China Economy Megathread

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Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

Ardennes posted:

In the case of China, wages are lower in the interior and the countryside than the coast, but the coast also has immediate access to shipping routes so I don't know if you are going to have the same dynamics.

Almost certainly not. SOEs are moving/being moved into the interior but the wage differential is simply not making up for the logistic nightmare involved. I know a guy who runs a state owned chemical firm who opened a major plant in Inner Mongolia: he was saying that the plant is vastly less economical than the Shanghai-based plant it replaced. Basically trucks are backed up all along the roads running to it, and the management are almost all relocated due to lack of local expertise (meaning they are on higher salaries than they would have been in Shanghai).

If Chinese SOEs can't make it work it's reasonable to assume that multinationals will be more likely to move to coastal Vietnam, Indonesia, Bangladesh etc. than to the Chinese hinterland.

# ? Nov 25, 2014 18:22

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# ? May 11, 2024 13:12

Ardennes: May 12, 2002

Daduzi posted:

Almost certainly not. SOEs are moving/being moved into the interior but the wage differential is simply not making up for the logistic nightmare involved. I know a guy who runs a state owned chemical firm who opened a major plant in Inner Mongolia: he was saying that the plant is vastly less economical than the Shanghai-based plant it replaced. Basically trucks are backed up all along the roads running to it, and the management are almost all relocated due to lack of local expertise (meaning they are on higher salaries than they would have been in Shanghai).

If Chinese SOEs can't make it work it's reasonable to assume that multinationals will be more likely to move to coastal Vietnam, Indonesia, Bangladesh etc. than to the Chinese hinterland.

Basically that is the trap, China can't lower wages on the coast and there are such a multitude of infrastructure and logistics issues to overcome in the interior that makes foreign competition more attractive. However, standards of living even in Chinese coastal cities isn't nearly anywhere close to the first world, but China has to deal with some of the very issues of first world countries such as inverted demographics and rigorous foreign competition for exports.

That said, China wouldn't be where it is today without US trade policy being extremely friendly and that is largely a legacy of the Cold War and the Sino-Soviet split.

# ? Nov 25, 2014 18:50

VideoTapir: Oct 18, 2005; He'll tire eventually.

Gee, maybe they should be building truck and rail corridors between some inland cities and the sea ports rather than golf courses and shopping malls.

# ? Nov 25, 2014 18:56

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

VideoTapir posted:

Gee, maybe they should be building truck and rail corridors between some inland cities and the sea ports rather than golf courses and shopping malls.

To be fair they have. Ultimately though the sheer volume of traffic that goes from Chinese ports would require an utterly ludicrous level of infrastructure to accommodate, unless all of the interior development were concentrated in one area (which kind of defeats the purpose).

# ? Nov 25, 2014 19:05

rex rabidorum vires: Mar 26, 2007; KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN KASPERI KAPANEN

Daduzi posted:

To be fair they have. Ultimately though the sheer volume of traffic that goes from Chinese ports would require an utterly ludicrous level of infrastructure to accommodate, unless all of the interior development were concentrated in one area (which kind of defeats the purpose).

Of the top 10 ports in the world China has 7 of them that handled roughly 157,000 TEUs of volume last year :stare:

. I could see that creating all sorts of fun logistical problems.

# ? Nov 25, 2014 20:15

Poil: Mar 17, 2007

computer parts posted:

"Look like Detroit" is a bit of an exaggeration but yes. This is sort of the opposite of what happened in the US/Europe, where the Chinese just decided to say "build all the infrastructure for stimulus" and didn't stop.

Then I got it right.

Just to clarify: Detroit was just an exaggeration as to how even if China went into an economic crisis and recession their reports would still indicate a strong growth because they're so inaccurate and fudged to look better.

rex rabidorum vires posted:

Of the top 10 ports in the world China has 7 of them that handled roughly 157,000 TEUs of volume last year . I could see that creating all sorts of fun logistical problems.

I spent 1� year studying international logistics and freight and yes, it's completely insane amounts. One of my teachers told us about when he visited Shanghai and at night all the lights from all of the cargo ships and cranes looked like a second city.

# ? Nov 25, 2014 23:56

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

How far to the negative would China's real GDP have to go before the official number went to 0%?

I am curious what sort of behaviour we will start to see in China when the economy dips since no one can actually believe the numbers anyways.

