Trade War with China

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Tam

Brigadier
Registered Member
Its called "averaging", you do that to even out income or expense fluctuations, in other words you take a quarter, or two quarters, or even a year of data, and divide it to by the number of months to "average" your income or "average" your expenses.... nothing nefarious, just a way to keep yourself out of trouble by relying on your high income data.

a friend is buying a business, the bank wants twelve months of income and receipts to make the loan....


There should be limits to doing that even in China. Cooking the books will give your political rivals the leverage to get you charged for corruption.
 

Tam

Brigadier
Registered Member
“I once visited Shaanxi Qinchuan Machinery Development and asked their boss when they would become the world’s largest machine tool producer, since they are already the third,” he said of the Shenzhen-listed company.

“The boss told me he could never achieve it in his life, because the products’ quality isn’t there.”


LOL something metaphysical must hapenning over there preventing them to improve the quality of their products . Such a cheap story


I believe he's just humble, and wants to push his subordinates to greater heights by giving them a goal to do better.

Better than being a hot air, only to see your products don't live up to the air temperature.
 

Tam

Brigadier
Registered Member
now I read
Forget about Donald Trump’s trade war – China’s manufacturers face bigger threats, says drafter of ‘Made in China 2025’
  • Gu Qiang, who helped craft the industrial modernisation plan, says structural issues at firms could hamper China’s pursuit of hi-tech manufacturing dominance
  • Companies also face major challenges over surging labour and financing costs, he says
Updated: 1:07am, 20 Apr, 2019
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I don't know about high financing costs. China's "QE" interventions to push economic growth means lower borrowing rates.

High labor costs are the direct result of high rental and real estate costs, especially when living in the city that are highly developed like Shanghai and Shenzhen. Considering that Shanghai is the big manufacturing center for ships from military to commercial, already quite obvious for anyone following the Chinese navy threads, that is going to be a big problem. However, this is alleviated by Chinese transportation infrastructure that allows you to move laborers from cheaper rural areas to the city quickly. That's how investing in infrastructure on transportation wins for the whole province.
 

Air Force Brat

Brigadier
Super Moderator
There should be limits to doing that even in China. Cooking the books will give your political rivals the leverage to get you charged for corruption.

Its not cooking the books Tam, its looking at the year ahead, for example on the farm you know in the spring, you're going to be buying seed, fertilizer, weed killer, insecticide, and even "cash rent" for those who lease ground, sometimes you pay 1/2 at spring planting, and the remaining 1/2 in the fall..

So you put your crop in and have very high expenses for the months of March, April, and May, you may have to spray for bugs or weeds during the summer months, then around the end of August harvest begins, so depending on what type of crop you have, you may sell off some of it, store some of it waiting till supply goes down and prices go up???

So as you look back at last years income and expenses, you average your income and expenses for 12 months, so saying you made 120,000 dollars, that would make your monthly income 10,000 dollars, your total expenses for the year were 60,000 dollars so your monthly expenses averaged out to 5,000 dollars a month... so you put your income in the bank in the fall, in order to have enough to pay for your production expenses in the spring...

So you don't take your 120,000 in the fall and go to Vega's and blow it all? but you bank it and work off of it for the whole year, after expenses are paid, your income is 5,000 a month, so you have to live on 5,000 a month... hopefully, when March or April come around you still have 30,000 in the bank, and you may have to take out a small production loan to borrow for your expenses...

So that's called "Income Averaging", so you do show higher profits some months than others, but you "average" your income, the same on the expense side, in the Spring your expenses are very high, but through the summer, fall and winter your expenses drop, so you "average" your expenses...
 

CMP

Senior Member
Registered Member
Thank you for explaining this practice to those of us not familiar with it. It certainly baffles my mind to think that some people would see that as cooking the books, as it certainly is not.

Its not cooking the books Tam, its looking at the year ahead, for example on the farm you know in the spring, you're going to be buying seed, fertilizer, weed killer, insecticide, and even "cash rent" for those who lease ground, sometimes you pay 1/2 at spring planting, and the remaining 1/2 in the fall..

