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May 11, 2024 13:09
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- whatever7
- Jul 26, 2001
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by LITERALLY AN ADMIN
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You're Chinese. Do you think whatever course it is wasn't simply lying to you?
It's from this lectures series:
America and the New Global Economy Lecture 35, The Economics of Global Climate Change
I will give you the exact quote, "....the economic lost according to the mid-range estimate of global warming is smaller than you might expect, at lease for the world as a whole. Standard estimates are 3 degree Celsius of warming by 2100 could lead to a fall in world GDP of 3% at that point. The reason the warming hurt some area and help some area. For example it looks likely that Russia, North America and china could benefit from global warming as their climate gets a little warmer, while say Africa, Latin America, South Asia and Western Europe probably will suffer from global warming. Also alot of world economic are not that dependent on temperature change"
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Jun 29, 2014 14:54
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- pedro0930
- Oct 15, 2012
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I read that as "not beneficial, but not as bad as one might imagine."
I am not certain, but I thought the point of the 3 degrees raise in temperature is that it will be the point of no return where a bunch of terrible stuff well start to cascade and self-reinforcing to the point where human action will pale in comparison?
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Jun 29, 2014 17:21
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- computer parts
- Nov 18, 2010
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PLEASE CLAP
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I read that as "not beneficial, but not as bad as one might imagine."
I am not certain, but I thought the point of the 3 degrees raise in temperature is that it will be the point of no return where a bunch of terrible stuff well start to cascade and self-reinforcing to the point where human action will pale in comparison?
No, it's just the point where prediction becomes impossible.
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Jun 29, 2014 17:24
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- Arglebargle III
- Feb 21, 2006
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I will give you the exact quote, "....the economic lost according to the mid-range estimate of global warming is smaller than you might expect, at lease for the world as a whole. Standard estimates are 3 degree Celsius of warming by 2100 could lead to a fall in world GDP of 3% at that point. The reason the warming hurt some area and help some area. For example it looks likely that Russia, North America and china could benefit from global warming as their climate gets a little warmer, while say Africa, Latin America, South Asia and Western Europe probably will suffer from global warming. Also alot of world economic are not that dependent on temperature change"
Ok cool. I find it hard to believe that China would benefit from increased temperatures though since I can't see the rainfall and desertification situation in north china improving in global warming.
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Jun 29, 2014 17:33
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- whatever7
- Jul 26, 2001
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by LITERALLY AN ADMIN
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No, it's just the point where prediction becomes impossible.
Aren't you excited we will live long enough to see the result?
BTW, Japan TV NHK made a landmark documentary series "Silk Road" in the beginning of 80s when China and Japan were BFF. 1st series 12 episodes were made inside China and 2nd series 18 episodes filmed from Kashmir to Eypt. I have watched it a few times. I am convinced there were major climate change in central asia in the last 2000 years. The study in this field is still very primative.
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Jun 29, 2014 17:49
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- Arglebargle III
- Feb 21, 2006
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Yeah major human-caused climate change is pretty accepted in Africa and Asia.
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Jun 29, 2014 18:07
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- Kassad
- Nov 12, 2005
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It's about time.
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Aren't you excited we will live long enough to see the result?
Will we? I thought the effects of climate change were only going to become really obvious by 2100 or so.
Edit: Well, maybe a decade or two earlier than that but I was born in 1985.
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Jun 29, 2014 19:08
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- computer parts
- Nov 18, 2010
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PLEASE CLAP
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Will we? I thought the effects of climate change were only going to become really obvious by 2100 or so.
Edit: Well, maybe a decade or two earlier than that but I was born in 1985.
2050 is what most of the predictions are aiming towards.
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Jun 29, 2014 20:21
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- Pimpmust
- Oct 1, 2008
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Sea level rise is gonna be trouble for the Yancheng, Shanghai, Tianjin, Weifang and the Guangzhou areas.
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Jun 29, 2014 21:19
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- ShadowHawk
- Jun 25, 2000
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CERTIFIED PRE OWNED TESLA OWNER
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Ok cool. I find it hard to believe that China would benefit from increased temperatures though since I can't see the rainfall and desertification situation in north china improving in global warming.
But perhaps more to the point, the most climate-dependent thing in the global economy is agriculture, and the general story of economics has been agriculture becoming increasingly less relevant for hundreds of years.
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Jun 30, 2014 04:29
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- The Dipshit
- Dec 21, 2005
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by FactsAreUseless
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China also has lots of cold and snowy areas.
