China Economy: News & Discussion

Discussion in 'China' started by Rage, Jun 1, 2009.

  1. RPK

    RPK Indyakudimahan Senior Member

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    fullstory

    China to buy first IMF bonds for 50 billion dollars

    Washington, Sept 2 (AFP) China has agreed to buy the first International Monetary Fund bonds for about USD 50 billion , the IMF said today.

    IMF managing director Dominique Strauss-Kahn and the deputy governor of the People's Bank of China, Yi Gang, signed the agreement Wednesday at IMF headquarters in Washington, the multilateral institution said.

    Under the agreement, the Chinese central bank "would purchase up to SDR 32 billion (around USD 50 billion) in IMF notes," it said.
     
  2. RPK

    RPK Indyakudimahan Senior Member

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    domain-b.com : Canada may replace Australia as China's favourite investment destination: study

    Canada is likely to replace Australia as the preferred investment destination for Chinese investors, who are eyeing the energy, natural resources, agriculture and biotechnology sector of the North American country.

    Armed with more than $2 trillion in foreign exchange reserves, China has supported its oil companies in making landmark overseas acquisitions since energy assets have fallen considerably due to the global economic downturn.

    Chinese majors have moved into Canada this year making hi profile investments in the Canadian energy sector.

    Wuhan Iron & Steel, China's fourth biggest steelmaker, acquired 19.9 per cent stake in Consolidated Thompson Iron Mines Limited for $240 million in June to gain access to iron ore.

    CIC, the $300 billion Chinese sovereign wealth fund acquired a 17.2-per cent stake in Teck Mining Company (Teck Cominco), Canada's largest diversified miner for $1.5 billion in July to take advantage of its coal resources (See: China's CIC fund to invest $1.5 billion in Canadian miner).

    Last month, state-owned oil giant, PetroChina agreed to acquire a 60-per cent stake in two planned Athabasca Oil Sands projects in Western Canada for $1.9 billion. (See: Petrochina buys 60 per cent stake in Canada's oilsands for $1.7 billion)

    Although China has not yet reduced its investment in Australia in the first half of this year, Beijing has been looking elsewhere since the past two months for securing its energy supplies.

    For the year 2008, China was the fourth largest investor in Australia with investments of $56.3 billion as of 31 December 2008, while China's investment in Canada was C$2.75 billion at the end of 2008. Canadian direct investment in China was nearly $3.6 billion.

    The non-profit Asia Pacific Foundation of Canada, surveyed 1,100 Chinese companies with overseas business who have annual revenues of $146,000, during the period December 2008 and February 2009, says says Canada should be ready for a growing inflow of Chinese investment over the next few years in a report titled China is Going Shopping. Is Canada Ready?.

    The survey, released this week, reveals that Canada is near the top of the list of overseas investment targets for Chinese companies. The 'new China' is flexing its economic muscle and Chinese investors are prepared to buy their way into new markets and secure access to resources and technology.

    Amongst the key findings of the survey were Canada's attraction due to its openness to Chinese investment, compared with countries in Western Europe.

    Chinese companies are most interested in Canada's energy and natural resources, agri-food and biotech sectors.

    Although only 7 per cent of the companies surveyed have investments in Canada, an impressive three-quarters of those already there say they are considering further investment within the next few years.

    One of the attractions of Canada is its position within the North American Free Trade Agreement (NAFTA), the trilateral trade bloc in North America comprising the US, Canada and Mexico.

    The majority of Chinese companies that have invested in Canada are looking to service the entire NAFTA market. Only 25 per cent said their planned investment was to service the Canadian market alone, the report showed.

    The survey found that among the biggest concerns Chinese firms have in considering investment in Canada is the unfamiliarity of Chinese brands in Canada, as well as their own lack of understanding of legal and market risks in that country. Among their least important concerns is the possibility of negative reaction from the Canadian public or government to greater Chinese investment.
     
  3. RPK

    RPK Indyakudimahan Senior Member

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    ?China development faces new problems`

    Beijing: President Hu Jintao said on Sunday that China's rapid development faced "a series of new problems" including maintaining social stability, in a speech 10 days ahead of the sensitive National Day.


    As authorities make exhaustive preparations to celebrate the 60th anniversary of the founding of communist China on October 1, Hu also said that Western-style democracy was not an option for the Asian giant.

    There was "an arduous task with regards to the impact of the international financial crisis and maintaining the rapid and steady growth of the economy," he said.

