All of which - taken at face value - would support my assertion that the US federal government interferes less heavily in the US economy than the PRC central government does in the Chinese economy, no?
China's Emergence As A Global Superpower
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All of which - taken at face value - would support my assertion that the US federal government interferes less heavily in the US economy than the PRC central government does in the Chinese economy, no?
Do you think the CCP plans the locations of a new noodle shop? Or bike sales and repair center? No that is a very capitalistic, free market, invisible hand of Adam Smythe decission making process with less government direction, regulations and red tape than in the US. (how they sell tainted milk etc. also.)
Yes they have 5 year plans, as set ot 10 to make their long range 50 year planning basis or outline, but this is for the infrastructure - thing like dams, railorads, power plans, air ports, not the typical small businness firms which make up the bulk of the economy and 100% of the typical Chinese's economic activities.
Like almost all countries, the Chinese banks are regulated. China just raised both interest rates (sort of like the FED does) and the reserve requirements, which are still far below Brazil's 50% of demand deposits held by government as a "reserver requirement." The US does too little bank regulation. If it did even half as much as Brazil there would never have been the current crisis.
Most Chinese banks now have some traded shares.* I think one (Bank of Commerce and Industry, as I recall?) even has the government as a minority owner now.
More true of Brazil by far than of China is your statement that "Commercial lending in China is an arm of the state" For example, I have account in, and shares of, the Bank of Brazil, but the government is the majority owner, controls its loan policy. (Makes sure the big farmers get what they need to finance planting their crops, etc. and advance it funds when needed.)
China opened up the banking system to foreign investors about two years ago, mainly to get more modern (have ATMs and credit card technology). I think your view of Chinese banking is very obsolute.
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*Usually not listed on any stock exchange and publicly traded but privately held, mainly by pension funds and other banks etc. The shares oif the Chinese bank not now majority owned by Chinese government are held by some London banks as I recall.
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Do you think the US does?
Nobody is asserting that China is a Stalinist command economy. But that doesn't mean the PRC is more hands-off than the US.
They are not so much "regulated" as "owned and operated by the State."
Consider the "Big Four" in China - which dominate commercial lending there - are all state-owned enterprizes:
http://en.wikipedia.org/wiki/Big_Four_(banks)#People.27s_Republic_of_China
Then there are the "policy banks," whose express purpose is to take over certain explicit government-directed lending from the big four.
All of the major ones have the state as a controlling interest.
If you were referring to the Industrial and Commercial Bank of China, that one is still counted as state-owned (and the biggest bank in the world by market cap).
I'm well aware of those developments, and also how limited they have been, and also how careful the CCP has been not to compromise their controlling position in the commercial banking sector.
http://en.wikipedia.org/wiki/Banking_in_China
kmguru
Staff member
You are correct. Our federal government does not really do anything to save our economy. That is why, I will vote to get rid of the government. Everyone would be on their own like gun fights at OK Corral.
But then again, what do you call when fed takes the tax money and gives it to the Wall Street? That is not interference?
Of course it is. I've never asserted that the US is any kind of paragon of laissez-faire capitalism, nor would I want it to be so.
But the occasional counter-cyclical bail-out doesn't make the US into a centrally-planned economy, or put it in front of China on that scale. The major banks in China are directly owned and controlled by the state. When the US government becomes a controlling stakeholder in all of the major commercial banks in the US, then there will be something to this comparison.
Until then, it's just disingenuous exaggeration, both of the scale of government involvement in the US, and of liberalization in China.
kmguru
Staff member
Who said U.S. is a centrally planned economy? In fact based on a new book "Comeback America" by David Walker, the ex-CEO of Government Accounting Office - since founding of our country, U.S. never had a plan to follow. The country has been lucky to have so much resources and boost from two World Wars that, the country never needed any planning.
Those days are over, specially when others learned how to beat the system.
I have been fortunate to have been exposed to the inner working of USSR, and China. China is a super feedback loop economy, USA is an open loop economy while USSR was in a vodoo economy.
In an open loop economy, you rarely have any control over the external disturbances which is happening now. When external system is stable, then you can have fairly decent control on an open loop control.
Our primary problem is that there is no incentive or punishment for our own companies to stay in the U.S. There is no feedback loop for counter balance. There was a positive feedback that operated in our financial business which became unstable as it happens in any positive feedback systems. When that happens, the country nosedives fast.
We are still in open loop control outside of the financial industries.
To Quad, ref your post 943:
The Chinese banking system is very rapidly changing. In your Wiki link’s section on banking reform in China the latest information is from 2005 – that is nearly 5 years old!– As obsolete as your POV about Chinese banking system.
Chinese banks are no longer funded by the government, but turn to the capital and equity markets for additional capitalization when needed. If anything the unsound* US banking system is more dependent on government hand outs of new funds than the Chinese banking system is!
