Good chance this will be a "CIA" false flag event. This is a very good way for US Telecoms companies to gain back market share, not just in the USA.
Chinese Economics Thread
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Good chance this will be a "CIA" false flag event. This is a very good way for US Telecoms companies to gain back market share, not just in the USA.
Dangerously addictive like cocaine - I'd rather be a passenger in an aircraft flown by a pilot addicted to cocaine than by one addicted to alcohol.No, definitely not something dangerously addictive like cocaine. I never hear of someone driving dangerously because of a "gambling-induced high"but I'm sure researchers will not work towards that, but towards something that's socially accepted as "normal". I was half joking when I made the comments but you never know what they'll come up with.
AssassinsMace
Lieutenant General
How China's Economy Keeps Growing
By Kenneth Rapoza | Forbes – 2 hrs 33 mins ago...
Betting against China is as unwise as betting against the Fed.
For much of the last 20 years, economists have forecast the demise of the Chinese economy. It seems to be lost on them that since the global economic crisis of 2008, the Chinese economy has grown a combined 40%. Meanwhile, the U.S. economy has grown by a wimpy 0.5%. China bears have predicted a Chinese equity market crash every year for the past 20 years and every year they have been wrong. China stocks have grown by an average of 7% each year and rose by 9% in 2008.
Frank Newman is probably the only American to ever run a Chinese bank and a large American bank in his career. Newman ran the Shenzhen Development Bank for five years, ending in 2010. Prior to that, he worked as a CFO at Bank of America and was a former CEO at Bankers Trust. I spoke with him recently about Chinese banking, the real estate bubble and his new book "Six Myths That Hold Back America: What America Can Learn From The Chinese Economy."
"The Chinese stock market has done poorly this year, but that has been an emerging market phenomenon not a China one," he says. Newman also worked Deputy Treasury Secretary under President Bill Clinton. China equities underperformed the S&P 500 year-to-date, but despite warning of a pending blow out in housing and Chinese banking, the popularly traded iShares FTSE China (FXI) exchange traded fund is down 15% compared to the MSCI Emerging Markets (EEM) ETF which is down 16%. The main Russian (RSX), Brazilian (EWZ) and Indian (EPI) ETFs are all down by more than 21%. China beats them all.
The country continues to flip-off the naysayers.
Are you a man...or a mouse?
Deng Xiaoping, former head of the Communist Party and one of China's reformist economic leaders, once said that it doesn't matter whether the cat is black or white, so long as it catches the mouse. China is catching the mouse. Europe's cat is stuck in a tree and the fire departments of the European Union can't figure out how to get her down. America's fat cat is mowing down on something entirely different than rodent, though not in much healthier shape for it.
As the core Western economies try figuring out what economic polices to employ, it is worth understanding how China's economy has done so well over the years.
China has developed an economic strategy utilizing government controlled investment and exports. However, much of China's economy is driven by the private sector, not by state owned enterprises. Business in China is largely conducted through corporations and millions of small to mid sized companies that are growth oriented and -- depending on the sector -- innovators.
The government's investment strategy was on fixed infrastructure and manufacturing capabilities. In some ways, everyone in China benefited even if their core business was working as a cobbler outside a tier three city in central China. Beijing fostered development of the private sector and used other means, including government sponsorship of large scale industrial companies to build capacity, employing labor brought into the cities from the countryside. The chain of transactions flourished so that each block of spending by the government led to a chain of consumer spending as well as private sector development of businesses to provide goods and services along the chain. The cobbler gets more shoes to fix, therefore he makes more money.
"Let's say that people in the U.S. conclude that they need a new bridge somewhere. And China also concludes that it needs a bridge to get a train over a river. In the U.S., the bridge would likely involve a toll system, under which the projected cash flow would cover the construction costs, maintenance and bond interest to build the bridge. In China, the plan would be nearly identical. But in America, there would be a problem with financing. The state where the bridge is to be built has no money. Washington can't finance it because there will be political opposition due to the deficit. Therefore, the bridge never gets built," says Newman. "In China, there is no concern over deficit spending, especially it there was high unemployment. Beijing would see to it that the needed labor was hired, workers would get jobs, and the country's infrastructure would improve, making it more competitive for the future. The government would have a special entity created to own and operate the bridge and would arrange for one of the Big Four banks to fund it outright. The bridge would be built and there would be no increase to the deficit because the government would classify the costs as investment, not expenditure. So China would have better roads and bridges while the U.S. has worsening roads and bridges because of its fears about debt. "
Newman makes clear in his book that he is not recommending Washington become a one-party town, but that U.S. fears over its deficit are holding the country back during a time of high unemployment. Those concerns do not trouble China, and that's one of the ways China's economy keeps on growing.
