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I know you're trying to keep this thread bumped up to the top of the list, and guess what I'll help you.

I'm glad people are still underestimating China. It serves our "Tao guang yang hui" strategy perfectly. :D

I am genuinely concerned about impending crisis in the Chinese economy and its impact on global economy, even though we will get away with minor scratches.

What that strategy means? You always have some fancy strategy to justify worst of situations!! :D
 
:rofl:

Western economist? Aren't they the one screwing up their own economic? And you still can trust their words?
Western wconomists or economists in general, all useless shits. None of these big mouths in the past have predicted a downturn in the economy. Their bs solutions are to print and spend out of any recession. wonder why you need phd for this bs ?
 
I am genuinely concerned about impending crisis in the Chinese economy and its impact on global economy, even though we will get away with minor scratches.

What that strategy means? You always have some fancy strategy to justify worst of situations!! :D

"Tao guang yang hui" (韜光養晦) is Deng Xiaoping's strategy, in English you might say it's like "biding your time and building your capabilities". The characters literally mean: "Hide brightness, nourish obscurity".

Directly contrary to India's strategy, part of which involved India's favorite President Kalam announcing to the world that India would be a superpower in 2012. :P

That's exactly the opposite of what we're trying to do. Our leaders are always on the news saying "China is still a developing country" (which is the truth).
 
China is a super big developing country..
Every part is developing, from poor to rich.
Also CNY is under devaluation internally.
So the debt is really nothing big deal..
Today`s debt at dangerous level is no longer that bad after a few years..

And total chinese bank debt has risen to $25 trillion, that $4 trillion can be an effective tool for trolling, but it is not the solution to every problem China faces or going to face @Chinese-Dragon
 
I am genuinely concerned about impending crisis in the Chinese economy and its impact on global economy, even though we will get away with minor scratches.

What that strategy means? You always have some fancy strategy to justify worst of situations!! :D
reading your posts on China and Modi is pretty funny.

You guys have unshaken faith in him, yet no faith in China, for obvious reasons.

Does China have problems? Does US have problems? Does India, everyone's got problems, but it's how we handle them.

I didn't read all of it, but let's look at the time line, at first property building and luxury apartments and shopping centres were seen as a waste in China, than it was HSR and ghost cities, bad debts, and all that.

But do you know how many cities have 300,000 or more in population in China? They could be ghost cities but they are not, you can't just look at the cities that have filled, but the cities that were never ghost cities in the first place.

I'm sure China will face some kind of problem at some point that will need restructuring, but I can't personally predict that.


Are there bad decisions? Obviously, Kobe bryant missed the most shots in NBA, but he has made way more than almost everybody. You have to look at the whole body of work.

India doesn't have as big as a ghost city problem, how many of those smart cities you have running out of the 100? Or so? Can you guarantee the success of all of them? You don't have this problem, same as Scalabrin doesn't miss as many shots, cause he warms the bench relative to Kobe.

You play in the game, you will miss shots.
 
India doesn't have as big as a ghost city problem, how many of those smart cities you have running out of the 100? Or so? Can you guarantee the success of all of them?

Now, India does absolutely have no ghost cities. Their trains are fully-packed.
 
"Tao guang yang hui" (韜光養晦) is Deng Xiaoping's strategy, in English you might say it's like "biding your time and building your capabilities". The characters literally mean: "Hide brightness, nourish obscurity".

Directly contrary to India's strategy, part of which involved India's favorite President Kalam announcing to the world that India would be a superpower in 2012. :P

That's exactly the opposite of what we're trying to do. Our leaders are always on the news saying "China is still a developing country" (which is the truth).

China is not obscure, on the contrary they are extremely vocal and aggresive about showing their muscles to the world.

Have you ever been to India? Just asking, nothing related to the thread.
 
Overcapacity is wastage, CCP made three when one was needed, the primary goal was to throw in more investment into the economy as stimulus to drive growth, 'infrastructure building' was a secondary goal. All those investments have jacked up their GDP in previous years, but now they are about to add to the NPA of dangerously over-leveraged Chinese banks.

Over capacity?

