Chinese Economics Thread

Brumby

Major
I think manqiangxue's closing sentence of that previous post is very wise:
Maybe you should note that the goal itself was set by the Chinese government. I did not make up the standard. You can argue that the goal itself is not appropriate as an economic marker (although the market thinks otherwise) but the convoluted reasoning is entertaining.
 

Brumby

Major
Stop digging is what everyone else is saying to you. You don't think my logic is obvious? Then tell me why, according your definition of stalling as failing to achieve your own goals, you couldn't avoid stalling by setting lower goals? Why is this logic perfectly reasonable to everyone except you? Explain why you think it doesn't work.

I have already provided my rebuttal. Your job is to undercut mine. It is not my job to talk on your behalf.
 

broadsword

Brigadier
From the rand to the ringgit, emerging-market currencies slumped. Commodity prices fell into territory not seen since 1999. The contagion infected Western markets, too.

Next year, I see accelerated selling for Dow Jones, followed by another year of relative calm. Other markets that correlate with DJ, will similarly be in a funk.
 

manqiangrexue

Brigadier
So ........ is next year not a future state regardless when the goal was set and not meeting a goal is not a failure?

You missed the assumption that academic goals change every year just like economic goals. Therefore, any goals, A's or C's, already resulted in the B's that were received; the goals are of no further consequence since they have expired. Next year, new goals, which last 1 year. I don't know what they are; they can change. Yeah, in an extremely strict manner of speaking, aiming for a 4.0 GPA and getting a 3.9 is technically failure to meet your goal, but it is not a failure as compared to peers, which is where is matters. If you think that the Asian kid who got slapped by his parents for getting a 3.9 is a failure compared to the (avoid racist remark) kid whose parents were delighted by his 2.3, then it just becomes very clear that you're operating in a different universe. The Chinese government set very very high goals that are extremely difficult to reach, and in most past years, has surpassed those marks. I wouldn't worry at all if it comes a little under target one year because the target was set at such a world-beating level. It would not even come close to a normal person's definition of stalling.

I have already provided my rebuttal. Your job is to undercut mine. It is not my job to talk on your behalf.

I did; I already posted a logic that undercut your definition of stalled, and you disagreed with that logic, but provided no reason why it was flawed. Honestly, I don't know what you don't get with this simple logic. I don't know how elementary I have to get with you to explain this and I may not be able to figure that out as the answer might be shocking. I quite frankly feel like you already know you were wrong but you just wanna waste everybody's time by arguing about things like in post 4595 and 4599. You were making sense with 4573. Let's just keep it at that.
 

Blackstone

Brigadier
I have already provided my rebuttal. Your job is to undercut mine. It is not my job to talk on your behalf.
You already admitted to setting your own standard for evaluating China's 2015 GDP performance, not out of sound economic or financial principles, but from your personal bias. You recently railed against some China fanbois on SDF as irrational Sinophiles, and yet you turnaround and do the same. Unless it's an honest mistake, your actions prove you a hypocrite. So, are you just another Gordon Chang want-to-be, or can you be reasonable, rational, and balanced on PRC topics?
 

Equation

Lieutenant General
When Chen Mingxu was a boy, U.S. businessmen poured into rural China, welcomed with tax breaks and
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Thirty years later, in a kind of reverse migration, Chen finds himself in southwestern Alabama smiling wanly over bacon-wrapped meatloaf and banana pudding.

Chen, who employs about 200 locals, manages the first U.S. factory built by Golden Dragon Precise Copper Tube Group Inc. with a $120-million investment in Wilcox, one of the poorest counties in Alabama. The state coughed up around $20 million, outbidding dozens of other cities and states hoping for the jobs and investments.

Last year, Chinese companies plowed
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into the U.S., up from zero in the early 2000s, making it the
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of foreign direct investment in the country. Chinese-affiliated companies now employ more than 80,000 Americans, according to New York-based Rhodium Group, which tracks cross-border investment.


