China may not grow by 7% or 8% a year, but what they have done is grown by 7% or 8% a year for quite a few years.
They have pulled of a great coup in reality.
They have built a 21st century infrastructure with modern cities, freeways and railway networks, ports.
All in 15 years or so and all financed by selling us cheap shit that we used to make before they started making it cheaper.
To keep themselves afloat for a while, they have lots of US and Euro paper. They also own a lot of our hard assets as well (factories, farmland, residential property).
Chinas slowdown is not a massive problem for China.
It is a massive problem for everybody else.
Exactly.
Except that it took more like 25 years. It really started about 1990, but nobody was looking then. 1980 if you mark the start as being Deng's open door policy.
Quote:
Chinas slowdown is not a massive problem for China.
It is a massive problem for everybody else.
^^^^^^^^^^ THIS.
10 years ago China needed nearly 10% growth on the eastern seaboard in order to have 3% growth in Sichuan, and its workforce was growing fast from people leaving farms. Now the growth rates between the coastal provinces and the western provinces that matter are quite a bit closer, the working-age population has started to shrink, and they can back off a bit on urbanisation if the have to.
What do you mean? China has never *not* had capital controls.
hidflect
7 Sep 2015, 11:15 PM
A senior banking friend I have in Tokyo (he said, boasting) has not only completely confirmed the opinion that China is toast but goes further to say all his colleagues in his institution and others completely concur. They are all just politely waiting for the country to fall over not wishing to instigate anything peremptorily for political reasons. And I suppose, because there's no safe profit to be had in destabilizing China. But in the meantime, they are not putting one thin dime in and have worked furiously to close out any exposure they have. He thinks that since China only consumes 2% of external global finished goods it won't have that much effect on the developed economy...
Wishful thinking. I am sure lots of people in Japan wish China would just go away. They will be disappointed.
I've said it before and will say again, all rapidly industrialising economies crashed and burned regularly. England, America, France etc during their industrial revolution.
It is important and necessary to do so, as it weeds out corruption, inefficiency, waste, nepotism etc.
China should have done it long ago.
WHAT WOULD EDDIE DO? MAAAATE! Share a cot with Milton?
I've said it before and will say again, all rapidly industrialising economies crashed and burned regularly. England, America, France etc during their industrial revolution.
It is important and necessary to do so, as it weeds out corruption, inefficiency, waste, nepotism etc.
China should have done it long ago.
Or they rapidly induatrialise then stagnate for the next 100 years like Russia.
True....I didn't even consider Russia. I guess there are more, like......North Korea.
I guess a few dictatorship as well.
For the most part, like China, they are not worth considering other than as abstract anomalies.
Some people argue that China hasn't even industrialised yet, but rather is an "industrial neo-feudalist" society.
Sort of like how some third world countries cannot be considered industrial just because they have a few manufacturing free trade zones in their territory.
China to roll out trillion-yuan fiscal stimulus: report
BEIJING, Sept. 11 (Xinhua) -- China is considering more than 1 trillion yuan in fiscal stimulus over the next three years, according to a latest report from the China International Capital Corporation (CICC).
A total of 1.2 trillion yuan (188 billion U.S. dollars) to 1.5 trillion yuan may be taken from the government coffers to replenish the capital for investment projects, mainly those already approved by the authorities, the investment bank estimated.
The stimulus is likely to drive a total potential investment of 5 trillion yuan to 7 trillion yuan in the next three years, or 2.5 percent to 3.4 percent of the 2015 GDP each year, it said.
Investment projects will be funded by not only policy banks but also commercial lenders and private investors via the public-private partnership.
The report came after the Ministry of Finance put forward multiple fiscal policies aimed at stabilizing growth on Tuesday, such as coordinating funds to accelerate project construction, activating idle money and widening tax breaks.
The move indicated that China's fiscal policy will be "firing on all cylinders to support growth", the CICC said.
China is battling a property downturn, industrial overcapacity, sluggish demand and struggling exports, which dropped growth to 7 percent for the first half of the year.
Fiscal policy has moved to center stage in growth stabilization, as the room for monetary loosening became more constrained after several interest rate cuts and fiscal deposits continued to increase, according to the CICC.
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