China Economy Megathread

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Vesi: Jan 12, 2005; pikachu looking at?

I'm more into Black Labial

# ? Dec 29, 2014 15:01

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# ? May 12, 2024 20:14

Slaan: Mar 16, 2009; ASHERAH DEMANDS I FEAST, I VOTE FOR A FEAST OF FLESH

I would drink from both your labials, to be honest. :guinness:

This isn't a thing that only happens in China, either. Nigeria, especially, has the same thing going on, though they mostly stick with sportswear brands. The football cleats they have on sale are all 'Noike" or "Qddidqs" just like they pointed out "Addidos" in the story. I was surprised to read that there are Chinese companies trying to ape Japanese brands though; I wouldn't think that the Chinese would want a brand that sounds Japanese because of the last 100 years of history.

# ? Dec 29, 2014 15:33

Nintendo Kid: Aug 4, 2011; by Smythe

Slaan posted:

I would drink from both your labials, to be honest.

This isn't a thing that only happens in China, either. Nigeria, especially, has the same thing going on, though they mostly stick with sportswear brands. The football cleats they have on sale are all 'Noike" or "Qddidqs" just like they pointed out "Addidos" in the story. I was surprised to read that there are Chinese companies trying to ape Japanese brands though; I wouldn't think that the Chinese would want a brand that sounds Japanese because of the last 100 years of history.

Sure they hate the Japanese, but they recognize world-renowned brands at the same time.

# ? Dec 29, 2014 20:57

feedmegin: Jul 30, 2008

Vesi posted:

I'm more into Black Labial

To be fair, Johnny Worker is a good name for a Communist whisky :ussr:

# ? Dec 29, 2014 21:21

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

I just noticed that it was distilled, blended and olded in Scotland.

It's the olding that makes a whiskey really great.

# ? Dec 29, 2014 23:10

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

So there's lots of hemming and hawing about China having the largest economy when adjusted for PPP. But when I look at nominal GDP and GDP per capita China is still way behind. How meaningful is the PPP adjustment?

# ? Dec 29, 2014 23:40

Nintendo Kid: Aug 4, 2011; by Smythe

Fojar38 posted:

So there's lots of hemming and hawing about China having the largest economy when adjusted for PPP. But when I look at nominal GDP and GDP per capita China is still way behind. How meaningful is the PPP adjustment?

It's not very meaningful. PPP is most designed for comparing what an actual person can buy out of normal goods among countries, it kinda stops being sensical for whole countries except for meaningless dickwaving.

# ? Dec 29, 2014 23:52

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

Nintendo Kid posted:

It's not very meaningful. PPP is most designed for comparing what an actual person can buy out of normal goods among countries, it kinda stops being sensical for whole countries except for meaningless dickwaving.

It's especially meaningless for countries with huge gini coefficients because increase in GDP does not necessarily mean any meaningful increase in purchasing power for the majority of people.

# ? Dec 30, 2014 00:59

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

http://m.economictimes.com/news/international/business/china-december-manufacturing-index-at-49-6-hsbc/articleshow/45698279.cms

quote:

SHANGHAI: Activity in China's factory sector shrank for the first time in seven months in December, a private survey showed on Wednesday, highlighting the urgency behind a series of surprise easing moves by Beijing in the past two months.

The weak performance will add to the debate over whether Beijing needs to roll out more support measures to avert a sharper economic slowdown or fast-track market reforms to stimulate demand - or both.

The report puts a final sluggish stamp on what has been a surprisingly grim fourth quarter for the world's second-largest economy, which is expected to grow at its slowest pace this year in nearly a quarter of a century.

"Domestic demand led the slowdown as new orders contracted for the first time since April 2014. Price contraction deepened," said Qu Hongbin, chief economist for China at HSBC.

"We believe that weaker economic activity and stronger disinflationary pressures warrant further monetary easing."

The final HSBC/Markit Purchasing Managers' Index ( PMI) for December came in at 49.6, just below the 50.0 level that separates growth from contraction. The number was slightly higher than a preliminary "flash" reading of 49.5 but down from the final 50.0 in November.

Total new orders contracted for the first time since April, albeit slightly, although new export orders increased.

Highlighting soft demand, output prices declined for the fifth consecutive month, with many companies surveyed saying they were cutting prices due to increased competition.

This in turn prompted firms to reduce output for the second consecutive month, although the rate of contraction was tiny.

Employment weakened for the 14th straight month, although the pace of job shedding slowed.