As the U.S. prepares for a state visit by Chinese President Xi Jinping at the end of September, the countries’ economic relations are undergoing a profound shift. With China facing rising wages, a falling labor supply and excess capacity, its companies are crossing the seas to sink roots in neglected corners of the U.S. heartland.

Chinese Expansion
“Like the Japanese and Koreans before them, Chinese companies want to invest in their export market,” said David Loevinger, a former China specialist at the U.S. Treasury who is now an analyst at fund manager TCW Group Inc. in Los Angeles. “As exporters move up the value chain, you increasingly want to get closer to your customers.”

One of the goals of Xi’s visit is to make progress on a treaty aimed at spurring Chinese ventures in the U.S. and opening up China to areas where foreign investment is barred or restricted. Under the treaty, U.S. banks would be permitted to own Chinese subsidiaries outright, retailers could run their own distribution networks there and manufacturers could build without a local partner.

Even if all that gets agreed to, tensions will hardly dissipate. The U.S. accuses China of vast industrial and governmental spying, and the spread of Chinese money is bound to come with increased concerns. China’s yuan devaluation this month seeped into theelection debate, with Republicans accusing Beijing of manipulating its currency to the detriment of American workers.

Hostile Takeover?
As Gene Poteat, past president of the Association of Former Intelligence Officers in Falls Church, Virginia, put it, “China’s belligerent expansion into geographical areas claimed by others, their harassment of international flights and their continuous hacking into American cyber networks has not gone unnoticed.”

The Chinese have their own set of worries.

Golden Dragon chose Alabama to bring it closer to clients in the South and avoid anti-dumping tariffs on copper products. But it was caught unawares by the attitudes of some of the workers and the demands of the trade union.

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Golden Dragon Precise Copper Tube Group factory in Wilcox, Alabama.

Photographer: Ye Xie/Bloomberg
“Individualism is strong among U.S. workers,” Qiao Gaopan, a 37-year-old Golden Dragon engineer, said pointedly. “They don’t listen to you but have lots of opinions.”

And although tens of millions of China’s workers belong to trade unions, those groups have no say on pay or conditions. The inverse is true in Alabama, a
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where barely a 10th of workers belong to unions that nonetheless wield real power. That created some tensions for Golden Dragon.

Dragon Adapts
When it set up shop a year ago, the company offered workers $11 an hour, less than the $18 paid by a similar factory in Mississippi, according to Daniel Flippo of United Steelworkers. There were also complaints about safety and lack of training and promotion, Flippo said.

As a result, and despite pressure from state and company officials, the workers voted to unionize.

Chen, 33, argued that $11 was only a starting salary for workers with no experience. Either way, Golden Dragon ended up increasing its wages and changing earlier restrictive rules, including a badge-in system and limited sick leave. It also dealt with a complaint over safety. Chen, who studied in Britain and led the company’s factory in Mexico before coming to Wilcox, took over in May.

Cultural Differences
It hasn’t been easy for the company’s Chinese engineers, who speak limited English and live in trailers onsite about 10 miles from Thomasville, with some 4,000 inhabitants. The only cinema in town was closed several months ago. They spend nights online chatting with relatives in China.

James Deshler, a 29-year-old machinist working at the plant since March 2014, blames cultural differences and language barriers for most of the problems at the company. He said he gets into constant arguments with Chinese colleagues over the lengths of smoking breaks, cleanliness in the restrooms, even the right way to fix a leaking pipe.

There are bright spots. Sue Thomas, for one, is grateful that Golden Dragon came. Thomas, 50, lost her security guard job at the neighboring oil pipe company Energex Tube, as did her husband. She gets along with her Chinese coworkers and said she sometimes brings them home for dinner or takes them to local casinos.

Apart from Golden Dragon’s Wilcox facility, which produces 100 million pounds of copper tubing annually, Alabama is also home to two other Chinese companies -- Continental Motors, which makes piston engines for aircraft in Mobile, and Shandong Swan USA Inc., which makes saws for cotton gins in Montgomery.

