Inst's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/319689/comments http://seekingalpha.com/article/111057-will-u-s-growth-beat-china-s-in-2009?source=feed#comment-332200 332200 Wed, 17 Dec 2008 12:59:05 -0500 http://seekingalpha.com/article/110308-china-these-trade-numbers-are-awful?source=feed#comment-332061 332061
The problem with your analogy criticizing the value-added approach is that in NYC's case all of the inputs come from the city economy. In China's case, the inputs come from outside the country. So when demand for inputs fall, the detriments are primarily experienced by the supplier countries instead of the producing country. Perhaps I misunderstood something? I thank you for taking the time to write a detailed response to my link; if I'm still mistaken, would you please be kind enough to correct me?]]> Wed, 17 Dec 2008 11:19:10 -0500
The problem with your analogy criticizing the value-added approach is that in NYC's case all of the inputs come from the city economy. In China's case, the inputs come from outside the country. So when demand for inputs fall, the detriments are primarily experienced by the supplier countries instead of the producing country. Perhaps I misunderstood something? I thank you for taking the time to write a detailed response to my link; if I'm still mistaken, would you please be kind enough to correct me?]]> http://seekingalpha.com/article/110308-china-these-trade-numbers-are-awful?source=feed#comment-329612 329612 www.allroadsleadtochin.... I have the sneaking suspicion that Professor Pettis isn't aware of this article as I've never seen him offering a rebuttal.

Mr. Anderson (lawl teh matrix?) argues that when looked at in value-added terms, the amount of Chinese economic growth supplied for by the export sector is actually quite minimal, especially when compared to countries like Taiwan and South Korea. The fact that Taiwan and South Korea are already experiencing economic contraction, while China is not provides evidence for this contention.

If you hold on to the limited-export-damage theory, then you need alternatives to explain why the Chinese economy has been doing so horribly as of late. I've seen arguments that what really did the Chinese economy in was the collapse of the real estate market and a major decline in investment. There's also arguments that the collapse of the export sector has influenced consumer confidence, and if I understand the Professor correctly, part of it has to do with the Chinese money supply.]]> Mon, 15 Dec 2008 03:38:36 -0500 www.allroadsleadtochin.... I have the sneaking suspicion that Professor Pettis isn't aware of this article as I've never seen him offering a rebuttal.

Mr. Anderson (lawl teh matrix?) argues that when looked at in value-added terms, the amount of Chinese economic growth supplied for by the export sector is actually quite minimal, especially when compared to countries like Taiwan and South Korea. The fact that Taiwan and South Korea are already experiencing economic contraction, while China is not provides evidence for this contention.

If you hold on to the limited-export-damage theory, then you need alternatives to explain why the Chinese economy has been doing so horribly as of late. I've seen arguments that what really did the Chinese economy in was the collapse of the real estate market and a major decline in investment. There's also arguments that the collapse of the export sector has influenced consumer confidence, and if I understand the Professor correctly, part of it has to do with the Chinese money supply.]]> http://seekingalpha.com/article/110637-china-credit-is-contracting-rapidly?source=feed#comment-329606 329606
In China, there is lending up and down the supply chain. The supplier to this and that company uses an informal loan to delay payment for goods and services on time. What happened with the recent export bust was that since the decrease in export orders decreased the amount of capital available, this informal lending system started seizing up, as companies were no longer able to loan each other money for payment.]]> Mon, 15 Dec 2008 03:24:12 -0500
In China, there is lending up and down the supply chain. The supplier to this and that company uses an informal loan to delay payment for goods and services on time. What happened with the recent export bust was that since the decrease in export orders decreased the amount of capital available, this informal lending system started seizing up, as companies were no longer able to loan each other money for payment.]]>