So you put your crop in and have very high expenses for the months of March, April, and May, you may have to spray for bugs or weeds during the summer months, then around the end of August harvest begins, so depending on what type of crop you have, you may sell off some of it, store some of it waiting till supply goes down and prices go up???

So as you look back at last years income and expenses, you average your income and expenses for 12 months, so saying you made 120,000 dollars, that would make your monthly income 10,000 dollars, your total expenses for the year were 60,000 dollars so your monthly expenses averaged out to 5,000 dollars a month... so you put your income in the bank in the fall, in order to have enough to pay for your production expenses in the spring...

So you don't take your 120,000 in the fall and go to Vega's and blow it all? but you bank it and work off of it for the whole year, after expenses are paid, your income is 5,000 a month, so you have to live on 5,000 a month... hopefully, when March or April come around you still have 30,000 in the bank, and you may have to take out a small production loan to borrow for your expenses...

So that's called "Income Averaging", so you do show higher profits some months than others, but you "average" your income, the same on the expense side, in the Spring your expenses are very high, but through the summer, fall and winter your expenses drop, so you "average" your expenses...
 

Air Force Brat

Brigadier
Super Moderator
Thank you for explaining this practice to those of us not familiar with it. It certainly baffles my mind to think that some people would see that as cooking the books, as it certainly is not.

You're more than welcome, and thank you for you "like"....
 
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Air Force Brat

Brigadier
Super Moderator
I believe he's just humble, and wants to push his subordinates to greater heights by giving them a goal to do better.

Better than being a hot air, only to see your products don't live up to the air temperature.

He's "managing expectations" by being honest and upfront, take the development of the jet engines, they've come a long way from the fuel sucking, dangerous, powerplants of the 50's to safe, reliable, and fuel efficient. that's taken 70 years of everyones best efforts... production tolerances have come way down in order to get to this state...

So he's communicating where the machine tool industry needs to go, if they are striving to be number one, but in business, being #3 isn't a bad position...
 

localizer

Colonel
Registered Member
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Exclusive: Major U.S. cancer center ousts ‘Asian’ researchers after NIH flags their foreign ties

Stupid move. I’ve always had my doubts about Francis Collins ever since he saw a waterfall split into 3 and dropped down on his knees and accepted the Trinity. He hasn’t helped NIH funding increase one bit. I also saw the email he sent to my former school email. Disgusting.

I can only hope that when China gets to this point in development it will never practice this sort of retardation. Being able to attract talent is hard enough. It dossn’t matter if others try to catchup as long as you’re always one step ahead.
 

A.Man

Major
Its not cooking the books Tam, its looking at the year ahead, for example on the farm you know in the spring, you're going to be buying seed, fertilizer, weed killer, insecticide, and even "cash rent" for those who lease ground, sometimes you pay 1/2 at spring planting, and the remaining 1/2 in the fall..

So you put your crop in and have very high expenses for the months of March, April, and May, you may have to spray for bugs or weeds during the summer months, then around the end of August harvest begins, so depending on what type of crop you have, you may sell off some of it, store some of it waiting till supply goes down and prices go up???

So as you look back at last years income and expenses, you average your income and expenses for 12 months, so saying you made 120,000 dollars, that would make your monthly income 10,000 dollars, your total expenses for the year were 60,000 dollars so your monthly expenses averaged out to 5,000 dollars a month... so you put your income in the bank in the fall, in order to have enough to pay for your production expenses in the spring...

So you don't take your 120,000 in the fall and go to Vega's and blow it all? but you bank it and work off of it for the whole year, after expenses are paid, your income is 5,000 a month, so you have to live on 5,000 a month... hopefully, when March or April come around you still have 30,000 in the bank, and you may have to take out a small production loan to borrow for your expenses...

So that's called "Income Averaging", so you do show higher profits some months than others, but you "average" your income, the same on the expense side, in the Spring your expenses are very high, but through the summer, fall and winter your expenses drop, so you "average" your expenses...
OT, just FYI my friend, see what Chinese farmers are doing:

 
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