    He added the ruling Communist Party also faced "an arduous task in safeguarding and improving people's livelihood and maintaining social stability".

    Hu made the comments in a speech marking the 60th anniversary of the CPPCC, an advisory body to the Communist Party, posted on the official china.com.cn website.

    National Day, which will be marked by a huge military parade in the capital, comes at a delicate time for China, with simmering ethnic unrest in Xinjiang, a vast region in the northwest, and sporadic mass protests elsewhere.

    Hu called on members of the CPPCC to promote national unity in the country of 1.3 billion.

    You "must... assist the party and the government in doing its ethnic and religious work well, promote national unity, religious harmony and social stability," he said, according to the transcript.

    "We must refer to the fruits of mankind's political civilisation to develop socialist democracy, but we must by no means imitate the Western political system's method," he added.

    The comments came two days after a key annual meeting of the party's powerful central committee ended, vowing to battle endemic corruption and keep the economy growing.
     
  4. johnee

    johnee Elite Member Elite Member

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    How China Cooks Its Books


    It's an open secret that China has doctored its economic and financial statistics since the time of Mao. But could it all go south now?

    BY JORDAN CALINOFF | SEPTEMBER 3, 2009

    In February, local Chinese Labor Ministry officials came to "help" with massive layoffs at an electronics factory in Guangdong province, China. The owner of the factory felt nervous having government officials there, but kept his mouth shut. Who was he to complain that the officials were breaking the law by interfering with the firings, he added. They were the law! And they ordered him to offer his workers what seemed like a pretty good deal: Accept the layoff and receive the legal severance package, or "resign" and get an even larger upfront payment.

    "I would estimate around 70 percent of workers took the resignation deal. This is happening all over Guangdong," the factory owner said. "I help the Department of Labor, and they'll help me later on down the line."

    Such open-secret programs, writ large, help China manipulate its unemployment rate, because workers who "resign" don't count toward that number. The government estimates that roughly 20 million migrant factory workers have lost their jobs since the downturn started. But, with "resignations" included, the number is likely closer to 40 million or 50 million, according to estimates made by Yiping Huang, chief Asia economist for Citigroup. That is the same size as Germany's entire work force. China similarly distorts everything from its GDP to retail sales figures to production activity. This sort of number-padding isn't just unethical, it's also dangerous: The push to develop rosy economic data could actually lead China's economy over the cliff.

    Western media outlets often portray Chinese book-cooking as part and parcel of a monolithic central government and omnipotent Beijing bureaucrats. But the problem is manifold, a product of centralized government as well as decentralized officials.

    Pressure to distort or fudge statistics likely comes from up high -- and it's intense. "China announces its annual objective of GDP growth rate each year. In Chinese culture, the government has to reach the objective; otherwise, they will 'lose face,'" said Gary Liu, deputy director of the China Europe International Business School's Lujiazui International Financial Research Center. "For instance, the government announced that it wanted to ensure a GDP growth rate of 8 percent in 2009, and it has become the priority for government officials to meet that objective."

    But local and provincial governmental officials are the ones who actually fiddle with the numbers. They retain considerable autonomy and power, and have a self-interested reason to manipulate economic statistics. When they reach or exceed the central government's economic goals, they get rewarded with better jobs or more money. "The higher [their] GDP [figures], the higher the chance will be for local officials to get promoted," explained Liu.

    Such statistical creativity is nothing new in China. In 1958, Chairman Mao proclaimed that China would surpass Britain in steel production within 15 years. He mobilized villages throughout China to establish backyard steel furnaces, where in a futile attempt to reach outrageous production goals, villagers could melt down pots and pans and even burn their own furniture for furnace fuel. This effort produced worthless pig iron and diverted enough labor away from agriculture to be a main driver in the devastating famine of the Great Leap Forward.

    Last October, Vice Premier Li Keqiang said in a speech after inspecting China's Statistics Bureau, "China's foundation for statistics is still very weak, and the quality of statistics is to be further improved" -- a brutally harsh assessment coming from a top state official.

