China Economy Forum
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ahfatzia
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$785 billion is merely over 10% of China's $7 trillion plus economy. China also holds a foreign currency reserve or more than $3 trillion, so the number is practically means nothing.
It looks huge for a lot of countries but China is a large and cash rich country and just view it as such.
It looks huge for a lot of countries but China is a large and cash rich country and just view it as such.
bhisma
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You know they can't comment about it, Internet restrictions..
IndoCarib
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China’s external debt totalled a whopping $695 billion last year, highest in 27 years, adding to concerns that it might undermine the country’s fiscal position at a time when its economy has slowed down due to declining exports.
The external debt rose by $146 billion, or nearly 27 per cent from 2010, data released by the State Administration of Foreign Exchange said.
The proportion of short-term external debt to the total also climbed to a record high of 72 per cent as of December 31, against 68 per cent in 2010 and 60 per cent in 2009, data said. But the year-on-year increase in short-term debt moderated.
As of 2011 end, outstanding short-term debt stood at $500.9 billion, up 33 per cent.
The jump in foreign debt shows that China, which lends more than it borrows, is borrowing more from overseas to hedge against the devaluation of its foreign exchange reserves, analysts said.
Meanwhile, enterprises on the Chinese mainland have resorted to borrowing from overseas due to financing difficulties at home, they added.
China external debt soars to 27-year high
The external debt rose by $146 billion, or nearly 27 per cent from 2010, data released by the State Administration of Foreign Exchange said.
The proportion of short-term external debt to the total also climbed to a record high of 72 per cent as of December 31, against 68 per cent in 2010 and 60 per cent in 2009, data said. But the year-on-year increase in short-term debt moderated.
As of 2011 end, outstanding short-term debt stood at $500.9 billion, up 33 per cent.
The jump in foreign debt shows that China, which lends more than it borrows, is borrowing more from overseas to hedge against the devaluation of its foreign exchange reserves, analysts said.
Meanwhile, enterprises on the Chinese mainland have resorted to borrowing from overseas due to financing difficulties at home, they added.
China external debt soars to 27-year high
ahfatzia
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karan.1970
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China faces bigger challenges going forward to support domestic demand - The Economic Times
The recent deceleration in Asia's export growth reminds us that the headwinds from deleveraging in the developed world means that we continue to have a bumpy, below par and brittle (BBB) recovery.
Apart from concerns over sovereign debt that Europe is facing, the US will likely face its own domestic demand challenge: an impending fiscal cliff in 2013.
When the developed world is deleveraging and external demand remains weak, the challenge for China and the rest of the Asian economies is to generate domestic demand in a productive manner to offset this external weakness.
During 2004-07, the major growth driver for China was exports, supported by buoyant demand from developed markets. Investment aimed at building capacity to feed export demand was the other anchor of GDP growth.
However, as external demand fell after the credit crisis, makers in China resorted to a tactical approach to generate domestic demand by aggressively expanding bank credit, driving up the bank credit-to-GDP ratio from 101% in December 2008 to 128% in August 2012.
Indeed, in absolute terms since December 2008, China's banking system has disbursed loans of $5.4 trillion (about three times India's GDP). This rise in bank credit was channelled into investment, which rose from 42% of GDP in 2007 to around 50% in 2011.
This tactical approach of pushing domestic demand, which lacked productivity, worked initially. However, continuing with that approach for a longer period resulted in macro stability concerns.
Inflation, banking asset quality issues and a sharp slowdown of corporate profit growth were all symptoms that productivity had been adversely impacted in this period. There has been a huge increase in excess capacity in the economy.
According to IMF estimates, capacity utilisation in China has dropped from under 80% before the credit crisis to about 60% in 2011. While growth has again begun to slip, policymakers have been hesitant to initiate another round of aggressive stimulus due to concerns about the side effects of such a tactical approach.
We have been arguing for some time that both China and India need structural reforms to support domestic demand. We believe China has bigger challenges going forward.
The potential growth rate of the Chinese economy is likely to be lower given a slowing growth in the working-age population. Indeed, after 2015, China's working population will start shrinking.
These changes in the demographic structure of the economy imply that China needs to accept a slowing potential growth and change the growth mix from investment to consumption. Boosting investment growth could erode capital productivity further and risk destabilising the banking system.
Finally, slowing additions to the working-age population will mean that there will be lesser workers available to work on the newly-created capacity. Hence, we believe that the domestic demand alpha should come from boosting consumption, which will help to improve capacity utilisation and capital productivity.
The recent deceleration in Asia's export growth reminds us that the headwinds from deleveraging in the developed world means that we continue to have a bumpy, below par and brittle (BBB) recovery.
Apart from concerns over sovereign debt that Europe is facing, the US will likely face its own domestic demand challenge: an impending fiscal cliff in 2013.
When the developed world is deleveraging and external demand remains weak, the challenge for China and the rest of the Asian economies is to generate domestic demand in a productive manner to offset this external weakness.
During 2004-07, the major growth driver for China was exports, supported by buoyant demand from developed markets. Investment aimed at building capacity to feed export demand was the other anchor of GDP growth.
However, as external demand fell after the credit crisis, makers in China resorted to a tactical approach to generate domestic demand by aggressively expanding bank credit, driving up the bank credit-to-GDP ratio from 101% in December 2008 to 128% in August 2012.
