How many times can you lie about growth data and get away with it?

[santafe2]

Re: Will China do a Japan?

No, the parties are quite different. They may both be beholden to big business, but tell a woman who wants control of her body or a homosexual that both parties are the same and they will point to a mountain of evidence that they are both very different. As screwed up as the Democrats are, at least they are socially progressive.

OK, fair enough. They aren't progressive but they aren't as socially regressive. Unfortunately, they are in the same camp with regard to detention and interrogation. They both think it's OK to kill US citizens without trial. Guantanamo Bay, still open. Habeas corpus, still closed. They are marginally different, not quite different.

[Thailandnotes]

Re: China's dead end.

It’s hard to know what to even read about China.

(Recommendations appreciated.)

Evan Osnos, China correspondent for the New Yorker, writes, “This is an enduring struggle for journalists in writing about China. Because if you dwell only on the dissidents and the terrible stories of villainy out in the woolliest corners of the provinces, then you’re really only giving a negative impression of China. But if you dwell only on the incredible new buildings and new airports and the fact that middle-class Chinese are now grooming their dogs at the cost of the GNP of some small African republic…

Osnos’ Five Books interview http://fivebooks.com/interviews/evan-osnos-on-china

China section in Five Books http://fivebooks.com/sections/exploring-world/china

I may order China in Ten Words

(In “Disparity,” for example, Yu Hua illustrates the mind-boggling economic gaps that separate citizens of the country. In “Copycat,” he depicts the escalating trend of piracy and imitation as a creative new form of revolutionary action. And in “Bamboozle,” he describes the increasingly brazen practices of trickery, fraud, and chicanery that are, he suggests, becoming a way of life at every level of society.)

Or Fallow’s book on the airline industry

But somehow, I get the feeling both books barely scratch the surface.

[santafe2]

Re: China's dead end.

It’s hard to know what to even read about China.

My experience with Chinese companies over the last 30 years in business is that they are learning that it's more important to create world class products than cheap substandard products. Again, speaking from my most recent business perspective, the top 6 Chinese solar panel suppliers have all provided an excellent product. Two of them are toast but the other 4 are doing OK for now. It's easy for Westerners and other Asians to goof on China but I don't think it's smart or productive.

[don]

Re: China's dead end.

My experience with Chinese companies over the last 30 years in business is that they are learning that it's more important to create world class products than cheap substandard products. Again, speaking from my most recent business perspective, the top 6 Chinese solar panel suppliers have all provided an excellent product. Two of them are toast but the other 4 are doing OK for now. It's easy for Westerners and other Asians to goof on China but I don't think it's smart or productive.

As a kid I grew up hearing cheap goods from Japan ridiculed. Urban myths like Japan had a town they named USA to stamp on their exports, etc. That changed.

[Polish_Silver]

China's real estate bubble?

I can tell you that China is hardly the Singapore model even though they claim to emulate the Singapore model.

1. Unlike China, Singapore has very good social security and welfare system for the real destitute. Healthcare, food and housing is virtually free for the very old, handicap and sick.

2. Public housing is widely available in Singapore at x6 median income. In China, the majority have to settle for x20 to x30 income.

3. The other issue is corruption. There is corruption in Singapore, more than what the state media claims, but it is a great deal much lower than China even on a per capita basis.

4. The people in Singapore are very afraid of the law. In China, people break the law all the time.

There's a lot more differences.

There's much discussion of a real estate bubble in China. C1ue had some data that vacancy rates are not especially high. But what about prices of residential real estate relative to income?

I have heard stories that residence prices are very high multiples of annual income. That indicates a bubble, mortgage or not. 20X income is a lot to pay for a house. It means all your income for 20 years!

China is big. You cannot make the argument of "not enough land". If any place could make that argument it would be somewhere like Taiwan, maybe Hong Kong.

[Polish_Silver]

Chinese Name brands

I have posted similar ideas in the past but I disagree with this idea that we in the US are somehow ipso facto better prepared for the future than China. . . If we don't soon understand how smart our competitors are we may doom ourselves to being a 3rd world country with nukes.

For the most part, China has been relying on low wages and cost reduction to be competitive.