Southern Allure
Elsewhere, Sany Group Co., China’s largest heavy equipment maker, has invested $60 million in a factory in Peachtree City, Georgia, pledging 500 jobs. And Wanxiang Group Corp., China’s biggest autoparts maker, has 28 factories in 14 states.

Major merger and acquisitions include Anbang Insurance Group Co.’s $1.95 billion purchase of New York’s Waldorf Astoria hotel and the sale of One Chase Manhattan Plaza to Fosun International Ltd. for $750 million.

Derek Scissors of the American Enterprise Institute in Washington, said Chinese investment in the U.S. could increase to $100 billion in the next five years.

Chinese remember with mixed emotions the invasion of foreign business three decades ago, when assurances on both sides often went unmet, and note the irony and parallels now that roles are reversed. Observers add that while Chinese companies are entering a steadier market with more established legal systems, they too face confusion and unkept promises.

Complicated Feelings
“This is a market not easy for them to understand immediately and know how to navigate and negotiate into,” said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society in New York. “There’s a very big learning curve for both U.S. and Chinese companies.”

Alabama did live up to its offers to Golden Dragon, building GD Copper Drive in front of the factory and setting up training programs. But other states have failed to deliver the incentives they pledged to other companies, Chen said, declining to give names.

“States and cities don’t have foreign policy concerns,” said Scissors, the Washington-based analyst, who focuses on China.

On the other hand, Chinese companies just may.

“The best way to beat the enemy is probably to go to their homeland,” Chen said of his factory in Alabama. “As our former leader Deng Xiaoping put it, we’ll cross the river by touching the stones.”

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broadsword

Brigadier
Bltizo,

Here is the reply from the economist. He is on the payroll of a major mnc.

I am revising our forecast for 2015-16. My forecast for 2015 GDP growth is 6.7% yoy. Perhaps the official data will still be 7.0% yoy, but there is contradition against the lower growth in fixed asset investment and industrial output. The service sector is now becoming a more important driver to the growth, although its growth rate is also declining. So things might not be that bad as Andy Xie's figure.

The SOE reform is much slower than the market expectation, and this might also be a reason for the stock market meltdown. I think Xi Jinping is not willing to privatize the state-owned asset, so the technocrats are struggling to figure out a practical reform scheme. If the SOEs could be privatized, there will be two key positive impacts to the economy: 1) the private enterprises are more efficient than SOEs, so the structure of the economy could be improved if the private enterprises are allowed to enter more sectors previously dominated by SOEs; 2) currently SOEs absorbed most of the financial resources, and the financing costs are pushed higher because SOEs have less stringent constraint to their cost. After the reform, the private sector might have better access to bank loans and the bond market.

Ok, Blackstone may be right about this.
There are always rumors about Li Keqiang's position, and it is possible that he will step down after his first tenure. He might be a scapegoat for the stagnant reform.
But my gut feeling is he will still stay on after all.

The following is his response to my query about the quality of Chinese goods.
For the quality issue, I think the quality is very good of most OEM Chinese products for foreign companies. The issue exists for domestic brand names because: 1) the government itself is opportunistic and there lacks effective protection to property rights including IP, which encouraged short-sighted activities in the business; 2) Chinese enterprises are still on the learning curve for technology and management skills. The first issue is highly related to the reform. However, you can still see some Chinese companies are rising quickly on their learning curve.
 

AssassinsMace

Lieutenant General
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Journalist 'confesses' to causing China market chaos: state media

A financial journalist has "confessed" to causing "panic and disorder" on China's stock market and inflicting "huge losses on the country", state media reported on Sunday.

Wang Xiaolu, a journalist with Caijing magazine, was detained by Chinese authorities following China's recent stock market crash.

Wang was held for fabricating and spreading fake information on securities and futures market, according to Xinhua, a state-run news agency.