Also the US government is now setting caps on bonuses, and increasing the detailed level of interference in how the banks are run. Etc. Your POV is obsolete and more accurately describes the US banking system (which is deeply dependant on the government funding) than the healthy and only regulated, but not needing government funds, Chinese banking system.
I read the Chinese People’s Daily (CPD) almost every day. You must too (and not 5 years obsolete Wiki) if you want to understand that Currently there is very little difference between the US and Chinese banking system. (The main difference is that the Chinese banks are very sound with no “toxic trash”on their books and a government with 2.4 trillion dollars in reserves to back them if they should ever need help.) For example, less than a month ago (on 22 Dec2009) the CPD reported:
“Chinese banks will need to raise as much as 500 billion Yuan ($73.2 billion) from the capital market next year to beef up their capital reserves after a lending boom this year,…{said} Li Fuan, an official from the China Banking Regulatory Commission (CBRC).
Li also said that China's listed banks are likely to offer 300 billion to 400 billion Yuan in equity or bonds next year{I.e. in 2010}. In addition, Agricultural Bank of China is expected to raise 100 billion to 200 billion Yuan from its initial public offering next year, he said. …”
FROM: http://english.people.com.cn/90001/90778/90859/6848983.html
Yesterday or day before there was a story telling that Chinese Banks will be opening branches in Taiwan but I didn’t dig it up as it is not directly related to our different POVs. – It just illustrates that ever week there is at least one story of the rapid changes now occurring in the Chinese bank system.
You and wiki might as well quote Ming Dynasty banking facts as your five or more year old facts about this fast evolving banking system.
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*Chinese banks are profitable, not failing but 140 US banks did in 2009 and many think more than twice as many will fail in 2010, even with all the government assistance!
On 20 Jan 2010, U.S. stocks suffered their worst beating of the New Year and global makets were all significantly down because China’s central bank (strangely called the people’s bank) restricted the total loans that banks could make to 78% of what it had been and upped the reserve requirements to 16% of deposits, creating fears that these new bank lending curbs might blunt the worldwide economic rebound. For example, shares of the “Bank of China” and the “Construction Bank” (of China), both of which trade on the Honk Kongs stock exchange, fell 3.4% and 3.1% respectively in that one day.
I added this more recent data to prior post to further show that most banks in China are publicly traded, raise their capitalization from the equity and bond markets, not the Chinese government anymore. I.e. as stated earlier, Quadraphonic’s POV was correct three or four years ago but is now obsolete, and wrong now. Unlike US banks, Chinese banks are very sound and good investments so do not need government funding (as US banks did) to avoid collapse.
The Chinese banking system is very rapidly changing. In your Wiki link’s section on banking reform in China the latest information is from 2005 – that is nearly 5 years old!– As obsolete as your POV about Chinese banking system.
Chinese banks are no longer funded by the government, but turn to the capital and equity markets for additional capitalization when needed. If anything the unsound* US banking system is more dependent on government hand outs of new funds than the Chinese banking system is!
Also the US government is now setting caps on bonuses, and increasing the detailed level of interference in how the banks are run. Etc. Your POV is obsolete and more accurately describes the US banking system (which is deeply dependant on the government funding) than the healthy and only regulated, but not needing government funds, Chinese banking system.
I read the Chinese People’s Daily (CPD) almost every day. You must too (and not 5 years obsolete Wiki) if you want to understand that Currently there is very little difference between the US and Chinese banking system. (The main difference is that the Chinese banks are very sound with no “toxic trash”on their books and a government with 2.4 trillion dollars in reserves to back them if they should ever need help.) For example, less than a month ago (on 22 Dec2009) the CPD reported:
“Chinese banks will need to raise as much as 500 billion Yuan ($73.2 billion) from the capital market next year to beef up their capital reserves after a lending boom this year,…{said} Li Fuan, an official from the China Banking Regulatory Commission (CBRC).
Li also said that China's listed banks are likely to offer 300 billion to 400 billion Yuan in equity or bonds next year{I.e. in 2010}. In addition, Agricultural Bank of China is expected to raise 100 billion to 200 billion Yuan from its initial public offering next year, he said. …”
FROM: http://english.people.com.cn/90001/90778/90859/6848983.html
Yesterday or day before there was a story telling that Chinese Banks will be opening branches in Taiwan but I didn’t dig it up as it is not directly related to our different POVs. – It just illustrates that ever week there is at least one story of the rapid changes now occurring in the Chinese bank system.
You and wiki might as well quote Ming Dynasty banking facts as your five or more year old facts about this fast evolving banking system.
------------
*Chinese banks are profitable, not failing but 140 US banks did in 2009 and many think more than twice as many will fail in 2010, even with all the government assistance!
