China - Economic Data & News 04 (Feb 10 - Sep 10)

Re: China - Economic Data & News 4 (Feb 10 - Oct 10)

Postby winston » Tue Sep 14, 2010 10:41 am

The mainland's power output rose faster than expected in August, reflecting accelerated industrial production growth and hot weather throughout much of the nation, according to the National Bureau of Statistics.

Source: SCMP
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Tue Sep 14, 2010 7:23 pm

China Booms As Farmers Get Access To Credit By Shae Smith


The second stage to the booming Chinese economy is about to begin.

And many of the country’s farmers, with little more than shacks and eight kids to feed are going to be the driving force behind it.

No longer will the Chinese economy be solely reliant on cheap manufacturing of DVD player’s and mobile phones.

Now, these farmers will be able to step out of poverty and embrace the benefits of consumerism, like many of their city living countrymen.

‘Chinese farmers are possibly about to be sucked into the greatest financial revolution since the invention of the credit card,’ said one media commentator.

And it is, mostly for the Chinese government proving that they are part of the finance revolution.

See, private land ownership for farmers in China is strictly forbidden. Farmers have only been allowed to profit from products that arise from the use of the land, rather than the land values itself.

Compare that to their city dwelling citizens that were awarded property rights back in the 1990′s from the government.

However, now, after a successful trial with some peasant farmers, they will now able to use their land as collateral to obtain finance. While it’s only been kept to a small group, it’s been suggested it could go ahead nationally by the end of this year.

The trial, which has been going for almost two years, has each year seen increasing amounts borrowed on the back of land values. In fact in June this year, outstanding loan values from the small trial provinces was 2.6 trillion Yuan (AUD$415 billion), up by 24% for 2010.

What has prompted this move to allow Chinese farmers to use the land in order to access a loan?

Is this a giant leap forward or just another way to enslave the nation – which is already under totalitarian control?

It seems to us that a controlling and dominate government has found yet another to ensure that their booming economy remains under their control.

Which is to give the poorest people in the country access to finance, secured against land which right now, no-one else is allowed to buy.

See right now, the Chinese market is saturated and consumers have only been able to purchase so much.

If China wants to even out their economy and move towards a consumer driven market – cause that’s proved to work so well in the past! – then it must work out how to lift these farmers out of poverty and encourage them to spend.

Especially if consumers in the US and Europe aren’t interested in buying Chinese goods.

And in order to getting them to spend up, they need to give them access to credit. See, farmers’ incomes, which average around $600 a month, have only doubled over the past 15 years. Whereas the city residents, already earning twice the income of rural population back in 1995, have seen their incomes quadruple over the same period.

And it’s been China’s urbanisation that has been the driving economic force. If it wants to keep being seen as an economic force, it needs to work out a way to lift the farmers out of poverty.

Except, they’re going the wrong way about it.

The Chinese government is simply trying to get poor farmers to buy stuff. In reality, what they should be doing is giving farmers – and everyone else – economic and personal freedom, and property rights.

That way there would be an incentive for the Chinese to increase their wealth. Especially if they knew they could keep the wealth once they’ve earned it.

Yet the Chinese have fallen into the same trap as Western society. Believing the best way to wealth is to encourage the population to go into debt.

Not only that, but this major economic reform comes at a questionable time. China’s economy may be booming, but what about its major export markets?

The trial commenced at the start of the global financial crisis when the US and UK financially fell apart. And yet, it’s been given the go ahead to go national, about the time the same countries are dealing with slowing economies.

And by slowing economies, I’m really referring to the lack of American and English consumers finding the incentive to buy cheaply made electronic goods.

However if the Chinese government get their way, and I’m sure like all good dictatorships they will, it will ultimately mean boosting consumer spending.

This means that the country will be able to maintain the high rate of economic growth – until they figure out there’s no way the poor peasant farmers can repay the loans. Because despite the increased debt and the new material belongings, they will still be peasant farmers.

This move by the Chinese isn’t about offering the same freedoms as the city people. And it’s not about freeing an impoverished part of the country with access to cash.

