China Economy Forum

[Fanling Monk]

China can fulfill year's growth target: Premier


Premier Wen Jiabao has said China is capable of meeting its economic and social development goals for the year despite domestic and external challenges.

During an inspection tour of East China's Zhejiang Province on Tuesday and Wednesday, Wen pointed to positive changes emerging in some sectors, and favorable conditions to maintain steady and relatively fast growth.

"We have the conditions and capabilities, and will be sure to fulfil this year's economic and social development targets," he said.

The economy's fundamentals remain sound, the premier said, but he warned that the foundation for economic stabilization is still unstable, and that economic hardships may continue for some time.

The government pared its gross domestic product (GDP) growth target for 2012 to 7.5 percent from the previous 8 percent in March in the wake of a persistent slump in the United States and spreading debt woes in the eurozone.

Dragged down by a lackluster external market and government efforts to cool inflation, the country's GDP growth hit a three-year low of 7.6 percent in the second quarter of 2012.

Government leaders, enterprises and the whole society should have confidence, especially in times of difficulty, Wen said, calling for government authorities to carry out work in line with new conditions and local realities.

During meetings with local entrepreneurs, Wen said the economy has shown positive changes over recent months, especially since July, as both investment and consumption have grown steadily.

Wen said industrial production in eastern regions is picking up slowly, with July's industrial output growth in Guangdong, Zhejiang and Jiangsu up by 1.4, 1.9 and 0.7 percentage points, respectively, from those recorded in the first half.

Wen also cited a stable job market, which saw 8.12 million new urban jobs created in the first seven months, up 390,000 from the same period of last year, and easing price gains, which provides more room for monetary loosening.

Growth of the consumer price index, a key gauge of inflation, dropped to 1.8 percent year on year in July, the slowest rate since February 2010.

The country's central bank earlier in the year slashed the reserve requirement ratio for banks twice and interest rates twice in a bid to boost lending and shore up growth.

China can fulfill year's growth target: Premier - Globaltimes.cn

 

[Martian2]

China is approaching the technological frontier

China's economic growth rate has to decrease. This year, China's nominal GDP is $8 trillion. You can't keep growing at 10% indefinitely.

China has moved closer to the technological frontier. Its economy must slow down. There isn't that much new technology to keep boosting China's massive $8 trillion GDP.

China currently uses 20% more electricity per year than the United States. It is not possible to maintain a compound 10% growth.

 

[Fanling Monk]

Premier Wen Jiabao (温家&#23453 always a cautious and conservative man. The numbers are not too bad compares to the rest of the world.

China can fulfill year's growth target: Premier


Premier Wen Jiabao has said China is capable of meeting its economic and social development goals for the year despite domestic and external challenges.

During an inspection tour of East China's Zhejiang Province on Tuesday and Wednesday, Wen pointed to positive changes emerging in some sectors, and favorable conditions to maintain steady and relatively fast growth.

"We have the conditions and capabilities, and will be sure to fulfil this year's economic and social development targets," he said.

The economy's fundamentals remain sound, the premier said, but he warned that the foundation for economic stabilization is still unstable, and that economic hardships may continue for some time.

The government pared its gross domestic product (GDP) growth target for 2012 to 7.5 percent from the previous 8 percent in March in the wake of a persistent slump in the United States and spreading debt woes in the eurozone.

Dragged down by a lackluster external market and government efforts to cool inflation, the country's GDP growth hit a three-year low of 7.6 percent in the second quarter of 2012.

Government leaders, enterprises and the whole society should have confidence, especially in times of difficulty, Wen said, calling for government authorities to carry out work in line with new conditions and local realities.

During meetings with local entrepreneurs, Wen said the economy has shown positive changes over recent months, especially since July, as both investment and consumption have grown steadily.

Wen said industrial production in eastern regions is picking up slowly, with July's industrial output growth in Guangdong, Zhejiang and Jiangsu up by 1.4, 1.9 and 0.7 percentage points, respectively, from those recorded in the first half.

Wen also cited a stable job market, which saw 8.12 million new urban jobs created in the first seven months, up 390,000 from the same period of last year, and easing price gains, which provides more room for monetary loosening.

Growth of the consumer price index, a key gauge of inflation, dropped to 1.8 percent year on year in July, the slowest rate since February 2010.

