China's $22 trillion time-bomb

[karan21]

Well it seems to apply much more to India, doesn't it?

- India's dream of reaching double-digit growth has collapsed to 6%
- India has a large debt-to-GDP ratio, even higher than Spain's (according to the IMF)
- India has a large trade deficit, despite still being a developing nation
- India's government has a huge budget deficit

Even though according to "the Economist", India is 40 years behind China in terms of development indicators.

Yet India has already far surpassed us in terms of national debt, trade deficit, budget deficit... and every other negative indicator in this category.

looking at china's infra buddy even us is 20 yrs behind u guys. and europes old buildings are atleast 50 yrs behind and india 100 yrs. but all the stuff has been erected by printed money by ur country.

india had a debt of 90% in 1991 we lowered it ddown to 50 in 3 yrs and since then it has stayed in that range.
for 20 yrs we didnt let it go up and maintained a growth of 8%. we r a 2 trill economy still growing at 8%.
while china is 7 trill more than 10-15 trill in debt.

 

[WS-10 Engine]

thats tru china invests 2.6 tri a year on that and all is printed money. japan did the same and ur seeing what happened. they have high iq than even china so y they failed??? their economy is shrinking why? u know they ans but r not allowed to speak.

india will invest 1 trill in 5 yrs from now and that money will be used in a proper way and wont let country go on high debts. we want longer growth.

japan was a developed country in the 1980s, its infrastructure was already developed. heck its per capita gdp was already higher than america in the 1980s.
japan had little to no return on its investment due to being fully urbanized.

chinese return on investment is very high due to fast urbanization, chinese tax revenue are growing 30% per year.

chinese wealth is growing much fster than debt, indian debt is growing faster than wealth.

u go into debt to invest, build factories to produce goods, build infrastructure and gain returns and u pay down the debt.

india goes into debt for consuming depreciating consumer goods, there is no future return on indian debt. thats what happened to japan, greece, spain.

chinese housing market is based on little debt as buyers have to pay 30% down payment for 1st house and 60% for 2nd house. there is little threat of mortgage debt to the chinese banking system.
american and japanese housing market was based on zero down payment, so it was all based on debt. the banks gave out mortgages, and once house prices fell, the bank had to feel 100% of the pain, the non-performing loans skyrocketed and the banks were collapsing.

in china, when house prices fall, the losers will be the buyers as they used their own cash to buy them, banks have little exposure.

countries should only go to debt if u have a future return.
for example, a student goes into debt knowing that he can get a degree and get a job and pay that loan off. the money he earns in his job is the return.

 

[FairAndUnbiased]

yup japan is a classic example of a country of high iq destroyed by local debt. what abt china soon???

We have nowhere near Japan's debt and our debt can be rolled over indefinitely until it starts making money, while Japan's cannot. Of course, the US's debt is another story, and it can never make money again. The US's debt used to be able to make money though, and I have to say, the US government was brilliant in its economic policies.

 

[Chinese-Dragon]

Double Posted.

 

[Holmes]

The whole world runned on debt until, the bubble burst. See what happened, everything was ruined.
I say the "GLOBAL FINANCIAL SYSTEM NEEDS A NEW MODEL THAN THIS DEBT BASED STUFFS!!!".
DOES DEBT HAS ANY LIMITS???
Until then debt can burst anytime anywhere. "THE WHOLE SO CALLED GLOBALIZATION NEEDS SOME URGENT RE-INNOVATION".

 

[Shardul.....the lion]

Well it seems to apply much more to India, doesn't it?

- India's dream of reaching double-digit growth has collapsed to 6%
- India has a large debt-to-GDP ratio, even higher than Spain's (according to the IMF)
- India has a large trade deficit, despite still being a developing nation
- India's government has a huge budget deficit

Even though according to "the Economist", India is still 40 years behind China in terms of development indicators.

Yet India has already far surpassed us in terms of national debt, trade deficit, budget deficit... and every other negative indicator in this category.

Thats what you are thinking,
But many world economists are thinking about China whether it will land hard or soft. Nobody is commenting on hard or soft landing of Indian economy.
Year 2007 2010 2012 ()
China 14.2 10.4 7.5
India 9.8 8.8


See CD, the CHina GDP growth rate is decreasing every year much more rapidly from 14% to 10% (-4%). This shows China is landing down cooling down more rapidly than expected.

