China Economy: News & Discussion

[Daredevil]

DD,

any clues how much would be their total investment in all such bonds? and if possible individual figures or each country please, thanks.

Including all bonds in different currencies, the total bonds that China currently holds is $2.5 trillion.

The Problem With China's Stash of Cash - WSJ.com

 

[nitesh]

Interesting read:

The Man Who Makes Your iPhone - BusinessWeek

 

[badguy2000]

Where do you get off? At a nominal GDP of 4.909 trillion dollars for 2009 and a population of 1,324,655,000, China had a per capita GDP of $3700.

Now unless you're telling me China grew by 21.6% in the last fiscal or its population dropped by a hundred and seventy-four billion, China cannot have a per capita GDP of "$ 4,500" in 2010.

let's have a bet. if it proves to be 4500 USD by the end of the year,eat you keyboard ,ok?

 

[Vinod2070]

^^ Why don't you eat your keyboard right now? You have failed big time.

and I projected that CHna' per capital nomintal GDP would surpass 10 K USD in 2010 ,when it was only 2000 USD at that time....

 

[Rage]

let's have a bet. if it proves to be 4500 USD by the end of the year,eat you keyboard ,ok?

Done. You better start building your appetite.

 

[johnee]

Much of China's GDP vanishes into thin air​

In recent weeks, we've seen China diversify away from US dollar assets into Asian bonds. Is this the start of a trend?
No, the monthly treasury data is wrong: it doesn't check on the source of the original buyer. What we're seeing is an apparent decline in Chinese purchases and a gigantic increase in British purchases. All that's happening is that China's investment body for bonds is routing purchases through its British office — essentially to hide it to avert political criticism at home.

Can someone explain what he is saying?

 

[Aruni]

Can someone explain what he is saying?

Every trade has 2 counterparties (essentially the buyer and the seller). The article states that the US Treasury keeps records of the purchasers of US federal government bonds with reference to their location. So for example, they could run a report that lists the holders of such bonds by country to view the top 10 holders.

I assume that the report also states how much worth of bonds counterparties in these countries are holding (e.g. China- $X trillion). In order to not appear as a massive hoarder of US government bonds, the articles states, the Chinese are buying the bonds using the UK branch of their investment company. Since the US Treasury does not have a mechanism to track the ownership of the UK branch to establish that the ultimate counterparty is based in China, each purchase by the UK branch is entered as a purchase from the UK (and not China).

 

[Daredevil]

Indian model of growth wins praise over its Chinese rival

PTI, Sep 14, 2010, 01.29pm IST
BEIJING: Indian economic growth, often described as chaotic and weighed down by poor infrastructure, came in for praise from experts here, compared to more disciplined but highly autocratic Chinese model.

While Indian economic growth was more fuelled by high domestic consumption and services, the Chinese model relied heavily on manufacturing and exports, said Western and Chinese experts at the state TV debate, on the sidelines of of the World Economic Forum being held here.

Besides, India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages, said Fu Jun, professor of the Political Economy of the Peking University.

"India in comparison has done a better job", Jun said.

"What is interesting from now on is which one is more viable. I have to give credit to India. What India will do next is to continue the strategy and move into other areas. By comparison we (China) have to readjust our strategy into manufacturing. I do not see reasonable balance between supply and demand," he added.

Human resources development minister Kapil Sibal, who was participating in the debate, said, "Because our economy is based on domestic demand, there is much greater innovation and ability of the entrepreneurs to actually produce wealth. In the long run a lot of innovation and lot of wealth production is going to come from our part of the world."

Martin Wolf, associate editor of the Financial Times, who was critical of the Indian growth model said, however, "Indian development is working despite failure of organisation and poor infrastructure. It is clear that lot of successful multinational companies have good assets in India."

The debate, the first of the three was held on the side lines of the Geneva based World Economic Forum which was being held at Chinese port city of Tianjin, where over 1,400 political, business leaders and economists gathered to deliberate on "Driving Growth through Sustainability".

Besides Sibal, Karnataka chief minister, BS Yeddyurappa and a host of Indian business leaders are taking part in the meeting, which is inaugurated today by Chinese Prime Minister, We Jiabao.

 

[dove]

So what is the game plan of China in buying other countries' debt. Is it due to lack of RoI on Chinese investments or some ulterior intentions against in these countries.

