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  • #46
    Originally posted by zraver View Post
    Consumer demand has replaced export pressure to such a degree that the country still enjoyed massive growth despite the global recession. This means the stuff China made for the USA, got bought by Chinese instead. If X number of exports required by Y electricity how does turning X+I (production plus increase) in to D (domestic) do you have a decrease in power generation?

    Furthermore, with millions thrown out of work, whose buying those goods? since the layoffs and resignations reduce wage pressure- where is the money coming from? easy credit might be hiding serious flaws.
    they already went back to work.


    China’s Exports Advance 21%, Adding Pressure on Yuan (Update2)
    February 09, 2010, 11:51 PM EST

    Feb. 10 (Bloomberg) -- China’s exports jumped 21 percent in January from a year earlier, providing more ammunition to trading partners calling for a stronger yuan.

    Imports climbed a record 85.5 percent, according to data released by the customs bureau on its Web site today.

    U.S. officials may see Chinese trade gains as a sign that the nation no longer needs to protect exporters by keeping the yuan pegged to the dollar. At the same time, China’s policy makers may see the below-forecast exports and trade surplus as indicating that global demand is only gradually improving.

    “Chinese policy makers will be very cautious in interpreting the January data, which is highly distorted by the Chinese lunar new year holiday,” said Lu Ting, a Hong Kong- based economist at Bank of America-Merrill Lynch. “They may wait a few more months before making major policy moves.”

    Twelve-month non-deliverable yuan forwards dropped 0.3 percent to 6.6808 per dollar as of 12:20 p.m. in Hong Kong. Also today, an editorial in the state-owned China Securities Journal said that the currency may not have “big gains” in the first half because economic conditions haven’t improved.

    Stocks pared gains after the trade release, with the MSCI Asia Pacific index up 0.3 percent as of 12:10 p.m. in Hong Kong after earlier rising as much as 0.8 percent.

    China’s export gain was the biggest since September 2008. It compared with a 17.7 percent increase in December and the median 28 percent estimate of economists. The trade surplus of $14.17 billion fell short of economists’ $20 billion forecast.

    Imports rose by the most since Bloomberg data began in 1991.

    Fastest-Growing Economy

    The week-long lunar holiday was in January last year and February in 2010.

    The “positive trend remains intact,” and today’s report bolsters the case for the government to tighten policies and let the yuan strengthen in coming months, said Brian Jackson, an emerging-market strategist at Royal Bank of Canada in Hong Kong.

    The central bank has already raised banks’ reserve requirements to cool the world’s fastest-growing major economy. U.S. officials, pressing for a stronger Chinese currency to reduce trade imbalances, also argue that yuan gains against the dollar would also help China to restrain inflation.

    China last year overtook Germany as the world’s largest exporter, the German statistics office confirmed yesterday. Germany itself is benefitting from the expansion of China’s market, with its BGA wholesale and export federation projecting a 10 percent gain in shipments abroad in 2010, propelled by Chinese demand.

    Arms Sales, Chickens

    In Taiwan, government figures this week showed the biggest gain in its exports in more than 30 years on spending in China before the lunar holiday.

    Comparisons from a year earlier are also affected by depressed readings in early 2009 due to the financial crisis. China’s exports slid 17.5 percent in January 2009 and imports tumbled 43.1 percent.

    China’s static currency is fueling tensions with the U.S. that span anti-dumping duties on American chicken, arms sales to Taiwan, and the Dalai Lama’s planned meeting with President Barack Obama. On Feb. 4, China’s Foreign Ministry rejected Obama’s call for a stronger yuan, adding that “accusations and pressure will not help solve the issue.”

    The Chinese economy risks overheating this year as exports rebound, government economist Zhang Ming wrote in the China Securities Journal this month, adding that inflation pressures will encourage policy makers to let the yuan gain.

    Economic Acceleration

    Gross domestic product climbed 10.7 percent in the fourth quarter from a year earlier, the fastest pace in two years, after the government loosed an unprecedented expansion in credit to counter the effects of the financial crisis. China this year is projected to overtake Japan as No. 2 in global GDP rankings, after the U.S.

    “It’s getting too big a part of the global pie to keep relying on exports for growth, and so we do think there’s going to be a lot more policies to drive domestic consumption going forward,” Robert Subbaraman, chief economist for Asia excluding Japan at Nomura International Ltd., said in an interview on Bloomberg Television in Hong Kong today.

