Chinese Economics Thread

[Franklin]

 

[Franklin]

I'm trying to marry the chart below with the article below. How can inequality in China be worst than in the US based on that chart ? That chart represent the latest information from Credit Suise. One of them have to be wrong.

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[AssassinsMace]

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China tried to undermine economic report showing its ascendancy

By Jamil Anderlini in Beijing and David Pilling in Hong Kong

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China fought for a year to undermine new data showing it is poised to usurp the US as the world’s biggest economy in 2014 based on purchasing power, according to people who helped compile the report.

The report, released this week by the International Comparison Programme under the auspices of the World Bank, included a line stating that the “National Bureau of Statistics of China has expressed reservations about some aspects of the methodology”. Beijing has declined to publish the headline number for China and the report said that the NBS “does not endorse the results as official statistics”.

But, according to those involved in compiling the data, China’s distaste for the findings went further.

“A year ago, there was a huge debate. China wanted to throw this out. They don’t want to be seen as number one. They’re worried about the political implications with the US,” said one person involved in preparing the report. “They begged and threatened for a whole year . . . China hates it,” he said.

The main reason for China’s lack of triumphalism is that leaders do not want exposure to the international pressure that comes with being the world’s largest economy, according to people familiar with Chinese official views on the matter.

“They certainly don’t want to overstate the size of their economy. They are sensitive about that,” said Vinod Thomas, director-general of independent evaluation at the Asian Development Bank, which played a role in compiling Chinese statistics for the report. “The pushback and sensitivity has been muted publicly but, behind the scenes, it’s been there for sure.”

China’s tightly controlled state media did not mention the latest estimates, which were widely reported outside the country. Beijing has often balked at international estimates showing it has taken the global lead in everything from carbon emissions to energy use.

Taking the title as the world’s largest economy, held by the US since 1872, might be seen as a crowning achievement after three decades of rapid economic growth. However, China’s leaders are wary of the added international responsibility that could come with it.

“On a per-capita basis, China is still a very poor country so it does not want to be asked to do too much on the international stage – at least not yet,” said an adviser to senior Chinese policy makers.

At current exchange rates and projected growth rates, China is expected to overtake the US in real terms in about a decade but, even then, the country’s 1.36bn people will, on average, be relatively poor.

According to the latest ICP report, in per capita purchasing power terms China ranks just 99th in the world, while the US ranks 12th.

I love reading the comments from sites posting this article. Clearly some can't compute the meaning of this. Why? Because they're looking at what China wants as the same of what they would want. They want that title so how come China doesn't? They're so use to believing Beijing lies to make China look better, how can Beijing possibly lie to make China look worse? They wouldn't do that. Yeah it is probably a conspiracy to paint China as something it's really not just so they can justify dictating to China its responsibilities. China should stop giving money to the IMF and World Bank if there's resistance from the US and Europe to give China and others a say equal to how much money they contribute. Look at Ukraine where the IMF so easily hands money over for a purely political nature. It's just like their fears over money China invests in Africa. They don't want China to stop. They just want China to give the money to them so they can decide how that money is spent and take credit for themselves. It's just like Hollywood actors and charity. They just get other people to donate money for a cause but in the end it's the Hollywood actor that gets the credit.

 

[Franklin]

The conclusions of this report is based on the fact that China has imported more raw material for semi-conductors (silicon) over a same period compared to the US. Does anyone know how big China's plastic surgery industry is ?

China just surpassed the US in semiconductor manufacturing—and the trend is likely to accelerate

For the first time since the depths of the Great Recession, the the total value of materials consumed by all the world’s makers of microchips was down—2%, to $47.11 billion. But that’s just one of the stories told by data from the annual tabulation of the total value of materials consumed by all the world’s makers of microchips, compiled by industry association SEMI.

Assembling data from SEMI’s last four annual reports—which together cover the past 5 years, a number of trends are apparent.

China is now a bigger consumer of the raw materials used for making microchips than North America is.

This is a huge change from 2008, when China consumed only $3.57 billion of silicon ingots and the other materials used for semiconductor manufacture, compared to $4.99 billion consumed by North America. This means that the number and productivity of plants for making microchips—which are high-investment, high-tech, finished product type manufacturing operations requiring a high level of expertise—are expanding in China even as they decline in North America. Compared to 2008, consumption of semiconductor materials in North America is down $250 million to $4.74 billion, while in China consumption has shot up 42% to $5.07 billion.
The decline of the PC is probably to blame for the overall drop in consumption of microchip materials in 2012.

In 2012, manufacturers shipped record numbers of mobile devices. Demand for set-top boxes and embedded systems (e.g. industrial control systems and the computers that go into cars) remained soft on account of a troubled global economy, but to see a drop in semiconductors shipped in the absence of an outright recession suggests that what’s really going on here is the decline of the PC—and the expensive, materials-hungry processors and memory it incorporates.
Production of microchips in Japan is declining rapidly.