But perhaps more to the point, the most climate-dependent thing in the global economy is agriculture, and the general story of economics has been agriculture becoming increasingly less relevant for hundreds of years.
If you said less labor-intensive instead of less relevant, I'd be happy to agree with you. Can't agree with the thought that knowing where food is coming from for 7 billion people isn't important.
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Jun 30, 2014 05:53
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- computer parts
- Nov 18, 2010
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PLEASE CLAP
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If you said less labor-intensive instead of less relevant, I'd be happy to agree with you. Can't agree with the thought that knowing where food is coming from for 7 billion people isn't important.
It's becoming more efficient both in the yield/laborer sense and the yield/area sense.
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Jun 30, 2014 06:25
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- ShadowHawk
- Jun 25, 2000
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CERTIFIED PRE OWNED TESLA OWNER
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If you said less labor-intensive instead of less relevant, I'd be happy to agree with you. Can't agree with the thought that knowing where food is coming from for 7 billion people isn't important.
If some catastrophe dramatically disrupted agriculture and made it twice as expensive in terms of all relevant resources, to a first order approximation the effect on the economy would be about as large as that difference. So if agg is 1% of our economy, it would be about like having a recession cutting back 1%. That's not so bad relatively speaking, it's like 1/5 of what happened in 2008.
Now, in poorer economies agg is a much bigger deal, so the effects would be much more drastic there. But I don't think China's will be in that boat for long -- they produce an awful lot of value that isn't agriculture.
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Jun 30, 2014 06:37
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- The Dipshit
- Dec 21, 2005
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by FactsAreUseless
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It's more of a concern of a yield/acre, you find concerns with China that yield/acre will drop down despite best efforts (I've seen estimates at ~30% for China by the 2050s, lemme try to dig them up when it isn't so late and I'm not so sleepy). "Twice as expensive" is a wild abstraction of something like arable land, and assuming a perfect conversion between money to harvest doesn't sit right with me.
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Jun 30, 2014 06:59
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- Femur
- Jan 10, 2004
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I REALLY NEED TO SHUT THE FUCK UP
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When millions of people suddenly die, it's gonna be a shock, compromising your decision making abilities slightly and all your little war games you've played is not going to go correctly, as you've already abandoned a pretty good axiom, that a group is only as strong as it's weakest member.
And even if they don't die, having to suddenly deal with the influx of people into your leftover good cities will not go smoothly.
I honestly don't know what's going to happen, but dismissing the human element is a critical mistake.
As is making predictions based on historical results, one crucial flaw being the value of things has changed.
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Jun 30, 2014 08:21
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- dilbertschalter
- Jan 12, 2010
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Sea level rise is gonna be trouble for the Yancheng, Shanghai, Tianjin, Weifang and the Guangzhou areas.
Yeah, the Yangtze River Delta has been the economic/cultural heartland of China most of the last thousand years and even fairly "small" rises in sea level doom it.
One thing that I'm sad about (in a morbid and terrible way) is that I probably won't be around to see some of the insane engineering projects the Chinese government dreams up to deal with sea level rise.
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Jun 30, 2014 12:12
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- MeinPanzer
- Dec 20, 2004
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anyone who reads Cinema Discusso for anything more than slackjawed trolling will see the shittiness in my posts
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Aren't you excited we will live long enough to see the result?
BTW, Japan TV NHK made a landmark documentary series "Silk Road" in the beginning of 80s when China and Japan were BFF. 1st series 12 episodes were made inside China and 2nd series 18 episodes filmed from Kashmir to Eypt. I have watched it a few times. I am convinced there were major climate change in central asia in the last 2000 years. The study in this field is still very primative.
One of the areas I am currently working in is climate change in the ancient Mediterranean world, and I have been doing some tangential reading on trends in Central Asian climate history. I am more familiar with the data for 1000 BC-1000 AD, but in the first millennium AD at least there have been, for instance, several megadroughts in Central Asia and China that have been connected with massive population movements (such as the Huns moving westward and invading Europe). This area of research is still rudimentary, but it is moving rapidly and producing some very interesting results.
Also, all of you claiming that the US could absorb the loss of the Great Plains' agricultural output after the depletion of the Ogallala and other major aquifers with minor difficulties are deluding yourselves. This won't happen in isolation, but will be connected with drought in some areas (like the Southwest, which is already heavily affected by water shortages), and flooding and other phenomena harmful to agriculture elsewhere. You have to look at the dynamics of the entire system
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Jun 30, 2014 13:36
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- whatever7
- Jul 26, 2001
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by LITERALLY AN ADMIN
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Yeah, the Yangtze River Delta has been the economic/cultural heartland of China most of the last thousand years and even fairly "small" rises in sea level doom it.