    Policy makers may opt to shrink the trade surplus through raising wages rather than yuan gains, Credit Suisse Group AG economist Tao Dong said in an interview yesterday. Higher labor costs would cut Chinese export competitiveness while boosting domestic spending power and sustaining growth, he said.

    Jiangsu’s Wage Boost

    Jiangsu, the nation’s third-largest exporting province in 2008, boosted the minimum wage 13 percent this month in an effort the local labor department said was aimed at attracting workers.

    Central bank Governor Zhou Xiaochuan said yesterday that policy makers need to “closely watch” inflation. Fan Gang, the academic member of the monetary policy committee, warned Feb. 1 that asset bubbles are “the real worry” for the Chinese economy.

    --Sophie Leung, Li Yanping, Kevin Hamlin. Editors: Paul Panckhurst, Lily Nonomiya.

    To contact the reporter on this story: Sophie Leung in Hong Kong at +852-2977-6126 or [email protected]

    To contact the editor responsible for this story: Chris Anstey at +65-6212-1130 or [email protected]
    “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

    Comment


    • #47
      * JANUARY 6, 2010

      Crisis Helps China Become Top Exporter
      China Dethrones Germany as Top Goods Exporter - WSJ.com

      Save This ↓ More
      * smaller Text larger

      By JOHN W. MILLER

      BRUSSELS -- China took over the mantle of the world's top exporter from Germany in 2009, according to the latest figures, helped on its way by a global economic crisis that has taken a greater toll on other trading powers.

      China exported $957 billion of goods in the first 10 months of 2009, compared with $917 billion for Germany, according to data compiled by Global Trade Information Services, a Geneva-based firm that collects and tabulates customs data. No November or December developments are likely to overturn the Chinese lead, trade experts say.

      China had long been expected to become the world's largest exporter, with annual growth in exports regularly exceeding 20% in the past decade.
      [Trades Horse Race chart]

      "China's overtaking Germany on exports was only a matter of time," said Mei Xinyu, who works for a think tank affiliated with China's Commerce Ministry.

      Douglas Irwin, a professor at Dartmouth College, said "China has been growing much more rapidly than Germany on all sorts of dimensions and has a population of 1.3 billion, while Germany has 83 million."

      China's ascendancy has been boosted by the financial crisis, from which China has suffered less than other major economies. With trade in tatters around the world, Chinese exports fell 20.4% during the first ten months of 2009, compared with 27.37% for Germany and 31.09% for Japan. U.S. exports dropped 21.37%, with the weak dollar making U.S. goods cheaper and preventing a steeper fall.

      A combination of factors account for China's relative resilience. The Chinese currency is tied to the sinking dollar, helping to keep China's exports competitive on price.

      By contrast with Germany, China also produces many low-cost goods that are relatively recession-proof. "The demand for low-end and labor-intensive products is relatively stable," said Shen Minggao, chief China economist at Citibank in Beijing.

      "Most of the products China produces for the global market are life necessities," less affected by the financial crisis, says Huang Huiguo, CEO of Kingsons International, a Guangzhou-based exporter of leather bags.

      To be sure, China's export prowess "is not speaking to how important and powerful Chinese companies are on their own," says Scott Kennedy, a China expert and political scientist at Indiana University. Sixty percent of the country's exports come from companies owned by foreign investors, he says.

      The last decade has seen a sea change in global trade. Until as late as 2002, the U.S. was the world's leading exporter, before Germany claimed the top spot in 2003. At the time, China -- which joined the World Trade Organization in 2001 -- was fifth, behind Japan and France. In 1997, China had been tenth, also trailing Canada and a host of European countries.

      For Germany, the ascendance of China has been a double-edged sword. The country is "our biggest competitor but also our most dynamic market," says Jens Nagel, a trade expert with the German Exporters Association.

      "We were proud to keep the ceremonial title of world export champion six years in a row, but now China has taken the lead," Mr. Nagel adds.

      He cites the strong euro and the financial crisis among reasons behind the change. The association expects German exports to grow 10% in 2010. "It won't take us back to 2008, but the worst is over," says Mr. Nagel.
      —Andrew Batson, Gao Sen, Sue Feng and Kersten Zhang contributed to this article.
      “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

      Comment


      • #48
        Foreign direct investment is totally 65 Billion in 2009.