What a difference five years makes. Japan, in 2008 the world’s most rapacious consumer of semiconductor materials, has seen production crash, especially in the 2011-2012 period—down 8% to $8.35 billion. Compare that with nearly $10 billion in 2008.
The harder it is to make microchips, the more consolidation there is in the hands of fewer manufacturers.

From 2011 to 2012, consumption of microchip precursor materials was flat or down in every region except for China and Taiwan. Taiwan has come to dominate this industry, with contract manufacturers like Taiwan Semiconductor Manufacturing Company churning out chips for countless chip design companies that do not own their own manufacturing facilities—including mobile and telecommunications giants like Qualcomm and now, Apple.

What’s going on here is that, as we approach the end of Moore’s Law—which says, essentially, that we can expect microchips to improve at a rapid clip on a predictable timetable—we are reaching the physical limits of current manufacturing. That means factories are more expensive than ever, with price tags into the billions for a single facility. If a manufacturer wants the latest and fastest chip technology, there are only a few companies that can play at that level, and you can count them on one hand: TSMC in Taiwan, Intel and Global Foundries in North America, and Samsung in South Korea.
Consumption of microchips in China is exploding—and more and more of them are being sourced locally.

In 2012, China consumed 33% of the world’s integrated circuits (i.e. microchips) while the US consumed only 13.5%. Much of that, of course, is incorporated into products that will ultimately be exported—like iPhones. China’s share of world microchip consumption came to $137.5 billion in 2012, according to SEMI China. Meanwhile, the total value of microchips produced in China was only $28.5 billion. Closing that gap are companies like Semiconductor Manufacturing International (SMIC), Shanghai Huali Microelectronics (HLMC), Shanghai HuaHong NEC Electronics Company (HHNEC), Grace Semiconductor Manufacturing and Advanced Semiconductor Manufacturing (ASMC).

In the long run, the general emphasis on electronics manufacturing in China, along with this gap between production and demand, indicates that China is, as usual, the sleeping giant in this field. While mainland China’s production of microchips lags behind most other regions, in 2012 it saw the biggest percentage growth in consumption of microchip materials and matched the absolute value of growth in Taiwan, the only other region that saw growth last year.

Here’s the thing about microchips: China’s government views them, rightly, as an important strategic asset. It’s a stretch to compare them to, say, oil, but they are clearly very important in our increasingly connected world. It’s hard to imagine a future in which they are any less important an economic enabler than they are now. So the overall trend in where they are manufactured has implications for everything from national defense to overall competitiveness in high tech.

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[broadsword]

City of Hangzhou orders 2,000 BYD electric buses and 1,000 electric taxis
9 May 2014

BYD Company Ltd. has received a record-setting order for their new energy vehicles from the City of Hangzhou, which is situated in east China along the Qiantang River. The order for 2,000 long-range, battery-electric transit buses and 1,000 long-range, pure-electric cars was signed this week by the Mayor of Hangzhou, Hongming Zhang, and is one of the world’s largest all-electric fleets yet ordered.

In response to China’s deteriorating air quality and ecological environment, Hangzhou’s Leadership has taken a serious stance on combatting the issues by adopting zero-tailpipe-emissions public transportation—i.e., electric buses and taxis.

Hangzhou is home to Alibaba, another high-tech Chinese company.

Today the electric vehicle market is growing and EV technologies have matured to the point where every city transit should be adopting them. The turning point of new energy is now, and we want to see BYD grow the same way we saw Jack Ma’s Alibaba grow years ago.
—Secretary Gong Zheng of Hangzhou’s Municipal Committee

BYD will be making special arrangements to deliver the first 1,000 buses and 500 eTaxis by the end of 2014.

 

[SampanViking]

Confirmed today in Russian Media, Putin goes to Shanghai on May 20th in an official visit as prelude to attending the 4th CICA conference, being held in the city on May 21st. Putin is to meet with Xi and sign; among other agreements, the 30 year Gas Supply Deal.

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[mr.bean]

Confirmed today in Russian Media, Putin goes to Shanghai on May 20th in an official visit as prelude to attending the 4th CICA conference, being held in the city on May 21st. Putin is to meet with Xi and sign; among other agreements, the 30 year Gas Supply Deal.

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the whole world is watching whether that 30year gas deal will be signed or not. if they do sign it, it would be the biggest snub on Obama's effort to sanction russia that's china's answer to Obama's pivot to asia.

 

[AssassinsMace]

This is something you won't see being quoted much.

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[Equation]

This is something you won't see being quoted much.

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Yep I just read that article, funny how some media was anger by China's probing of drug maker GSK for it's involvement in bribing local physicians in China into purchasing their drugs.

 

[broadsword]

Yep I just read that article, funny how some media was anger by China's probing of drug maker GSK for it's involvement in bribing local physicians in China into purchasing their drugs.

The media's denial was epic. Since the first report came out, GSK has been probed in Poland and Iraq for bribery.