China Economy: News & Discussion

[Martian]

China's Nominal GDP Officially Passes Japan's

China has officially passed Japan in nominal terms as the world's 2nd largest economy. Note the calculation discrepancy between 2008's GDP numbers and the revised 2009 numbers which increased from $4.909 trillion to $5.296 trillion. This was due to a revision to the 2009 GDP growth from 8.7% to 9.1% as well as a baseline change to the starting 2009 GDP number along with the recent Renminbi exchange rate increase.

http://english.peopledaily.com.cn/90001/90...62/7050765.html

"China's GDP rises 9.1% in 2009, surpassing Japan
16:31, July 02, 2010

Beijing has revved up its 2009 GDP volume at more than US$5.29 trillion, exceeding Japan's US$5.08 trillion.

China's National Bureau of Statistics revised up the country's GDP (gross domestic product) growth rate for 2009 from 8.7 percent to 9.1 percent.

After a detailed check-up, the bureau modified the volume of GDP, a major gauge of a country or a region's economic production, to 34.0507 trillion yuan (US$5.296 trillion) last year, according to a Xinhua report.

With the upward revisions, China has surpassed Japan as the world's second-largest economy. Japan posted nominal GDP of US$ 5.085 trillion last year.

Most economists forecast China's economy will grow more than 10 percent in 2010, powered by strong domestic consumption and government-inspired investments in high-speed trains and new energies."

 

[Martian]

1) Technically, I think China did not pass Japan in nominal GDP last year because the standard practice is to use the average currency conversion rate for the year or 2009 (e.g. 6.83 Yuan to 1 U.S. dollar). See http://blogs.wsj.com/chinarealtime/2010/07...l-number-three/

2) It will be interesting to see the new GDP projections for China by both the IMF and Goldman Sachs. The IMF-projected GDP for China is lacking by about $1/2 trillion dollars. The Goldman Sachs' projections are about $1 trillion dollars short for 2010 China. See http://en.wikipedia.org/wiki/List_of_count...al%29_estimates

3) China will catch up faster to U.S. GDP than most people expected. China's economic growth rate is roughly 8 to 10% per year. In contrast, U.S. growth rate is approximately 2 to 3%. In addition, China's currency appreciation gives China's nominal GDP an additional boost. America had better keep an eye on the rear-view mirror. China is closing in fast.

 

[nitesh]

good article:

Smart, Young, and Broke

 

[amoy]

Since the '90s, Chinese universities have doubled their admissions, far outpacing the job market for college grads. This year China's universities and tech institutes churned out roughly 6.3 million graduates. Many grew up in impoverished rural towns and villages and attended second- or third-tier schools in the provinces, trusting that studying hard would bring them better lives than their parents had. But when they move on and apply for jobs in Beijing or Shanghai or any of China's other booming metropolises, they get a nasty shock.

The discontent rising among the ants is even more worrying. Blue-collar wages have actually soared recently, while white-collar pay is shrinking, thanks to a massive glut of university graduates. And salary cuts aren't their only complaint. Official Chinese labor statistics (which tend to be unrealistically rosy) claim that 87 percent of college grads find work of some sort sooner or later. In other words, even the government admits that at least one in eight is permanently unemployed. And those who get jobs don't always find work in their chosen fields. Nearly a third of Beijing's ants are employed in "sales in private business." For tech engineers, that often means peddling low-end electronic gear for the city's computer wholesalers.

Lots of youth mirroring the above mentioned life. The disparity across regions seems appalling.

Q's
1) what's the number of grads each year from Indian universities and tech institutes ? what's their beginning pay level
2) What about Indian new grads? do they usually find an ideal job matching their competency with a decent pay ?

 

[Pintu]

http://www.thestatesman.net/index.php?option=com_content&view=article&id=334171&catid=40


China's exports surge despite yuan

10 July 2010
press trust of india
BEIJING, 10 JULY: Braving the European debt crisis and increase in the value of Chinese currency, yuan, China's exports went up by 43.9 per cent raking up $137.4 billion.
In June, exports were up 43.9 per cent while imports, at $117.37 billion, were up 34.1 per cent on year-on-year basis, resulting in a total trade value of $254.77 billion, figures released by the General Administration of Customs (GAC) said.
However, China's trade surplus fell by 42.5 per cent in the first six months this year to $55.3 billion. In the first half of 2010, exports rose by 35.2 per cent to $705.09 billion while imports were up by 52.7 per cent to $649.79 billion.
China's foreign trade in the first half totalled $1.35 trillion, a year-on-year increase of 43.1 per cent, after the country saw its June exports and overall trade, both climbing to record highs.
The June exports increased 4.3 per cent from May and the imports were 4.6 per cent higher than the last month. These were first figures released after the recent marginal appreciation of yuan by Chinese government following pressure from the United States. The yuan rose by about 0.78 per cent.
The new export figures also showed that the Chinese exports, the mainstay of the country's economy, were not hit by the European debt crisis as feared.