# ? Nov 26, 2014 00:01

icantfindaname: Jul 1, 2008

Probably the same as Japan, IE lower the interest rate to 0%, print money forever, and not actually fix the underlying problems ever, with no effect. The only difference is that the Chinese population might get pissed enough that the growth stopped so soon and with so much comical environmental damage that they'll threaten the stability of the government, in that case, who knows what happens

# ? Nov 26, 2014 00:16

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

icantfindaname posted:

Probably the same as Japan, IE lower the interest rate to 0%, print money forever, and not actually fix the underlying problems ever, with no effect. The only difference is that the Chinese population might get pissed enough that the growth stopped so soon and with so much comical environmental damage that they'll threaten the stability of the government, in that case, who knows what happens

Yeah, but that would be an official response to the issue. Since China is wholly committed to the idea of growth forever, I expect them to never do any of the things other governments would do when they have a downturn.

My economic behaviour is semi-rational based on what I witness in my day to day life, and because I can believe the numbers that are published about my country. China will be an interesting experiment to see what happens when you remove one of those inputs.

My question was more "What the population will do?" when the economy turns, but is still officially 5%, rather than what the government will do.

# ? Nov 26, 2014 00:29

Ardennes: May 12, 2002

ocrumsprug posted:

How far to the negative would China's real GDP have to go before the official number went to 0%?

I am curious what sort of behaviour we will start to see in China when the economy dips since no one can actually believe the numbers anyways.

I doubt the government would ever report less than 3-5% even if the economic was in complete freefall.

I think we might see more local disturbances, but it is seems unlikely there would be a real movement that would threaten the government itself. That said, there is no way that the state legitimacy is going to take a giant hit, and Beijing is going to take every effort to keep the situation suppressed.

Ultimately, it is in the interests of Western companies who manufacture goods in China to keep the situation stable and that means it is in the interests of Western governments as well.

# ? Nov 26, 2014 00:53

namaste friends: Sep 18, 2004; by Smythe

http://www.ft.com/intl/fastft/246461

quote:

China's stock market is swinging uncontrollably as a herd of retail investors place bets in the market.

The Shanghai Composite rose as much as 2.7 per cent this morning before a complete reversal that pushed it down 3 per cent. Now it's back up 0.7 per cent. Wait, no, it's down 1 per cent again. Yeah, it's happening that quickly.

In US dollars daily turnover this year has averaged just less than $20bn. As of 11:35am Hong Kong time, turnover is already $68bn. The record high for daily turnover, according to Bloomberg records going back to 2005, was on Wednesday at $86bn.

As previously noted, monthly new account openings from domestic investors "nearly tripled between May and September," according to Morgan Stanley.

The market has been rallying hard for three weeks - see reasons why here. When rallies happen this quickly, a turnround or collapse becomes more possible, hence the big swings today.

# ? Dec 5, 2014 06:30

Fall Sick and Die: Nov 22, 2003

This is probably really stupid and wrong but I imagine there are a lot of business owners and managers with extreme debt about to come due who are investing as a last ditch effort to make money to pay off or extend the debts.

# ? Dec 5, 2014 09:26

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

Well the Shanghai Composite have been extremely active recently because of the Hong Kong - Shanghai Stock through train. It's much easier for Hong Kongers and the outside world investing in the SHanghai stock market through Hong Kong. During the opening week the HK stock market actually tanked and i lost 10% in holdings. But the Shanghai side though it was just rally after rally after rally.

# ? Dec 5, 2014 10:47

Arglebargle III: Feb 21, 2006

Literally every investing and econ publication i have read today has called this an irrational frenzy. Since we know hosed up banking policy has forced investment into non traditional real estate and WMP outlets I'm inclined to believe this huge rally and volatility has nothing to do with fundamentals (iron ore imports still falling, electricity demand still slowing) and is all about ravenous demand for investment that's been suppressed for a long time.

# ? Dec 5, 2014 12:21

Fall Sick and Die: Nov 22, 2003

I thought the same thing too but Chinese people haven't been unable to invest in Chinese stocks at any point have they? Even if Joe Chinaman decides that an apartment isn't a good investment anymore and he's worried about the black market investment products, he's not going to be exuberantly investing in the stock market. Everyone I know in China considers it little more than gambling. Not that they don't like gambling but how do you cheat on your wife when you're calling in the stocks??

# ? Dec 5, 2014 15:00

Femur: Jan 10, 2004; I REALLY NEED TO SHUT THE FUCK UP

Yeah, but greed takes over, and waiting for rent takes too long.