Indeed, in absolute terms since December 2008, China's banking system has disbursed loans of $5.4 trillion (about three times India's GDP). This rise in bank credit was channelled into investment, which rose from 42% of GDP in 2007 to around 50% in 2011.
This tactical approach of pushing domestic demand, which lacked productivity, worked initially. However, continuing with that approach for a longer period resulted in macro stability concerns.
Inflation, banking asset quality issues and a sharp slowdown of corporate profit growth were all symptoms that productivity had been adversely impacted in this period. There has been a huge increase in excess capacity in the economy.
According to IMF estimates, capacity utilisation in China has dropped from under 80% before the credit crisis to about 60% in 2011. While growth has again begun to slip, policymakers have been hesitant to initiate another round of aggressive stimulus due to concerns about the side effects of such a tactical approach.
We have been arguing for some time that both China and India need structural reforms to support domestic demand. We believe China has bigger challenges going forward.
The potential growth rate of the Chinese economy is likely to be lower given a slowing growth in the working-age population. Indeed, after 2015, China's working population will start shrinking.
These changes in the demographic structure of the economy imply that China needs to accept a slowing potential growth and change the growth mix from investment to consumption. Boosting investment growth could erode capital productivity further and risk destabilising the banking system.
Finally, slowing additions to the working-age population will mean that there will be lesser workers available to work on the newly-created capacity. Hence, we believe that the domestic demand alpha should come from boosting consumption, which will help to improve capacity utilisation and capital productivity.
shuttler
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Because that worked so well everywhere else.....
ps: you still think im Indian?
not much difference!
shuttler
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Closure of the world’s largest span railway-highway bridge
Closure of the world’s largest span railway-highway bridge | China's Great Science and Technology
2012-09-16 — On Sep. 16th, Huanggang Yangtze River Bridge, the the world’s largest span railway-highway bridge, is finished its closure of main span steel girder. The completion of Huanggang Yangtze River Bridge will realize “seamless connection” of from the full range of road and railway transportation between Huanggang City and Wuhan. Huanggang Bridge is the 6th railway-highway bridge above Yangtze River.
At 10:16, a 70-ton rotary dedicated girder machine accurately lift a steel beam rods to the main bridge final closure, ahead of the construction workers waiting immediately stepped forward, adjust, move, and will soon be a rod pieces fixed on the final closure.
China bridge construction of one of the main the MBEC bear Bridge construction tasks, already five in the Yangtze River railway bridge by it. According to Liu Jiewen, the person in charge of the project department, in order to ensure that the main span steel girder precise closure, researchers for the first time use modern image recognition measurement techniques used in the bridge closure precise measuring.
Huanggang Yangtze River Bridge has length of 4008 meters, is designed for the double-deck, lower for two-way high-speed railway, the upper is four-lane highway. The main bridge’s structure is the twin towers steel truss cable-stayed bridge with double cable planes. Its main span is 567 meters and is the largest one of same type bridge which ever built and is being built.
23 billion is invested in Huanggang Yangtze River Bridge, which started in February 2010, is the trinity control project of Wuhan-Huanggang highway, railway and intercity rail. Bridge is to open traffic by the end of 2013, when the transportation time from Wuhan to Huanggang is shorten to just 28 minutes.
Phenomenal! When this is completed, it will be the world's biggest integration of all the people and products within the area! Great mobility and adding vibrancy to the economy!Terrific!
WS-10 Engine
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we are the worlds largest creditor nation(india is still a debtor nation) , we dont borrow from no one. we lend to everyone.we lend more to the developing world than the world bank. we lend to the US. why do you think the US and europeans are coming to china begging us to buy their bonds, because we have the money son.
our external debt is 9.5% of GDP ($695 billion external debt out of $7.3 TRILLION economy), absolutely miniscule number.
our forex reserves are $3 trillion.
our sovereign wealth funds has nearly $1 trillion.
we also have the largest savings pool of over $3 trillion.
our budget deficit was 1% last year and we has a budget surplus so far this year.
we have a trade surplus of about $150-$200 billion.
our debts are TINY compared to our wealth.
btw, hows the dropee..oh i mean rupee....doing? 25% collapse, investors fleeing india. inflation skyhigh.
indian growth miracle is over.
Indian companies are now borrowing from us.
WE ARE THE BANKER TO THE WORLD
try harder indians, much much harder.
shuttler
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we lend more to the developing world than the world bank. we lend to the US. why do you think the US and europeans are coming to china begging us to buy their bonds, because we have the money son.
our external debt is 9.5% of GDP ($695 billion external debt out of $7.3 TRILLION economy), absolutely miniscule number.
.....
WE ARE THE BANKER TO THE WORLD
try harder indians.....harder.
dont show all our wealth Buddy! the indian cheerleading trolls dont understand all of them. No need to give them free lessons!
WS-10 Engine
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WS-10 Engine
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Apparently india is the ONLY country in asia with a current account DEFICIT!
remember india is still a net debtor, while china is the largest creditor nation.
india currently has STAGFLATION.
remember india is still a net debtor, while china is the largest creditor nation.
india currently has STAGFLATION.
shuttler
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There is not much comparison between China and india. In fact india always targets us as a country to match. We almost neglect them. There are a lot more countries in the world that we keep ourselves abreast with. india is not in the league.
On an earlier statement, Stephen Roach made this comment:
India Worries Me More Than China
29 dec, 2011
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