 

[Armand2REP]

China Loans 'Distorted,' Exceeding Official Numbers, Fitch Says
July 14, 2010, 5:22 AM EDT

July 14 (Bloomberg) -- Chinese bank lending in the first half was 28 percent higher than official numbers suggest as more loans were repackaged into investment products, "distorting" credit data, Fitch Ratings said.

After adjusting for "informal securitization," new loans stood at about 5.9 trillion yuan ($871 billion) in the first six months, topping People's Bank of China data of about 4.6 trillion yuan posted this month, Fitch said in a statement today.

The central bank said last week that money and loan growth in the first half was "reasonable" after banks awarded a record 9.59 trillion yuan of lending last year. China's policy makers have ordered banks to limit new credit at 7.5 trillion yuan this year to alleviate the threat of asset-price bubbles.

At the end of June, more than 2.3 trillion yuan in outstanding credit was in investment products and off the balance sheets of Chinese banks, Fitch estimated in today's release, up more than ten-fold from the end of 2007.

Credit-backed investment products are "frequently marketed as substitutes for bank deposits, and investors commonly believe there is an implicit commitment from banks to repay investors upon maturity," Fitch said. "These implicit obligations currently are not included in financial statements, and represent a hidden call on liquidity."

http://www.businessweek.com/news/20...ed-exceeding-official-numbers-fitch-says.html

 

[redragon]

powered by strong domestic consumption and government-inspired investments in high-speed trains and new energies."

This is the most important part

 

[Armand2REP]

This is the most important part

It is the most important part. But it isn't happening fast enough. Consumption as a share of GDP is actually going down while GDP growth is fully reliant on fixed asset investment in construction. Without the banks lending money like mad, China's GDP growth would actually be zero. They have already lent 6 trillion RMB and are set to break last years record of 9.6 trillion. Every year it takes more and more lending to keep strong growth rates, and there are more and more NPLs the banks have to shift off their balance sheets. The NPLs from the 90s are still floating around the system with only a 20% recovery. The consumer growth is based on huge stimulus measures for autos and white appliances. All of this is artificial and unsustainable. A few green industries are not going to make up for the collapse of the construction sector.

 

[badguy2000]

It is the most important part. But it isn't happening fast enough. Consumption as a share of GDP is actually going down while GDP growth is fully reliant on fixed asset investment in construction. Without the banks lending money like mad, China's GDP growth would actually be zero. They have already lent 6 trillion RMB and are set to break last years record of 9.6 trillion. Every year it takes more and more lending to keep strong growth rates, and there are more and more NPLs the banks have to shift off their balance sheets. The NPLs from the 90s are still floating around the system with only a 20% recovery. The consumer growth is based on huge stimulus measures for autos and white appliances. All of this is artificial and unsustainable. A few green industries are not going to make up for the collapse of the construction sector.

guy, the total asset of all Chinese banks was only 0.5 trillion USD,so 0.2 trillion NPLS seemed a disasater at that time.



now, the total asset of all Chinse banks is 10 trillion USD ,so 0.2 trllion NPLS is just a peanuts.
your head is still a one-way one.


BTW, CHina is already one of biggest importer in the world. if Chinese economy was down, many countries including france would also have a tough day.
so,you had better pray chinese economy would not "hard land". otherwise more french guys like you would lose jobs and become street beggars.

 

[Armand2REP]

The total outstanding NPLs is calculated at $1.3-1.5 trillion today. The Big 4 are constantly scrubbing and rolling over NPLs from their balance sheets, Agri bank just scrubbed $137B this week. Chinese bank assets are based on property values, what do you think is going to happen when property prices collapse? Bank assets will be cut in half. $5 trillion in assets equalling $2 trillion in bad debt makes for a banking crisis especially when banks are now buying their own dumping grounds for their NPLs. There is plenty of evidence signalling this, inability to raise interest rates, constant increases in reserve requirements, and the ever increasing amounts of loans needed to keep it floated. You are headed for another 90s crisis but this time, the amounts are too big to hide them away.

BTW, Chinese imports are slowing signalling the Chinese economy is going down. Countries like France do not rely on exporting to China, that is an Asian market and I do not really care if countries like Taiwan, Japan, and Australia go down. It would just be more Asian beggars on the streets, not French.

