Posted on 10/09/2008 12:16:26 AM PDT by KingJaja
When Obama talked about China's infrastructure, he was shouted down.
He was not entirely correct, but there is a h*ll of a lot of infrastructure spending going on in China. The link shows pictures of some new metro lines / stations in China.
The Chinese are putting the trade surplus to good use!
Interesting, although to achieve this it seems that they have been merciless in their application of what Americans would call ‘eminent domain’.
The Chinese arent stupid. They have been thinking things through for 4000 years as a people. They will do everything they can to insulate themselves ASAP from the nasty flu that is going around the globe due to the US (ane Europe as well) coughing on everyone. This starts with weaning off exports for vitality (at least to North America; maybe they will focus more in inter-Asian trade) and also massive domestic market consumption and infrastructure.
Interesting. I thought we didn’t need that manufacturing. Now China is funding it’s infrastructure expansion with it. Sure glad we don’t have to worry about our infrastructure. Bwa ha ha ha ha...
If the U.S. cuts back it’s foreign trade purchases, no amount of effort on China’s part is going to make them not take a huge hit IMO. You can’t have the spigot going full tilt, then cut the flow by half and not have serious problems.
Do you see it differently? I honestly think this could send China back to the tinker toys.
No, I think they are capable of coping and surprising all of us. There is a lot more to that economic powerhouse than just exports to the Walmart, granted it is a large amount.
Gotta admire those ChiComs; they've got everything figgered out.
yitbos
"8 October 2007 WASHINGTON (MarketWatch) -- The world economy has entered a "major downturn" with significant risks of worsening, the International Monetary Fund said Wednesday in its annual World Economic Outlook. "After years of strong growth, the world economy is decelerating quickly," the report said. "Global activity is being buffeted by an extraordinary financial shock and by still-high energy and other commodity prices." .... The IMF forecast has been significantly reduced since July's report. Global growth in 2009 is now seen at 3%, rather than 3.9%. The advanced economies are expected to grow 0.5%, rather than 1.4%. The emerging markets are expected to grow 6.1%, rather than 6.7%. The United States economy is projected to grow 0.1%, rather than the 0.8% projected three months ago. The euro-zone economy is expected to grow 0.2%, rather than 1.2%. Japan is expected to grow 0.5%, not 1.5%. Emerging economies should fare better. China's growth-rate forecast was marked down to 9.3% from 9.8%, and India's to 6.9% from 8%. Global trade is expected to slow significantly from 7.2% growth in 2007 to 4.9% in 2008 and 4.1% in 2009. With commodity prices projected to fall in 2009, inflation should moderate to about 2% in the advanced economies, the IMF said. Rex Nutting is Washington bureau chief of MarketWatch.
Americans haven’t fully grasped what’s going on in China. Most of us are still stuck on the old cold war mentality and the ‘China is the new Soviet Union’ meme.
China is not the Soviet Union and neither is it Nazi Germany. Most American politicians are too intellectually lazy or dishonest to educate the American people on what China really is.
The credit crunch will open our eyes wide to how powerful we have allowed China to be and to how foolish the concept of a ‘post - industrial’ economy is.
The plenum of the CCP starts today and a major topic is the private ownership of farmland. This is big. They want to grant peasants the rights to sell their land to big concerns for a profit, they are talking about property rights.
The CCP is putting measures in place to guarantee a domestic consumption boom.
Now many freepers say the Chinese will go belly up, but they barrelled their way past the last Asian economic crisis.
Whatever, you say about Hu Jintao and Wen Jiabao - they are not incompetent managers of the Chinese economy.