Plus you really can only squeeze so much from a dying country/world, so you have to turn to speculation, or you fall behind the new rich.

# ? Dec 5, 2014 22:51

VideoTapir: Oct 18, 2005; He'll tire eventually.

Fall Sick and Die posted:

I thought the same thing too but Chinese people haven't been unable to invest in Chinese stocks at any point have they? Even if Joe Chinaman decides that an apartment isn't a good investment anymore and he's worried about the black market investment products, he's not going to be exuberantly investing in the stock market. Everyone I know in China considers it little more than gambling. Not that they don't like gambling but how do you cheat on your wife when you're calling in the stocks??

I went to a lecture at Tsinghua in early 2013 where the professor was talking about investment in china and saying that basically no Chinese stocks pay dividends. The way he framed it was that virtually no money in China goes to public investors, everything goes to insiders. So essentially yes, it is gambling.

VideoTapir fucked around with this message at 22:17 on Dec 7, 2014

# ? Dec 7, 2014 22:14

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

Buying mainland stocks that aren't (i.e. can't because they can't/don't want to meet reporting and governance requirements) listed in Hong Kong is not investing. It's gambling. Even more than playing stocks is already gambling. Mainland stock markets are almost literally casinos because everything about the listed companies is completely opaque. It's why valuations are so low there and why there have been barely any mainland buyers taking advantage of the Through Train. It's all been Hong Kongers going the other way for some stupid reason.

# ? Dec 8, 2014 03:33

I would blow Dane Cook: Dec 26, 2008

I never would have guessed that a stock market bubble would have killed off china before it's housing bubble did.

Bloodnose posted:

Buying mainland stocks that aren't (i.e. can't because they can't/don't want to meet reporting and governance requirements) listed in Hong Kong is not investing. It's gambling. Even more than playing stocks is already gambling. Mainland stock markets are almost literally casinos because everything about the listed companies is completely opaque. It's why valuations are so low there and why there have been barely any mainland buyers taking advantage of the Through Train. It's all been Hong Kongers going the other way for some stupid reason.

Wait so the money is going in the opposite direction that it should be?

# ? Dec 8, 2014 12:13

namaste friends: Sep 18, 2004; by Smythe

quote:

Nice from Simon Rabinovitch at the Economist:

One middle-aged man, Mr Xu, had come to meet a manager to inquire about how to subscribe to initial public offerings; their average first-day gain has been about 40% this year. He said he had taken the afternoon off work for the meeting and could hardly conceal his glee. �I�ve been trading since 1992 (just two years after the Shanghai Stock Exchange was established) and I guarantee you this bull market will last,� he said. He confessed to getting badly bruised by the last big one � his portfolio of 500,000 yuan had swollen to 3 million yuan by 2007 at the peak of the market, before falling back to its original level.

At the other end of the spectrum in terms of experience was Ms Zhou, 25, an interior designer with dyed-blonde hair. Like many other young professionals, she had previously put a big chunk of her savings in an online investment fund marketed by Alibaba, an e-commerce company. The fall in interest rates has reduced the return on that fund, pushing her to look for alternatives. �I had been thinking for a while about buying stocks but I had to travel for work and missed the best opportunity,� she sighed. �I will be conservative at first. Just one or two thousand yuan. Or maybe ten thousand.�

Which says a lot about the mechanical nature of this �super-bull� run. There�s simply quite a bit of money in China and a limited number of places for it to go. Once one is found�

quote:

That�s the Shanghai Comp breaching the 3000 mark at pixel time, up 30 per cent since October and 41 per cent this year.

And yes, over the medium term valuations might justify some exuberance (there�s some MS in the usual place which notes that the Shanghai-A is currently trading at 14.2 x 12-month trailing P/E,a 35 per cent discount to its 10 year average while the HK-Shanghai Connect will have its say over time) but in the shorter term you have to keep your eyes firmly fixed on retail activity � 370,000 accounts opened last week according to the Economist � and leverage.

We�ve harped on about them already but they are also why this aggressive move upwards � over 20 per cent over the last ten trading days � might put paid to any further easing any time soon.

