Chinese Economics Thread

[plawolf]

On every single products including those containing Rare Earth Elements in which China has a near monopoly on it? I doubt it. TPP is basically a way for the US to sale their natural gas to markets without restrictions and competition.

TPP rules are more about manufacturing process rather than raw materials. Basically, its about value added.

The more value added to a product, the more TPP rules will aim to restrict it.

They want all the rare earths China has, they just don't want any Chinese made high-tech goods with them in it.

Its basically trying to encourage the kind of neo-imperialist resource stripping for minimal or zero investments and returns that the west always (baselessly) accuse China of doing in Africa on China.

They would just love it if China just sold them only raw materials or basic manufactured materials and light goods that have been minimally transformed from their natural state, with tiny profit margins, minimal technical content and no incentive for Chinese firms to invest and move up the value chain.

 

[GreenestGDP]

... ...
They would just love it if China just sold them only raw materials or basic manufactured materials and light goods that have been minimally transformed from their natural state, with tiny profit margins, minimal technical content and no incentive for Chinese firms to invest and move up the value chain.

One of the huge problem in China is this continuous illegal Rare Earth mining.
This stealing of National Treasure seems to happen big time at this moment.


Soon, China will be at the mercy of other nation in order to supply their own high tech industry. Say, the production of AESA radar for J-20 is delayed, because China no longer has the required Rare Earth materials.


Just curios, how severe is China punishing these Sell--Out--your--own--Motherland low--life Hanjian criminals ?

It seems they all have been getting away nicely.

Some of these Hanjian criminals, ... ...
... maybe belong to those affluent Chinese who pay the US surrogate mother,
so that they can become US citizens.


I wonder ... ... how come the China Central leaderships neglect to handle this urgent National Security problem in a very effective way ?


Maybe the solution is quickly making a nationwide announcement ... ...


1) Confiscate all the Hanjian wealth, and use the money to finance the children of ( those poor PLA soldiers + Wang Qi Shan teams ), so they too ... ... can study abroad in Germany and UK.


2) Death penalty for the Hanjian criminals and their immediate family members and those who facilitate these illegal Rare Earth mining processes and transportation.


Where are the dimwit Cai Xin Digest and People' Daily and
CCTV reporters and editors ?

And most importantly, where is Hu Shu Li ?

Cai Xin reporters and editors are suppose to be uncovering these heinous crimes.





Maybe, Hu Shu Li is too busy in finding a US surrogate mother,
so all her family members can become US citizens.

------------------------------------------------------------

Rare earth producers say illegal mining
in China responsible for historic low prices

... illegal Chinese miners for adding to a global oversupply of rare earths that has driven prices down to historic lows. ...

"We understand that illegal producers currently represent almost half of China's rare earths production," Lynas said in the report.

The elements have been particularly hard-hit in the ongoing commodities rout. Prices have dropped over tenfold since the 2010 peak, and the total market is now around $1 billion, down from over $17 billion

Source:

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[manqiangrexue]

One of the huge problem in China is this continuous illegal Rare Earth mining.
This stealing of National Treasure seems to happen big time at this moment.


Soon, China will be at the mercy of other nation in order to supply their own high tech industry. Say, the production of AESA radar for J-20 is delayed, because China no longer has the required Rare Earth materials.


Just curios, how severe is China punishing these Sell--Out--your--own--Motherland low--life Hanjian criminals ?

It seems they all have been getting away nicely.

Some of these Hanjian criminals, ... ...
... maybe belong to those affluent Chinese who pay the US surrogate mother,
so that they can become US citizens.


I wonder ... ... how come the China Central leaderships neglect to handle this urgent National Security problem in a very effective way ?


Maybe the solution is quickly making a nationwide announcement ... ...


1) Confiscate all the Hanjian wealth, and use the money to finance the children of ( those poor PLA soldiers + Wang Qi Shan teams ), so they too ... ... can study abroad in Germany and UK.


2) Death penalty for the Hanjian criminals and their immediate family members and those who facilitate these illegal Rare Earth mining processes and transportation.


Where are the dimwit Cai Xin Digest and People' Daily and
CCTV reporters and editors ?

And most importantly, where is Hu Shu Li ?

Cai Xin reporters and editors are suppose to be uncovering these heinous crimes.


View attachment 20468


Maybe, Hu Shu Li is too busy in finding a US surrogate mother,
so all her family members can become US citizens.

------------------------------------------------------------

Rare earth producers say illegal mining
in China responsible for historic low prices






View attachment 20467



Source:

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I think there is some confusion. Rare earths are not actually rare (other than promethium) but they are named so because the process to isolate them from the natural ore is grueling. They are supposedly quite plentiful and abundant. So I don't think that China being mined clean and unable to manufacture J-20 radars is a concern at all. It's about driving market prices too low with too much supply.

