Chinese Economics Thread

AssassinsMace

Lieutenant General
Let's say it's what the Obama administration claims AIIB doesn't give a meaningful economic return to its allies that have joined. Well then that means it's more a statement against Obama who worked so hard to get allies not to join. Japan blows with the wind. With key US allies that are a part of that strong Western wind joining AIIB... Japan sees the negative implications of putting all its eggs in one basket. It's like placing one foot out the door just in case. I'm sure Japan wants AIIB to fail but doesn't know if it will. Does it matter as accused that China is doing this out of its own interests? Japan has shown Asia no leadership with ADB and Obama has given no alternative. That doesn't spell out that the naysayers want to help countries with underdeveloped infrastructure.
 
Let's say it's what the Obama administration claims AIIB doesn't give a meaningful economic return to its allies that have joined. Well then that means it's more a statement against Obama who worked so hard to get allies not to join. Japan blows with the wind. With key US allies that are a part of that strong Western wind joining AIIB... Japan sees the negative implications of putting all its eggs in one basket. It's like placing one foot out the door just in case. I'm sure Japan wants AIIB to fail but doesn't know if it will. Does it matter as accused that China is doing this out of its own interests? Japan has shown Asia no leadership with ADB and Obama has given no alternative. That doesn't spell out that the naysayers want to help countries with underdeveloped infrastructure.

Congress dropped the ball on reforming the IMF which had it happened would have taken away the impetus for many countries to join a new institution like the AIIB.
 

broadsword

Brigadier
Nearly half the drones approved to fly in US airspace are from this Chinese company

Reuters

David Morgan, Reuters

Apr. 16, 2015
WASHINGTON (Reuters) - Chinese drone maker SZ DJI Technology has established a strong early lead in the U.S. commercial market as companies turn to its inexpensive, light-weight flying devices for a host of uses from shooting films to mapping and site inspections.

Sixty-one of the 129 companies that received regulatory approval to use unmanned aircraft are using DJI drones, or 47 percent, far ahead of its nearest rival, a Reuters review of federal records as of April 9 shows.

Nearly 400 other companies, more than half of the 695 businesses still awaiting approval, have applied to use DJI drones.

Shenzhen-based DJI, whose best-selling Phantom 2 Vision+ drone retails for around $1,200 in the United States, estimates that it already has about 70 percent of the commercial market worldwide and a larger portion of the consumer market.

Federal records also suggest that DJI is quickly expanding its U.S. market share, thanks in part to a new process speeding federal exemptions for companies that intend to use drones previously vetted by regulators.

DJI accounted for about a third of the roughly 50 exemptions granted by the Federal Aviation Administration (FAA) from last September through mid-March. But it has claimed just over half of the 89 exemptions received since then.

Industry experts say basic drones such as DJI's are likely to drive the U.S. commercial market for the foreseeable future, meeting business demand for uses such as aerial photography for site inspections, real estate promotions and video production.

The market for more sophisticated unmanned aerial vehicles (UAVs) is being limited by FAA policy that restricts commercial drone flights to line-of-sight operations at altitudes of 500 feet (152 meters) or less. Those rules are complicating efforts by e-commerce giants Amazon.com and Google Inc to develop high-tech drones capable of delivering packages over long distances.

"Those limitations effectively rule out larger UAVs, which are not going to be cost-effective with that sort of restriction," said Philip Finnegan, the Teal Group’s director of corporate analysis. "It’s really going to drive things toward the low end of the market."

The Teal Group expects the U.S. market for commercial drones to reach $5.4 billion in sales by 2023.

Founded in 2006 by Chinese entrepreneur Frank Wang, DJI generated nearly $500 million in revenue in 2014, up from $130 million in the prior year.

It expects to exceed $1 billion in sales this year and is in talks with investors to raise new capital. A person familiar with the discussions said DJI, valued at $10 billion, is also pursuing partnerships.DJI dronesREUTERS/Charles PlatiauA 'Phantom 2' drone by DJI company flies during the 4th Intergalactic Meeting of Phantom's Pilots (MIPP) in an open secure area in the Bois de Boulogne, western Paris, March 16, 2014.

EASE OF USE

The emergence of a Chinese company as a dominant player in a new U.S. technology market has so far not raised concerns in Congress. Other Chinese technology companies including telecom equipment maker Huawei Technologies Co Ltd. have been accused by U.S. lawmakers of posing national security risks, hurting their chances of building a substantial U.S. business.

DJI's U.S. business customers include American International Group Inc, Commonwealth Edison Co in addition to a host of lesser known firms in real estate, insurance, energy, agriculture and film and television.

Due to safety concerns, U.S. companies are banned from using drones unless they obtain an FAA exemption. The U.S. aviation regulator proposed rules in February to lift the ban, but final regulations are not expected until late 2016 or early 2017.

Since FAA began granting exemptions last September, gains have been limited for DJI’s rivals, whose products are often much more expensive. DJI's nearest competitor in the U.S. commercial market is Swiss drone-maker senseFly, owned by Paris-based Parrot, with 8.5 percent of the exempted companies, federal records show.

