Firmer currency and solid growth means China could pass $10,000 per capita GDP in 2019

[Han Patriot]

the true obstacle to China economy's future advancement is not Japan, America or any of other clowns, its the SOE, they should focus on science reserchs, strategic defense sectors and monetary safeties, but not in commerical field.

the government really did a great job to unleash our strength in last 30 years, but not by meddling with private sectors, but to let it go!

I used to think that way. My opinion is let the private sector run the hardest sector, the most unprofitable sector and you shall see magic getting woven. Cash cows like power, oil, etc, you need to have a mixed ownership approach. Reform the SOEs to be fully profit driven except for strategic sectors like Singapore. You can make SOEs as competitive as private companies, Singapore has proven it.

 

[Cybernetics]

the true obstacle to China economy's future advancement is not Japan, America or any of other clowns, its the SOE, they should focus on science reserchs, strategic defense sectors and monetary safeties, but not in commerical field.

the government really did a great job to unleash our strength in last 30 years, but not by meddling with private sectors, but to let it go!

The issue is not the state owning these companies. In fact i think its an efficient system if implemented correctly. All developed nation's state own substantial parts of their economy, just not as directly or rigidly. For example the pension system in Canada is a state function and they own equities in all sectors, bonds, build and own infrastructure (paid highways, toll bridges, utility). The nation sometimes owns and funds strategic industries like aerospace. There are also "crown corporations" in Canada that are owned by the state but managed like a private firm. These funds place their representatives on the boards of major companies, influencing their actions to meet fund goals in turn meeting state goals. The benefit of a more detached ownership is allowing best in market talent to be in charge of the firm, boosting efficiency, while having board members to keep management in check.

Its good for China to allow some trading of assets, especially state assets between institutions to produce risk and pricing related information if they are more market and less strategic functions.

https://en.wikipedia.org/wiki/Crown_corporations_of_Canada
http://www.cppib.com/en/what-we-do/our-investments/

 

[leviathan]

The guy is extremely active on this forum with multiple accounts...

I bet he is the true '5 Mao'....or i heard he got fired and have plenty of free time...

 

[nang2]

You sound like a know-it-all, except you seem to know very little. When you preach the free-market to people who understand how the real world works, it can be really annoying.

The US government practices plenty of intervention.

Amazon.com Inc. does not have to pay state sales taxes. This is a distortion of the free market, but the US government wants to help create a company that can dominate worldwide online sales.

Boeing receives military contracts from the United States government. This buttresses Boeing's finances and helps Boeing fund its new civilian aircraft designs.

The US government provides agricultural subsidies to its farmers.

Tesla is only profitable due to government tax breaks for electric vehicles.

The US economy is nowhere near a free market. You just have to look a little deeper and you can see all of the subsidies and tax distortions. The goal of the US government is the same as the Chinese government: help its corporations achieve massive scale and profits.

China has opted for a more direct approach. Instead of an indirect subsidy hidden in the tax code or funneling money through military programs, China directly funds Chinese corporations. This is more efficient and transparent.
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Here are the federal and state tax credits that Tesla uses to lower the cost of Tesla cars to buyers.

A key government perk for Tesla buyers is running out, says Edmunds | CNBC (July 28, 2017)

You assumed too quickly. When I say free market, you assume US, despite the fact that I have been repetitively saying the current US is far from being a free market. US may be freer in some aspects than China but also is more restrictive in other areas.

The US after the civil war was much closer to be a true free market, though it still practiced protective tariff then. Throughout the western history, there were only very few moments when near-true free market emerged, such as England after demolishing Corn Law and US after civil war.

In the last few decades, China also accidentally embraced free market through weaken administration and corrupted government officials.

Hey everyone, I found out about something unique and interesting- nang2 is JDHungary's alt account.

This is beyond stupidity.

The issue is not the state owning these companies. In fact i think its an efficient system if implemented correctly. All developed nation's state own substantial parts of their economy, just not as directly or rigidly. For example the pension system in Canada is a state function and they own equities in all sectors, bonds, build and own infrastructure (paid highways, toll bridges, utility). The nation sometimes owns and funds strategic industries like aerospace. There are also "crown corporations" in Canada that are owned by the state but managed like a private firm. These funds place their representatives on the boards of major companies, influencing their actions to meet fund goals in turn meeting state goals. The benefit of a more detached ownership is allowing best in market talent to be in charge of the firm, boosting efficiency, while having board members to keep management in check.

Its good for China to allow some trading of assets, especially state assets between institutions to produce risk and pricing related information if they are more market and less strategic functions.

https://en.wikipedia.org/wiki/Crown_corporations_of_Canada
http://www.cppib.com/en/what-we-do/our-investments/

The keyword here is "implemented correctly". There is no doubt that with a team of able leaders, the performance of any company can be fantastic. But with a team of lousy leaders, how could the situation be rectified? With private ownership, the owner directly takes the loss. He feels the pain personally and if he is rational, he will be prompted to address the situation with utmost rigor. With state ownership, who is feeling the pain and takes an action? How rigorous that action would be? That is the biggest challenge facing all state-owned companies.

