bladerunner
Banned Idiot
Not at all China seeking market status was to prevent other countries taking punitive action against her exports. You were the one that asked the question about whether China was pointing a gun at them.
Chinese Economics Thread
- Thread starter Norfolk
- Start date
AssassinsMace
Lieutenant General
More info the liars want to keep a lid on. I especially love the comments section where those who think this just says China is less a significant player in the global economy. Really? China is still the No. 2 economy in the world where these people thought before was because China profited from these products. That hasn't changed. What it says and which they will be in denial is it shows how much stronger the economy is without them which was thought was dependent on them for everything.
Last edited:
AssassinsMace
Lieutenant General
Really? Then mine was on topic.
bladerunner
Banned Idiot
As I remember the original spin stated that only the lower tech stuff would be off shored, high tech design research and manufacture would remain at home. That promise is fast disappearing.
SEcondly the writer conviently ignored the fact that Chinese exports consists of more than just manufacturing for Western brand names.
Last edited:
Geographer
Junior Member
What you really need to pay attention to in determining who the profits go to is ownership. Even if Apple has research centers and manufacturing in China, if it's still owned primarily by Americans that is where the profits will flow. Conversely, if it loses money, it is better to be the country with the factories and research centers than the owners.
China has very few international brands or companies. Only Lenovo is a world-famous Chinese company. China has plenty of companies, but they have historically done sub-contract work for companies like Apple, Intel, etc., never designing their own products or marketing them abroad. This is a significant challenge for China's development into an advanced economy, because if they don't, they will always be the bridesmaid to larger, more famous, more innovative, and profitable companies. China seems to be taking the route of Lenovo in buying foreign brands, just like Lenovo did with the PC division of IBM. I recall some European car brands recently going to Chinese companies. There is nothing wrong with that. Their new owners still have to keep the strong brand going, though. Lenovo has maintained the strength of the ThinkPad brand, for example, and leverage it to expand its profile all over the world.
AssassinsMace
Lieutenant General
How is any of it China's fault? The most important factor is it's the foreign corporation that makes these decisions to outsorce any of these jobs. It's like esteemed journalist Robert J. Samuelson of the Washington Post who just looked at a list of countries who had direct and indirect connection to the 2008 finanacial crisis and chose just China to blame because it bought US Treasuries which he says made home loan interests low and thus caused the housing market to collapse. Pay no mind that these banks had 100% power to deny people who couldn't afford to buy a home a loan. Or like in many of the cases helped input false information so these people could get qualified for a loan. Again, it's like if an oil company was blamed because a drunk driver hit and killed a little girl with a car. If the oil company didn't produce the gas so the drunk driver could use to drive and kill with his car, it wouldn't have happened. What ever happened to taking responsibility of one's own actions? And then three years later Samuelson writes in his column that blaming China for the West's problems is foolish.
cn_habs
Junior Member
Throw away society?
Endless deregulation and money printing to repay your current debt will slowly eat the middle class away bit by bit. What did the ECB just did last week creating 439 billion Euro out of thin air? Have you watched "Inside Job" yet? Even a great value investor/crook like Buffet called out derivatives as WMD. It's quite ironic that the man who larged started this financial mess by creating the fiat currency and the FED is considered as one of the greatest presidents of the US in the modern era. Donald Regan.
The difference is that the Chinese people know that their government officials are shameless and arrogant thieves while the Western middle class find it unthinkable/impossible that they could been robbed by banksters in a democratic society.
Kurt
Junior Member
Let's see some things from another angle. China was a country under heavy influence of the Soviet planning on how to manage human and industrial management. The major problem of this system were low per capita productivity and lack of fashionable goods. The strength of this system was its excellent education in basics as well as natural sciences and mathematics. Of course that's a simplification, but I think it serves our analyses well and true.
Unlike other countries with a similarly structured human and industrial infrastructure China started early and small scale to use her well educated workers on small scale experiments for higher per capita output of goods they could sell on an international market. An essential political step for this was quite totally breaking friendly realtions with the Soviets and becoming a partner of the American led camp. We mainly think about Chinese sweatshops, but setting up these efficient production entities provides examples and transfer know-how and education for own development. It took them yet several decades and more than a generation until China reached a cultural level that allows them to set their sight on over more complicated projects because they have constantly developed their human capital. this development includes a rational to bear current circumstances because constant progress and an improved life are imminent.
