competitor. Hardly unique to China. This happens a lot in the US, especially with the H1Bs since they think they can always flee home. There was the high frequency trading code theft at SocGen and the logic bomb at Fannie.

Court documents show that Hilead was set up with the help of the state-run Chinese Academy of Sciences. And because the project fit national and local government policy goals, Hilead received a $300 million loan from the national government’s China Development Bank. The loan came after the company won the approval of the party secretary of Shandong Province, one of the country’s highest-ranking public officials.

[wong]

What Indians see as a huge negative for China, we Chinese see as a huge positive. That's why China will continue to move in a different trajectory from India. Yes, you will soon be the most populous nation on earth. No one is trying to compete with you there.

From FT: Waves from slowing China to break our shores
"That sense of concern is not evident in Beijing. China has seen the emerging markets of Asia seize up in the late nineties, with little impact on its own well-being. Japan has been losing ground for two decades. The global financial crisis of 2008 suggested that the US model was deeply flawed, its growth dependent on debt that came largely from Beijing itself. Now, with Europe in recession, many Chinese feel that their system has proved far superior to those of any of its competitors.

In the past, slower growth in China would have been a problem. In the last ten years, China needed growth of 8 per cent to generate jobs for about 115m people joining its labour force. But the demographic change as its population ages as a result of the one child policy means that in the coming decade less than 20m people will join the labour force. That means a slower rate of growth will not be calamitous for China."

[Hari Seldon]

^^^So the gender imbalance de facto seen in PRC is not a negative for PRC? Interesting, if true.

[anishns]

The Supel Powel



Check out @0:44

BTW they despise the Japanese so much, yet most of their counterfeit copies are of Japanese brands. Also, they seem to have special love for Adidas

[Theo_Fidel]

That's why China will continue to move in a different trajectory from India.

Agree. What goes up must come down.

^^^^
Re: 0.44 you can't be serious.

What the hell is MasterBeef.

[anishns]

^^^^
Re: 0.44 you can't be serious.

What the hell is MasterBeef.

Theo Sir....I don't create the video.....only link it!

But, this is hilarious!

[SaiK]

What would they name 'Buck Knives'?

[VikramS]

Of course you left out this paragraph.

"It is unclear whether the government at this point knew about Cathay’s patent or that Mr. Wang had come from Cathay. Analysts say that rather than being a target of government animus, Cathay may have simply been an unintended victim — collateral damage — of the Chinese government’s drive to bolster state partners like Hilead."

And?

What did they do to fix the situation AFTER they found out that there was a problem and there was an "unintended" victim.

On what basis did the government approve Mr. Wang's proposal if they had not known his background, capabilities and knowledge? I guess it is only in China that a $300M venture investment is made with no due diligence about the founders. If that is an indication about the quality of thought behind investment decisions in China, then perhaps all that Western talk about a huge amount of bad loans is grounded in reality.

BTW, most Indians are not hoping for a collapse in China; if the world's second largest economy collapses it will have negative effects on everyone. A natural slowdown in the growth rates consistent with the demographics is normal and as you mentioned not all that bad a thing. By the same logic the Indian economy will also likely do better within the context of the way the two countries operate. So why do you talk about capitulation and what not? Why the need for everyone to pay homage to your schlong? Why that insecurity?

What bothers me is that there are few checks and balances in the system and a history of boorish behavior which gets amplified if there is internal stress.

I do not know what kind of satisfaction you get defending the CCP but if you are any indication of thinking of the new generation of Chinese, the future can not be very bright.

[RamaY]

The Supel Powel

[youtube]vPQHpHvVWH8

Check out @0:44

BTW they despise the Japanese so much, yet most of their counterfeit copies are of Japanese brands. Also, they seem to have special love for Adidas

Soon PRC will be named UN-tied states of China

[Singha]

I always suspected a lot of the 'fashion' oriented lines of adidas/puma were counterfeit. my wife is going to shanghai for work soon and both me and my son want new shoes (son wants much more)....getting cold feet now, perhaps going to big stores operated by the brands themselves is ok...but we have the case of the nakli Apple too in kunming. infact a chinese co just own a lawsuit over the ipad name which they had patented before apple.

