Chinese Economics Thread

[Martian]

Re: something new?

what do you think of it? business as usual or something new is on the horizon? Is USA pacience regarding china´s mercantilism finally coming to an end?

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U.S. patience with China coming to an end? Are you joking? Some people have been waiting for 15 years since 1995. Does the following sound familiar?

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"Tension grows with China // U.S. cites trade barriers, surplus
[FINAL Edition]
USA TODAY (pre-1997 Fulltext) - McLean, Va.
Author: James Cox
Date: Nov 7, 1995
Start Page: 04.B
Section: MONEY
Text Word Count: 320
Abstract (Document Summary)

HONG KONG - U.S. and Chinese trade officials meet this week in Beijing amid signs the Clinton administration, with little to show after three years of talks, is losing patience with China on trade issues.

The administration is trying to convince Chinese leaders that relations will deteriorate if China fails to move to lift trade barriers and cut its trade surplus before next year's U.S. elections."

 

[Hendrik_2000]

Yeah all those noise for nothing. Let face it both countries need each other. On different note. So where are all those growling bear?. guess they must be hibernating somewhere in the cave

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China Is Successfully Taming Growth
By SHARON LAFRANIERE
Published: July 14, 2010

BEIJING — China’s economy has slowed from its blistering growth earlier this year after the government took measures to ward off inflation and rein in a runaway property market, government data released on Thursday showed.

The country’s gross domestic product rose 10.3 percent in the second quarter, compared with an increase of 11.9 percent during the first quarter.

Li-gang Liu, China economist at ANZ in Hong Kong, said the data showed that China was still charging ahead at a more reasonable rate. “We think there is still a lot of heavy lifting for monetary policy makers and inflation has not peaked,” he said. “But the monetary tightening policy so far has had the intended result.”

China’s industrial output for June also signaled tempered growth. Production rose 13.7 percent last month compared with the same month last year. That was down from a 16.5 percent increase in May over May 2009.

At the same time, inflation slowed to 2.9 percent in June, down from 3.1 percent in May and below the government’s official target of 3 percent, according to the National Bureau of Statistics.

Economists largely applauded the slower growth, saying the government needed to tame property prices after the first quarter’s galloping expansion in gross domestic product was the highest in three years.

“At the moment, it is good news,” said Stephen Green, head of China research for Standard Chartered Bank in Shanghai. “The economy was overheating, and the government over the past six months has withdrawn some of the stimulus. They have done a pretty good job of taking the heat off.”

Record lending last year was a crucial part of the government’s efforts to stimulate the economy. This year, China repeatedly tightened reserve requirements for banks. Chinese banks reported a sharp drop in loans in the first half of the year.

The government also imposed certain restrictions on property buying. June data suggest the market may be starting to cool. Average property prices in 70 cities declined 0.1 percent compared with the month before, the first drop since February 2009, according to China analysts for UBS Securities.

“We are now starting to see the effect of policies dealing with excessive housing prices, Sheng Laiyun, a spokesman for the government’s statistics bureau, at a news conference in Beijing.

A drastic slowdown of China’s growth could depress commodity prices and threaten chances for a global economy recovery. China is expected to account for one third of the world’s economic growth this year.

But Mr. Green said fluctuations in China’s economy were often overblown by investors. “Global markets have a kind of Jekyll and Hyde attitude toward China,” he said. “Either it is booming and saving the world or it is collapsing and taking the world with it.”

Mr. Sheng, of the statistics bureau, said data on Thursday showed, “The economy is running well and continues to run according to our expectations.”


Bettina Wassener contributed reporting from Hong Kong.

 

[Orthan]

U.S. patience with China coming to an end? Are you joking? Some people have been waiting for 15 years since 1995. Does the following sound familiar?

Its surely sounds familiar. But keep in mind that was 15 years ago. USA has lost most of its low-manufacturing base to developing nations, mainly china, and now its on the middle of its worst recession since great depression, and it will take years to recover to 2007 growth rates. Will USA pacience last that long?

Yeah all those noise for nothing. Let face it both countries need each other.

Sure. that is still true. However china is increasingly making sure that the USA doesnt need china. china is not cooperating on:
- climate talks;
- iran nuclear programm;
- north korea nuclear programm and cheonan sinking;
- trade;
- security;

In fact, i think right now china is not cooperating on anything with USA. That doesnt bode well for the future.