"BEIJING, Sept. 22 (Xinhua) -- Americans know little about China. They think Singapore is a Chinese city and Samsung is a Chinese brand. They would be wrong. A survey released Monday, called "A Study of American Perceptions on China," was conducted by US-based Perspective Resources Inc. (PRI). Two million U.S. citizens, all 18 years and older with different social and education backgrounds, were asked ten questions about China. When it comes to China's most recognized symbol, 49 percent said the Great wall. The Olympics came in second with 36 percent, rice and food received 34 percent of the vote and 32 percent said the dragon. Other symbols mentioned include pandas, the flag, electronics and pagoda. When Americans were asked to think about China the mentioned words like "highly populated", "government or communism", "culture or history" and the color red. The survey said Jackie Chan is the most famous Chinese person followed by Bruce Lee, late chairman Mao Zedong, Confucius, Jet Li, Yao Ming, "Buddha", Lucy Liu, Genghis Khan and Chow Yun Fat. What are the most popular Chinese dishes? Nearly 60 percent of Americans say it is rice or fried rice. They also mentioned egg rolls, noodles, wonton soup, fortune cookies, egg drop soup and stir fry. Only 25 percent listed the Peking Duck which is Beijng's feature food. It should be noted, fortune cookies, though popular with Chinese restaurants in the U.S., are seldom seen in the Chinese mainland. When it comes to places to visit, Americans think of Beijing, the Great Wall, Hong Kong, Shanghai, "Bird's Nest", Forbidden City, Tibet and Tiananmen Square. Twenty-two percent of those surveyed also mentioned Singapore which they mistakenly think is a Chinese city. Chinese brand names are least familiar with Americans who named Samsung, Toyota, Nissan and Nike, which are not Chinese at all. Forty-two percent said they cannot mention any Chinese brands, however87 percent said they use products made in China such as clothing, electronics and toys. Asked about the most important issues in China, 39 percent said civil rights and freedom. Other said population control, pollution, Communism and Capitalism, the economy, labor issues, sweat shops, low quality products , U.S. debt to China and Tibet. The survey was commissioned by the Blue Ocean Network (BON) International Communications Committee, a non-governmental media organization which aims to promote western understanding about China. BON Standing Committee Vice Chairman Gu Yifan said, 49 percent of respondents were interested in Chinese history and culture and 53 percent hoped to someday visit China. The survey's margin of error was within five percent. Set up in 1973, PRI has clients such as Cable News Network (CNN), General Electric (GE), AT&T, VISA and American Airlines. BON, a new, independent English-language television and media network about China, goes live on the air in the U.S. in spring 2009. "
The two entire continents together don't equal half the U.S. GDP. Those ChiComs are going to have to do a lot of selling there.
Africa GDP = $2.09 trilllion
South America GDP = $2.9 trillion
yitbos
The Chinese have always, in the past, out paced the U.S. in their desire to enslave their population. The Communist Party, to expand it's ability to profit, enjoys a huge a disparity between it's power and wealth, and their general population's 'lifestyle'. We may be catching up to them in that race, thanks to our government's willingness to sell America out. "Think what you do when you run in debt; you give to another power over your liberty." ~ Benjamin Franklin.
More like, I was saying, after 4000 years the Chinese have found out that communism is the way to go.
Maybe so. There are some very enlightened personages who think you can hardly give the peasants the right to vote on how wealth is distributed. You need a government of elites to do that, just as we have in the U.S.A.
yitbos
Trust me they are thinking long term.
What if they can get Africa to grow at 10% per annum (current rate is 6%)? China has gambled on Africa and Africa will either totally destroy itself or grow.
Contrary to the perception in the news media, Africa is more peaceful than it was 10 years ago.
Living in Africa, it is easy to see how African economies can grow at 10% per annum. Africa has serious infrastructure needs and the Chinese are best placed to supply these needs.
South America is full of rapidly growing nations like Brazil. The Chinese are fast becoming the dominant economic player in the ‘stans’ (Afghanistan included), then there is East Asia.
In the next 20 years we will see a China united with Taiwan, more closely aligned with Japan and no longer under the influence of the Communist Party.
Are we ready for that time?
Those professing uncommon familiarity of Red China cannot easily dismiss at the same time U.S. economic interests worldwide. It's not like U.S. has no competitive economic interests in emerging foreign countries.
Half the kids in the U.S. can't find Communist China on a map. That has nothing to do with U.S. foreign business interests.
yitbos
As socialist slaves, we will be irrelevant.
Let's not permit that to come to pass.
I think you are right. China did things backwards regarding their modern economy. They use the foreign market to jump start their domestic market. Now the domestic market is big enough to require more intense development and exploitation. China could invert on itself and not skip a beat. Foreign trade is necessary for the new and luxurious, but China has accumulated enough knowledge to innovate and build luxury items of their own.
