Chinese Economics Thread

[kliu0]

I thought 20-30 years ago toys, electronics, clothing were all made in Taiwan. China only opened up less than 20 years ago?

I do believe that India and other countries are going to catch up real fast. China is still stuck making cheap toys and clothes for everyone, instead of making more advanced products. However as advanced things can be, they won't be allowed to make high grade/state of the art computer parts "wafer plants" due to "security risks for the USA". Thats good news for USA and its allies which make that sort of thing.

 

[crobato]

I thought 20-30 years ago toys, electronics, clothing were all made in Taiwan. China only opened up less than 20 years ago?

I do believe that India and other countries are going to catch up real fast. China is still stuck making cheap toys and clothes for everyone, instead of making more advanced products. However as advanced things can be, they won't be allowed to make high grade/state of the art computer parts "wafer plants" due to "security risks for the USA". Thats good news for USA and its allies which make that sort of thing.

That's not really true. Allowed or not, in China they already are. The fabs, the machines, they're all there and all managed to get there. China is starting even to produce their own photo lithography machines.

China is already one generation behind the leading edge. Currently the leading edge is defined as .045 micron, and China is already making parts at 0.09 micron. That's already generations ahead of certified military electronics, many of which is still in the 0.35 and 0.18 micron.

Chinese government has been micromanaging the economy towards a technology intensive one, and they're willing even to let the toy makers die out.

 

[yehe]

Actually, I seriously doubt that other countries like India will have the capability to even take over the toy manufacturing from china anytime soon yet, no disrespect but they simply doesn't have the infrastructure, buraucratic swiftness, and labor production effectiveness, some company that moved out of china last couple years are actually moving back to China now, cause of power shortage, transport inefficiency and in many cases, inability to keep delivery time, they simply decided that it's not worth the trouble.


But aaaanyways, with the new labor law implemented in China starting this year and export tax relief abolished for many goods, higher salary, overall shortage of factory laborforce across china, seems the only way for companies to survive is to upgrade/change thier production or goods away from labor intensive ones.
Obviously this is what china's government is counting on as well, this can also have the beneficial effect of relief the pressure of revalue the chinese RMB currency, cooling down the already overheated chinese economy, shuting down/move out heavy polluting industries etc.

Just watch how this will affect rest of the world, overall inflation is a certainty across the globe, the low inflation(which is def. not normal if u look at the economical history of the world) that have been kept in the last 1.5 decades not the least by chinese cheap goods is starting to come to an end.

oh BTW. I read something on the news that ssaid that chinese companies like HuaWei are taking 60% share of global mobilecommunication infrastructure order the first half of the year, out competing Motorola, Ericcsson, Simens etc., these are high tech stuff some of I am sure that can easily be used in military aspect.

 

[SampanViking]

I thought 20-30 years ago toys, electronics, clothing were all made in Taiwan. China only opened up less than 20 years ago?

I do believe that India and other countries are going to catch up real fast. China is still stuck making cheap toys and clothes for everyone, instead of making more advanced products. However as advanced things can be, they won't be allowed to make high grade/state of the art computer parts "wafer plants" due to "security risks for the USA". Thats good news for USA and its allies which make that sort of thing.

You seem to be a member of the International League of Wishful Thinkers kliu0, Ningbo, Shanghai, Wuhai, Hangzhou and many other major manufacturing centres in Zhejiang are stuffed with Chip Fabrication Plants both indigenous and Foreign Owned.

A good friend of mine there is a Fabrication Engineer working in the Industry.

 

[antimatter]

India has about the same population as China but it's GDP is only about 1.1trillion and CHina of 3.3 trillion. In order to catch up to this current chinese level, India might need 10% annual GDP growth for many years, 30 yrs.
Btw, the 10% has to be real GDP growth /w inflation taken into account.

By the time India reaches 3.3 trillion GDP, China would have a GDP of 9 to 10 trillion.

Also, Some Taiwanese are very sared if China take its bread and butter semiconductor industry, it will make them poorer and much more dependent on CHina, therefore further squashing its independent movement in the future.

I think China investing more in this area would have a big consequence on Taiwan.. maybe a better option than miliatry. Because military operation would have very negative repercussions whereas if CHina overwhelm its hightech area, nobody would say much...

recently CHina just pumped in 5 billion USD to Tibet to boost its economy. What a waste of money! Tibet problem can't be solved through moneywise. Imagine if that 5 billion pump into the hightech/semicondcutor area forming JVs and get some equipments to the Universities to training for the students or R&D centers..