[wong]

^^^So the gender imbalance de facto seen in PRC is not a negative for PRC? Interesting, if true.

Of course the gender imbalance is even worst in India, yet you worry about China.

[wong]

Every major private equity firm and venture capital firm (Warburg Pincus, KKR, Kleiner Perkins) has been in China for over 10 to 20 years. They compete with the state for both deals and talent. I would not worry about the efficiency of Chinese venture funding. They have been some of the most profitable deals in the world in the past 10 years. What I found interesting from reading about the Rajat Gupta insider trading case was that he couldn' make money in India with his venture capital firm. If he can't, who can ???

As for this demographic dividend you are hoping for, it may or may not happen. It takes more than just bodies. All the other ingredients will have to be in place.

Of course you left out this paragraph.

"It is unclear whether the government at this point knew about Cathay’s patent or that Mr. Wang had come from Cathay. Analysts say that rather than being a target of government animus, Cathay may have simply been an unintended victim — collateral damage — of the Chinese government’s drive to bolster state partners like Hilead."

And?

What did they do to fix the situation AFTER they found out that there was a problem and there was an "unintended" victim.

On what basis did the government approve Mr. Wang's proposal if they had not known his background, capabilities and knowledge? I guess it is only in China that a $300M venture investment is made with no due diligence about the founders. If that is an indication about the quality of thought behind investment decisions in China, then perhaps all that Western talk about a huge amount of bad loans is grounded in reality.

BTW, most Indians are not hoping for a collapse in China; if the world's second largest economy collapses it will have negative effects on everyone. A natural slowdown in the growth rates consistent with the demographics is normal and as you mentioned not all that bad a thing. By the same logic the Indian economy will also likely do better within the context of the way the two countries operate. So why do you talk about capitulation and what not? Why the need for everyone to pay homage to your schlong? Why that insecurity?

What bothers me is that there are few checks and balances in the system and a history of boorish behavior which gets amplified if there is internal stress.

I do not know what kind of satisfaction you get defending the CCP but if you are any indication of thinking of the new generation of Chinese, the future can not be very bright.

[chola]

I would say it is patently worse for China since in addition to the gender imbalance Chinese females are particularly coveted in the West while the Chinese male is universally unwanted for being effeminate.

[wong]

I would say it is patently worse for China since in addition to the gender imbalance Chinese females are particularly coveted in the West while the Chinese male is universally unwanted for being effeminate.

Some logic you have there. Even if what you wrote is true, which it isn't, we are talking about Chinese people in China, not Chinese people in the West. In the West the women (not all, but many) covet you for your money and how big your wallet is. I know this from personal experience. The other silly stereotypes you wrote, I won't even address.

[chola]

I would say it is patently worse for China since in addition to the gender imbalance Chinese females are particularly coveted in the West while the Chinese male is universally unwanted for being effeminate.

Some logic you have there. Even if what you wrote is true, which it isn't, we are talking about Chinese people in China, not Chinese people in the West. In the West the women (not all, but many) covet you for your money and how big your wallet is. I know this from personal experience. The other silly stereotypes you wrote, I won't even address.

Yes, we are talking about the Chinese people in China. There are two parallel cottage industries in China decreasing the amount of females in a society already seriously short of females: one -- Westerners are adopting thousands of little Chinese girls since this sick society doesn't want them (witness the little girl being run over repeatedly without anyone caring to stop and help) and two, white and foreign males of all stripes including overseas Chinese export thousands of Chinese females back to the West as wives, mistresses and concubines.

I'd say I have some personal experience. I'm married to a Chinese-American wife. I find the overall visage of Chinese girls very attractive with the porcelain coloring, hairless smooth skin and delicate features, especially when combined with American-style physical toning and conditioning (she was on the volleyball and swim teams in school). So I congratulate you on providing the world with your females though it is becoming more and more unlikely that Chinese males would be able to corral them or any other females.

