Vienna

China Blows a Double Bubble

thanks for your reply,
I have lived in the states for 9 month and have audited over 20 factories all over the states within the last few years. I must say that I have met many people who where very open to new procedures. Besides that I have been learning Chinese and speak it quite well, been there since 1994.
What I want to say, is probably the same that you mentioned. When evaluating a system, you need to take into account the parameters and look into them deeply, without going back to the typical old myth and evaluating a systems this way. What typically is done, and what is completely distracting are the following arguments,

they are communists, no free market like in the US, they don't report correctly ....... e.g. in Michigan factories no argument was ever considered, since they where the inventors of production line manufacturing . DOT

People have to start looking over the plate.


On Jul 12 11:27 AM coreopsis wrote:

> Sadly, Vienna, I must counsel you: you cannot reason with most Americans.
> They live in an island (albeit a very large one) which is quite impervious
> to serious understanding. They work among, and go home to other,
> Americans. This is a tremendous liability when you consider that
> most of the rest of the world is increasing its understanding of
> what is valuable and effective from many systems around the world.
>
>
> In less than a decade, the US has brought us the Internet bubble,
> Enron, MCI, and the latest incarnation of delusion: AIG, Citibank,
> Fannie Mae, etc. The future of the globe must move away from the
> US to a rebalance with multiple parties, including the EU, the BRICs,
> and other emerging nations.
>
> 'Le roi est mort, vive le Roi!'

China Blows a Double Bubble

I agree with this,
when I was in the states I have been lectures on the great China thing. Many people quoted statistics, but used the PPP ones. In the same sentence they believed China would buy US stuff. What they would not understand, that the PPP uses chinese prices, but they will not be able to buy US stuff using nominal values, and if then only US stuff produced in China, where the bosses in US will recieve their payments. The avarage citizen in the US will not have too much benefit of this, for some time to come.
In future we all have to learn to live with less.


On Jul 11 01:17 PM Michael Clark wrote:

> Actually, Hutton's entire article is worth reading, especially by
> those who think China is going to lead the world back to affluence.
>
>
> www.guardian.co.uk/wor...

China Blows a Double Bubble

Your comment is very detailed, but please consider,

> Careful what you believe about China. They tell us what they want
> us to believe.
We believe that the US also tells us and their citzens what they want

> China is still a communist country
Stop riding the communist thing, that was 1950, it does not matter in fact if your capitalist or communist, the US has 2 parties opposed to one chinese, that both do the same, so where is the difference.

> It was explained to me by a Chinese national: 'When a Chinese
> business takes out a loan from the bank, 50% of the loan is
> earmarked for bribes.' In other words, 50% of the loan is non-
> performing from its inception
I wonder how much corruption is going on in the US, these bonuses, the wars and the rest that seems to be quite well nown.

So after you have lectured the world on so many things, I will give you one good suggestion,
Sweep before your own door (a German saying)

On Jul 11 03:54 AM Michael Clark wrote:

> Careful what you believe about China. They tell us what they want
> us to believe.
>
> have a gut feeling that China's 'green shoots' may not be green at
> all. I did read about huge increases in automobile sales. And I watch
> Chinese stock indexes rise without looking back for the last few
> months. But there is something about China I just don't trust. China
> is still a communist country. China (like all Asian countries) is
> more concerned about appearances that with realities, more concerned
> about what the neighbor is saying and thinking. I've been told that
> 'face' is so important in Asia, that an Asian would rather dresss
> well and have nothing in his pocket than dress poorly and have money
> in his pocket.
>
> During the Vietnam War, Americans would ask ally South Vietnamese
> officers and intelligence operatives about existing conditions on
> the ground; the response was always positive. It was either the need
> to maintain 'face' -- that is, put a good face on everything -- or
> because the South Vietnamese officials felt it would be rude to tell
> the Americans the truth if they thought they didn't want to hear
> the truth. It was hugely frustrating for Americans who live to fix
> the negatives to never hear any negatives from their allies. Eventually,
> the Americans stopped asking their allies anything, except about
> things that didn't matter, like the weather.
>
> In my mind, the whole Asian economic miracle (China and Vietnam,
> etc.) of the last decade is a bubble of illusion waiting to break.
> Interesting that I should come across an article on the web this
> week (DNA Read the World) by Venkatesan Vembu where the writer calls
> into question the Chinese recovery:
>
> Increasingly, economy watchers are beginning to believe falsehood
> could go a step beyond: China's GDP numbers. Ever since the official
> Chinese statistical agency announced earlier this year that the country's
> GDP grew 6.1% in the first quarter of 2009, there have been murmurs
> of scepticism about the authenticity of those figures. A few have
> observed that the GDP data are inconsistent with other data, such
> as weak power production.
> Those murmurs have in recent weeks turned into a high-decibel chorus
> that is beginning to openly rubbish the validity of the official
> numbers.
> "The Q1 6.1% GDP outturn is simply a lie," notes Albert Edwards,
> chief global strategist, Societe Generale. "It helps explain why
> the Chinese data is derided by so many economic commentators."<br/&...
> prices worldwide have surged in recent weeks on the hopes of a robust
> V-shaped revival in the Chinese economy. But Edwards, who had rightly
> called the Malaysian economic crisis of 1997 and the dotcom bust
> of 2000, believes that "to the extent that the renewed surge in commodities
> and the metals and mining sectors are based on the Chinese growth
> miracle, the markets are relying on a combination of hype, lies and
> wishful thinking."
> Edwards isn't alone in questioning the validity of the official data.
> Last month, the International Energy Agency (seekingalpha.com/symbo...)
> observed that China's first-quarter GDP data "does not tally with
> oil demand data, which contracted by 3.5% year on year." One explanation
> for this, IEA analysts reasoned, "is simply that real GDP data are
> not accurate, and therefore should not be taken at face value."<br/>Simu...
> analysts at Lombard Street Research, a London-based economic consultancy,
> too argued that the 6.1% GDP growth figure was inconsistent with
> the 20% decline in trade volumes over the same period, because it
> would have required domestic demand to expand by 9% in real terms.
> Using official nominal annual growth rates for GDP and consumption
> for the first quarter, and consumer and fixed investment price indices
> as deflators for consumer spending and investment, respectively,
> Lombard analysts claimed that domestic demand expanded at most by
> 2% year on year in real terms.
> They therefore concluded that real GDP growth in the first quarter
> was probably slightly negative or nil at best, and even in the fourth
> quarter of 2008, real growth was likely negative or flat. "If so,
> the last two quarters would effectively signal, from a Chinese perspective,
> a recession of a rare magnitude."
> China's official statistical agency, the National Bureau of Statistics,
> responded to IEA's scepticism with a stern rap on the knuckles. "It
> is regrettable that the point of view in the... article is groundless,"
> a notice on its website said.
> "We believe that, for an international organisation, this approach
> lacks seriousness.""
>
> Even economists who point to anecdotal evidence of China's recovery
> concede that interpreting official Chinese data is problematic.<br/>...
> to understand China's GDP data is always a nightmare for professional
> China economists," observes Credit Suisse chief regional economist
> Dong Tao. "Since I joined this industry 14 years ago, I've had this
> trouble, I still have this trouble, and I suspect I will continue
> to have this trouble."
> He points out that there is abundant anecdotal evidence of a "phenomenal
> improvement" in China's economy over the previous quarter too. "Go
> to restaurants, talk to real estate agents, count the number of shipping
> containers at terminals, see the number of cars being sold... I believe
> in my eyes."
> The plain-speaking Edwards, however, argues that "if the bubble of
> belief in China's medium-term growth prospects finally bursts, it
> will have huge investment implications."
> It is all too easy, he reckons, for investors to buy into "beguiling
> growth stories, which are in fact utter nonsense." He concedes that
> China's mammoth 4 trillion yuan stimulus has had a beneficial effect
> on economic activity this year, but says that he still questions
> the "quaint notion the markets now seem to have that the Chinese
> economy can grow at a respectable rate when the rest of the world
> is in a deep recession."
> The "bullish group think on China is just as vulnerable to massive
> disappointment as any other extreme of bubble nonsense I have seen
> over the last two decades," says Edwards. "The fall to earth will
> be equally shocking."
>
> dnaindia.com/money/rep...
>
>
> This week I also read that an official Chinese banking committee
> oveersight member admitted by over 50% of the loans connected to
> the government's massive stimulus program had been spent to purchase
> shares in China's stock markets and for purchase of Chinese houses
> and land. I didn't realize the stock market and the housing markets
> were 'infrastructure' plays. If stocks correct, and Chinese property
> markets continue to decline, these loans might quickly add to the
> problem Chinese banks have almost always had with non-performing
> loans.
>
> It was explained to me by a Chinese national: 'When a Chinese business
> takes out a loan from the bank, 50% of the loan is earmarked for
> bribes.' In other words, 50% of the loan is non-performing from its
> inception.
>
> Yesterday, China reported that exports fell for an eighth month,
> falling 21.4%, after a 26.4% drop in May. Imports also declined,
> but by less than the estimated 13.2%. 'Green shoots' anyone? Anyone?
>
>
> Sun Mingchun, Chief China Economist at Nomura Holdings was the first
> to stand up and cheer the report: 'There is light at the end of the
> tunnel,' Mingchun (actually) said. "The worst for exports will soon
> be over."
>
> Premier Wen Jiabao, however, was not so quick to jump up and down
> and smile. He said the foundations for an economic recovery were
> "not yet solid" and pledged to continue a pro-active fiscal policy
> and moderately loose monetary policy
>
> Exports to the U.S. fell 16.9 percent in the first half of 2009 from
> a year earlier, the customs bureau reported. Shipments to the European
> Union declined 24.5 percent.
>
> I won't even get in to the bloody riots that have swept through China
> over the last year, the most recent being a mix of have-not Uigurs
> (Chinese Turkish-language Muslims) and have (Han Chinese) in the
> northwest of China, which left 100 dead, 1000 injured and 1500 arrested.
> One of the targets of the riot was a new car showroom that left 65
> new cars burned and smashed.
>
> Economic-inspired riots have swept Chinese provinces for the last
> year -- and Chinese officials are concerned about more civil unrest.
> Anecdotal evidence has been bandied about the internet since 2005
> that agents of the Chinese government (and independent rich Chinese)
> are buying U.S. foreclosed houses into which they might move their
> families if civil unrest were to topple the Chinese government or
> if the boom might turn to bust.