Comments on: "China may be heading for a severe economic slowdown"

By: Anonymous

Anonymous — Mon, 10 Nov 2008 00:46:00 +0000

Excellent analysis re: China’s economic outlook -

http://www.garpdigitallibrary.org/download/GRR/2089.pdf

By: mft

mft — Sun, 09 Nov 2008 17:40:00 +0000

BEIJING/SAO PAULO (Reuters) – China approved a massive stimulus plan on Sunday worth nearly $600 billion through 2010 to boost domestic demand as part of a global push for measures to soften an expected recession in many countries.

Now that IS a stimulus plan!

By: RBG

RBG — Sun, 09 Nov 2008 13:40:00 +0000

CLSA has a small (c.US$1B) private equity operation, but its main activities (revenue/profit sources) are brokerage. It has big research operation for its brokerage.

By: madmilker

madmilker — Sun, 09 Nov 2008 04:16:00 +0000

IT’S YOUR TURN….CHINA!
People in America need to realize jus what got America in this shape…”cheap” yes so-call cheap items from a foreign land and now the largest company in America wants to make everything “green” but at the same time they put 95% made in China in their stores in China and support Chinese export…don’t take my word…its on their China web page quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote! Now! if there be 182 country’s making items for the world to buy and they have only 5% of the pie in China…duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there…. but with the “yuan” going up in value and the US dollar going down…all the foreign items that the American consumer buys thinking it is cheap has went up in price. People…its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the “we the people” have to turn to the “second” largest employer in America(Uncle Sam) to sell “we the people” debt in order to get all them dollars back! 50 years ago a foreigner would had given their left nut for a US dollar or a Hershey’s chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think “MADE IN AMERICA.”

By: Anonymous

Anonymous — Sun, 09 Nov 2008 01:45:00 +0000

Yves: fyi – a couple of weeks ago I was in China. When I arrived your blog could be accessed, but your article “Renminbi to Fall Next Year?” http://www.nakedcapitalism.com/2008/10/renminbi-to-fall-next-year.html caused it to be blocked by the censors. Looking at the official sources such as China Daily (www.chinadaily.com.cn), Chinese officials are clearly trying to steer the economy towards a soft landing…

FIrst we all heard that Chinese demand would keep commodity prices rising and rising (irrespective of what would happen in the West), now we hear that domestic Chinese demand will still keep their economy growing by over 6%. Not being an economist myself, can some please explain how they would be able to do this?

By: Anonymous

Anonymous — Sat, 08 Nov 2008 20:45:00 +0000

Exports?
Some say PRC, Asia can
expand local/domestic demand
. Some say they are still
dependent on exports.

By: mft

mft — Sat, 08 Nov 2008 16:03:00 +0000

There have been several indications recently that China's steel industry is collapsing. This could be because of falling exports (unlikely), an investment stop (likely), or burst real estate bubble (also likely).

For years investment (about 40% of GDP) has has been the real motor of Chinese economic growth, driven by the opportunities presented by exports and domestic consumption. It has been an investment-led economy far more than an export-led economy.

What happens now if the collapse of the steel industry spreads to other heavy industry sectors? Is the rest of the world going to be flooded by Chinese goods at dumping prices? Deflation, anybody?

By: Mean Mister Mustard

Mean Mister Mustard — Sat, 08 Nov 2008 15:48:00 +0000

Interesting article, but I think mention of China’s over-investment was largely missing. Everyone who says China isn’t about exports elides over the fact that much of the domestic growth is in construction and that a strangely large percentage of those buildings are empty.

By: Matt Dubuque

Matt Dubuque — Sat, 08 Nov 2008 14:57:00 +0000

The reason they published this is because it is an open secret and everyone who is plugged in knows what is going on. This is not really news. It's been out there for months.

It's just that the American media is completely clueless. Note that even this story was from Britain.

But still the Americans do not get it.

Feminism taught us that the personal is the political.

Therefore, consider the following:

Your extended family has a major financial crisis. Would you rather experience that shock with 100 million dollars in the bank or being in debt 100 million dollars facing imminent bankruptcy?

Only a fool would argue they were equivalent.

Similarly, if you were a nation undergoing an enormous financial shock, would you rather have 2 TRILLION in the bank (i.e. China), or be 2 TRILLION in the hole (i.e. the USA)?

Only a fool would argue they are equivalent.

Matt Dubuque

By: Anonymous

Anonymous — Sat, 08 Nov 2008 14:32:00 +0000

There is something unreal about 5.5% growth being defined as a “severe economic slowdown”. Yes, I’ve heard the argument that China needs a very high minimum rate of growth just to create enough jobs for the teeming millions. But still.

And although there seems to be an undercurrent of schadenfreude at the prospect of an economic and military rival taking a fall, no one seems to be mentioning the utterly catastrophic consequences for the US if a slowed-down China no longer has a huge cash flow of dollars to be recycled into Treasuries. The consequences of foreign central banks withdrawing from Agencies are already being felt in the form of bafflingly high spreads. What happens when they back off from buying Treasuries too, just as the extraordinary funding requirements of the US soar even higher? The war effort, bailouts, alphabet soup Fed facilities, and the plain old longstanding budget deficit will all add up to an enormous funding crisis that isn’t even on most people’s radar screens.