China Archives - Page 12 of 15 - the patient investor

October 30, 2012

Chinese TV Host Says Regime Nearly Bankrupt | Epoch Times

A sobering assessment of China’s economy reported by Matthew Robertson:

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis — on the brink of bankruptcy.

The youtube audio requires translation:

http://youtu.be/comHcv7qSBg

Robertson summarizes Lang’s assessment into five key points:

The regime’s debt sits at about 36 trillion yuan (US$5.68 trillion).
The real inflation rate is 16 percent, not 6.2 percent as claimed.
There is serious excess capacity in the economy, and private consumption is only 30 percent of economic activity.
Published GDP of 9 percent is also fabricated. According to Lang, GDP has contracted 10 percent.
Taxes are too high. Last year, direct and indirect taxes on businesses amounted to 70 percent of earnings…..

via Chinese TV Host Says Regime Nearly Bankrupt | Business & Economy | China | Epoch Times.

October 29, 2012

A Hard Landing Down Under | The Big Picture

Andy Xie has a bearish outlook on China and believes 2013 could be a tough year for Australia:

The market went from not believing in China’s growth story a decade ago to extrapolating past performance into the infinite future……The year 2008 should have been the end of this boom cycle. China’s stimulus misled the market into believing otherwise…..The Australian economy is probably a bubble on top of China’s overinvestment bubble. The latter’s unwinding will sooner or later trigger the former to do so, too…..

via A Hard Landing Down Under | The Big Picture.

October 15, 2012

China Inc waves a red flag on economic recovery | Reuters

By Vikram Subhedar

(Reuters) – Chinese corporate profits show no sign of a second-half recovery as analysts cut earnings estimates in September by the most in 2-1/2 years, a red flag for investors who expect the world’s second biggest economy to start picking up soon……

via China Inc waves a red flag on economic recovery | Reuters.

October 15, 2012

China’s export growth accelerated in September

by Zarathustra

China’s trade data for September show some improvement in growth. Export growth picked up to 9.9% yoy in September, up from 2.7% yoy in August, and better than consensus estimate fo 5.5% yoy…….

via China’s export growth accelerated in September.

September 22, 2012

As the U.S. Borrows, Who Lends? – NYTimes.com

By Floyd Norris

Estimates by the Treasury Department released this week indicated that over the 12 months through July, China reduced its position in Treasury securities by $165 billion, cutting them to $1.15 trillion despite making a small amount of purchases in July. And the Federal Reserve reported that, as of Wednesday, it owned $1.65 trillion in Treasury securities, $17 billion less than it had owned a year earlier.

…..China’s selling of Treasuries over the 12-month period was offset by the actions of Japan, another country whose trade surplus with the United States remains large. The Japanese are estimated to have increased their holdings by $232 billion over the 12 months, to $1.12 trillion. Those figures include both government and private holders of Treasuries.

via As the U.S. Borrows, Who Lends? – NYTimes.com.

September 18, 2012

Why is China afraid of the Louisiana Purchase? | Foreign Policy

By Joshua Keating

The buying and selling of territory between states is a lot less common than it was in the days when European powers held vast overseas empires and there was significantly more terra nullius to be claimed….

On the other hand, given how many territorial disputes China is involved in at the moment, a study of how these conflicts have been resolved peacably in the past might not be a terrible idea.

via Why is China afraid of the Louisiana Purchase? | FP Passport.

September 6, 2012

China’s overinvestment: the problem of having too much

By Zarathustra:

How is it that an economy grows at 7.6% yoy is squeezing corporate profitability so hard? How is it that an economy growing at 7.6% yoy feel like there is not enough demand for all the goods and services being produced?…..The answer, to our mind, is quite simply that China has been investing in too much productive capacity…… The return on investments might be good before the financial crisis, yet the collapse of external demand after the financial crisis and more recently in the persistent Euro Crisis have cut external demand significantly. Meanwhile, domestic demand is not growing quite enough to pick up the slack created by collapse of external demand. Worse still, it is rather clear that domestic demand has been sustained by none other than investment itself. Thus, it should come as very little surprise that IMF’s estimate put China’s capacity utilisation at just about 60%.

via China’s overinvestment: the problem of having too much.

Hat tip to Macrobusiness.com.au

September 4, 2012

China’s steel mills braced for slowdown – FT.com

Wang Qinghai, chief executive of Shougang, one of China’s biggest state-owned mills, says one reason for slowing steel demand is that China is changing its economic development model. “The investment-led mode of economic development isn’t sustainable, so the government is actively lowering the growth rate . . . in order to create space for economic structural adjustment,” he said at a conference in Beijing on Saturday. That adjustment is a painful process, however, and Mr Wang summarises the outlook for the steel industry as “huge production capacity, a bleak market, and meagre profit”.

via China’s steel mills braced for slowdown – FT.com.

July 31, 2012

China: Why the Recovery Has Begun | PRAGMATIC CAPITALISM

A bullish outlook on China from Citi Research:

The key drivers of growth recovery are that de-stocking is near its end, the hard landing risk of the property sector is contained, and investment, consumption and exports had shown signs of improvement in June. In our view, given more policy supports in the near term, 3Q GDP growth will likely be flattish…….the planned Rmb360bn infrastructure investment will be fully implemented.

via China: Why the Recovery Has Begun | PRAGMATIC CAPITALISM.

July 16, 2012

Labor Shortage May Help China Adjust to Slower Growth – WSJ.com

Reflecting the tight labor market, wage income for urban households rose 13% year-on-year in the first half, and average monthly income for migrant workers rose 14.9%, according to data from China’s National Bureau of Statistics…… At current rates, China’s private-sector manufacturing wages will double from their 2011 levels by 2015, and triple by 2017, eroding competitiveness and denting the exports that have played a key part in China’s early growth.

via Labor Shortage May Help China Adjust to Slower Growth – WSJ.com.

Comment:~ It makes you question official inflation figures of just 2.2 percent when wage increases are significantly higher.