Chinese Economics Thread

[antiterror13]

It means exactly what I wrote. Mainland China does not offer anything that they have a monopoly of and is essential to another nation's economy.
The US on the other hand has exclusive rights to the printing of US dollar and is essential in making transaction with OPEC/ NY & London oil bourses since they only accept US dollar.

Japan has a quasi state which has been seen in recent past with the Higashi-Nihon earthquake and Kumamoto earthquake where various manufacturing industries stopped around the globe due to various shortage in components made in Japan.
The reason I state quasi is because the components could be changed to another supplier within a year so it will only last for a short period.

I am not sure the relevancy of higasi nohin and the topic? ... have you googled it yet?

 

[Franklin]

I'm curious why you would think that growing smaller cities (not towns) is not efficient nor environmentally sound?

China already has quite a few mega cities. In addition to Beijing and Shanghai, there's also Chongqing. Chengdu and Zhengzhou are also on their way to becoming megacities.

The primary problems with megacities are congestion and housing inaffordability. Both can be alleviated by dispersing economic activity to smaller cities.

As for financial viability, we have to look at the bigger picture. The metro system itself may not be profitable purely based on the tickets it sells, but what about the economic activity it generates? That boost of productivity will not factor into any calculation of a metro system's profitability, but is nevertheless the most crucial purpose for building a metro system in the first place!

Because having economic activities clustered is the best way to get efficiency. And when you have all these smaller cities growing it will take up more land than just a few big cities growing.

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I disagree with this. Countries that print money will always end up in trouble. No matter who it is. Just look at Japan and the US that should be a lesson for China and everybody else. Unfortunately we here in Europe are going down the same route as the Americans and the Japanese.

 

[Jura The idiot]

The only people who is using the Yaun is the people who are doing transaction with PRC. There are no third party transaction that is not directly connected to PRC ...

about two (?) years ago there had been, I think in this Thread, a lot of talking about

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and how things should be great with their currencies ... since then, Russia and Brazil didn't perform well as far as I know, I haven't heard about the Rep. of South Africa
(except in connection with

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LOL!), and I don't know if India and China are really interested if you know what I'm saying

 

[Engineer]

The only people who is using the Yaun is the people who are doing transaction with PRC.

Which is basically everybody.

There are no third party transaction that is not directly connected to PRC and will stay that way since PRC and/or mainland China does not offer anything that is exclusive and essential to the global economy.

Actually, China does offer something that is exclusive and essential to the global economy, which is Chinese market. It is exclusive because it needs approval for entering. It is essential because the Western population has been squeezed dry, and the population with disposal income in the foreseeable future is in China.

 

[SamuraiBlue]

Markets are all over the world and being restrictive make it less appealing to people who wants to sell.
On top even if the population is 1 billion the actual population that can afford luxury items are only 30% of the total with the rest same or just above developing economies.

Nope not really exclusive at all.

 

[Engineer]

Markets are all over the world and being restrictive make it less appealing to people who wants to sell.

What would be one example of those markets? Zimbabwe? The situation is that there aren't markets all over the world for Western firms.

Your second assertion is correct, although China could afford to be restrictive because there are only two outcomes: western companies still want entry, or western companies get deterred which provide a better developing environment for Chinese companies. Both outcomes are favorable to China.

On top even if the population is 1 billion the actual population that can afford luxury items are only 30% of the total with the rest same or just above developing economies.

Nope not really exclusive at all.

That 30% is basically the entire population of US. Yes, pretty essential and exclusive.

 

[taxiya]

I see someone's post as pure flame baiting with a deeply rooted "I don't like so I don't reason/look" mental, why bother to pick it up?

 

[Yvrch]

This Norman fellow is a fool if he really believes what he wrote.

Therefore, their ability to lend in yuan is without limit and loan losses are the equivalent of deficit spending here in the United States: It's a fiscal transfer to the economy. China is completely capable of doing that to infinity if it wanted to, and while there might be other consequences like inflation, China is not hindered by any need to "obtain funds" to merely credit bank accounts with yuan or keep the loans flowing.

The US dollar and other nation's currency is quite different since the US dollar is used around the world as transaction currency.
Transaction of crude oil and other various natural resources is done through US dollar so you need to exchange your own currency into US dollars to purchase these natural resources.
This creates a massive demand and money flow of the US dollar in which the entire global economy is moved on.
Basically the more US dollar is put into market the entire global economy will go into an inflation but the US will not suffer anything because relatively speaking nothing changes.
On the other hand Yaun is only circulated locally within Mainland China and is not pegged to anything that is essential to the global economy so if PRC starts to do the same thing inflation only hits locally devaluating the yuan within the global currency market and will most likely be hit with a double whammy in which trying to sell the Yaun will require a premium beyond the market price due to further risk of devaluation of the Yaun while in stock.
What this results to is energy prices will sky rocket and local economy will see inflation going into overdrive. The debts will be written off but the Yaun so will the PRC economy dragging down the communist government with it.

First off, what original author was saying is a theoretical scenario if China chooses to go down that path. What is missing is a lot of details that would make that scenario possible, if not likely. Theoretically speaking, China can do that within reasonable bounds. Fact is, those QE, QQE currently going on around the world are basically fiscal transfers, as central banks are doing the heavy lifting while politicians shirking their responsibilities to make necessary painful structural changes and tax reforms. Politicians are looking after their own self-interest, ie their office and associated political power, and don't want to alienate their constituency base and the special interest groups that enable them in getting re-elected. China doesn't have that election weakness. It is the only major economy making the visible and painful structural reforms.

Theoretically speaking, if your economy has certain size and maturity, you can do that in perpetuity, within reasonable bounds. Some has already done it. US, Japan, EU etc through fiscal transfers. FFS, they are even buying corporate bonds. BoJ is tracking to be one of the top major holders of Nikkei 225.

So US alone can do it because it has the special status is not exactly correct.

World's financial system is rapidly evolving, and China now has a say in how that system is supposed to run and participates in setting global standards, which she never had in the past. So is India. Old economy is slowly peeling away before our eyes around the world. Regulators and standards are just trying to catch up.

Most of what you described have been already done in Japan, and still ongoing there.
So you can judge it for yourself.

 

[Yvrch]

The only people who is using the Yaun is the people who are doing transaction with PRC. There are no third party transaction that is not directly connected to PRC and will stay that way since PRC and/or mainland China does not offer anything that is exclusive and essential to the global economy.

Not trying to be rude or anything, but either you should have your head checked or just shut up.

Don't try to have an opinion on something you can't obviously chew, let alone digest.

 

[manqiangrexue]

LOL Every time Samurai says anything about China, I just laugh. He's the resident Gordon Chang. There is literally no way that he would say anything that isn't negative about China no matter if China got stronger, weaker, richer, poorer, more aggressive, less aggressive, won a contract, lost a contract, etc... And the trend is obvious that China is getting stronger, richer, more technologically advanced, more competitive every day at a historically unprecedented pace. If one day, Samurai says something positive about China, I'll burn an incense for him cus I know he's on his death bed revelation.