On 20 Jan 2010, U.S. stocks suffered their worst beating of the New Year and global makets were all significantly down because China’s central bank (strangely called the people’s bank) restricted the total loans that banks could make to 78% of what it had been and upped the reserve requirements to 16% of deposits, creating fears that these new bank lending curbs might blunt the worldwide economic rebound. For example, shares of the “Bank of China” and the “Construction Bank” (of China), both of which trade on the Honk Kongs stock exchange, fell 3.4% and 3.1% respectively in that one day.
I added this more recent data to prior post to further show that most banks in China are publicly traded, raise their capitalization from the equity and bond markets, not the Chinese government anymore. I.e. as stated earlier, Quadraphonic’s POV was correct three or four years ago but is now obsolete, and wrong now. Unlike US banks, Chinese banks are very sound and good investments so do not need government funding (as US banks did) to avoid collapse.
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IMHO (and that of many others) Jim Jubak is one of the most perceptive commentators on finance etc. Don't fail to hear his take on what the real danger to China is at:
http://www.moneyshow.com/video/video.asp?wid=5032&t=3&scode=015362
The real danger, according to Jim, is the same as that which destroyed Spain after it discovered the new world and gained more gold and silver than the rest of Europe combined!
I.e. China must switch away from it "mercantilism" or it is doomed. I think China knows this and is already changing to a domestic based economy, but Jim's comparison to Spain is another factor why they will.
http://www.moneyshow.com/video/video.asp?wid=5032&t=3&scode=015362
The real danger, according to Jim, is the same as that which destroyed Spain after it discovered the new world and gained more gold and silver than the rest of Europe combined!
I.e. China must switch away from it "mercantilism" or it is doomed. I think China knows this and is already changing to a domestic based economy, but Jim's comparison to Spain is another factor why they will.
kmguru
Staff member
Talking to a Chinese friend in mainland, he said that Chinese are aware of this, but do not know when to open up the domestic market and its associated credit structure. They are worried that if they pull away too quick, then they might see the same bubble as America and everything will go down fast. So, they are slow to react as long as things are humming along fine.
The problem is that China doesnt have very much other than mercantilism.
It's incredible how amazingly fast their country has gotten.
I may be wrong, but it seems like not that many significant global innovations. And much of what they are exporting, are just things that were designed in other countries.
I think that is mainly true now, but like everything else in China, rapidly changing.
For example last week my local paper had story about a Chinese biochem professor (at Princeton, as I recall) who had lived in the US for 18 years, got his Ph.D. in USA etc. and recently won 10 million dollar prize (from the Howard Hughs medical foundation, as I recall) for his breakthru discoveries in cancer mechanisms. Well he has felt the call of his mother land and is returning to China to set up a cancer research institute there. (With his 10 million dollars, which will go a lot further there.) He is actively recruiting others from US and EU to join him there.
Because common urban Chinese are so much more prosperous now more of them can afford to send their children (their only child) to the USA for advanced studies in universities than ever, but many more will return to China, the "new land of opportunity" after graduation with their US Ph.D.s than those that came a decade or more ago.
China is not yet the academic center of the world, but has a well funded plan to build 50 "Harvard or MITs" equal regional universities. They have the money and are making "offers you cannot refuse" to many of the world's best professors to come and teach in these new centers. In a couple of decades, China will be the academic center of the world (again as it was for more than a 1000 years four or five centuries ago.)
BTW China's Q42009 GDP grew at 10.7%. See: http://www.bloomberg.com/apps/news?pid=20601087&sid=aOPgylTc9ntU&pos=1
I don't know the US's for that period, but bet it is at leastfive times smaller. I also would not be the least surprized if US GDP were negative again before 2010 ends. To be the center of the world, academically or other wise takes money which China has and the US does not.It is just a question of time until China is again the center of the world - about two decades at most I would guess.
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More support for post 947's point from today's People's Daily:
"The Bank of China (BOC) board has agreed to sell up to 40 billion Yuan (5.86 billion U.S. dollars) of bonds convertible to A shares to improve capital adequacy. ... The proceeds from the issuance of the six-year convertible bonds will be used to replenish the bank's capital base and working capital and to lift its capital adequacy ratio, according to the BOC, the third largest lender by market value in China. ..."
{Note now banks in China are ranked by their market value.}
From: http://english.peopledaily.com.cn/90001/90778/90859/6877063.html 24Jan2010.
I.e. American banks, more than Chinese banks, turn to their government for recapitalization. Chinese banks are sound and profitable so they can and do raise all the capital they need from the equity and bond markets.
This is not to say that Chinese banks are all private - many are still majority owned by the government* - much like in Brazil. E.g. I own stock in Bank of Brazil, but the government has slightly more than 50% of it. In Brazil's case the government does occasionally mandate loans especially to farms needing cash for seeds fertilizer, etc. before harvest. Then the Brazilian government may provide the capital. Many other banks in Brazil are 100% private, but Bank of Brazil is the largest with private Itau a close second.