It’s all about ensuring that China can continue its path of economic dominance, by using debt to control its people, and at the same time creating the world’s biggest consumer bubble since the last one!

http://www.dailymarkets.com/economy/201 ... to-credit/
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby kennynah » Tue Sep 14, 2010 8:06 pm

why is the chinese government doing this? giving farmland collateralized loans?
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Thu Sep 16, 2010 11:45 am

China Daily (Hong Kong Edition)

-- The National Development and Reform Commission (NDRC) will launch another round of inspections this month on the status of investment projects under the central government's 4 trillion yuan ($586 billion) stimulus package.
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Fri Sep 17, 2010 3:51 pm

When the regulators are worried, you better be worried too ... :roll:

=DJ UPDATE: PBOC Sees Risks Including Inflation, Financial Sector Woes

BEIJING (Dow Jones)--Though economic confidence is increasing, China still faces many challenges in maintaining a fast and stable growth rate, including inflation risks and possible problems in the financial sector, the People's Bank of China said Friday.

Some problems in the financial sector are 'hard to ignore,' the central bank said in its annual financial stability report. In particular, there is a need to improve risk management by local government financing vehicles, which are entities set up by local governments to borrow money from the banking system, it said.

China should start the process of securitizing local government financing vehicle loans, it added.

( Securitize to who ? )

Loose monetary conditions in China may also create risks of inflation, asset price bubbles, or bad loans in the banking system, the PBOC said.

Domestic credit growth in China is still relatively strong, and the problem of ample liquidity is again becoming prominent as external economic conditions improve, it said.

The wide ranging report also touched on risks to the global economic recovery. The scope for further stimulus by major economies is limited due to concerns over fiscal sustainability and asset price bubbles, it said.

Big swings in the value of the dollar can also affect the global economic recovery, it said. Rapid appreciation of the dollar can put pressure on the prices for basic materials, affecting resource-dependent economies, it said. Meanwhile, rapid dollar depreciation can lead to global inflation pressures, asset price bubbles, and financial instability.

Liquidity creation around the world is causing strong inflows of short-term capital into many 'emerging Asian economies,' the PBOC said. 'In many areas, this is causing excessively fast asset price rises, excessive exchange rate appreciation and foreign exchange reserve accumulation,' the PBOC said.

China will maintain its current policy settings of a moderately loose monetary policy and an active fiscal policy, the PBOC said.

The central bank also said it will push forward further development on the yuan's cross-border use as part of the country's financial system reform and move toward capital account convertibility.

The PBOC said it will increase the scale of the yuan's use in cross-border trade settlement, and gradually increase channels for foreign institutions to obtain and use yuan.

It will also push to allow the yuan to be exchanged against various minor currencies on the interbank foreign exchange market, the PBOC said.

Source: Aaron Back, Dow Jones Newswires
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Fri Sep 17, 2010 7:24 pm

TOL:-

The following are my thoughts on the different scenarios:-
1) Moderate Growth ( 7% - 11% ); Probability: 55%
2) Slow Growth ( < 5% ); Probability: 30%
3) Strong Growth ( > 12% ); Probability: 15%

What's yours ?
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Tue Sep 21, 2010 11:53 am

DJ MARKET TALK:Daiwa Highlights China 5-Year Plan Beneficiaries

1059 [Dow Jones] Daiwa says there is no strong consensus on what China's 12th Five-Year Plan (FYP) will contain, but believes broad areas such as narrowing wealth gap, reducing carbon emissions will be almost certainly main themes. Adds, overall urbanisation likely another key theme.

Among stock covered by Daiwa and listed in HK, expects Peak Sport (1968.HK), TravelSky (0696.HK), Angang Steel (0347.HK), Sinopec (0386.HK), China Longyuan Power (0916.HK), Dongfang Electric (1072.HK), Shanghai Electric (2727.HK), BYD Co. (1211.HK) to be main beneficiaries of 12th FYP.


Source: Dow Jones Newswire
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Thu Sep 23, 2010 7:38 am

TOL:-

Jim Chanos and even Andy Xie, have mentioned a couple of times, that the emperor is actually not wearing any clothes.

At the same time, every parrot around you, is saying that the emperor is wearing the finest of silk, that's invincible to the naked eye.

So how does one check whether the emperor is really naked or not ?

Can one really trust one's own eyes ?

And what about observing the actions of the emperor himself ? Well, he's certainly been behaving very majestically. Building sporting venues, building parks, holding ceremonies, giving speeches, telling people how great he is, etc.

At the same time, some of his subjects have been spending a lot of time in Macau, while others have been cooking the books and running road ...

In times like these, it's back to Investing 101. Milk the trend until it breaks. Be aware that the emperor could actually be naked but since everyone seems to buy the story that he's wearing the finest invincible silk, then it's still probably safe to play the game.