The country's central bank earlier in the year slashed the reserve requirement ratio for banks twice and interest rates twice in a bid to boost lending and shore up growth.

China can fulfill year's growth target: Premier - Globaltimes.cn

 

[Martian2]

China's economy becomes 2% more efficient in 2011

China's energy use per unit of GDP down 2% in 2011 - China.org.cn

"China's energy use per unit of GDP down 2% in 2011
August 17, 2012

Government data issued on Thursday show that China cut its energy usage by 2.01 percent in 2011 to 0.79 tonnes of standard coal equivalent for every 10,000 yuan (US$1,570) of China's GDP.

Beijing recorded the greatest decline, dropping its energy use by 6.94 percent to 0.45 tonnes of standard coal equivalent per unit of GDP, according to the figures jointly released by the National Development and Reform Commission, the National Bureau of Statistics and the National Energy Administration.

Qinghai province in west China registered the greatest increase in power usage per unit of GDP with an increase of 9.44 percent, followed by a 6.96-percent increase in Xinjiang Uygur autonomous region, also in west China and a 5.23-percent increase in Hainan.

The government also evaluated energy use per every 10,000 yuan of industrial value-added output. Beijing topped the list with a decline of 18.5 percent. West China's Ningxia Hui autonomous region ranked at the bottom of the list, with a 14.72-percent increase in power usage per unit of industrial value-added output.

The Tibet autonomous region, Hong Kong, Macau and Taiwan were excluded from the calculations.

China plans to cut the energy use per unit of GDP by 16 percent by 2015 from the level in 2011. It also aims to lift non-fossil fuel energy usage to 11.4 percent of the country's total energy consumption from the current 8.6 percent.

To meet the targets, the government has adopted a range of measures, including the closure of outdated thermal power plants and iron and cement workshops and a push for the use of clean energy, such as solar and wind power.

The government also hopes to reduce greenhouse gas emissions per unit of GDP in 2020 by 40 to 45 percent compared to 2005 levels."

 

[vK_man]

Given the global slowdown and the Chinese policy response, this restructuring agenda is now on hold. The new measures will succeed in keeping high single-digit growth going for a time, as they did in 2009-10. But they will do so by aggravating the economy’s imbalances and storing up problems for the future. This is not good news for those of us concerned with China’s longer run prospects.

Reverse Offshoring Begins

Already, the strains are starting to show. The Chinese competitive advantage of a seemingly inexhaustable supply of cheap labor is starting to erode. Wage pressures are rising as fewer and fewer workers are migrating from the countryside to search for work in the cities. In reaction, the decision of multinational companies to offshore production to low-wage countries like China is not the no-brainer it once was. Indeed, a recent poll by Boston Consulting Group (full study here) indicates that more than one-third of American manufacturers are considering reversing the offshoring trend and bringing the jobs back to American shores (emphasis added):

Decision makers at 106 companies across a broad range of industries responded to the survey, which BCG conducted in late February. Thirty-seven percent said they plan to reshore manufacturing operations or are 'actively considering' it. That response rate rose to 48% among executives at companies with $10 billion or more in revenues -- a third of the sample.

The top factors cited as driving future decisions on production locations: labor costs (57%), product quality (41%), ease of doing business (29%), and proximity to customers (28%). In addition, 92% said they believe that labor costs in China 'will continue to escalate,' and 70% agreed that 'sourcing in China is more costly than it looks on paper.'

In particular, some companies are nearing "tipping points":

Interest in shifting manufacturing to the U.S. is particularly strong among companies in several sectors identified in BCG’s March report as nearing a 'tipping point.' In these industry groups, China’s cost advantage is likely to shrink within the next few years to the point where companies should rethink where they produce certain goods, mainly those for sale in North America. These tipping-point sectors are transportation goods, appliances and electrical equipment, furniture, plastic and rubber products, machinery, fabricated metal products, and computers and electronics. BCG predicts that production of 10 to 30 percent of U.S. imports from China in these industries, which account for approximately 70% of goods that the U.S. imports from that nation, could shift to the U.S. before the end of the decade.