What can China do with any country's debt except hope they will pay it off as per original terms ? Its not like a feudal lord (or mafia gangster) would buy debt and then force the party to either pay immediately or become their slaves or something. I can't see anything suspicious except China trying desperately to diversify their dollar holdings.

Did that 'defecting' bank head actually resurface ???

 

[navida]

[QUOTE/]
Besides, India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages, said Fu Jun, professor of the Political Economy of the Peking University.

"India in comparison has done a better job", Jun said.
[/QUOTE]

While it is true that India is poised to produce better brands and organization, China has fared much better in distributing the wealth among the masses. Do you guys have an opinion? What should/would India do to uplift the masses and include them in its growth story?

 

[navida]

"Besides, India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages, said Fu Jun, professor of the Political Economy of the Peking University.

"India in comparison has done a better job", Jun said. "


While it is true that India is poised to produce better brands and organizations, China has fared much better in distributing the wealth among the masses. Do you guys have an opinion? What should/would India do to uplift the masses and include them in its growth story?

 

[dove]

China's gini index is much worse that India's. This means wealth distribution is far more equal in India (relatively) than China. This is why indian cities won't shine like china, until the smaller towns and villages also grow more prosperous.

 

[badguy2000]

China's gini index is much worse that India's. This means wealth distribution is far more equal in India (relatively) than China. This is why indian cities won't shine like china, until the smaller towns and villages also grow more prosperous.

case is that even Chinese small towns has better infrastructures than India main cities such as Mumbai and Delhi.
case is that India not only has more billionaires than CHina ,but also has much more poor people than CHina,while India's GDP is less 1/4 of CHina.
Furthermore, indian rich men are richer than CHinese rich men while India poor men are much poorer than Chinese poor.

so,
if Gini index were really to "show" the case that China's wealth distribution is far worse than India, it just proves that Gini index itself would be a bull$hit completely.

 

[dove]

GINI index does not mean which country is wealthier - it simply measures the difference in wealth between rich and poor within a country. Apparently the main Chinese cities often rival even most western cities in infrastructure and modern architecture, yet thousands of chinese villages are utterly poor comparable to the worst india has to offer. This huge difference between the poorest and the richest is what is measured by GINI index.

But then, it is impossible there can be any problem of any sort with the glorious chinese empire and anyone who suggests otherwise must be a liar. I look forward to a bright future where all indices in the world are belong to china.

 

[SHASH2K2]

China imports in surprise August surge

China reported a surprise surge in imports during August, leading to a fall in its trade surplus to $20bn (£13bn).

Imports rose 35.2% from a year ago, faster than the 26.1% markets expected.

This means that imports grew slightly faster than exports, which rose by only 34.4%, as expected.

The news, which follows a surprising contraction in the US trade deficit in July, may weaken critics of China's trade practices in the US.
Down but not out

The US Congress is due to hold hearings next week on China's controversial exchange rate policy.

Many politicians and economists accuse the Chinese of keeping the yuan weak in order to make its exports unfairly competitive.

Despite shrinking slightly, China's trade surplus in August was still its third consecutive monthly surplus in excess of $20bn.

On Friday, the People's Bank of China allowed the yuan to appreciate against the dollar to its strongest level since Beijing weakened its strict currency peg in June.

The Chinese currency was fixed at $6.768 for the day, meaning it has been allowed to strengthen a mere 0.9% since the change in exchange rate policy.

Chinese steel exports fell 38% versus the previous month, as widely anticipated, after a 9% tax credit from Beijing for exporters was allowed to expire.

Imports of iron ore - processed by China into exportable steel - also fell 13% from July for the same reason.

Chinese shares fell back on the latest trade figures, following signs that net exports - a key driver of Chinese growth - may be flagging.

The Shanghai composite index, and the Hang Seng index in Hong Kong, dropped by about 0.5% on the announcement.

 

[SHASH2K2]

Figuring out China's real economic size

It is usually noisy. Stallholders shout out the prices of their produce, laid out on wooden tables or on sheets on the ground.

Money changes hands constantly in what is still a largely cash society. How does the government keep track of all these financial transactions?


It is an important question. New figures suggest China could have just overtaken Japan as the world's second-largest economy.

But how do we know? Can we trust statistics from China, which is not always open and transparent with numbers?