One thing that I'm sad about (in a morbid and terrible way) is that I probably won't be around to see some of the insane engineering projects the Chinese government dreams up to deal with sea level rise.
Here is a hilarious project for you. A sea canal that link Beijing to Tianjin and turn Beijing into a sea port.
http://www.forbes.com/sites/ericrmeyer/2014/06/21/a-new-china-dream-beijing-a-sea-port/
Only registered members can see post attachments!
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Jun 30, 2014 13:42
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- namaste friends
- Sep 18, 2004
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by Smythe
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quote:environmental considerations have not yet been taken into account
lol
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Jun 30, 2014 14:52
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- dr_rat
- Jun 4, 2001
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Even better
quote: And finally, as notices Xia Qing, a former director at the Research Academy of Environmental Sciences, “those fine inventors are defying physics: the land is high in the west and low in the east in this country: they are asking water to flow uphill.”
Just checked, apparently Beijing is 40 to 60 meters above sea level. So that's roughly around the height of Christ the redeemer(38 meters)at its lowest point.
That would be one hell of a canal.
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Jun 30, 2014 17:32
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- FrozenVent
- May 1, 2009
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The Boeing 737-200QC is the undisputed workhorse of the skies.
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Even better
Just checked, apparently Beijing is 40 to 60 meters above sea level. So that's roughly around the height of Christ the redeemer(38 meters)at its lowest point.
That would be one hell of a canal.
The port of Duluth is something like 184 meters above sea level.
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Jun 30, 2014 17:50
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- dr_rat
- Jun 4, 2001
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The port of Duluth is something like 184 meters above sea level.
Unless I'm missing something its just on natural lakes, with upstream river flow into it meaning the elevation isn't a factor.
You would still have to pump all the water up that distance, The locks just allow for easier ship movement and could help control the water flow. End of the day you can't beat physics. I mean I'm not sayings not doable, it certainly is, it would just be pretty impressive.
dr_rat fucked around with this message at 18:33 on Jun 30, 2014
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Jun 30, 2014 18:31
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- namaste friends
- Sep 18, 2004
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by Smythe
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Whoa whoa whoa
http://www.ft.com/intl/cms/s/0/2084...l#axzz36BBVagy6
quote:
The anti-corruption campaign launched by Xi Jinping, China’s president, has brought down its most powerful figure so far, after the ruling Communist party expelled a former military leader and accused him of handing out promotions in exchange for bribes.
The case against General Xu Caihou, once one of the most senior generals in the People’s Liberation Army, will be referred to prosecutors, China’s official Xinhua news agency reported on Monday, citing an announcement by the party’s Central Committee.
More
Mr Xu’s prosecution, agreed on Monday at a meeting of the politburo, is the latest development in an anti-corruption drive established shortly after Mr Xi came to power in 2012, in which he pledged to take on “tigers” -- members of China’s elite – as well as low-level bureaucrats or “flies”.
No military figure of Mr Xu’s stature has been felled by corruption allegations in recent memory. The general sat on the politburo and was a vice-chairman of the Central Military Commission.
“He’ll be the highest military official to face trial . . . in more than 30 years,” said Chris Johnson, head of China studies at the Center for Strategic and International Studies in Washington.
The last time such a shake-up occurred in the military top brass was when former Chinese leader Deng Xiaoping dismissed Yang Shangkun and his half brother Yang Baibing in 1992. Neither of the Yang brothers, who had built powerful factions within the army, was accused of corruption or any other legal offence.
Monday’s announcement was the first official confirmation that Gen Xu, who is reportedly battling cancer, is facing corruption charges.
A statement issued after the politburo meeting said: “Investigations revealed that Xu Caihou had used his position to help others secure promotions, and had taken bribery directly and through his family members,” according to Xinhua. “His case is serious and leaves a vile impact,” the statement added.
Mr Johnson said: “They could have laid it all at the door of personal failings, as they usually do. But they are suggesting instead that he was creating his own power base in the military through patronage, by allowing people to
pay bribes for these positions.”
Local media have reported that one of the suspects in the case, accused of bribing Gen Xu, was Gen Gu Junshan, the former deputy head of logistics of the PLA, who was arrested on March 31. Gen Gu was the subject of lurid TV reports showing his palatial house in Henan province.