No。China's infrastructure density is way lower than countries like Germany and France。

Guangdong Province,with a population of 100 million and a land area 56% of Germany,aims for 4000km of operating rails by 2020 but the total will still be only about 1/10 of Germany‘s rail mileage today。

Ditto for other infrastructure。

Over the next 10 years China needs to plough at least 20 trillion USD into infrastructure to even come close to bringing itself up to the standard against which it measures itself。
 
I have been to Chennai this year.
I would say India people in real life are nice. Busy with their own life.
India people in the internet are caring more about India`s position in the world than real life..
Yet I would say people`s life quality influence the countries position a lot.
A country where people having great life will surely more recognized than country with people in poor condition.

China is not obscure, on the contrary they are extremely vocal and aggresive about showing their muscles to the world.

Have you ever been to India? Just asking, nothing related to the thread.

China really invest a lot on base infrastructure like high way, railway, and industrial capacity of manufacturing..
These investment seems too much for current China
But soon people start to enjoy the benefit of these investment with better transportation and better products..


such wasteful investments.
not good for taxpayers.
 
The boom in infrastructure investment is far from over。

A case in point:

The three-year old Beijing-Shanghai HSR is already overly congested and near saturation,warranting a feasibility study for a second HSR。

In the meantime,service intervals will be shortened from the current 4.5 mins on average to 3.0mins。
 
:rofl:


Western wconomists or economists in general, all useless shits. None of these big mouths in the past have predicted a downturn in the economy. Their bs solutions are to print and spend out of any recession. wonder why you need phd for this bs ?

China did the same, China’s total bank debt has grown from $14 trillion in 2008 to $25 trillion today – more than double the total size of the US commercial banking sector. To support this massive growth in credit, China’s central bank has more than doubled its money supply (M2) by simply printing more money. While rapid growth in credit and large-scale monetary expansion may have softened the blow of the 2008 financial crisis and contributed to renewed growth, history has never seen such a colossal ramp-up of both money and credit without a subsequent period of financial chaos.
 
Wasted investment; China's $6.8-trillion hole?
SHANGHAI

HAS CHINA really blown $6.8 trillion on worthless investments over the past five years? This is the startling claim made by two Chinese government researchers that has, understandably, caused quite a stir. If true, it would mean that fully 37% of Chinese investment since 2009 was wasted on building bridges to nowhere and homes with no one in them. There is, without question, plenty of worrying evidence that Chinese investment has become less efficient in recent years. But a closer look at how the researchers produced the $6.8 trillion figure badly damages their claim. Calling it a back-of-the-envelope estimate would be undeserved praise.

The $6.8 trillion calculation was made by Xu Ce of the National Development and Reform Commission, an economic planning agency, and Wang Yuan of the Academy of Macroeconomic Research, a think-tank under the commission. Their analysis was published last week as an opinion piece in the Shanghai Securities Journal, a government-run newspaper. In their article, they estimate that worthless investment totalled 7.9 trillion yuan in 2009; 5.4 trillion yuan in 2010; 4.7 trillion yuan in 2011; 10.6 trillion yuan in 2012; and 13.2 trillion yuan last year. That amounts to 41.8 trillion yuan over the past five years, or $6.8 trillion at the current exchange rate.

These are remarkably precise figures for wasted investment, something that, by its nature, is extremely hard to pin down. There are practical difficulties – for example, we know that some government investment funds have been skimmed off by corrupt officials, but it takes careful forensics to track the ill-gotten gains of one rotten official, let alone thousands of them. Even greater are the theoretical challenges. China has clearly built too many homes, too quickly, but if some of those that stand empty today are eventually bought then what once seemed a wasted investment could yet turn into a productive one.

So how exactly do Mr Xu and Ms Wang arrive at their numbers? Their method is to compare China’s capital efficiency in the 1980s and 1990s with the past decade; they treat any decline in efficiency as evidence of wasted investment. Although they don’t publish their calculations in full, their conclusions have the virtue of being very easy to replicate from official data. (Be warned that this is slightly wonky.)

