Chinese Economics Thread

Zool

Junior Member
For me, Democracy and Communism and the like, are propaganda buzzwords in the modern age. What matters most is effective governance (I.e. deliverable results the people are happy with) and a stable system that can change gears (people and/or parties, without bloodshed) if current government is not meeting the needs and wants of the majority. Which is my lead in to:
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, Contributor

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President Donald Trump boards Air Force One at Andrews Air Force Base in Maryland on March 15, 2017. Trump and Brexit are part and parcel to the anti-establishment movements sweeping the West. While the U.S. and Europe grapple with their political futures, China and India plow ahead to become the engines of global growth. (Photo by NICHOLAS KAMM/AFP/Getty Images)

As Americans and Europeans sling poison arrows at each other day in and day out over who has the best politicians (answer: no one), China and India go on their merry way running the world.

That's right. When world GDP grows
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or so this year, 75% of it would have come from China and India. And while India is still vastly poorer than China and doesn't quite have the multinational muscle, Chinese corporate giants and their new billionaire entrepreneurial class are building the next global leaders that will compete and maybe beat John Deere, Caterpillar, Samsung, Dell, Hewlett Packard, Cisco, Tesla... Each year, the list gets longer. Cisco might not be beat by Huawei in the United States, but Huawei is making inroads in Latin America. They certainly are doing so in Asia, where everybody lives.

The financial capitals of the world are still London and New York, but Shanghai will likely replace Tokyo soon, if it hasn't already. More importantly, the rise of China and India means that corporate capital is more in tune with them...than us.

"The central theme of international politics...is the steadily eroding power of the West," says Gideon Rachman, Financial Times chief foreign affairs commentator and author of the new book
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"This erosion is closely linked to the growing concentration of wealth in Asia, and in particular the rise of China."

Gideon argues that, like the U.K. referendum to leave the European Union due to concerns over low income migrants from the Muslim countries, Trump's promise to "Make America Great Again" is a promise to bring the U.S. back to its halycon days when it was the richest and most relevant economic power in the world. The U.S. is still the richest and most relevant economic power in the world, but China is rising. In fact, it makes little sense for the U.S. to start a trade war with China given the role that country could play in foreign direct investment capital here at home.

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Mark Rutte, Dutch prime minister and leader of the Liberal Party (VVD), reacts while speaking to a group of children after casting his vote in the Dutch general election in The Hague, Netherlands, on Wednesday, March 15, 2017. Dutch voters are heading to the polls in a general election that will provide the first gauge of the spread of populism into the core of Europe following last year's Brexit vote. (Photographer: Chris Ratcliffe/Bloomberg)

See:
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-- Forbes


The speed of transformation in India and China has taken Western opinion makers off guard. India is rarely mentioned. Within the business and investing world, India is mainly known -- for better or for worse -- as an IT juggernaut with the five biggest
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. If you listen to Silicon Valley for five minutes, the message is that Palo Alto wouldn't survive if not for Indian brain power.

China is seen in a negative light more than in a positive one, but it is becoming an important source of capital for real estate development and even Hollywood.

The Chinese economy continues to grow even as growth is not what it once was a decade ago. China was just 6% of the U.S. economy in 1990. It was 80% by 2012, according to a University of British Colombia study by economist
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. We have all heard about China overtaking the GDP of old Western powers with much tinier populations, namely France, Germany and the U.K. China has them beat since 2006.

As this occurs, the U.S. is rethinking trade deals with China and the rest of the world. Europe is rethinking the very existence of the European Union. Looked at broadly, the West is facing its worst political crisis in a generation. To some, it is a cleansing. To others, it is the Apocalypse. To China, it is a Godsend.

Chinese Premier Li Kequiang, at the close of annual National People’s Congress yesterday, said that China did not want a trade war with the U.S. and he noted that Chinese bilateral trade and investment created nearly one million jobs in the U.S. last year.

But, even as pundits declare the West is lost, the U.S. still has some mighty tricks up its sleeve. For starters, IMF chief Christine Lagarde says that the improved outlook of the global economy partly reflects a projected pick-up in advanced economy activity helped by expectations of more expansionary fiscal policy in the U.S. even though the bulk of that might not materialize until 2018. For the Western world, the U.S. economy is No. 1.

There's also China's Achilles heel:
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.
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are far more favorable. The same holds for the U.S., says Advisor Revolution strategist Michael Williams.

