Chinese Economics Thread

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

  1. N00813
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    N00813 Junior Member
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    (cont.)
    Notes:

    [1] Page 10: “Commercial banks are the key players at the centre of shadow credit intermediation (Figure 1, rose and red arrows). They are the main linkage between the suppliers and borrowers of funds in both the formal and the shadow banking system. Banks issue key shadow banking instruments such as wealth management products (WMP), they channel investors’ funds and provide liquidity to other shadow banking entities (eg trust companies), and they are holders of shadow banking instruments such as trust beneficiary rights (TBR) or interbank WMPs.”

    [2] Page 11: “Shadow banking provides credit to private firms which otherwise would be unavailable or too difficult to obtain. As these firms are typically more productive than their state-owned counterparts (Hsieh and Klenow (2009), Dollar and Wei (2007)), shadow credit is likely to lead to direct economic gains. Traditionally, most private firms as well as smaller state-owned enterprises (SOEs) have difficulties in accessing the formal credit market, as large state-owned banks prefer to lend to large SOEs (Hale and Long (2010), Lu et al (2015), Tsai (2016)). Banks’ preferences for large SOEs reflect historical relationships and high creditworthiness due to implicit or explicit government backing, reducing the credit supply to potentially more productive private firms. Shadow credit intermediation has helped to fill this gap.”

    [3] Page 27: “Measures of the size and dynamics of shadow banking in China depend on the specific perspective that is taken. For instance, taking the ultimate creditor view yields a much larger size estimate than taking the ultimate borrower perspective, as a large portion of the proceeds from WMPs is channelled into the bond market. Taking a holistic view by summing up the volumes of shadow credit intermediation over the entire credit intermediation process naturally results in an even higher estimate. But doing so introduces a high degree of double-counting, if the measure of interest is shadow credit to ultimate borrowers. A sizeable share of the underlying investment of bank-issued WMPs, for instance, appears on trust companies’ balance sheets. Adding up the two may capture the total volume of activity by shadow banking intermediaries, but it substantially overstates the amount of shadow credit that eventually flows to ultimate borrowers.”

    [4] Page 12: “Shadow banking in China is less complex than in the United States, as it involves fewer entity types and fewer steps of credit intermediation. Mostly, shadow credit intermediation in China is a one-step or two-step intermediation process, as it is effectively based on “plain vanilla” loans or instruments that entail a one-to-one link to the revenues from the underlying debt instruments. In contrast, a typical shadow credit intermediation process in the United States involves seven steps (“vertical slicing”) and a large number of financial entities (Adrian and Ashcraft (2016)).

    Nevertheless, the tight linkages between shadow savings instruments and bond market, as well as the new forms of structured shadow credit intermediation, signal that shadow banking in China is growing more complex.”

    [5] Glenn Luk's answer to How has financial repression of the household sector come into play in China's economic growth model?
     
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  2. N00813
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  3. Anlsvrthng
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    Anlsvrthng Junior Member
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    I

    The problem is not the corporate debt, but that without the household consumption increase the GDP growth should be 3 % less.

    And this 3% comming from the new household debt, not from wage increase .So no sign of reballancing.
     
  4. Jura
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    Jura Lieutenant General

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    now I read
    China reports better air quality on lunar New Year's Eve
    Xinhua| 2018-02-16 22:24:32 http://www.xinhuanet.com/english/2018-02/16/c_136980187.htm

     
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  5. Hendrik_2000
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    Hendrik_2000 Colonel

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    This is another excellent article by NHK "Asia Insight"
    If you see this video you will realize the importance of good rail transportation . How it can become the agent of prosperity by improving connectivity reduced cost and save time all at the same time. promoting bussiness activity and igniting enterpreneurship.
    It give hope to million of people for better tomorrow as one of the goji berry farmer said
    "Someday I will buy a car and visit my son home in style"

    So all those western critic who only criticize the cost missed their mark completely. Excellent video NHK is very smart outfit They inform their readership instead of mindless "reality show like the bachelor and their kind" Complete waste of brain cell
     
  6. Anlsvrthng
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    Anlsvrthng Junior Member
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    The rail for short / medium distances is not so usable ( rail line more expensive than the road) , however in this case I think China try to develop rail lines to found back up transportation methods to the sea shipping.