Gen Gu was suspected of having paid Gen Xu Rmb35m (about $5.6m), according to a report by the South China Morning Post in March. The paper also reported that Gen Xu had been dragged from his hospital bed when he was detained by 20 policemen on March 15.
Mr Xi has repeatedly vowed to stamp out entrenched corruption in the military, seeking to transform it from an politicised hangover from the Mao era into a professional fighting force capable of projecting power all the way into the western Pacific.
He has also pledged to reform the service by getting rid of non combat roles, abolishing some of China’s seven military regions, and moving to a joint command system.
Analysts said the campaign against military graft can be viewed as part of the wider reform effort and simultaneously designed to intimidate senior officers into not opposing the plans by making examples out of some.
Two other prominent officials were also expelled from the party on Monday – Jiang Jiemin, the former head of the state assets regulator, and Li Dongsheng, the former public security vice-minister.
Mr Jiang, who once ran China National Petroleum Corp, was a close ally of Zhou Yongkang. Mr Zhou, a former member of the party’s most powerful body, the Politburo Standing Committee, is widely reported to be the subject of a long-running corruption investigation. However, this has not been officially acknowledged by Beijing.
The expulsion of another individual associated with Mr Zhou’s clique, the former CNPC vice-president Wang Yongchun, was also announced on Monday.
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Jul 1, 2014 03:21
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- namaste friends
- Sep 18, 2004
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by Smythe
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I guess things aren't that bad.
http://on.ft.com/VBfrBa
quote:
HSBC's monthly survey of China's manufacturing sector confirmed that conditions at the world's workshop improved markedly in June.
The HSBC measure, derived from asking questions at 420 companies, gave a final reading of 50.7, up from 49.4 in May (but slightly below the 50.8 "flash estimate" a week ago).
A level above 50 indicates growth. June marks the first month above that level since December.
The forward looking new orders component saw the strongest rate of growth in 15 months.
The trend largely supports China's larger, state-sponsored survey of 3,000 companies, which earlier on Tuesday moved up from 50.8 to 51, the highest level since December.
Hongbin Qu, economist at HSBC, said the survey "confirms the trend of stronger demand and faster destocking."
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Jul 1, 2014 03:31
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- FrozenVent
- May 1, 2009
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The Boeing 737-200QC is the undisputed workhorse of the skies.
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Unless I'm missing something its just on natural lakes, with upstream river flow into it meaning the elevation isn't a factor.
Yeah ships drive right over Niagara Falls, no big deal. I agree that they would need a significant quantity of water to flood the upper part, but there's no need to have it flow out all that quick.
Oh and a 3000 ton ship is tiny, that-number-is-missing-a-zero tiny.
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Jul 1, 2014 04:30
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- Bip Roberts
- Mar 29, 2005
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Yeah ships drive right over Niagara Falls, no big deal. I agree that they would need a significant quantity of water to flood the upper part, but there's no need to have it flow out all that quick.
Oh and a 3000 ton ship is tiny, that-number-is-missing-a-zero tiny.
Are you somehow being glib about the infrastructure needed to build the Saint Lawrence and Great Lakes shipping channels being cheap?
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Jul 1, 2014 06:05
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- Arglebargle III
- Feb 21, 2006
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Canal more like anal can!
But seriously 38 meters is higher than the Panama Canal. It would be a big job for no particular reason.
Except a temporary boost to GDP so the party boss of the area can get a good report and move up. Party officials at the provincial level are judged by some sort of proprietary scorecard that weights GDP growth heavily. Taking out big loans for massive infrastructure projects boosts your political resume, and you'll be promoted or transferred by the time the party's over so who cares.
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Jul 1, 2014 14:16
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.forbes.com/sites/gordonchang/2014/06/29/chinas-wanxiang-challenges-tesla-for-dominance-of-global-electrics-market/
quote:
China's Alibaba And Tencent Gobbling Up Everything In Sight
Comment Now Follow Comments
Jack Ma, the leading light behind Alibaba Group, was drunk when he agreed to take a stake in Guangzhou Evergrande Football Club, at least according to Hui Ka Yan, the seller. And Ma did not bother too much with the details of his 1.2 billion yuan ($192 million) buy on behalf of Alibaba. “We finished it in 15 minutes,” said Hui, referring to the negotiations.
So Hangzhou-based Alibaba, which will list next month on the New York Stock Exchange, is now a half owner of a soccer team in the capital of Guangdong province. But that is not the only purchase Ma’s company has made in recent days. So far this year, Alibaba has spent more than $4.5 billion on acquisitions.