 

[broadsword]

What Will It Mean If the Yuan Gets Reserve-Currency Status?

October 24, 2015

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At least $1 trillion of global reserves may migrate to yuan
Successful bid would boost Xi's economic reform efforts


International Monetary Fund representatives have given China strong signals that the yuan is likely to soon join the fund’s basket of reserve currencies, known as Special Drawing Rights, Chinese officials with knowledge of the matter told Bloomberg News this week. Here’s a primer on what that means.

What is a Special Drawing Right?

The fund created the SDR in 1969 to boost global liquidity as the Bretton Woods system of fixed exchange rates unraveled. While the SDR is not technically a currency, it gives IMF member countries who hold it the right to obtain any of the currencies in the basket -- currently the dollar, euro, yen and pound -- to meet balance-of-payments needs. So the ability to convert SDRs into yuan on demand is crucial. Its value is currently based on weighted rates for the four currencies.

How much of these SDRs are out there?

The equivalent of about $280 billion in SDRs were created and allocated to IMF members as of September, compared with about $11.3 trillion in global reserve assets. The U.S. reported about $50 billion in SDR holdings as of August.

Why does China want this status so badly?

In a 2009 speech, People’s Bank of China Governor Zhou Xiaochuan said the global financial crisis underscored the risks of a global monetary system that relies on national reserve currencies. While not mentioning the yuan by name, Zhou argued that the SDR should take on the role of a “super-sovereign reserve currency,” with its basket expanded to include currencies of all major economies.

Chinese officials have since been more explicit. After meeting President Barack Obama last month at the White House, President Xi Jinping thanked the U.S. for its conditional support for the yuan joining the SDR. Winning the IMF’s endorsement would allow reformers within the Chinese government to argue that the country’s shift toward a more market-based economy is bearing fruit.

Why is the IMF likely to approve this?

Global use of the yuan has surged since the IMF rejected SDR inclusion in the last review in 2010. By one measure, the currency became the fourth most-used in global payments with a 2.79 percent share in August, surpassing the yen, according to the Society for Worldwide Interbank Financial Telecommunication, known as Swift.

The IMF uses several indicators to determine if a currency is “freely usable,” the benchmark for inclusion in the SDR basket. IMF staff members said in a report in August that the yuan trails its global counterparts in major benchmarks, such as its use in official reserves, debt holdings and currency trading. But staffers have also stressed that the fund’s 24 executive directors, who will make the final call, will need to use their judgment.

Many major economies, including the U.S., Germany and U.K., say they’re prepared to back the yuan’s inclusion if it meets the IMF criteria. Supporting the yuan may boost relations between China and countries such as the U.K., which has sought to make London a major yuan trading hub.

Adding the yuan to the basket may also help the IMF improve its standing with the Chinese. China and other emerging markets were supposed to gain greater representation at the fund under reforms agreed to in 2010, but the U.S. Congress has yet to ratify the changes.
What’s likely to happen to yuan assets in the longer term?

At least $1 trillion of global reserves will migrate to Chinese assets if the yuan joins the IMF’s reserve basket, according to Standard Chartered Plc and AXA Investment Managers.

Foreign companies’ issuance of yuan-denominated securities in China, known as panda bonds, could exceed $50 billion in the next five years, according to the World Bank’s International Finance Corp.

“Once the Chinese yuan becomes part of the SDR, central-bank reserve managers and institutional investors will automatically want to accumulate yuan-denominated assets,” Hua Jingdong, vice president and treasurer at IFC, said in an interview in Lima earlier this month during the IMF and World Bank annual meetings. “It will be strategically important for China to welcome all kinds of issuers to become regular issuers in China’s onshore market.”

 

[solarz]

I think there is some confusion. Rare earths are not actually rare (other than promethium) but they are named so because the process to isolate them from the natural ore is grueling. They are supposedly quite plentiful and abundant. So I don't think that China being mined clean and unable to manufacture J-20 radars is a concern at all. It's about driving market prices too low with too much supply.

Which was the point of the strategy. By flooding the market with low price rare earth, China was able to monopolize the market. This directly led to large high tech manufacturing companies to establish their factories in China (ie Foxconn), and create tons of jobs.