Newman and I spoke specifically about China banks and real estate during his brief stay Stateside. He lives in Hong Kong.
KR: Some in the market are concerned that non-performing loans are increasing in China.
FN: The banks in China are in far better shape than the people outside the country realize. Non-performing loans at Shenzhen Development Bank when I got there were around 20% of our loan portfolio and when I left they were just 0.5%. We didn't take on a lot of commercial real estate risk, and I am sure that a lot of banks will see their non-performing loans (NPL) rise because of that risk. No one knows for sure the NPLs in China, but from my point of view, whenever problems arise in China, the government has been able to move quickly. That's not a comment on the country's politics. It's just how the economy works. A lot of people don't realize that fully.
KR: I get the sense that Beijing will fight tooth and nail to prevent a banking crisis.
FN: Listen, the Chinese government does not want a banking crisis and the Chinese government will therefore not have a banking crisis. The government sets the rules. There is no political squabbling about how to manage this.
KR: Is there a problem in the banking sector?
FN: NPLs are coming down as a whole and are low by international standards. Working capital is solid. Regulations are very tough. I'm not making this up from an analysts desk in New York. I dealt with regulators for five years. They have pushed the banks to prepare for non-performing loans because of the possibility of mid-sized and small real estate developers going bankrupt. They've required banks to increase their provisions for bad loans. If your bank's model for non-performers suggests you could lose a billion, you need to have two billion reserved in a special account to cover it.
KR: Losing a few real estate developing companies will mean more layoffs at a time when the economy is slowing.
FN: Yes, some small and midsized developers could fail. You can't save them all. China is slowly reforming its economy and when it comes to the private sector, business plans can go wrong. It happens.
KR: What if there is a surprise and larger companies fail because of government investment projects got built and no one used them.
FN: I think most of the projects were not a waste of money. Shenzhen improved their subway system, now millions more people are using it. They've done this in other cities, too, and now have a better subway system than we have in the U.S. Let's assume the government spends $1 trillion on infrastructure and 30% of it was wasted. What happened? You still saved yourself from a recession, you kept people employed during an economic slowdown and you made $700 billion in infrastructure improvements -- a more efficient electric grid, improvements at ports to allow for greater U.S. shipments abroad when the global economy picks up. There are things the Chinese can learn from the U.S. about Democracy, but there is a lot we should learn from the Chinese instead of attacking them and blaming them all the time.
KR: What about the currency issue? The currency has strengthened over the last several years, yet our trade deficit with China keeps getting larger. Washington still seems to think that if China would only strengthen the renmimbi faster, the deficit will balance out.
FN: They're wrong. The U.S. has to get China to buy more stuff from us, but there's a lot of bureaucratic problems involved in that, such as intellectual property rights, for example. It's improving. Our exports to China are increasing.
KR: China isn't going to listen to a word Washington says about its currency, right?
FN: They are not going to do anything to ever look like they are succumbing to foreign pressure. Ever. Period. Consider this, why would China want to put the value of the renmimbi in the hands of the market when in their view -- and this is not hard to understand -- the market has mispriced assets consistently over the last several years. Is the market really that brilliant? Their record on pricing currency and derivatives is abysmal. Look where the mortgage backed derivatives crisis took us in 2008.
KR: How is the China housing bubble different than the U.S. housing bubble.
FN: I've foreclosed on houses in China before. But this is rare. There is no subprime. There is no such thing as no money down, or CMOs. Chinese consumers are not over-leveraged.
KR: When I lived in Brazil last year, you'd see blocs of new high-rise luxury apartments going up. Cranes. Skeletal buildings, with for sale signs on them for years and no buyers. Developers went bankrupt, but it didn't bring down a city, let along a national economy. I imagine it's the same in China. You've heard about the vacant apartment buildings, the "ghost cities." Concerning?
FN: For all the press that's given these vacant apartment buildings littering Chinese cities, I have to say that there is not many of them. Those properties were mostly bought as investments or for future retirement. Big developers bought the land to those buildings years ago, when land values were cheap so they are dealing with sizable profit margins and can revalue the properties lower if they had to without a loss.
KR: What's your scenario for China banks if there is a crisis there?
FN: Ten years ago, China's biggest banks were all in trouble so the government created this asset management company that acquired all of these toxic assets, similar to what the U.S. would do years later. The balance sheets on the big four banks improved, and the debt was cleared. The government owned asset management company still holds the bad debt and slowly it is paying interest and principal, but it just keeps rolling that debt over. A loan that was due in 2012 gets pushed back to 2015 and so on. It could go on forever.