I understand that America has competitive economic interests, but for the past eight years, America has been more ‘reactive’ than ‘proactive’ in its approach.
Case studies:
1. Africa - US involvement in Africa is in REACTION to the Chinese push into Africa. As I write, there is no coordinated economic strategy for US business interests in Africa. The State Department does its own thing, whilst individual US businesses do their own thing.
If Africa takes off (like the Chinese are gambling on), then the US will be caught flat-footed.
2. Central Asia (the ‘stans’) - US interests are primarily security driven. But security without strong economics is meaningless. The Chinese are fast becoming the dominant economic player in this region.
I could go on and on.
Consider this, a cigarette lighter that cost $0.20 cents to make in Shenzhen is sold for say $2.00 in New York. What makes us rich is the the ‘value’ added (post-production) to put the cost at $2.00.
What will happen when the Chinese smarten up (as they will) and demand a larger share of the $1.80 added to the cost of the goods in NY?
Yes, China is building, building, building.
I was just on the phone with a friend in Indiana, describing to him the metro rail lines that keep expanding here, with a lot of investment from Germany and the USA in engineering and all else.
My family took two days in the beautiful (really!) city of Hangzhou with its historic wonderfully park-encircled West Lake. The upkeep of these park areas is as well done as the regional, state, and national parks in the USA. It's a very restful tourist and vacation spot.
Around our place in Shanghai, construction cranes are everywhere. The Minhang Economic Development Zone immediately to our east is booming and seems to be under very well thought-out infrastructure development — the boulevards are very wide. Traffic management, once a joke, still a little bit laughable at times, is improving rapidly.
My biggest negative comment would be that I am fully aware that the workers putting all of this together make so little that it can be called virtual slave labor. And let's not forget that.
But in my comments to my Indiana buddy, I stated that average Americans living being Chicago and Nashville along I-65 don't live as nicely or as conveniently as the average residents of Shanghai. There is MONEY - MONEY -MONEY here. The high class coffee shops and restaurants are packed full in the evenings, and people are spending $20 (USD) a head in these places.
We do remember that 75% of Chinese still live in rural China, not in the cities, but farm incomes are on a steady increase, and more luxurious life-styles are also found in the countryside now, expanding at a whizzing pace compared to 18 years ago when we first came to China and began our long association with this land. And I just saw a report about much more serious changes on the farms, allowing land owners to more freely use, sell, or otherwise transfer their land. Farmers who feel like they are being over-run by industrialists are now much better protected and/or compensated.
My sense about China is this:
1. China will continue to expand its military complex, supported by the fruits of industrialization, including military owned and run manufacturing plants producing both military and civilian goods.
2. Although China would not mind taking Taiwan by military force if necessary . . . and it could happen . . . China is not interested in overt military confrontations with anyone at this point. They will feed the military and terrorist ambitions of others, however.
3. China intends world hogemony, but they believe they can do it by helping the west into the economic drink. They were taught from the early days of the revolution that development and good comes out of chaos, and they are willing to risk chaos, and manipulate it for their own advantage. American industry and markets may believe that the Chinese should be afraid of the economic demise of America and Europe, but I don't believe they are afraid. I think they see it as a necessary progression through chaos to their own revolutionary victory.
4. China does not have the same value system as the United States (which is on a slide off into the abyss of corruption herself). Chinese business is perfectly well accepting of lying, cheating, greed, industrial and commercial espionage. I think that American companies long doing business in China know this, and have counted their losses in these areas as investments into long-range strongholds in China. They could afford it. Smaller foreign companies don't do as well, because they don't have big dollars that they can throw away.
In 1993 I conducted a De Paul/Stonier graduate on a trip into NE China. This American is a known expert in electronic banking and international investment schemes. He met with thirteen companies in Heilongjiang Province, and listened to their project presentations. Their hopes were to arrange American investment.
Before the meetings, I asked the host (a business manager for the Northeast Agricultural University) whether his friends would deliberately try to cheat the American business people recommended by the American banker. The answer was a very direct, “YES, of course!”