    Indeed, China has predicated its very claim of being the healthiest large economy in the world on faulty statistics. The government insists that even though China's all-important export sector has been devastated -- contracting about 25 percent in the past year -- a massive uptick in domestic consumption has kept factories producing and growth churning along. A close examination of retail sales and GDP growth, however, tells a different story. China's domestic retail sales have risen about 15 percent year on year, but that does not really translate into Chinese consumers purchasing 15 percent more televisions and T-shirts. The country tabulates sales when a factory ships units to a retailer, meaning China includes unused or warehoused inventory in its consumption data. There is ample evidence that state-owned enterprises buy goods from one another, simply shifting products back and forth, and that those transactions count as retail sales in national statistics.

    China's retail statistics seem implausible for other reasons, too. They would imply an increase in salaries among Chinese people, allowing them to purchase that extra 15 percent. To be sure, the Statistics Bureau reported salaries had increased 12.9 percent in the first half of 2009. But Chinese netizens complained such numbers were hard to believe -- as did the bureau's chief.

    A look at GDP growth also raises serious questions. China's economy grew at an annualized 6.1 percent rate in the first quarter, and 7.9 percent in the second. Yet electricity usage, a key indicator in industrial growth and a harder metric to manipulate, declined 2.2 percent in the first six months of the year. How could an economy largely dependent on manufacturing grow while its industrial sector shrank?

    It couldn't; the numbers don't add up. China announced a $600 billion stimulus package (equal to about 14 percent of GDP) last fall. At that point, local governments started counting the dedicated stimulus funds in GDP statistics -- before finding projects to use the funds, and therefore far before the trillions of yuan started trickling into the economy. Local governments keen to raise their growth and production numbers said they spent stimulus money while still deciding on what to spend it, one economist explained. Thus, China's provincial GDP tabulations add up to far more than the countrywide estimate.

    Alternative macroeconomic metrics, such as the purchasing managers' index (PMI), which measures output, offer a no more accurate reflection. One private brokerage house, CLSA, compiles its own PMI, suggesting a sharp contraction in industrial output between December 2008 and March 2009. Beijing's PMI data, on the other hand, indicated that industrial output was expanding during that period.

    Unfortunately, such obfuscation means China's real economic health is difficult to assess. Most indicators that would help an intrepid economist correct the government numbers -- progress on infrastructure projects, end-user purchases, and the number of "resigned" workers -- are not public.

    Still, it is possible to infer the severity of the gap between economic reality and China-on-paper by looking closely at monetary policy. China's state-owned banks dramatically increased lending in the first half of 2009 -- by 34.5 percent year on year, to more than $1 trillion. This move seems intended to keep growth artificially high until exports bounce back. Most analysts agree that it is leading to large bubbles in the stock, real estate, and commodity markets. And the Chinese government recently announced plans to raise capital requirements -- an apparent sign it sees the need to reign in the expansion.

    For the long term, China is banking on its main export markets -- in the United States, Europe, and Japan -- recovering and starting to consume again. The hope is that in the meantime, rosy economic figures will placate the masses and stop unrest. But, if the rest of the world does not rebound, China risks the bursting of asset bubbles in property and stocks, declining domestic consumption, and rising unemployment.

    That's when the Wile E. Coyote moment could happen. Once Chinese citizens no longer believe that the economy is doing well, social unrest and more widespread worker riots -- already increasing in scope and severity -- are likely. That's something that China will have a harder time hiding. And then we'll know whether China's statistical manipulation was a smart move or a disastrous mistake.

    How China Cooks Its Books
     
  5. ppgj

    ppgj Senior Member Senior Member

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    Getting the recovery wrong- The Economic Times
    Prem Shankar Jha

    While China is fighting the global recession by ramping up investment, India is doing so by ramping up consumption. But both are doing the wrong
    thing, argues Prem Shankar Jha.

    There is a curious symmetry in the strategies that China and India are following to fight the global recession. On second thoughts, asymmetry might be a better word, for while China is fighting it by ramping up investment, India is doing so by ramping up consumption. The symmetry lies in the fact that both are doing the wrong thing.

    It is China that needs to push up domestic consumption to fight the recession and India that needs to invest heavily in its sub-Saharan infrastructure. Both countries know it; both are even making token efforts to do so. But neither has any heart in it. Therein lies the other element of symmetry.

    China’s response to the global economic crisis was to announce, in early November, that it would spend an additional 4 trillion Yuan ($586 billion) by December 2010. The announcement was greeted with both relief and scepticism: relief because it offered a ray of hope of a revival of global demand, and scepticism because many doubted China’s capacity to find the money and accelerate the tempo of investment so dramatically.