"We are still expecting an economic boom in the U.S. because of demographics," he says about the Millennial generation. "Boomers helped drive the market from 1,000 points in 1975 to over 10,000. China doesn't have that tailwind, but we do."
 

Blackstone

Brigadier
This article wouldn't make Gordon Chang happy.

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Admitting you are a bull on China takes bravery. You’ll face a barrage of questions about the country’s draconian capital controls and unsustainable leverage. Then there’s the misdirected investment by Beijing and the resulting overcapacity the economy must absorb.
Sample the FT’s top stories for a week

However, an increasing number of analysts are publicly confessing their bullishness. “Why we are bullish on China” is how Morgan Stanley bluntly titled a report published last month. This week, Goldman Sachs’ Asia equity team upgraded China to “overweight”.

Back in December, Jason Sun, Citigroup’s China equity strategist, described his upbeat outlook as “non-consensus positive”. Analysts may be moving towards that consensus but investors have yet to follow: data show international fund managers’ holdings of Chinese equities are hovering at their lowest points in the past decade compared to their benchmarks.

Morgan Stanley’s argument took a very long-term view. The Goldman team’s upgrade was prompted by more current developments, particularly an inflation-driven rise in China’s nominal growth, as rising commodity prices lift corporate profits. China’s 19th National Congress this autumn, which sets the tone for the leadership from Beijing, is also seen as a help, with the government thought likely to provide any support needed to keep the economy on course ahead of the big event.

“We’re not saying everything is right with China — there are certainly causes for concern,” said Timothy Moe, Goldman Sachs’ chief Asia-Pacific equity strategist. “What we are saying, pretty emphatically, is that growth prospects have improved.”

Just over a year ago, investors faced what Mr Moe calls a “paroxysm of negativity”, as they were overwhelmed by fears of an imminent and sharp depreciation of the renminbi. “I remember being in the US in February last year and seemingly everyone we spoke with was expecting a 20 per cent depreciation in the next two months,” he said. “Now interest in China appears to be gradually building, but we don’t think people are really acting on it yet.”

One of investors’ biggest sticking points about China has been the swift increase in leverage, particularly among companies. However, widely followed data compiled by the Bank for International Settlements last week showed the first quarterly decline in five years for corporate leverage as a percentage of gross domestic product. While the reduction was small — it dipped to 166.2 per cent from 166.8 per cent — Mr Sun thinks it marks the turning point he and his colleagues have been forecasting since the middle of last year.

“Our hundreds of client meetings since then suggest overwhelming scepticism, but now nothing looks impossible,” he wrote to clients this month. “Even China’s total credit-to-GDP build-up, with household and government leverage included, is moderating.”

If getting enthused by small signs of deleveraging is only for some bulls, others could look instead at the picture suggested by dollar positioning. Long-dollar positions are near record levels once again, data last week showed. The positioning is extreme enough that any unwind in the dollar — and resulting rise in emerging market currencies — has the potential to lift EM inflows very quickly. China accounts for 27 per cent of the sector benchmark, the MSCI Emerging Markets index.

“If we were starting from a point where dollar positions were more balanced, that’s one thing,” said Helen Zhu, BlackRock’s head of China equities. “But if we’re starting from a point where everyone expects the dollar to strengthen, then the probability of swinging the other way is far higher.”

China bears can still find plenty to cavil at, and can, of course, always argue the risk of a nasty policy surprise from Donald Trump outweighs a profit pick-up. But bullish analysts are showing increasing confidence, and they can call on numbers, too. Funds invested in the S&P 500 or the FTSE Eurofirst a year ago would have returned 20 per cent and 14 per cent, respectively. The same money in the Hang Seng China Enterprises index would have produced a 28 per cent total return.
 

AssassinsMace

Lieutenant General
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Not sure if this article suggests some law was broken. So what if a government helps a company develop technology. Sounds like a violation of sovereignty to suggest they can't do that. The US has a history of helping out US corporations to this very day no matter how they spin it. They say most technological advances in the US have roots in US military research and development. Isn't that what this article seems to have a problem with when China does it?

Just because the US wants to privatize everything, it doesn't mean the world has to follow. That seems to be the problem the US has in general with China and "communism." That's why Google thought it had the right to rule China. If Google were allowed to freely operate in China like they demanded, they would've snuff-out domestic Chinese start-ups. There would be no Alibaba or Baidu. There would be no Xioami or Huawei if US telecom corporations had free reign in China. They want to say that's following capitalist principles. No its establishing their domination over China which has always been their ultimate goal. They don't want to have to cater to Chinese consumers. How dare that Hollywood has put Chinese elements into their movies just to get Chinese consumers to want to watch them! They want to dictate what Chinese consumers want. Chinese only exist to make them rich and serve their interests. Anything else is considered a threat to their interests as this article suggests. They can threaten your interests but you're not allowed to do it to them all the way down to assisting a company into competing against theirs. Yeah, Xiaomi has to develop technology on its own without any outside assistance because that's what's fair.