The Chinese believe that they were cheated by the west all through the 18th and 19th centuries and through the first half of the 20th. Their “cheating” the west in return is “patriotic.” They believe what they can cheat or manipulate out of the west is just a return of what they see as long belonging to them. This was a principle openly to to agribusiness students at the agricultural university in Harbin in the early 1990s. We lived there, and spoke to many students about these subjects.
Not bad for 1/4 the population and no slave labor.
U.S.A. GDP = $13.84 trillion (2007 est.) Lots of domestic production, consumption and income from foreign investments
Red China " GDP (official exchange rate): $3.251 trillion (2007 est.).
I'll have to admit the ChiComs have us on cultural history 4000 yrs to 232.
yitbos
Yeah. The road to success is paved over the lives of tens of millions of your own people. But they should have all been happy to sacrifice for the cultural revolution.
But that isn’t really important. We should emulate that, eh? Can’t have people shouted down.
Before you get too smug.
America’s success was built on the backs of millions of slaves (thousands maimed etc), white indentured servants, Chinese coolies (who built the great railway system of the US) and Japanese labourers.
America’s path to success was much bloodier by many orders of magnitude.
Britain’s success was built on the backs of millions of subjugated colonials and underpaid child labourers (read Oliver Twist).
What is going on in China is a fast-paced Industrial Revolution. And Industrial Revolutions are not very kind processes.
“America’s success was built on the backs of millions of slaves (thousands maimed etc), white indentured servants, Chinese coolies (who built the great railway system of the US) and Japanese labourers.”
Thanks for the laugh. That’s the most asinine tripe I’ve read all week. Go back to your stupid, babbling Marxist professors and ask for passage to China so you can attend a re-education camp.
Africa GDP = $2.09 trilllion South America GDP = $2.9 trillion
Don't underestimate the value of trading with countries in those two continents. China is juggling both the developed world and the developing world. In the developing world, as in the developed world, China is essentially exporting her labor. Case in point, there is a mountain in Peru in which the Peruvian government has allowed the Chinese to remove because of it's copper content. This will occur over the next 20-30 years. The price is just pennies on the dollar as opposed to buying copper on the open market. Copper is copper is copper no matter how you slice it.
The same with Africa as well. China is using their own labor to trade as oppose to buying on the open market. It is cheaper for China to build ports and infrastructure for the various African countries to extract the natural resources than to buy it on the open market.
China is doing what is financially responsible for them..
Self Ping.
U.S.A. GDP = $13.84 trillion (2007 est.) Lots of domestic production, consumption and income from foreign investments Red China " GDP (official exchange rate): $3.251 trillion (2007 est.).
GDP does reveal a strength on the part of the US, no question about it. However, China's lack of GDP doesn't not mean it reveals a weakness. Consider this: 50% of the world's construction now occur IN CHINA. It may be true that the market value of, for example, the US construction industry may exceed that of China (as that would be added to the GDP value you stated above), but when you add up the actual square footage built in China, it equals the rest of the world combined because they are using CHINESE labor. Think about it, China is installing (and pouring concrete) that is equal to all the construction of North America, Europe, Russia, Japan, the Middle East, Africa, S. America, Australia, etc. COMBINED !!!!
I've seen pictures of places like Dubai, Russia and construction is quite impressive. And construction in the developed world as well. However, add them all up and it is only equal to what one country, China, is building on an annual basis.
As far as GDP, yes, in 2007, the US economy is 4 times that of China. However, extrapolate back 30 years, and the US economy was easily 20 or more times that of China. So they are catching up fast.
And don't underestimate how fast it can happen too. As China closes her labor intensive factories, they will continue to expand high tech. It's the only way they can compete as the outside world continues to pressure her to readjust her currency. China, without a doubt will retain a growth rate of at least 6% (as a minimum) ahead of the US for the next decade and a half. Coupled with the fact that the value of the reminbi will double in value (or triple), it's really a matter of time (less than 15 years) before China surpasses the US to become the largest economy.
And what about beyond 15 years, say 30 years from now? It's possible that China's GDP will match that of the combined GDP of Europe and North America. There is considerable restructure occuring there, so don't let the modest GDP of China fool you. They have risen through the ranks of over 10-15 countries in the last 30 years and is third in the world and will soon surpass Japan (I believe in about 5 years) to become the second largest economy in the world.
