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Dr.Zeppelin posted:Not necessarily, it was a lot higher in 2012 and a LOT higher in 2009 looks like. The Shanghai Composite is again hovering around 2000. A recession could be priced in, it has reached that level before. Ultimately, it is a lot of opaqueness in the Chinese bond market especially and it is unclear exactly how many bad loans are being effectively backed by the big public banks.
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Mar 18, 2014 05:59
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Cultural Imperial posted:Before you guys go all Bill Ackman and poo poo, like China is some Herbalife whale, I strongly urge you to read Kalenn Istarion's post on shorting here: I don't know if anyone was recommending actually shorting Chinese stocks. This is more of a macro-economic thread, also at this point, the timing is completely up in the air because Chinese still has enough capital to keep the economy rolling along admittedly at a slowing pace. In macro-economic terms, it is more complex because we (the real public at least) don't have a firm idea of much of the inner-mechanics of what is happening in China, and the extent Chinese figures are actually accurate. As for the geopolitics, China is obviously a rising great power, beyond that is more cloudy especially future economic dominance.
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Mar 18, 2014 06:04
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Also to be frank, the US in around 1850 was in fact largely agricultural and pre-industrial, you could argue not "medieval" but it was a very different place in 1910. If anything most industrial phases of development share more commonality in timing and function then they don't. The USSR is a bit of a weird case because it had to stop and start its development at least twice do to wars and a revolutions but in general the Stalinist period did in fact have a very high rate of industrialization. Britain's colonial empire was obviously different than the largely domestic resources of the US or present-day China's reliance on international trade. One can argue though the UK/US emphasis on resources their governments physically controlled (including crown corporations) gave them a more secure source of resources than China, as in general international trade is more uncontrollable and unpredictable. Anyway, China's economy isn't going to disappear, but China's just won't have the breakneck pace growth of constant industrialization. It happened to Japan, and it happened to the Asian tigers and it will happen to China. The real problem I think is the Western media and the complete lack of acknowledgement that industrialization has happened before (and will happen again) and growth rates of the sort have happen and will happen again. From about 2005 to 2012, there was plenty of hysteria in the states (very close to the same sort of attitude in the US during the 1980s) without little or any reflection on what was going on versus very recent history. To be that issue on its own is problematic. Ardennes fucked around with this message at 01:33 on Mar 20, 2014 |
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Mar 18, 2014 22:13
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Typo posted:One of the ways (China today) handles this is by simply be really good at copying other country's innovations. That also has the effect of not having an indigenous base of knowledge to call back on to make your own revolutionary improvements.
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Mar 21, 2014 07:07
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Cultural Imperial posted:http://www.minyanville.com/sectors/global-markets/articles/will-China-Debt-Bomb-Trigger-US/3/26/2014/id/54329 The ultimate question is going to be how much the Chinese government is willing (or is able) to tap those currency reserves, and ultimately the costs of propping up the banking industry. Remember those foreign currency reserves also exist to back up the Renminbi, and if they are raiding that piggy bank it may have a long term effect on their currency. Remember, the Renminbi is not a major reserve currency, especially in comparison to the Chinese economy. Right now, their currency reserves are around 40-60% of GDP, a considerable amount but not necessarily unassailable under the right pressures.
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Mar 27, 2014 15:32
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asdf32 posted:One thing that's important about China for discussions like this is it's size. When China is able to grow and reduce poverty it means a significant chunk of the worldwide population is improving. We don't have to try and generalize from it (though we may want too). The issue is the possibility of a "trade bubble," many of the economies that relied on trade for growth and improved standards of living may in fact begin to hit a wall if they haven't already. A big part of the development that happened from the 90s/00s was that these economies used their comparative advantage (ie cheap labor) to offshore manufacturing and services from the first world. Ultimately, the issue becomes when demand within the first world is sapped and there are effectively more limited options for finding capital. For a while it was claimed that China could just develop from internal demand but it is clear that much of that growth was purely financed on internal debt with relatively little return. "Trade is key" in so far when the conditions are right but much of the history of ISI is also wrapped up in the Cold War and the fact many countries in the third world purposefully tried to distance themselves from the US/first world and therefore used ISI in order to maintain political independence. Edit: The countries that did cozy up (sometimes they didn't have much of a choice...like Japan) did well for a while, especially if trade barriers opened up between them and the United States but this relationship also had its own complexities. Ardennes fucked around with this message at 10:15 on Apr 6, 2014 |
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Apr 6, 2014 09:27
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Russia had industrialized in some limited ways before ww1, and you could point to industrialization around Moscow, St.Peterburg and parts of Eastern Ukraine but on the whole the population of the entire did live in many ways a early modern or medieval experience as far as daily life. Literacy was rare much less infrastructure, many Ukrainian/Russian villages largely lived life as they did 200-300 years earlier. Central Asia and the Caucasus were pretty much left alone outside a handful of cities like Baku. Most peasants lived in rough houses that many times didn't have chimneys or windows, and their main intellectual/culture experience was religious either through the icons (or pictures of the Tsar) in a corner of their house or more a more elaborate hierarchy of icons in their church. On complaint against the Bolsheviks by American historians was that industrial workers made up less than 10% of the population....which sort of cuts both ways by showing how little industrialization had taken place.