        Feb 11th 2010 | From The Economist print edition

        The flow of foreign direct investment (FDI) fell by 39% in 2009 to just over $1 trillion, from a shade under $1.7 trillion in 2008, according to the UN Conference on Trade and Development. All kinds of investment—equity capital, reinvested earnings, and intra-company loans—were affected by the downturn. Rich countries saw FDI inflows plunge by 41%, and foreign investment into developing countries fell by more than a third. Not every country was badly hit. FDI into China, where economic growth remained robust, declined by only 2.6%. Foreigners actually invested more in Germany and Italy last year than in 2008. Despite FDI plunging by 57% last year, America remained the world’s top investment destination.

        Foreign direct investment | The Economist
        “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

        Comment


        • #49
          Furthermore, with millions thrown out of work, whose buying those goods? since the layoffs and resignations reduce wage pressure- where is the money coming from? easy credit might be hiding serious flaws.
          Short answer is by the 1.5 Trillion dollars of easy credit and major subsiding the appliance buy.


          Old news from one year ago.





          Appliance rebate program targets rural China

          Liu Yadan, right, discusses a refrigerator purchase with Shang Hongyu, manager of the Suning appliance store in Tongzhou, China. "This policy is a kind of social welfare," Shang says.

          http://www.usatoday.com/news/world/2...chinabuy_N.htm

          *

          By Calum MacLeod, USA TODAY
          TONGZHOU, China — The two Liu sisters carry a pricey shopping list into the biggest appliance store here to grab some bargains now available to China's rural residents.

          Liu Yaning, 23, is getting married next month, and village tradition demands that newlyweds start their life together with a new TV, refrigerator and washer.

          One of her biggest wedding gifts may be the 13% rebate the Chinese government is offering to boost consumption of computers, water heaters air conditioners and other big-ticket items among the 737 million farmers and others who live outside the cities.

          The rebate policy, called "home appliances go to the countryside," debuted nationwide this week to encourage sales within China to offset the country's plummeting exports because of the global financial crisis.

          "The biggest potential for boosting domestic demand lies in rural areas," said a major Communist Party policy document issued this week.

          Liu Yadan, 20, says the house she and her older sister share with their farming parents in Tongzhou, a semirural district 12 miles from central Beijing, already has appliances, but her sister must have new ones for her wedding day.

          "She needs to upgrade to better models, and this subsidy plan will save us money," says Liu,while shopping Thursday.

          Consumption in the countryside, where the majority of China's 1.3 billion people live, has long lagged behind the more prosperous cities because people are poorer in rural areas.

          The rebate program seems popular so far. Sales jumped 30% during a year-long pilot program in select provinces, according to the People's Daily, the Communist Party newspaper.

          He Xuefeng, a sociology professor at the Central China Science and Technology University, warns that the rebates could tempt farmers to go into debt. "Encouraging farmers to consume, and saying it is patriotic to consume, is ridiculous," He says.

          Some farmers buy a full range of appliances for their wedding day, then spend the next five years laboring to pay for them, He says.

          "To stimulate consumption, it would be better for the government to spend this money on building basic infrastructure in the villages. That way farmers would benefit far more," He says.

          Customers have doubled this week at the Suning appliance chain store in Tongzhou, manager Shang Hongyu says.

          "The response has been great," she says. "This policy is a kind of social welfare."

          Li Dewu, 51, who was browsing for a new refrigerator, welcomes the subsidy.

          "China is a socialist country, so the government should help the farmers. This measure is a tactic from the old planned economy, and should have been implemented long before."

          Chuan Tang, a researcher at the CLSA brokerage in Hong Kong, says washing machines and refrigerators are likely to be the best sellers because only 30% of people own them, vs. more than 95% who have TVs.

          The rebates could help slumping sales at the nation's largest appliance retailer, Gome, known as the Best Buy of China. "Rural sales have become a core area of our work. We will be driving our company vans into the villages to sell products," company vice president He Yangqing says.

          Chen Gang, deputy secretary-general of the China Household Electrical Appliance Association, laughs off any concerns that farmers will be lured into debt to buy washers and color TVs.

          "There is far more blind consumption in the cities than the countryside," he says. "China's farmers are very careful with their money."
          “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

          Comment


          • #50
            before people say China will go broke.....