This development must be particularly worrisome to Chinese policymakers and makes the objective to rebalance growth away from infrastructure spending to the Chinese consumer far more urgent. In this way, the Chinese economy would be able to grow more sustainably by creating a new source of demand from their own domestic economy. Alas, it does not appear likely to happen as refocusing growth away from infrastructure spending would seriously hurt Party insiders who have gotten obscenely rich in this boom, as I pointed out before (see "Good News: China Soft Landing, Bad News...").

Ironically, the latest Chinese move to engage in the more-of-the-same infrastructure-based stimulus will have the effect of rebalancing growth away from infrastructure spending to the consumer. But instead of the Chinese consumer, it will be the American consumer as the reverse offshoring trend starts to take hold and accelerate.

Could China Be Rebalancing Growth To The Wrong Consumer? - Seeking Alpha
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Seems China is focusing on the american consumer,while the american consumer is increasingly becoming impoverished.China should focus on Domestic consumer else it will shooting itself in the Foot by the focusing on Bankrupt western consumers.

 

[Martian2]

That's funny. An Indian giving China advice on economic growth.

China's economy has grown by 10% for thirty years, despite the persistent predictions of doom from the anti-China crowd.

This year, China's economic growth is a healthy 7.5 to 8%. China is still earning a hefty $200 billion annual trade surplus.

Why should we take advice from Indians that can't keep the electricity on, has a collapsing currency (e.g. Indian rupee has depreciated by 25% in the last year to 56 rupees per dollar), a large Indian fiscal deficit, a large Indian trade deficit, and a collapsing economic growth rate (down to 5.5 to 6%)?

It's like an Indian athlete giving advice to a Chinese Olympic gold medalist on gymnastics. It's just bizarre.

Are you Indians about to give us advice on how to conduct our spacewalks next? Or how we should design and build our next world's fastest supercomputer?

You Indians are completely incompetent and you're in no position to give anybody any advice.

 

[vK_man]

That's funny. An Indian giving China advice on economic growth.

China's economy has grown by 10% for thirty years, despite the persistent predictions of doom from the anti-China crowd.

This year, China's economic growth is a healthy 7.5 to 8%. China is still earning a hefty $200 billion annual trade surplus.

Why should we take advice from Indians that can't keep the electricity on, has a collapsing currency (e.g. Indian rupee has depreciated by 25% in the last year to 56 rupees per dollar), a large Indian fiscal deficit, a large Indian trade deficit, and a collapsing growth rate (down to 5.5 to 6%)?

huh? First ,I had started a separate topic so how the hell did it get integrated? And yes,I know India is in worse economic state.Our govt stealthily devaluated our currency for Exporters and IT and some finance bigwigs. I know my govt is looting this nation left,right and center. So ,need not worry about us.

By the way the article is written by an Mr.Hui a mutual fund manager not me. So its not indian advice .

 

[Martian2]

huh? First ,I had started a separate topic so how the hell did it get integrated? And yes,I know India is in worse economic state.Our govt stealthily devaluated our currency for Exporters and IT and some finance bigwigs. I know my govt is looting this nation left,right and center. So ,need not worry about us.

By the way the article is written by an Mr.Hui a mutual fund manager not me. So its not indian advice .

If it's not advice you agree with then why are you posting anti-China garbage? There are hundreds of anti-China articles being written every day. Will we see you post a flood of that crap in here? You Indians (e.g. Holmes, Abishek, etc.) have done it in the past.

China certainly doesn't need help with its economy. It is sitting on a $3.4 trillion forex war chest.

 

[vK_man]

If it's not advice you agree with then why are you posting anti-China garbage? There are hundreds of anti-China articles being written every day. Will we see you post a flood of that crap in here? You Indians (e.g. Holmes, Abishek, etc.) have done it in the past.

China certainly doesn't need help with its economy.

Troll mode on:

Well its chini advice ,mr.hui fund manager special for you.

Troll mode off:

No need to insult.Its an hypothesis by Mr.Hui .lets wait and watch. Seems Jade was right.Your sympathies lie with China than USA. Do you support Taiwan China unification?

 

[Martian2]

Troll mode on:

Well its chini advice ,mr.hui fund manager special for you.

Troll mode off:

No need to insult.Its an hypothesis by Mr.Hui .lets wait and watch. Seems Jade was right.Your sympathies lie with China than USA. Do you support Taiwan China unification?