As Deutsche�s Zhiwei Zhang said, the reaction since the last rate cut suggests another one might be a little further off now:

The probability of a reserve requirement ratio (RRR) cut in Dec has dropped to under 20% from 40% on 21 November when the surprise rate cut happened. Cutting RRR and/or interest rates amid a sharp stock market rally may add fuel to the fire and jeopardize financial stability. We believe the government may implement prudential regulation to contain the pace of leverage build-up in the equity market. Failure to do so may impose risks on the economy�

We believe the market rally may actually delay major policy easing measures. On 21 November, when the surprise rate cut happened, our view was that the policy easing cycle had started, and the next action was to cut RRR by 50bp in Q1. We thought there was a 40% probability that the RRR cut could happen in Dec rather than next year. We now believe this probability has dropped to below 20%.

Cutting the RRR and/or interest rate amid a sharp stock market rally may add fuel to the fire and jeopardize financial stability. Note that leverage in the financial market has risen sharply, with transactions financed through margin borrowing (outstanding) rising to 881bn on 5 Dec from 406bn at the end of June.

Moreover, the rally may exacerbate the tight liquidity conditions in the real economy as money is lured to the equity market.

It�s a hard place for the Chinese government to be � ease and you risk exacerbating the rally and increasing financial instability, don�t ease (or heaven forbid, tighten) and you harm the real and virtual economy. By virtual we mean, as DB say, financial stocks and the like: the Shanghai bank equity index has risen 31 per cent, the non-bank financial index rose 51 per cent, while the industrial index rose only 12 per cent.

As Deutsche say:

If we are wrong and the government continues to tolerate or encourage the leverage build-up, we see rising risks to the financial sector and the real economy in 2015. The key risk is the difficulty for the government in managing liquidity conditions in the economy. Note that the economy already faces liquidity risks. The liquidity squeeze in June 2013 illustrated how vulnerable the financial system was to liquidity shocks. As leverage in the economy has continued to build, the vulnerability has likely risen since then. The stock rally will make the overall liquidity conditions in the financial sector more complicated and volatile. Another risk is that it will bring up effective interest rates, as money demand rises due to the equity market rally. This will offset the efforts the government put into lowering financing costs.

Hahhahahahahah

# ? Dec 8, 2014 15:40

icantfindaname: Jul 1, 2008

Jumpingmanjim posted:

I never would have guessed that a stock market bubble would have killed off china before it's housing bubble did.

Why not both at once? Japan did it, so can China

# ? Dec 8, 2014 16:56

I would blow Dane Cook: Dec 26, 2008

icantfindaname posted:

Why not both at once? Japan did it, so can China

All this talk of large numbers of retail investors moving into the market and getting leveraged up is giving me a real 1929 vibe.

# ? Dec 8, 2014 21:32

whatever7: Jul 26, 2001; by LITERALLY AN ADMIN

icantfindaname posted:

Why not both at once? Japan did it, so can China

Japan's bubble was triggered by the raising yen. China hasn't allowed Yuan appropriated. As a matter of fact China has showed IMF it's willing to drag IMF mediating functions to a haul if it get any more hush criticism from IMF.

I don't think China's domestic stock market will get a decent bubble in the near future. Low return in stock market and high saving rate are two sides of the same coin. If China want Chinese keep putting money in the low interest saving accounts, they wouldn't let the stock market take off.

# ? Dec 9, 2014 03:49

My Imaginary GF: Jul 17, 2005; by R. Guyovich

http://www.stratfor.com/analysis/lower-oil-prices-carry-geopolitical-consequences

quote:

Summary

Editor's Note: The recent drop in global oil prices is affecting economies around the world. This series examines the reasons behind the falling prices and their effects on major energy consumers and producers. Part One discusses the structural changes in the oil market, particularly the growth in supply and the decline in demand. Part Two will examine the countries likely to be most troubled by price drops, while Part Three will look at the countries likely to gain the most.

Since mid-June, the price of Brent crude oil has fallen by nearly 25 percent — going from a high of $115 to about $87 a barrel — and structural factors are causing concern among global oil producers that oil prices will remain near current levels through at least the end of 2015. This concern has caused several investment banks to slash their oil price outlooks for the immediate future. Stratfor believes that oil supplies will stay high as energy production in North America increases and OPEC countries remain hesitant or unable to cut production significantly. Moreover, in the short term, the Chinese economic slowdown and stagnant European economy will limit the potential for growth in oil demand. These factors could make it harder for global oil prices to rebound to their previous levels.

