Why India will not be able to match up with China

[Developereo]

Hey, how come the sign outside the building says "Embassy of the United States of America"?

Just kidding....

I love China!

 

[shchinese]

when I watch news and saw India's spending on military hardwares, I always think it is better to spend the money on infrastructure or education. when most roads are shitty, why spend billions on aircraft carriers when neighbors have zero?

I don't have the answer, but I know for the past 17 years of hard working, we now have two aircraft under planning and the plan is to build 6. Can you Indians match up? you can't - simple can't afford to have 6 aircraft carrier combat groups.

another issue for India is its energy supply, in less than one decade, China will complete its investment in the oversea energy industries and hole stake for a lot of mines, can India still get enough oil? can india still power the entire nation?

China can also block all rare earth export to India, that concludes its modern development and send it back to WWII ages. It is good to have 95% of the total rare earth deposit on earth. of course, Indian can spend more on space exploration and get their required rare earth from the moon,
you know it is technically feasible just a little more expensive.

China can also build a huge dam and block the mother river of India, effectively cut 30% of water supply to India. It is said that there is ice on the Mars, so water supply shouldn't be a problem for the space power India.

when it comes to the cutting edge decision making phase, when we have to attack India's mainland in military conflicts, our guarded rockets can hit New Delhi, which is only 300km away, from our border, they are much cheaper and easier to maintain/produce than missiles. However, it is 3000 kilometers away from India's border to our nearest population center - Lanzhou. as of today, India still doesn't have anything that can hit Beijing or Shanghai. one day even when they acquire such technologies, it is a 6000km one way flight and we can easily trace and destroy them during its course. india also needs to prove its anti-satelliate ability.

for conversational warfares, how India is going to stand our waves of Type-99G2? T-90 is about 1 decade behind the technologies and we can build/upgrade/redesign every single component on Type-99G2.

How india is going to defend our waves of FBC-1 bombers?
How india is going to defend our waves of 054a mother sinkers? we can easily build 6/year during peaceful time.

as you can see, I didn't mention J-10/J-11B/Su-30. they are not considered as weapons, because not all components can be made/upgraded in China.

in terms of military strength, india is about 25 years behind China and the gap is widening.

 

[Developereo]

India surpassed China in total purchases in 2004, agreeing to buy 5.7 billion dollars in arms. [...] China was third, signing 2.2 billion dollars in contracts

Ummm...

Having to buy your weapons is not something to be proud of.
Global superpowers build their own weapons and sell them to friends.

(Yes, I know the irony of this coming from a Pakistani, but I have always advocated greater indigenization for Pakistan.)

 

[RPK]

It is not because your stats is 10 years old, it is a misleading ranking list which doesn't include our best universities which led the nation for the past 100 years.

Tsinghua was the best one for the past 100 years.
Shanghai Jiaotong is the best one in southern part of China for the past 100 years.however, none of them are in the list.

the above wiki article means nothing, as I have clearly told you there is no "reform" for most part of China until 1992.

I grow up in that era, I lived in the most developed region of China - Shanghai, however there was just no reform until 1992. Shanghai even didn't have a open share market until 1992. To some extent, Beijing's (i.e. northern part of China) reform didn't come until later 1990s, as of today, the pricing system for some sectors in Beijing is just the same as the 1970 era. e.g. the metro/bus ticket price in Shanghai is about 5-10 times more expensive than the prices in Beijing, because they didn't had that reform to let private business to run such public transportation business.

Hey Have you ever read China Bubble?

here

The Chinese economy reminds me of the movie “Speed”, where Dennis Hopper wires a bus with explosives and sets them to blow if the bus goes slower than 50 miles per hour.

