ChinaToday
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Oh, how should I start. I think I will make with a bit clarifications on some of the issues you are talking about, but first of all, I will make one thing clear. There is a difference between falling short of ideal and falling short of necessity. Basically, falling short of ideal will be a student getting a 96 on a test when his ideal expectation is 100 and falling short of necessity will be a student getting 56 on the same test when 60 is the passing grade. Both are 4 points short from the target, but the effect is very very different. So keep this in mind when you read the t
Now by RMB appreciation problem, I assume you mean the effect of export reduction due to RMB worth more relative to other currencies. While this is true if you only consider the selling part, the fact is, as long as the appreciate rate is consistent and slow, this is hardly problem. Why is this? Well, this is because as RMB appreciates, the cost of raw material will go down; therefore, balancing the final price of the product. Remember, if RMB is worth more US dollars, then import raw materials will also be cheaper. (remember, China accounts for HALF of the raw material import in the entire world)
If you are talking about the so called M2 problem, then let me nib that one in the bud. Chinese M2 is roughly equivalent to US M3, because the Chinese financial markets are heavily regulated. The raw M2 amount is also worthless because by itself it is not a indicator for financial health. The true indicator for potential M2 problem is the CPI. Chinese CPI, with the exception of 2007 (6.58%), has been consistently below 5% in the past 12 years. In fact, 2012 only has a CPI rate of 2.41%. This indicates the economy is quite healthy.
According to Trulia, the AVERAGE real estate at LA in April 13 is about $312/square ft. This translates to roughly 20672.93 RMB/square meter. Big city housing is expensive, news at 7 o'clock. As for the salary of real estate agent. So you are saying a guy making $1624.51 per month is a lot? I am pretty you make more as a dish washer in NY.
The correct cycle is:
National revenue rise---> accumulated capital/fixed asset amount increase--->production increase vs employee salary increase
If the production increase outpace the salary increase, then national revenue rise, if not, then the revenue false. This is the main cycle for a nation. The housing and commodity price is in a related, but separated cycle.
Whether the people is rich or not has nothing to do with the absolute price of a single commodity or item. The true indicator is the living standard. Can you honestly say with a straight face that living standard in China now is worse than a decade ago?
Yeah, because a 16 grand loan is a sign of crazy party. If that is actually true, then US would be a mental asylum and this is a sign that people are poor...how?
Japan's lost decade comes from the plaza accord, where US, Britain and France managed to neuter Japanese export. In order to maintain growth, the Japanese has to throw their money into financial sector or in other words, forcefully transition into a financial based economy. In summary, they are in their sorry state because someone forced them to neuter their economy over the barrels of a gun. How exact is this suppose to happen to China?
US' decline occurred because cold war arm race outpacing the natural growth of US economy. As a result, Reagen is forced to switch US to a financial base economy to provide fast and artificial growth. The Chinese military spending is pegged at 1.6% GDP far below that of US or any major nation, including the likes of India. So how exact is this suppose to happen to China, again?
This is not to mention the fact that Japan and US economies are managed differently than Chinese economy. For example, US economy is famous for its periodic depression and recession cycle. Chinese economy doesn't have those. The circumstance and basic situation in China right now is completely different from Japan and US 20 years. Where exactly did you draw that conclusion?
Where did the "trillions" figure came from? The biggest stimulus from Chinese government in the past decade is during 2008 where the government injected roughly 650 billion USD into the ENTIRE infrastructure sector. High speed rail way, for example, took the biggest slice of the pie. The rest went into school, hospital and dams, etc. Real estate sector is mainly privately owned and privately constructed, how is the Chinese government "throw it to China house market" as you so eloquently put?
And I would like to remind everyone the distinction I made at the beginning of this post. Sure, the Chinese housing price is not as ideal as some of us would liked, but it is far from "too expensive to live". In fact, the house ownership rate in China is approximately 90%. This value is significantly higher than all nations with a population 15 million or above.
Please, at least do a bit research on specifics of the Chinese economy. Read actual economy reports and key indicators.
China will most definitely face quite a bit challenge in the next decade. For example, Chinese economy will expand its influence into some of the sectors that are literally the "last fort" of many western economy. As a result, China will face challenges from intense protectionism. Chinese RMB will also begin to transition into a world trade medium, which create management challenges. Militarily, Chinese and US will also come into quite a bit conflict. These are all big challenges. However, please don't pull problems that do not actually exist out of thin air.
Dam you are putting off many indian trolls coming to bad mouth china in this thread