            China's Foreign Reserves Rise to $2.4 Trillion
            China's foreign reserves rise to $2.4 trillion, up 24 percent over 2008 despite global crisis
            BEIJING January 15, 2010 (AP)
            The Associated Press
            China's Foreign Reserves Rise to $2.4 Trillion - ABC News

            China's foreign reserves, already the world's biggest, surged 24 percent last year to $2.4 trillion despite the global financial crisis, the central bank reported Friday.

            China's reserves are closely watched in the United States, which is looking to Beijing to help finance its stimulus spending by continuing to recycle its trade surpluses into buying Treasury securities and other government debt.

            The reserves grew by $453 billion in 2009, an even faster growth rate than the previous year, the central bank said. The reserves added $10.4 billion in December alone.

            China's reserve growth is driven by its currency controls, which requires Beijing to buy dollars and other foreign currency that flows into the country in order to control the state-set exchange rate of China's yuan.

            China, which overtook Germany last year as the biggest exporter, reported a $196 billion trade surplus for 2009.

            Regulators also say foreign "hot money" is flowing into China for speculative investments in real estate and stocks, which the government is trying to stop.

            China had $798.9 billion of its reserves invested in U.S. Treasury securities as of October, according to the U.S. government.

            ———
            “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

            Comment


            • #51
              xinhui, does Michael Pettis have any credibility? I found him via twofish and James Fallows; he seems to be a consummate panda (China bear), but I find that his criticisms seem cliche and quite often wrong.

              Comment


              • #52
                Pettis is a professor in Peking University, he's legit. Hhe has quite a few followers on seekingalpha

                Michael Pettis -- Seeking Alpha

                That means something about his credibility (investors are not dumb)

                Comment


                • #53
                  This gent thinks so.





                  Bloomberg
                  Rogoff Says China Crisis May Trigger Regional Slump (Update1)
                  February 24, 2010, 12:23 AM EST
                  More From Businessweek

                  Rogoff Says China Crisis May Trigger Regional Slump (Update1) - BusinessWeek


                  (Adds example of social unrest in the 10th paragraph.)

                  By Aki Ito and Patrick Rial

                  Feb. 24 (Bloomberg) -- China’s economic growth will plunge to as low as 2 percent following the collapse of a “debt- fueled bubble” within 10 years, sparking a regional recession, according to Harvard University Professor Kenneth Rogoff.

                  “You’re not going to go a decade without having a bump in the business cycle,” Rogoff, former chief economist at the International Monetary Fund, said in an interview in Tokyo yesterday. “We would learn just how important China is when that happens. It would cause a recession everywhere surrounding” the country, including Japan and South Korea, and be “horrible” for Latin American commodity exporters, he said.

                  China, set to surpass Japan as the second-largest economy this year, has helped pull the world out of its deepest postwar slump. Record lending, soaring property values and accelerating economic growth prompted the government to begin retracting stimulus measures implemented during the global recession.

                  “Their response to the latest financial crisis clearly raised the risk that they have a debt-fueled bubble in the economy,” said Rogoff, who in 2008 predicted the failure of big American banks.

                  In 2008, China cut interest rates, started rolling out a 4 trillion yuan ($586 billion) spending package and scrapped quotas limiting lending by banks to counter slumping exports.

                  ‘Best Bet’

                  While Rogoff said he isn’t sure what will cause China’s bubble to pop, he said land is “the best bet” as it is “the most common source” of crises. Real estate values in Shanghai and Beijing have “taken a departure from reality,” said the economist, co-author of “This Time is Different,” a 2009 book that charts the history of financial calamities in 66 countries.

                  A collapse would depress output gains to 2 to 3 percent, a “very painful” period which would persist for about a year and a half, Rogoff said. The slowdown won’t lead to a Japan- like “lost decade,” he added. In a speech earlier yesterday, he said China will do “very well this century.”

                  China, the world’s fastest-growing major economy, expanded 10.7 percent from a year earlier last quarter. The World Bank forecasts a 9 percent expansion in 2010.

                  China may provide more than a third of global growth in this year, according to Nomura Holdings Inc., Japan’s biggest broker. The country’s policy makers aim for a minimum of 8 percent growth annually to create jobs and avoid social unrest.

                  Migrant Laborers

                  The global financial crisis left 20 million Chinese migrant laborers unemployed and more than 7 million college graduates seeking work by March last year. In February 2009, a clash between police and about 1,000 protesting workers from a textile factory in Sichuan province injured six demonstrators, rights group Chinese Human Rights Defenders reported.