KR: The takeaway in your U.S.-China comparison is that the U.S. government should invest in job creation at a time like this, as China has done to develop a middle class society. Dick Cheney: Deficits don't matter.
FN: Washington has to stop squabbling over the ideological stuff. I don't like intrusive government either, but I do think we need some infrastructure projects. The U.S. is too afraid of deficits, but that's mostly politically motivated. Under Bush, the total amount of Treasury debt held by individuals went from $3 trillion to $7.5 trillion and nobody was worried about it. We demonize it now because it is political. We shouldn't demonize it. There is an appropriate time to use deficit spending. Ten years from now, the U.S. economy might be hot. You need to have the air conditioner ready. China's built and continues to build their cooling system, so when the economy is hot, it can cool it off, and when the economy is cold, it can heat it up. Sometimes they get it wrong, but I would argue that so far their track record has been perfect.
By Kenneth Rapoza | Forbes – 2 hrs 33 mins ago...
Betting against China is as unwise as betting against the Fed.
For much of the last 20 years, economists have forecast the demise of the Chinese economy. It seems to be lost on them that since the global economic crisis of 2008, the Chinese economy has grown a combined 40%. Meanwhile, the U.S. economy has grown by a wimpy 0.5%. China bears have predicted a Chinese equity market crash every year for the past 20 years and every year they have been wrong. China stocks have grown by an average of 7% each year and rose by 9% in 2008.
Frank Newman is probably the only American to ever run a Chinese bank and a large American bank in his career. Newman ran the Shenzhen Development Bank for five years, ending in 2010. Prior to that, he worked as a CFO at Bank of America and was a former CEO at Bankers Trust. I spoke with him recently about Chinese banking, the real estate bubble and his new book "Six Myths That Hold Back America: What America Can Learn From The Chinese Economy."
"The Chinese stock market has done poorly this year, but that has been an emerging market phenomenon not a China one," he says. Newman also worked Deputy Treasury Secretary under President Bill Clinton. China equities underperformed the S&P 500 year-to-date, but despite warning of a pending blow out in housing and Chinese banking, the popularly traded iShares FTSE China (FXI) exchange traded fund is down 15% compared to the MSCI Emerging Markets (EEM) ETF which is down 16%. The main Russian (RSX), Brazilian (EWZ) and Indian (EPI) ETFs are all down by more than 21%. China beats them all.
The country continues to flip-off the naysayers.
Are you a man...or a mouse?
Deng Xiaoping, former head of the Communist Party and one of China's reformist economic leaders, once said that it doesn't matter whether the cat is black or white, so long as it catches the mouse. China is catching the mouse. Europe's cat is stuck in a tree and the fire departments of the European Union can't figure out how to get her down. America's fat cat is mowing down on something entirely different than rodent, though not in much healthier shape for it.
As the core Western economies try figuring out what economic polices to employ, it is worth understanding how China's economy has done so well over the years.
China has developed an economic strategy utilizing government controlled investment and exports. However, much of China's economy is driven by the private sector, not by state owned enterprises. Business in China is largely conducted through corporations and millions of small to mid sized companies that are growth oriented and -- depending on the sector -- innovators.
The government's investment strategy was on fixed infrastructure and manufacturing capabilities. In some ways, everyone in China benefited even if their core business was working as a cobbler outside a tier three city in central China. Beijing fostered development of the private sector and used other means, including government sponsorship of large scale industrial companies to build capacity, employing labor brought into the cities from the countryside. The chain of transactions flourished so that each block of spending by the government led to a chain of consumer spending as well as private sector development of businesses to provide goods and services along the chain. The cobbler gets more shoes to fix, therefore he makes more money.
"Let's say that people in the U.S. conclude that they need a new bridge somewhere. And China also concludes that it needs a bridge to get a train over a river. In the U.S., the bridge would likely involve a toll system, under which the projected cash flow would cover the construction costs, maintenance and bond interest to build the bridge. In China, the plan would be nearly identical. But in America, there would be a problem with financing. The state where the bridge is to be built has no money. Washington can't finance it because there will be political opposition due to the deficit. Therefore, the bridge never gets built," says Newman. "In China, there is no concern over deficit spending, especially it there was high unemployment. Beijing would see to it that the needed labor was hired, workers would get jobs, and the country's infrastructure would improve, making it more competitive for the future. The government would have a special entity created to own and operate the bridge and would arrange for one of the Big Four banks to fund it outright. The bridge would be built and there would be no increase to the deficit because the government would classify the costs as investment, not expenditure. So China would have better roads and bridges while the U.S. has worsening roads and bridges because of its fears about debt. "
Newman makes clear in his book that he is not recommending Washington become a one-party town, but that U.S. fears over its deficit are holding the country back during a time of high unemployment. Those concerns do not trouble China, and that's one of the ways China's economy keeps on growing.