    The sea lanes are harder to protect than a railway line in Xinjiang.

    Like Russai / europe, no one can cut off the shipping lanes of these cuntries.
     
  7. Anlsvrthng
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    Anlsvrthng Junior Member
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    I see on a daily basis how creative ROI calculations used up to promote carriers within a profit oriented western company.

    You make the assesment/project plan, get the promotion, and the collapse happens after you moved up in the hierarchy by several level.

    It usually takes only same sloppy job at same part of the project planning , visible only on few lines in the 1000 pages long document to hide risk/extra cost items, that will be discovered during the implementation.
     
  8. supercat
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    supercat Junior Member

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    Yes, incompetency and fraud are inevitable in financial analysis. However, for such behavior to adversely affect a country's economy on the national level, it has to be VERY widely spread. Are China's financial planners grossly less competent or fraud prone than their counterparts in other countries? I strongly doubt that's the case.
     
  9. Hendrik_2000
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    Hendrik_2000 Colonel

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    Here is another excellent take on OBOR by Deutsche Welle though with a Europena prespective But Germany take it in the stride since they are competitive and has no problem competing with the Chinese
    They the German has a sense of history in the making and I believe they wil make a good choice If you can't beat them you migh as well join them. Resistance is futile
    Only fearfull Anglo Saxon country are bitching on OBOR



    A modern trade route between Asia and Europe is under construction. The gigantic project is the brainchild of Chinese president Xi Jinping. The New Silk Road is one of the most ambitious undertakings by far to be put forward by the Chinese president Xi Jinping. 10,000 kilometers of road, a railway line and a shipping route are to run from western China to Europe via Kazakhstan, the Urals and Moscow. Since the start of the 21st century China has become the most important export nation on the global stage. But in light of increasing tensions in the South China Sea and the threat from North Korea, it’s becoming more and more important for China to open up alternative trade routes. As a result the country has turned its gaze westward, to central Asia with its many resources and to Europe, which is still its most important trading partner. The construction of the road with the parallel railway line has already begun in Chongqing, a megacity in the country’s interior that’s just one example of the economic boom of the past thirty years. The products made here will, it’s hoped, reach European customers effortlessly in a few years’ time. But it’s not just China’s exporters who hope to benefit from this infrastructure project. Rural regions in the west of the country should also see a boost. There’s the province of Xinjiang for example, which has seen little of the economic growth of recent years. But China’s ambitions go beyond its national borders. The planned New Silk Road runs past rich oil fields as it goes through Kazakhstan. The extraction of oil is to be ramped up, thereby securing China’s growing need for energy. By extending the route all the way to the edge of the Urals, Beijing can get all the way to Russia. But it’s not certain whether the former big brother will welcome the expansion of China’s sphere of influence all the way to central Asia and Europe. In the form of a geopolitical road movie, this documentary looks at the far-reaching shifts in the Eurasian power balance. Sooner or later the Europeans will have to take a stance on China’s new ‘soft imperialism’. _______ Exciting, powerful and informative – DW Documentary is always close to current affairs and international events. Our eclectic mix of award-winning films and reports take you straight to the heart of the story. Dive into different cultures, journey across distant lands, and discover the inner workings of modern-day life. Subscribe and explore the world around you – every day, one DW Documentary at a time.
     
  10. Anlsvrthng
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    Anlsvrthng Junior Member
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    I think it is quite safe to say ( based on cement & iron production) China has half of all investment projects of the world, and scaled up the number of them in a short time period.

    It is quite safe to say that even if the official wants to create ROI calculation on the best available data and as hoest as possible he would fail to predict the correct numbers, considering the sheer number of projects.


    Say if you make at the same time airport, high speed railway and highway between two city , then the ROI calculation can be true for all investement plan taking into consideration the condisitons prior of the building of all three project. And this is an obivous example, usually in real life you found more complicated issues.

    And the basic question, if you scale up by one magnitude the number of projects in few years time, how can you found enought trained, good quality planner / project manager ?
     
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