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* US is the largest share holder of Citi (and perhaps some other large US Banks and essentially the sole owner of AIG, Fanny May & Freddy Mack, which functioned as "secondary banks" taking mortgage paper from the primary banks so they could lend more.) I think the government will need to re-capitalize the FDIC before the end of 2010. It has already borrowed 5 years of future income to cope with last year’s 140 bank failures.
Ironically, as China phases out the SOE (state owned enterprizes) the US is creating them. GM now stands for Government Motors, etc.
"The Bank of China (BOC) board has agreed to sell up to 40 billion Yuan (5.86 billion U.S. dollars) of bonds convertible to A shares to improve capital adequacy. ... The proceeds from the issuance of the six-year convertible bonds will be used to replenish the bank's capital base and working capital and to lift its capital adequacy ratio, according to the BOC, the third largest lender by market value in China. ..."
{Note now banks in China are ranked by their market value.}
From: http://english.peopledaily.com.cn/90001/90778/90859/6877063.html 24Jan2010.
I.e. American banks, more than Chinese banks, turn to their government for recapitalization. Chinese banks are sound and profitable so they can and do raise all the capital they need from the equity and bond markets.
This is not to say that Chinese banks are all private - many are still majority owned by the government* - much like in Brazil. E.g. I own stock in Bank of Brazil, but the government has slightly more than 50% of it. In Brazil's case the government does occasionally mandate loans especially to farms needing cash for seeds fertilizer, etc. before harvest. Then the Brazilian government may provide the capital. Many other banks in Brazil are 100% private, but Bank of Brazil is the largest with private Itau a close second.
---------------
* US is the largest share holder of Citi (and perhaps some other large US Banks and essentially the sole owner of AIG, Fanny May & Freddy Mack, which functioned as "secondary banks" taking mortgage paper from the primary banks so they could lend more.) I think the government will need to re-capitalize the FDIC before the end of 2010. It has already borrowed 5 years of future income to cope with last year’s 140 bank failures.
Ironically, as China phases out the SOE (state owned enterprizes) the US is creating them. GM now stands for Government Motors, etc.
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"... Petrobras with the help of GE upgraded the 87-megawatt power plant to switch between running on natural gas or ethanol instantaneously. Brazil primarily relies on hydroelectric power but needs backup thermoelectric generation during the dry season.
John Ingham, Latin America products director for GE, said tests showed switching the plant to ethanol reduced carbon dioxide emissions without lowering energy output. GE has around 770 turbines like those used in the Juiz de Fora plant, including many in Japan, that could be converted to run on ethanol, he said. Brazil, the top global ethanol exporter, is already in talks with Japan to develop biofuels power generation there.
"A plant like that consumes a lot of ethanol, so it has to be in a place that makes sense (such as) places that have no access to gas, like Japan ..."
From:http://news.cnet.com/8301-11128_3-10437398-54.html (Quoting Reuters. This story was in my local paper more than a week ago, but in Portugese so I waited for English article to post.)
John Ingham, Latin America products director for GE, said tests showed switching the plant to ethanol reduced carbon dioxide emissions without lowering energy output. GE has around 770 turbines like those used in the Juiz de Fora plant, including many in Japan, that could be converted to run on ethanol, he said. Brazil, the top global ethanol exporter, is already in talks with Japan to develop biofuels power generation there.
"A plant like that consumes a lot of ethanol, so it has to be in a place that makes sense (such as) places that have no access to gas, like Japan ..."
From:http://news.cnet.com/8301-11128_3-10437398-54.html (Quoting Reuters. This story was in my local paper more than a week ago, but in Portugese so I waited for English article to post.)
“China … may choose to shrink its trade surplus through raising workers’ wages rather than letting the yuan appreciate …Higher labor costs would cut Chinese export competitiveness while boosting domestic spending power and sustaining economic growth … “Wage increases are a better option because they largely benefit Chinese workers,” … “Currency appreciation will only result in Chinese exporters losing out to competitors in Malaysia and Mexico.”
This month’s 13 percent increase in minimum wage in eastern China’s Jiangsu province indicates that higher pay will play an important role in officials’ efforts to rebalance growth … In Jiangsu, which was the nation’s third-largest exporting province in 2008, the government raised the minimum wage to attract workers, the local labor department said. {Billy T insert: China’s problem is more jobs than skilled workers? !} Shanghai, the No. 2 exporter, is following suit from April 1, Mayor Han Zheng said. Beijing, Zhejiang and cities in the southern Guangdong province also plan increases, the China Business News reported Jan. 27, citing labor officials.