    The scepticism was understandable: a decade earlier, when China had last slipped into a recession, Premier Zhu Rongji had announced a $200 billion a year stimulus package. Wen Jiabao’s package was ten times larger. Indeed, Dragonomics, the Economist’s Beijing-based research arm, estimated that only $130 billion was truly new investment. The rest had already been sanctioned under various heads.

    But China has utterly, and crushingly, confounded the sceptics. In the January to March quarter, the first full quarter after the announcement of the stimulus package, total spending under the package rose by 4.6 trillion yuan! How, one may well ask, can we make such an estimate so soon in a country known for fudging its figures?

    The answer is much the same as it would be for India: the most unambiguous yardstick of a jump in spending is the aggregate rise in bank credit. In China this rose by 4.6 trillion yuan more in January to March 2009 than it had risen during the same quarter of 2008!

    This was three times as much as the ‘normal’ increase in outstanding loans in the same quarter of 2008. But this year with prices falling and production slowing down sharply the normal increase in credit should have been much smaller.

    In sum, China has come close to meeting a stimulus target set for 27 months, in three months! What is more, since investment projects take time to complete, the amount committed for spending on identified projects is much, much larger.

    How has China achieved this miracle? The answer reveals both the short-term strengths and long-term weaknesses of its peculiar economic structure. China has been able to do this because the central government has only limited control over investment in the economy.

    Much, if not the major part, of the investment is done by four tiers of local government: the provincial governments, prefectures, counties and urban municipalities/ townships. Not for the first time in the past thirty years, these have run away with the investment agenda.

    What has made this possible is the central government’s directive to the banking system to provide funds liberally for the projects submitted to them by the local governments. According to the blueprint that the National Reform and Development Commission (NRDC) had prepared, two thirds of the investment had to be made by the local governments.

    To maintain a degree of co-ordination they were asked to submit their projects to the NRDC, and to do it as soon
    as possible.

    The provinces treated Beijing’s sense of urgency and their renewed freedom to borrow almost at will (that had been taken away, in theory at least, by banking reforms in 1997) to indulge in an orgy of wish fulfilment.

    By the end of December, 18 provinces (out of 31) had already submitted projects worth 25 trillion yuan. The NRDC has winnowed the wish list but there is only so much it can do. As a result, the actual investment till March has been three times the 1.2 trillion yuan budgeted for till the end of 2009!

    ‘There is only one small hitch. Only 9% of this money is going to support the incomes of those who have been hit by the recession, or to boost rural consumption. 91% is going to ‘non-financial business companies’.

    Three-fifths of this, in turn, is going into the creation of still more power and transport infrastructure, while another 12% is going into the technological modernisation of industry. In all, barely a fifth of the investment will reach the rural areas, where two-thirds of the people still reside.

    India, by contrast, has poured money, also borrowed ruthlessly from the banking system, into consumption. Against a budgeted borrowing of Rs 132,000 crore in 2008-9, the government borrowed Rs 342,000 crore.

    This year it has budgeted for Rs 401,000 crore and is likely to end up borrowing Rs 500,000 crore. Thus the net fiscal stimulus, i.e., the amount that the government would not have borrowed had there not been the excuse of the global recession will amount to about Rs 550,000 crore or $115 billion.

    Given that India’s GDP is only 40%t of China’s, the jolt being sought to be given to the economy is comparable. But of this, the share of investment is even smaller than the share of consumption in China: it is a paltry Rs 25,000 crore or 5 billion dollars. This is not even 5% of the total.

    Nor is private investment filling the gap. On the contrary, the growth of aggregate bank credit has been a paltry 15% in the past year, a full 10% below what it was in 2007-08. Since most of this goes into meeting working capital needs, it is a safe bet that private investment has actually contracted in recent months.

    Both countries are on the wrong track. China desperately needs to increase income levels and social security payments in the rural areas and among its migrant labour force, to stem a further rise in political discontent.

    India needs to at least quadruple its annual investment in infrastructure if it is ever to emerge as a first rate economic power.

    If neither can do it, the reasons lie not in the understanding or aims of their leaders, but in the way that politics has locked their economies on potentially dangerous economic paths. Thereby hangs a tale that will take too long to tell in the space allotted to me, It must told another time.
     