According to the report, Wang "confessed" that his "false information" had "caused panics and disorder at [the] stock market, seriously undermined the market confidence, and inflicted huge losses on the country and investors".

Wang wrote a story in July saying the securities regulator was studying plans for government funds to exit the market.

The China Securities Regulatory Commission (CSRC) quickly denied the Caijing story, labelling it "irresponsible".

But Caijing said it "defended journalists' rights to do their duty under the law", according to a statement posted on its website.

Xinhua reported that authorities had also detained an official from China's securities watchdog and four senior executives of the country's major securities dealer for "stock market violations".

Liu Shufan, an official with the CSRC was held on suspicion of insider dealings, taking bribes and forging official seals, said the report.

Liu "confessed" that he has forged official seals to fake a court ruling on divorce and taxation certificates for his mistress.

Chinese state media regularly carries what it presents as confessions of suspects in high-profile cases.

Formal arrest in China normally comes after some time in police detention, when the case is handed to prosecutors, with trial and conviction almost guaranteed.

The news agency also reported that 197 people have been punished in a special campaign by Chinese police targeting online rumours about China's stock market, the recent fatal explosions in Tianjin and "other key events".

No details of the punishments were given, but according to the report, the crimes punished included claiming a man had jumped to his death in Beijing due to the stock market slump, falsifying the number of people who had died in the Tianjin blasts, and circulating "seditious" rumours about China's upcoming commemorations of the 70th anniversary of the end of World War II.

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Chinese tourists unfazed by currency fall, market turmoil

China's currency devaluation and slowing economy have caused enormous turmoil in world financial markets, but they have not really bothered tourists like Henry Lee.

Not yet, at least.

"I don't even know what the exchange rate is," the 36-year-old technology entrepreneur from Beijing admitted.

"We're just here to relax with our kids. We're not making any big purchases. I bought a Tumi bag, and I got a Tiffany bracelet for my wife," said the father-of-two during a visit to Singapore's Merlion Park, which faces the massive Marina Bay Sands casino complex, a favourite destination for Chinese visitors.

Lee is among tens of millions from China's growing middle class who travel across the globe every year for leisure.

A record 117 million Chinese travelled overseas in 2014, according to the Sydney-based Centre for Asia-Pacific Aviation (CAPA) -- more than double the 57 million in 2010 -- and experts expect that trend to continue.

"The short-term outlook for Chinese outbound visitors remains strong and the long-term is bright," CAPA said in a report issued Thursday.

Beijing's surprise devaluation of its currency on August 11, which is now trading at a four-year low against the dollar, has sparked fears China's big-spending tourists will start staying at home.

Shares in tourism-linked businesses such as hotels across Asia have tanked, while Cathay Pacific's chief executive has been forced to reassure investors the airline's future was secure.

Businesses on the ground, however, say more relaxed visa policies and the strength of the yuan against Asian currencies mean Chinese tourists will remain not only the most numerous, but also some of the biggest spenders.

- Big spenders -

"It's not uncommon for a Chinese VIP player to gamble well over a million US dollars per trip," said Aaron Fischer, regional head of consumer and gaming research at brokerage and investment group CLSA. "There's probably 5,000 of them."

The financial clout of China's travellers can be eye-popping.

According to China's state news agency Xinhua, Chinese tourists spent $164.8 billion in 2014, a four-fold increase compared to 2008. A whopping 88 percent of that was on shopping, it said, citing the China Tourism Academy, a government agency.

Japan alone saw more than 550,000 visitors from China in July, a figure more than double the same period a year ago, and the average Chinese tourist spends around $1,100 -- about twice as much as the next-highest spending cohort -- according to the Japan Tourism Marketing think-tank.

Fischer predicted that the yuan's depreciation would not hinder Chinese from travelling but some may become more cost-conscious, particularly when it comes to luxury items.