Newman and I spoke specifically about China banks and real estate during his brief stay Stateside. He lives in Hong Kong.
KR: Some in the market are concerned that non-performing loans are increasing in China.
FN: The banks in China are in far better shape than the people outside the country realize. Non-performing loans at Shenzhen Development Bank when I got there were around 20% of our loan portfolio and when I left they were just 0.5%. We didn't take on a lot of commercial real estate risk, and I am sure that a lot of banks will see their non-performing loans (NPL) rise because of that risk. No one knows for sure the NPLs in China, but from my point of view, whenever problems arise in China, the government has been able to move quickly. That's not a comment on the country's politics. It's just how the economy works. A lot of people don't realize that fully.
KR: I get the sense that Beijing will fight tooth and nail to prevent a banking crisis.
FN: Listen, the Chinese government does not want a banking crisis and the Chinese government will therefore not have a banking crisis. The government sets the rules. There is no political squabbling about how to manage this.
KR: Is there a problem in the banking sector?
FN: NPLs are coming down as a whole and are low by international standards. Working capital is solid. Regulations are very tough. I'm not making this up from an analysts desk in New York. I dealt with regulators for five years. They have pushed the banks to prepare for non-performing loans because of the possibility of mid-sized and small real estate developers going bankrupt. They've required banks to increase their provisions for bad loans. If your bank's model for non-performers suggests you could lose a billion, you need to have two billion reserved in a special account to cover it.
KR: Losing a few real estate developing companies will mean more layoffs at a time when the economy is slowing.
FN: Yes, some small and midsized developers could fail. You can't save them all. China is slowly reforming its economy and when it comes to the private sector, business plans can go wrong. It happens.
KR: What if there is a surprise and larger companies fail because of government investment projects got built and no one used them.
FN: I think most of the projects were not a waste of money. Shenzhen improved their subway system, now millions more people are using it. They've done this in other cities, too, and now have a better subway system than we have in the U.S. Let's assume the government spends $1 trillion on infrastructure and 30% of it was wasted. What happened? You still saved yourself from a recession, you kept people employed during an economic slowdown and you made $700 billion in infrastructure improvements -- a more efficient electric grid, improvements at ports to allow for greater U.S. shipments abroad when the global economy picks up. There are things the Chinese can learn from the U.S. about Democracy, but there is a lot we should learn from the Chinese instead of attacking them and blaming them all the time.
KR: What about the currency issue? The currency has strengthened over the last several years, yet our trade deficit with China keeps getting larger. Washington still seems to think that if China would only strengthen the renmimbi faster, the deficit will balance out.
FN: They're wrong. The U.S. has to get China to buy more stuff from us, but there's a lot of bureaucratic problems involved in that, such as intellectual property rights, for example. It's improving. Our exports to China are increasing.
KR: China isn't going to listen to a word Washington says about its currency, right?
FN: They are not going to do anything to ever look like they are succumbing to foreign pressure. Ever. Period. Consider this, why would China want to put the value of the renmimbi in the hands of the market when in their view -- and this is not hard to understand -- the market has mispriced assets consistently over the last several years. Is the market really that brilliant? Their record on pricing currency and derivatives is abysmal. Look where the mortgage backed derivatives crisis took us in 2008.
KR: How is the China housing bubble different than the U.S. housing bubble.
FN: I've foreclosed on houses in China before. But this is rare. There is no subprime. There is no such thing as no money down, or CMOs. Chinese consumers are not over-leveraged.
KR: When I lived in Brazil last year, you'd see blocs of new high-rise luxury apartments going up. Cranes. Skeletal buildings, with for sale signs on them for years and no buyers. Developers went bankrupt, but it didn't bring down a city, let along a national economy. I imagine it's the same in China. You've heard about the vacant apartment buildings, the "ghost cities." Concerning?
FN: For all the press that's given these vacant apartment buildings littering Chinese cities, I have to say that there is not many of them. Those properties were mostly bought as investments or for future retirement. Big developers bought the land to those buildings years ago, when land values were cheap so they are dealing with sizable profit margins and can revalue the properties lower if they had to without a loss.
KR: What's your scenario for China banks if there is a crisis there?