 

[Obcession]

Its surely sounds familiar. But keep in mind that was 15 years ago. USA has lost most of its low-manufacturing base to developing nations, mainly china, and now its on the middle of its worst recession since great depression, and it will take years to recover to 2007 growth rates. Will USA pacience last that long?



Sure. that is still true. However china is increasingly making sure that the USA doesnt need china. china is not cooperating on:
- climate talks;
- iran nuclear programm;
- north korea nuclear programm and cheonan sinking;
- trade;
- security;

In fact, i think right now china is not cooperating on anything with USA. That doesnt bode well for the future.

Hi Orthan,

To answer your points:

China is cooperating on climate talks, it WAS actively engaged in Copenhagen and it HAS put forth an ambitious emission reduction target for itself. I think China takes the environment more seriously than most of the nations there. It is especially leading in fields such as green technology and PV cells, where it enjoys a significant market share. I believe China has just surpassed the US in the amount of energy generated by sustainable sources (I could dig the source up if requested, forgot where I've read this).

Yet US is coming to China again and again to try to convince China to support sanctions against Iran? China has its own interests in Iranian energy and a lot of investment by China in Iranian infrastructure has been made. China WAS cooperating by not using its veto in the last Iranian sanction passed recently. And that was the best it could do. You just wouldn't expect a country with enormous economic interests in another country to sanction that country. It defies logic.

Actually, it was China who started and hosted the six-nation talks, and has tried continuously over the past few years to restart the talks. China has been the most active player in facilitating negotiations over North Korea's nukes. Sorry mate, your claims that China is not helping in North Korea nuclear program just doesn't stand.

As for Cheonan, China has claimed that "it will absolutely not shelter any country who is responsible for the attack". It hasn't condemned North Korea directly, but it has not impeded in an UN joint condemnation of North Korea's attack, implying that China agrees with the joint condemnation. They just can't say this publically or China's other allies will lose faith in China's ability to protect them.

Trade? What trade? With the US just raising tariffs on Chinese tires by 35%? Meanwhile China is signing free trade agreements left and right (with the ECFA recently concluded a month ago, and with the China-ASEAN FTA). The US is following classic trade protectionism, while the rest of the world, especially China, is trying to combat protectionism. Care to explain how 35% tariffs encourage trade?

I think I'm wasting my time typing 50 words for your spontaneous "TRADE" or "SECURITY" remarks, but since I will be going to school in 3 minutes, I might as well finish this.

How is China not cooperating on security? Thousands of Chinese peacekeepers are abroad under the UN. China has maintained a fleet of 3 ships in the Gulf of Aden for some time now. It has concluded or is attempting to conclude border disputes with Russia, India, and Vietnam. Of which, with Russia and Vietnam the border disputes are already settled. I think we can agree that Iraq and Afghanistan are countries out of China's jurisdiction?

 

[SampanViking]

Its surely sounds familiar. But keep in mind that was 15 years ago. USA has lost most of its low-manufacturing base to developing nations, mainly china, and now its on the middle of its worst recession since great depression, and it will take years to recover to 2007 growth rates. Will USA pacience last that long?



Sure. that is still true. However china is increasingly making sure that the USA doesnt need china. china is not cooperating on:
- climate talks;
- iran nuclear programm;
- north korea nuclear programm and cheonan sinking;
- trade;
- security;

In fact, i think right now china is not cooperating on anything with USA. That doesnt bode well for the future.

This is a comedy right? but then what should I expect from a poster that uses a troll as his avatar.

Yes the old Chinese Currency manipulator strawman. Remind me again when; between 2005 and 2008, the Yuan strengthened against the dollar by 20% how this affected the US trade deficit?

Finally I suppose if the US is genuinely that unhappy with China, it is always free to take its debts elsewhere.

 

[cloyce]

Now, Sino-US relationship is going from the Strain stage to the Crisis stage.

I think this is the long term trend.

This world is just too small for two superpowers.

 

[AssassinsMace]

