Chinese Economics Thread

[AssassinsMace]

I'm watching Obama's State of Union speech right now and he just mentioned how China wants to write the rules of trade in the fastest growing region in the world but sternly called for the US to write them. He didn't mention what region by name. Demanding that the US dictate the rules works well for the home audience but if he actually mentioned that the US gets to write the rules for Asia, it sounds like an arrogant outsider dictator.

 

[AssassinsMace]

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See... Obama in his speech did not name Asia. He just said the fastest growing region in the world. Read the comments and people know and see the arrogance of saying the US must write the rules for Asia.

 

[broadsword]

Obama must have found the bitter pill hard to swallow.
Just to quote the first paragraph...

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Is he going to resort to arm-twisting or some false flags?

 

[solarz]

Just going through google news on China, and it's a really hilarious read. When China was growing at a pace over 10%, they cried that China was growing too fast and that its economy was going to collapse. Now that China's pace has slowed, they're crying that China's economy is diving and that it's going into recession.

It is just so difficult to find any english language news articles that show a real understanding of the situation in China.

 

[Blitzo]

Obama must have found the bitter pill hard to swallow.
Just to quote the first paragraph...

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Is he going to resort to arm-twisting or some false flags?

That news is from two months ago... Agreeing to a study of the Chinese free trade pact is quite different to agreeing to join it. Not to mention it is still in the very early stages of development compared to the US pact.

 

[AssassinsMace]

Early on there was an article I read talking about how TPP would play out for countries other than the US. Basically what Obama said during his State of the Union speech put it plainly that the US gets to write the rules to have unrestricted access. Obama and US corporations are going to engineer it so they have the power to change the laws in other countries. Something Canadians charged China can do to them with a recent agreement which they say violates their sovereignty. The reason why China is excluded from initial membership is to give China no say and the reason why other countries are willing to join despite the US being able change their own domestic laws is the hierarchy of membership where China's neighbors will have an advantage to dictate to and if China wants to join. If China doesn't join, TPP fails. It's all on the hope China eventually does join. There was another article I read where it said bi-lateral trade agreements are better because you don't have to deal with the types of problems the EU has experience where one country can ruin it all for you. If these regional free trade agreements were so wonderful why didn't all of Asia minus China to do it a lot earlier? Why didn't all Western economies join together much earlier instead of talking about it just now? The biggest potential for growth is where the most can be made. Every other potential member of TPP are export dependent. China has the potential of being the largest consumer market in all categories. Bigger than the US. Western markets are already saturated and developed. That's why China is the prize. If the West had unrestricted access to China early on, there would have never been an Alibaba but instead Amazon would've dominated. There would be no domestic companies because Western companies would've established themselves and destroyed any upstarts. TPP is about stopping independence. If China's strategy were to establish bi-lateral agreements, that could work to undermine TPP. Just look at it like how the Philippines wants to insult China yet they are worried about China leaving them out of its Asia development plans. That's how China should deal with TPP and not entertain joining. Western countries complain that China's economic relations with African countries come with little restrictions. So how is it that the US believes they are better partner when they come with restrictions. If Asian countries are tempted more with China's free trade idea, it's because it less restrictive than the US. Obama can only play the historic Asian nationalism card using the hate and fear of China being the primary player and not because it's a bad deal.

 

[solarz]

Early on there was an article I read talking about how TPP would play out for countries other than the US. Basically what Obama said during his State of the Union speech put it plainly that the US gets to write the rules to have unrestricted access. Obama and US corporations are going to engineer it so they have the power to change the laws in other countries. Something Canadians charged China can do to them with a recent agreement which they say violates their sovereignty. The reason why China is excluded from initial membership is to give China no say and the reason why other countries are willing to join despite the US being able change their own domestic laws is the hierarchy of membership where China's neighbors will have an advantage to dictate to and if China wants to join. If China doesn't join, TPP fails. It's all on the hope China eventually does join. There was another article I read where it said bi-lateral trade agreements are better because you don't have to deal with the types of problems the EU has experience where one country can ruin it all for you. If these regional free trade agreements were so wonderful why didn't all of Asia minus China to do it a lot earlier? Why didn't all Western economies join together much earlier instead of talking about it just now? The biggest potential for growth is where the most can be made. Every other potential member of TPP are export dependent. China has the potential of being the largest consumer market in all categories. Bigger than the US. Western markets are already saturated and developed. That's why China is the prize. If the West had unrestricted access to China early on, there would have never been an Alibaba but instead Amazon would've dominated. There would be no domestic companies because Western companies would've established themselves and destroyed any upstarts. TPP is about stopping independence. If China's strategy were to establish bi-lateral agreements, that could work to undermine TPP. Just look at it like how the Philippines wants to insult China yet they are worried about China leaving them out of its Asia development plans. That's how China should deal with TPP and not entertain joining. Western countries complain that China's economic relations with African countries come with little restrictions. So how is it that the US believes they are better partner when they come with restrictions. If Asian countries are tempted more with China's free trade idea, it's because it less restrictive than the US. Obama can only play the historic Asian nationalism card using the hate and fear of China being the primary player and not because it's a bad deal.

