China's Economy going down

[Imdmn04]

This article is full of incorrect facts.

It claims China has already entered recession, last time I checked China's 2008 GDP growth was 8-9 percent. That number is lower than the usual double digit growth, but nonetheless still growing.

A recession is defined as two consecutive quarters of negative growth, I don't see it happening. I do see significant GDP growth slowdowns, perhaps to 3-5 percent GDP growth in 2009.

Don't think for a second that China's weakened economy benefits us, it is acutally detrimental to our economy. U.S. firms has invested so much in the Chinese market, a contraction in the Chinese market means layoffs back at home. You also don't want China to call back our debt.

 

[Dari]

Originally posted by: Imdmn04
This article is full of incorrect facts.

It claims China has already entered recession, last time I checked China's 2008 GDP growth was 8-9 percent. That number is lower than the usual double digit growth, but nonetheless still growing.

A recession is defined as two consecutive quarters of negative growth, I don't see it happening. I do see significant GDP growth slowdowns, perhaps to 3-5 percent GDP growth in 2009.

Don't think for a second that China's weakened economy benefits us, it is acutally detrimental to our economy. U.S. firms has invested so much in the Chinese market, a contraction in the Chinese market means layoffs back at home. You also don't want China to call back our debt.

No it doesn't. The canard of China being a boon for Western producers has been around for over a 100 years now and it has been proven false for over a 100 years.

 

[Triumph]

I don't see why China has to be dependent upon the US. A huge country with vast natural resources, plenty of cheap labor, and a government willing to exploit both, could easily (relatively speaking) turn its efforts inward. The US didn't become the richest country in the world by exporting cheap consumer goods. Seems to me that we did it by inventing and developing products and services for our own consumption, primarily. Wealth can be created by means other than export. China is scary, make no mistake, the country literally has more cell phones than the US has people.

 

[StageLeft]

Yeah, it's been clear to anybody who read even a single article on China (and not fear mongering ones) would understand that if China and the US stopped talking China would be the one in the basement every Friday evening looking at porn, not the US, who still has friends to go out drinking with. China is in dire need of all the money it receives from the US. Whether it will stay that way, probably not, but right now China absolutely needs the US to stay strong.

 

[Imdmn04]

Originally posted by: Dari

Originally posted by: Imdmn04
This article is full of incorrect facts.

It claims China has already entered recession, last time I checked China's 2008 GDP growth was 8-9 percent. That number is lower than the usual double digit growth, but nonetheless still growing.

A recession is defined as two consecutive quarters of negative growth, I don't see it happening. I do see significant GDP growth slowdowns, perhaps to 3-5 percent GDP growth in 2009.

Don't think for a second that China's weakened economy benefits us, it is acutally detrimental to our economy. U.S. firms has invested so much in the Chinese market, a contraction in the Chinese market means layoffs back at home. You also don't want China to call back our debt.

No it doesn't. The canard of China being a boon for Western producers has been around for over a 100 years now and it has been proven false for over a 100 years.

Proof? Last 100 years? You ever been to China?

China has only entered economic reforms for the past 30 years. It went from a country that fed on tree barks to a country with World's 3rd largest economy in 30 years.

I live in Seattle, so Boeing is big around here. Boeing just announced a 4500 workers layoff. Why? Orders stopped coming in, a big portion of it was from China.

GM is very successful and profitable in China, where do you think all the profit goes? It goes back to Detroit where they spend it on UAW. China is the 2nd largest market in the world for Coca-cola, McDonalds, Nike, all the iconic American brands. American banking giants such as JP Morgan, Morgan Stanley, Goldman Sachs all made a killing in the Chinese real estate market.

 

[Dari]

Originally posted by: Imdmn04

Originally posted by: Dari

Originally posted by: Imdmn04
This article is full of incorrect facts.

It claims China has already entered recession, last time I checked China's 2008 GDP growth was 8-9 percent. That number is lower than the usual double digit growth, but nonetheless still growing.

A recession is defined as two consecutive quarters of negative growth, I don't see it happening. I do see significant GDP growth slowdowns, perhaps to 3-5 percent GDP growth in 2009.