How many Chinese name brands have wide recognition? I can't think of one

Germany: BMW, Puma, SAP, Bosch.

Japan: Toyota, Mitsubishi, Sony

USA: Boeing, IBM, Apple, Dow Corning


China : ?

But I see substantial data that China can do more than cut cost.

Consider Rigol and AW batteries.

Without political reform, I think China's development will be limited.
It's not the people that are the limiting factor. It's the system they are in.

[touchring]

Re: China's real estate bubble?

There's much discussion of a real estate bubble in China. C1ue had some data that vacancy rates are not especially high. But what about prices of residential real estate relative to income?

I have heard stories that residence prices are very high multiples of annual income. That indicates a bubble, mortgage or not. 20X income is a lot to pay for a house. It means all your income for 20 years!

China is big. You cannot make the argument of "not enough land". If any place could make that argument it would be somewhere like Taiwan, maybe Hong Kong.

Vacancy cannot crash the Chinese property bubble. Entire cities were empty (ghost cities) but prices can still rise.

The problem starts if Bernanke stops printing cash at the same rate and the RMB starts to devalue.

[jabberwocky]

Re: Chinese Name brands

For the most part, China has been relying on low wages and cost reduction to be competitive.

How many Chinese name brands have wide recognition? I can't think of one

Germany: BMW, Puma, SAP, Bosch.

Japan: Toyota, Mitsubishi, Sony

USA: Boeing, IBM, Apple, Dow Corning


China : ?

But I see substantial data that China can do more than cut cost.

Consider Rigol and AW batteries.

Without political reform, I think China's development will be limited.
It's not the people that are the limiting factor. It's the system they are in.

When I was a child (50's-60's), "made in Japan" meant "junk". It was a slur.
I am not suggesting that China will repeat a "Japan". Zen Buddhism/Shintoism is not Confuscism, and I have tried to make clear my contention that culture restricts and modifies path dependency in economics, but, who knows? Only the Shadow...........and, perhaps.........EJ?

[jabberwocky]

Re: China's dead end.

As a kid I grew up hearing cheap goods from Japan ridiculed. Urban myths like Japan had a town they named USA to stamp on their exports, etc. That changed.

Great minds think alike, Don! I just posted almost the same anecdote!

[c1ue]

Re: China's dead end.

Evan Osnos, China correspondent for the New Yorker, writes, “This is an enduring struggle for journalists in writing about China. Because if you dwell only on the dissidents and the terrible stories of villainy out in the woolliest corners of the provinces, then you’re really only giving a negative impression of China. But if you dwell only on the incredible new buildings and new airports and the fact that middle-class Chinese are now grooming their dogs at the cost of the GNP of some small African republic…

Spot on. The corruption is unquestionable, as is the reality of how life has improved in China for just about everyone. Listening to either the US MSM or Chinese propaganda are both equally unproductive; IMO only time will tell what the true story is.

I'd also note that China has clearly shown that they do care when the abuses become too public (egregious apparently isn't itself a factor). When was the last time a US official got shot for outrageous abuse of authority/failure to do their job?

C1ue had some data that vacancy rates are not especially high.

I merely provided some context. The problem with what is said in almost all of the MSM, as well as in the official government statistics, is that there is little to no context. In the former case, it is sensationalism. In the latter case, it is a combination of poorly constructed bureaucratic charters combined with at least some deliberate obfuscation.

How many Chinese name brands have wide recognition? I can't think of one

Huawei. They're right in Cisco's and Juniper's face in the competition to sell telephony to the ROW.

They also are clearly independent and have a strategic plan - much like Samsung.

The main reason we don't see others is that the market in China is still progressing. Once the internal market gains sufficient sophistication to demand products which are closer to world par, then we'll start seeing brands outside China.

In other areas like nuclear power plant construction, I suspect Chinese companies (or more likely company) will make their presence felt sooner rather than later.

[don]

Re: China's dead end.

Great minds think alike, Don! I just posted almost the same anecdote!

[Belvegas]

Re: Will China do a Japan?

i spent a number of years working in singapore and japan. currently, i'm working in china. it's difficult to think of many similarities amongst the three. if i have to guess which country will be in the best position ten years from now i'll put my money on singapore.

