Chinese Economics Thread

[AssassinsMace]

I see this discussion and the frozen hair kid where the same theme surfaces. Despite China achieving this or that economically faster than anyone else in the history of world and becoming the 2nd most powerful country and now challenging number one, the US, China has somehow failed overall because it hasn't figured out everything and now must surrender to the US and adopt their ways. And poor people in the US can't be judged against the US system unlike when you can spot a poor person in China.

OMG! There's poor people in China? The Chinese and their godless heathen Chinee ways have failed and must now surrender to the West because they only know what's best.

That's what they're saying. They've been telling their lies for so long now they're believing them forgetting it was their lie. Did any Chinese say there were no poor people in China? No, the West's propaganda says it in order to paint Chinese as arrogant. Arrogant people don't know what's right. The Chinese can't take care of themselves so it gives them the right to impose themselves in guise of a humanitarian reason while trying to get people to forget they have poor people under their system. This is the black and white mentality they want to trap people into. If they portray themselves as the good and you don't blindly follow them, it must mean it's because you're evil. Truly good people will follow blindly those that are good. So if you're not evil, then you better obey and follow without question.

Like the West cares about this boy with the frozen hair? Like the West really cares about women being sexually harassed and raped in China when they only bring it up after the embarrassment of these scandals hit the US? Like they really care about efficiency of China economy so they create a stronger competitor so they can be worried more about the China threat? They only care about what they're getting. These are just excuses to change China so the Chinese serves their interests over the interests their own people. Read all the articles lately of the alarm over China's economic influence. Not one crime in anything they mention. How do you tell why it's not a crime? Because they do it.

 

[PanAsian]

Improving industrial and economic efficiency and accountability, protecting the environment and people's health, going in the right direction and more to be done, gung ho!

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JANUARY 23, 2018 / 8:07 PM / UPDATED 2 HOURS AGO
China trash town's cleanup bolstered by import ban
David Stanway
8 MIN READ

GUIYU, China (Reuters) - The dizzying stench of burning plastic still drifts through the alleys, workshops and warehouses of Guiyu, the southern Chinese town that has long symbolized China’s role as the main recycler of the world’s waste.

But residents say the air isn’t half as noxious as it was five years ago, when authorities launched a drive to industrialize the town’s recycling operations – and address the chronic health problems that came from dismantling things like old computers and mobile phones by hand.

The acrid black smoke that once billowed from the backstreets has gone, and the rivers that wind their way through the town of about 100,000 people, though still cluttered with trash, are much cleaner, residents say.

Now, the residents of Guiyu – located in the economic powerhouse province of Guangdong, about 175 miles from Hong Kong – are grappling with a new cleanup of the recycling industry that remains a mainstay of the town’s economy.

In an effort to deal with its fast-growing domestic waste problem, the Chinese government has blocked all imports of 24 types of foreign trash.

The ban, which took effect on Jan 1, has left countries like Britain and the United States reeling, with few alternative destinations for mountains of old mobile phones, paper, textiles and plastics once treated in backyard operations along China’s eastern coast.

It has also forced recycling centers like Guiyu to step up their efforts to transform informal, backstreet industries into fully regulated, more technologically advanced and environmentally friendly ones.

The effort in Guiyu also underlines the ability of the Chinese government to address the country’s chronic pollution issues when it has the political will - and offers the right incentives - to do so.

While residents in Guiyu generally welcome the cleaner environment, the ban on foreign waste - which is usually better sorted than domestic trash and therefore more lucrative to handle - has been a damaging blow for many recyclers.

The boss of one recycling facility, who requested anonymity, said she was “close to bankruptcy”.

“We don’t have any foreign trash any more,” she said. “The ban has made it harder to make money.”

These backyard facilities still receive local trash, but are mostly limited to handling lower-end plastics. Higher-end electronic and metal waste is limited to those companies that move into a new recycling park set up by the local government that has facilities to deal with the pollution risks.

The new regulations come as China struggles to tackle the country’s soaring domestic waste problem. Beijing has said it plans to invest nearly 200 billion yuan ($31.07 billion) in household waste treatment alone over 2016-2020 and has vowed to stop being a receptacle for the world’s junk.

“The fundamental purpose was to solve the problem of pollution,” said Wang Jingwei, a professor at Shanghai Polytechnic University who runs an experimental recycling facility and advises governments on waste treatment.

“Some big cities, and even some remote rural areas, are besieged with trash,” he said. “The dependence on foreign waste meant no one was dealing with domestic garbage.”

In the 2000s, Guiyu became a symbol of the environmental devastation caused by recycling hazardous waste with little regulation after being singled out by groups like Greenpeace and featuring in a string of international media reports.