Ma is not the only online mogul cutting checks at a furious pace. China’s internet companies have gone on buying binges this year, resulting in an “unprecedented wave of consolidation” according to Doug Young of the South China Morning Post. “No one pays much attention anymore to anything worth less than $1 billion,” he writes.
Maybe so, but a number of the smallish deals have great significance. Ma started the frenzy in April of last year with his purchase of 18% of microblogging platform Weibo for $586 million. And he has continued the dealmaking. For instance, this March Alibaba agreed to plunk down $692 million for about 35% of Hong Kong-listed Intime Retail Group, which operates supermarkets and department stores in China. Mr. Ma is apparently diving into bricks-and-mortar retailing, starting at the high end.
Alibaba not only wants to sell you things, it wants to deliver them to your front door. In May, the company agreed to pay $249 million for 10.4% of Singapore Post, Singapore’s main postal service, a prelude to cooperation on logistics. The deal followed December’s announcement of what is essentially a purchase of 9.9% of Goodaymart, the logistics business of Haier Electronics, the white goods maker (Alibaba also bought bonds convertible into Haier stock). The acquisitions come at a time when Alibaba has entered into other logistics arrangements, most notably with China’s postal service, China Post.
Tencent Holdings, the company that could ultimately dethrone Alibaba, is on the acquisition trail too. For instance, last September the social media giant announced it would pay $448 million for 36.5% of the Sogou search engine, also taking an option for 3.5% more of the Sohu.com unit.
And Tencent’s moves continued this year. At the end of last month, the Hong Kong-listed company announced a $736 million acquisition of 19.9% of Beijing-based 58.com, the largest of the Craigslist-like sites in China. Analysts say the deal will be good for Tencent’s Tenpay, which in Q1 captured 18.9% of China’s third-party online payment market. That’s well behind Alipay, the Alibaba affiliate with a whopping 47.6% share.
Yet the 58.com deal will also help WeChat, Tencent’s mobile-messaging service. Tencent will integrate 58.com services on WeChat, which had 396 million active users in Q1. “We believe 58.com may develop some tailor-made products and services specifically to fit the WeChat user base,” Alicia Yap of Barclays notes.
The 58.com deal takes on added significance because it followed Tencent taking a strategic position in NASDAQ-listed JD.com, China’s second-biggest e-commerce site. In March, the Shenzhen-based Tencent agreed to pay $214.7 million and transfer some of its struggling businesses in return for a 15% stake.
And in January, Tencent agreed to pay $193 million for 9.9% of China South Sea City Holdings, a warehouse and logistics business in China. Tencent, in short, is putting together the elements of an e-commerce business, which will be fed by its social media properties.
So what’s the story behind all the tie-ups? For one thing, Alibaba is changing its focus, largely because O2O—online to offline—is seen as crucial to the expansion of Chinese retailing. Yet Jack Ma’s purchases have come under scrutiny because they are occurring while Alibaba is trying, through acquisition, to expand into other areas, namely media, finance, and entertainment. Not all of Alibaba’s deals take it out of its core business—the purchase of the remaining portion of UCWeb, a mobile browser developer, last month is certainly a good move—but Jack Ma’s company could become unrecognizable in a few years.
Alibaba looks attractive now because it has an 80% share of China’s white hot e-commerce market, but Jack Ma is blurring the company’s focus, moving into areas where it may not have a competitive advantage and where profits are certainly not as rich.
The Intime purchase is especially illuminating. Analysts liked the deal—Alibaba platforms can offer the convenience of picking up purchases around the corner, Intime’s inventory can be offered online, and Alipay can expand its penetration—but these advantages could largely have been obtained without the equity purchase. Moreover, the broader implications of the acquisition are disturbing.
What Ma is essentially saying with the Intime move is that the future of e-commerce in China is tied to physical stores. Running physical stores, however, will dilute margins, degrade ratios, and multiply management burdens in Hangzhou. And there will be complications. Intime has competitors that now have reason to go after Alibaba, perhaps by joining forces with archrival Tencent.
At the archrival, the acquisition strategy looks much more disciplined. Tencent is invading Alibaba’s e-commerce turf with deals that, unlike Jack Ma’s, are easily explainable.
Tencent, in short, has a laser-like focus while Alibaba is moving—splurging—in many directions at once. Not all of Ma’s visionary strategies have to pan out, but some of them have the potential of bringing Alibaba down to earth.