China today reported a trade surplus of $14.17 billion in January, down from $18.43 billion in December, as imports grew by a record 85.5 percent from a year earlier, outpacing a 21 percent increase in exports. Tao said: “Higher wages will aid policy makers’ aim to boost domestic consumption and move away from depending on exports.”
{Billy T insert: As I predicted, China is switching to a more domestic GDP by increasing worker’s pay / spending/ reducing their savings rate. The CCP knows that US buying of Chinese exports is running on “unsustainable stimulus.” I.e. higher Chinese salaries, in addition to a stronger social "safety net" and better free medical services, are being used by the CCP to speed conversion to a domestic dominated GDP.
Never again will Chinese workers work long hours for little pay so Americans can buy cheap goods at Wal-Mart, etc. These workers will increasingly get the benefits previously given to Americans and the CCP will become more popular than ever. Domestic productivity is also being increased, in part by breaking the "iron rice bowl" civil servants and workers in the SOEs previously had.*}
President Hu Jintao on Feb. 3 urged “no delay” in efforts to reduce dependence on exports and investment and boost service industries and consumption. China’s current-account surplus fell 35 percent last year to $284.1 billion as exports declined because of the global slump. The government will need to manage inflation expectations as wages climb, Tao said. Consumer prices jumped 1.9 percent on year in December and may have climbed 2.1 percent in January, according to the median estimate of economists in a Bloomberg. ..."
From: http://www.bloomberg.com/apps/news?pid=20601109&sid=aCSqfG_NTimU&pos=12
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* "... China to raise bar for civil servant management ... China has already been considering to replace the "iron rice bowls" with more fragile ones, to turn civil service into an incentive-oriented, performance-driven {workforce} ... "
From: http://english.people.com.cn/90001/90776/90882/6889319.html (The 6 Feb 2010 English edition)
This month’s 13 percent increase in minimum wage in eastern China’s Jiangsu province indicates that higher pay will play an important role in officials’ efforts to rebalance growth … In Jiangsu, which was the nation’s third-largest exporting province in 2008, the government raised the minimum wage to attract workers, the local labor department said. {Billy T insert: China’s problem is more jobs than skilled workers? !} Shanghai, the No. 2 exporter, is following suit from April 1, Mayor Han Zheng said. Beijing, Zhejiang and cities in the southern Guangdong province also plan increases, the China Business News reported Jan. 27, citing labor officials.
China today reported a trade surplus of $14.17 billion in January, down from $18.43 billion in December, as imports grew by a record 85.5 percent from a year earlier, outpacing a 21 percent increase in exports. Tao said: “Higher wages will aid policy makers’ aim to boost domestic consumption and move away from depending on exports.”
{Billy T insert: As I predicted, China is switching to a more domestic GDP by increasing worker’s pay / spending/ reducing their savings rate. The CCP knows that US buying of Chinese exports is running on “unsustainable stimulus.” I.e. higher Chinese salaries, in addition to a stronger social "safety net" and better free medical services, are being used by the CCP to speed conversion to a domestic dominated GDP.
Never again will Chinese workers work long hours for little pay so Americans can buy cheap goods at Wal-Mart, etc. These workers will increasingly get the benefits previously given to Americans and the CCP will become more popular than ever. Domestic productivity is also being increased, in part by breaking the "iron rice bowl" civil servants and workers in the SOEs previously had.*}
President Hu Jintao on Feb. 3 urged “no delay” in efforts to reduce dependence on exports and investment and boost service industries and consumption. China’s current-account surplus fell 35 percent last year to $284.1 billion as exports declined because of the global slump. The government will need to manage inflation expectations as wages climb, Tao said. Consumer prices jumped 1.9 percent on year in December and may have climbed 2.1 percent in January, according to the median estimate of economists in a Bloomberg. ..."
From: http://www.bloomberg.com/apps/news?pid=20601109&sid=aCSqfG_NTimU&pos=12
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* "... China to raise bar for civil servant management ... China has already been considering to replace the "iron rice bowls" with more fragile ones, to turn civil service into an incentive-oriented, performance-driven {workforce} ... "
From: http://english.people.com.cn/90001/90776/90882/6889319.html (The 6 Feb 2010 English edition)
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“…net exports account for only about 20% of China's gross domestic product (GDP) growth. … In other words, this is hardly a nation that will wither and die on the vine if the West stops buying. China's markets are basically closed. So when Western pundits try to argue that a decline in exports will sink China's economy, the numbers just don't compute.
If anything, we are dangerously close to a situation in which the West's purchases become irrelevant to China's continued growth.* The United States and other Western powers may need China, but as China's consumer strength grows, it's increasingly likely that the Red Dragon and its consumers won't need us.”
Graphs and text quoted from: http://moneymorning.com/2010/02/06/investing-in-china-5/
China's mixed economic system (CCP directed infrastructure spending and free market determines consumer goods and services available) is simply better than the US's, which has planning only to the next election and is controlled by lobbyist writing the laws for congressmen.
