News on China's scientific and technological development.

This might be a touch off topic but there is a bit of wisdom of when to spend your savings and when to save. Currently China is experiencing somewhat alarming inflation rates. These inflation rates will destroy individual savings if the savings are not spent during the inflation phase.

Last year's inflation rate, real-estate based, was estimated to be around 15%. The Chinese Academy of Social Sciences estimate that next year's inflation rate might be in the 20-25% percent range.

In other words, if you are saving for a house, your savings in just three years would depreciate around 50%. Half your money would have disappeared with nothing to show for it.

People can offset the most destructive aspects of inflation on savings by buying real assets, such as real property, commodities, or foreign currencies that are appreciating at levels at least equal to the inflation rate.

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kyanges said:

What am I talking about? Basically what you just said, but I was mentioning in addition to it, my hope, that in finding the ideal compromise between the two ends of the spectrum, that the Chinese don't ever find themselves in a debate similar to the American controversy on whether or not something like Intelligent Design (ID) can be taught in a science class as a viable alternative to the theory of evolution merely for the sake of "Thinking outside the box."

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You're confusing justification with intent. "Thinking outside the box" is just one of the many lame excuses the IDists came up with to justify their religious agenda (others being religious freedom, freedom of speech, etc.). It's got nothing at all to do with fostering creativity.

janxtv said:

People can offset the most destructive aspects of inflation on savings by buying real assets, such as real property, commodities, or foreign currencies that are appreciating at levels at least equal to the inflation rate.

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Most people can't afford to purchase property without getting a mortgage, in which case you would end up paying interest on your loan. What commodities can you purchase? Currency trading can be pretty risky.

It's also wrong to tie the inflation rate to real estate prices. Real estate soars in China due to investment pressures, which is a completely different dynamic from the price of grocery and other day-to-day goods.

solarz said:

Most people can't afford to purchase property without getting a mortgage, in which case you would end up paying interest on your loan. What commodities can you purchase? Currency trading can be pretty risky.

It's also wrong to tie the inflation rate to real estate prices. Real estate soars in China due to investment pressures, which is a completely different dynamic from the price of grocery and other day-to-day goods.

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Point taken. An example of how people who can't afford their own house can save their savings is to join their resources with others to purchase a "investment property". The Investment Property is then rented out, or just held as vacant. This action will preserve the families' capital. As real estate continues to appreciate, the savings principal shall be preserved. The amount of money required to service the loan is a pittance compared to the amount of money that is destroyed by the rate of inflation.

The above mentioned wealth preservation strategy is what an extremely large number of wise Chinese people are doing right now.

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The dynamics of inflation are many fold. Inflation/deflation is only the ratio of change of X amount of money that is required to buy X amount of goods and services. To say that real estate prices are divorced from other commodity prices does not square with standard economic theory or with the vast amount of wise Chinese families that are protecting their savings by holding real estate.

jantxv said:

The dynamics of inflation are many fold. Inflation/deflation is only the ratio of change of X amount of money that is required to buy X amount of goods and services. To say that real estate prices are divorced from other commodity prices does not square with standard economic theory or with the vast amount of wise Chinese families that are protecting their savings by holding real estate.

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Real Estate prices soared over 100% from 2009 to 2010. Prices of other commodities did not.

As for purchasing real estate with other people.... yeah, good luck with that. Most likely it will end up with the partners fighting over the house.

solarz said:

Real Estate prices soared over 100% from 2009 to 2010. Prices of other commodities did not.

As for purchasing real estate with other people.... yeah, good luck with that. Most likely it will end up with the partners fighting over the house.

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Again, point taken. That is why many say that Capitalism creates vast wealth inequality. Not everyone is as well disciplined as others. Those people that successfully create stable co-operations formalize the relationship into successful companies. Whether it is Communism/Capitalism with Chinese Characteristics, wealth creation adds to the overall Social Harmony of Society in that the few that create wealth have a portion of that wealth distributed by the State to help those that have "bad luck".

With most property in China bought up and held vacant, the Chinese State is now encouraging wise Chinese to buy overseas properties to further protect those families' wealth in real property.

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jantxv said:

Again, point taken. That is why many say that Capitalism creates vast wealth inequality. Not everyone is as well disciplined as others. Those people that successfully create stable co-operations formalize the relationship into successful companies.

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So do you wanna invest in Chinese real estate with me?

With most property in China bought up and held vacant, the Chinese State is now encouraging wise Chinese to buy overseas properties to further protect those families' wealth in real property.

Source:

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Overseas properties suck. US real estate keeps falling, and Toronto's outlook is uncertain.

solarz said:

So do you wanna invest in Chinese real estate with me?