  6. Quickgun Murugan

    Quickgun Murugan Regular Member

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    China's GDP growth to top 7% in first three quarters

    BEIJING: China's gross domestic product (GDP) growth in the first three quarters should exceed 7 percent, Xiong Bilin, deputy director general of the Industry Department of the National Development and Reform Commission (NDRC), said Monday.

    The specific GDP growth figure in the first three quarters is scheduled to be released Thursday.

    Few difficulties stood in the way of China realizing its annual target -- made early this year -- of 8 percent GDP growth year on year, said Xiong at a press conference highlighting production overcapacity.

    The government's 4-trillion-yuan ($586 billion) stimulus package, rolled out in November last year, contributed much to China's economic recovery, Xiong said.

    China's GDP growth was 7.1 percent in the first half over the same period last year with 6.1 percent in the first quarter and 7.9 percent in the second.

    The NDRC would mainly redress production overcapacity in six sectors, including steel, cement, plate glass, the coal-chemical industry, polycrystalline silicon and wind power equipment, said Xiong.

    The NDRC also warned of obvious production overcapacity in sectors like electrolytic aluminum, ship manufacturing and soybean oil extraction.
     
  7. badguy2000

    badguy2000 Respected Member Senior Member

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    here is the data of chinese steel production in the past 60 years.
    the Unit is "10 thousands Tons"
    Year Production Yearly-addition Growth Rate
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]

    it is cited from a chinese thesis.

    source : ccthere

    the data should be right,because I have checked many other resource.
     
  8. badguy2000

    badguy2000 Respected Member Senior Member

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    BTW, Chinese steel production of 2009 is expected to be about 600 million-700 million Tons,almost 30% more than the steel production of 2007.

    Chinese steel production is almost = Japan's +USA's+ Russia's+Ukraine+India's+S.Korea's+France+UK's+Italy's and others
     
  9. badguy2000

    badguy2000 Respected Member Senior Member

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    even Chinese per capital steel consumption has caught up with the fully-industrialized economies like USA and UK.

    now,China is during the climax stage of industrialization and urbanization.So, Chinese have to pour sooo much steel and concrete to build huge amount of infrastructure projects like roads,seaports,airports, buildings....etc.
    As we see, after steel and concrete are being poured , new cities and roads are being built.


    After Chinese finished its industrialization and urbanizaiton in one or two decades, most necessary infrastructures will be finished . At that time, CHinese steel consumption will go down ,just as USA and UK did .

    India has not entered the stage of real industrializaton and urbanization yet. but it will sooner or later. at that time ,India will also consume huge amount of steel as CHina does today.
     
  10. Vladimir79

    Vladimir79 Defence Professionals Defence Professionals

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    China inflation worries re-emerge with recovery

    Michael Sainsbury, China correspondent | October 26, 2009
    Article from: The Australian

    CHINESE bureaucrats and bankers have warned the economy is overheating and reform is urgently needed after figures showed the country's economy galloping towards 8 per cent GDP growth this year.

    China's stimulus package, which could pump as much as 22 trillion yuan ($3.5trillion) in payments and loans into the economy over two years, has kept things moving, triggering a sharp bounce back from the global downturn.

    GDP growth, already at 7.7 per cent for the first nine months, is expected to easily hit the 8 per cent target, and the country appears assured of similar growth rates in coming years.

    "We do not expect the amount of spending related to the government's investment stimulus to decline in 2010, which would be a partial withdrawal of the stimulus. In other words, the rest (2 trillion yuan) of the two-year stimulus package will be spent in 2010, and maybe even somewhat more," UBS economist Tao Wang said. "However, the increase of government-mandated investment will inevitably be much smaller than this year, which is what counts for growth."

    Spending is relatively easy. Now comes the hard bit.

    Reform slowed under the leadership of Hu Jintao and was almost completely stymied by the global recession. China must restructure its economy away from exports and heavy industry towards domestic consumption, innovation and services.

    The government understands this -- there have been increasing comments from government think tanks and bankers. The State Council or cabinet increasingly speaks about the need for economic reform in recognition that growth is overly reliant on public demand.

    "I think they were doing quite well before the downturn," Royal Bank of Scotland China economist Ben Simpfendorfer said. "There was the introduction of the labour law, raising minimum wages and environmental protection law in the export hub of Guangdong in particular."

    The stimulus, which has been directed at infrastructure projects and benefited large state-owned enterprises, has further unbalanced China's economy.

    "The statistics bureau estimates that gross capital formation (including inventories) contributed 7.3 percentage points to growth in the first three quarters this year," Citi economist Ken Tang said.