                  World exporters are increasingly relying on China as consumers in the U.S. and Europe retrench.

                  Honda Motor Co. and Nissan Motor Co. are adding capacity in China, which last year overtook the U.S. as the biggest car market. Rio Tinto Group’s sales to China overtook those to North America and Europe in 2009, reaching 24.3 percent of the total from 18.8 percent a year earlier, the mining company said this month.

                  Chinese policy makers are trying to cool lending that helped property prices in 70 cities climb at the fastest pace in 21 months in January. The government aims to reduce new loans to 7.5 trillion yuan this year from a record 9.59 trillion yuan in 2009. The People’s Bank of China raised the proportion of deposits that lenders must set aside as reserves twice this year to cool the economy.

                  “If there’s a this-time-is-different story in the world right now, it’s China,” Rogoff said in the speech at a forum hosted by CLSA Asia-Pacific Markets, a unit of Credit Agricole SA, France’s largest retail bank.

                  People say China “won’t have a financial crisis because there’s central planning, because there’s a high savings rate, because there’s a large pool of labor, blah blah,” he added. “I say of course China will have a financial crisis one day.”


                  --With assistance from Jason Clenfield in Tokyo and Kevin Hamlin in Beijing. Editors: Russell Ward, Paul Panckhurst

                  To contact the reporter on this story: Aki Ito in Tokyo at +81-3-3201-3423 [email protected]; Patrick Rial in Tokyo at +81-3-3201-3773 or [email protected]

                  To contact the editor responsible for this story: Chris Anstey at +81-3-3201-7553 or [email protected]

                  %CNY
                  Last edited by xinhui; 24 Feb 10,, 18:23.
                  “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

                  Comment


                  • #54
                    He is not the first one and he won't be the last one.;)

                    In the end, it really comes down to when and how the bubble is going to pop. Can CCP pops the bubble before it is getting too big?

                    Comment


                    • #55
                      Originally posted by RollingWave View Post
                      Of course, the US took advantage of Taiwan's status in the 90s and used section 301 of their 1974 trade act and applied special penalties on Taiwan to force it to comply with copyrights issues. which is actually quiet unfair since that is applying a US domestic law on a foreign country. (and realistically it only works on countries like Taiwan that inherently have a need to comply with US demands and have non-existent leverage on the international stage, try it on China and we're REALLY going into great depression II
                      )
                      How is it unfair? The U.S. doesn't HAVE to allow any other country--Taiwan included--access to its domestic market. We can go ahead and attach restrictions to importers--for instance that they abide by copyright laws.

                      Comment


                      • #56
                        Communist Party Needs to Loosen Its Grip in China

                        Inside Asia - Communist Party Needs to Loosen Its Grip in China - NYTimes.com
                        o

                        By ALAN WHEATLEY
                        Published: March 1, 2010

                        BEIJING — Turkeys don’t vote for Christmas, and the Chinese Communist Party is not exactly itching to release its iron grip on society and the economy.

                        But that is exactly what the party needs to do to prolong the fast economic growth that underpins its political legitimacy: Cutting state-owned companies down to size and opening up to private enterprise hold the key to sustaining productivity gains and redistributing income more equitably.

                        Coming from Western economists, such a prescription is standard stuff. What is striking is the urgency with which some prominent Chinese academics are making the same case.

                        “In the financial crisis, China seems to have performed quite well,” said Yang Yao, director of the China Center for Economic Research at Peking University. “But the problem is that government involvement in the economy has increased significantly.”

                        “Ultimately, this trend should be stopped, and the government should retreat from the economy — not just from monopolistic areas but also from competitive sectors,” he said in an interview.

                        The success of Beijing’s overwhelming fiscal and monetary response to the global credit crunch has bolstered the confidence of state planners and put advocates of freer markets on the defensive.

                        The phrase “guojin mintui” — the state advances as the private sector retreats — has become common currency in debate about the Chinese economy.

                        Mr. Yang said the phenomenon was real, especially in the financial sector, where he fears overhauls could be postponed indefinitely.

                        Mr. Yang was elaborating on a recent hard-hitting article in the journal Foreign Affairs in which he argued that there was no alternative to greater democratization if the Communist Party wanted to encourage economic growth and maintain social stability.