It is precisely that concern that is worrying organisations like the Indonesian Association of Travel Agencies.

Its chairman Asnawi Bahar said the industry's fear was that Chinese visitors, who number roughly one million visitors to the archipelago annually, would "hold back on shopping and shorten their stay in Indonesia".

Trade bodies in a litany of other Asian countries from the Philippines to South Korea have expressed similar concerns.

- Lower visa barriers -

Many of them, however, are helped by the fact that their own currencies have fallen sharply.

The yuan is still at, or close to, two-year or longer highs against the currencies of popular tourist destinations like Japan, South Korea, Australia and the eurozone, CAPA said.

"I think that in the bigger picture scheme of things, Chinese tourism to Australia will continue to rise," said Craig James, chief economist at Australian stockbroking firm CommSec.

Other countries -- from Europe to those in the Asia-Pacific region -- have sought to lower visa barriers for Chinese travellers in a bid to attract what the China Tourism Academy says is the world's largest pool of tourists.

More and more places are becoming friendlier to Chinese tourists, starting from the immigration counter: Chinese passport holders now get visa-free access to at least 74 countries, compared to 18 two years ago.

That is also happening in shops and, CAPA noted, Australian airports now have Chinese-language signs as well as guides and duty-free sales staff who speak Mandarin.

What is clear, according to analysts, is that not only are hotels, retailers and travel firms increasingly catering to the Chinese, but the Chinese are enthusiastic customers.

"If the relative cost of travel changes significantly, what it typically does is move people from one country to another," said CLSA's Fischer.

"In emerging markets like China," he added, "there's always this very, very strong underlying desire to travel."
 

broadsword

Brigadier
There are figures within economy that can't lie one being energy consumption, second is amount of logistics since "things" needs to move for it to be traded, last being consumption of natural resources.
How are the other two doing?



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Electricity consumption and railway cargo volume, two key indicators of economic performance, are showing encouraging signs of growth, China's national economic planner said on Sunday.
 

Zool

Junior Member
The title is India but lots of talk about China in the article, being that these are the two largest developing economies in the world. Underscores the challenge to global economic growth as a whole:

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_83304021_indiapeople.jpg

India's economy grew at an annual rate of 7% between April and June, official figures have shown.

This is slower than the 7.5% growth recorded for the previous quarter, and lower than expected.

India and China - which also posted 7% growth in the second quarter - are now the joint fastest growing major economies in the world.

But some economists have expressed concerns that India's official figures
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true growth.

"At face value, today's GDP figures for [the second quarter] suggest that India matched China as the world's fastest-growing major economy last quarter," said Shilan Shah at Capital Economics.

"But the GDP data remain inconsistent with numerous other indicators which suggest that, at best, the economy is in the early stages of recovery after three years of tepid growth.

"The official GDP data are overstating the strength of the economy, most probably by a significant margin."

'Boost'
With concerns about slowing growth in China, some investors are starting to turn to India as the next driver of global growth.

Some were expecting stronger growth than 7% - in two of the previous three quarters, the Indian economy grew faster than China.

"The GDP number is disappointing but, overall, going ahead we expect India's economic growth to be driven by domestic demand," said Madhavi Arora, from Kotak Mahindra Bank in Mumbai.

"With commodity prices falling, there should be a boost to corporate margins going ahead and household spending should also go up."

Analysis: Simon Atkinson, editor, India Business Report, Mumbai

There will be plenty of people disappointed with this number. Some economists I've spoken to recently thought GDP growth would be closer to 8% - streaking ahead of China's.

Digging into the detail - it looks like growth in Indian manufacturing has slowed from a year ago - a bit of a blow given this is one of the Modi government's main initiatives.

And whether pace picks up in the July-September period will largely depend on the weather. This is the monsoon season and when rains are good and harvest plentiful, rural consumption goes up as people working in agriculture have more money to spend.

But, so far, many parts of the country have seen less rain than you'd expect.
 
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