[VikramS]

Every major private equity firm and venture capital firm (Warburg Pincus, KKR, Kleiner Perkins) has been in China for over 10 to 20 years. They compete with the state for both deals and talent. I would not worry about the efficiency of Chinese venture funding. They have been some of the most profitable deals in the world in the past 10 years. What I found interesting from reading about the Rajat Gupta insider trading case was that he couldn' make money in India with his venture capital firm. If he can't, who can ???

As for this demographic dividend you are hoping for, it may or may not happen. It takes more than just bodies. All the other ingredients will have to be in place.

What do foreign VC funds have to do with the investment decisions made by the state? And if it is true that foreign firms compete with the state then why did they not do this deal?

I think the simple answer is that they knew that the deal was a ripoff and a theft and the Western companies will typically stay away from blatant IP theft. But the Chinese state do not have such qualms because once the CCP head-honcho has given his blessing, no law in the world can protect the IP.

I also find your statement about foreign firms competing with the state highly improbable; it is not typically considered wise to compete with the state in PRC; you are supposed to cooperate.

As for this demographic dividend you are hoping for, it may or may not happen. It takes more than just bodies. All the other ingredients will have to be in place.

Ah, now this gets interesting. Can you elaborate more about the other ingredients which need to be in place? That will shed more light.

[g.sarkar]

Sorry if already posted:
http://www.latimes.com/business/la-fi-c ... 1127.story
Chinese leaders fret about unrest as economy sours
China's top security chief warns provincial officials to brace for disorder if financial conditions worsen.
By David Pierson, Los Angeles Times
December 5, 2011, 4:04 p.m.
Reporting from Beijing—
"Images of Greek demonstrators rioting over austerity measures and Occupy Wall Street protesters scuffling with police in the U.S. appear to be worrying China's communist leaders.
One of China's most senior officials has acknowledged that the souring global economy has the government on edge.
According to an official New China News Agency report Saturday, China's top security chief warned provincial officials to brace for unrest if financial conditions continue to deteriorate.
Zhou Yongkang, a member of China's nine-person Politburo Standing Committee, said the country should focus on developing better "social management" — a euphemism for control aimed at stamping out opposition and demonstrations.
"Faced with the negative impact of the market economy, we still have not established a complete social management system," Zhou said. "How to establish a social management with Chinese characteristics to suit the socialistic market economic system in China is the most pressing task we face today."
Nothing is potentially more destabilizing to the government than a sustained financial crisis; the Communist Party has staked its credibility on delivering solid economic growth.
Chief among those threats is the slowing manufacturing sector. China has been hit recently by a spate of labor strikes sparked by complaints of shrinking paychecks and poor working conditions. More than 200 workers demonstrated at a Singaporean-owned electronics plant in Shanghai last week over rumors of a mass layoff.
Manufacturing activity contracted in November, the first time the sector has retreated in nearly three years, signaling that the worst is yet to come........"
Gautam

[RamaY]

PRC demolished a bridge built in 1994 after the efforts to repair it failed.

http://www.bbc.co.uk/news/world-asia-16138023

At this rate PRC can rebuild its infra every 15 years..

[g.sarkar]