    "Consumption added four percentage points, while net exports subtracted 3.6percentage points for a total of 7.7 per cent year-to-date growth. Based on earlier released details, we estimate that pure investment was responsible for 8.2 percentage points in the third quarter, while inventory building added just over one point and the consumption contribution is picking up a bit from the second quarter."

    The spending is pushing up growth and prices, yet the government maintained lower interest rates, encouraging banks to lend with abandon. Now the government has put the lending brakes on the banks and is watching inflation.

    "Current measures to drain liquidity in the open market operations would continue, while a hike in the reserve requirement may still be possible this year," Mr Tang said. "We continue to expect rate hikes to begin in spring next year, when both growth and inflation would likely be higher and many other central banks are expected to raise rates."

    The government has been acknowledging for the past two months that inflation will re-emerge as a problem -- as it was before the global crisis.

    Some analysts are estimating growth of 11 per cent in the first half of next year before falling below 10 per cent.

    So why do Chinese policy-makers continue to hold off pushing up interest rates despite clear signs the economy is starting to overheat in some areas?

    In short, the government wants to keep rates low while it fixes a private enterprise lending problem.

    The stimulus benefited state-run companies but the private enterprises that have been the engine room of China's extraordinary boom have missed out. Banks have been reluctant to lend to smaller businesses -- the bulk of the private sector -- preferring to make large loans to government-backed corporations.

    "There is now a risk that fiscal and monetary stimulus is left too loose for too long, especially as officials attempt to spur a stronger recovery in the private sector," Mr Simpfendorfer said. "It is thus time to drop the growth target, and focus on economic reform, rather than fiscal stimulus, if a sustainable recovery is to emerge."

    The Chinese government seems to know this, but can it pull it off?

    China inflation worries re-emerge with recovery | The Australian

    What I find amasing is that China can expand the M2 money supply so much, face increased wages and material hikes, and yet inflation isn't rampant. - just amasing!
     
  11. RPK

    RPK Indyakudimahan Senior Member

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    US slaps import penalties on Chinese tubular goods

    fullstory

    Washington, Nov 6 (AFP) The US Commerce Department announced it has imposed anti-dumping tariffs of up to 99 per cent on imports of Chinese tubular goods.

    The department said it has "determined that Chinese producers/exporters have sold OCTG (oil country tubular goods) in the United States at prices ranging from zero to 99.14 per cent less than normal value."

    The duties will be imposed based on individual companies' dumping rates, the department said, adding that imports of OCTG from China were valued at an estimated 2.6 billion dollars in 2008.

    Dumping occurs when a foreign company sells a product in the United States at less than normal value.
     
  12. Vladimir79

    Vladimir79 Defence Professionals Defence Professionals

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    Can this be the start of Sino-US trade wars? :twizt:
     
  13. Daredevil

    Daredevil On Vacation! Administrator

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    It has already started when US imposed import tariffs on Chinese made tyres. Such trade wars will be followed by other countries which are hurt by cheap chinese goods due to currency value of renminbini which is kept artificially low and pegged against the dollar. As the dollar takes the beating, the renminbini will also become lower in its value and will lead to even more trade surpluses with other countries due to cheap exports and effectively starting new trade wars.
     
  14. Daredevil

    Daredevil On Vacation! Administrator

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    Is China headed toward collapse?

    Chanos, a billionaire, is the founder of the investment firm Kynikos Associates and a famous short seller — an investor who scrutinizes companies looking for hidden flaws and then bets against those firms in the market.

    His most famous call came in 2001, when Chanos was one of the first to figure out that the accounting numbers presented to the public by Enron were pure fiction. Chanos began contacting Wall Street investment houses that were touting Enron’s stock. “We were struck by how many of them conceded that there was no way to analyze Enron but that investing in Enron was, instead, a ‘trust me’ story,” Chanos told a congressional committee in 2002.

    Now, Chanos says he has found another “trust me” story: China. And he is moving to short the entire nation’s economy. Washington policymakers would do well to understand his argument, because if he’s right, the consequences will be felt here.

    Chanos and the other bears point to several key pieces of evidence that China is heading for a crash.