Sensefly's eBee mapping drone package has a price tag of around $25,000. More complex systems made by European and U.S. competitors can cost upwards of $100,000.

DJI has gained its market lead without a U.S.-based sales staff. Both hobbyists and business customers purchase drones through online retail outlets and directly from DJI's site, and say they stand out for their ease of use as well as the low price.

“Everything just works. A lot of other systems require you to tweak all the settings and parameters," said Paul Callahan, chief executive of New York-based SouthGate Films, which won FAA approval this month to use a DJI drone for aerial photography including solar panel inspections.

Some lawmakers, including Senator Charles Schumer of New York, have called on the FAA to ease flying restrictions so drones can be used for a wider array of business applications. Lawmakers have also argued that restrictions on outdoor drone testing have put U.S. companies at a disadvantage to foreign rivals, which operate in less restrictive climates overseas.

Some industry executives say low-end drones like DJI's risk becoming commoditized and that the more promising market lies in high-end services such as thermal imaging and 3D mapping. DJI says it has plans to expand into more sophisticated drones.
 

In4ser

Junior Member
The quiet revolution
A slowing economy commands headlines, but the real story is reform

Apr 18th 2015 | From the print edition
Timekeeper

WITH China, the received wisdom belongs to the pessimists. Figures this week revealed that growth has slowed sharply and deflation set in, as the economy is weighed down by a property slump and factory production is at its weakest since the dark days of the global financial crisis. In the first three months of 2015, GDP grew at “only” 7% year-on-year. Growth for 2015 will probably be the weakest in 25 years.

Fears are rising that, after three soaring decades, China is about to crash. That would be a disaster. China is the world’s second-largest economy and Asia’s pre-eminent rising power. Fortunately, the pessimists are missing something. China is not only more economically robust than they allow, it is also putting itself through a quiet—and welcome—financial revolution.

The robustness rests on several pillars. Most of China’s debts are domestic, and the government still has enough sway to stop debtors and creditors getting into a panic. The country is shifting the balance away from investment and towards consumption, which will put the economy on more stable ground (see article). Thanks to a boom in services, China generated over 13m new urban jobs last year, a record that makes slower growth tolerable. Given China’s far bigger economy, expected growth of 7% this year would boost the global economy by more than 14% growth did in 2007.

However, the real reason to doubt the pessimists is China’s reforms. After a decade of dithering, the government is acting in three vital areas. First, in finance, it has started to loosen control over interest rates and the flow of capital across China’s borders. The cost of credit has long been artificially low, squashing the returns available to savers while, at the same time, succouring inefficient state-owned firms and pushing up investment. Caps on deposit rates are becoming less relevant, thanks to an explosion of bank-account substitutes that now attract nearly a third of household savings. Zhou Xiaochuan, the governor of China’s central bank, has said there is a “high probability” of full rate-liberalisation by the end of this year.

China is also becoming more tolerant of cross-border cash flows. The yuan is, little by little, becoming more flexible; multinational firms are able to move revenues abroad more easily than before. The government’s determination to get the IMF to recognise the yuan as a convertible currency before the end of 2015 should pave the way for bolder moves.

The second area is fiscal. Reforms in the early 1990s gave local governments greater responsibility for spending, but few sources of revenue. China’s problem of too much investment stems in big part from that blunder. Stuck with a flimsy tax base, cities have relied on sales of land to fund their operations and have engaged in reckless off-books borrowing.

The finance ministry now says it will sort out this mess by 2020. The central government will transfer funds to provinces, especially for social priorities, while local governments will receive more tax revenues. A pilot programme has been launched to clear up local-government debt. It lays the ground for a municipal-bond market—despite the risks, that is better than today’s opaque funding for provinces and cities.

The third area of reform is administrative. In early 2013, at the start of his term as prime minister, Li Keqiang pledged that he would cut red tape and make life easier for private companies. It is easy to be cynical, yet there has been a boom in the registration of private firms: 3.6m were created last year, almost double 2012’s total.

The high road of lower growth
In time, these reforms will lead to capital being allocated more efficiently. Lenders will price risks more accurately, with the most deserving firms finding funds and savers earning decent returns. If so, Chinese growth will slow—how could it not?—but gradually and without breaking the system.

China's growth is slowing. A detailed look at what is behind the slowdown
Yet dangers remain. Liberalisation risks breeding instability. When countries from Thailand to South Korea dismantled capital controls in the 1990s, their asset prices and external debts surged, ultimately leading to banking crises. China has stronger defences but nonetheless its foreign borrowing is rising and its stockmarket is up by three-quarters in six months.

And then comes politics. Economic reforms have high-level backing. Yet the anti-corruption campaign of President Xi Jinping means that officials live in fear of a knock on the door by investigators. Many officials dare not engage in bold local experiments for fear of offending someone powerful.