Trash is still the mainstay of Guiyu’s economy, but hundreds of recycling businesses have been consolidated or shut completely in recent years and authorities are now cracking down on smuggled waste, further starving small and polluting businesses of supplies.

“Although the dismantling of old electronics is the leading industry in Guiyu, we should say it was more a profession than an industry,” said Zheng Jinxiong, vice chairman of a government commission tasked with running the recycling industry park, set up on the edge of town.

“The local government had an obligation as well as an ability to lead, standardize, make it scientific,” he said.

Zheng said the government had tried to make the changes easier for residents, funding land purchases and renting them new buildings at low cost, as well as providing discounts on environmental protection equipment.

UPGRADING WASTE

Five years ago, sacks of trash provided a decent living for thousands of farmers and laborers in Guiyu. Much of that involved dismantling modems, mainframes and mobile phones in homes or backstreet workshops.

Workers would rip out the innards of electronic products with their hands, applying acid and melting down casings with cigarette lighters, extracting metals like copper and shredding plastic into reusable pellets.

With backyard operators banned from handling electronic waste, truckloads of broken computers and circuit boards are now delivered to the sprawling industrial park, where authorities can monitor environmental, health and safety standards.

Some big recycling companies have been encouraged to invest in the park, including TCL, whose local branch, TCL Deqing, invested 50 million yuan in a production line for dismantling household appliances.

A subsidiary of China Energy Conservation and Environmental Protection Equipment Group also invested 100 million yuan in a circuit board recycling facility.

The government said 1,243 businesses have been consolidated into 29 larger enterprises and relocated to the park. As many as 3,245 makeshift chimneys built to expel toxic recycling fumes from residential buildings have been removed.

However, almost 1,500 households are still recycling plastic in Guiyu’s old town, a warren of cluttered backstreets, where sacks packed with waste - keyboards, cigarette lighters, toys, old tires - spill out of shops and warehouses.

A woman who would only provide her surname, Su, said she used to recycle small amounts of electronic waste to help supplement the family income.

“We stopped doing it because it was bad for our health,” she said.

Su said she and her husband got involved in the business to pay their youngest child’s school fees. Middlemen would visit their home every week and pay them for the recycled materials, with no questions asked.

“We didn’t know where it came from,” she said. “We know some people actually went overseas directly and shipped it back in containers.”

SMUGGLING TRASH
In addition to the ban on waste imports, China is also targeting smugglers who bring in trash from abroad.

Last year, China’s customs authorities vowed to “unflinchingly crack down” on waste smuggling, and 421 suspects were arrested over the course of the year, including 127 caught in December, accused of bringing in 323,000 tonnes of plastics and mine slag.

According to court documents, some gangs were involved in schemes to launder imported cargoes of scrap mobile phones and computers by shipping them from Hong Kong to the North Korean port of Nampo.

There, they would be dismantled, stripped of identifying features and smuggled to the Chinese border port of Dandong, from where they were sent to Guiyu, classified as domestic waste.

Wang, the Shanghai waste expert, said Chinese ships delivering goods to Europe and elsewhere had an incentive to bring waste into China: whatever the price, it would be preferable to returning home with empty holds.

Guiyu’s industrial park said it had tightened procedures to stop smuggled waste from entering its gates, and was cooperating with police, customs and environmental authorities.

“I dare not say there is no smuggling at all, but right now we can say that it is harder to come across, and fundamentally it isn’t happening anymore,” said Zheng.

He also said that Guiyu had been struggling to handle waste from the surrounding province of Guangdong, as well as China and the rest of the world.

“If we can handle all the various waste in our province and still have capacity, then we can also do more from the rest of the country,” he said.

($1 = 6.4361 yuan)

Additional reporting by Anita Li and Aly Song in GUIYU and the SHANGHAI newsroom; Editing by Philip McClellan

 

[plawolf]

Anyways, the biggest recent economic story is the US decision to slap tarrifs on solar panels and washing machines, with potentially more to come as aluminium, steel and intellectual property reports are due shortly.

It’s very hard to judge how China might play this.

On the one hand, China might drag their feet a little until all those reports are out and see what Trump does overall before deciding how best to respond.

So in the short term, we will probably just see complaints from Beijing without too much in the way of tit-for-tat as Beijing might be weary that a knee-jerk reaction might force Trump’s hand to slap tarrifs in those other fields also where he might not have done without the need to look like he is standing up to China.

OTOH, China might feel that these two are a test case for Trump to see how China might react. So a strong reaction to these two cases might dissuade Trump from imposing more tarrifs.

