Chinese Economics Thread

[Martian]

My comment on TIME (from 8 days ago).

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[ahho]

I wonder why more Chinese cities don't introduce congestion charges. This will help them to raise revenue and reduce traffic and pollution. So far i only heard of beijing doing it.

Well they did and in a stupid way. For example, Guangzhou have limit the number of licence plate and from what I remember, the plate goes up to almost $100,000.00 RMB. If you want to replace your vehicle, you can only replace it with a vehicle with the same or lower displacement. In China a microvan or a cheap car goes around $9000~$30,000. Most people that buy the cheaper vehicles uses it for work (transportation of goods or car pooling). Guangzhou is also planning to ban entrance of vehicle coming from outside the city. A lot of business use their personal transportation to bring their goods to the city, this could really dampen the economy.

IMO, I think they really should un-ban motorcycle and enforce the traffic law more heavily on people that disobey it. A lot of middle class really don't mind riding motorcycles if it gets to the destination faster and more leisurely.

To give you an idea how bad the traffic is in Guangzhou, crossing the river could take almost an 1 hour. If I travel from Guanzhou to Jianmen it only take average 1 hour 30 minute.

 

[antiterror13]

In graphics: Chinese economic data in 2013

very impressive

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[kroko]

It appears that china debt will just keep growing.

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Instead of deleveraging, reducing the annual growth target of 7,5% to 7% for exemple (which would still be very strong for a 8 trillion economy), they keep the same path that has lead to the enormous debt that china currenly has. They have to realize that debt-fuelled growth is not "stable growth". When they wake up, it will be very bad for the economy.

China is heading for a financial crisis.

 

[Lezt]

It appears that china debt will just keep growing.

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Instead of deleveraging, reducing the annual growth target of 7,5% to 7% for exemple (which would still be very strong for a 8 trillion economy), they keep the same path that has lead to the enormous debt that china currenly has. They have to realize that debt-fuelled growth is not "stable growth". When they wake up, it will be very bad for the economy.

China is heading for a financial crisis.

The financial crisis will come, but I highly doubt that it would be from debt.... especially when people are still buying houses and cars purely based on hard cash. There are minimal debt generating social welfare programs that plague China to date than the West+Japan

But yeah, there is more than what meets the eye than the simple generalization as the Chinese economy had always been debt free in comparison to the western ones so to cry it as a debt fueled growth is rhetoric.

 

[Zerozen]

The financial crisis will come, but I highly doubt that it would be from debt.... especially when people are still buying houses and cars purely based on hard cash. There are minimal debt generating social welfare programs that plague China to date than the West+Japan

But yeah, there is more than what meets the eye than the simple generalization as the Chinese economy had always been debt free in comparison to the western ones so to cry it as a debt fueled growth is rhetoric.

In economics, debt is good as long the debtor keeps paying periodically to keep books rolling, without it default stops the books.

 

[Franklin]

It seems that the anti corruption drive in China is having an effect as prices from luxury watches, hotel rooms and cars are all falling as officials spend less. But the last part of this article is LMAO.

China austerity campaign knocks official spending in 2013

A campaign against Chinese government excess took major bites out of spending on official meetings, travel and vehicles in 2013, the Communist Party's chief disciplinary body said.

The Central Commission for Discipline Inspection (CCDI) said in a statement money spent on meetings, official overseas trips and vehicle purchases fell by about 53 percent, 39 percent and 10 percent respectively from 2012.

The Chinese leadership under President Xi Jinping has been publicizing efforts to crack down on wasteful government spending and corruption to shore up its mandate to rule, which has been shaken by suspicion that officials waste taxpayers' money on extravagances even as economic growth slows.

Anti-corruption chief Wang Qishan on Saturday called for efforts to innovate disciplinary inspection and make it "the Sword of Damocles" that will hang over officials' heads, the official Xinhua news agency reported.

The commission is preparing to investigate numerous government agencies this year, including the Ministry of Science and Technology, Shanghai-based Fudan University, state-owned China National Cereals, Oils and Foodstuffs Corporation (COFCO), the Xinjiang Production and Construction Corps and other regional governments including that of Beijing city, Xinhua said.

Wang asked inspectors to keep a "sober mind" as the situation of the country's anti-corruption fight remains "grave and complicated", Xinhua added.

He urged inspectors to earnestly perform their duties, adding that those who "turn a blind eye to violations will be held accountable".

But Wang made no mention of specific cases, such as that of retired former domestic security chief Zhou Yongkang, who sources have told Reuters is the target of a corruption probe.

The government has yet to make any announcement about Zhou, though Beijing has confirmed the downfall of several of his allies, including Jiang Jiemin, briefly top regulator of state-owned enterprises, and former Vice Minister of Public Security Li Dongsheng.

The crackdown has damaged the business of many high-end restaurants and hotels, in particular in Beijing, and has also caused concern that a decline in government fleet vehicle purchases will reduce revenues at foreign luxury automobile makers.

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[Piotr]

China is becoming more and more attractive to foreign investors.

Russia's richest man Usmanov ditches Apple and Facebook for China
Russia’s biggest billionaire has bought shares in big Chinese internet retailer Alibaba, after selling his stakes in US tech giants Apple and Facebook. The deal comes as the West imposes sanctions on Russia, that could spread from politics to business.

Usmanov, 60, a founder of Russia’s iron ore Metalloinvest holding company, has an estimated fortune of $18.6 billion as of March 2014 and is increasing his bet on China, while selling American assets.

“Chinese companies account for about 70 percent to 80 percent of the portfolio of our foreign internet investments,” Ivan Streshinskiy, head of Usmanov’s asset-management company USM Advisors LLC, told Bloomberg in an interview in Moscow.