Hurt by a sagging property market, unsteady exports and cooling domestic demand and investment, China's economic growth is expected to slow to a 24-year low of 7.4 per cent this year, although surprisingly weak fourth-quarter data has some analysts wondering whether that might be too optimistic.

Many market watchers expect Beijing to lower its annual growth target to 7 per cent next year, from 7.5 per cent in 2014.

Faltering factory output, rising deflationary pressures, sliding industrial profits and increasing non-performing loans highlight the policy challenges facing Beijing in 2015. Authorities need to not only encourage more lending by banks, but also find a way to stimulate genuine demand.

The central bank unexpectedly cut interest rates in late November for the first time in more than two years in bid to keep down borrowing costs and support growth. It has also loosened some lending restrictions.

# ? Dec 31, 2014 04:23

Ardennes: May 12, 2002

Daduzi posted:

It's especially meaningless for countries with huge gini coefficients because increase in GDP does not necessarily mean any meaningful increase in purchasing power for the majority of people.

Also, there is the unique problem in China of establishing an accurate "basket of goods" which complicates PPP further, and then the whole issue of Chinese statistics themselves. Basically, PPP though is a poor way of measuring raw economic-political power (which is far more zero sum) and a better way at understanding GDP per capita however even in that case for China especially, it is rather murky. Basically, it is a non-issue beyond trivia sake.

I think the recent currency swaps China has been doing to Venezuela, Russia and Argentina is more interesting and indicative of them building their own alliance system of large and middle powers.

# ? Dec 31, 2014 04:30

namaste friends: Sep 18, 2004; by Smythe

http://www.bloomberg.com/news/2014-12-31/yuan-posts-first-annual-drop-since-2009-as-china-growth-slows.html

quote:

China�s yuan posted its first annual decline in five years as a slowing economy prompted policy makers to cut interest rates at a time when the U.S. is preparing to raise borrowing costs amid quickening growth.

Expansion in China probably cooled to 7.4 percent in 2014, from 7.7 percent last year, according to the median estimate in a Bloomberg survey before data due in January. Manufacturing contracted in December for the first time in seven months, a Purchasing Managers� Index indicated today. The Bloomberg Dollar Spot Index, a gauge of the greenback�s strength, surged 12.5 percent in past six months.

�The policy-driven decline to change market expectations and a slowdown in the economy contributed to the yuan�s drop,� said Tommy Xie, a Singapore-based economist at Oversea-Chinese Banking Corp. �In recent months, companies have been holding more dollars as they are worried the Federal Reserve will hike interest rates.�

The yuan in Shanghai has weakened 2.4 percent against its U.S. counterpart this year, ending a four-year advance of 13 percent that was the best performance among 24 emerging-market currencies tracked by Bloomberg.

The spot rate fell 0.03 percent to close at 6.2040 per dollar in Shanghai, China Foreign Exchange Trade System prices show. It jumped 0.32 percent yesterday, the most since May, after the government relaxed rules on banks� foreign-exchange holdings, allowing them to hold fewer dollars. China�s financial markets will be shut for the rest of this week for New Year�s Day holidays.

The PBOC raised the yuan�s reference rate 0.06 percent today to 6.1190, trimming this year�s decline to 0.36 percent. The central bank guided a retreat in the yuan during the first four months of 2014 by weakening the fixing, a move that helped damp speculation the currency was a one-way appreciation bet.

Volatility Surge

Fluctuations in the yuan have picked up since the central bank doubled the currency�s daily trading band to 2 percent in March, pledging to give market forces a greater role in determining the exchange rate. The spot rate traded at a record 1.78 percent discount to the reference rate on Dec. 19. It was 0.7 percent stronger than the fixing on Nov. 6.

One-month implied volatility in the onshore yuan, a measure of expected swings used to price options, jumped 72 basis points this year to 2.57 percent. That�s the biggest increase in four years. The yuan�s reading is still the second-lowest among developing nations, higher only than the Hong Kong dollar which is pegged to the greenback.

In Hong Kong�s offshore market, the yuan slid 2.7 percent this year, the first annual decline since trading commenced in 2010. Twelve-month non-deliverable forwards declined 3.4 percent and traded at a 2.1 percent discount to the spot rate in Shanghai.

The Purchasing Managers� Index for manufacturing was 49.6 for December, HSBC Holdings Plc and Markit Economics said today. That compared with a median estimate of 49.5 in a Bloomberg survey. An official PMI due tomorrow is expected to indicate factory output failed to expand in December for the first time in more than two years, another survey showed.

Here it comes.