Be also aware that this game can go on for years due to a lack of data and transparency. One does not want be a Contrarian too early in this type of game ...
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Fri Sep 24, 2010 7:34 am

And if you believe that the emperor is wearing the finest invincible silk, here's something to support your argument ....

The China Bears Are Wrong By Shaun Rein

China may have passed Japan as the world's second-largest economy in August, but that hasn't stopped bearish analysts from forecasting hard times for the Chinese economy.

Such skeptics as short-seller Jim Chanos warned earlier this year that China's real estate bubble is a thousand times worse than Dubai's. Former Morgan Stanley economist Andy Xie has argued that China is in a real estate bubble because 25 percent to 30 percent of the country's homes are vacant and the typical consumer has to work a full year to be able to afford a closet.

And Businessweek.com columnist John Lee argues that China has become ever-more reliant on an unsustainable economic model built on exports.


http://www.businessweek.com/globalbiz/c ... 490542.htm
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Re: China - Economic Data & News 04 (Feb 10 - Sep 10)

Postby winston » Sun Sep 26, 2010 1:43 pm

US seizes chance as China rattles Asia

For years, US policymakers have watched uneasily as China grew more assertive, fearing that the emerging power would cut into Washington's clout in one of the world's most dynamic regions.

But in recent weeks, China's rise has instead offered a golden opportunity for the United States, which has swiftly rallied behind the growing number of Asian nations that have butted heads with Beijing.

After China piled pressure on Japan to free a captain captured near disputed islands, the United States said it considered the chain -- known as the Senkaku in Japanese and Diaoyu in Chinese -- to be under Tokyo's administration, meaning that US forces would be obliged by treaty to defend Japan in an attack.

With Southeast Asian nations voicing alarm over Chinese attempts to exert sovereignty in disputed waters, President Barack Obama and regional leaders in a summit Friday called for freedom of navigation in the South China Sea.

The United States also defied Chinese warnings and carried out joint war games with South Korea after accusing Beijing's ally North Korea of sinking a South Korean vessel.

"It's always bad when an American lectures someone on arrogance, but the Chinese should beware of premature arrogance," said Ralph Cossa, president of the Center for Strategic and International Studies' Pacific Forum.

"The more they flex their muscle in the South China Sea, the more people dial 911 and hope the (US Navy's) Seventh Fleet will answer. And the same thing with the Japanese," Cossa said.

In Japan, where a left-leaning government swept to power last year pledging to be more "independent" from the United States, Prime Minister Naoto Kan has thrown his support behind a US base plan and appointed one of his party's most hawkish figures, Seiji Maehara, as foreign minister in a recent reshuffle.

The United States has also built growing partnerships with Southeast Asia, particularly Indonesia and former war foe Vietnam, two countries with historically tense relations with China.

The Obama administration insists it has no grand designs to encircle China. Since taking office, Obama has sought broader relations with China, including cooperation on reviving the global economy and fighting climate change.

But Kurt Campbell, the assistant secretary of state for East Asia, said he has recently seen a shift in views in the region among those convinced of US decline.

"I see more and more in Asia a recognition that the United States is going to be a dominant, key player in Asia for at least the better part of the next 40 or 50 years," Campbell said.

Asia has a growing recognition that "yes, China's role on the global stage has grown much larger in recent years, but the truth is the United States has never left the stage and we're going to be a main actor on that stage for decades to come," Campbell said.

The United States stations some 100,000 troops in Asia excluding Afghanistan, the vast majority in Japan and South Korea. The US defense budget for the fiscal year beginning in October is 700 billion dollars, far above China's 150 billion dollar budget last year as estimated by the Pentagon.

Deputy Secretary of State James Steinberg said the United States accepted that China would expand its military but hoped it would use its forces in a positive way -- praising as an example Beijing's naval deployment to fight piracy off Somalia.

"There are ways in which China's military modernization can contribute to and enhance regional and global security, and there are ways that could pose some risks to that," Steinberg said.

However, a Pentagon study in August found that China's military had already secured a strong edge over Taiwan, which Beijing claims, and that it was increasingly looking to exert its influence throughout Asia.

Walter Lohman, director of the Asian Studies Center at the conservative Heritage Foundation, said the changing dynamic in Asia has been China's growing assertiveness, not any shift in US policy.

"The Chinese really believe that we are rallying against them," Lohman said. "They're missing a very important point -- the Vietnamese are coming to us and the Japanese are coming to us, not the other way around."

Source: AFP Global Edition
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