Interviews with market stallholders suggest they do not always declare everything they earn to the Chinese tax bureau.

This implies that China's economy could be bigger than the government believes.

Wang Xiaolu, of the China Reform Foundation, carried out research that supports this idea. He says the hidden economy could be huge.
Methods questioned

Mr Wang checked income and spending patterns in a survey covering 4,000 samples across 19 Chinese provinces.

He estimates that in 2008, the disposable income of urban Chinese households could have been 90% more than the government thought.

Not all economists believe Chinese economic data is completely unreliable, but some question the methods used to collect it.


Wang Tao, head of economic research in China for the bank UBS, said China relied on local governments and businesses to report what they were doing.

"Sometimes it might be in the interests of a locality or a company to over-report what they have done, especially if their boss will then look on them favourably," she said.

There is another problem.

Getting businesses to report was easier when China had a planned economy and there were relatively few sectors in the economy.

It is now more open and capitalist. Individuals can start their own businesses and whole industries can spring up in a short period of time. This makes it difficult for the government to track the economy.

"For example, when the economy is booming, you could have a restaurant set up, but nobody went there and asked them to report," said Ms Wang.

"But when the economy goes bad, maybe they went bust and nobody noticed."

All this means that the speed of economic growth in China - it grew by 8.7% for the whole of last year - is perhaps exaggerated, but the economy is possibly bigger than estimates suggest.

China's economy could have overtaken Japan's several years ago.
A man and a woman use an ATM machine located outside a bank in central Beijing China's economy could be even bigger than thought

Gathering accurate statistics is not just an academic exercise: they help governments, businesses and individuals make informed financial decisions.

One group of people that needs dependable information are individual stock market traders in China.

They gather at small stock trading centres in towns and cities across the country. Citic Securities runs one that is housed in the former home of an imperial princess in Beijing.

Wang Yuxiang has been going there for the best part of a decade to buy and sell shares on China's stock markets.

She is one of dozens of pensioners who spend hours each day watching the centre's electronic notice board report the latest company movements.

Does she trust all economic data and information?

"There's always true and false information - companies are no different. You have to watch a business over a period of time," said the 65-year-old.

The pensioner is particularly wary of state-run companies, because she believes they are unpredictable.

So if Mrs Wang does not trust all China's economic data, how can economists really calculate when China will overtake Japan as the world's second-largest economy?

Wang Tao, of UBS, suggested that perhaps we should not get too fixated with that particular milestone.

"Contribution to world growth matters more than size. From that point of view, China passed Japan quite a while ago," she said.

 

[badguy2000]

GINI index does not mean which country is wealthier - it simply measures the difference in wealth between rich and poor within a country.


Apparently the main Chinese cities often rival even most western cities in infrastructure and modern architecture, yet thousands of chinese villages are utterly poor comparable to the worst india has to offer.

well, case is that not only CHinee grade A cities are as good as New York ,but aslo hundreds of Chines towns have much better infrastructures than India's grade A cities like Mumbai.

 

[dove]

I'm sure all chinese are very rich. Apparently the poorest of your rich are very very less rich than the richest of your rich, hence the 'stupid' gini number. Maybe india will get a dictator who will take all our money from banks and build gleaming cities where we need a license to enter, thus making all indians also very rich.

Its good to see chinese are allowed to visit indian forums and participate in open discussions that may involve tibet, dalai lama, falun gong, tiananmen etc etc.. the country must have a lot of confidence in its citizens these days.

 

[navida]

China's gini index is much worse that India's. This means wealth distribution is far more equal in India (relatively) than China. This is why indian cities won't shine like china, until the smaller towns and villages also grow more prosperous.

I don't know how the gini is calculated but we cannot deny the fact that filthy rich Indians like Ambani build $2billion house near Daravi slum and donates crores worth of diamond jewels to the Tirupati temple. Doesn't it make you sick? If our billionaires do not know how to give back to the country , the government must do it for them. Like how it is done in China.

 

[navida]

well, case is that not only CHinee grade A cities are as good as New York ,but aslo hundreds of Chines towns have much better infrastructures than India's grade A cities like Mumbai.

To be frank, a lot of India's towns and villages have better infrastructure than many of the cities. It's because building modern infrastructure in places where roads were non existent is easier than expanding and improving the old ones in crowded cities.