Don't think for a second that China's weakened economy benefits us, it is acutally detrimental to our economy. U.S. firms has invested so much in the Chinese market, a contraction in the Chinese market means layoffs back at home. You also don't want China to call back our debt.

No it doesn't. The canard of China being a boon for Western producers has been around for over a 100 years now and it has been proven false for over a 100 years.

Proof? Last 100 years? You ever been to China?

China has only entered economic reforms for the past 30 years. It went from a country that fed on tree barks to a country with World's 3rd largest economy in 30 years.

I live in Seattle, so Boeing is big around here. Boeing just announced a 4500 workers layoff. Why? Orders stopped coming in, a big portion of it was from China.

GM is very successful and profitable in China, where do you think all the profit goes? It goes back to Detroit where they spend it on UAW. China is the 2nd largest market in the world for Coca-cola, McDonalds, Nike, all the iconic American brands. American banking giants such as JP Morgan, Morgan Stanley, Goldman Sachs all made a killing in the Chinese real estate market.

lol, Boeing only has one other competitor. So using them as an example is wrong when they're the exception.

GM makes cars in China and I'm sure their profit there gets recycled there because it is a growing market.

Coke and McD both make their products locally in China so the only thing that gets sent back is profit. If sales goes down for either company, it's the Chinese workers that take the hit, not Americans.

Same thing for Nike.

American banks have local offices (with local lawyers, accountants, researchers, analysts, etc...) in China. Their main remittance is knowledge and profit. Should things go bad, again, it'll be the locals that suffer.

Now, if you look at everyone one of these companies you'll find a Chinese partner that was forced upon them by the government. We don't do the same thing here. More than likely, these "partners" are stealing IP for the next generation of Chinese companies.

 

[First]

Originally posted by: Zebo
No the problem with economics is Friedman and Keynes can both win a Nobel prize.

That's only a problem if you're a layman who doesn't understand why they won those prizes.

 

[soccerballtux]

Originally posted by: Dari

Originally posted by: Imdmn04

Originally posted by: Dari

Originally posted by: Imdmn04
This article is full of incorrect facts.

It claims China has already entered recession, last time I checked China's 2008 GDP growth was 8-9 percent. That number is lower than the usual double digit growth, but nonetheless still growing.

A recession is defined as two consecutive quarters of negative growth, I don't see it happening. I do see significant GDP growth slowdowns, perhaps to 3-5 percent GDP growth in 2009.

Don't think for a second that China's weakened economy benefits us, it is acutally detrimental to our economy. U.S. firms has invested so much in the Chinese market, a contraction in the Chinese market means layoffs back at home. You also don't want China to call back our debt.

No it doesn't. The canard of China being a boon for Western producers has been around for over a 100 years now and it has been proven false for over a 100 years.

Proof? Last 100 years? You ever been to China?

China has only entered economic reforms for the past 30 years. It went from a country that fed on tree barks to a country with World's 3rd largest economy in 30 years.

I live in Seattle, so Boeing is big around here. Boeing just announced a 4500 workers layoff. Why? Orders stopped coming in, a big portion of it was from China.

GM is very successful and profitable in China, where do you think all the profit goes? It goes back to Detroit where they spend it on UAW. China is the 2nd largest market in the world for Coca-cola, McDonalds, Nike, all the iconic American brands. American banking giants such as JP Morgan, Morgan Stanley, Goldman Sachs all made a killing in the Chinese real estate market.

lol, Boeing only has one other competitor. So using them as an example is wrong when they're the exception.

GM makes cars in China and I'm sure their profit there gets recycled there because it is a growing market.

Coke and McD both make their products locally in China so the only thing that gets sent back is profit. If sales goes down for either company, it's the Chinese workers that take the hit, not Americans.

Same thing for Nike.

American banks have local offices (with local lawyers, accountants, researchers, analysts, etc...) in China. Their main remittance is knowledge and profit. Should things go bad, again, it'll be the locals that suffer.

Now, if you look at everyone one of these companies you'll find a Chinese partner that was forced upon them by the government. We don't do the same thing here. More than likely, these "partners" are stealing IP for the next generation of Chinese companies.