I think a lot will depend on how China views his character, whether he responds to ‘soft’ or ‘hard’ measures.

From what I have seen, Trump is a classic bully, and pulls stunts to bully small suppliers all the time when he was in business. So appeasement is only likely to embolden him and tempt him to press for more.

However, what is less clear is how well he responds to pushback. He strikes me as an incredibly vain and self absorbed person, so would not stand any public loss of face.

So I think China’s obvious play is to push back hard enough to convince Trump that he doesn’t want a full blown trade war, but give trump enough plausible deniability so he can avoid getting called out at home about backing down.

How to do that would be what China pays the big bucks to its strategists for.

 

[nugroho]

As I said before Chinese economy is transition into consumer driven economy contrary to the nay sayer
I think they entered a goldilock period now with low inflation and increasing wages coupled with improved world economy generating strong export

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The modern Chinese economy was built based on its competitive advantage in manufacturing. But following

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of roughly 80% since 2010, it has experienced a consistent year-over-year deceleration due to an

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. In the past year, the slowed growth has finally stopped. In 2017, the Chinese economy experienced

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for the first time in seven years, but this acceleration is not because manufacturing is having a resurgence. In fact, many areas of manufacturing continue to fade in importance in China for a number of reasons.

Shutterstock

However, even as the death knell tolls for low-end manufacturing, this is ultimately a positive sign for China’s economic forecast in 2018 because it signals that China’s economy is growing up. The fact that gross domestic product (GDP) stabilized (even improved) despite manufacturing weakness means that China is able to stand on its own two feet based on services and consumption like a mature economy. The manufacturing crutch is being slowly pulled away, and China is still standing.

But before we can look ahead, it’s important to look at some of the key drivers that led to this acceleration. Traditionally, the foundation of the Chinese economy has been set in manufacturing. The government heavily subsidized the industry and

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. As such, it was attractive to foreign companies to invest in Chinese manufacturing.

However, manufacturing has been weakening in China for three primary reasons. First, changes in government policy have

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. Second, the

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while the

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, putting Chinese manufacturers at a pricing disadvantage on exports. Lastly, China is facing

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. In other words, other countries in the region, such as Malaysia and Bangladesh, are offering quality manufacturing alternatives at a cheaper price. In fact, even Chinese investors are investing in

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.

As manufacturers began to leave China in 2010, we saw an

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that lasted until 2016. During this same time period, however, the Chinese consumer was growing stronger, and we have now reached the tipping point where the strength of consumer is outpacing the deceleration caused by the manufacturing exodus. By 2015, the

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was responsible for more than 50% of China’s GDP, and in the past year,

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rose 0.1% -- from 6.7% in 2016 to 6.8% in 2017 -- which, for a country of China’s size, is quite significant.

The fact that China’s economy can show accelerated growth despite the continued weakening of the manufacturing industry is a strong positive indicator that it is ready to become a mature market. While the country is still far off from becoming a saturated market, like the U.S. or Europe, and slowing its growth to a comparable rate, the transition to a consumer-based economy proves that China has entered an important inflection point. It will be pivotal for U.S. companies to understand the current transition if they want to grow their presence and offering in Asia.

Entering 2018, the strength of the Chinese consumer will continue to outpace the dwindling manufacturing industry and propel the economy forward. China has experienced consistent wage growth while the cost of living has stayed relatively low, helped along by the

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. As a result,

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is up. Consumers are feeling confident, and positive consumer sentiment indicates healthy future spending.

Overall, while the manufacturing outlook in China is bleak, factors such as positive consumer sentiment, a strong yuan and wage growth indicate that the consumer has grown strong enough to support a maturing economy. While the Chinese economy used to be manufacturing-based, it is now consumer-based. As the economy in China continues to mature in the coming year, we can expect an overall positive outlook.

But.... consumer-based economy will at last erode Chinese saving to zero ????

 

[manqiangrexue]

But.... consumer-based economy will at last erode Chinese saving to zero ????

Nah, that's not what that means. The goal is to get Chinese people to consume more made-in-China. This will greatly weaken the ability of China's trade partners to boycott or otherwise use economic blackmail against China. China will still keep its trade surplus as an net exporter but this surplus will become less important to the economy since most of the purchases will be at home. It's basically becoming more self-sufficient. What it does not mean is for China to become a net consumer of goods, consuming more than it produces and using imports and trade deficit to plug the gap.

 

[Jura The idiot]

now I read
Spotlight: China reveals top-level planning of economic policy at Davos forum
Xinhua| 2018-01-24 23:41:23

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Liu He, a senior Chinese official, Wednesday elaborated on the top-level planning of China's economic policy for the next few years at the World Economic Forum (WEF) held in this Swiss resort.