 

[PrOeLiTeZ]

I thought 20-30 years ago toys, electronics, clothing were all made in Taiwan. China only opened up less than 20 years ago?

I do believe that India and other countries are going to catch up real fast. China is still stuck making cheap toys and clothes for everyone, instead of making more advanced products. However as advanced things can be, they won't be allowed to make high grade/state of the art computer parts "wafer plants" due to "security risks for the USA". Thats good news for USA and its allies which make that sort of thing.

Umm sounds like wikipedia information that you are giving us, we all aint newbies in Chinese ecnomoy so dont lecture us with you critical negative thinking of just imaging China as a factory for toys and clothes...that image is decade old that still are attached to people's head...

China now is one of the biggest shipyard builders, electronics (Lenovo ranked 4th in world in terms of sales), building machinery, chemicals, aviation aeroplanes and engines, communication network systems (mobile phones), and also besides these domestic products they are home to were some of the worlds most sophiscated, expensive and popular items are constructed. So China will have some form of knowledge from all these constructions.....Aviation for one.

India catching up to China really fast im doubting they'll catch up but not anytime soon, their infrastructure is still a mess, individual GDP is really low, education low, country less developed....

So in order for India to "catch up" they should address their mother lands issue before competing on the big stage and showing the world what india is made of. India lags behind China in aviation and engineering.

 

[antimatter]

In order to shift into higher gear. I think China should tax higher on all foreign IC components imported in order to promote greater production inside China.

At the same time each foreign owned fab established in CHina require them to establish link to a university program, requiring to donate certain amount of old equipments to the school for student R&D. and get involved into the curriculum. Such as Intel fab in Dalian invovled with local university to train more process engineers.

CHina government has to spend money to buy new equipments from JV equipment makers to promote its core equipment making competence.
the government then distribute them to schools and R&D centers.

 

[yongke]

Please, Log in or Register to view URLs content!

Key Conclusions:

• Potential stumbling blocks to sustained Chinese growth—export concerns, domestic economic instability, inequality and poverty, pollution, social unrest, or even corruption and slow political reform—are unlikely to undermine China’s long-term success.

• China’s financial system, rather than a shortcoming that compromises growth potential, is one of the strengths of what the report calls “China’s money-making machine,” in part because of its ability to support the financing of infrastructure and other public investments necessary for sustained rapid growth.

• A Chinese economy that eclipses the U.S. by midcentury has both commercial and potential military implications. China will be the preeminent world commercial influence. China’s military capabilities are a small fraction of the United States’ today, so there is time to prepare for a very different world in fifty years, says the report.

Remember how the bashers alway find some excuse that support the idea of China is going to self-destruction right around the corner? Well, this article fly in the face of these allegations. The economy haven't failed since opening up 30 years ago, I don't see why the current crop of problems will bring it down any more than the problems facing China 10, 20, 30 years past.

 

[Autumn Child]

I do believe that India and other countries are going to catch up real fast.

How is India going to catch up when its infaltion is at 12% and higher than its GDP growth? China's infaltion eases to 6.3% with GDP growth forecasted to be above 10% this year and record surplus from trade.

 

[Mr T]

How is India going to catch up when its infaltion is at 12% and higher than its GDP growth? China's infaltion eases to 6.3% with GDP growth forecasted to be above 10% this year and record surplus from trade.

Inflation is normally included in calculations for GDP growth - otherwise those GDP figures would be meaningless.

As for Chinese inflation, I thought the average for this year was still over 7%.

Remember how the bashers alway find some excuse that support the idea of China is going to self-destruction right around the corner? Well, this article fly in the face of these allegations.

Since when does one article overturn a wide range of concerns from other institutions and publications?

The economy haven't failed since opening up 30 years ago, I don't see why the current crop of problems will bring it down any more than the problems facing China 10, 20, 30 years past.

Actually there have been economic problems over the last 30 years - why do you think caused all that trouble in the 1980s? As a developing nation, China didn't have to go into recession to have a "failing" economy.

China's demographics have also been changing, something that hasn't been a problem for China in the last few decades. That's a longer term matter, but it won't go away easily - it will be a choice between even more population growth by changing the one-child policy (and higher strain on resources), or higher taxes.