# ? Dec 31, 2014 18:24

Arglebargle III: Feb 21, 2006

The Chinese economy certainly isn't looking good but the yuan's slipping valuation against the dollar is hardly a sign of doom. China is an exporter struggling to maintain competitiveness while the US is outperforming the rest of the developed world. A weaker yuan isn't bad for China and a stronger dollar isn't bad for China.

# ? Jan 1, 2015 02:01

namaste friends: Sep 18, 2004; by Smythe

http://on.ft.com/1IDEggJ

quote:

Vehicle sales in China rose 6.9 per cent in 2014 - roughly half the pace of growth seen a year before.

The China Association of Automobile Manufacturers said sales in the world's largest auto market totalled 23.5m units last year, up from 21.98m in 2013. The 6.9 per cent growth pace compares with 13.9 per cent in 2013. From 2005 to 2013, sales rose at a compound rate of 18 per cent, according to Bloomberg.

In December alone, sales were up 12.9 per cent from a year before to 1.42m units - a big jump compared to gains of just 2.3 per cent in November and 2.8 per cent in October.

# ? Jan 12, 2015 07:49

I would blow Dane Cook: Dec 26, 2008

Cultural Imperial posted:

http://on.ft.com/1IDEggJ

Maybe they aren't crashing as much?

# ? Jan 12, 2015 10:40

Disinterested: Jun 29, 2011; You look like you're still raking it in. Still killing 'em?

On the other hand, the crashing oil price should be pretty good for China. When oil is pushing way over $100 the margins on low-value, high-volume goods like get lovely fast.

# ? Jan 12, 2015 10:42

namaste friends: Sep 18, 2004; by Smythe

http://www.ft.com/intl/cms/s/0/4278bdf4-9f80-11e4-ba25-00144feab7de.html?siteedition=intl#axzz3PF0SSHx1

quote:

Shares of China�s biggest securities brokerages tumbled on Monday, dragging the broader market down more than 6 per cent, after the regulator acted to curb margin lending, which has helped fuel a frenzied rise in mainland shares in recent months.

The China Securities Regulatory Commission said on Friday that it had banned Citic Securities, Haitong Securities and Guotai Junan Securities � the country�s three largest brokerages by assets � from opening new margin trading accounts for three months, following investigations into high-risk margin trading.

Brokerage shares have been among the biggest beneficiaries of a bull market that began in November, with the Shanghai Composite Index closing on Friday at its highest level in 65 months. Citic and Haitong have both taken advantage of surging share prices to raise fresh capital through private placements.

Margin financing, which allows investors to borrow money to buy into the stock market, has helped powered the equities rally, with outstanding margin loans standing on Friday at Rmb767bn ($123bn), according to Shanghai Stock Exchange data, from only Rmb444bn at the end of October.

Commenting on the fall in the brokers� shares, Liu Jun, financials analyst at Changjiang Securities in Wuhan, said: �We think this is an incremental adjustment. The fast growth potential for margin financing and other emerging business areas at the brokerages hasn�t changed, but it�s developed too quickly. The regulators see risks in certain areas�.

�The impact on these brokerages� profits isn�t major. This is mainly a hit to sentiment,� Mr Liu added, noting that the three-month ban will cover the Chinese Spring Festival Holiday, when markets are closed.

The CSRC said that the three brokerages had wrongly rolled over some margin loans when they expired. Regulations require that when a financing contract expires, brokerages re-assess the borrower�s risk profile before issuing a new loan.

Citic has acknowledged it violated rules and on Monday told the Shanghai Exchange it �would no longer allow margin trading contracts to extend beyond the maximum six months�.
Shares in Citic and Haitong each fell by 10 per cent in Shanghai on Monday morning, the maximum daily limit. The Shanghai Composite fell by as much as 6.3 per cent in early trade, and was down 4.6 per cent by mid-morning.

An index of large mainland bank shares was down by 7.3 per cent. Analysts have said that banks are also involved in lending to stock investors.
In Hong Kong, Citic was down 12 per cent and Haitong was off 15 per cent, while Guotai Junan shed 8.2 per cent.

�The CSRC�s announcement regarding margin trading activities is a nasty surprise. With less incremental liquidity flow into stocks and dampened sentiment, the market will correct in the near term, and the move can be violent,� Hong Hao, managing director for research at Bocom International, the Hong Kong brokerage subsidiary of Bank of Communications, China�s fifth-largest lender, wrote in a note.