Thanks for the response. We’ll see...
Thanks for the comments. I do think that can alleviate part of China’s problem, but it’s going to have to replace the purchasing power of the United States, and I don’t think that happens. Some, yes, not as much as will be needed to replace it. I still think China is in store for a hard ride.
Thanks for the mention of this. That would be a smaller share than I had thought. China has a lot of projects on the drawing board or in development. It has obligations at a full tilt economic model. IMO 20% cuts into support for those plans. And if the United States goes into a recession, other nations will as well. It won’t just be the 20% that is effected.
This is something I have read about but haven't seen statistics.
For instance, Sudan. ChiComs have exported their own oil production and transportation security personnel? How many? Then they import Sudan petroleum.
Peru mining? How many coolies are there? An interesting search subject.
How many Mexicans has U.S. imported for the meat processing industry? Mexico exports labor, repatriates dollars?
A Marxist will tell you the only true currency is labor.
yitbos
The point I am making is the U.S. is not idle in the markets you mention.
Example: McDonalds has a franchise in Mao City. All employees are ChiComs. All products sold come from Red China. Who gets credit for ChiCom GDP growth? Profits? Who is involved in business of Red China?
yitbos
For instance, Sudan. ChiComs have exported their own oil production and transportation security personnel? How many? Then they import Sudan petroleum.
Peru mining? How many coolies are there? An interesting search subject.
I must admit, I don't have statistics for everything. So, I don't have an accounting of the monetary value of the labor exchanged.
How many Mexicans has U.S. imported for the meat processing industry? Mexico exports labor, repatriates dollars?
Yes, that is sort of the point I was making....sort of.
A Marxist will tell you the only true currency is labor.
Interesting comment. I wouldn't say it's the only true currency. But labor; whether it be manual, technological, innovative, managerial, is what is of value. What value is oil unless there is the technology (developed by man) to get it out of the ground, brute labor to work the oil rigs, managment of a financial system and administrative system to make it all work.
China's value of technology maybe behind that of the West, and thereby valued less on the open market, and thereby making them less competitive on the open market to buy resources, but it is nonetheless sufficient to get oil or other natural resources for themselves from countries that are much less developed than China.
Once again, don't underestimate China's ability to move ahead. There's a reason why the US government keeps a watchful eye on China's acquisition of technology, finances, natural resources, etc.....even though, in reality America should be more concerned with Al Qaeda and Russia :)
It’s true that 20% is much—enough to several affect a national economy severely. But here are a couple of macro-items on China.
China is quickly building infrastructure. That’s more than a beneficial action for the sake of her working class people. It’s a preparation of the consumer base to come. Service rebuilding projects like improved electrical grids, communications and roads can do much to facilitate consumer production and spending. Then there’s the western move toward the Chinese economy.
Some of our western investment research firms are advising clients to move their investment banking to China. Investment banking has been risky in the West, as we’ve seen. It’s meant for completing short term, high return projects. As news of that gets out more, many of us will then say, “Ah! China is headed for the same fate we’re experiencing!”
But the Chinese culture on micro-levels is very much a saving culture. Self-discipline and focus are apparent in all activities.
The Chinese plan is to hold and increase its economy at a time, when the West is in turmoil. We’ll see how it turns out.
I’ve been so mean and insensitive toward China in the past, so here’s a special, occasional dish for Chinese cowboys and their families in the north, after the soil there is improved again. :-)
Fry thin, short strips of tender cuts of beef in a covered skillet. When cooked a little, add about an inch of water and some hot stuff (whatever red peppers or sauce that you have). Stew under the lid until tender. Add tablespoon-sized portions of scrambled eggs and tomato wedges. Serve portions hot and a little spicy.
To have such meals in the north again, throw the rich western communist/fascist visitors with their short attention spans and cries of “overgrazing” out of your country. Drill for water and irrigate where needed. Fertilize the land heavily with goat herds. Then plant tough grasses and hays (roughages and dry-land, high-elevation legumes) for cattle re-introduction. Plant grains only a little bit away from ranch lands in wetter areas. See how that works out.
Thanks for the additional comments FamilyOp. It will be interesting to see how this plays out.
