HaavBline

Chinese Congress: 8% GDP, No Problem

Mad:

You have been reapeating this tired old hogwash for too long. Read something meaningful. Learn some new tricks.

Japan is very different from China. It is a very wealthy country that somehow is still much more depending on export than China for its GDP. Its export product mix is heavily discretionery high value items which has crashed. China's export product mix are much less discretionery basic items which may not take as much of a hit in this downturn.

Never face a recession? Read some basic history so you know how to hide your ignorance. Before China started the current growth streak 30 years ago, it had known things far worse than economic depression, and not once or twice either. Chinese older than 45 almost certainly have some (or a lot of) memory of bad old days. It is us Americans who have forgotten the very concept of 'rainy days'.

As a result of memories of very bad old days which lasted at least 150 years, Chinese financial strategies at national, business, and personally level are all far more defensive than western countries's counterparts. This is reflected in low leverage, high savings, and a healthy skepticism of unproven western 'innovations', such as financial engineering, market self-regulation, etc.


On Mar 05 12:53 PM The Mad Hedge Fund Trader wrote:

> I think they are being overly optimistic. If the Chinese think they
> are going to get 8% growth in 2009, then they are smoking their former
> largest import, Opium. I think they are totally unaware of the ton
> of bricks that is about to land on them in the form of the extinct
> American consumer. China has spent 30 years building a giant export
> machine, for which there are currently no buyers. Take a look at
> Japan’s statistics, which are far more reliable than China’s, which
> show exports falling off a cliff, machine tool orders evaporating,
> and once a half century losses for leading exporters like Toyota.
> These are numbers far worse than we saw during the depths of their
> lost decade. Of course, China has the money, and certainly the need,
> for a massive domestic infrastructure build out that can offset the
> disappearing exports. But this is not an economy that can exactly
> turn on a dime, and the transition will be painful. China can always
> report 8% GDP growth this year. Another problem is that modern China
> has never faced a recession, and defensive business strategies are
> essentially unknown. One of the advantages of a centrally planned
> totalitarian economy is that if you don’t like the economic numbers
> you are getting, just make up some better ones. Personally, I think
> 5% growth is more realistic, but then you have always known me as
> a shrinking, subdued, conservative kind of guy. If I wanted headlines
> I would be shouting 2% growth, or perish the thought, negative growth,
> from the rooftops, as some China watchers are. The implications for
> the global economy are huge.