It really boggles the mind that Obama is spending so much time and effort to contain China when ISIS is practically knocking on America's doorsteps.

 

[AssassinsMace]

It really boggles the mind that Obama is spending so much time and effort to contain China when ISIS is practically knocking on America's doorsteps.

It's because like I mentioned before in this forum Obama is all about his legacy and ironically he thought China was easier to manage than all the other world's problems. He's been criticized by pundits for avoiding dealing with the Palestinian/Israeli issue that has always been a major foreign policy issue for every President before him. Why was he avoiding it? Because he knew it would never be solved within his Presidency and thus he couldn't take credit. Obama believes all that nonsense about how China is dependent on the US and will yield under pressure and isolation. Taking on China where his predecessors just talked of doing but never acted as policy... he thought that was going to be a major feather in his cap. All he did was put cracks in the myth of China's dependency. His foreign policy missteps are weird. Like the treatment the Indian diplomat when India is suppose to important. Or on the march in Paris after the terrorists attack... I can only think that he actually believes in his the US is indispensable proclamation that it's made him arrogant and out of touch with reality.

 

[flyzies]

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China will avoid a financial crisis despite growth slowing, Davos hears
Chinese premier Li Keqiang says 2015 will be tough year for economy, but slowdown part of deliberate strategy by Beijing

Chinese premier Li Keqiang has said China would avoid a hard landing as he shrugged off concerns about his country’s

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.

In his keynote address to the World Economic Forum in Davos on Wednesday, Li admitted that 2015 would be a tough year for the economy as it

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.

“China’s economy will face substantial further downward pressure in 2015”, the Chinese premier said as he insisted that there would be no deviation from the focus on structural reform and better-balanced growth.

“At present,

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has entered the stage of the new normal, shifting from high speed to medium to high speed. That makes structural reform all the more necessary.”

China’s economy grew at 7.4% in 2014, its slowest rate since 1990, with the annual growth rate in the fourth quarter of the year just above 6%.

The slowdown is part of a deliberate strategy by Beijing to deal with the problems caused by the enormous stimulus programme introduced after the financial crisis of 2008, which saw credit expansion and large-scale investment in infrastructure.

Li said: “A financial crisis will not happen in China and China will not head for a hard landing.

In answer to a question from the WEF’s founder, Klaus Schwab, Li said that the easing of restrictions on the use of China’s currency, the renminbi, would continue gradually. “Internationalisation is a long term process. China is still a developing country,” he said.

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[Equation]

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Why The China Pessimists Will Be Proved Wrong

China’s 7.4% growth in GDP is the weakest full-year growth rate in more than two decades, and the government’s official growth target last year is missed. But don’t expect an overreaction from the government to boost economic growth in 2015.

The deceleration of economic growth has been accepted in China as the new normal, and it appears that there is a high level of tolerance for slower growth in 2015. China has also been sending strong messages lately that the rebalancing of the world’s second-largest economy will take place in a measured and sustainable way – and, as far as one can see, China is taking careful steps to recalibrate the economy and avert a sharper slowdown in growth.

There is little doubt that the Chinese economy is set for a bumpy ride in 2015. But is it set for a hard landing? No. If we learn from recent history of the management of economic growth in China, the pessimists are once again going to be proved wrong.

Don’t panic
The last time the Chinese economic recorded lower growth rate was in 1990 when it grew by 3.8%. But the new GDP figures have to be interpreted with caution. To put the new GDP figures in perspective, 7.4 is still a relatively healthy growth in the current global economic climate. The Chinese economy remains resilient. As any economist would argue, recalibrating any economy, let alone the second largest economy in the world, often comes with a price tag – slower economic growth.

Looking forward to 2015
Sustainable quality growth is the watchword for 2015. There is a near consensus that China’s economic growth will cool further in 2015. Some analysts are predicting a growth target of about 7.3% this year, but many think the official growth target is more likely to be pegged around an achievable target of 7%. The International Monetary Fund has predicted a growth rate of 6.8%.

There are many reasons for this prediction. The 2014 figures are yet another indicator pointing towards a tamed economic growth in 2015. 2014 was a year of tepid export growth and weaker-than-expected consumer growth and there are no apparent reasons to believe that they are not likely to last well into 2015.

Meanwhile, in the midst of gloomy predictions, the recent free-fall of oil prices is great news for China as the largest net importer of oil. Rock bottom oil prices are expected to lead to lower costs for both businesses and consumers thereby stimulating economic growth in 2015.

But what if … ?
The thing to watch out for in 2015 is the extent to which the measures being taken to stimulate export and consumer demand brings about the desired effects.

If the anticipated reforms – including the expected further cut in the benchmark lending rate and the likely lowering of requirement ratios reserve by the People’s Bank of China – do not work as well as projected, then perhaps unattractive measures may have to be considered to stop growth from sliding further.

There is no way of knowing, for instance, how consumers – one of the main driving forces of the economy – are going to react to lower interest rates.