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Apr 7, 2014 14:48
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Axe Master posted:Yeah, apologies for the anecdotal evidence however I imagine it is reflective of the current trend. One of the chemists at my university is on the verge of publishing a revolutionary process (which I will keep intentionally vague, I learned most of this from the bitter students in the lab), and the professor in question just returned from a lengthy trip to China to begin the process of starting a multi-billion dollar company there related to it. Part of this is to eschew the patent policy of the university (which is a whole other can of worms), but one would presume if the IP atmosphere in China is as dire as stated it wouldn't be in his best interest to build a startup there. Well, it could just be they have a better chance in China than running up against the university which sounds like will have the IP rights in the US. If anything it sounds like they are going to China because it has weaker IP protections for US IP (or otherwise the university would be all over them).
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Apr 7, 2014 17:01
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blueyedevil posted:The price is slightly higher than what China pays for -stan gas but lower than what Russia receives from Europe. Russia was trying to push this deal through as fast as possible because the Kremlin was probably getting a bit nervous about the future relationship with the EU. Yeah, it is a compromise, but I don't know if I would call it China twisting "Russia's" balls. The number I heard is around $350 per TCM which is still profitable for the Russians. For clarification, Russia was selling Ukraine gas as around $286 per TCM (which they had to buy).
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May 22, 2014 22:13
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As far as Chinese GDP and GDP growth, it is pretty difficult to believe official figures since they are so politicized. China could very well be in a recession now and it wouldn't ever show up.
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Jun 1, 2014 22:53
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GlassEye-Boy posted:Gordan Chang comes out with a China is on the edge of collapse article every couple of months. Who knows maybe one of these days he'll be right. It looks like he is slowly but surely getting closer.
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Jun 2, 2014 18:43
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Shifty Pony posted:And it won't happen because China has been using the purchases to keep RMB low compared to USD. A bunch of USD floating around trying to buy RMB means the USD won't buy you as much in China and that is bad news for exporters. Granted, the question will the Chinese government expand the monetary supply through even more lending to state banks and local governments and simply flood the balance sheets like Japan did? It seems like that is for the most part their course of action so far. That said, it is unclear if they would be any more successful than Japan was beyond maybe further increases in productivity. Ardennes fucked around with this message at 20:09 on Sep 22, 2014 |
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Sep 22, 2014 20:03
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Cultural Imperial posted:http://online.wsj.com/articles/china-pboc-injects-81-billion-into-top-banks-1410914151 That seems to be their course of action so far, but it is difficult to tell its effectiveness considering the notorious nature of statistics. GDP growth may never go down below 7%, regardless of what happens.
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Sep 22, 2014 20:17
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icantfindaname posted:So how exactly did Japan make it so much further on this model before imploding? I mean China is still significantly poorer than Japan was in 1990, what happened? Population is one thing it is just that much harder to get a population of a billion people to the same level of development as a country of about one hundred and fifty million. The Chinese need to export that just that much more relatively to bring in the same about of capital, and Japanese exports were more profitable usually to boot. Another issue is that the West, especially the US, was a relatively untapped and rich market after the war compared to now. Austerity, and household debt has taken a hit on consumer spending and at the same time China now faces far more competition than Japan once did for the same market. Also, Chinese companies haven't been very successful at branding compared to Japanese ones. By 1990, Sony and Toyota were household names in the US, on the other hand China still mostly does the manufacturing for foreign brands. Most Americans or Europeans would struggle to think of a major mainland brand, Lenov is probably the closet bet and even then it doesn't have quite the same buzz that Sony did in 1984. Basically, China is too big and too late.