Oil is the most geopolitically important commodity, and any structural change in oil markets will reverberate throughout the world, creating clear-cut winners and losers. Countries that consume large amounts of energy have been coping with oil prices above $100 per barrel since the beginning of 2011 as most of the developed world has been trying to emerge from financial and debt crises. A sustained period of lower oil prices could provide some relief to these countries. Major oil producers, on the other hand, have grown accustomed to high oil prices, often using them to underpin their national budgets. Sustained low oil prices will cause these oil producers to rethink their spending.

Analysis

The amount of oil production that has come online over the last four months is staggering. The United States has increased its production from 8.5 million barrels per day (bpd) in July to an estimated 9 million bpd. Libyan oil production has increased from about 200,000 bpd to more than 900,000 bpd. Saudi Arabia, Nigeria and Iraq have all increased production in recent months, and OPEC's production is at the highest level in two years. To put this into perspective, the International Energy Agency's projection for global oil demand growth for 2014 is only 700,000 bpd — roughly half of the total production increase mentioned above.

Looking to 2015, the growth prospects for energy production in North America continue to be positive. Even after production grew by about 1 million bpd in 2012, 2013 and again in 2014, the U.S. Energy Information Administration expects U.S. oil production to increase by another 750,000 bpd in 2015. Moreover, the Energy Information Administration consistently has underestimated production growth from tight oil (oil extracted from formations that are not naturally very permeable).

Production Cuts Remain Unlikely

The only OPEC members with enough flexibility to reduce oil production voluntarily are the United Arab Emirates, Kuwait and Saudi Arabia. None of the other members are in a financial position to take oil production offline. Libya, Algeria, Iraq, Iran, Nigeria and Venezuela all need maximum oil output and high prices to finance their budgets and social spending programs. Notably, Libya's OPEC governor called on the bloc to cut production by 500,000 bpd to buoy prices but made no mention that his country would take part in such a cut. Saudi Arabia, meanwhile, seems to have taken the opposite position, prioritizing a greater market share over higher prices.

Saudi Arabia's status as OPEC's swing producer has historically meant that Saudi Aramco will reduce production to create higher oil prices. But with U.S. production increasing so quickly and prices that are still relatively high, Riyadh has little interest to do so: A significant reduction in oil production might not increase the price of oil enough to make forgoing the additional exports worthwhile. Riyadh found itself in the same position in the 1980s when it cut production only to discover that its control over international oil prices was limited. The Saudis have been hesitant to play the same card ever since, instead exerting a small influence on prices while continuing to produce at high levels. More broadly, during the last four decades the Saudis — as well as the Emiratis and Kuwaitis — have amassed large wealth funds, enabling them to simply sit back and weather a period of low oil prices.

This means that if oil prices continue dropping, it will fall largely to U.S. producers to slow production expansion. North America's tight oil production costs vary considerably from basin to basin, but so long as oil prices do not continue falling — and they appear to have bottomed out in the mid-$80 per barrel range — almost all tight oil production will remain profitable, and drilling will continue to increase. The U.S. oil rig count, a rough indicator of impending oil production, remains near record levels, indicating that the recent downturn in oil prices has not dampened interest in drilling.

In fact, in the short- to mid-term, production prospects outside North America will be rather bleak. Most of the recent production increases elsewhere around the globe were due to one-off events, such as the revival of Libya's production. There are only a few other changes — such as Iranian exports becoming unconstrained or Saudi Aramco dipping into its spare production capacity — that could put significant volumes of oil back on the market. In fact, it is more likely that large-scale production will go offline in places such as Nigeria and Libya. All of these possibilities limit the potential of a more drastic decline in oil prices.

Low Demand is Likely to Linger

On the demand side, a bullish oil market is unlikely. North American oil consumption is structurally in decline and has been since the mid 2000s. Electric vehicles, natural gas and other alternatives will continue to penetrate the North American oil market, albeit very slowly. The European oil market exhibits the same patterns seen in North America, but in Europe the structural decline is occurring amid slowing economic growth; many of Europe's more developed economies, such as that of France, are at effectively zero growth.

Meanwhile, China's economy will continue to descend from the peaks of its post-2008 investment and construction boom. The decline of housing markets and related industries nationwide is at the heart of China's economic slowdown and will in large part determine China's overall economic health during the next one to two years. Although a collapse in China's housing market in the next 12 to 18 months is not expected, should one occur, it would send China's economy into a tailspin and subsequently dampen demand for oil. However, Stratfor does not anticipate that Beijing would allow this to happen. The central government will likely enact more stimulus similar to previous economic measures, such as large-scale public infrastructure projects driven by state-led investment.

