China's Growing Economy Mints Billionaires

[Koji]

FDI has dropped 14% for year total so far. The FDI is going to Afrika which has tripled since 2008. Investors are finding more profitable investments elsewhere.

Those investors are Chinese! If they were to invest in their own country, it wouldn't be called FDI would it?

 

[Koji]

Daredevil, more quotes from your sources:

"On the other hand, there are also companies that have chosen to move to China despite the crisis. Groupe SEB SA is the top maker of countertop kitchen appliances in the world. The company announced this month that it has decided to move its production of irons from France and Germany to China, cutting off 214 factory jobs.

A survey conducted by the Japan Bank for International Cooperation among 982 Japanese companies still ranked China as the most promising country for business expansion."


You can bet that as soon as the downturn is less severe, FDI will shoot up again in China.

 

[Daredevil]

Daredevil, more quotes from your sources:

"On the other hand, there are also companies that have chosen to move to China despite the crisis. Groupe SEB SA is the top maker of countertop kitchen appliances in the world. The company announced this month that it has decided to move its production of irons from France and Germany to China, cutting off 214 factory jobs.

A survey conducted by the Japan Bank for International Cooperation among 982 Japanese companies still ranked China as the most promising country for business expansion."


You can bet that as soon as the downturn is less severe, FDI will shoot up again in China.

We are not discussing if China will surge back when downturn is less but the disconnect between global economic recession and China's growth. Can't you understand this simple thing. If you want to discuss China's economy, there are other China Economy threads.

[mod]Anymore posts unrelated to main topic will be deleted.[/mod]

 

[Koji]

My point is that China still remains a lucrative business destination, so why is there a disconnect in wealth creation? Obviously business is still going there, and so it is logical that new billionaires are created.

 

[Daredevil]

My point is that China still remains a lucrative business destination, so why is there a disconnect in wealth creation? Obviously business is still going there, and so it is logical that new billionaires are created.

Business is going on but it has decreased a lot due to fall in exports and FDI. When there is decrease in business, there will be decrease in profits or even losses and so no new wealth is generated and so you should see no change or decrease in the number of billionaires but on the contrary there is increase in the number of billionaires. This defies the logic if one has to go by market economics. To this, I have replied in post number 2 that the increase in number of billionaires is more due to a stock bubble in China rather than increase in real wealth. Not to forget there is a real estate bubble as well.

 

[redragon]

FDI has dropped 14% for year total so far. The FDI is going to Afrika which has tripled since 2008. Investors are finding more profitable investments elsewhere.

How much of those are from China?

 

[Koji]

Business is going on but it has decreased a lot due to fall in exports and FDI. When there is decrease in business, there will be decrease in profits or even losses and so no new wealth is generated and so you should see no change or decrease in the number of billionaires but on the contrary there is increase in the number of billionaires. This defies the logic if one has to go by market economics. To this, I have replied in post number 2 that the increase in number of billionaires is more due to a stock bubble in China rather than increase in real wealth. Not to forget there is a real estate bubble as well.

A stock bubble I accept, but the NYTIMES has stated that there is no real estate bubble in China...yet.

 

[Pintu]

[mod] A request to everybody : Please try to avoid one liners during the discussion as much as possible [/mod]

 

[redragon]

It might be true and in future that is possible. What I have been trying to show is that there is a disconnect between the increase in number of billionaires to high growth rates and global economic recession, fall in exports, decrease in FDI. Things don't add up.

Please add the increase of investment within China and of domestic comsuption too. Why people can not face the truth that the import and export only contribute about 15% to Chinese GDP. And international trades are going down but not all disappear

 

[Daredevil]

A stock bubble I accept, but the NYTIMES has stated that there is no real estate bubble in China...yet.

NYTime is not begin or end of all things. There are many economists who have declared that China has twin bubble - a stock market bubble and a real estate bubble. Here are some articles about real estate bubble in China.

China Developing Its Own Real Estate Bubble


Beijing’s property prices are climbing at an unsustainable rate, with residential property in the city center leaping 6.5% in the past week alone, according to a report Friday in the state-run China Daily newspaper.

China's Real Estate Riddle

“The end is near!” That was the message top government expert Cao Jianhai delivered in April when he predicted that residential property prices in China will plunge by half in the next two years. He reasons that China’s recent run-up in housing—average prices have tripled over the past five years—is unsustainable given the huge volume of new apartments sitting empty throughout the country.

 

[Daredevil]

Please add the increase of investment within China and of domestic comsuption too.

See your domestic consumption

The Hindu Business Line : Domestic consumption holds the key to India’s turnaround

Why people can not face the truth that the import and export only contribute about 15% to Chinese GDP. And international trades are going down but not all disappear

China' exports are $1.435 trillion (2008 est.)

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

My basic math tells that 1.4 trillion of 4.4 trillion GDP of CHina comes to ~32%. That's a lot. Get your facts right and then come back.

 

[redragon]

See your domestic consumption


My basic math tells that 1.4 trillion of 4.4 trillion GDP of CHina comes to ~32%. That's a lot. Get your facts right and then come back.[/QUOTE]

the surplus is the net contribution of the international trade to Chinese GDP, not the total amount.

 

[Daredevil]

the surplus is the net contribution of the international trade to Chinese GDP, not the total amount.

Yes, I know. But if your surplus is down due to decrease in exports your GDP growth will also be down. Your surplus is still around 500 billion which makes it around 10% of your GDP. If you don't have trade surplus means your GDP growth will be down by 1%. Another thing that you are forgetting is the employment, taxes on them, ancillary expenses related to export industry all generate wealth which is not calculated as part of Exports but as part of Industrial manufacturing which also adds up to final GDP. So, it is not simple.

 

[redragon]

In 1998, China built highway, In 2008, China built high-speed rail way+ Policies to stimulate consumptions and to increase the rate of disposable house hold income. My bet is within 15 years, China will be #1 on GDP, the average will be one fourth of that of American

 

[Vladimir79]

Those investors are Chinese! If they were to invest in their own country, it wouldn't be called FDI would it?

Chinese FDI into Afrika is only 3% of their total of $56 billion. It is quite negligable to the Afrikan total.

UNCTAD.ORG >> Year 2007 >> ASIAN FOREIGN DIRECT INVESTMENT IN AFRICA: UNITED NATIONS REPORT POINTS TO A NEW ERA OF COOPERATION AMONG DEVELOPING COUNTRIES