With a big head start and more cash to burn, it is Alibaba’s game to lose. But Jack Ma is now beginning to act like a rock star, and the purchase of half of the Evergrande Football Club, which is wrong on so many levels, is probably not the worst step he is making at the moment.
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Jul 7, 2014 00:24
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- FrozenVent
- May 1, 2009
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The Boeing 737-200QC is the undisputed workhorse of the skies.
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Canal more like anal can!
But seriously 38 meters is higher than the Panama Canal. It would be a big job for no particular reason.
Panama's an inter oceanic canal though, it's just built with locks because it was easier to do it that way. Compare to Suez.
The Beijing canal idea is pretty dumb, but not because of the scale of the project - it's just pointless.
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Jul 7, 2014 00:35
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- whatever7
- Jul 26, 2001
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by LITERALLY AN ADMIN
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Word on the street is that Ma is investing into football because the current emperor, Xi is an avid football fan.
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Jul 7, 2014 01:56
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.ft.com/intl/cms/s/0/71a9e156-fafe-11e3-8959-00144feab7de.html#axzz36oFtfULS
quote:
The Chinese property sector is in a recession. Market optimists insist it is going through an “adjustment” similar to previous property downturns.
A more sober view, however, is that because of unprecedented overbuilding, and leverage nurtured by the eruption of shadow banking, this downturn is both more serious and systemic. China is probably in the first stage of a denouement of the property- and construction investment-led growth model of the past 15 years. Financial markets are having trouble pricing the implications.
Property accounts for about 25 per cent of capital investment, and roughly 13 per cent of gross domestic product. Incorporating associated industries, such as steel, cement, and construction machinery and materials, would raise the investment share of GDP to about 16 per cent.
If this leading edge of China’s growth model saw a fall in investment growth from 20 per cent to 10 per cent, economic growth would slide by roughly 2 per cent, taking into account secondary effects. The stream of downward revisions to economic growth is not over yet.
Despite structural oversupply, the decline in property starts, sales and prices has not yet been extraordinary. Property and land prices have been declining since the end of 2013, and have further to go, but they may not collapse as a result of forced sales by households. Household leverage and mortgage loan-to-value ratios are low, and homeowners are subject to large downpayments on first and second homes.
Chronic oversupply
Yet there is no masking chronic oversupply. Urban housing completion rates remain far in excess of the effective demand by the population with urban “hukou”, that is, urban registration. Across-the-board falls in construction indicator volumes and values have been accompanied by a sharp rise in inventories of unsold homes, and a surge to about 20 per cent in the aggregate vacancy rate.
While weaker trends have permeated the largest cities, they are most acute in so-called Tier 3 and 4 cities, which account for almost 70 per cent of homes under construction and home sales, and almost 60 per cent of housing investment. Inventories have risen to about 15-30 months of sales in many of these cities.
This downturn will not be over until we have had several quarters of declines in the ratio of credit to GDP and in property sales and transactions, non-financial sector deleveraging, and more defaults
Further, the intricate connections between residential and commercial property, shadow banking and vigorous credit creation raise financial instability risks. Direct commercial bank property loans form about a fifth of bank assets, but perhaps half of all bank loans are collateralised by property and land.
Banks are protected from sudden liquidity shocks by captive household deposits, but they will face problems over asset quality. Debt service risks loom large for construction-related companies, indebted state-owned enterprises with significant property financing and local governments.
Banks are also the principal sponsors of and agents in shadow banking, which has been encouraged by traditional bank lending restrictions, and grown in a few years into a near Rmb40tn ($6tn) industry, or half of GDP. The property and heavy industry sectors, such as coal and steel, have been leading borrowers, and consumers have gained from wealth management products, which pay much higher interest rates than controlled deposit rates.
Shadow banking has beaten a path towards the government’s stated aim of financial liberalisation, and yet regulators have become concerned about the eruption of risks to stability arising from excessive credit creation, rising borrower stress, and a building wave of defaults, mostly bailed out so far, as coal and property asset values fall.
Stealth stimulus
In spite of rhetoric that market forces should be allowed a greater role, the authorities have resorted to administrative stimulus by stealth as the property downturn has gathered pace.
Announced initiatives include two rounds of lower targeted reserve requirement ratios, actions to hold down interbank interest rates and ease property purchase and development conditions, and accelerated fiscal spending, and shantytown and railway investment. While these measures are helping to stabilise the economy at midyear, the harder the property downturn is resisted now, the bigger the economic and financial risks will become.