Have I not predicted, several years ago that someday China would say:
Go to Hell USA. We don't need to sell to you. Your green paper is worthless now.
They will do this because by sending US and EU into deep, long-lasting depression, they remove most of the competition for oil and minerals, etc. I.e. Save much more over the years on the cost of these imports than the ONE-TIME loss on the US Treasury bonds they may still be holding. China is as rapidly as possible signing long-term contracts all over the Southern Hemisphere to spend dollar assets it is holding. It will be a few years more before crashing the dollar, taking a loss on it Treasury bonds, is an economically smart move for China. Long ago, I predicted dollar would crash before Halloween 2014. Recent events give me no reason to change that prediction, but the US's growing debt bomb may explode before that.
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“… Chinese President Hu Jintao on Wednesday {10Feb10} urged the role of non-communist parties and personages in helping achieve the national goal for social and economic development in the new year. "We must rely on all Chinese people, including various democratic parties, societies, ethnic groups and people from all walks of life and in different stratums to achieve this year's goal for economic and social development," said Hueration of Industry and Commerce and those without party affiliations.
Hu expressed appreciation for their hard work last year as they offered valuable suggestions for coping with the financial crisis and maintaining stable and relatively fast economic growth, urging them to continue giving such suggestions. Non-communist parties' leaders at the gathering gave opinions on various issues including the transformation of the economic growth mode,* expansion of private investment, development of ethnic regions, compulsory education in rural areas and economic and cultural exchanges between the mainland and Taiwan, among others. …”
From: http://english.cpc.people.com.cn/66102/6893098.html
Billy T comment:
If true, it would seem that the CCP & non-communist leaders cooperate for the good of the country better than Republicans and Democrats do. Probably because they are not posturing for the next election, etc.
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* Note "transformation of the economic growth mode" is translated Chinese for "switching to a domestic dominated GDP." This phrase has been appearing in most economic articles for more than a year now.
What I predicted China would do years ago is now the official goal of Chinese economic policy. See prior post 995 to understand how rapidly and why China must do this. (Briefly: the US is broke and can only buy Chinese exports if China lends it dollars, but China is now tired of financing the US's growing debt. Read large and bold text near end of prior post.)
Hu expressed appreciation for their hard work last year as they offered valuable suggestions for coping with the financial crisis and maintaining stable and relatively fast economic growth, urging them to continue giving such suggestions. Non-communist parties' leaders at the gathering gave opinions on various issues including the transformation of the economic growth mode,* expansion of private investment, development of ethnic regions, compulsory education in rural areas and economic and cultural exchanges between the mainland and Taiwan, among others. …”
From: http://english.cpc.people.com.cn/66102/6893098.html
Billy T comment:
If true, it would seem that the CCP & non-communist leaders cooperate for the good of the country better than Republicans and Democrats do. Probably because they are not posturing for the next election, etc.
----------------
* Note "transformation of the economic growth mode" is translated Chinese for "switching to a domestic dominated GDP." This phrase has been appearing in most economic articles for more than a year now.
What I predicted China would do years ago is now the official goal of Chinese economic policy. See prior post 995 to understand how rapidly and why China must do this. (Briefly: the US is broke and can only buy Chinese exports if China lends it dollars, but China is now tired of financing the US's growing debt. Read large and bold text near end of prior post.)
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The Chinese government passed a medical reform plan in January 2009, which aims to spend 850 billion yuan [~100 BILION DOLLARS or more if Yuan appreciates} by 2011 to provide universal health care to the country's 1.3 billion population. The funds would be mainly used to "subsidize the nationwide medical insurance program, help disadvantaged people visit the doctor, and provide certain public health services free of charge for urban and rural residents," according to the statement.
China's Ministry of Finance (MOF) announced Friday that the central government had allocated 37.2 billion yuan…Specifically, 22 billion yuan will be used to subsidize a new type of rural cooperative medical care system, 3.7 billion to subsidize basic medical insurance for urban residents, 3.2 billion to urban and rural medicaid and 8.3 billion to basic public health services, according to a statement on the ministry's website.
From: http://english.people.com.cn/90001/90782/90880/6894597.html
Billy T comment: No comment necessary if you know how little US has done in this area in more than three decades of failed partisan attempts.
Read again bold of Billy T comment in last post.
China's Ministry of Finance (MOF) announced Friday that the central government had allocated 37.2 billion yuan…Specifically, 22 billion yuan will be used to subsidize a new type of rural cooperative medical care system, 3.7 billion to subsidize basic medical insurance for urban residents, 3.2 billion to urban and rural medicaid and 8.3 billion to basic public health services, according to a statement on the ministry's website.
