Chinese Economics Thread

[Janiz]

Japan lost 2 decades any more because it continually tries to reflate itself and build up more debt.

Japan had witnessed the real economic 'boom' which elevated every citizen to the level not heard by any other nation around the world (aside from Scandinavia) in previous 30 years before that. There's no point to compare mainland China and Japanese people 'stagnation' standard of living... And I doubt that anyone will upvote this post unlike the one I cited. But those are facts.

 

[siegecrossbow]

China builds multiple unit train for Europe


Xinhua, July 8, 2015

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The first advanced multiple unit train to be exported to Europe rolled off the assembly line of China's Zhuzhou Electric Locomotive Co., Ltd on Tuesday. [Photo: Zhuzhou Electric Locomotive Co., Ltd ]
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The first advanced multiple unit train to be exported to Europe rolled off the assembly line of China's Zhuzhou Electric Locomotive Co., Ltd on Tuesday.

The company, located in central China's Hunan Province, is a subsidiary of China's high-speed rail maker CRRC Corp. Ltd.

The motor coach train, colored red and yellow after the national flag of Macedonia, is the first of six such trains purchased by the country, said Chen Xihong, deputy chief engineer of Zhuzhou Electric Locomotive. The first one will be delivered soon.

Vlado Misajlovski, minister of transport and communications of Macedonia, witnessed the finished train rolling off the assembly line in a ceremony held at Zhuzhou Electric.
The train is of great significance to the cooperation of the two countries and for China-European rail transport, said the minister.

Macedonia requires the trains have a speed of 140 km per hour. When designing the train, the Chinese company has adopted technology for speed at 160 km per hour to ensure its operational safety and leave room for future speed hikes, said Chen.

The train has three cars which can carry 280 passengers in total. Its design is in line with the most strict safety standards in Europe.

The train will run on the 215-km-long railway between Tabanovce in northern Macedonia and Gevgelija at its southern border with Greece. The track passes the Macedonian capital Skopje.

It's refreshing to read something unrelated to the stock market crash on this thread.

 

[Brumby]

Who build the artificial environment for the market ? China's goverment ?
If you ever think that China government made an artificial environment to lift the market upside, then how about " big brokerages want to buy in lower prices then spreading the fear among the market so they can buy in nose dive market " idea?
Stock market always up and down.
As you said the winner is fundamental, I absolutely agree. But what is good fundamental and bad ones? The criterias differs significantly across the market.
PE ratio? , Ebitda? , PBV?, NPL? and tons of ratios.
Buying stocks for me is buying the future, not buying the past. Almost all fundamental ratio came from past , you wont have real fundamental ratio for future, all are only analysis and predictions.
China will grow 7% or at least 6,5 %, it is a very high growth rate for big size economy, I think you agree with me about this., So what is the bad fundamental for China?

What is your point? If you want to engage in a debate with me I don't have an issue with it provided there is clarity on the subject. I said "artificial" which is a descriptive term and not a relative term unlike good or bad.

 

[getready]

It's refreshing to read something unrelated to the stock market crash on this thread.

Give it some time. once the dust settle down and people realize there is more chance of Japan sinking into the bottom ocean than china economy collapsing any time soon, the anti China trolls will finish with their fapping till the next negative news comes around

 

[Brumby]

The idea behind the setting up of a free gold market in Shanghai is supposed by some to be to force up the gold derivative markets in Chicago, NY and London. Ambrose Evans-Pritchard wrote nearly twenty years ago an article in The Telegraph about the finding in Hong Kong of a gilded bar of tungsten with Fort Knox markings and his suggestion that the gold treasure of that place had been at least partly replaced by such bars. No-one can go and check on that treasure until perhaps the Chinese takes a lot of journalists to their thousands of tons of gold and dare US to do similarly.

There are effectively two distinctly separate issues that you are raising. The first is supposedly a less than perfect correlation between the base pricing and its derivation. Secondly, I think you are referring to a reversion to the gold standard in currency pricing. Regarding the first, derivatives by nature are much more complex financial instruments and a lot more variables go into its pricing. Depending on the instrument, you can have variables like interest rate differential, currency, and time decay which affects its pricing and so typically it will either be priced at a premium or discount. Also the liquidity of a derivative will impact pricing as some are more popular than others. Bottom line each derivative in the market will find its equilibrium because any over or under pricing will be exploited by arbitrage funds. This is how a free market is meant to work in any case.

As to the second point, I don't have an opinion on it.

 

[ahojunk]

The odd thing about China is it's an outlier on many conventional social-economic wisdom. Some examples:

Conventional Wisdom- centralized planning produces too much inefficiencies and retards national growth.
Empirical Evidence- using centralized planning for 30 years, China produced the fastest sustained economic growth in human history.

Conventional Wisdom- single party rule produces too much corruption, which depress economic development, and impoverish the masses.
Empirical Evidence- corruption rose over three decades to heights not seen since the worst of Qing Empire, but China got richer and richer and not poorer and poorer.