"In a nutshell, this policy centers around a key necessity, a main task and three critical battles," said Liu, a member of the Political Bureau of the Communist Party of China Central Committee and director of the General Office of the Central Leading Group for Financial and Economic Affairs.

Liu also pledged that China will open wider to the world across the board.

KEY NECESSITY

In his speech at the WEF, Liu stressed the necessity to transit the Chinese economy from a phase of rapid growth to one of high-quality development.

"Our focus needs to change from 'Is there enough?' to 'Is it good enough?'," he said.

Such a transition, he said, is the context in which China formulates its macroeconomic, structural, reform and social policies in the coming years.

"China's per capita income is moving up from the current level of 8,000-plus to 10,000 U.S. dollars and even higher. At such a stage of development, China needs to put more emphasis on structural improvement rather than quantity expansion," he said.

As China opens up wider to the outside world, this transition to a new model of development will create huge opportunities for many new industries.

"It means opportunities for businesses not just in China but across the world," said the senior official.

He also outlined some of the tangible benefits already in place. To this point, China's domestic demand has steadily expanded, with consumption contributing 58.8 percent to economic growth, nearly four percentage points higher than five years ago.

The added value of the service sector takes up 60 percent of

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, more than five percentage points higher than five years ago.

MAIN TASK

The principal contradiction in China's economic development, Liu said, is the structural mismatch resulting from the supply side failing to evolve in step with the demand.

This aspect of China's economic policy urgently needs to be fixed, he said.

The priority at the moment, he emphasized, is to cut excess capacity where necessary, reduce inventory in the housing sector, bring down the overall leverage ratio, lower cost across the board, and strengthen the weak links in the economy, ranging from public services to infrastructure and institutions.

"With these measures, we hope to make the supply side more adaptable and more innovative. Some initial progress has been made," Liu said.

Since 2016, China has cut over 115 million tons of steel capacity, eliminated an additional 140 million tons of substandard steel capacity, and phased out over 500 million tons of coal capacity.

Though these market clearing measures has led to price rises in some sectors, the total factor productivity growth stopped its decline and began to increase in 2016, Liu said.

"The positive spillover of our supply-side structural reform is being felt across the world. Indeed, this is a reform that we must continue and see through," he added.

CRITICAL BATTLES

According to Liu, China has to fight three critical battles in the next few years -- risk prevention, poverty reduction and pollution control.

"For China to build a moderately prosperous society in all respects, we must fix the shortest plank in our development through winning these battles," he said.

First, although China's financial system is basically sound with a high savings rate, China still needs to continue preventing and resolving major financial risks, Liu said.

"Shadow banking and hidden debt for local governments are serious problems we have to deal with," he specified.

Since the fourth quarter of 2017, China has had a marginally slower overall leverage ratio growth, which Liu said was a good sign.

Second, China will continue with smarter, more targeted efforts to lift more people out of poverty.

"We have set a target to basically eliminate absolute poverty in three years," he said.

In 2018 alone, China will lift 10 million people from absolute poverty, including 2.8 million who will be relocated from areas suffering from harsh conditions.

The third battle is to fight pollution continuously. "Green and low-carbon development is what the Chinese people want the most in a break with the traditional growth model," Liu said.

China will fulfill its pledges to counter climate change and honor the Paris Agreement, he said.

REFORM AND OPENING UP

This year marks the 40th anniversary of China's reform and opening-up drive, which is the very reason behind China's robust growth over the past four decades.

China has to advance reform and open up at a faster pace, Liu said.

China will further integrate with international trade rules and ease market access. China will also substantially open up the services sector, the financial sector in particular, and create a more attractive investment environment, he said.

China's vast domestic market, with a fast-growing middle-income population of 400 million, already the world's biggest, will contribute significantly to global development, Liu said.

The official also warned that deep-seated problems in the world economy have yet to be fixed, calling for concerted global efforts.

"Multiple risks and considerable uncertainties come in the form of high debts, asset bubbles, protectionism and the escalation of regional and international hotspots," Liu added.

Liu's speech is part of the 400 forums, discussions and meetings during WEF 2018 that lasts from Jan. 23 to 26.

Under the theme of "Creating a Shared Future in a Fractured World", this year's forum is bringing together a record number of heads of state, government and international organizations alongside leaders from business, civil society, and academia.

 

[plawolf]

But.... consumer-based economy will at last erode Chinese saving to zero ????

The key element of changing from an export led to a domestic consumption led economy isn’t about savings or borrowing, but about wealth.