In public share-holding company, the share holder can vote with his feet. In state-owned company, how would the so-called true owner (the people) act?

 

[TaiShang]

New guidelines for outbound investment soon
China Daily, December 01, 2017

China will introduce a "code of conduct" for outbound investment to provide better guidance on risks to companies investing overseas, after efforts to curb irrational investment have started to take effect, people familiar with the matter said.

"The code of conduct," which is yet to be released to the public, will guide enterprises' outbound investment and help them better identify risks in foreign countries, a government source said, without elaborating on when the document will be released.

The document is part of China's broader efforts to improve the regulations on outbound investments.

China's overseas investments witnessed high-speed growth in the past several years and have played a pivotal role in supporting the global economic recovery, according to a report released by the National Development and Reform Commission, the nation's top economic regulator, on Thursday.

But due to a lack of sufficient awareness of local risks, some investments made out of blind optimism have led to misunderstandings in the destination countries, the report said.

The government will enhance cooperation with foreign countries on building a legal framework and help enterprises identify risks, thereby improving the quality of investment, the report said.

China will provide more conveniences and further streamline registration procedures to investment projects that are neither sensitive nor restrictive, according to the report.

The government has removed some administrative hurdles, like the necessity to get prior approval for enterprises investing more than $300 million. Such firms only need to register with the NDRC, according to the latest guidelines.

The defence sector and industries that the government considers as irrational have been added to the sensitive category, which means investment in those sectors will undergo more government scrutiny and need the prior approval of the commission for investment in foreign countries, according to the guideline.

Irrational investments have been curbed after the government took measures to control buying sprees since late last year, data from the Ministry of Commerce showed.

Yan Yuejin, senior researcher with E-house China R&D Institute, said the government has no incentive to close the doors for enterprises if the submitted documents show that money will be used properly.

"The overall trend is that the government will sustain its path to further opening-up, with key focus on promoting the development of the Belt and Road Initiative," said Ivan Chung, associate managing director at global ratings agency Moody's.

http://www.china.org.cn/business/2017-12/01/content_50079803.htm

@Martian2

 

[Unknown-V]

If China adopt SNA 2008 to calculate their GDP, it could reach (or maybe surpass) USD 10000 per capita right now. Today China still use SNA 1993. CMIIW

 

[TaiShang]

If China adopt SNA 2008 to calculate their GDP, it could reach (or maybe surpass) USD 10000 per capita right now. Today China still use SNA 1993. CMIIW

Better not to arbitrarily inflate GDP. That may suit developed nations and SP2012, but it may not serve well for China as it may lead to unsubstantiated complacency.

Better underestimate our conditions than overestimate.

 

[Götterdämmerung]

BTW, hail to the USA and its fabulously incorruptible gouvernment.

 

[Han Patriot]

Better not to arbitrarily inflate GDP. That may suit developed nations and SP2012, but it may not serve well for China as it may lead to unsubstantiated complacency.

Better underestimate our conditions than overestimate.

See, this is the right attitude, even with such poverty, we get so much attention, imagine if we use the new SNA calculations. Indians would jump up and down.

 

[Hakikat ve Hikmet]

With GDP/person in 10K$ regim, the world is getting shaken by OBOR/SCA etc., what will happen when it moves up to 20K band?????

 

[AndrewJin]

See, this is the right attitude, even with such poverty, we get so much attention, imagine if we use the new SNA calculations. Indians would jump up and down.

They already behave like supa powans when they are still living in slums

 

[TaiShang]

They already behave like supa powans when they are still living in slums

They have less slums than China, according to latest statistics. And one particular city in SP2012 has already passed Shanghai. In SP 2012, development is more equitable and people live in a "greater" harmony with environment. The harmony necessitates mass open-defecation and burning of bio-biodegradables. You just do not understand the greatness and long vision in SP2012.

 

[GeraltofRivia]

Better not to arbitrarily inflate GDP. That may suit developed nations and SP2012, but it may not serve well for China as it may lead to unsubstantiated complacency.

Better underestimate our conditions than overestimate.

Cannot agree more. It doesn't add any value to the nation by adjusting to the new methodology, except for taking on more "responsibilities" like UN fees. Staying with the current method also means the numbers are calculated consistently over time. it is a not fun job to re calculate for the historical period.

As long as all the citizens are getting richer, healthier and happier, why would you want to tell everyone how much money you earn?

 

[TaiShang]

Cannot agree more. It doesn't add any value to the nation by adjusting to the new methodology, except for taking on more "responsibilities" like UN fees. Staying with the current method also means the numbers are calculated consistently over time. it is a not fun job to re calculate for the historical period.

As long as all the citizens are getting richer, healthier and happier, why would you want to tell everyone how much money you earn?

Indeed. That's why I believe it will take a while until China moves to adopt the new method. Actually, I did not know about taking on more responsibilities, hence, payments to IOs.

If that's the case, let the current and upcoming superpowers take on that responsibility and enjoy the soft power from it.

China is responsible, first and foremost, to its own people who have to achieve middle income status as a starter.