Some of you Indians are obsessed with China's economy and looking for absurd minor flaws. Your Indian economy is falling apart and you're worried about the mighty Chinese economy? You guys should set your own house in order before you start minding other people's business.

Off-topic: Yes, I do support China-Taiwan reunification. I grew up in a KMT family and the KMT has always supported reunification. If you're KMT, you believe in reunification in the same way that some Indians believe in Hinduism.

 

[vK_man]

It is sitting on a $3.4 trillion forex war chest.

well the USA is trying to inflate its way out,thats clear from the constant Quantitative easings and stealth pumping of money.I don't know how long dollar can continue like this. And this will reduce the real purchasing power of the chinese surplus.

Before you cite BLS inflation data, please note that they use hedonics ,substitution to skew real inflation and a lot of creative accounting is being used by US Govt.

 

[Martian2]

well the USA is trying to inflate its way out,thats clear from the constant Quantitative easings and stealth pumping of money.I don't know how long dollar can continue like this. And this will reduce the real purchasing power of the chinese surplus.

Before you cite BLS inflation data, please note that they use hedonics ,substitution to skew real inflation and a lot of creative accounting is being used by US Govt.

The U.S. has stopped trying to inflate its way out of its debts. There has not been a QE3.

China has been signing currency swap agreements with other countries to remove the use of the U.S. dollar. If there's a QE3, the currency swaps with other countries will grow in size and increase in number. The U.S. is restrained from a QE3, because of the fear of accelerating the replacement of the U.S. dollar with the Chinese Yuan.

The world isn't stupid. They won't sit by quietly and let the U.S. inflate its way out of debt at their expense.

 

[vK_man]

The U.S. has stopped trying to inflate its way out of its debts. There has not been a QE3.

China has been signing currency swap agreements with other countries to remove the use of the U.S. dollar. If there's a QE3, the currency swaps with other countries will grow in size and increase in number. The U.S. is restrained from a QE3, because of the fear of accelerating the replacement of the U.S. dollar with the Chinese Yuan.

The world isn't stupid. They won't sit by quietly and let the U.S. inflate its way out of debt at their expense.

You really believe official words? After the multi trillion Libor scandal , and trillions missing from Fed you think so.

And in response to Chinese making currency swap agreements,US military is covertly ruining Chinese investments in Africa and trying to ring it with military bases,so basically they are trying to control the chinese supply lines. And the Fed has given stealth bailouts before. FYI ,Fed is using interest rate swaps to hide its real level liabilities.
Also I am hearing that Operation Twist which is underway is a stealth QE3 ,But i am yet to do my own analysis.
http://www.marketoracle.co.uk/Article35883.html


And most of the world ,with exception of Russia can do squat against US military.And the rest of the world is being forced to swallow the inflation being created by Fed.I am not joking on this.

 

[Martian2]

You really believe official words? After the multi trillion Libor scandal , and trillions missing from Fed you think so.

And in response to Chinese making currency swap agreements,US military is covertly ruining Chinese investments in Africa and trying to ring it with military bases,so basically they are trying to control the chinese supply lines. And the Fed has given stealth bailouts before. FYI ,Fed is using interest rate swaps to hide its real level liabilities.
Also I am hearing that Operation Twist which is underway is a stealth QE3 ,But i am yet to do my own analysis.
http://www.marketoracle.co.uk/Article35883.html


And most of the world ,with exception of Russia can do squat against US military.And the rest of the world is being forced to swallow the inflation being created by Fed.I am not joking on this.

You're just another Indian conspiracy nut. You can believe in whatever fantasy world that you want.

I've wasted enough of my time.

 

[vK_man]

You're just another Indian conspiracy nut. You can believe in whatever fantasy world that you want.

I've wasted enough of my time.

and you believe official wordings.. A lot of financial and geopolitical analysts will disagree with you. Sure go trust MF Global and its fraud.Close your eyes.But financial data is speaking otherwise.Even some of the best investment analysts on Seekingalpha are astounded by the scope of the Libor scandal. So if I am conspiracy nut,fine.Better than being govt propaganda worshipper ,a govt that shelters fraudsters and thieves? Sorry I have no faith in them ,after being defrauded by MFGlobal of my hard earned money.