Chinese Economics Thread

Discussion in 'Members' Club Room' started by Norfolk, Jan 10, 2008.

  1. FuManChu
    Offline

    FuManChu Senior Member

    Joined:
    Feb 5, 2006
    Messages:
    1,403
    Likes Received:
    6
    You have evidence to the contrary? I'd like to see it, because all I read about is increased cost to the producer. On certain issues like pork it's clear that the rises are natural (disease in the national herd) - coal has become more in demand globally too.
     
  2. Schumacher
    Offline

    Schumacher Senior Member

    Joined:
    Sep 16, 2005
    Messages:
    1,310
    Likes Received:
    189
    Did I say there're no increases to producer prices ? I said there're also businesses who take advantage of inflation to raw material prices to pass on a higher rate of increase to the consumers than the costs increase they've actually incurred.
    Chinese officials have on many occasions mentioned the importance of battling such profiteering as part of the overall task against inflation.
    When such distortion exists in the market, hoping market forces alone to fight inflation will take a long time & incur high social costs.
     
  3. FuManChu
    Offline

    FuManChu Senior Member

    Joined:
    Feb 5, 2006
    Messages:
    1,403
    Likes Received:
    6
    If you believe the main problem is down to such activities, you need to give some actual evidence for it. Otherwise I believe the comments made by people such as Henry Li and Li Jianwei.

    If you don't believe it is the main problem, then it does go back to the lack of government flexibility over pricing.

    Of course, because the only other option is to admit that their lack of action in the past/poor policy-making has led to the current problem. In China, whenever there is a problem someone other than the central government is to blame.
     
  4. Schumacher
    Offline

    Schumacher Senior Member

    Joined:
    Sep 16, 2005
    Messages:
    1,310
    Likes Received:
    189
    I have no problem believing it when I see reports pointing to profiteering for some of the problems be it in China or anywhere else, even in economies more well-developed than China, it's common to have businesses take advantage of situations to raise prices more than justifiable by costs alone. That's why there're laws related to consumer protection, fair competition etc.
    So the evidence is in those reports. I'm puzzled why you find it hard to believe such common issues exists. I can only attribute it to lack of experience in observing such issues.

    It's ultimately your choice whose analysis you want to believe. Pick the ones you like & simply dismiss the official version or any similar ones.
     
  5. FuManChu
    Offline

    FuManChu Senior Member

    Joined:
    Feb 5, 2006
    Messages:
    1,403
    Likes Received:
    6
    And as I asked, I would like some evidence that indicates such activities are the main cause of China's price inflation rather than what the central government has done/failed to do.

    Which reports? Published by whom? Available where?

    Actually it's because I have experience in observing such issues that I am sceptical. Governments frequently whine about "price speculators", "hoarders" et al when inflation becomes a problem because it's a good way to deflect attention from anything they may (or may not) have done. Of course such people do operate, but frequently they're a symptom of inflation or a relatively minor contributing factor, rather than the primary cause.

    If you can provide some other analysis, it might make for interesting reading. But all you have done is regurgitated what I already know - the government is blaming others for the situation.
     
  6. Schumacher
    Offline

    Schumacher Senior Member

    Joined:
    Sep 16, 2005
    Messages:
    1,310
    Likes Received:
    189
    These reports have appeared regularly on both Chinese & others' reports when talking abt issues related to inflation. I'll try to remember to point it out to U next time I see one.
    I find these reports common sense that's why I don't bookmark or save them, unlike a rare report like for example one reporting PLAAF has flown a stealth for the first time etc.

    How minor/major such issues as a contribution to the overall inflation is up for debate.
    Take the price of water & gasoline for instance, the government has increase the prices of these 2 substantially over the years but still maintain tight control at the higher level as well as them still not being as high as 'market price' yet.
    This is moving in the 'right' direction of market reform & reducing wastage but at the same time being aware of distortions that still exists in the imperfect market.
    This is about real world situation rather than purely theoretical discussion.
     
  7. FuManChu
    Offline

    FuManChu Senior Member

    Joined:
    Feb 5, 2006
    Messages:
    1,403
    Likes Received:
    6
    Strange, I don't see any reports of "devious business activity" being the source of the energy shortage in the following article either.....

    Pinched by Price Controls, Power Plants in China Scale Back

     
  8. SampanViking
    Offline

    SampanViking The Capitalist
    Staff Member Super Moderator VIP Professional

    Joined:
    Aug 29, 2005
    Messages:
    2,646
    Likes Received:
    1,538
    Much of the current shortage in capacity is being blamed on transportation problems, due to snow in the Coal Mining Regions.

    You may argue that a move to a fully integrated Nationwide grid may help a bit, but given the distance and the Capacity required, it would still need transportation to many remote Power Station Nodes in order to maintain a regular and stable current.
     
  9. Schumacher
    Offline

    Schumacher Senior Member

    Joined:
    Sep 16, 2005
    Messages:
    1,310
    Likes Received:
    189
    Tell me you're joking, to try to prove there's no "devious business activity" you simply post a report that has no mention of it. It's like looking up & see no birds in the sky you therefore conclude there's no such an animal as birds. lol
     
  10. FuManChu
    Offline

    FuManChu Senior Member

    Joined:
    Feb 5, 2006
    Messages:
    1,403
    Likes Received:
    6
    You're too paranoid, Schu. Methinks you should calm down a bit and not jump to conclusions. I suggest you try drinking less coffee and have more water in your diet.

    I was merely commenting that I found it strange yet another report on the situation hadn't mentioned these "obvious" factors that are so important to explain the shortages.
     
Loading...

Share This Page