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

[Polish_Silver]

Chinese wages rising fast?

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

http://www.cnbc.com/id/100570888

The Atlantic claims wages in China are rising at 18%/year.

If higher wages are a trend, would that not solve the problems of long hours, insufficient domestic consumption etc.

[astonas]

Re: Chinese wages rising fast?

The Atlantic claims wages in China are rising at 18%/year.

If higher wages are a trend, would that not solve the problems of long hours, insufficient domestic consumption etc.

It depends if the rise is simply inflation, or an actual shift in supply and demand. China's books are pretty opaque.

[Polish_Silver]

Bubble? What bubble?

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.

So the annual rent is about 14.4k, giving a cost to rent multiple of about 52 years

My house would go for about $230k and would rent for about $2k/month, giving me a multiple of about 9.6 years .

I'd say somebody's got a bubble.

[Polish_Silver]

Re: Chinese wages rising fast?

It depends if the rise is simply inflation, or an actual shift in supply and demand. China's books are pretty opaque.

The opaque bookkeeping, along with the capital controls, and currency manipulation, is a sign that they have significant problems. A really robust economy would not resort to any of these things.

[touchring]

Re: Chinese wages rising fast?

It depends if the rise is simply inflation, or an actual shift in supply and demand. China's books are pretty opaque.

In the past, whenever there's a famine, the provincial governor will downplay the severity - this happens again during Mao's time. As a result, the central government did not allocate and send emergency food supplies. The central government gets the wrong picture all the time. Only when it becomes a disaster than the officials realize the severity of the problem.

[ProdigyofZen]

Re: China's dead end.

Revolution is not happening in the neighbouring FSU Republics. And there the majority of the population is dirt poor...literally. Anybody with any education is emigrating...to Europe or the Gulf if they have foreign language skills, or Russia if they don't. The "brain drain" going on from Kyrgyzstan, Uzbekistan and to a lesser degree Kazakhastan is dramatic. China seems infinitely better managed than the first two of these examples, however.

I just got back from NYC. This is one of the only places in the world where a 2nd year immigrant from Tajikistan can explain the history of central park to me while driving a pedicab in 30 mins.

The kid was very nice and even took me and the GF from Central Park to 230 West 49th Street after the tour for free. We were conversing in a dialect of Farsi since Tajiks usually speak Farsi/Pashto. I know this because of a good friend back in college from Tajikistan who spoke Russian, Farsi, Pashto, Tajik, English.

IMO on the case of China, I believe if it does implode the country will turn inward as it has always done throughout history since the An Lushan rebellion.

[Thailandnotes]

Re: Bubble? What bubble?

So the annual rent is about 14.4k, giving a cost to rent multiple of about 52/year

My house would go for about $230k and would rent for about $2k/month, giving me a multiple of about 9.6 .

I'd say somebody's got a bubble.

Pick a city in Asia, any city. Google it attaching “property bubble” and you will get plenty of hits/lots of discussion, as well as many announcements by governments claiming counter measures…a few days ago Singapore (up 150 % since 2008) doubled the tax for non permanent residents buying property. Total cost on top of purchase price now equals 18 %.

There are always comments about how few lights are on and how many balconies lack potted plants, followed with questions about how many purchases are investment/vacation rentals and what percent of the building is money laundering.

Not so much for Singapore.

Having considered buying property in Thailand and watching others do it, I know how out of whack things can get. Farmland I considered buying 8 years ago for 300,000 baht per rai is now selling for 1,200,000, but nearby, condo and small house prices have barely budged. With massive building and new properties constantly coming up for sale, the market for three and four year old apartments has been stagnant for almost ten years.

China’s real estate market can be confusing for a myriad of reasons. Shanghai’s 10-year 150 % property increase has accompanied a population explosion and an amazing transformation of infrastructure. Chinese nationals have fewer options to invest savings.

To me, more than anything else, existing home sales and prices are an indication of musical chairs. I’m always amazed when housing bubble articles fail to mention it.

After the 97 “Asian Crisis” countries got lumped together and still are in many journalists’ minds.

Belvegas wrote: 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.

This deceptively simple comment may be the most insightful thing I’ve read on this website in a while.

[touchring]

Re: Bubble? What bubble?

Pick a city in Asia, any city. Google it attaching “property bubble” and you will get plenty of hits/lots of discussion, as well as many announcements by governments claiming counter measures…a few days ago Singapore (up 150 % since 2008) doubled the tax for non permanent residents buying property. Total cost on top of purchase price now equals 18 %.

There are always comments about how few lights are on and how many balconies lack potted plants, followed with questions about how many purchases are investment/vacation rentals and what percent of the building is money laundering.

Not so much for Singapore.

Having considered buying property in Thailand and watching others do it, I know how out of whack things can get. Farmland I considered buying 8 years ago for 300,000 baht per rai is now selling for 1,200,000, but nearby, condo and small house prices have barely budged. With massive building and new properties constantly coming up for sale, the market for three and four year old apartments has been stagnant for almost ten years.

China’s real estate market can be confusing for a myriad of reasons. Shanghai’s 10-year 150 % property increase has accompanied a population explosion and an amazing transformation of infrastructure. Chinese nationals have fewer options to invest savings.

In Singapore, people call this "Human Ponzi".

When credit is plentiful, you add people, the economy and real estate will boom. This is a no brainer policy. Singapore's working population has doubled in the last 10 years or so. I believe this is also the same case with Shanghai.

When times are good, it's good to have a lot of people. But when the economy slows down, the huge population becomes a menace, e.g. Arab Spring in Egypt, slums in India and South America.

But Singapore has an advantage over Shanghai. It is easy to shave off aliens that are out of job and when there's a recession. Not so easy for Shanghai. Of course, having a huge foreign population comes with its own troubles, like what happened when expats in Dubai absconded a couple years back.