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Sep 29, 2014 21:33
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My Imaginary GF posted:Partly this. Partly, its an issue of rates and accurate accounting. I don't trust that which I can't verify, and I can't verify Chinese data. Accounting is obviously another issue but purposefully difficult to cite because we can only guess how much they are off. I suspect the issue will come up soon when China "officially" passes the US in GDP PPP. Admittedly, Japan has had an issue with the transition to service industry as well. Japanese government also put a significant emphasis on liquidity not to state-owned enterprises but very large private corporations that worked closely with the government. Ultimately, the Japanese method was more transparent and flexible than China's current system but they can be compared. Japanese democracy was still dominated by a single party for most of its existence, the LDP didn't carry the same weight as the CCP but nevertheless ruled Japan mostly uncontested. Nevertheless, a liberal democracy dominated by one party is still more flexible than a literal one party state. In essence though China's system is even more rigid and opaque than Japan but there are obviously similarities in the development model. Granted, another big difference is that Japan mostly neglected its military during the post-war period. Japan does have an arms industry, but obviously China is putting far more of an emphasis on it in comparison. A massive arms build ups have worked economically before, the only problem is it makes war quite tempting. It will be interesting to see in the next few years how aggressive the PLN gets. Ardennes fucked around with this message at 22:15 on Sep 29, 2014 |
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Sep 29, 2014 22:06
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Grand Theft Autobot posted:That, and it requires the development of certain skillsets for the workforce that may not be suitable for other industries, creates a lot of plant and equipment that can't easily be transitioned to other work or liquidated quickly or efficiently, and creates a brain drain from other, potentially more dynamic industries. Propping up certain sectors, or devoting huge amounts of money and capital to war production can be helpful counter-cyclical fiscal policies (to the extent that just pump-priming would be in general), but in the long-run I wouldn't be surprised to see some serious economic derangement. Certainly, but I have a feeling Beijing might be looking for a "easy fix" soon to the issue of growth beyond just lying about it. Military build-up certainly isn't much of a solution especially not a long term one but nationalism, expansionism and an investment with dual returns (you can also shoot people with arms) may very well be compelling to China. Chinese military spending is already expanding rapidly as it is. Anyway, in order to improve the savings rate of Chinese consumers, wages would have to go much higher and even then China really can't control demand for exports overseas or the expense of imports. In addition, like Japan, they have so much bad debt that is built up that stimulus can only go so far, although it is complicated by the fact so much of the economy is controlled by the state. Putting money into arms, probably isn't going to fix that, but it may provide a useful distraction. Ardennes fucked around with this message at 22:43 on Sep 29, 2014 |
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Sep 29, 2014 22:40
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Ceciltron posted:You guys do realise that less than 10% of the Chinese economy is State Owned Enterprises, right? Pretty much all of the banking industry is state owned, which is going to ultimately make a pretty massive difference. Also local-governments play a large role in the economy, especially regarding the large amount of debt they have accrued.
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Sep 30, 2014 14:56
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Ceciltron posted:Some friends of mine collaborated on a piece addressing this specifically. If you'll allow me to dump some text: Obviously, a very large shadow banking exists and is difficult to regulate, but at the same time I think it is far too much to assume the formal banking system is therefore now almost irrelevant. State owned banking still account for a large amount of lending, 98% of formal banking assets are in state owned banks. Also according to the New York Times at least: quote:As of 2011, 35% of business activity and 43% of profits in the People's Republic of China resulted from companies in which the state owned a majority interest. Critics, such as The New York Times, have alleged that China's state-owned companies are a vehicle for corruption by the families of ruling party leaders who have sometimes amassed fortunes while managing them.[24] http://www.nytimes.com/2012/11/10/world/asia/state-enterprises-pose-test-for-chinas-new-leaders.html Ultimately that is probably their percentage of the formal, not the shadow economy but I don't really think you can dismiss how expansive SOEs still are. Then there are is the issue of local governments, which obviously can be considered part of the state, who themselves are considerably in debt and if anything there has been shown connections between them and shadow banking. Obviously, there are two economies in China, but the "shadow" economy still has considerable connections to the state.