http://www.latimes.com/business/la-fi-c ... full.story
China's housing bubble is losing air
Home prices and sales plunge after China's government intentionally slams on the brakes. Some recent buyers stage demonstrations, destroy real estate offices and demand refunds of up to 40%.
By David Pierson, Los Angeles Times
December 13, 2011
Reporting from Beijing—
"Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy. It's old news in the United States, but now the air has started to leak from another great housing bubble — in China.
Home prices nationwide declined in November for the third straight month, according to an index of values in 100 major cities compiled by the China Index Academy, an independent real estate firm. Average prices in the Shanghai area are down about 40% from their peak in mid-2009, to about $176,000 for a 1,000-square-foot home.
Sales have plummeted. In Beijing, nearly two years' worth of inventory is clogging the market, and more than 1,000 real estate agencies have closed this year. Developers who once pre-sold housing projects within hours are growing desperate. A real estate company in the eastern city of Wenzhou is offering to throw in a new BMW with a home purchase.
The swift turnaround has stunned buyers such as Shanghai resident Mark Li, who thought prices had nowhere to go but up. The software engineer closed on a $250,000, three-bedroom apartment in August, only to watch weeks later as the developer slashed prices 25% on identical units to attract buyers in a slowing market.
Outraged, Li and hundreds of others who paid full price trashed the sales office, scuffled with employees and protested for three days before police broke up the demonstration. Walking away now would mean losing the $75,000 down payment that he borrowed from his working-class parents.
"I still haven't told them," Li, 29, said of his home's plummeting value. "It will just make them worry, and it's already too late."
It's all eerily similar to the early stages of the U.S. housing crash. The big difference is that the Chinese government intentionally slammed on the brakes.
Over the last year it has tightened lending and prohibited the purchase of more than one home in several cities, in a bid to discourage speculators and bring down prices. Chinese authorities say they're trying to tame inflation and defuse public anger over housing costs, the fallout from the government's efforts to stimulate the economy with easy credit during the global financial crisis. They have pledged to keep home buying limits in place for the foreseeable future.
But concern is growing about Beijing's ability to engineer a soft landing......."
Gautam
PS the comments are interesting.

[VikramS]

g.sarkar

That news about the parents investing their life savings is really sad.

As some have mentioned earlier since the CCP keeps interest rates artificially low, well below the rate of inflation, a lot of Chinese use Real Estate as an inflation hedge.That keeps fuelling the bubble and now the poor people are losing their life savings.

There has been a huge transfer of wealth from the labor class with limited investment options to the neo elite capitalist ruling class which benefits from that literally slave labor. Tight control of labor, cheap and abundant money keeps the owners happy penalise workers who toil only to see see their wealth eroded away.

In contrast the RBI tries to keep the real interest rate positive, even though the fiscal policies are far from ideal; in China however the real interest rate is negative. While the Western bond crisis gather the headlines, failed Chinese govt bond auctions are not that rare; sometimes investors just do not want to fund the government and get a negative real rate of return.

[Hari Seldon]

China’s deserted fake Disneyland

About 45 minutes outside of Beijing are the deserted ruins of what was supposed to be the world's largest amusement park. Instead, farmers have reclaimed the land planting corn and digging wells next to spires modeled after Disneyland.

-----

The propaganda article from the western press above clearly shows how naked the unprovoked western aggression against pure, poor, pristine china has gotten of late only.

And that despite the chinese government, in a rare show of uncharacteristic generosity extending the olive branch to the west. Yes, its true. China, magnanimously, offered the west the same deal it offered its own people (wow or what?!?!) - perpetual serfdom.

Sadly, the haughty west in rejecting this golden offer has proven itself grossly unworthy of china's mercy....shiver in yer boots, barbarians... the mandate from heaven shall soon be upon ye....

Cough, cough. Jai hu, jai mao. Cough cough.

[Theo_Fidel]

^^^^
To go with the above fantasy land... ..eating of bitter tears for all...

Chinese have never experienced a true financial panic. I think they are completely unprepared.

http://www.npr.org/2011/12/12/143305690 ... t-problems

The government has become so concerned about deepening debt that it has ordered banks to cut off loans to certain local projects, including a highway that is supposed to stretch more than 60 miles in western China's Shaanxi province.

A short drive from the city of Yan'an, a 100-yard elevated section of that highway stands dormant with nothing on either side.

"From April until now, the subcontractors on this road haven't been paid any money," says Cui Jinmin, who ran a crew of about 15 workers here. "There's nothing we can do. The road's owner [the local government] has no money; we can only wait." Cui lives in a shack with his wife, Li Na, in a muddy work camp on the edge of the orphaned stretch of highway. He says the government stopped paying his crew back in April and his workers finally gave up and left in July. "Right now, they owe our team at least $300,000," says Cui, who watches over the heavy machinery and rusting construction materials. "Almost the entire project is halted. We've worked for so many years, this is the worst project we've ever worked on." In fact, one worker at another section of highway became so desperate for his wages, he climbed up on a bridge pillar and threatened to jump, according to a local newspaper. Officials here refused to discuss the project, which is supposed to connect Yan'an, the cradle of China's Communist revolution, with Wuqi, a Shaanxi county.