[Polish_Silver]

Singapore's population

In Singapore, people call this "Human Ponzi".

When credit is plentiful, you add people, the economy and real estate will boom. This is a no brainer policy. Singapore's working population has doubled in the last 10 years or so. I believe this is also the same case with Shanghai.

When times are good, it's good to have a lot of people. But when the economy slows down, the huge population becomes a menace, e.g. Arab Spring in Egypt, slums in India and South America.

But Singapore has an advantage over Shanghai. It is easy to shave off aliens that are out of job and when there's a recession. Not so easy for Shanghai. Of course, having a huge foreign population comes with its own troubles, like what happened when expats in Dubai absconded a couple years back.

I am surprised that Singapore's population could grow so fast. I thought the birthrate in Singapore was quite low. Are there many foreign workers there?

Is it politically acceptable to kick them out?

I would think many of them would not want to leave.

[bart]

Re: Will China do a Japan?

I seldom laugh out loud at iTulip comments but thankfully there is a place where we can laugh at ourselves and observe that sad as it is, there is one party.

Party Hearty! ;-)

[ST]

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

A bubble burst in China will make the riots in Greece look trivial.

A bubble burst in China will likely be behind the scenes. If you are a policy maker in China what do you do when you see the cracks occuring? You pull the strings with your puppet (North Korea) to create a diversion. A burst bubble in China will likely result in a wave of nationalism not seen in generations against some foreign enemy.

[Polish_Silver]

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

A bubble burst in China will likely be behind the scenes. If you are a policy maker in China what do you do when you see the cracks occuring? You pull the strings with your puppet (North Korea) to create a diversion. A burst bubble in China will likely result in a wave of nationalism not seen in generations against some foreign enemy.

China is certainly not the only country to do that in recent times. But would it work? Could a great number of Chinese citizens get so emotional about Japan or Taiwan?

A California friend who was fluent in Mandarin told me that for many years, the Chinese government made efforts to create anti-american feeling. Presumably, they also worked to promote anti-Japanese feeling.

But I think these things are less effective as the population becomes more educated and affluent. That's why I am so disappointed with the behavior of the United States in recent years. But our political system sucks. So does China's, I guess.

[ST]

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

China is certainly not the only country to do that in recent times. But would it work? Could a great number of Chinese citizens get so emotional about Japan or Taiwan?

A California friend who was fluent in Mandarin told me that for many years, the Chinese government made efforts to create anti-american feeling. Presumably, they also worked to promote anti-Japanese feeling.

But I think these things are less effective as the population becomes more educated and affluent. That's why I am so disappointed with the behavior of the United States in recent years. But our political system sucks. So does China's, I guess.

Yep. I think you envision what economic despair might feel like to the average citizen during such a time - have to put yourselves in someone's shoes who is experiencing personal crisis due to a lack of income and control over their own destiny. In such a state someone feeling shame and despair looks for something to believe in, and is prone to seduction by someone exuding unwavering, inspiring confidence. It is the stuff of mass movements. In a society that goes way beyond book burning to selective censorship of the internet, media and easily has the capability to manufacture events to influence citizens? Easy as pie, imo.

[Polish_Silver]

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

Yep. I think you envision what economic despair might feel like to the average citizen during such a time - have to put yourselves in someone's shoes who is experiencing personal crisis due to a lack of income and control over their own destiny. In such a state someone feeling shame and despair looks for something to believe in, and is prone to seduction by someone exuding unwavering, inspiring confidence. It is the stuff of mass movements. In a society that goes way beyond book burning to selective censorship of the internet, media and easily has the capability to manufacture events to influence citizens? Easy as pie, imo.

That is scary! And they have nuclear weapons, zillions of unmarried young men, etc.!

[ProdigyofZen]

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

That is scary! And they have nuclear weapons, zillions of unmarried young men, etc.!

Yes silver they do but when was the last time China made any aggressive military offensive? http://www.history.army.mil/brochure...ff/chinoff.htm

The Chinese laid down at the hands of the Japanese when they outnumbered them 10 to 1.

The Chinese backed down from the British when Matheson and Jardin lobbyed the British government to go to war with China to protect their opium trade in Hong Kong in the 1830's. http://en.wikipedia.org/wiki/History...atheson_%26_Co.

"Once in London, Jardine's first order of business was to meet with the new Foreign Secretary Lord Palmerston who had replaced Wellington. He carried with him a letter of introduction written by Chief Superintendent of trade in Canton Charles Elliot that relayed a few of his credentials to Palmerston. Jardine persuaded Palmerston to wage war on China^[35] and provided a comprehensive plan along with detailed maps and strategies, the indemnifications and political demands from China and even the number of troops and warships needed in what was known as the Jardine Paper. War followed and in 1842, the Treaty of Nanking was signed by official representatives of both Britain and China. It allowed the opening of major five major Chinese ports, provided indemnification for the opium destroyed and completed the formal acquisition of the island of Hong Kong, which had been officially taken over as a trading and military base on 26 January 1841, though it had already been used for years as a transhipment point. Trade with China, especially in illegal opium, grew, and so did the firm of Jardine, Matheson and Co, by that time already known as the Princely Hong^[36] for its status as the largest British trading firm in East Asia"


The legacy of Jardin Matheson due to their efforts in the 1830's to convince the British to attack China with gunships now is that they own some of the most prime land in the world in Hong Kong. http://www.jardines.com/

They even own the Mandarin Oriental.

My point is, knowing Chinese history I am not quite sure I see them attacking other countries (perhaps aside from ones they deem their own like Taiwan) or being imperialists.

They don't call their country the "middle kingdom" for nothing. They haven't seen any other place better than their kingdom since the An Lushan rebellion.