Comments on: Getting ready to scrutinize China’s unbelievably good numbers

By: duke

duke — Sat, 27 Jan 2007 07:07:09 +0000

I am pretty sure none of you guys have any solid economics background. The GDP of China is actually in general thought to be purposely understated to ease out the anger of american politicians.

The civilization of China has spanned over several thousand years,and remarkably in most of the time stands as the top one among nations. The revival of its economy that we have witnessed over the last several decades just simply prove how strenuous this nation essentially is.

By: bps

bps — Fri, 26 Jan 2007 13:34:12 +0000

I think you’re right on all counts gs. A recent report said that as China’s “peasants” moved from the farms to the cities the urban population was growing 10-20% faster than job creation. That’s a staggering number considering China’s GDP growth – it’s also a lot of unemployment. Other reports cite 80,000+ “mass disturbances” (read riots against the government) for a host of reasons, commonly cited is the forcible taking of land farmed by the “peasants” with no compensation and then given to the well-connected for “economic development projects.” Then there’s the on-going issue of non-performing loans in the largely bankrupt state-owned banks.

I suspect a lot if not all of China’s economic growth is real, by that I mean real economic activity is taking place. What I don’t know is how efficient that activity is. I believe a lot of the economic activity is being used to prop up non-performing loans and other structural problems left over from communism and cultural practices at odds with sound economic decisions. The rest is being used to try and employee hundreds of million of people moving in the cities.

At the end of the day, I think the goal of the Chinese government is the same as any government: stability and survival of its own regime.

By: gs

gs — Thu, 25 Jan 2007 18:01:41 +0000

Maybe it will all be different this time.

I take that as irony.

Per bps, I wonder about the motivation for China’s steady torrent of economic hype. Maybe it’s a legitimate expression of national pride. Maybe it’s a barefaced swindle. Maybe it’s a swindle with a purpose: to unload bad debts and unprofitable enterprises onto foreign investors.

By: bps

bps — Wed, 24 Jan 2007 22:27:09 +0000

Be careful with any comment remotely similar to “this time its different.” Trees don’t grow to the sky. Never have; never will.

I’d love to see a correlation study between China’s announced economic figures and direct foreign investment. I suspect those numbers play like the stock market. The better the news, the more people wanting to buy the stock. That was the whole point of Enron – keep the good news (earnings growth) going so people would keep buying the stock.