Investors have viewed brokerages in part as a momentum play on the broader market, as record turnover amid the market rise boosts income from commissions.
Even after its plunge on Monday, Citic�s mainland shares have still more than doubled since November, while Haitong�s are up over 90 per cent.
Additional reporting by Patrick McGee in Hong Kong

# ? Jan 19, 2015 06:11

I would blow Dane Cook: Dec 26, 2008

it's 1929 in China.

# ? Jan 19, 2015 11:23

Arglebargle III: Feb 21, 2006

To add perspective, everyone knew the Shanghai market was insanely overheated. The day it opened (I forget what exactly triggered the runaway) it was up up up and nobody believed it was based on fundamentals. That a regulator stepped in and banned margin trades is probably a good thing. Sure it's a bloodbath but everyone knew it was coming and it would have been worse in the future had nobody come in and stopped the party.

This is the important part too: Even after its plunge on Monday, Citic�s mainland shares have still more than doubled since November, while Haitong�s are up over 90 per cent. It's been a crazy market.

# ? Jan 19, 2015 14:55

Sauzer: Jan 31, 2006; Some Sort of Guy

Jumpingmanjim posted:

it's 1929 in China.

China Economy Megathread, 2025:
"...any day now!"

# ? Jan 21, 2015 04:28

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

Sauzer posted:

China Economy Megathread, 2025:
"...any day now!"

I'm not sure there will be a 1929-esque hard landing but the Chinese economic miracle is definitely over and there are tough times ahead.

# ? Jan 21, 2015 05:25

Arglebargle III: Feb 21, 2006

http://www.bloomberg.com/news/2015-01-21/china-s-stocks-rise-as-spring-airlines-jumps-in-trading-debut.html

You can read the article yourself because I guess Blumberg is blocked now and I broke my dang VPN being a idiot.

Anyway the point is that stocks have recovered 95% from last week's rouwt.

Arglebargle III fucked around with this message at 16:52 on Jan 21, 2015

# ? Jan 21, 2015 13:06

I would blow Dane Cook: Dec 26, 2008

What's more volatile, chinese shares or bitcoin?

# ? Jan 21, 2015 13:18

Disinterested: Jun 29, 2011; You look like you're still raking it in. Still killing 'em?

Jumpingmanjim posted:

What's more volatile, chinese shares or bitcoin?

The only thing I'm sure of is that neither of them is a currency.

# ? Jan 21, 2015 13:50

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

I can't handle the market changes anymore. I'm cashing out.

# ? Jan 23, 2015 09:16

namaste friends: Sep 18, 2004; by Smythe

http://www.ft.com/intl/cms/s/0/9bba...l#axzz3RGvKNEJy

quote:

February 9, 2015 8:21 am
Chinese mining tycoon executed

China has executed a mining tycoon with ties to Zhou Yongkang, the powerful former security chief and the most important person to date netted in China�s two-year anti-corruption purge.

Liu Han, the former chairman of Sichuan-based miner Hanlong Group, was heading a A$1.4bn bid for Australian-listed Sundance Resources when he and his wife were detained in March 2013.

His trial a year later included 35 other people charged with organising, leading and participating in Mafia-like groups. His brother Liu Wei was convicted of gunning down three people in their home town in Sichuan Province.

Liu, who denied the charges, was once the biggest private entrepreneur in Sichuan province, with investments spanning financing, energy, real estate and mining. He had a fortune of $650m, according to estimates by the Hurun report, which tracks wealthy Chinese.

�His crimes didn�t warrant the death penalty,� said Mao Lixin, Liu�s lawyer during the appeal process. He confirmed the execution.

Liu�s defence included claims that he had helped the Sichuan government �maintain social stability� by investing in state-owned firms that were on the verge of bankruptcy, thus helping to stave off protests by laid-off workers, in return for lucrative business deals. Mr Zhou was Sichuan�s top-ranking official from 1999-2002.

The anti-corruption investigation into the power base of Mr Zhou � until November 2012 one of the most powerful men in the country � has swept up a number of rich private businessmen in Sichuan province. Mr Zhou�s son, Zhou Bin, invested in a hydropower dam and tourist project in Sichuan together with Liu.

Prosecutors argued that Liu covered up murders committed by his brother, Liu Wei, who allegedly ran gambling rings in their home town of Guanghan, Sichuan. Liu Wei and three others were also executed.

The two brothers were also charged with raising money through high interest rate lending and stock market manipulation, and helping facilitate Chinese citizens gamble in Macau � a location often used to channel money overseas.

After Liu�s year-long disappearance in 2013, the bid for Sundance collapsed.