China's Stimulus Plan

The highway is part of a massive stimulus program China's government launched in 2008 to cushion the economy from the effects of the global financial crisis. The strategy worked, but many local governments racked up huge debts along the way. Local governments in western China's Gansu province owe $22 billion, or 1 1/2 times their annual revenue, according to a provincial report. Next door in Inner Mongolia, the tab is $44 billion — or about 90 percent of local revenue. How many projects have crashed like the highway in Shaanxi is unclear.

Cui Jinmin oversees an abandoned strip of unfinished highway in western China's Shaanxi province. Cui says the government stopped paying his workers in April and they went home in July.

"We don't really know, which is the scary thing," says Stephen Green, who heads research on Greater China at Standard Chartered Bank in Hong Kong. Green says most projects won't be able to pay for themselves. Most highways just don't earn enough money in tolls.

Roads aren't the only problem. China's high-speed rail system has run up more than $300 billion of debt, according to China's Rail Ministry. "The banks have stopped lending money — more or less — to the Ministry of Railways," says Green, "which means hundreds of projects around the country for high-speed rail have been slowed down or stopped."

[ashi]

Is Chanos Finally Getting It Right on China?

Two years ago famed hedge fund short seller Jim Chanos made waves by predicting a real estate collapse for China. He proclaimed that China was like "Dubai times 1000, or worse." His predictions have not been proven right.

Now, Chanos seems to be backtracking on his dire predictions. He told CNBC last week in an interview that, "China's going to survive all this. This is not the end of the next Middle Kingdom" but that China is facing a "pretty big speed bump." A speed bump, no matter how big, is quite different from Chanos’ earlier gloomy predictions.

There has been a slowdown in manufacturing and housing prices. A closer look at the economy actually shows that Chanos is correct this time – there is a serious speed bump in China’s economic future but that a soft landing is the likely scenario.

Looking ahead China’s consumer sector should continue to soar while the road ahead for the real estate and manufacturing sectors looks bumpy.

[Christopher Sidor]

Is Chanos Finally Getting It Right on China?

Looking ahead China’s consumer sector should continue to soar while the road ahead for the real estate and manufacturing sectors looks bumpy.

I wish China all the best in its efforts to transform into a consumption led economy from an export led economy. Let us see if you can actually pull it off.

On a side note it is good to know that China might not have a hard landing.

[g.sarkar]

http://www.npr.org/2011/12/13/143623874 ... eads-lower
After Boom Years, Chinese Housing Market Looks Soft
by Frank Langfitt
"In recent years, China's real estate market has boomed. A three-bedroom apartment in Shanghai overlooking the river can still run more than $3 million, but that's beginning to change.
Sales have begun to drop around the country in recent months. The slide comes as the world's most dynamic economy grapples with other challenges, including massive local government debt and slowing growth.
Falling prices have sparked protests against real estate companies in Beijing, Shanghai and the southern city of Nanjing.
On Sunday, about 100 angry home buyers descended on the Shanghai headquarters of China Vanke, one of the nation's biggest property firms.
"Vanke cheats! Give me back my hard-earned money!" a crowd chanted as it unfurled bed sheets and placards with messages criticizing the company.
anke, which refused to talk for this story, posted guards in green camouflage uniforms at the front gate. Home buyers have recently overrun other Vanke offices in Shanghai and Beijing. Demonstrators wore surgical masks to hide their identities, saying they feared Vanke would try to seek retribution.
One protester, a woman with the surname of Sun, bought a Vanke apartment in August.
"The price was about $280,000," said the woman, who works at a video game company. "The price now is a bit more than $200,000."
A fellow protester surnamed Ling — no one wanted to give their full names — said the company sold apartments, then slashed prices to attract new buyers and generate cash.
Ling said the price of her apartment fell $60,000, or more than a quarter of its value, in just a few months....."
Gautam