                        Attacking local governments for simply pursuing economic gain instead of improving the average citizen’s welfare, Mr. Yang said popular discontent over infringements of economic and political rights would inevitably lead to periodic unrest. A way would have to be found soon to let ordinary people take part in the political process, he said.

                        “The reforms carried out over the last 30 years have mostly been responses to imminent crises,” he wrote. “Popular resistance and economic imbalances are now moving China toward another major crisis.”

                        He added that “strong and privileged interest groups and commercialized local governments are blocking equal distribution of the benefits of economic growth throughout society,” thereby rendering futile the Communist Party’s “strategy of trading economic growth for people’s consent to its absolute rule.”

                        Prime Minister Wen Jiabao pledged Saturday to redouble efforts to increase the share of national income going to households, rather than enterprises, but his government has shown no sign of wanting to rein in rich and powerful state-owned companies.

                        Indeed, China Mobile intends to spend nearly $6 billion of its $37.5 billion cash mountain to buy 20 percent of Shanghai Pudong Development Bank, according to two Chinese brokerage firms. The stakes of Citigroup and private investors would be diluted in the process.

                        Zhang Lifan, a liberal scholar and historian, goes so far as to argue that the retreat of the private sector was an underlying factor behind the collapse of the Qing Dynasty in 1911 and the 1966-1976 Cultural Revolution.

                        “History has proved that ‘guojin mintui’ is not sustainable,“ Mr. Zhang wrote in a recent article. “If we can’t curb the advance of the state sector, it will definitely have an impact on China’s future industrial structure and economic development.”

                        This is not to deny the ruling party credit for some important initiatives. Spending on social services has soared, which should eventually reduce precautionary savings and increase consumption, according to Andy Rothman, an economist at the brokerage firm C.L.S.A. in Shanghai.

                        Outlays on health care rose 163 percent from 2005 to 2008; on education by 125 percent; and on social security by 83 percent, he said in a report.

                        Mr. Rothman said the trend continued in 2009, with central government spending on education and health care estimated to have increased 25 percent and 48 percent, respectively.

                        And Mr. Yang, the Peking University professor, described unfolding changes to make it easier for migrant workers to settle in smaller cities with their families as a historic breakthrough.

                        It is the very success of such policies that make economists wish the Communist Party were bolder.

                        Fan Gang, an economist who sits on the central bank’s monetary policy committee, said China still had immense potential for changes that could galvanize growth.

                        For all its achievements, he said, China could be a wealthier and fairer society if it did more to curtail the power of the state over the economy. Not doing this was hampering efficiency and feeding corruption, one of the biggest complaints of ordinary Chinese.

                        “To truly address this problem we must press ahead with market reforms and privatize state-owned enterprises, as well as reducing government controls and the various powers of government departments, so that market mechanisms play a bigger role,” Mr. Fan wrote in the magazine Green Leaf.

                        Against this background, investors will comb Mr. Wen’s annual policy speech Friday to the National People’s Congress, China’s parliament, for signs that the Communist Party is ready to re-emphasize reform now that the economy is back on solid ground.

                        Minggao Shen and fellow economists at Citigroup Global Markets said that China’s current growth model could not last for more than a few years. Structural adjustments long identified by the Communist Party to rebalance the economy were inevitable, they wrote in a report.

                        In an echo of Mr. Yang’s argument that only crisis encourages change, they said: “The only difference is whether this is a planned reform or a forced reform. China’s experiences in the past three decades suggest it’s very likely to be the latter.”

                        Alan Wheatley is a Reuters columnist.
                        “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

                        Comment


                        • #57
                          I'm trying to source it but apparently with certain land reforms in place, allowing peasants to rent their land to agricultural corporations, the labor market in Guangzhou has slumped in a way suggesting that some peasants, for the time being, are now happy with being landlords.

                          Comment


                          • #58
                            latest from Forsythe, a CDF member.

                            China’s Wen Blocked by Politics From Fixing Economy (Update1) - BusinessWeek

                            China’s Wen Blocked by Politics From Fixing Economy (Update1)
                            March 04, 2010, 5:13 AM EST

                            (Adds Wen’s comments on economy in sixth paragraph, updates number of economists surveyed in eighth paragraph.)