FN: Ten years ago, China's biggest banks were all in trouble so the government created this asset management company that acquired all of these toxic assets, similar to what the U.S. would do years later. The balance sheets on the big four banks improved, and the debt was cleared. The government owned asset management company still holds the bad debt and slowly it is paying interest and principal, but it just keeps rolling that debt over. A loan that was due in 2012 gets pushed back to 2015 and so on. It could go on forever.
KR: The takeaway in your U.S.-China comparison is that the U.S. government should invest in job creation at a time like this, as China has done to develop a middle class society. Dick Cheney: Deficits don't matter.
FN: Washington has to stop squabbling over the ideological stuff. I don't like intrusive government either, but I do think we need some infrastructure projects. The U.S. is too afraid of deficits, but that's mostly politically motivated. Under Bush, the total amount of Treasury debt held by individuals went from $3 trillion to $7.5 trillion and nobody was worried about it. We demonize it now because it is political. We shouldn't demonize it. There is an appropriate time to use deficit spending. Ten years from now, the U.S. economy might be hot. You need to have the air conditioner ready. China's built and continues to build their cooling system, so when the economy is hot, it can cool it off, and when the economy is cold, it can heat it up. Sometimes they get it wrong, but I would argue that so far their track record has been perfect.
Bloomberg has another article about china-based hacking
what do you think of it? there is no doubt that there is economic benefits to china engaging in cyber espionage. But the question is, what is its true scale? and what will be the consequences in the long term?
what do you think of it? there is no doubt that there is economic benefits to china engaging in cyber espionage. But the question is, what is its true scale? and what will be the consequences in the long term?
Equation
Lieutenant General
Doh! There goes GM and Ford stock values and profits.
CottageLV
Banned Idiot
What most foreigners don't understand is the Chinese culture. I understand that European culture believes in achieving the goal through any means possible. But the Chinese values reputation very highly, almost to a perverted level. Something like this would degrade and taint the reputation of the nation and its government.
This would be like a bunch of grandpas ordering kids to steal bikes from other kids, which is dumb and highly unlikely.
However, another possibility is very likely to happen, which is coming from the angry youth within the population. This happens every time when some heated clashes between Sino-American relationships, such as the bombing of Chinese embassy in Belgrade, the spy plane collision in the South China Sea, the recent spy ship collision and so on. This is not just done in China, but in countless homes around the world, when angry youth are mad of other countries and want to take actions, they turn on their computers and began hacking.
Schumacher
Senior Member
As Iraq frees itself from foreign invasion & occupation, China is playing a part in rebuilding the country.
Chinese firm signs $1.2b deal for Iraq power plant
Baghdad seeks to meet growing demand
Bloomberg
Published: 00:00 December 16, 2011
Baghdad: China Machinery Engineering Corp (CMEC) signed a $1.19 billion (Dh4.37 billion) contract to build a 1,260-megawatt power station in Iraq, an Electricity Ministry spokesman said.
The Beijing-based company will install the natural-gas-fired plant in the Salahuddin governorate north of the Iraqi capital in 45 months, Mussab Serri said in an interview during the signing ceremony yesterday in Baghdad.
The ministry also signed contracts valued at a total of $69.8 million yesterday with Farab Co and another Iranian company to double the generation capacity of the gas-fired Sadr plant in Baghdad to 640 megawatts within 12 months, he said.
Iraq's power plants and distribution network have suffered from years of conflict, sanctions, insurgent attacks and underinvestment. ......................................................................
Chinese firm signs $1.2b deal for Iraq power plant
Baghdad seeks to meet growing demand
Bloomberg
Published: 00:00 December 16, 2011
Baghdad: China Machinery Engineering Corp (CMEC) signed a $1.19 billion (Dh4.37 billion) contract to build a 1,260-megawatt power station in Iraq, an Electricity Ministry spokesman said.
The Beijing-based company will install the natural-gas-fired plant in the Salahuddin governorate north of the Iraqi capital in 45 months, Mussab Serri said in an interview during the signing ceremony yesterday in Baghdad.
The ministry also signed contracts valued at a total of $69.8 million yesterday with Farab Co and another Iranian company to double the generation capacity of the gas-fired Sadr plant in Baghdad to 640 megawatts within 12 months, he said.
Iraq's power plants and distribution network have suffered from years of conflict, sanctions, insurgent attacks and underinvestment. ......................................................................
Schumacher
Senior Member
You need to learn to be less sensitive. We have entire threads of 'politics' here like
http://www.sinodefenceforum.com/mem...n-accused-stabbing-s-korean-offical-5817.html
http://www.sinodefenceforum.com/members-club-room/euro-crisis-5764.html
Not to mention 'political' posts disguised as a 'photo' posts.
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