At least one legacy has survived Liu. The school he donated in Sichuan province was one of the few to stay intact during the major earthquake in May 2008 that claimed at least 69,000 lives. Nearly 500 students and teachers survived at the Liu Han Hope primary school in Haiyuan village, while other nearby schools crumbled.

Also, I read another article this morning that states the US, Canada and Australia don't have extradition treaties with China?

# ? Feb 9, 2015 19:02

dr_rat: Jun 4, 2001

Cultural Imperial posted:

http://www.ft.com/intl/cms/s/0/9bba...l#axzz3RGvKNEJy

Also, I read another article this morning that states the US, Canada and Australia don't have extradition treaties with China?

Looks like its possible that may change, in Australia at least:
http://www.theaustralian.com.au/business/latest/australia-considers-extradition-treaty-with-china/story-e6frg90f-1227118652294

The main issue seems to be Australia is not meant to extradite anyone anywhere where they face the risk of the death plenty.

# ? Feb 9, 2015 21:31

namaste friends: Sep 18, 2004; by Smythe

http://finance.yahoo.com/news/goldman-partner-called-japans-demise-220000765.html

quote:

China Will End Up Like Japan, Says Observer Who Called It in 1990

(Bloomberg) -- Forecasts for China to surpass the U.S. as the world�s main economic power are misplaced. So says an observer who foresaw Japan�s eventual demise a year before its land-price bubble began to burst.

�The vulnerabilities in China today are very similar to the vulnerabilities in Japan,� said Roy Smith, 76, who was a Goldman Sachs Group Inc. partner when he wrote a column saying Japan�s rise as a financial hegemon was done. �Nobody agrees with me. But they didn�t agree with me in 1990, so at least I have one right.�

Among the risks: bad loans, overpriced stocks and a frothy property market are flashing danger for China�s economy and putting pressure on a fragile financial system -- similar to conditions that triggered Japan�s fall, said Smith, a finance professor at New York University�s Stern School of Business. A further parallel is the burden of an aging population, with mounting pension and health-care costs, he says.

While China probably will avoid prolonged Japan-style stagnation, a major crisis could expose weaknesses that aren�t apparent now, according to Smith.

�Most people today are talking about China displacing the United States as the great power of the 21st century,� he said in a telephone interview last week. �My view is that it is more likely to end up like Japan -- that is, the status of a former would-be superpower that isn�t.�

China�s Rise
China surpassed Japan as the world�s No. 2 economy by gross domestic product in 2010 after three decades of rapid growth, fueled by the largest urbanization in history. It is tipped by many forecasters eventually to overtake the U.S. in output. By other measures, such as GDP per person, China is further behind the U.S.

On a per-capita basis, China�s GDP in 2013 was still just half of where Japan was in 1960, according to World Bank data. That leaves plenty of scope to catch up to rich-world peers, more optimistic observers say.

�The key difference I see between China now and Japan in 1990 is that China is at a much lower stage of development,� said Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, who previously worked at the World Bank.

Even so, China�s progress has confronted mounting challenges in recent years. In 2014, the economy expanded at the slowest full-year pace in almost a quarter century.

Credit Concerns
The slowdown has thrown a spotlight on a mounting debt pile that includes souring loans to local government financing vehicles, or LGFVs, which funded a boom in construction. Doubts about the creditworthiness of LGFV debt deepened last year, when Premier Li Keqiang started to pare back implicit guarantees for the regional financing units.

China�s total debt pile, including borrowing by households, banks, governments and companies, ballooned to 282 percent of national output in mid-2014 from 121 percent in 2000, according to an estimate by the McKinsey Global Institute.

�The Chinese financial structure is very fragile because a lot of it is misreported and will reveal a great deal of weakness when it comes out,� said Smith, who specializes in international banking and finance at the Stern School. �I don�t know when it is going to come out, but when it does it is going to have consequences and take away a lot of the world�s confidence in the Chinese system.�

Some signs of stress are already emerging: Kaisa Group Holdings Ltd., a troubled real-estate developer based in the southern Chinese city of Shenzhen that must repay billions of dollars in borrowings this year, rattled investors by missing payment deadlines on a loan and a bond after the local government blocked several of its projects late last year.

Rocks, Slime
�They say a rising tide lifts all boats -- a falling tide reveals all the rocks and slime,� said Smith. �There was a lot of it in Japan that people did not expect to see.��

The former Goldman Sachs executive doesn�t claim to have a flawless forecasting record or to have been the only one who tipped Japan�s economic decline.