No Imdaman is right-- in the case of GM, Nike those profits being sent back fund higher-wage, higher education jobs over here.

We'd need some numbers on exactly how much money this is that we're talking about, before we could theorize about how many R&D jobs this means.

 

[sandorski]

China has enough Cash that it could survive awhile without the US. It wouldn't be growth and likely be Recessionary, but I suspect they can avoid this downturn without a pile of Longterm issues. If they could, they should setup a Strategic Petroleum Reserve like the US and take advantage of current Prices. Unless something like that was already in the works, it would be too late to do it.

 

[Dari]

Originally posted by: soccerballtux

Originally posted by: Dari

Originally posted by: Imdmn04

Originally posted by: Dari

Originally posted by: Imdmn04
This article is full of incorrect facts.

It claims China has already entered recession, last time I checked China's 2008 GDP growth was 8-9 percent. That number is lower than the usual double digit growth, but nonetheless still growing.

A recession is defined as two consecutive quarters of negative growth, I don't see it happening. I do see significant GDP growth slowdowns, perhaps to 3-5 percent GDP growth in 2009.

Don't think for a second that China's weakened economy benefits us, it is acutally detrimental to our economy. U.S. firms has invested so much in the Chinese market, a contraction in the Chinese market means layoffs back at home. You also don't want China to call back our debt.

No it doesn't. The canard of China being a boon for Western producers has been around for over a 100 years now and it has been proven false for over a 100 years.

Proof? Last 100 years? You ever been to China?

China has only entered economic reforms for the past 30 years. It went from a country that fed on tree barks to a country with World's 3rd largest economy in 30 years.

I live in Seattle, so Boeing is big around here. Boeing just announced a 4500 workers layoff. Why? Orders stopped coming in, a big portion of it was from China.

GM is very successful and profitable in China, where do you think all the profit goes? It goes back to Detroit where they spend it on UAW. China is the 2nd largest market in the world for Coca-cola, McDonalds, Nike, all the iconic American brands. American banking giants such as JP Morgan, Morgan Stanley, Goldman Sachs all made a killing in the Chinese real estate market.

lol, Boeing only has one other competitor. So using them as an example is wrong when they're the exception.

GM makes cars in China and I'm sure their profit there gets recycled there because it is a growing market.

Coke and McD both make their products locally in China so the only thing that gets sent back is profit. If sales goes down for either company, it's the Chinese workers that take the hit, not Americans.

Same thing for Nike.

American banks have local offices (with local lawyers, accountants, researchers, analysts, etc...) in China. Their main remittance is knowledge and profit. Should things go bad, again, it'll be the locals that suffer.

Now, if you look at everyone one of these companies you'll find a Chinese partner that was forced upon them by the government. We don't do the same thing here. More than likely, these "partners" are stealing IP for the next generation of Chinese companies.

No Imdaman is right-- in the case of GM, Nike those profits being sent back fund higher-wage, higher education jobs over here.

We'd need some numbers on exactly how much money this is that we're talking about, before we could theorize about how many R&D jobs this means.

In theory they should but in reality much of the profit goes to investors. The point of each region is so that they are self-sustaining, not to transfer wealth from a profitable region to a loss-making one (indefinitely). Financially, it makes little sense because the companies can put their tax attorneys and accountants to work to make the losses work for them (remember, a product made in another country counts as part of that nation's GDP). Also, companies don't really do centralized R&D anymore considering different regions have different tastes. Hence (again), everything is localized.

This is 21st century economics, not shit from the 1950s. The main way Americans would really profit is if we had manufactering in America and actually made stuff to sell there.

 

[alchemize]

Originally posted by: LegendKiller
I've said the same thing for the last 2 years re: China.

Don't be going all McCowen on us, I want a link from 06/07

I agree with you, and I think I even predicted the same thing. /goes off to search

 

[LegendKiller]

Originally posted by: alchemize

Originally posted by: LegendKiller
I've said the same thing for the last 2 years re: China.