 

[AssassinsMace]

Rare earths are not rare. It's a misnomer. It's the processing of rare earth metals which is hazardous therefore more costly therefore gives it the perception that it is "rare." That's why when this whole dispute with China happened, there was a big deal made how a US processor was going to break China's monopoly and the US was going to be independent. I knew it was going to fail and that US processor recently went bankrupt. If you get American workers with the wages, worker protection, and the health safety net they expect dealing with such materials, the cost of processing their rare earths explodes. You also hear about how other countries having rare earths that were going to break China's monopoly because developed economies were going to buy it from them instead. And did you know when they obtain the raw ore that contain rare earths, they ship them to China to be processed? American workers want their high paying jobs. Processing rare earths would be a high paying job in the US. But just as the lie about China stealing jobs from Americans when US corporation chose and not were forced to outsource, it's cheaper for corporate America to have China do all the dirty work and take all the risks in processing rare earths. And why do politicians perpetuate the lies? Because proclaiming China is "stealing" or "holding a monopoly" over the world like China is holding a hostage gives them an excuse to claim it's out of their hands so US corporations, to whom they're beholden to, can make as much money as they can. If that were China, they would call that corruption. If Western economies were to buy their own rare earths at the prices it would cost to process them domestically, all their electronics that make them king of the economic world would be out of reach to the average consumer and certainly consumers in emerging markets. The smartphone market in the developed world are slowing meaning it's reached saturation. All the money going to be made from smartphones in the future are going to be from emerging markets and the developed world. And the West want all those jobs returned home? Saturation and highly expensive smartphones means slow sales for the former kings. And guess who can sell just as good smartphones and at a price the emerging and developing markets can afford? This isn't cheating or stealing. It's called capitalist market forces at work.

 

[B.I.B.]

Agree with you 99.8% there Mace,
But i would like to add that. What I think prompted the West to get back into the Rare Earth production was with prices moving upwards and annoucements by China to restrict supplies.

On a more serious note theres a world wide lego shortage.(joking)
and theres two more years before the Lego factory at Jinxiang comes into production (sob)

Yub you guessed it. I still play with Lego.... well occasionally anyway

 

[Equation]

Africa's flourishing Ethiopian Airlines is clear -- the future lies with China and it plans to hit home that point by putting Chinese crew members on all flights to China as of next month.

"Asia and particularly China is our focus. This is our biggest market," CEO Tewolde Gebremariam told AFP.

The Addis Ababa-based company already has flights to Beijing, Shanghai, Hong Kong and Guangzhou.

Now the airline is training Chinese crews for its China-bound flights, because "90 percent of passengers flying to China don't speak English".

"They don't understand the safety instructions," Gebremariam said, adding that they needed teams that speak their language and "understand their culture".

Some 30 young Chinese recruits are completing their training at the Ethiopian Airlines aviation academy.

"I chose Ethiopian Airlines because I want an international experience," said He Xupeng, who left a Chinese company back home to join the African air carrier.

China has invested heavily in major construction projects in Africa, one of the latest being sub-Saharan Africa's first modern tramway, a $475-million scheme largely funded by China's Exim bank that opened last month in the Ethiopian capital.

Beijing sees Africa as a key source of natural resources and raw materials and even built the $200 million African Union headquarters in Addis Ababa in 2012 as a gift expressing "friendship to the African people".

Because of China's ever-expanding investments across the continent, the Chinese community has grown steadily in Africa, as has the market for flights to and from Asia.


- Junction of Africa and Asia -

At the Ethiopian Airlines training centre, Africa's sole centre to boast a Boeing 787 simulator, there are pilots, technicians and flight crew of 49 nationalities.

The country has come a long way from the global headlines generated by Ethiopia's 1984 famine, experiencing near-double-digit economic growth and huge infrastructure investment that have made it one of Africa's top-performing economies and a magnet for foreign investment.

Ethiopian now boasts the largest fleet in Africa, with 77 aircraft. It has grown rapidly, acquiring 32 new planes since 2010.

With six million passengers in 2014, it aims to surpass other major African airlines such as EgyptAir and South African Airways -- which count seven million passengers.

Gebremariam said he wants to make Ethiopian Airlines the primary carrier between Africa and Asia.

"We're the best point of entry for the continent," Gebremariam said. "Addis is situated at the junction point between the emerging economies of Africa and Asia."

In addition to its 91 international destinations, the company hopes to add Jakarta and Ho Chi Minh City in the next year. It also wants Yaounde on its list of destinations in Africa.

"Today, 80 percent of air traffic in Africa is controlled by non-African companies," Ethiopian's chief executive said.

"The market is unbalanced. We want to change that."

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[B.I.B.]

On Presidents Xi recent trip to Britain, a visit was made to Imperial's Data Science instituation where collaborative research is continuing with natable Chinese Companies and Instituitions. eg
Huawei, Tsinghua University, Zhejiang University, Shanghai Jiao Tong, Wuhan and Peking Universities, and the Chinese Academy of Sciences.