Still, his October 1990 predictions on Japan proved prescient. Made amid a tumble in the stock market that year, they preceded the pricking of the country�s property bubble. In a column in the New York Times, he assessed that Japanese manufacturers would shift production abroad and that the nation�s banks would be impaired by losses on property loans.

Japan Call
�Japan�s extraordinary economic and financial success has carried the seeds of its own undoing, some of which have rooted and are now beginning to bloom,� Smith wrote at the time.

He isn�t counting on a paradigm shift out of Japanese Prime Minister Shinzo Abe�s reflation program. Smith sees �some kind of twilight equilibrium� with economic stagnation and low inflation.

China�s leaders, who gather this week for an annual session of the national legislature, are trying to restructure the economy toward domestic demand led by consumption and services - - away from debt-fueled infrastructure. Economists anticipate a raft of reforms to state-owned enterprises as part of the push.

�China won�t end up in this peculiar Japanese no man�s land between growth and non-growth,� Smith said. �But I do think they could have an economic smash-down that could really set back the China dream and the China role as a global superpower in major ways.�

# ? Mar 4, 2015 06:44

namaste friends: Sep 18, 2004; by Smythe

http://www.ft.com/intl/cms/s/0/1bc73e72-c2d7-11e4-ad89-00144feab7de.html

quote:

China lowers GDP growth target to �around 7%�

China will target economic growth of �around 7 per cent� this year, Premier Li Keqiang told parliament on Thursday, signalling that the leadership expects the country�s economy to slow further following the slowest expansion for 24 years in 2014.

The country, which has enjoyed some of the fastest growth rates in the world in the past two decades or so, is now slowing as it approaches middle-income levels. Mr Li reiterated Beijing�s refrain that economic development has entered �a new normal�.

Illustrating the breadth of issues Beijing is grappling with, Mr Li�s 3 per cent target for consumer price inflation is a far cry from January�s annual pace of only 0.8 per cent.

Thursday�s speech marked the second straight year that Mr Li has used the �around� formulation, a sign of greater flexibility in meeting the target. China�s economy grew at 7.4 per cent last year, after Mr Li set a target of �around 7.5 per cent� at the parliament in 2014 � the first time since 1998 that growth has fallen short of the government�s goal.

China�s gross domestic product grew 7.7 per cent each year in 2012 and 2013 and until 2010 the economy had maintained an average growth rate of more than 10 per cent for over 30 years.

�China�s economic development has entered a new normal. Our country is in a crucial period during which challenges need to be overcome and problems need to be resolved,� Mr Li told the National People�s Congress in his official government work report.

�The target growth rate of approximately 7 per cent takes into consideration what is needed and what is possible.�

The People�s Bank of China cut interest rates in November and again last week in an effort to curb the growth slowdown and prevent a rise in real interest rates amid the slowdown in inflation.

At the same time, authorities have repeatedly stressed that a slowdown in growth is inevitable and that they do not intend to resort to heavy-handed stimulus to maintain the double-digit growth that prevailed for much of the past decade.

Mr Li said the government aimed to �achieve a basic balance of payments�, hinting at tolerance for moderate capital outflows that have put pressure on China�s currency in recent months.

China ran a balance of payments surplus of $118bn in 2014 but a deficit of $66m in the fourth quarter, only its second quarterly deficit since 1998.

Mr Li�s work report also set a target of 10m new urban jobs and trade growth of �around 6 per cent�. China added 13.2m urban jobs in 2014, the stats bureau said on Wednesday.

The latest targets reflect the government�s efforts to reduce the economy�s reliance on fixed-asset investment to drive growth, while increasing the contribution from consumption and trade.

China�s top economic planning agency announced an FAI growth target of 15 per cent for 2015, down from 15.3 per cent actual growth in 2014. A slowdown in both the real estate and manufacturing sectors has crimped appetite for construction and investment in new plant and equipment.

Meanwhile, Mr Li said the country would see trade growth of 6 per cent in 2015, up from actual growth of 3.4 per cent in merchandise trade last year, according to customs data. The planning agency also set a target of 13 per cent growth for retail sales � a gauge of consumption � compared with actual growth of 11.9 per cent in 2014.