                            March 4 (Bloomberg) -- Premier Wen Jiabao calls China’s economic growth path “unbalanced, uncoordinated, and unsustainable.” This week’s annual parliament session may prove he is unable to change its course.

                            Wen, 67, will give what amounts to China’s State of the Union speech tomorrow to the National People’s Congress in Beijing. His audience will include people who, according to analysts, disagree with some possible measures to fix the imbalance: provincial and municipal officials and such company heads as Hangzhou Wahaha Group Co. Chairman Zong Qinghou.

                            Adding to the inertia is the fact that Wen, President Hu Jintao and other leaders are nearing the end of their tenures, said Jim McGregor, a senior counselor in Beijing at APCO Worldwide. APCO is a public-affairs group advising clients including China Cosco Holdings Co., Asia’s biggest shipping company.

                            “China’s in severe election mode,” McGregor said in a Bloomberg Television interview. “They have 2 1/2 years left in their term.” There is “a lot of jockeying for position.”

                            Wen says China’s growth model -- emphasizing investment, manufacturing and exports over consumption -- is creating economic distortions. He told an online audience on Feb. 27 that 2010 would be “the most complicated year for the country’s economy” as the government sought to control property prices and inflation stoked by $1.4 trillion in new lending last year.

                            Wen has on at least two occasions said China’s growth was unsustainable and unbalanced; in a Dec. 27 interview with the official Xinhua News Agency and at the 2007 National People’s Congress.

                            ‘Debt-Fueled Bubble’

                            Wen’s view is shared by Kenneth Rogoff, a professor at Harvard University in Cambridge, Massachusetts. Rogoff said on Feb. 23 that a collapse of China’s “debt-fueled bubble” could send growth to as low as 2 percent from last year’s 8.7 percent.

                            China is forecast by the International Monetary Fund to surpass Japan in 2010 as the world’s second-largest economy and will expand 9.5 percent this year, according to the median estimate of 39 economists. That compares with a 3 percent forecast for U.S. growth.

                            “Things need to change now,” said Wang Tao, a Beijing-based economist for UBS AG, in an interview. “Later the costs will become higher and higher.”

                            Property Tax

                            One remedy is an overhaul of the tax system, Wang and other economists say, to create a dependable stream of revenue for China’s local governments. A property tax and a sales tax could wean them from dependence on land sales and production taxes. Land sales helped fuel real-estate speculation and taxes on industrial production stoked overcapacity in steel and cement as local governments built factories regardless of whether they generated a profit.

                            Those measures aren’t on this year’s Congress agenda “because there are so many people against it,” Wang said.

                            While a property tax isn’t likely to be implemented this year, a timetable may be set, Hong Kong-based CLSA Asia-Pacific Markets said in a Feb. 22 research note.

                            Many government officials oppose the tax, fearing it will reduce the value of their own real-estate holdings, said Arthur Kroeber, managing director of Beijing-based Dragonomics, an economics-research firm whose clients include hedge funds and Fortune 500 companies.

                            ‘Not Suitable’

                            “A property tax is not suitable,” said Zong, of Hangzhou-based Wahaha, in an interview. He is a delegate to the Congress. “There is no need for it. It will just make houses less affordable.”

                            Wen is likely instead to announce measures, some of them favored by Zong, to help ease income disparities. They may include increasing the minimum wage and spending more on housing for poor people, CLSA said. Such moves help promote consumption and ease economic distortion, but they are insufficient, Wang said.

                            Boosting consumer spending through actions such as an expansion of rural rebates for appliances will be a boon for Beijing-based computer maker Lenovo Group Ltd. and Hong Kong-based television maker Skyworth Digital Holdings Ltd., CLSA said.

                            Property developers including Liao Xiaoqi, a former vice minister of commerce and the chairman of Beijing-based China World Trade Center Co., are due to attend the annual meeting as members of China’s political-advisory body. Leaders of state-owned companies that bought real estate with some of last year’s record $1.4 trillion in new loans are also among the delegates.

                            State-Owned Companies

                            State-owned companies have become an increasingly powerful political force in China, helped by government policies favorable to the large-scale construction projects and manufacturing that they dominate. State-run companies had sales of 22.5 trillion yuan ($3.3 trillion) and profit of 1.3 trillion yuan last year, according to the Ministry of Finance.

                            “They have become very very powerful, very cash rich, and very resistant to various kinds of reform,” Kroeber said.