Don't be going all McCowen on us, I want a link from 06/07

I agree with you, and I think I even predicted the same thing. /goes off to search

Wasn't just here but in some other forums and online chats. I had one discussion with a Chinese national in a game/chat. He was immensely pissed off at me for predicting this type of stuff. It was actually quite funny that people can't be rational about their own countries.

 

[LegendKiller]

Originally posted by: rchiu

Originally posted by: shira
I'm confused. Just three or four weeks ago, I was reading that the Chinese economy would grow by "only" 7% this year, which would be barely enough to sustain the 10-million-a-year job growth they needed to stave off a recession.

And now this article is saying the Chinese economy will SHRINK, by MORE than 5%?

What's changed so dramatically in world economy the past few weeks to cause this huge revision in the projection?

The article says "If GDP in the US, EU, and Japan contract at 5% this year, China's economy is very likely to shrink faster." It doesn't offer any fact or figure on how much Chinese economy is gonna grow or shrink.

According to Economist, China economy will grow by 8% in 2009 and 7.5% in 2010.

Their run a government budget surplus. They have a huge foreign reserve. They are in a much better position than US to spent on infrastructures or provide economy stimulus.

So yeah, as usual there are lots of Chinese haters here who don't wanna look at fact or real analysis.

The problem is that once things start snowballing on them their reserves won't help too much. Their capital needs are vast for the amount of miltech they are trying to build, not to mention projects such as 3 gorges.

 

[Atreus21]

Originally posted by: LegendKiller

Originally posted by: Dari

Originally posted by: Genx87
I can tell they are going in the shitter because a rollover fund I have has lost 50% of its value in the last 8 months. Erasing out the the 50% appreciation over the previous 18 months and then some.

It should be interesting to see how exporting countries like Germany and China fair compared to importing countries like the United States.

Wasn't it obvious last year when you saw the currency lag? For a while the dollar was weak while everyone else was strong. Then when shit really hit the fan theirs became weak and now the dollar is very strong. That implies that they are dependent on us more than we are of them. Nobody is happy when the American consumer isn't happy. This just goes to show that countries that have an export policy (and spend less time working on their domestic consumption) for GDP growth will be the first and hardest hit.

I laughed at the morons who were still parroting "decoupling/delinking" in early 2008. If the US catches a cold, the world catches drug resistant TB.

I was thinking anal hemorrhagic fever, myself.

 

[Dari]

Originally posted by: Atreus21

Originally posted by: LegendKiller

Originally posted by: Dari

Originally posted by: Genx87
I can tell they are going in the shitter because a rollover fund I have has lost 50% of its value in the last 8 months. Erasing out the the 50% appreciation over the previous 18 months and then some.

It should be interesting to see how exporting countries like Germany and China fair compared to importing countries like the United States.

Wasn't it obvious last year when you saw the currency lag? For a while the dollar was weak while everyone else was strong. Then when shit really hit the fan theirs became weak and now the dollar is very strong. That implies that they are dependent on us more than we are of them. Nobody is happy when the American consumer isn't happy. This just goes to show that countries that have an export policy (and spend less time working on their domestic consumption) for GDP growth will be the first and hardest hit.

I laughed at the morons who were still parroting "decoupling/delinking" in early 2008. If the US catches a cold, the world catches drug resistant TB.

I was thinking anal hemorrhagic fever, myself.

You have a vibrant imagination.

 

[BoomerD]

Wouldn't hurt my feelings a bit if China's economy totally collapsed and companies had to move their factories back to the USA. Same with India and tech support jobs.

Fuck the world economy...I'm only concerned about the US economy. If the rest of the world benefits from the US having a strong economy, so be it, but if they don't...pft. don't care.

 

[StageLeft]

Originally posted by: sandorski
China has enough Cash that it could survive awhile without the US. It wouldn't be growth and likely be Recessionary, but I suspect they can avoid this downturn without a pile of Longterm issues. If they could, they should setup a Strategic Petroleum Reserve like the US and take advantage of current Prices. Unless something like that was already in the works, it would be too late to do it.

No it could not. If ties were cut with the US China would be hardcore gang-fvcked and very quickly at that. They still have many millions of people toiling away in fields and doing menial labor and their unemployment is relatively high.