Chinese have an astonishingly positive outlook on the future. They see it as full of chances and this believe in possibilities now spurns economic development, including the crucial step towards own creative ideas. We should neither over nor understate foreign influence on China, this country has thoroughly been confirmed by adopting the best during more then a century of struggles to form a new proud self-identity from a shattered world view that had led them for centuries. So the two European cultural inputs from West and East have brought to fruit the own inspired dream of the Chinese. You most certainly can't stop such a development as soon as a society has within developed a suitable knowledge to solving today's problems.
Just to make a contrast, Pakistan (supplying much of the workforce) and the Arabian Persian Gulf states have not developed their human capital and institutions to a similar success as China and if their oil runs dry, they will only depend on really exploited foreign immigrants to run their economies. Despite that these countries have an officially higher per capita wealth than China and many European countries, well, they lack constructive ideas.
In this sense I argue that the Chinese will earn a living equivalent to their capabilities to shape the world with their goods, everybody does, but some societies are more and some less efficient in organizing themselves for success on this field. It should be added that extreme success in a narrow field of economics might not make people have a better living unless they take other issues into account to achieve the live they want to live. From my perspective the environmental price of current developement doesn't seem to be as much adressed in developing countries, including China, as in developed countries and will pose great longterm costs for compareably small short-term benefits.
Unlike other countries with a similarly structured human and industrial infrastructure China started early and small scale to use her well educated workers on small scale experiments for higher per capita output of goods they could sell on an international market. An essential political step for this was quite totally breaking friendly realtions with the Soviets and becoming a partner of the American led camp. We mainly think about Chinese sweatshops, but setting up these efficient production entities provides examples and transfer know-how and education for own development. It took them yet several decades and more than a generation until China reached a cultural level that allows them to set their sight on over more complicated projects because they have constantly developed their human capital. this development includes a rational to bear current circumstances because constant progress and an improved life are imminent.
Chinese have an astonishingly positive outlook on the future. They see it as full of chances and this believe in possibilities now spurns economic development, including the crucial step towards own creative ideas. We should neither over nor understate foreign influence on China, this country has thoroughly been confirmed by adopting the best during more then a century of struggles to form a new proud self-identity from a shattered world view that had led them for centuries. So the two European cultural inputs from West and East have brought to fruit the own inspired dream of the Chinese. You most certainly can't stop such a development as soon as a society has within developed a suitable knowledge to solving today's problems.
Just to make a contrast, Pakistan (supplying much of the workforce) and the Arabian Persian Gulf states have not developed their human capital and institutions to a similar success as China and if their oil runs dry, they will only depend on really exploited foreign immigrants to run their economies. Despite that these countries have an officially higher per capita wealth than China and many European countries, well, they lack constructive ideas.
In this sense I argue that the Chinese will earn a living equivalent to their capabilities to shape the world with their goods, everybody does, but some societies are more and some less efficient in organizing themselves for success on this field. It should be added that extreme success in a narrow field of economics might not make people have a better living unless they take other issues into account to achieve the live they want to live. From my perspective the environmental price of current developement doesn't seem to be as much adressed in developing countries, including China, as in developed countries and will pose great longterm costs for compareably small short-term benefits.
Arithmetic and algebra are different things. And Roman numerals were not used for arithmetic. The Romans use the abacus, I understand originally a sandy area on which you made you calculations moving stones, to do their calculations. Only the results were noted in their very awkward numerals.
Geographer
Junior Member
First of all, increasing the money supply to stimulate demand during an economic recession is standard monetary policy. Inflation in the euro zone and United States is very low. Moreover, long-term yields of German and America sovereign debt are very low, indicating that investors do not fear long-term high inflation.
1 year bond yield 0.12%
5 year bond yield 0.92%
10 year bond yield 2.03%
1 year bond yield -0.03%
5 year bond yield 0.84%
10 year bond yield 1.92%
Those are extremely low yields. Why would investors loan money to the American and German governments if they feared high inflation and devalued currencies in the future? The bonds are paid back in the national currencies. These low interest rates demonstrate investor confidence in the American and German (and to a lesser , the euro zone) economies.
Inflation in the United States is 3.4% annually as of November 2011, and in the euro zone it is 3%, both according to TradingEconomics.com.
Second, China has also increased its money supply! According to the People's Bank of China, the M1 money supply (cash and coins + checking accounts) increased 16% in 2010, 370,000,000,000 yuan. A lot of that went to buy foreign assets like USD and US Treasury bonds, though. But in order to buy USD, you have to sell yuan, putting downward pressure on the yuan. This is how China maintains its ~6.5 yuan = 1 USD peg. A weaker currency makes imports more expensive, increasing inflation. China has a much greater threat of inflation than America or Europe.