Are you all forgetting that the majority of exports coming out of China are not for Chinese owned companies? They're foreign owned produced in China. The big lie over trade is that all those products are 100% Chinese when they are in fact the property of corporations from the very countries complaining about the trade imbalance. So the only ones profitting from all those products made in China and sold in the West are Western corporations. You actually think they are going to start a serious conflict over an "imabalance" of their own making and imagination? You might as well ask why haven't they started a war already for all the other serious things they complain about China. So if they have been so wronged and they're so right, why haven't they done anything yet about it? If they are the only ones that will gain everything that is owed them, then why haven't they done anything? The fact is it has nothing to do with China. It's either they lie about trade all together or these very foreign corporations are paying off politicans at home to do nothing because they make more money outsourcing than ever having manufacturing coming back to the US. All this complaining from politicans is show for the voters and that's it. Take a look at the opposition to reform in Wall Street. The average citizen believes their own big corporations and banking financiers are looking out for themselves and not for the best interests of their own country yet there's opposition to reform by those in Washington. They don't want anything to change and no new regulation imposed because it's anti-business to which Obama is being accused. And you really think these very same politicians are going to disrupt the cash-cow of outsourcing? The fact is this is the fault of the ignorant American voter who contradicts him or herself when they at one time think corpoarations like BP are evil when it comes to affecting their own lives but then at the same time when these evil corporations are in China, it's because the evil Chinese are putting a gun to their heads forcing them to outsource to China. Or how the Washington Post and New York Times blame China for this financial crisis because China buys US treasuries keeping interests rates low thus allowing greedy Wall Street types to create schemes so they can make money exploiting the innocent. Like I mention before long ago, that's like blaming an oil company for producing the gasoline a drunk driver bought for his car that hit and killed a child. There's absolutely no responsibilty on the drunk driver's part but it's all to blame on the oil company for making the gasoline. If they didn't make gasoline, the drunk driver would've never been able to drive a car to hit and kill the most innocent cutest blonde haired little girl with freckles. And this logic is coming from the guardians of information in the free world... And they wonder why China blocks them from unfettered access to its citizens.

 

[Martian]

"The World Depends on U.S.-China Cooperation" - Wall Street Journal

I do not agree that Sino-American relations are heading into a crisis. It only looks that way because China is growing stronger and the U.S. is unhappy at the loss of overwhelming unilateral economic power. The closing of the military technology gap has also contributed to the sense of "crisis."

The only true crisis is how does America intend to interact with an increasingly co-equal China. For those that doubt this proposition, the IMF 5-year projection is that China's nominal GDP will be 1/2 of American GDP by 2015 (see

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). If you believe that purchasing-power-parity (i.e. PPP) is a better measure then China's PPP GDP will be the same as the United States in 5 years (see

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).

China's military budget is the second-largest in the world. However, it is only a fraction of the U.S. military budget. The caveat is that China's military budget continues to grow year-after-year while the U.S. is talking about cutting its military budget to tackle the federal deficit and debt.

The U.S. is the leader of the developed world. Arguably, China is the leader of the developing world (e.g. most of Africa and Southeast Asia support China at the U.N.). The world is split roughly into two halves. Nothing will be accomplished if the developed world and the developing world do not cooperate (e.g. the current standoff at the WTO Doha round is a prime example).

In conclusion, the United States and China will continue to squabble, but they will compromise. Both countries are pragmatic and they understand that problems need to be solved. There is very little to be gained from confrontation or finger-pointing.

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"May 10, 2010 ... The United States is increasingly reaching out to China for cooperation in managing multiple international challenges, including economic ..."

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"* APRIL 23, 2009
The World Depends on U.S.-China Cooperation
The two countries have many shared interests."

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"BBC News - ‎Jun 26, 2010‎
China's President Hu Jintao has accepted an invitation for a state visit from US President Barack Obama, the White House has said. The invitation was made ..."

 

[cloyce]

Sino-US competition is real. And it is persistent.

Sino-US cooperation is necessary but temporary.

Sino-US friendship is false, everybody is just pretending it's true.


I do not have an optimistic view about future trends. Sorry.

 

[Martian]

Sino-US competition is real. And it is persistent.

Sino-US cooperation is necessary but temporary.

Sino-US friendship is false, everybody is just pretending it's true.


I do not have an optimistic view about future trends. Sorry.

I agree with your first three statements.

1) The top dog and the contender are eyeing each other.
2) Pragmatic problem-solving is the only solution.
3) Two contrasting cultures. Individualism vs. collectivism. "Do the needs of the one outweigh the many or do the needs of the many outweigh the one?"

However, I am an optimist. Let's get to the heart of the matter. What do the U.S. and China both want? A stable world and a better life (e.g. improving living standard).

Do the differences trump the commonality? I don't think so. If the U.S. and China focus on their differences then we're back to the Cold War. Resources are poured into thermonuclear weapons and human extinction is just a push of the button away. No one wants that.

Ergo, cooperation is the only rational path forward. You don't have to like it, but it is the only option.

Would you rather have this (e.g. confrontation):

China's DF-31A ICBM

or this (e.g. cooperation)?