It’s not able getting people to spent money they don’t have (even if that is what the west has been doing); but rather about making the people rich enough that their normal consumption generates enough economic scale to keep the economy going.

An internal consumer driven economic model only makes viable sense when your internal market (ie wealth and spending power of your consumers) have reached a sufficent critical mass to be self sustaining.

That is why it is so hard for developing countries to achieve it, with most getting stuck in the so-called middle income trap, where their population achieves middle income, thereby pricing themselves out of the export led economic model, but still haven’t achieved enough aggregate economic scale for internal consumption to take over as the engine of growth and development.

If you look at the figures, the Chinese general public are not drawing down savings or borrowing to fund their consumption.

The Chinese government and economy has created enough growth and wealth that rising incomes are creating more and more disposable income on top of your core savings and essential outgoings m to allow the middle class to enjoy more goods and services without living outside their means. That is what is driving the consumer lead economic transition.

For example, if someone has monthly essential outgoings of 500, and wants to save 250 per month, and he/she has an after tax monthly salary of 1000. That leaves them with 250 to treat themselves with during the month.

If, after 5 years, essential outgoing have increased to 600 because of inflation, but they are now earning 1500 per month. Even if they increase their savings to 500, that still leaves them 400 to treat themselves with, which is a net increase in consumption after accounting for inflation.

China has the advantage of scale, in that even a small rise in wages can create vast increases in consumption. But it is also its recentless investment to advance its technological and manufacturing base that is allow it to escape the middle income trap by making sure value/productivity gains are more than offsetting the increased costs from higher wages.

It is China’s wage growth and climbing up the value ladder that are the key drivers of its consumption led economic transition.

 

[Anlsvrthng]

An internal consumer driven economic model only makes viable sense when your internal market (ie wealth and spending power of your consumers) have reached a sufficent critical mass to be self sustaining.

That is why it is so hard for developing countries to achieve it, with most getting stuck in the so-called middle income trap, where their population achieves middle income, thereby pricing themselves out of the export led economic model, but still haven’t achieved enough aggregate economic scale for internal consumption to take over as the engine of growth and development.

offsetting the increased costs from higher wages.

It is China’s wage growth and climbing up the value ladder that are the key drivers of its consumption led economic transition.

Again, household final consumption.

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And ,ifChina export more than import, then per definition the internal demand is insufficient compared to the industrial capacity.Or the industry makes things that the average cinese doesn't want.
Or the consumers hasn't got enought money to buy import items. Pick your choice.

And the Chinese high saving rate doesn't came from the households. It comming from the companies

 

[Anlsvrthng]

Nugroho meant that all technology starts out poor or underachieving. Maybe at first, the robot created would cost $1000 but only be capable of $500 of work before it broke down. Without further investment, the company cannot make any sales and has no more money to develop. The robot design will fail. But with SOEs investing in it (or buying it directly), what at first may appear to be a poor or "inefficient" investment, the technology will have the finances to mature and eventually make $1000 robots that can perform $1000, $10,000, $100,000, etc... worth of work. Of course, it is not the "efficient" private business owner's concern nor his prerogative to ever fund such a robot venture at his own expense; he needs to grow his own business. But with the "loans" and "inefficiency" of the SOE, that robotics company may be able to advance, prosper, and become a technological powerhouse bolstering the nation.

Your example of the rail has no relevancy and no point, though in a vacuum, it is true. If someone were to build an expensive rail that did not develop any region, and could not save travelers enough time to balance the cost of the project throughout its entire useful life, then it is a poorly planned rail project and should not have been undertaken. Nobody is arguing to do that and there are no instances in China's history of such a from-nowhere-through-nowhere-to-nowhere project, to the best of my knowledge. When China invests in rails, people ride them; it saves travelers incredible amounts of time, speeds up business, and most of all, it leads to vertical development of rural/poor areas. The vast trickle-down positive effects are nearly impossible to quantify. So I don't understand at all why you brought up this irrelevant example, unless of course, you meant to point out that ticket earnings from recently inaugurated lines have yet to balance their construction costs, which would be an absolutely ridiculous thing to even mention.

Let go to the basic : China stuck in the middle age until 1950 because of the inefficient(non existing) and expensive way to change.Great Britain controled the world because it was able to make highly efficient iprovements with low cost.

So, the SOE will be humilitated by small companies in investent


Example the whole semiconuctor revolution in the silicon valley was dictated by small /micro companies, not big companies.

Highly efficient inventors and nvestors.

 

[AssassinsMace]

Great Britain controlled the world because they raped, pillaged, and plundered the world.