    First, they point to the enormous Chinese economic stimulus effort — with the government spending $900 billion to prop up a $4.3 trillion economy. “Yet China’s economy, for all the stimulus it has received in 11 months, is underperforming,” Gordon Chang, author of “The Coming Collapse of China,” wrote in Forbes at the end of October. “More important, it is unlikely that [third-quarter] expansion was anywhere near the claimed 8.9 percent.”

    Chang argues that inconsistencies in Chinese official statistics — like the surging numbers for car sales but flat statistics for gasoline consumption — indicate that the Chinese are simply cooking their books. He speculates that Chinese state-run companies are buying fleets of cars and simply storing them in giant parking lots in order to generate apparent growth.

    Another data point cited by the bears: overcapacity. For example, the Chinese already consume more cement than the rest of the world combined, at 1.4 billion tons per year. But they have dramatically ramped up their ability to produce even more in recent years, leading to an estimated spare capacity of about 340 million tons, which, according to a report prepared earlier this year by Pivot Capital Management, is more than the consumption in the U.S., India and Japan combined.

    This, Chanos and others argue, is happening in sector after sector in the Chinese economy. And that means the Chinese are in danger of producing huge quantities of goods and products that they will be unable to sell.

    The Pivot Capital report was extremely popular in Chanos’s office and concluded, “We believe the coming slowdown in China has the potential to be a similar watershed event for world markets as the reversal of the U.S. subprime and housing boom.”

    And the bears also keep a close eye on anecdotal reports from the ground level in China, like a recent posting on a blog called The Peking Duck about shopping at Beijing’s “stunningly dysfunctional, catastrophic mall, called The Place.”

    “I was shocked at what I saw,” the blogger wrote. “Fifty percent of the eateries in the basement were boarded up. The cheap food court, too, was gone, covered up with ugly blue boarding, making the basement especially grim and dreary. ... There is simply too much stuff, too many stores and no buyers.”
     
  15. badguy2000

    badguy2000 Respected Member Senior Member

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    oh yeah...another Gordon Chang appears.....but I am afraid that he can not become as notorious as Gordon Chang any more, even if he would do more amazing streaking deeds than Gordon Chang.....

    as we all know, the man that invented the first wheel is looked on as a talent,but the ones that want to "invent" wheel for a second time are always looked on as stupid guys.

    what writer do is just to invent "china to collapse" for X00000th time.

    Frankly speaking ,He can not become famous for it....if he really wants to attract other's attention, I suggest that streakings be a better option to him.
     
  16. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Gordon Chang is a good author just because you don't like what he is saying don't discredit him, he is giving concrete evidence evidence for his views.
     
  17. badguy2000

    badguy2000 Respected Member Senior Member

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    forget it...

    MR. Chang is just the most successful spy of China........

    He succeeded in persuading west people that China wouldl collapse and west people needed not be wary to the emergence of CHina at all.

    Seen from hisorical perspective, Mr.Chang succeed in managing necesary time and room for Chinese emergence....he will be a hero to Chinese....:dfi-1:
     
  18. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    nice job by Mr Gordon Chang if your theory is true but how does a Chinese economic collapse make him a hero??
     
  19. RAM

    RAM The southern Man Senior Member

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    China raises gasoline, diesel prices

    China will raise gasoline and diesel prices both by 480 yuan (US$70.28) per tonne from Tuesday, the National Development and Reform Commission (NDRC) announced on its website Monday.

    The benchmark price of gasoline will be 7,100 yuan a tonne and that of diesel 6,360 yuan a tonne, according to the NDRC.The retail price of gasoline will climb by 0.36 yuan per liter and that of diesel will rise by 0.41 yuan per liter.The country adopted a new fuel pricing mechanism, which took effect on Jan. 1.

    Under the pricing mechanism, the NDRC will consider changing the benchmark retail prices of oil products when the international crude price changes more than four percent over 22 straight work days."Margins of price fluctuations are within expectation. The price hike can help relieve domestic refiners' pressure from soaring oil refining cost," said Wang Jing, an analyst on petrochemical sector with Orient Securities Company Limited.

    The price hike was aimed to protect oil refiners' interests, ensure market supply and help lead rational consumption to promote energy-saving and emission reduction, the NDRC said.The NDRC would take active measures to help reduce pressure brought to sectors like transportation, the NDRC said.International crude oil price might continue to rise within this year as demand would continue to grow amid global economic recovery, Wang said.

    China raises gasoline, diesel prices - China.org.cn
     
  20. Daredevil

    Daredevil On Vacation! Administrator

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