Financial markets have not yet priced for the end of China’s long-running property boom. With or without short-term palliatives, construction will support but no longer lead GDP growth, and the sector will have to work off oversupply and leverage, while adjusting to new legal restrictions affecting land clearance, resettlement of people, and agricultural land preservation.
At the very least, this downturn will not be over until we have had several quarters of declines in the ratio of credit to GDP and in property sales and transactions, non-financial sector deleveraging, and more defaults. You can see why the process has barely begun.
George Magnus is an independent economic adviser to UBS
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Jul 7, 2014 19:48
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.scmp.com/business/china-business/article/1548282/bankruptcies-rock-loan-guarantors-china
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Mainland loan guarantors have found themselves ensnared in the woes of the underground banking sector following a fresh wave of bankruptcies around the country.
Creaking under the weight of bad debts, hundreds of guarantee groups would be unable to bear even more, although their services are critical for the economic system and the millions of small firms that provide the majority of the mainland's jobs.
"It is by all means a risky business," said Wang Xiao, a Zhejiang entrepreneur who invests in a loan guarantee business. "An increasing number of loan defaults will soon force us to close down the business."
In Wenzhou, nearly 90 per cent of loan guarantors have failed since the start of the credit crisis arising from the underground banking system, according to the media.
The city, dubbed the capital of China's private businesses, had pinned hopes on the companies offering capital guarantee services to bail out troubled small companies when Beijing allowed it to legalise the underground banks.
"It could become the last straw that breaks the camel's back," said Yan Yipan, the head of law firm Zhejiang Panyuan, which mainly deals with cases related to financing. "Without the loan guarantee services, it will be more difficult for small companies to do business."
Rampant loan-shark schemes in Wenzhou resulted in the collapse of the city's economy, with dozens of underground banking operators and investors either committing suicide or fleeing the country.
The government felt loan guarantors could bridge the gap between cash-hungry businesses and financial institutions. Borrowers without enough collateral could use loan guarantee services to access much-needed funds. The guarantors normally charge 3 per cent of the loan amount as fees.
"Three per cent fee looks good, but a loan default would be equivalent to the total profits made from dozens of deals," Wang said.
At the end of last year, there were more than 8,000 licensed loan guarantors, with most of them focusing on serving small enterprises. The companies had a combined registered capital of 880 billion yuan (HK$1.1 trillion), according to the China Banking Regulatory Commission.
Online consultancy Forward said financing demands from the small firms topped 16 trillion yuan in 2012. Indeed, thousands of illegal loan guarantors have been offering guarantee services for the underground banks in the past decade. In April, a bank run in Sheyang, Jiangsu province, was sparked by the collapse of illegal loan guarantors.
In Guangdong, the financial authorities said more than 30 loan guarantors had failed so far this year, while in Sichuan, the provincial government revoked 12 loan guarantee licences. The problems with loan guarantors would weigh further on a mainland leadership already buffeted by complaints about the way government treats small firms.
"Without the privately owned small businesses, China's economy won't have a future," said Song Weiping, the chairman of developer Greentown China. "They are the babies and they should be looked after carefully."
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Jul 8, 2014 05:40
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.ft.com/intl/cms/s/0/491e...l#axzz37N2ov7CR
quote:
Shoppers taking the bus to the centre of China’s scenic city of Hangzhou last weekend paid no attention to the man in the white T-shirt until he suddenly spilled a can of paint thinner, crouched down and lit it.
A surveillance camera recorded passengers trying to escape as flames filled the aisle and licked at the seats. Passing drivers doused the burning vehicle with fire extinguishers as smoke billowed through the street.
More
For all the horror of that summer day in Hangzhou, it was not the first such event. The month before, two high schoolers were injured wrestling a machete away from an attacker on a bus. In February, a four-month-old baby was among six killed when a jealous husband set fire to a bus in southwestern China.
In the past decade, almost 100 Chinese have died after fellow passengers deliberately burnt or blew up buses. Some 300 more suffered severe burns or other injuries, including 29 people last weekend.
“Everyone’s shook up. It feels like terrorism,” said Mrs Zhu, an office worker in Hangzhou. “When it happened in other cities, I never worried. But this wasn’t some bus in the outskirts; this was a central line we all took.”
Chinese who kill random strangers en masse are guaranteed one reward – a moment when attention must be paid to them, after a lifetime of bitter anonymity.
“He told others that he wanted to follow other examples and create malignant incidents to make a name for himself,” the police report on last weekend’s attack concluded.