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Sep 30, 2014 15:20
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Ceciltron posted:As our source, we used the China Labour bulletin for 14 December, 2007, as well as others in that series from different dates. That is fair, but certainly it is going to be a bit different than Japan where conglomerates were private and autonomous, if anything I think it is going to be even harder for China to change direction specifically because the state and the economy has become an amorphous blob of a patronage network. However, it is also an issue simply because it is more opaque and harder to predict, a balance-sheet recession may already be happening but at this point many in the West are simply trying to figure out what variables would warn us of it happening.
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Oct 1, 2014 14:34
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CIGNX posted:To put it succinctly, each country experienced exogenous shocks to their financial system at different points in their economic development. Japan's credit bubble was arguably a result of the 1985 Plaza accord, where the then-G6 nations collectively appreciated the Yen. This led to lower interest rates, which then led to credit expansion and thus a bubble. For China, the 2008 financial crisis threaten to plunge their economy into negative GDP growth. With western-style financial reforms discredited, they turned to credit expansions to infrastructure and politically important projects to boost GDP, hence the 2009 stimulus in the form of credit. These bubbles and crashes weren't inevitable results of their development models but rather reactions to an outside shock. The bubble itself in Japan may have been caused by low interest rates, but in general the developmental model was reaching its limits, first by importer nations reacting to Japan and then competition by other exports. A big part of the 2008 crash was the loss of manufacturing jobs in the West, and the rise of a bad credit across the 2000s. You really can't separate the two, since China's model ultimately meant that it would have more limited horizons for exports. Also, their developmental model would reach its own limits even if a financial crisis didn't happen. Beyond that it is was also up to China to try to flood credit so broadly and the problems associated with it because they needed to maintain artificially high growth for political reasons.
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Oct 2, 2014 05:02
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Cultural Imperial posted:http://blogs.wsj.com/economics/2014/10/11/china-central-bank-official-no-major-stimulus-needed-in-foreseeable-future/ I wonder if signs of any sort of "landing" will show up in actual state statistics. I like the positioning of the rhetoric though, I mean it wasn't like ever aspect of Chinese society wasn't geared for maximized growth for the last two decades.
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Oct 12, 2014 16:36
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whatever7 posted:I have been reading some economic books recently. One interesting point about I got from Michael Pettis's "The Great Rebalancing" is that China is not really a "export economy", China is a "Investment Economy". China used about 50% of its GDP for reinvestment, which is a crazy rear end high number. It only happened twice before, Germany in the 30s and Soviet Union in the 50s. Ultimately though the capital China has gotten for that investment in the first place primarily have come from manufactured exports, which in turn have over time been reinvested, during the 2000s. Basically, they work hand in hand.
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Oct 12, 2014 20:26
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My Imaginary GF posted:Chinese economics question: Say you're a provincial official with a good unreported revenue stream. What are the investment and banking options open to you? At one time, a nice trip to Macao.
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Oct 12, 2014 20:41
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Arglebargle III posted:They're going to change the CCP scorecard* to count debt levels in addition to GDP growth. Kind of closing the barn door after the horse has bolted but at least we'll have no more ridiculous projects like the Gansu government agency that wanted to level mountains and fill valleys to build more cities. GDP growth as a metric for party advancement has been a big driver of the huge loans taken out by local government to pay for infrastructure projects. It's an incredibly easy way to goose GDP numbers. With major officials rotated from place to place I'm sure there was an I'll-Be-Gone-You'll-Be-Gone mentality towards debt. If that sounds like a recipe for terrible policy, welcome to the last 10 years. Yeah with GDP numbers more than ever seeming to be "decided on" beforehand, there is still plenty of room for graft as long as the party line on statistics is kept as it has been. I do have to say I am surprised when I read something on Bloomberg accepting new GDP growth announcements without even the smallest gain of salt. Is it really a "tinfoil hat conspiracy" to suspect the numbers the CCP is publishing at this point? http://www.nytimes.com/2014/10/21/business/international/mixed-economic-signals-from-china.html?_r=0 quote:Mixed Economic Signals From China This article is a it better, the real surprising part is how different China reported exports to HK and NK's reported imports from China are. If anything since 2010 it is like they have existed in different worlds. Ardennes fucked around with this message at 16:27 on Oct 21, 2014 |
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Oct 21, 2014 14:46
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DailyDumSum posted:I recently came back from a cheap tourist tour in China. I did not go to Beijing or Shanghai, but instead went to Kumming and Dai Lai. This maybe western economics thinking here, but what I saw (low population, shops everywhere few people buying, entire towers for sale). It really felt like something was going on. I wonder if the CCP can come clean at this point especially since every new statistic compounds the issue even further. I have a feeling we may be having to live in "fantasy land" at least at the media/political level since admitting something is seriously off the rails in China questions some of the basic principles of how the global economy is suppose to work. Also I don't know if there are scapegoats big enough to hide how bad things look like they have gotten in China. Obviously, they may try any way but there is going to be a lot of fallout. I mean China has been beating the growth drum for over 30 years at this point, where is their legitimacy when it turns out to be a fib since 2010-2011 or so? And yeah, Australia is pretty much screwed, maybe they can keep the housing bubble going for a while but I don't know how the Australian economy is going to bounce back between what is going to be an epic housing crash and an dried up export market. Brazil is already feeling it and that is one of the big reasons current presidential race is so close.