… and a quick note on my limited knowledge of real estate in china. i rent an apartment in one of shanghai's nicest neighborhoods for about USD1,200 per month. an identical apartment in my building is currently for sale at an asking price of USD750,000.

[touchring]

Re: Will China do a Japan?

i spent a number of years working in singapore and japan. currently, i'm working in china. it's difficult to think of many similarities amongst the three. if i have to guess which country will be in the best position ten years from now i'll put my money on singapore.

… and a quick note on my limited knowledge of real estate in china. i rent an apartment in one of shanghai's nicest neighborhoods for about USD1,200 per month. an identical apartment in my building is currently for sale at an asking price of USD750,000.

A nice city studio apartment for rent in Singapore can cost between USD2500 to USD4000 a month to rent, a lot more expensive than Shanghai.

[NCR85]

Re: Will China do a Japan?

China's leader's desire to emulate Singapore's economy is misguided. Singapore's economic model works because of the country's history, small geographic and ethnic scale, and finance industry concentration. China is a huge third world continent, like Africa, with a handful of Singapores along its trade routes. The UK is closer to a workable version of the Singapore model than China can ever be.

China cannot scale because it is a centrally planned economy. It grows via finance not via organic economic activity. It is constrained by central planning and dictatorship.

We in the U.S. have the luxury of thinking that our legislature is corrupt because it has allowed the finance industry to survive an egregious violation of the public trust. Here's what the average Chinese citizen has to deal with:

"The net worth of the 70 richest delegates in China’s National People’s Congress, which opens its annual session on March 5, rose to 565.8 billion yuan (US$89.8 billion) in 2011, a gain of $11.5 billion from 2010, according to figures from the Hurun Report, which tracks the country’s wealthy. That compares to the $7.5 billion net worth of all 660 top officials in the three branches of the U.S. government."

China’s Billionaire People’s Congress Makes Capitol Hill Look Like Pauper

As I've said, a gigantic 3rd world country with nukes.

China will eventually fail just like every technocratic dictatorship has; as Nazi Germany failed, as the Soviet Union failed, as Syria is failing, but with Chinese Characteristics.

This discussion reminded me of this blog post about how China is emulating not Singapore's, but South Korea's growth model: http://esoltas.blogspot.com/2012/04/...uth-korea.html

Although I get the impression many of your objections apply to that thesis to the same degree.

[touchring]

Re: Will China do a Japan?

This discussion reminded me of this blog post about how China is emulating not Singapore's, but South Korea's growth model: http://esoltas.blogspot.com/2012/04/...uth-korea.html

Although I get the impression many of your objections apply to that thesis to the same degree.

They look similar, but there's a huge difference between the culture in Korea vs China.

But whatever variations in the models used, Singapore model, Korean model or Chinese model, one thing for sure, these models are doomed to fail in the next 20-30 years because the resulting real estate bubble and 12 hour days will devastate the working population in time to come.

If a new apartment costs 20-30 years' income, how do people get married and have children??

Unlike an ailing economy, a demographic time bomb is far harder to fix. You can't boost population as quickly as you print money. It takes 20-25 years for children to grow up and enter the workforce.

If you're small enough, such as Singapore, you can bring planeloads of foreigners, but even that since they are foreigners, it is subjective whether they'll stay in the event of a recession or a catastrophe.

http://www.bloomberg.com/news/2013-0...na-s-edge.html

China’s pool of 15- to 39-year-olds, which supplies the bulk of workers for industry, construction and services, fell to 525 million last year, from 557 million five years earlier, according to data compiled by Bloomberg News from the U.S. Census Bureau’s international population database. The number employed in industry rose to 147 million from 117 million in the five years through September.

Here's a list of some of the Total fertility rate for various countries. The total fertility rate is the average number of children a woman will produce in her lifetime.

Hong Kong (PRC) 1.108
Singapore 1.15
South Korea 1.22
Japan 1.39
Germany 1.39
Switzerland 1.5
People's Republic of China 1.598
Australia 1.92
United Kingdom 1.94
France 2
United States 2.1
New Zealand 2.16

http://en.wikipedia.org/wiki/List_of...fertility_rate