 

[badguy2000]

The total outstanding NPLs is calculated at $1.3-1.5 trillion today. The Big 4 are constantly scrubbing and rolling over NPLs from their balance sheets, Agri bank just scrubbed $137B this week. Chinese bank assets are based on property values, what do you think is going to happen when property prices collapse? Bank assets will be cut in half. $5 trillion in assets equalling $2 trillion in bad debt makes for a banking crisis especially when banks are now buying their own dumping grounds for their NPLs. There is plenty of evidence signalling this, inability to raise interest rates, constant increases in reserve requirements, and the ever increasing amounts of loans needed to keep it floated. You are headed for another 90s crisis but this time, the amounts are too big to hide them away.

BTW, Chinese imports are slowing signalling the Chinese economy is going down. Countries like France do not rely on exporting to China, that is an Asian market and I do not really care if countries like Taiwan, Japan, and Australia go down. It would just be more Asian beggars on the streets, not French.

guy, keep on your magic digial game and wild imagination of "china to collapse" ...haha, that is what you are best at.

what we chinese are best at is not digital game of " somebody to collapse",but building,building and building.

you guys have been keep on blahing "china to collapse" since 1989 while we chinese have been building ,building and building since since 1989.

now anyone here knows what has happened when you guys blahed " china to collapse" and we chinese built ,built and built after 1989.

So. guy, if you guys insist "china to collapse",nobody here will be suprise at all,just as though nobody here would be suprised if you insist the earth were not round.


BTW, take care of your PIGS,don't skew it again.

Chinese won't save your ass once more by IMF.

 

[Armand2REP]

I am not... you guys nor am I predicting the collapse of China. Japan didn't collapse in the 1990s, they just stagnated for the last 20 years. China's meteoric rise has been based on exports, low skilled labour base, and construction, all of which whose growth has been maxed out. The viable growth of China has already exceeded its limits and is living on borrowed cash. 44 trillion RMB to be exact. Overcapacity has reached the scale of 20-30% in most industries and property, that is how over-estimated the Chinese economy really is.

 

[badguy2000]

I am not... you guys nor am I predicting the collapse of China. Japan didn't collapse in the 1990s, they just stagnated for the last 20 years. China's meteoric rise has been based on exports, low skilled labour base, and construction, all of which whose growth has been maxed out. The viable growth of China has already exceeded its limits and is living on borrowed cash. 44 trillion RMB to be exact. Overcapacity has reached the scale of 20-30% in most industries and property, that is how over-estimated the Chinese economy really is.

empty talk one more? lies would become truth if repeated 1000 times? are you the believer of Goebbel?

you repeat "china to collapse" or "china to stagnat" or " china to mplode" or " chinese banks to die" after you appeared in the forum .

I am quite surprised now how you can repeat vendoring so when the fact is that chinese banks and Chinese economy are saving the asses of west ones .

 

[Armand2REP]

I have been saying all along China will stagnate, the very comparison of Japan. Anything else is your slander.

 

[SHASH2K2]

China Boomtown Migrants Sorely Underpaid
BEIJING (Reuters) - Young migrant workers in the southern Chinese boomtown of Shenzhen are sorely underpaid but in no position to ask for more money, state media Monday cited a survey as showing against a backdrop of strikes.

Factories in China's export powerhouse province of Guangdong, where Shenzhen is located, have been hit by a string of stoppages over the past few months by workers demanding a bigger slice of the country's economic wealth.

In Shenzhen, just across the border from Hong Kong, the average monthly wage for young migrant workers is less than half that of those who hold full-time, long-term jobs in the same city, at 1,838.6 yuan (177.18 pounds), according to the new survey.

"Many companies pay in line with the city's lowest minimum standard, and migrant workers can only raise their income by doing excessive amounts of overtime," the All-China Federation of Trade Unions said.

Such a salary "can only maintain the very lowest standards of living in Shenzhen," it added.

The survey, excerpts of which were carried in Communist Party mouthpiece the People's Daily, made no reference to the bout of strikes, in line with the muted coverage of the unrest by Chinese media.

The latest strike has affected a plant supplying parts to Honda Motors' China operations.

But the publication of the study in an official newspaper shows that the rising demands of a new generation of workers migrating from Chinese villages, or born to migrants in the cities, are weighing on policy-makers.

A similar report last month warned migrant demands were a test for stability, something the Communist Party values above all else.

The new survey pointed out that young migrant workers were in a weak position when it came to pushing for higher pay.

"They ... don't know much about protecting their rights and ... lack communication channels within companies," it said. "When their rights are infringed upon in most cases they choose to change jobs, so there is a lot of movement of labour."

Young migrants thought they should be getting at least 2,679 yuan a month, but would need 4,200 yuan a month to be able to afford to have a family, the survey found.

Though they were better educated than the generation of migrants that came before them, they were still essentially doing the same manual jobs and few had risen to the ranks of management, it added.

But only one percent would go back to the countryside.

"Everything will get better and better, as long as we work hard and keep forging ahead," more than three-quarters of respondents said. The newspaper did not say how many people took part.