From: http://english.people.com.cn/90001/90782/90880/6894597.html
Billy T comment: No comment necessary if you know how little US has done in this area in more than three decades of failed partisan attempts.
Read again bold of Billy T comment in last post.
"... Saudi Arabia, the world's largest oil producer, last year shipped more oil to China than it did the United States for the first time ever.
China in December alone imported a record-high 1.2 million bpd of Saudi oil, as its economy rode the momentum of Beijing's $585 billion (2 trillion yuan) stimulus package. U.S. imports of Saudi oil, on the other hand, fell to a 22-year low of 998,000 bpd in the first 11 months of 2009.
"This is a reflection of the global economy," Jim Burkhard, managing director of global oil at IHS Cambridge Energy Research Associates, told The Financial Times. "China has been growing. The U.S. hasn't. We've seen that reflected in oil demand figures." ..."
Above quote from: http://moneymorning.com/2010/02/23/saudi-arabia-china/
See also Financial Times article at: http://www.ft.com/cms/s/0/8dd5a1bc-1f52-11df-9584-00144feab49a.html?nclick_check=1
Billy T comment:
Article seems to say that in December alone, China imported more oil from Saudi Arabia than the US did in a Year! (but I think surely they mean that the monthly average shipped to China was greater.) Also note that China buys about 60% of Iran's production. China is rapidly surpassing the USA where it is important, but not in production of events like the super bowl, which do nothing for the economy a year later.
Instead of spending much of its money on silly, transitory diversions, China is building infrastructure: hydro power dams, wind farms, solar power system, nuclear power plants (about 8 each year vs. US's none for 30 years), world's highest speed trains (soon to have more miles of them than rest of world's total! They are about twice as fast as the US's fastest), new hospitals and clinics,especially to serve the rural areas, new world class universities. (Often staffed by professors "stolen" from the best in the West. This and next year's 5 plans calls for 50 new ones equal to Harvard or MIT, and is well funded.).
Hope you enjoyed the rose bowl, if you could still afford to watch it. China is a serious economy and growing so rapidly that several regions have more jobs than skilled workers to fill them so is increasing wages and benefits to retain those they have. Real wage in China are growing about 13%/ year as China switches to a domestic dominated economy.
The CCP knows the US is broke and will not be able to buy China's exports if China does not lend back the dollars it earns. - For several months now China has cashed in more US treasury bonds than it has bought - looks like the US will need to have the FED increasingly print money to finance the US growing debts - Certainly that will drive up interest rates making US debt more expensive to finance. Soon US debt will greater than 100% of GDP and then rapidly grow worse until the run on the dollar occurs. (After that, at least the debt can be paid off, with near worthless dollars. - Everything is going much like I predicted it would many years ago.)
For more on China's plans for great universities staffed by Western professors, see post 4 this thread, made in 2005.
China in December alone imported a record-high 1.2 million bpd of Saudi oil, as its economy rode the momentum of Beijing's $585 billion (2 trillion yuan) stimulus package. U.S. imports of Saudi oil, on the other hand, fell to a 22-year low of 998,000 bpd in the first 11 months of 2009.
"This is a reflection of the global economy," Jim Burkhard, managing director of global oil at IHS Cambridge Energy Research Associates, told The Financial Times. "China has been growing. The U.S. hasn't. We've seen that reflected in oil demand figures." ..."
Above quote from: http://moneymorning.com/2010/02/23/saudi-arabia-china/
See also Financial Times article at: http://www.ft.com/cms/s/0/8dd5a1bc-1f52-11df-9584-00144feab49a.html?nclick_check=1
Billy T comment:
Article seems to say that in December alone, China imported more oil from Saudi Arabia than the US did in a Year! (but I think surely they mean that the monthly average shipped to China was greater.) Also note that China buys about 60% of Iran's production. China is rapidly surpassing the USA where it is important, but not in production of events like the super bowl, which do nothing for the economy a year later.
Instead of spending much of its money on silly, transitory diversions, China is building infrastructure: hydro power dams, wind farms, solar power system, nuclear power plants (about 8 each year vs. US's none for 30 years), world's highest speed trains (soon to have more miles of them than rest of world's total! They are about twice as fast as the US's fastest), new hospitals and clinics,especially to serve the rural areas, new world class universities. (Often staffed by professors "stolen" from the best in the West. This and next year's 5 plans calls for 50 new ones equal to Harvard or MIT, and is well funded.).
Hope you enjoyed the rose bowl, if you could still afford to watch it. China is a serious economy and growing so rapidly that several regions have more jobs than skilled workers to fill them so is increasing wages and benefits to retain those they have. Real wage in China are growing about 13%/ year as China switches to a domestic dominated economy.