Mr Xu and Ms Wang base their analysis entirely on the concept of incremental capital output ratio, or ICOR. ICOR is a measure of how much investment it takes to produce each additional unit of growth in an economy, with investment the numerator and additional GDP the denominator. The higher a country’s ICOR, the less efficient it is – that is, it takes more investment to produce a smaller amount of economic output. Mr Xu and Ms Wang begin by calculating that China’s average ICOR from 1979 to 1996 was 2.6. To do so they tot up each year’s ICOR and calculate a simple average. Here is a table of all of China's ICORs from 1979 to 1996, yielding the same average that they calculate:

Note: Some tables & charts could not be posted here because of formatting isues, please go to the link below to check those.

(Sources: National Bureau of Statistics; The Economist)


These numbers are fine for what they are – estimates of the efficiency of Chinese investment – but it is at this point that the two researchers make several unreasonable leaps of logic. First, they use the 1979-96 ICOR average of 2.6 as their baseline estimate of what China’s ICOR ought to be were its investments all efficient. Next, they calculate the difference in China’s investment efficiency from 2009-13. For example, in 2009, the ICOR was 5, which is 48% less efficient than the baseline ICOR of 2.6. Therefore, they conclude, 48% of all Chinese investment in 2009 – 7.9 trillion yuan – was worthless. Similar calculations for each year up until 2013 yields the eye-popping result that 41.8 trillion yuan has been wasted.

There are two major, indeed fatal, flaws in this. First, why have they chosen 1979-96 as their baseline for ICOR efficiency in China? A quick glance at the tables above reveals that there was a big jump in ICOR (that is, a big decline in efficiency) from 1997-2000, followed by an improvement. The 1979-96 selection leads to a sharp downward bias in their baseline estimate. If we break the ICOR into decades, and break out the past five years separately, the results are very different, as this table shows.

Note: Some tables & charts could not be posted here because of formatting isues, please go to the link below to check those.

(Sources: National Bureau of Statistics; The Economist)

* stopping pre-stimulus


Using Mr Xu and Ms Wang’s method for calculating efficiency differences, we now can compare the ICOR of 4.2 over the past five years with 3.3, the average for both of the previous two decades. This is a much more relevant yardstick than the pre-1997 era. On this revised basis, China’s investments after the global financial were 21% less efficient than in the 1990-2008 period. Sticking to Mr Xu and Ms Wang’s approach, this would mean that 21% of all investment over the past five years – 22.6 trillion yuan ($3.7 trillion) – had been wasted. That is still a lot of money to burn through, but it is almost half their headline-grabbing estimate.

That leads to the second and even bigger flaw – namely, this is a lousy method for calculating wasted investment. ICOR serves as a rough guide to the efficiency of investment. It does not, however, show how much money was been wasted, only that it is generating smaller or bigger growth returns compared with previous years. For example, say that an investment of $1000 boosts GDP by $500 this year, but only by $400 next year. In this case, ICOR will have risen from 2 to 2.5. Using Mr Xu and Ms Wang’s framework, because investment is 20% less efficient in the second year than it was in the first year (ICOR of 2.5 vs 2), this is tantamount to 20% of investment, or $200, being worthless. But that is completely absurd. All we can conclude is that the return on investment has fallen, not that $200 has been wasted. Moreover, it is inevitable that in years when investment soars – which was, after all, the point of China’s stimulus package – investment returns will appear to suffer. The real question is whether those investments deliver returns over time, hence the point in looking at average ICORs over a longer period.

None of this is to give the Chinese economy a clean bill of health. As we have written, debt has increased too quickly, and declines in both productivity and investment efficiency are worrisome. But $6.8 trillion down the drain in just five years? This at least is one thing that will not keep us up at night.

Wasted investment: China's $6.8-trillion hole? | The Economist
Such an important post and still not enough recognition. This was very informative and slightly depressing as China's imminent decline (not to the bottom though) is going to worry the (super import hungry consumer)West a lot. India will also take a hit but eventually as the manufacturing will get a boost, in the long run it will help us bridge the lack of a full fledged manufacturing sector.
 
I am of the mindset no infrastructural investment is a waste.


Do you want to say that Ghost cities and Huge shopping complexes build in Noman's land are right use of Money? It will add to your GDP without any ROI and circulation of Income. It will fail to uplift the living standard of people which goes side by side with spending.
 

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