In the last few months Usmanov sold the stake in Apple he bought for about $100 million last year, Streshinskiy said.Prior to the Apple sale the Russian tycoon started a gradual sale of his 10 percent stake in Facebook he bought in 2009, when the company was valued between $6 billion and $10 billion. Usmanov sold some of the shares in the Facebook IPO, that valued the company at $104 billion.

Alibaba, the world’s second biggest internet company after Google Inc., is valued at about $200 billion, as Bloomberg cites an investment bank data. The Chinese on-line retailer posted surging sales in the three months through September, marking fourth straight quarterly profit.
China’s safe harbor

As Russia’s relations with the west sour over the Crimea referendum and the crisis in Ukraine, Usmanov says his Metalloinvest holding would increase its presence in the Chinese market, in case Europe imposes sanctions on its exports.

“We are concerned with the possible sanctions against Russia but don’t see any dramatic repercussions for our business,” Streshinskiy said. “China is unlikely to impose any sanctions. So, we will be trading in rubles, yuan, Hong Kong or Singapore dollars.”

On Monday the EU and the US imposed sanctions against some leading Russian officials, which include visa bans and asset freezes for presidential aide Vladislav Surkov and presidential adviser Sergey Glazyev. No Russian corporate assets have so far been affected.

China is one of Russia’s biggest trading partners, with bilateral trade estimated at a record $87.5 billion in 2012.

Over the past years the two countries have been actively strengthening economic ties, with direct investment by Chinese companies into Russia increasing 40 times, to reach S4.9 billion between 2004 and 2012, according to Tang Hua, an official with China's National Development and Reform Commission.
Taking an investment opportunity in a crisis

One of Russia’s key indices - the MICEX – has lost about 15 percent since the start of the unrest in Ukraine and the protests in Kiev.

Though on Monday Russia’s exchanges reacted positively to the results of the Crimea referendum, they could see a further fall in the longer term, Streshinskiy said. If this is the case, Usmanov may buy some shares of the wireless operator MegaFon and internet company Mail.ru Group.

“Mail.ru and MegaFon revenue is coming from Russia and people won’t stop making calls and using the internet,” Streshinskiy said. “If the events further escalate, we will be buying shares. A crisis is always a good opportunity as valuations become cheap.”

Source:

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I think China will soon be world's biggest economy.

 

[AssassinsMace]

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It's interesting that the vanguards of capitalist market principles seem to want ignore them when it comes to China. Meaning they only believe in whatever they hold out as their values just as long as they benefit the most from it. Some want to poke China in the eye but they don't want anything that they benefit from China to negatively be affected as a result. China is told not to mix politics and trade yet that's what is always done to China when they want something.

I think it was Wal Mart that thought up the idea that the customer knows best and Americans have embraced that idea and used it for consumer activism. Hollywood wants China to watch their movies yet they refuse to make any significant moves to make their movies appealing to Chinese audiences. That's fair but don't then expect Chinese to go watch them. But somehow Hollywood cries foul and accuses conspiracy when Hollywood movies don't reign over Chinese domestic competition. There are those that accuse China of unfair trade practices yet Chinese companies don't have a significant presence in their countries. Do we see Chinese movies reigning over Hollywood movies in the US to then accuse unfair trade practices? They hide that little fact just like Made in China doesn't mean Profited by China to which how trade is being calculated to then accuse China of unfair trade practices. It's said that the Japanese auto industry started beating the US because there was a culture over in Detroit that they made cars without thinking about what the consumer wanted. That was the difference with Japan because they were tuned in more on what the market wanted to which is how they took over.

 

[broadsword]

BYD’s Qin plug-in hybrid the best selling automotive EV in China
21 March 2014
Tech6


2nd-generation Dual Mode (DM II) plug-in hybrid system of the Qin.

BYD’s second-generation Dual-Mode, plug-in hybrid electric sedan Qin has posted a second month of strong sales in February. Trends in March now make it “China’s Best-Selling Electric Vehicle” according to China’s National Passenger Car Association. In the first weeks of 2014, more than 6,000 Qin vehicles were sold, accounting for more than one-half of the Chinese new-energy vehicle market.

Analysts are not expecting sales to slow, as both Shanghai and Beijing announced earlier this month that they will now permit BYD new energy vehicles to qualify for local municipality green-vehicle incentives and be licensed in those regions.
Qin


BYD’s Qin.

The Qin combines a 1.5-liter, turbocharged, direct-injection 4-cylinder, 113 kW (152 hp), 240 N·m (177 lb-ft) engine with a 110 kW (148 hp), 250 N·m (184 lb-ft) electric motor; combined system power is 217 kW (291 hp) maximum with 479 N·m (353 lb-ft) maximum torque. The system uses a 6-speed DCT transmission. A 13 kWh Li-ion battery pack provides energy storage.

Compared to the first generation of the dual-mode PHEV drive system (DM I), DM II features a larger displacement engine (1.5L turbo, direct-injected up from a 1.0L naturally aspirated engine), with power increasing to 113 kW up from 50 kW (67 hp).

The voltage of the electric motor has increased from 330V to 500V, and power output from the motor has increased from 75 kW to 110 kW. Maximum rotation speed of the motor has also increased from 6,000 rpm in DM I to 10,000 rpm in DM II. The overall drive efficiency of DM II has increased by 7%, according to BYD.

Acceleration from 0 to 100 km/h takes 5.9 seconds. BYD says that fuel consumption is 1.6 l/100 km (147 mpg US), with an all-electric range of 70 km (43 miles).

The Qin is only the first of multiple of BYD electric vehicles launching as the electric version of the S7-styled SUV—internally named the Tang—is set to be released later this year. The Qin is currently available to domestic Chinese and Latin American markets and senior officials at BYD have discussed expanding exported versions of these new energy vehicles in the coming years.