".............Working with a raft of collaborators, and particularly Zhejiang University and the Wittgenstein Centre for Demography and Global Human Capital in Vienna, the project draws upon 50 years’ worth of stored data on infrastructure, GDP, demographics, education profiling and much more.............
.....The project is by its very nature ongoing and evolving and resulting models and simulations can be used by local and central government officials in China and elsewhere to assess the impact of certain policies.
“This is just the beginning,” says Professor Guo. “We are starting with the macro picture but it will gradually become more and more fine grained, such that we could even ascertain what the effect of the speed of a rail line might be on the population.”

Drawing upon Imperial’s expertise in Railway and Transport Strategy Centre (RTSC), the DSI is also building models of passenger flow in the Shanghai Metro and 8 other urban rail systems in China.

By collecting secondby-second entry and exit data at every single station, they can build up a picture of how the network behaves, for example predicting the effects that closing a station has on load distribution.

“This has real value in managing city transportation, helping to ensure efficiency, safety and security,” says Yike.

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[B.I.B.]

I found this an interesting read from a economic sense the aftermath of the most passionate HK/China debates that crop up from time to time.

" How Much Does Hong Kong need China"

In the past, so the legend goes, Hong Kong feared nothing. Today, the city seems frozen by its obstacles. Can it change, once more? In a recent commentary, I argued that, in the absence of a radical new growth strategy, Hong Kong is facing an eclipse. In a response, “Hong Kong’s strength lies in China’s weakness,” Jake Van Der Kamp argues that Hong Kong’s ageing population is not a major challenge; that the industrial base of the Chinese province of Guangdong is relatively low-tech; and as a result, further integration with it would not enhance Hong Kong’s growth prospects.

I beg to disagree on all three counts, big time. In each case, facts are pretty clear. In the past, Hong Kong benefited from China’s vulnerabilities. In the future, it must find a way to complement China’s strengths.

Graying Hong Kong

Jake’s view is that Hong Kong’s erosion by ageing population is not that big of a deal and, really, not that different from China. Well, let us look at the facts. A simple comparison of countries by median age will do.
In the list of the grayest populations worldwide, the top positions belong to Monaco, Germany, and Japan in which the median age is about 46-51 years. Without elevated immigration, these countries will soon suffer from severe population decline.

With its median age of 45 years, Hong Kong comes right after them, unfortunately. It is graying far faster than other SARs, such as Taiwan (38.7 years, 53rd) or Macau (37.2 years, 62nd), not to speak of China (36.3 years; 65th).

Today even the city’s leaders are lamenting about the aging population, the explosion of elderly poverty and youth unemployment. In such circumstances, ignorance is not bliss.

Guangdong myths and realities

According to Jake’s view, the [Guangdong] province’s industrial base is not built primarily on fancy electronic high-technology but on low-technology plastic moldings and cheap toys.” That view of Guangdong is severely flawed.

Contemporary Guangdong has more than 106 million people, which accounts for almost 8% of the total in the mainland. It is China’s largest province by GDP and the home of a broad set of multinational and Chinese global corporate giants.

In China, Guangdong has led the way in moving up the manufacturing value chain from light industry to high-end manufacturing. Ranked in terms of the value-added, its key industries include information and communication technology (22%), electrical machinery & equipment (9%), raw chemical materials and chemical products (5%) and automobiles (5%).

In light of these facts, the idea that Guangdong’s industrial base is today based on “low technology plastic mouldings and cheap toys” is just a Rip Van Winkle fantasy.

Financial and innovation risks are immediate

In the past, Hong Kong has thrived thanks to vibrant tourism, dynamic trade, and rising property prices. Today, tourism is falling, trade is lingering, and property prices are facing a mean correction. What is worse, some of these trends are no longer just cyclical, but secular.

Moreover, disintermediation of Hong Kong as China’s privileged financial channel is reflected by the new free trade zones in the mainland, the proliferation of offshore RMB centers, and the evolving Shanghai-London Stock Connect. Shanghai is China’s new financial center, supported by a set of rising financial niche cities.

Finally, the notion of Hong Kong’s innovation edge is a myth. Let us be clear: As long as the city’s R&D per GDP is around 0.7%, it trails behind India and Ukraine, and barely holds its own against Pakistan or South Africa.

These cold facts led to my conclusion that economic integration with Guangdong could alleviate the erosion of Hong Kong’s maturing economy and aging population, while boosting entrepreneurship, venture capital, and innovation across the region.

The hard reality is Hong Kong’s growth has eclipsed. Without an aggressive growth strategy and China’s innovation, the city’s living standards will deflate over time. Those who care about the city should fight for its future, not lament over its fading glory.

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