China's demand for oil could remain relatively strong in the absence of economic collapse, but China's increases in demand are likely to be more moderate than usual at an estimated 400,000 bpd over the course of the year. Increases in demand in the rest of the world combined will likely be no more than that figure. Meanwhile, global oil supplies do not appear likely to decline in the coming months. Therefore, there is every reason to believe that oil prices will stay lower than $100 per barrel for much of 2015, unless Saudi Arabia and OPEC change their minds about production cuts.

All eyes watching oil markets will turn to OPEC's semiannual meeting Nov. 27 to look for any shifts. If there are none, the lower price of oil will continue to have significant geopolitical consequences for consumer and producer countries alike.

Bolded the relevant portion. What I'm wondering is---how? My impression is that there aren't very many economically-multiplying projects left in China.

Only major one I can think of would be a complete phase-out of coal power for LNG, nuclear, and renewable sources. Have there been any purges of all the coal-linked networks lately?

# ? Dec 13, 2014 05:59

whatever7: Jul 26, 2001; by LITERALLY AN ADMIN

China just increased gas tax to keep domestic gas price high after the international gas price drop.

This world wide gas firesale is basically the Americans and the Arabs's conspiracy to punish the commie infidel Russkies . It's going to totally crash Venezuela by accident.

# ? Dec 13, 2014 06:41

My Imaginary GF: Jul 17, 2005; by R. Guyovich

whatever7 posted:

China just increased gas tax to keep domestic gas price high after the international gas price drop.

This world wide gas firesale is basically the Americans and the Arabs's conspiracy to punish the commie infidel Russkies . It's going to totally crash Venezuela by accident.

Its not a conspiracy, its market forces at work. Its what you get when you fail to implement structural reform in China.

Venezuela, I see developong insurgency or foreign coup. Nigeria? Now there's a failed-state waiting to happen. China? Totally hosed by low oil prices.

# ? Dec 13, 2014 06:59

I would blow Dane Cook: Dec 26, 2008

My Imaginary GF posted:

http://www.stratfor.com/analysis/lower-oil-prices-carry-geopolitical-consequences

Bolded the relevant portion. What I'm wondering is---how? My impression is that there aren't very many economically-multiplying projects left in China.

Only major one I can think of would be a complete phase-out of coal power for LNG, nuclear, and renewable sources. Have there been any purges of all the coal-linked networks lately?

Dig holes and fill them up again?

# ? Dec 13, 2014 12:31

computer parts: Nov 18, 2010; PLEASE CLAP

My Imaginary GF posted:

Only major one I can think of would be a complete phase-out of coal power for LNG, nuclear, and renewable sources. Have there been any purges of all the coal-linked networks lately?

It's a major priority to get nuclear up and running but they're still a decade out for operational plants iirc.

# ? Dec 13, 2014 15:09

Baudolino: Apr 1, 2010; THUNDERDOME LOSER

Why is low oil prices a problem for the chinese economy? Lower energy costs should be a boon if you are industrial powerhose. Consumers will have to spend less on petrol and can therefore spend more on other things. Since China consumes more oil than it produces does it not stand to gain from low prices?

# ? Dec 13, 2014 17:20

Vladimir Putin: Mar 17, 2007; by R. Guyovich

Baudolino posted:

Why is low oil prices a problem for the chinese economy? Lower energy costs should be a boon if you are industrial powerhose. Consumers will have to spend less on petrol and can therefore spend more on other things. Since China consumes more oil than it produces does it not stand to gain from low prices?

Agreed, low energy prices should be a concern mostly to energy exporters. Any heavily manufacturing economies should be stimulated by low energy prices.

# ? Dec 13, 2014 17:41

My Imaginary GF: Jul 17, 2005; by R. Guyovich

Baudolino posted:

Why is low oil prices a problem for the chinese economy? Lower energy costs should be a boon if you are industrial powerhose. Consumers will have to spend less on petrol and can therefore spend more on other things. Since China consumes more oil than it produces does it not stand to gain from low prices?

Less consumers for Chinese goods. China has a major market share of foreign infrastructure development projects, especially energy-related ones throughout Africa. Combined with the continued purge, additional capital flight will result in the need to expand the purge to raise capital and shore up the liquid foreign currency reserves, expediting liquid foreign currency flight.