 

[Jhhnn]

Originally posted by: JS80
Good article. Maybe they should fucking use their dollar reserve and put it to fucking work instead of sitting on it like typical cheap person. That's what trade is, a promise to consume the counterparty good. Maybe China will bring us out of a recession haha...

How lame. They did put it to work, buying huge quantities of US govt securities, also Fannie and Freddie paper, so forth and so on... huge infrastructure projects as well.

Their economy can only absorb dollars at a rate slower than they can get them from trade... hence their huge reserves, which are also used for the purposes of fractional reserve banking in China.

They need for the US to put our own financial house in order if they're to prosper, no doubt, but they're the ones with the money, honey, and failure on our part to rein in the flimflam artists of the financial markets will cause them to hold it rather than invest it in this country's economy. That extends to the fiscal policies of our govt, as well- if we won't raise revenues in a way that will support debt maintenance, they won't even buy treasuries, but will attempt to convert dollars to other currencies... quietly, of course, so as not to destroy the value of their own dollar reserves... If it looks to them like we're screwing them over, they'll cut and run, take their lumps, bury the value of the dollar and us right along with them...

 

[soccerballtux]

Originally posted by: Jhhnn

Originally posted by: JS80
Good article. Maybe they should fucking use their dollar reserve and put it to fucking work instead of sitting on it like typical cheap person. That's what trade is, a promise to consume the counterparty good. Maybe China will bring us out of a recession haha...

Their economy can only absorb dollars at a rate slower than they can get them from trade... hence their huge reserves, which are also used for the purposes of fractional reserve banking in China.

Why is this the upper boundary? Does their economy even "absorb" USD? I thought the government simply said "ok we will trade yuan for your USD", they put the USD into an account, and then the US company gave the yuans to the manufacturing company.

Come to think of it, they could do a lot of good for us to apply pressure to our government to be spending money in ways that increases our middle class' purchasing power (which is weakening). Somehow I don't think they're smart enough to do that...or pull it off. Shame, because that would be great for us (normal folk).

 

[rchiu]

Originally posted by: LegendKiller

Originally posted by: rchiu

Originally posted by: shira
I'm confused. Just three or four weeks ago, I was reading that the Chinese economy would grow by "only" 7% this year, which would be barely enough to sustain the 10-million-a-year job growth they needed to stave off a recession.

And now this article is saying the Chinese economy will SHRINK, by MORE than 5%?

What's changed so dramatically in world economy the past few weeks to cause this huge revision in the projection?

The article says "If GDP in the US, EU, and Japan contract at 5% this year, China's economy is very likely to shrink faster." It doesn't offer any fact or figure on how much Chinese economy is gonna grow or shrink.

According to Economist, China economy will grow by 8% in 2009 and 7.5% in 2010.

Their run a government budget surplus. They have a huge foreign reserve. They are in a much better position than US to spent on infrastructures or provide economy stimulus.

So yeah, as usual there are lots of Chinese haters here who don't wanna look at fact or real analysis.

The problem is that once things start snowballing on them their reserves won't help too much. Their capital needs are vast for the amount of miltech they are trying to build, not to mention projects such as 3 gorges.

As much as their need for capital, their government is still projected to run a surplus through 2010. And even though their export is ~40% of GDP, their net export is only ~10% of GDP, meaning if China export less, if there is corresponding reduction in import, the overall GDP effect won't be that much. China with their 1.3 billion population and increasing purchasing power isn't as dependent on export as many Asain/SE Asian countries as many of you people like to believe.

Nobody is saying Chinese economy is decoupled from US and the rest of the world. But I don't buy the snowballing effect. It's more like an earthquake where US is the epicenter. Of course China is gonna feel the shock too, but the impact is not direct and the magnitute is gonna be less. Plus Chinese government is more equipted to deal with a slow economy because of their fiscal and monetory discipline. They got more money to stimulate the economy if needed without going heavily into debt.

 

[Jhhnn]

Unlike the US, China is a nation of savers. Domestic demand for goods and services remains quite low relative to income from trade- they produce more than they consume. Until very recently, there was no consumer credit in China, for example. They save up to buy anything major, at all. And despite huge govt expenditures on infrastructure, their cash reserves are growing...