Police identified the attacker as Bao Laixu, an 34-year-old man so badly burnt that “it’s not possible to get his oral confession by interrogation”. Mr Bao left the terraced fields of Gansu province in central China in his mid-teens to seek work in the factories of Guangdong more than 2,000km south but contracted tuberculosis. After a brief return home in 2008, he drifted east looking for jobs, making few friends and never contacting his family.
More than half China’s 1.4bn people live in cities, compared with about 10 per cent a generation ago. Rapid urbanisation has split families and destroyed villages and neighbourhoods. The gap between rich and poor is one of the widest in the world.
Many feel they have failed to grasp the success they see celebrated around them, or had their spirit broken by repeated setbacks.
“He might not have thought too clearly about whether he hurt other people. Everything would have been black in his eyes,” said Hu Cheng, a city dweller who also knows despair. Mr Hu once tried to blow himself up outside a courthouse after failing to stop the demolition of his home. Guards pinned him to the ground before he could light his petrol-soaked clothes.
Chinese media have uncovered family disputes, illness, debt and unemployment behind attacks by Han Chinese, an ethnic group native to east Asia. Suicide bombers often target police stations or local government bureaux in retribution for land grabs or other slights.
We are in a unique time now in China. We are unable to see some deep problems. What we see is just some waves, but what is under the water, we can’t see
- Beijing criminologist
In contrast, Chinese journalists have little freedom to investigate attacks by Uighurs, a Muslim, Turkic people native to the frontier region of Xinjiang. Overseas human rights groups claim similar land and housing disputes or police mistreatment as well as religious and employment discrimination lie behind attacks there, whereas Beijing almost always attributes those to terrorism or separatism.
“We don’t target a specific ethnicity,” said Chinese terrorism expert Li Wei, who works for a state-backed research institute. He said attacks such as bus bombings might be political in the sense that they showed people were upset with the government, but “most of them are not planned by a certain group or organisation, and there is no terrorist ideology behind their acts”.
Chinese authorities said eight Uighurs who stabbed to death 33 people at a southwestern train station in March, and another group who ploughed two cars through a morning market in the Xinjiang capital Urumqi in May, killing 43, wanted to commit jihad.
In 2008, the Turkistan Islamic Party claimed responsibility for bus explosions in Shanghai and Kunming, but the Kunming bombs later turned out to be the work of a Chinese ex-convict, who died trying to bomb an expat bar on Christmas Eve that year.
Many Chinese believe sympathetic coverage of disgruntled attackers’ problems encourages copycats as in 2010, when six killers hacked schoolchildren to death. At dawn on Friday, a migrant worker attempted to set a city bus alight in the southern city of Changsha.
The morning of the Hangzhou attack, the accused Mr Bao left Yiwu, a trading city that produces most of the world’s zippers. He travelled through the green hills to Hangzhou then rode the Number 7 bus for nearly an hour before lighting his fire.
Journalists, who tracked down Mr Bao’s parents, were shocked at how impoverished his village was and were told by neighbours they had thought he had been a success because he had made it to the big city.
“We are in a unique time now in China. We are unable to see some deep problems,” said a criminologist in Beijing, who did not want to be identified for fear of appearing sympathetic to the attacker. “What we see is just some waves, but what is under the water, we can’t see.”
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Jul 13, 2014 18:32
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- Raenir Salazar
- Nov 5, 2010
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College Slice
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Figuring out how to cope with the fact that you are one ultimately expendable person out of seven billion is going to be the psychological challenge of the 21 century; I can entirely see how anyone could one day just stop and realize how small they are, like they are in some kind of Lovecraft story and go insane from the realization. Similar to those people who, despite flying planes just fine regularly will suddenly one day have a freak out and lock themselves in the bathroom.
Back centuries ago you were a farmer or a cobbler or some dude with a sword and you knew your purpose, you made the drat shoes for ever person in that village and they knew you did too; now you're likely to be just one guy out of 100,000 pushing buttons that might make a car you'll never see driven by someone you'll never meet in a country you'll never be too.
We're just not wired for that and figuring out how to cope with it is going to be a real thing in the future I think.
Hearing these sorts of stories that seem to come from this is just tragic and horrifying.
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Jul 13, 2014 18:43
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- Adbot
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ADBOT LOVES YOU
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May 11, 2024 13:09
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- Bip Roberts
- Mar 29, 2005
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How much are public suicides actually a barometer of underlying economic problems? I can see them being related but it seems like it might be a pretty coarse grained canary in the coal-mine to look at these things.
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Jul 13, 2014 18:56
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Jun 29, 2014 14:51