China's official trade unions come under the control of the ruling Communist Party, and rarely support strikes or confrontations with employers. Many private companies do not have unions, or if they do they are controlled by management.

Some union officials have been pressing for more vocal representation of workers, including migrants.

http://www.nytimes.com/reuters/2010/07/18/world/international-uk-china-labour.html

 

[Armand2REP]

Chinese steel sector almost in the red as prices fall -CISA
Monday, 19 Jul 2010

Reuters quoted the China Iron & Steel Association said China massive steel sector which has begun cutting production in the face of falling prices and softening demand is nearing the break-even point.

CISA said in a statement "Most steel products prices have extended falls in July to a level almost below the mills' production costs, and this will continue supporting prices. It said the production cuts and the limited room for further falls in margins may cause steel prices to rebound slightly in the near future."

CISA also predicted China exports of steel products would fall sharply in the second half of the year adding to pressure on the sector. It said "Moreover, there are still uncertainties for the economic recovery in the euro zone and Chinese steel exports will fall sharply in the second half of this year putting more pressure on the domestic market."

CISA blamed rising international trade protectionism and the removal of export tax rebate for some steel products earlier this week for the tougher export environment. While exports slow, the domestic market is also gloomy with mills facing a squeeze from two directions steel prices are under pressure from slower growth in China car and building sectors but input costs have not fallen as fast.

CISA said average prices for imported iron ore rose by 8.82%MoM to USD 139.85 per tonne cost & freight in June, while prices for domestic ore, coke and scrap were still relatively high. At the same time, steel production is still growing fast on a YoY basis and high inventories will weigh on the sluggish market.

Inventories for five major steel products in 26 major cities stood at a combined 15.72 million tonnes by the end of June down by 0.4% or 60,000 tonnes MoM.

http://www.steelguru.com/chinese_ne...t_in_the_red_as_prices_fall_-CISA/155769.html

 

[nitesh]

thiefs of highest degree

http://www.businessweek.com/news/20...wei-of-conspiring-to-steal-trade-secrets.html
Motorola Accuses Huawei of Conspiring to Steal Trade Secrets

The suit comes as security concerns undermine Huawei and ZTE Corp., China's two biggest network-gear makers, in their ability to expand in some markets. India blocked domestic phone companies from buying equipment made by Chinese vendors, people familiar with the matter said, and U.S. government concerns over national security led Huawei to abandon a joint bid to buy 3Com Corp. in 2008.

more on this:

2 Indians are also involved!

http://www.engadget.com/2010/07/21/motorola-sues-huawei-and-several-former-employees-for-stealing-w/

 

[nitesh]

if previous one was not sufficient:

http://money.cnn.com/2010/07/22/autos/gm_theft_hybrid_secrets/index.htm
Couple charged with GM hybrid tech theft

 

[nitesh]

a good read:

Why China Is The Mother Of All Grey Swans

 

[Pintu]

http://timesofindia.indiatimes.com/...o-2-eco-topples-Japan/articleshow/6238946.cms

China No. 2 eco, topples Japan
REUTERS, Jul 31, 2010, 12.27am IST

BEIJING: China has overtaken Japan to become the world's second-largest economy, the fruit of three decades of rapid growth that has lifted hundreds of millions of people out of poverty.

Depending on how fast its exchange rate rises, China is on course to overtake the US and vault into the No. 1 spot sometime around 2025, according to projections by the World Bank, Goldman Sachs and others. China came close to surpassing Japan in 2009 and the disclosure by a senior official that it had now done so comes as no surprise. Indeed, Yi Gang, China's chief currency regulator, mentioned the milestone in passing in remarks published on Friday.

"China, in fact, is now already the world's second-largest economy," he said in an interview with China Reform magazine posted on the website (www.safe.gov.cn) of his agency, the State Administration of Foreign Exchange.

Cruising past Japan might give China bragging rights, but its per-capita income of about $3,800 a year is a fraction of Japan's or America's. "China is still a developing country, and we should be wise enough to know ourselves," Yi said, when asked whether the time was ripe for the yuan to become an international currency.

"China's economy expanded 11.1% in the first half of 2010, from a year earlier, and is likely to log growth of more than 9% for the whole year. China has averaged more than 9.5% growth annually since it embarked on market reforms in 1978. But that pace was bound to slow over time as a matter of arithmetic," Yi said.

If China could chalk up growth this decade of 7-8% annually, that would still be a strong performance. The issue was whether the pace could be sustained, Yi said, not least because of the environmental constraints China faces. In an assessment disputed by Beijing, the International Energy Agency said last week that China had surpassed US as the world's largest energy user. If China can keep up a clip of 5-6% a year in the 2020s, it will have maintained rapid growth for 50 years, which Yi said would be unprecedented in human history.