Other targets for 2015 include:
● Inbound non-financial foreign direct investment: $120bn, after recording an the same figure in 2014 (NDRC)
● Outbound non-financial FDI: $113bn, against actual $103bn in 2014 (NDRC)
● Carbon dioxide intensity: Cut CO2 emissions per unit of GDP by 3.1 per cent in 2015 (Li Keqiang)
● Research and development spending (all sectors): 2.2 per cent of GDP, against 2 per cent in 2012, the last year for which data is available (Li Keqiang)

welp

# ? Mar 7, 2015 18:17

CarrKnight: May 24, 2013

quote:

Among the risks: bad loans, overpriced stocks and a frothy property market are flashing danger for China�s economy and putting pressure on a fragile financial system -- similar to conditions that triggered Japan�s fal

Or any fall, anywhere else, ever.

# ? Mar 7, 2015 19:26

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

So lots of ink has been spilled about China's attempts to "rebalance" its economy away from production and towards consumption. I'm a little bit confused as to how that's supposed to work though, because doesn't becoming a consumption-based economy necessitate also being a high income economy? China is still 82nd in the world for GDP per capita and the average Chinese income is still below $5000. How exactly are people envisioning a consumption based economy will work?

# ? Apr 1, 2015 01:14

whatever7: Jul 26, 2001; by LITERALLY AN ADMIN

Fojar38 posted:

So lots of ink has been spilled about China's attempts to "rebalance" its economy away from production and towards consumption. I'm a little bit confused as to how that's supposed to work though, because doesn't becoming a consumption-based economy necessitate also being a high income economy? China is still 82nd in the world for GDP per capita and the average Chinese income is still below $5000. How exactly are people envisioning a consumption based economy will work?

I don't believe this theory personally. Consumption economic is what alot of economists want China do. I don't believe Beijing either believe in it or is doing it. I think China is still doing "investment economy". Beijing is just shifting from domestic infrastructure investment to foreign infrastructure investment. I think BJ is betting on places like India infrastructure market, high speed rail in resource rich African countries, canal projects in Nicaragua and Thailand etc etc to carry the growth in the next 10-20 years.

edit: also building loving islands in South China Sea. That's basically another form of huge resource invest, for projects that doesn't count in the military budget but clearly can be used for military purpose.

The only sector I see China is going full body consumption economy is the imported movie market.

whatever7 fucked around with this message at 02:21 on Apr 1, 2015

# ? Apr 1, 2015 02:18

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

What of those countries don't want the Chinese to come and build a bunch of infrastructure that nobody will use? I doubt India would be keen on the prospect of the Chinese building most of their stuff for example. In fact China has cheesed off most of its neighbours in Southeast Asia as well. That leaves Africa but Africa remains a very unstable place to invest.

# ? Apr 1, 2015 02:43

pedro0930: Oct 15, 2012

The GDP per capita of China may be low, but there is still a middle class with significant disposal income in the major cities. Just 1% of the Chinese population needs to have something resembling a middle class income and you have over ten million Chinese people to support a consumer economy after all. Isn't China already some of the largest consumer of all sorts of consumer goods in the world?

# ? Apr 1, 2015 02:52

icantfindaname: Jul 1, 2008

Fojar38 posted:

What of those countries don't want the Chinese to come and build a bunch of infrastructure that nobody will use? I doubt India would be keen on the prospect of the Chinese building most of their stuff for example. In fact China has cheesed off most of its neighbours in Southeast Asia as well. That leaves Africa but Africa remains a very unstable place to invest.

I don't understand how building infrastructure in India is supposed to help China's economy? Is it just that China's government literally doesn't know how to do anything other than public works projects? So now that China itself is saturated with infrastructure, they're forced to go build infrastructure elsewhere, because doing the things that will actually fix their country is beyond their competence?

pedro0930 posted:

The GDP per capita of China may be low, but there is still a middle class with significant disposal income in the major cities. Just 1% of the Chinese population needs to have something resembling a middle class income and you have over ten million Chinese people to support a consumer economy after all. Isn't China already some of the largest consumer of all sorts of consumer goods in the world?

That's good if you're a foreign company exporting things to China, but the relative size is important for the structural health of China's economy.

# ? Apr 1, 2015 03:40

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

icantfindaname posted:

That's good if you're a foreign company exporting things to China, but the relative size is important for the structural health of China's economy.

This is true. If China's middle class only makes up a small segment of its population then a consumption based economy will be impossible, and based on the numbers China's middle class is small and not growing fast enough.

# ? Apr 1, 2015 03:43

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

Fojar38 posted:

What of those countries don't want the Chinese to come and build a bunch of infrastructure that nobody will use? I doubt India would be keen on the prospect of the Chinese building most of their stuff for example. In fact China has cheesed off most of its neighbours in Southeast Asia as well. That leaves Africa but Africa remains a very unstable place to invest.