Most people who say they believe in this or that like in rights are actually only talking about it for themselves. It's not as heroic where they think they should be rewarded or something like they want to make it out to be. Not hard to stand up for in believing in things for yourself only. Yeah they believe in capitalism... when they're the ones that benefit most by it. All their rules for everyone else are more communist. Very confusing if you believe in what they say they believe in. Not confusing and you can see everything fall into place if this is pure self interest at work and not any morals and principles involved. You can do anything you want within living in cage and they'll call that freedom.

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A lot of those US innovations started off with government help. The Department of Energy’s $32 billion loan program helped many clean energy companies get their start. (And despite high-profile failures like Solyndra, the overall failure rate of companies enrolled in the program is only 2.7 percent.) The DOE also funds a lot of early-stage research—through programs like ARPA-E, and tech transfer programs at many of its national labs—nurturing technology until it’s ready for private companies to commercialize. “The vast majority of new technologies that scale up and become big biz success stories have many years of life symbiotically linked with government,” says Ion Yadigaroglu, partner and managing principal at Capricorn Investment Group. “There are no private subsidies for the kind of early-stage R&D work that flows from the government, and if you shut that down, then X years after the fact you see a lot less innovation flowing to the private market.”

Illegal for China to do but not illegal for the US. The past several weeks there have been articles how the EU is considering China advancing in technology is a trade violation and illegal because the more independent China becomes, the less China will buy from them. You can spin freedom as a trade violation too because they can't make as much money as they can from you if you're not their slave.
 

Hendrik_2000

Lieutenant General
For the next 10 years China need to improve the lot of country side folk .Great effort has been made today to extend the infrastructure to the countryside thing like road , electricity, water and broadband. It is a basic requirement but the most important ingredient is mostly missing . An intelligent and techsavy entrepreneur to inspire and lead the country folk in revitalizing the country side

Here China can learn from Japan. Interesting video about a guy who return to his hometown and lead his village to prosperity
He got his inspiration from reading a Japanese book about Hometown as told by NHK

 

Orthan

Senior Member
Saw a link to this page at newsnow.com.uk.

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I didnt knew that gordon chang appeared in breitbart news. Regarding his 2001 prediction that china would colapse within 10 years, he is saying “I’m about six years late”.
 

Blackstone

Brigadier
Saw a link to this page at newsnow.com.uk.

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I didnt knew that gordon chang appeared in breitbart news. Regarding his 2001 prediction that china would colapse within 10 years, he is saying “I’m about six years late”.
Last year, Chang said he was about 5 years late, and in 2015, he said he was about 4 years late. In fact, l first heard him say something like that on Bloomberg and on Fox News around 2010, predicting imminent CCP collapse. Even a broken clock is right twice a day, but not so Gordon Chang, and none of the interviewers held him accountable. Such is the state of American journalism; it's no longer about reporting the news and let viewers decide, it's all agenda-driven 24/7.
 

SamuraiBlue

Captain
Well looks as if PRC is rising the barriers.

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BEIJING (AP) — China's trading partners are bringing the top U.N. food standards official to Beijing in a last-ditch attempt to persuade regulators to scale back plans to require intensive inspections of food imports — including such low-risk items as wine and chocolate — that Washington and Europe say could disrupt billions of dollars in commerce.

The rule could inflame tensions with the administration of U.S. President Donald Trump, who has promised to raise tariffs on imports from China, and the European Union.

Under the rule, due to take effect as early as October, each consignment of food would require a certificate from a foreign inspector confirming it meets Chinese quality standards. Other countries require such inspections only for meat, dairy and other perishable items.


That alarms suppliers that see China as a growing market for American fruit juice and snack foods, French wine, German chocolate, Italian pasta and Australian orange juice. They complain Beijing already uses safety rules in ways that hamper access for beef and other goods in violation of its market-opening commitments.

"It could bring down food imports quite dramatically," said the German ambassador to Beijing, Michael Clauss. "It often seems it is more about protecting Chinese producers than about food safety."...... to read more
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This could be considered as a WTO violation.
 
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