# ? Dec 13, 2014 21:47

Ardennes: May 12, 2002

My Imaginary GF posted:

Less consumers for Chinese goods. China has a major market share of foreign infrastructure development projects, especially energy-related ones throughout Africa. Combined with the continued purge, additional capital flight will result in the need to expand the purge to raise capital and shore up the liquid foreign currency reserves, expediting liquid foreign currency flight.

The issue being that it isn't going to affect the first world and much of the third world very much. Yes, Russian and Venezuelan consumers will be effected but the Chinese economy isn't dependent on them. Cheap oil is theoretically a very good thing for China as it allows them to produce exports cheaper which is the central focus of their economy.

The anti-corruption purge is completely separate issue.

# ? Dec 13, 2014 22:44

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

My Imaginary GF has a really weird fascination with purges. I think he might have a purge fetish. He brings them up in every post about China.

# ? Dec 14, 2014 00:24

Ceciltron: Jan 11, 2007; Text BEEP to 43527 for the dancing robot!; Pillbug

Bloodnose posted:

My Imaginary GF has a really weird fascination with purges. I think he might have a purge fetish. He brings them up in every post about China.

Well, China IS the street purge capital of the world. The Hong Kongers get very upset and vocal at people purging in the streets.

# ? Dec 14, 2014 00:38

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

My Imaginary GF posted:

Less consumers for Chinese goods.

Who are China's largest export customers? What effect does lower energy costs have on domestic consumption in those countries. Hint: it doesn't suppress it.

# ? Dec 14, 2014 02:45

Warcabbit: Apr 26, 2008; Wedge Regret

Hm. What's the price of oil do to Chinese shipping and ship manufacturing?

# ? Dec 14, 2014 03:34

My Imaginary GF: Jul 17, 2005; by R. Guyovich

Bloodnose posted:

My Imaginary GF has a really weird fascination with purges. I think he might have a purge fetish. He brings them up in every post about China.

There is an ongoing purge, no matter what PRC deigns to call it. I'm expecting it to hit Macau soon.

Warcabbit posted:

Hm. What's the price of oil do to Chinese shipping and ship manufacturing?

Shipping? Its bad for shipping, actually, because China has over-produced international shipping capacity. What that means is that you have to subsidize the carriers to take your cargo. Lower prices mean lower margins for some shippers, slightly higher for others, and require increases in subsidies to shippers in order to take your goods. The more you produce that needs to be exported, the more you need to subsidize carriers to take your products to international market. Its quite a contradictory system: the more you ship, the higher your operating costs.

My Imaginary GF fucked around with this message at 04:03 on Dec 14, 2014

# ? Dec 14, 2014 03:59

GlassEye-Boy: Jul 12, 2001

My Imaginary GF posted:

There is an ongoing purge, no matter what PRC deigns to call it. I'm expecting it to hit Macau soon.

Shipping? Its bad for shipping, actually, because China has over-produced international shipping capacity. What that means is that you have to subsidize the carriers to take your cargo. Lower prices mean lower margins for some shippers, slightly higher for others, and require increases in subsidies to shippers in order to take your goods. The more you produce that needs to be exported, the more you need to subsidize carriers to take your products to international market. Its quite a contradictory system: the more you ship, the higher your operating costs.

This line of reasoning just doesn't make sense to me. Over capacity issues aside, Why would lower oil costs lower profit margins?

# ? Dec 14, 2014 04:11

My Imaginary GF: Jul 17, 2005; by R. Guyovich

GlassEye-Boy posted:

This line of reasoning just doesn't make sense to me. Over capacity issues aside, Why would lower oil costs lower profit margins?

Because you're losing money on every product you export, and exporting more products won't increase your revenue. Lower oil prices increase the pressure to produce more in order to maintain the facade that your enterprise isn't a pyramid scheme.

# ? Dec 14, 2014 04:20

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# ? May 11, 2024 13:12

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

My Imaginary GF posted:

There is an ongoing purge, no matter what PRC deigns to call it. I'm expecting it to hit Macau soon.

Macau is a Special Administrative Region that operates on a different legal and political system from the mainland. You've been having trouble understanding this with regard to Hong Kong too. I don't know how to make it any clearer for you. There are no Communist Party members in the Hong Kong or Macau governments. There is no Communist Party in either territory's political system. They don't purge in those territories. It doesn't happen.

Unless you mean an economic hit, in which case, welcome to months ago. Gambling revenue reports are out and they've already indicated the first drop in the rake since the liberalization of casino licenses.

# ? Dec 14, 2014 04:44

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