                            The result may be that Wen and Hu, 67, won’t be able to muster the political support needed to overhaul the tax system and close down needless factories, Wang and Kroeber say.

                            Wen and Hu’s 10-year tenures begin to wind down starting in late 2012, when they step down from their Communist Party posts. Both are due to retire from their government positions in March 2013.

                            “The closer that we get to the leadership transition, the more incentive the top leaders have just to kick all the tough structural problems down the road and let the next guys handle it,” Kroeber said.

                            --Michael Forsythe. With assistance from Stephen Engle and John Liu in Beijing. Editors: Anne Swardson, Ken Fireman

                            To contact the editor responsible for this story: Bill Austin at [email protected]
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                            “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

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                            • #59
                              Originally posted by Inst View Post
                              I'm trying to source it but apparently with certain land reforms in place, allowing peasants to rent their land to agricultural corporations, the labor market in Guangzhou has slumped in a way suggesting that some peasants, for the time being, are now happy with being landlords.
                              are you kidding me, no one in the Pearl river wants to farm. The policy created bunch of lazy, drunk, living off the family rentals.
                              “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

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                              • #60
                                China February exports jump 45.7 percent

                                The Associated Press: China February exports jump 45.7 percent

                                By JOE McDONALD (AP) –
                                BEIJING — China's exports rose in February in a new sign of growing global demand that could help persuade officials to let the Chinese currency rise.

                                Exports were up 45.7 percent over a year earlier, the Chinese customs agency reported Wednesday, beating analyst forecasts of 35 to 40 percent growth. Imports surged 44.7 percent, the agency said, reflecting growing demand in China as it emerges from the global crisis.

                                "China's trade is extending its recovery," said Zhu Jianfang, an economist for Citic Securities in Beijing. "Exporters are getting more orders these days."

                                February's growth rate was boosted by comparison with last year's weak trade amid the global downturn and came despite the weeklong Lunar New Year holiday, when many companies shut down.

                                Zhu said the data increase chances the government might allow China's currency, the yuan, to rise in value. Beijing has held the yuan steady against the dollar for 18 months to help Chinese exporters but is under pressure from Washington and other trading partners that say it is undervalued and is swelling China's trade surplus.

                                Combining data from January and February shows exports surged 31.4 percent during the period from a year earlier, the customs agency said. Analysts say looking at that two-month period compensates for the distortion of the Lunar New Year holiday and produces a more accurate picture of China's trade.

                                In a reflection of stronger global trade, China's total February imports and exports were up 45.2 percent from the same month last year. China overtook Germany in 2009 as the world's top exporter.

                                China's central bank governor, Zhou Xiaochuan, said Saturday that Beijing will be "very cautious" about easing exchange-rate controls because the global economic outlook is still uncertain.

                                China's global trade surplus for the January-February period narrowed by 50.3 percent from the same time last year, reflecting surging Chinese demand for imports spurred by its quick rebound from the crisis while the United States and other key export markets are still struggling.

                                Chinese economic growth accelerated to 10.9 percent in the final quarter of 2009 on the strength of massive stimulus spending and bank loans. That drove demand for imported iron ore and other materials used in stimulus-financed construction projects.

                                "Stronger domestic demand led to the good performance of imports," said Liu Qiyuan, an economist for China Merchant Securities. "We can see the domestic economic is on track for recovery."

                                China's global trade surplus was $7.6 billion in February and the combined January-February surplus was $21.8 billion.

                                Its trade surplus with the United States in the January-February period shrank by 27 percent to $20.9 billion. The gap with the 27-nation European Union, China's biggest trading partner, widened by 34 percent to $22.3 billion.

                                China's combined trade surpluses with its major export markets were larger than its global surplus because it also ran substantial deficits with Australia, Brazil, Taiwan and other suppliers of iron ore, industrial components and other materials needed by its booming export manufacturers.

                                The commerce minister, Chen Deming, cautioned Saturday that despite stronger recent trade, it will be two to three years before China's exports return to pre-crisis levels.

                                "With unemployment in the U.S. and EU remaining stubbornly high, and government subsidies to consumption winding down, that recovery will necessarily be a slow process," Tom Orlik, an analyst in Beijing for Stone & McCarthy Research Associates, said in a report.

                                Associated Press researcher Bonnie Cao in Beijing contributed to this report.
                                “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all” -- Joan Robinson

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