You're seeing this in parts of Africa---China came in, built infrastructure in exchange for mining and land concessions, elimination of trade unions, death of the African garment and refining industries. Now you have hospitals and schools with no doctors, no teachers, no electricity, and populations quite displeased with officials who work eith Chinese rather participate in American and French development projects.

Who wants to drink cans of melamine milk, or what is commonly disdained as the worst rice in the world by locals, when one can have Nestle formula and purchase California Red on the open market?

# ? Apr 1, 2015 04:44

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

My Imaginary GF posted:

You're seeing this in parts of Africa---China came in, built infrastructure in exchange for mining and land concessions, elimination of trade unions, death of the African garment and refining industries. Now you have hospitals and schools with no doctors, no teachers, no electricity, and populations quite displeased with officials who work eith Chinese rather participate in American and French development projects.

Who wants to drink cans of melamine milk, or what is commonly disdained as the worst rice in the world by locals, when one can have Nestle formula and purchase California Red on the open market?

Not only that but aren't there multiple cases of China investing in African dictatorships only to have said countries take the investment and then tell China to piss off? Because what's China going to do, invade? Sanction them? Shut them out of trade organizations?

# ? Apr 1, 2015 04:47

whatever7: Jul 26, 2001; by LITERALLY AN ADMIN

Fojar38 posted:

What of those countries don't want the Chinese to come and build a bunch of infrastructure that nobody will use? I doubt India would be keen on the prospect of the Chinese building most of their stuff for example. In fact China has cheesed off most of its neighbours in Southeast Asia as well. That leaves Africa but Africa remains a very unstable place to invest.

First of all, the whole India is badly in need of infrastructure upgrade. Getting the Indians to hire Chinese companies is the hard part.

As far as how well will this work out for Beijing, I don't know. I don't have stat on what percentage of GDP these foreign investments are taking up. I guess if it doesn't work out Beijing can just sell cheap weapons to Shia and Sunni countries. This world is going to hell in a hand basket.

# ? Apr 1, 2015 05:33

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

Fojar38 posted:

Not only that but aren't there multiple cases of China investing in African dictatorships only to have said countries take the investment and then tell China to piss off? Because what's China going to do, invade? Sanction them? Shut them out of trade organizations?

Well, something like that. Usually, the projects are substandard when delivered. From the healthcare projects I've worked on in Zim, it goes like this: Local official promises a new hospital in exchange for using Chinese suppliers on a traditional trade union job, project is built with lots of kickbacks by all Chinese management with horrid labor practices. One to two years later, the rural clinic is only used as a stable or squater's hut---while it was built as a clinic, no doctors were trained; no medical procurement was arranged; no electricity nor water was attached to the project site; when Chinese doctors were operating at the project site, the only reports to come out would be local horror stories at the hygine, quality of care, and language divide. When you have rural Zimbabweans complaining about the quality and hygine of care provision, you know its...well, not somewhere you'd ever go, no matter what happens.

So the locals get pissed for not having any jobs, for not getting what they were promised, and blame the Chinese. The local managers attempt to renege on the project; the Chinese lobby Grace; Grace sends in a loyalist general with ZPF paramilitary; China ships out machettes; an ethnic cleansing and low-level insurgency is born.

So what's China gonna do? Ethnically cleanse those who go against party interests. Say what you will about America and France, the worst we'll usually do is inaction and plausably deniable assistance. We don't ethnically cleanse locals when we gently caress up a development project.

whatever7 posted:

First of all, the whole India is badly in need of infrastructure upgrade. Getting the Indians to hire Chinese companies is the hard part.

As far as how well will this work out for Beijing, I don't know. I don't have stat on what percentage of GDP these foreign investments are taking up. I guess if it doesn't work out Beijing can just sell cheap weapons to Shia and Sunni countries. This world is going to hell in a hand basket.

The "foreign investments" don't take up GDP---they engage in colonial practices reminiscent of the 1920s more than anything. In Zim, you had the destruction of the garment sector and plat refining in exchange for China as the lender of last resort, after China forced Mugabe to seize white land or face a Chinese-funded insurgency. China is like the empire in star wars: The terms of the deal have changed, pray they do not change further.

My Imaginary GF fucked around with this message at 05:48 on Apr 1, 2015

# ? Apr 1, 2015 05:45

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# ? May 12, 2024 20:14

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

I don think those huge infrastructure projects are intended to turn a profit. They're intended to keep people employed.

# ? Apr 1, 2015 05:53

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