Govt efforts to stimulate consumer spending in China have met with limited success- until recently, economic conditions in China over the last 100 years were like the great depression in the rest of the world, so it's understandable that they have a cultural affinity for saving when they can, for being frugal, and for having actual assets... Americans who lived the depression were a lot like that, too...

If the Chinese govt started giving away money, most of the recipients would save it... even people who are quite poor by our standards...

 

[fleshconsumed]

http://www.cnn.com/2009/WORLD/...ml?eref=rss_topstories

Somehow, I think China will be OK.

 

[LegendKiller]

Originally posted by: fleshconsumed
http://www.cnn.com/2009/WORLD/...ml?eref=rss_topstories

Somehow, I think China will be OK.

Most economics would agree that Germany, Japan, and the US, will fall less than China. Why? Because the more mature economies.

SocGen analysts are predicting massive social upheaval in China, resulting in an eventual Yuan devaluation to stave off revolution, causing a trade war and eventual global depression.

China's fooked. I'd even go as far to suggest there'll be a regime change in the next 5-10 years.

 

[LegendKiller]

Originally posted by: rchiu

Originally posted by: LegendKiller

Originally posted by: rchiu

Originally posted by: shira
I'm confused. Just three or four weeks ago, I was reading that the Chinese economy would grow by "only" 7% this year, which would be barely enough to sustain the 10-million-a-year job growth they needed to stave off a recession.

And now this article is saying the Chinese economy will SHRINK, by MORE than 5%?

What's changed so dramatically in world economy the past few weeks to cause this huge revision in the projection?

The article says "If GDP in the US, EU, and Japan contract at 5% this year, China's economy is very likely to shrink faster." It doesn't offer any fact or figure on how much Chinese economy is gonna grow or shrink.

According to Economist, China economy will grow by 8% in 2009 and 7.5% in 2010.

Their run a government budget surplus. They have a huge foreign reserve. They are in a much better position than US to spent on infrastructures or provide economy stimulus.

So yeah, as usual there are lots of Chinese haters here who don't wanna look at fact or real analysis.

The problem is that once things start snowballing on them their reserves won't help too much. Their capital needs are vast for the amount of miltech they are trying to build, not to mention projects such as 3 gorges.

As much as their need for capital, their government is still projected to run a surplus through 2010. And even though their export is ~40% of GDP, their net export is only ~10% of GDP, meaning if China export less, if there is corresponding reduction in import, the overall GDP effect won't be that much. China with their 1.3 billion population and increasing purchasing power isn't as dependent on export as many Asain/SE Asian countries as many of you people like to believe.

Nobody is saying Chinese economy is decoupled from US and the rest of the world. But I don't buy the snowballing effect. It's more like an earthquake where US is the epicenter. Of course China is gonna feel the shock too, but the impact is not direct and the magnitute is gonna be less. Plus Chinese government is more equipted to deal with a slow economy because of their fiscal and monetory discipline. They got more money to stimulate the economy if needed without going heavily into debt.

The problem is, the government is the only one buying imports and they need to keep buying them, given the investments in infrastructure and military. The "net" is BS.

 

[JS80]

Originally posted by: Jhhnn
Unlike the US, China is a nation of savers. Domestic demand for goods and services remains quite low relative to income from trade- they produce more than they consume. Until very recently, there was no consumer credit in China, for example. They save up to buy anything major, at all. And despite huge govt expenditures on infrastructure, their cash reserves are growing...

Govt efforts to stimulate consumer spending in China have met with limited success- until recently, economic conditions in China over the last 100 years were like the great depression in the rest of the world, so it's understandable that they have a cultural affinity for saving when they can, for being frugal, and for having actual assets... Americans who lived the depression were a lot like that, too...

If the Chinese govt started giving away money, most of the recipients would save it... even people who are quite poor by our standards...

Whether you know it or not, you pretty much just explained to us why China will not ever catch up to other first world countries.

I agree with LK that China will likely implode in the next decade or two. And if the US and Europe does contract by 5% I would say it's highly likely China implodes in the next decade.