Blackstone
Brigadier
China has its own rating agency, so Moody's move might make the government increase range and scope of its new agency faster.
Chinese Economics Thread
- Thread starter Norfolk
- Start date
Ultra
Junior Member
Those rating agencies should be treated as garbage. Remember sub-prime?
Those same credit rating agencies gave AAA+ ratings to those "investment vehicles" back then for so long which led to that huge mess. Honestly I think those people should all be round up and be executed for committing the robbery of the century.
So I wouldn't pay any attention to those garbage.
Just because they were wrong in the past, doesnt mean they are wrong now. There are ample signs of a huge credit buildup in china. Remember that people learned the lessons and are now more alert to this problem than before the 2008 financial crisis. Another reason to take them seriously.
manqiangrexue
Brigadier
True, in the sense that even a broken clock is right twice a day. But in general, trust is built on accuracy. You wouldn't trust your healthcare to a doctor who accidentally killed his last 20 patients just because he could be right this time, would you? The reasons to take them seriously are provided by them as well, and those reasons are as good as the agency that issues them. (Now another possibility is that they are right in the sense that if a Western market were threatened by the same forces, it would bring meltdown, however China's economy is more state-controlled and thus more capable of quickly making purposed adjustments and maneuvers to avoid danger and/or overcome obstacles.) Before they are proven right or wrong, I assume it's as good as they were in the past.
Hendrik_2000
Lieutenant General
SCMP are staffed by english lit major from England who has nothing better than skewer China whenever they can find tidbit of bad news.Nothing new here I seen it over the years but nothing ever materialize .It was not to long ago they criticize Chinese as not spending enough
Here is better news. Chinese company can compete against foreign brand and win the market. All they need is temporary protection to bulk up
But China did allow foreign company to open shop in China and does not coddle up domestic company unlike many developing country. As well China streamline the FDI regulation without red tape
From another China basher Al Jazeera
For the first time, local brands have more power in China than those of multinational firms, an annual marketing report says.
In 2016, the top 100 Chinese companies were more valuable than the leading 100 international brands operating in the country, the report claims, which could be another sign of China's growing business clout.
Al Jazeera's Andrew Thomas reports from Beijing.
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manqiangrexue
Brigadier
This actually sounds like Americans more than Chinese. Chinese people don't like to owe people money. They do things unlike Americans. Chinese parents often accumulate a lump sum of money to buy their children a house and car for wedding present. If they can't buy something upfront, they are likely not to buy at all. They will gather money and buy things 1 whole item at a time. Americans like to find ways to divvy their income up to pay just the lowest down payment and monthly mortgage possible among several expensive purchases so they can live the high life immediately but end up losing everything if they lose their jobs. If the figures are true that Chinese household debt is rising, it's probably a result of a gradual shift caused by Western influence though I expect that to flatten out and be counteracted upon by their traditional Chinese checks at some point.
Funny story: I drove a used Chevrolet cobalt coupe when I was in grad school with $28K stipend and when I met an American friend, he gave me the most American financial advice. "Hey, you know what you gotta do, bro? How much you get each month? Like 2K? $700 for rent and utilities, $500 for food? OK cool. You gotta go to Mercedes, trade your Chevy in for the down payment amount on an E Class, then get them to about $700 per month installment. You could be driving a Mercedes, bro!!" I looked at him with an eye-roll that expressed exactly how smart I thought his financial strategy was. Dude made $170K per year selling oil. When oil prices dropped, he was broke and desperate in a month. Nothing saved up, everything he owned he was still making payments on.
PiSigma
"the engineer"
I'm surprised you know someone that works in oil and gas that doesn't save. Everyone in O&G knows got to save for those bad economic crashes.
But I concur about Chinese people saving money. Scmp have some of the worst reporting on China out of China hands down. I don't know any Chinese person in China or in Canada that have debt other than a mortgage (Canada only). In china, I don't even know people with a mortgage, and they got multiple properties for rent.
There are people with debt, mostly credit card type. But unlike north america, most people pay it off immediately instead of paying the monthly minimum. That's why unionpay doesn't make that much money, hardly any interest payments.
AssassinsMace
Lieutenant General
Senator John McCain was in Australia upset that China is a bully using its economy to get its way with neighbors. Yeah like how the US does it... The story above is at the real heart of McCain's unease. It's something they can't stop without becoming evil. There is another way to negate China's influence... stop being greedy! If it wasn't for their own greed, China wouldn't be influencing how foreign companies operate. But then again power-hungry megalomaniacs wouldn't be content that Chinese companies can be the tops of the world just from doing business in China alone. So yeah doing evil is the only way they can stop it. Yes China should never be like a country that John McCain likes.