That matters because reform ultimately requires an end to the dire system of hukou, or household registration, which relegates some 300m people who have migrated to cities from the countryside to second-class status and hampers their ability to become empowered consumers. Likewise, farmers and ex-farmers need the right to sell their houses and land, or they will not be able to share in China’s transformation.

Ever fond of vivid similes, Mr Li says economic reforms will involve the pain a soldier feels when cutting off his own poisoned arm in order to carry on fighting. “Real sacrifice”, he says, is needed. China’s quiet revolution goes some of the way. But Mr Li is right: much pain lies ahead.

Source:
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Blackstone

Brigadier
The quiet revolution
A slowing economy commands headlines, but the real story is reform
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THIS, is the item US media should place its concentration, and not China bear stories. Xi Jinping has amassed more power than anyone since Deng (some say since Mao himself), and he has/will use that power to ruthlessly implement reforms. Those that bet against Xi/Li and their reforms need to wake up and smell the coffee. China hawks should do some soul searching and ask themselves what happens if their wet dreams come true and China fails/implodes. The kinds of trouble a weak and aggrieved China is legend. US should stop "promoting democracy" (that's code for regime change) and incorporate China into a G2 arrangement, while she still has the upper hand.

Once China reaches what Xi calls a 'moderately well off' society, it will change on its own. I'm highly confident some kind of democracy will take place; not Western Liberal Democracy to be sure, but something along the lines of democratic- meritocracy. Can't happen you say? Compare the CCP of 2015 to the CCP before Deng's reforms in 1979/1980.
 

Ultra

Junior Member
THIS, is the item US media should place its concentration, and not China bear stories. Xi Jinping has amassed more power than anyone since Deng (some say since Mao himself), and he has/will use that power to ruthlessly implement reforms. Those that bet against Xi/Li and their reforms need to wake up and smell the coffee. China hawks should do some soul searching and ask themselves what happens if their wet dreams come true and China fails/implodes. The kinds of trouble a weak and aggrieved China is legend. US should stop "promoting democracy" (that's code for regime change) and incorporate China into a G2 arrangement, while she still has the upper hand.

Once China reaches what Xi calls a 'moderately well off' society, it will change on its own. I'm highly confident some kind of democracy will take place; not Western Liberal Democracy to be sure, but something along the lines of democratic- meritocracy. Can't happen you say? Compare the CCP of 2015 to the CCP before Deng's reforms in 1979/1980.


China will evolve more or less like Singapore - a quasi-democratic dictatorship ;)
It is said that Lee Kuan Yew had visited China many times and the close ties they have underlines China's desire to emulate Singapore's success (I think Deng Xiaoping even said it one time he like to see China to become more like Singapore). Singapore's political system and the success of its economy is what Chinese leadership wants to emulate and probably gives the closest model for China to transition to. A high income economically successful high technology society with almost zero corruption and a passive population with little dissent to the "centralized" leadership where they have no choice.

Deng Xiaoping on China's future and Singapore (1992):
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delft

Brigadier
China will evolve more or less like Singapore - a quasi-democratic dictatorship ;)
It is said that Lee Kuan Yew had visited China many times and the close ties they have underlines China's desire to emulate Singapore's success (I think Deng Xiaoping even said it one time he like to see China to become more like Singapore). Singapore's political system and the success of its economy is what Chinese leadership wants to emulate and probably gives the closest model for China to transition to. A high income economically successful high technology society with almost zero corruption and a passive population with little dissent to the "centralized" leadership where they have no choice.

Deng Xiaoping on China's future and Singapore (1992):
Please, Log in or Register to view URLs content!
Size has a lot to do with how a country is organized. Switzerland and US are both federations so are more alike in some respects than Switzerland and The Netherlands. However Switzerland modelling itself on US or US on Switzerland is rightly unthinkable while The Netherlands and Switzerland might teach each other some things.
 

mr.bean

Junior Member
THIS, is the item US media should place its concentration, and not China bear stories. Xi Jinping has amassed more power than anyone since Deng (some say since Mao himself), and he has/will use that power to ruthlessly implement reforms. Those that bet against Xi/Li and their reforms need to wake up and smell the coffee. China hawks should do some soul searching and ask themselves what happens if their wet dreams come true and China fails/implodes. The kinds of trouble a weak and aggrieved China is legend. US should stop "promoting democracy" (that's code for regime change) and incorporate China into a G2 arrangement, while she still has the upper hand.

Once China reaches what Xi calls a 'moderately well off' society, it will change on its own. I'm highly confident some kind of democracy will take place; not Western Liberal Democracy to be sure, but something along the lines of democratic- meritocracy. Can't happen you say? Compare the CCP of 2015 to the CCP before Deng's reforms in 1979/1980.


that's not going to happen. the whole AIIB spectacle already shows us how the US will behave against a rising power. when Xi jinping said ''the pacific ocean is big enough for both the US and China'' he was extending his hand out for cooperation but what china got was exactly opposite. I think Beijing has no illusions about the US and expect full confrontation and sabotage in the coming years. the next stage for the anti china roadshow will be the upcoming Shangri la dialogue in Singapore. it will be entertaining indeed.
 
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