China's GDP increased by SIX TIMES over the last 10 years

[senheiser]

The way the Renminbi has depreciated over the past month (2.94% depreciation), the Chinese economy would be smaller this year than it was last year in US Dollar terms. The depreciation over the past month has wiped out all the appreciation of last year. That's big.

The only way for Chinese economy to surpass the US economy is by having a stronger Renminbi.

Chinese economy is in big trouble right now with a massive 6 year credit boom (Since 2008) coming to an end and the growth rate indicators doing very poorly. Non-Performing Loans (NPL) are rising for banks and many private businesses are defaulting on their bonds. Property market is cooling rapidly with home prices down AND sales down. This property cooling is causing trouble for banks as many of their loan portfolio is property or property-related such as glass industry, steel industry, furniture industry, aluminium industry, etc.

Property is the core for the Chinese economy as it drives many other large GDP contributing industries like steel, aluminium, copper, iron ore, glass, furniture, automobile, etc. So when property sales fall, other industries suffer.

The other problem is massive overcapacity in many industries (especially state-owned) which means they have to cut back the supply which will further hurt GDP growth.

As all these industries are suffering, the Chinese financial system will come under severe stress as companies cannot pay back their loans as demand wanes. This will cause problems in the banking system and bond yields will rise.

This is why the borrowing rates have gone up which causes more problems for small & medium sized companies as their borrowing costs are getting higher.

All these higher borrowing costs in Renminbi are causing Chinese banks and companies to issue bonds in US dollars (lower borrowing rates) instead of Renminbi (higher borrowing rates). This lack of demand for Renminbi is causing the Renminbi exchange rate to depreciate.

I've never believed in the 'China collapse theory' but you got to be realistic and see the Chinese economy has some big problems to deal with.

Only solution is to accelerate the major economic reform announced during the 3rd Plenum by giving more power to the markets.

only solution is making the remnimbi convertible and decreasing interests rates, Chinese interests rates are at 6% despite inflation only being 2%

 

[Chinese-Dragon]

only solution is making the remnimbi convertible and decreasing interests rates, Chinese interests rates are at 6% despite inflation only being 2%

I agree with you.

Our inflation rates are low now, so we have room to lower the interest rates as a growth-boosting measure.

The thing is that the Chinese government is very paranoid about overheating and asset bubbles. For example, to buy a second house in Guangzhou, you need to pay a 70% down-payment on the total value!

Compare that to the West before the Credit Crunch, where they had something called "negative equity", where not only did you need a 0% down-payment to buy a house, but they would actually loan money to you in addition to that! No wonder it crashed.

I also agree with making the RMB more flexible, however that must be done slowly. Our current economic reforms will start to liberalize the Yuan exchange rate, but in stages. What we have now, is a "band" in which the Yuan's value is allowed to fluctuate, it can respond to market forces but only within set boundaries.

If we make it free-floating right away, the value of the Yuan will soar upwards too quickly, which means our industries may not have enough time to adjust. So it will be done in slow stages.

In the long-term, a strong Yuan will give us more economic power. Combined with a weakening dollar (as it loses its position as the world's reserve currency), our nominal GDP will increase far beyond even what we currently expect.

 

[The Sultan Erdogan]

Well that was Atatürks motto. Erdogan gives no **** about Ataturk. Erdogan sees himself as decendant of the Ottoman empire. Turkey is clearly shifting towards neo ottomanism in the Middle east and turkic world.

Turkey supporting Uighur separatist groups in Turkey.

I am not into any Neo-Ottomanism.

You say crap about West and then go on to believe Western media bullshit? Hypocrite.

A retarded youtube video proves nothing. Stop being stupid.

I am on the path of AtaTurk. Also, I see China as a very important nation and want good relations with China.

Stop your propaganda

 

[liall]

China will develop india after the invasion.

I dont know man. WOuld I be happier under Mao compared to Gandhis? I think I will. k go on you can invade have my support

 

[Beast]

Well that was Atatürks motto. Erdogan gives no **** about Ataturk. Erdogan sees himself as decendant of the Ottoman empire. Turkey is clearly shifting towards neo ottomanism in the Middle east and turkic world.

Turkey supporting Uighur separatist groups in Turkey.

Turkey dare not and it just you keep insisting... Remember Turkey has their Kurdish problem.

China slower economic growth is to weep out low product industry and force small medium enterprise to go higher chain and produce higher value goods. If your labour cost goes high, you need to increase the value of your product to compensate yhe higher operating cost.

 

[LordTyrannus]

I am not into any Neo-Ottomanism.

You say crap about West and then go on to believe Western media bullshit? Hypocrite.

A retarded youtube video proves nothing. Stop being stupid.

I am on the path of AtaTurk. Also, I see China as a very important nation and want good relations with China.

Stop your propaganda

I dont ask which path you go. I am telling you that your PM erdogan gives a flying fvck about Ataturk. He is for Neo ottomanism. China is not important for Turkey. In fact chinese low labor goods are flooding turkish market and killing turkish industry jobs.

China is invading your countries economy.

 

[Chinese-Dragon]

I dont know man. WOuld I be happier under Mao compared to Gandhis? I think I will. k go on you can invade have my support

LOL... what?

Turkey dare not and it just you keep insisting... Remember Turkey has their Kurdish problem.

China slower economic growth is to weep out low product industry and force small medium enterprise to go higher chain and produce higher value goods. If your labour cost goes high, you need to increase the value of your product to compensate yhe higher operating cost.

In fact, despite our slower GDP growth in percentage terms, in real terms we are adding more to our GDP now then we have ever done before in modern history. Because our economic base size is so much larger.

 

[bolo]

only solution is making the remnimbi convertible and decreasing interests rates, Chinese interests rates are at 6% despite inflation only being 2%

That's because China is not printing infinite amount of money thus interest rate should be 6%. The only reason US rate is near 0 is because they are printing like madmen. Inflation is killing US.