Example: McDonalds has a franchise in Mao City. All employees are ChiComs. All products sold come from Red China. Who gets credit for ChiCom GDP growth? Profits? Who is involved in business of Red China?
I'm not sure what point you are trying to make?
If you mean that the US should take credit for China's growth, I would partly agree with you. Early in her economic development, China only had physical labor to offer. Very little managerial, technological, and innovative assets. But as time marches on, she is acquiring them. Not fully of course as the per capita of China is still behind that of the West.
But there is considerable industries in the pipeline that reveals her increased prowess in these areas. While China is closing her textile factories (and they are happening quite brutally and mercilessly), China is EXPANDING her aerospace industries. Aibus for example recently inaugurated an A320 factory there and have comitted to expanding suppliers there. Boeing will follow suit by expanding the suppliers there.
So, while China is hurting in textiles, make no mistake, other higher value added industries are expanding there. General Motors continue to expand there (though in the recent economic downturn it has slowed a bit).
Ship building is expanding. There is a shipyard in Shanghai, when completed will be as large as all of South Korea (and South Korea is currently the second largest ship building country in the world in terms of tonnage).
I could go on, but I don't think you want me to :)
That's because labor is not restricted to human beings or muscles?
Here's is a French socialist unemployed argument for idleness: "Why should I work when there are machines? Right now the Germans have the most machines. But under EU, after they get rich, they must give the machines to us. In the meantime, the Germans will give us some of their profits.
This ad hominem example is being passed down by the socialists in our schools. They do not count on a distribution of someone elses labor. They count on the production of the machines. Everyone should benefit equally from machines. FWIW.
yitbos
If you mean that the US should take credit for China's growth,"
I'm saying that a lot of U.S. GDP comes from foreign investment.
The whole end of this thread was the question of U.S. neglect of foreign investment opportunity .
I don't think the U.S. is missing the boat by not exporting slave labor to foreign countries. It's not too efficient. The Reds are virtually despised in every country they have significant numbers.
yitbos
In a way, it is, it's just that machines make it more efficient. One person could move as much earth with heavy equipment as a hundred persons could with wheel borrows and shovels. Both scenarios are moving earth, but one labor does it more efficiently.
Here's is a French socialist unemployed argument for idleness: "Why should I work when there are machines? Right now the Germans have the most machines. But under EU, after they get rich, they must give the machines to us. In the meantime, the Germans will give us some of their profits.
This ad hominem example is being passed down by the socialists in our schools. They do not count on a distribution of someone elses labor. They count on the production of the machines. Everyone should benefit equally from machines. FWIW.
It's a simplistic view. But the value of labor is dependent upon a host of factors, but it still have significant value. A weed whacker can be purchased for what? say....$1000 for a commercial grade. Hiring the guy to work it is still over $10,000/yr. Machines make labor more valueable.
One only has to look at the construction industry. A construction company that invests in equipment will spend millions. But which cost more over the course of 10-20 years? His equipment or his army of construction workers? The construction workers of course.
China has alot too. Cumulatively, they have almost as much as the US. Annually, and lately, it has been exceeding the US.
The whole end of this thread was the question of U.S. neglect of foreign investment opportunity .
I don't think the U.S. is missing the boat by not exporting slave labor to foreign countries. It's not too efficient. The Reds are virtually despised in every country they have significant numbers.
The US invest more overseas than China (as measured in dollars). In fact, I would venture to say that is the one of the areas where China pales in comparison to the US. But where and how China invests have different strategies, one in which China could leverage her cheaper labor.
China has an abundance of cheap labor that could be "bartered" for a countries natural resources. Their technology is not at a marketable level where they could compete with the West for resources on the open market. Exceptions abound of course. Case in point is iron ore from Australia. But in countries where there is virtually no infrastructure to take out the natural resources, it is likely cheaper for China to build the infrastructure themselves and take it out than to buy it on the open market.
But there will come a day, when China's technological prowess which reach a level where they could compete with the West. And when they do, they may not have to build for others, but instead, manage and hire the locals for natural resources.....the same way Western companies do. In fact, I would venture to say, it is already happening as much of the mining is done by the locals.
yitbos
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