Conventional Wisdom- authoritarian governments oppresses its citizens and cause widespread resentment against the elites.
Empirical Evidence- a poll by Harvard University showed Beijing enjoys >70% popular support; provincial governments about 60% support, county and local 45%-55% support.

Conventional Wisdom- as nations become more wealthy and produce sizable middle class, they'd want democracy.
Empirical Evidence- the CCP has done well co-opting the rising middle class by developing feedback systems to detect major grievances and address them before they get out of control.

I don't believe corruption is good for any country nor do I believe single-party rule is good (I live in a single-party State, and I want it voted out of power), but I think China is opposite on so many generally accepted wisdom, it behooves the rest of the world to take a closer look and see what is so different about the Middle Kingdom.

:
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Nobody will deny corruption is bad (unless you are the one doing it or benefit from it! )

But single party state? I beg to differ. I have ask this question to great many of my singaporean friends, and all of them don't think it is a problem, in fact they think it is great, it has kept Singapore one of the high standard of living, efficient, advanced country in the world (their words not mine).

I have read an article which seems to echo the same thing in Saudi Arabia and Dubai, where they are essentially single party state, no democracy, but most citizens are happy there because of high standard of living that government provided.

To most people, the function of the government is to provide security and stability for one to thrive in. Democracy is often incompatible with the above two - you only have to look at Philippine, Thailand, and many other democratic fail states. Of course it doesn't mean all single party dictatorship are not fail state, far from it - North Korea being one prime example. But when single party authoritarian system works, it often works very well - recent example includes most of the 4 asian tigers - Taiwan, South Korea, Singapore, and even today, Vietnam is a rising economic powerhouse even though it is a single party authoritarian state very much like China.

The following TED video by Eric X, Li probably explains the China's political system and its successful impact on China's economy.

Published on Jul 1, 2013
It's a standard assumption in the West: As a society progresses, it eventually becomes a capitalist, multi-party democracy. Right? Eric X. Li, a Chinese investor and political scientist, begs to differ. In this provocative, boundary-pushing talk, he asks his audience to consider that there's more than one way to run a successful modern nation.

 

[Dolcevita]

India and Pakistan becomes full SCO members

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Russian President Vladimir Putin has officially announced the accession of India and Pakistan to the Shanghai Cooperation Organization (SCO).

In a key briefing after the summit of SCO leaders in the Russian city of Ufa, Putin announced Friday that India and Pakistan will join the SCO, a first time expansion of the heavy-weight Eurasian group since its inception in 2001.

The SCO, which also includes former Soviet republics in Central Asia, has been viewed as a de facto counterweight to major Western alliances such as the North Atlantic Treaty Organization (NATO). Those seeking membership in the body also want to enjoy the economic benefits, with India now having a better access to the energy resources of Central Asia.

Putin also announced that Belarus would obtain observer status in the SCO, joining Afghanistan, Iran and Mongolia. He said the body welcomes applications by Azerbaijan, Armenia, Cambodia and Nepal, which are considered “dialogue partners.”

The Russian leader further touched upon the major results of the SCO summit, including an agreement between the heads of state on more cooperation on the problem of drug trafficking in Afghanistan, a country which Putin said is seeing a rising influence of the ISIL terrorist group.

He said plans for deepening economic and trade ties between the members are also high on agenda.

“It is obvious that together we can more effectively resist crisis events in the world economy and finance, more easily overcome restrictions and barriers of various kinds,” Putin said, adding “We think the development of cooperation in production of food, transport, energy and financial security is important.”

 

[AssassinsMace]

Being liked is overrated. Americans think the world is ungrateful. Japan was hated at its height being an ally of those most paranoid about them. And now the reigning 2nd largest economy in the world, China, is hated by those that value being liked more than getting their economy in order. The notion that being liked by others is valuable is like how the New York Times peddles how China needs soft power. Soft power like how they point to yoga from India being "liked" as being example of Indian soft power. But that's not power when someone else decides what you have deserves to be liked. The power lies with those who get to decide what's to be liked. And you notice the countries that value being liked the most are below China?

 

[SamuraiBlue]

Depreciation of the currency that export industrial goods is neither good or bad to the nation.
On one side you can export more due to more sales or better profit margin, but on the other hand import of goods from other nations becomes higher.

A very interesting example is Argentina in which they were able to bounce back because they defaulted.

 

[Yvrch]

As they say it, level-headed always see a mixed bag, neither only good nor only bad.
When it comes to China, any followers would know the real story is always in the big picture.
So any news about the bond market? CNH? They may as well be worth looking at to round out the stock crash, just so to get a better perspective.
As China gradually transforms herself to a truly global economic and financial powerhouse, she needs to let go of her control on a few things. These controls have served her well so far but slowly turning to outlast their usefulness as the circumstances have changed. China is step by step preparing herself to let go of control on interest rate, exchange rate and capital account. These will have immense effects on savings and investment, banking and finance, monetary and fiscal policies, etc domestically. China has been gradually pushing for a global redback – offshore market, yuan swap, IMF currency basket, AIIB - that will someday rival the current dollar hegemony in global financial transactions. That won’t happen until all three are up and running on their own.