The CCP knows the US is broke and will not be able to buy China's exports if China does not lend back the dollars it earns. - For several months now China has cashed in more US treasury bonds than it has bought - looks like the US will need to have the FED increasingly print money to finance the US growing debts - Certainly that will drive up interest rates making US debt more expensive to finance. Soon US debt will greater than 100% of GDP and then rapidly grow worse until the run on the dollar occurs. (After that, at least the debt can be paid off, with near worthless dollars. - Everything is going much like I predicted it would many years ago.)
For more on China's plans for great universities staffed by Western professors, see post 4 this thread, made in 2005.
Why selling 6.4 billion of very advanced weapons to Taiwan now is stupid. (They will end up in Chinese hands after re-unification and are part of why China is now selling more US Treasury bonds than it is buying.)
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Replying to Medtron's "They {China} produce the processor chips." Baron Max said in post 131:
"But can they feed and house and clothe and provide adequate healthcare and public education for all of their people?"
Quite ironic don't you think? When US educational achievements of the general population in math and sciences are far below China's AND the January 2010 Report of Hunger in America noted that 37 million Americans now receive emergency boxes of food each month.
Jaynee Day, director of Food Bank Second Harvest* of Nashville, where official unemployment is greater than 11% (a local GM plant recently closed there), said: Demand has increased 38% in last few months and donations have been falling. ... The profile of those needing aid is changing: The number of families with several generations living together needing food assistance has tripled." (Her agency has warehouse of 7,000 square meters and 363 neighborhood distribution centers.) Day said: "We are never going to return to the pre-crisis employment levels so the need for food aid will continue and probably grow.
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*Agency name and my quote of Day may not be exact as I am translating back into English from feature article on Hunger in America in my local paper, Folio de Sao Paulo, page B10 of 22 Feb 2010.
Profile of the needy Day's agency serves:
40% white, 34% negro, 21% hispanic and 9% "other" (As that is 104% there must be some double counted.)
"But can they feed and house and clothe and provide adequate healthcare and public education for all of their people?"
Quite ironic don't you think? When US educational achievements of the general population in math and sciences are far below China's AND the January 2010 Report of Hunger in America noted that 37 million Americans now receive emergency boxes of food each month.
Jaynee Day, director of Food Bank Second Harvest* of Nashville, where official unemployment is greater than 11% (a local GM plant recently closed there), said: Demand has increased 38% in last few months and donations have been falling. ... The profile of those needing aid is changing: The number of families with several generations living together needing food assistance has tripled." (Her agency has warehouse of 7,000 square meters and 363 neighborhood distribution centers.) Day said: "We are never going to return to the pre-crisis employment levels so the need for food aid will continue and probably grow.
------------
*Agency name and my quote of Day may not be exact as I am translating back into English from feature article on Hunger in America in my local paper, Folio de Sao Paulo, page B10 of 22 Feb 2010.
Profile of the needy Day's agency serves:
40% white, 34% negro, 21% hispanic and 9% "other" (As that is 104% there must be some double counted.)
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Serious labor shortages are developing in China's coastal cities as China improves the material standards of the central rural areas with modern facilities (better schools, hospitals, new urban centers, high speed rail lines, etc.).
See five photos of “street recruiters” from five cities trying to get workers (and very brief text) here:
http://www.chinadaily.com.cn/photo/2010-02/25/content_9502591.htm
Read brief article about the recruiting problems of the Zhejiang province region here:
http://www.chinadaily.com.cn/china/2010-02/27/content_9513994.htm
It states:
"East China's Zhejiang province is facing the most severe labor shortage since 2003, with an average of 383 jobs for every 100 registered job seekers ... The province's labor needs are expected to increase by 20 to 30 percent over last year ... Supply of workers is down because the labor-rich provinces in China's central and western regions retained people who used to go work in the southeastern coastal regions as their economy develops fast ... "
Billy T comment:
It is little wonder real wages are increasing at nearly 15% per year and associated company benefits are expanding. If you can speak Mandarin, there is a job for you in China (and some very pretty girls.)
See five photos of “street recruiters” from five cities trying to get workers (and very brief text) here:
http://www.chinadaily.com.cn/photo/2010-02/25/content_9502591.htm
Read brief article about the recruiting problems of the Zhejiang province region here:
http://www.chinadaily.com.cn/china/2010-02/27/content_9513994.htm
It states:
"East China's Zhejiang province is facing the most severe labor shortage since 2003, with an average of 383 jobs for every 100 registered job seekers ... The province's labor needs are expected to increase by 20 to 30 percent over last year ... Supply of workers is down because the labor-rich provinces in China's central and western regions retained people who used to go work in the southeastern coastal regions as their economy develops fast ... "
Billy T comment:
It is little wonder real wages are increasing at nearly 15% per year and associated company benefits are expanding. If you can speak Mandarin, there is a job for you in China (and some very pretty girls.)