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LOL, Unfortunately the Chinese government is cracking down on "Hot Money", which is money from foreigners (which I am) flooding into the Chinese real estate market for short term profits. However, there is ample opportunity for domestic and oversea Chinese citizens to still invest.

solarz said:

Overseas properties suck. US real estate keeps falling, and Toronto's outlook is uncertain.

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#1 rule of Investment; Buy Low then Sell High. Repeat.

Guess that's all I wanted to say. For a nation to have the resources to plow into scientific and technological know how, abundant funds help tremendously. The Chinese Government seems to fully supports wealth creation to fund these activities as the Peoples Daily is giving a heads-up to everyone that is willing to listen.

Chinese Internet Company Profits Significantly Trump American


"If one looks at China with a population of 1.3 billion people, it is easy to see that there is a large potential for future expansion of Internet users in that country. Whereas others countries like the U.S. may see limited growth when it comes to Internet users. We can call China the new frontier."



"Chinese Internet Company Profits Significantly Trump American
September 28, 2010 By Kyle


From GWC‘s Chinnovations on The New Media: Leave Google aside, the margin of the rest of the global players seems to be weaker than that of the China internet companies. And in China, NetEase & Tencent have shared the largest portion of the internet market collectively.

Related posts:

1. China’s Tencent - Dominating Global Internet Giants Google and Amazon. From GWC‘s Report Chinnovations on The New Media: Due to a large number of users, in 5 years time Tencent has already become the 3rd largest internet company, after Google & Amazon in market cap. The ferocious increasing speed just leaves Google & Amazon far behind....

2. Chinese Internet Habits vs. the US. It’s important to understand the difference between Chinese internet habits and those of the West, especially for brands entering China. The chart below, by BCG, shows several key consumption differences between China and the US; differences that lead to completely new strategies to connect with Chinese audiences. Key elements here are the greater emphasis on [...]...

3. Chinese Netizens Create 50.7% of Total Internet Content. From China Daily: For the first time in history, Chinese Internet users have produced more content than professional websites. Hu Yanping, of the Data Center of China Internet (DCCI), said the era of Web 2.0 has officially overtaken Web 1.0 as the amount of content generated by personal users on blogs, online forums, social networking sites [...]...

4. QQ (Tencent) Dominates Chinese Mobile IM Market. From China Internet Watch: According to data released by Enfodesk, Q2 mobile IM market went up by 40 million active users; Tencent QQ leads with 60% market share; far beyond closet competitor Fetion’s (China Mobile) 22%. Related articles US China Internet Summit (downtheavenue.com) Tudou ‘That Love Comes’ Original Drama Series Debut (prnewswire.com) Chinese firms stake [...]...

5. Rich Chinese Prefer the Internet vs. Offline Channels. From Synovate China Media Atlas; channel preference of higher-income Chinese. Higher-income Chinese tend to prefer Internet channels vs. all other available channels. While outdoor and TV are strong, expect offline channels to lose ground to digital communication medium; primarily due to low-cost and easy access vs. other channels...."

Enough of high speed rail news, here's a piece of news about a not so fast but very powerful train from China.



"The first six of Kiwirail's 20 new DL class locomotive engines were unloaded at the Port of Tauranga yesterday, an occasion anxiously anticipated and welcomed by all those involved with the almost $80 million project.

Vessel Beluga Foresight delivered its special cargo from China to the Port of Tauranga on Friday and the double-cab diesel locomotives, each weighing nearly 108 tonnes, were transported to the Norske Skog marshalling yard yesterday and lifted by cranes on to the railway tracks for closer inspection.

Built by China's Dalian Locomotive and Rolling Stock Company to Kiwirail specifications, they are expected to be in service before Christmas.

They will be used on the Auckland-Hamilton-Tauranga "golden triangle" freight route and also on Bay of Plenty forestry routes.

They have a 2700kw engine, will be hauling 2000 tonnes of freight and are expected to be 5 to 10 per cent more fuel efficient than the existing 149 fleet of engines.

Where they can replace two existing locomotives, the fuel saving is expected to reach almost 30 per cent.................................................."

solarz said:

Most people can't afford to purchase property without getting a mortgage, in which case you would end up paying interest on your loan. What commodities can you purchase? Currency trading can be pretty risky.

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My born-in-China grandparents always like to buy gold jewelry whenever they had the spare cash to do so (when they were alive that is).

And looking at the number of goldsmith shops in HK, Macau and the booming coastal cities in PRC, I'd say this habit is still very much alive amongst the populace.