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Oct 21, 2014 18:49
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ocrumsprug posted:Out of curiousity, how long can China publish rubbish numbers before it doesn't matter what they say? Obviously they have more leeway since they aren't transparent, but I cannot imagine that the US (or anyone else) would get away for long lying about their GDP. One thing is that China is seen as a counter-balance to the US and the only real "chance" to replace the US as a the largest economy on earth. However, that reasoning also accepts what China (and the US ironically enough) has done to make that result happen. Also, I think there is a certain amount of faith in publish statistics simply because usually there is some accuracy to them, I have a feeling that period of history is ending.
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Oct 21, 2014 20:09
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ocrumsprug posted:I just try and fail to imagine a situation where some developer in the US was building cities that no one was living in, or someone (a lot of someones) purchasing investment properties in Detroit, and then taking GDP growth numbers seriously. Ultimately, it is because the US is more transparent but also....it already happened until 2008 or so. I saw a lot of houses in California that didn't make a whole lot of sense. The US didn't fake statistics (well...expect unemployment) but ultimately we relied on a very similar bubble economy, but its collapse was more visible. Granted, it is at this point that, it becomes unclear where the global economy has anywhere to go because the "West" and the "East" are on the edge of failure at the moment.
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Oct 21, 2014 20:22
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Fojar38 posted:The USSR did, it just turns out that central planning is a really inefficient way to run an economy. By 1989, the USSR's GDP was about half that of the US, $2,659 B versus $5,233B. If anything it was impressive the Soviet Union lasted so long against an alliance of countries that was so much more economically powerful then them, but it also explains a lot of the choices they made and the shortcuts they took. GDP per capita in 1989 was around $9,000 versus $21,000 in the US, in comparison the USSR has GDP per capita similar to Venezuela. Ardennes fucked around with this message at 04:59 on Oct 22, 2014 |
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Oct 22, 2014 04:51
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icantfindaname posted:Which is why I said "consistently". Argentina today isn't an "enemy of the West" by any meaningful metric. Economically there has been some pretty nasty stuff between Argentina's creditors and it lately, the IMF certainly seemed like the enemy of the Argentinian people for a while. Don't fall into the trap, that because the CCP says something the opposite has to be true. CCP and the US can be full of poo poo at the same time. Yeah, it depends on how much you want to say "democracy" because you could say Gaza, Russia or Iran. We weren't very supportive of Morsi either in Egypt. Then of course Allende and Mosaddegh. Yeah then there was most of the coups in Latin America beyond Chile including the 2009 one in Honduras. No a country doesn't have to be a puppet of the US to be an democracy, but if anything it would probably be a good idea to steer away from both the ways China and the US doing thing. Ardennes fucked around with this message at 05:05 on Oct 22, 2014 |
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Oct 22, 2014 05:01
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Typo posted:The USSR never exceeded something like 1/3 the size of the US economy in terms of GDP, and that's by Soviet numbers which may or may not be complete fantasy. And yeah, central planning meant that what was produced may or may not actually be useful for anything. That said in the early 1920s, the economy of the USSR was a far smaller size and to be honest I don't think the Soviets could have come from the recovery of the Civil War/WW1, industrialization and then WW2 and its recovery without a significant degree of central planning. It started to fall apart in the 1960s/1970s when all the low hanging fruit was taken and the Soviets really couldn't compete with Western technology and the transition from an industrial to a service/information economy, the Brezhnev malaise.