 

[dearone4u_22]

Indians always like to claim that India is the "second-fastest growing major economy in the world".

The problem... is that India is only growing at 6.1%.

Meanwhile... Turkey, Argentina, Sri Lanka etc. are all currently growing above 8%+.

OMG .... do you know anything about economics or you just copy paste article for trolling....

when you consider two countries GDP growth next time consider the size of that economy

10% of 100 = 10.
6% of 1000 = 60.
so you mean 10% of 100 is greater that 6% of 1000

this fiscal japan gdp grew rises 1.5% that doesn't mean they out of deflation ..its just a effect of reconstruction work going on in japan after tsunami which is acting as a stimulatory factor to japan economy....

In economic CAGR (compounded annual growth rate) is the important indicator for the growth comparision then one off increase in growth rate.....

Next time when you compare gdp growth as an indicator for country's strength ...see that country's economic base first...

 

[karan21]

loll i dont think chinas bubble will burst. given their high iq and a communist govt they have developed a strategy of gradually slowing down growth rates starting this year where they slowed it down 1% to 7.5 from last years 8.5% target.

eventually by the end of decade china will grow at 2% just like us and germany.

 

[Rig Vedic]

People should try to understand the modern monetary system. How is money created.

Without debt there would be no money.

As long as the capital is being used efficiently, and the debt is in your own currency, there is nothing to worry about.

 

[karan21]

People should try to understand the modern monetary system. How is money created.

Without debt there would be no money.

yes tru but with higher debt u keep on going on slow growth rates. india should maintain its debt in 60 s range and sustain a 8% growth like we did from 1995 to 2011. 2012 someting messed up

 

[Chinese-Dragon]

Even IF India was "somehow" to match China's percentage GDP growth rate, our base economy is four times bigger than India's. So we will still be adding four times more to our economy every year, even if the percentage growth rates are the same.

That is even in the best case scenario for India.

But look at the actual results.

BBC News - India's GDP growth falls to 6.1%

 

[karan21]

People should try to understand the modern monetary system. How is money created.

Without debt there would be no money.

yes tru but with debt u keep on going on slow growth rates. india should maintain its debt in 60 s range and sustain a 8% growth like we did from 1995 to 2011. 2012 someting messed up

Even IF India was "somehow" to match China's percentage GDP growth rate, our base economy is four times bigger than India's. So we will still be adding four times more to our economy every year, even if the percentage growth rates are the same.

That is even in the best case scenario for India.

But look at the actual results.

BBC News - India's GDP growth falls to 6.1%

this is the fourth time u posted the same link. tell me how many times more??
dude final 2012 growth is 7.1
now plz dont post it again

 

[Chinese-Dragon]

when you consider two countries GDP growth next time consider the size of that economy

10% of 100 = 10.
6% of 1000 = 60.
so you mean 10% of 100 is greater that 6% of 1000

According to that logic, America with a $14 trillion GDP is growing faster than India.

In fact, America with 2% growth is adding more to their economy every year than India is.

 

[karan21]

Even IF India was "somehow" to match China's percentage GDP growth rate, our base economy is four times bigger than India's. So we will still be adding four times more to our economy every year, even if the percentage growth rates are the same.

That is even in the best case scenario for India.

But look at the actual results.

BBC News - India's GDP growth falls to 6.1%

u have no understanding of economics. bcos ur 26% economy is based on real esatate and growth doesnt count on that. that is investment done in real estate which is huge in china.

all i have to say is china prepare for a slow down not a collapse.

 

[FairAndUnbiased]

People should try to understand the modern monetary system. How is money created.

Without debt there would be no money.

As long as the capital is being used efficiently, and the debt is in your own currency, there is nothing to worry about.

True, but the problem is, the capital could be squandered. Also, excess debt in own currency leads to very high inflation, which is triply bad if the public knows about it, but only "regular bad" if you hide it somehow. If the debt increases too much without a corresponding increase in production because it was squandered (for example, if the country creates debt to make a giant paper airplane out of currency) then even meltdown is not out of the question.