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Oct 22, 2014 05:10
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Bloodnose posted:You've really drunk the mainland kool-aid if you think Iran is democratic at all. It's exactly as democratic as the proposal for Hong Kong's 2017 election. Like that election proposal looks totally modeled after Iran's election model. And it's undemocratic enough to cause an umbrella revolution. The difference is that the clerics have allowed relative moderates to hold power in the past/present that Beijing probably wouldn't allow. Democracy in Iran is managed obviously but at the same time there is a unspoken degree of compromise that doesn't exist in a regime like Sisi or Assad.
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Oct 22, 2014 05:38
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Fall Sick and Die posted:Not just Iran's cool-aid but Israel's as well, why do people ignore Tunisia, Lebanon, Turkey, Azerbaijan. Azerbaijan is basically North Korea light, it is a strict authoritarian state with election results announced before they even happen. Georgia or Armenia would be much much better examples. Also, Turkey is really part of the Middle East culturally and so are the Caucasus. I could see at least the Caucasus being called its own separate region though.
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Oct 22, 2014 05:49
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whatever7 posted:I wouldn't count Turkey as part of ME because Turkey didn't want to be counted as part of ME. I probably will count Turkey as ME now because Turkey now wants to be part of ME, also Turkey is doing things to the minority blatantly only can be justified under ME value system. What is a "ME value system"? No wait, I don't want to know. Arglebargle III posted:Also, someone mentioned the CPC cooking China's economic numbers. It's not that the CPC cooks the numbers, it's that everyone in the chain reports false numbers to each other for their own ulterior motives. The CPC doesn't know their own numbers because they can't trust their colleagues. Li Keqiang (Premier of the PRC State Council a.k.a. Xi's Number One) was caught on mic saying "China's numbers are all man-made" but he wasn't gloating that his government manages to fool the rest of the world but saying that he himself, China's #2 man, doesn't pay attention to the statistics because he knows they're rigged. In other words, China's #2 man doesn't have an exactly accurate number himself. That is still cooking the books, and I am skeptical there isn't state complicity involved. They "trust" them because not trusting them is a hazard to their career but it doesn't mean they aren't complicit is passing false statistics. Obviously, great economic data is good for everyone politically but it is very hard at least to me to give them a pass for it just because of the chaotic way it is done. At the end of the day they know they are passing off bad numbers even though they aren't the ones that actually added the extra zero to numbers.
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Oct 22, 2014 17:53
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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. Yeah, I don't know if I expect Detroit, Chinese labor costs are still so low that I doubt manufacturing would disappear but there is going to have be a large correction that is going to impact their growth for a while. Basically, the whole GDP growth project has most likely gone awry and China may very well be caught in a lower-middle trap while having to deal with a rapidly aging population, and some truly impressive environmental damage. The whole build up fantasy of the Chinese "taking over the world" just isn't going to be happen for a long while if ever. https://www.youtube.com/watch?v=OTSQozWP-rM Ardennes fucked around with this message at 17:08 on Nov 25, 2014 |
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Nov 25, 2014 17:06
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Cultural Imperial posted:Chinese labour costs are going up and China is losing its competitive advantage believe it or not. It is to an extent, and exports will be squeezed but at the same time they still export a very large amount of the world's manufactured goods.The Chinese economy isn't going to dry up but growth will simply because there is no way to really sustain it. Also, almost certainly reported growth and thus reported total GDP is likely significantly lower than official numbers. Ardennes fucked around with this message at 18:07 on Nov 25, 2014 |
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Nov 25, 2014 17:44
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computer parts posted:A lot of Detroit's manufacturing just moved to lower cost of living states too, it didn't go out of country. A big part of it is also simply the racial history of the United States, and you don't have the similar issues expect in Tibet/Xinjiang. 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.
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Nov 25, 2014 18:12
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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). 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.
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Nov 25, 2014 18:50
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ocrumsprug posted:How far to the negative would China's real GDP have to go before the official number went to 0%? 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.
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Nov 26, 2014 00:53
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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.
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Dec 13, 2014 22:44
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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.
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Dec 31, 2014 04:30
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