The Chinese economy has 1.2 billion unsuspecting people on board. It could all blow if economic growth drops below its current pace of more than 8 percent. Even a small, otherwise harmless speed bump is likely to send this gigantic economy into a severe recession. Here are the reasons why:

China has become a de facto manufacturer for the world. With exception of food products, it is difficult finding a product that was not, at least in part, manufactured in China. Industrial production accounts for 53 percent of its Gross National Product (according to CIA Handbook), double the rate of most developed nations. Industrial production for the United States is 19.7 percent of GDP, UK 26.3 percent, Japan 24.7 percent. Chinese economic growth is largely driven by the manufacturing sector, as its industrial production growing at the double rate of GDP.
The manufacturing industry is very capital intensive. Building factories requires a large upfront investment. To make things worse, with commodity costs rising, the required investment has increased. Once it’s built there is a fixed cost associated with running a factory that is to some degree independent of utilization level – a classical definition of operational leverage. Laying-off workers is a politically sensitive process thus creating another layer of fixed costs.
Debt is an instrument of choice in China. Due to a lack of equity-fund- raising alternatives, bank debt and underground finance companies that charge very high interest rates are the predominate sources of capital in China – financial leverage. Large piles of debt (financial leverage) combined with high fixed costs (operational leverage) create a very high total operational leverage. Total operational leverage in China is elevated further as factories are built to accommodate a future demand, and since it has been rising in the past automatically projected to climb in the future.

This greatly leveraged growth works fine as long as the economy continues to grow at fast pace. As sales are growing, costs are not growing as fast as they are largely fixed (thanks to operational leverage) leading to operating margins expansion - the beauty of leverage. Unfortunately leverage works both ways, as sales growth slows down the opposite takes place.

There are many factors that could cause the fatal slow down in Chinese economic growth:<

Slowdown of China’s largest trading ‘partner’ - the U.S. economy: China is financing its biggest customer – the U.S. consumer. Similar to Lucent Technologies trying to induce sales growth by financing its dot.com customers, China is in part financing U.S. consumers by buying U.S. Treasuries, thus keeping the U.S. interest rates at very low levels and creating what Mr. Greenspan called a ‘conundrum’.
Higher short-term rates coupled with debt levered balance sheets, doubling of credit card minimum payments (coming to consumer door steps in January 2006), high gasoline prices topped with a sprinkle of significantly higher heating costs may push consumer off the shopping train - lowering demand for Chinese produced goods.
An ever rising pile of politically motivated bad loans may bring the Chinese banking system to a halt (similar to Japan’s of late 80s). Though China is trying to Westernize its lending practices, a dangerous combination of semi-market economy and a in most part government controlled banks is very dangerous. In this environment loans are often made not on the merit of investment but based on political connection – a recipe for disaster.
Overcapacity - It is a human tendency to draw straight lines and thus making linear projections from past into the future. During the fast growth period the angle of the straight lines is usually tilted upward, causing over investment in fixed assets, as inability to keep up with demand may cause manufacturers to lose valuable customers. However, overcapacity is a death sentence in the manufacturing (fixed costs) world.

As companies face overcapacity or slowdown in demand, they try to stimulate sales by cutting prices, which in part lead to price wars (similar to what we observed in the U.S. between Sprint, MCI and AT&T (NYSE: T) in long distance business in mid 90s) and to a fatal deflation.

Currently companies emphasize their China strategy on their conference calls, in a similar fashion as companies were emphasizing their internet strategies in the late 90s. Though did not start re-naming themselves to incorporate China into their names -a common practice in late stages of internet bubble; It is very apparent that many are making large investments in China. As it usually happens after the bubble pops, the past assets turn into today’s liabilities. Thus, a highly touted exposure to China that was looked upon as an important asset lead to a written-off investment, leaving nothing but a trail of liabilities behind.

Though a pop in Chinese bubble is unimaginable to many, the same way as collapse of Japan and fifteen year recession that followed was unimaginable in late 80s. It is not a question of ‘if’ but more of a question of ‘when’ the Chinese economy will cross that metaphorical 50 miles per hour mark and falling into the deep abyss of prolonged recession and very possible deflation.

China is living through one of the greatest historical bubbles. Books will likely be written to describing its ‘ridiculousness’, but as always, they’ll be written after the fact. Here are some suggestions for the book titles: “The Chinese Conundrum” or “The Great Chinese Bubble” or “Irrational Exuberance 2”.

But, as with any bubble timing, the pop is very difficult. Bears are usually too early to call it and bulls are usually too late to see it.

As government published numbers of economic growth cannot be trusted, investors should look for anecdotal clues for the inflection point. Conference calls of U.S. companies doing business in China are probably the best source of information.

The risk of the Chinese bubble is real, thus it may be wise to prepare by immunizing portfolios from that risk. Though being completely rid of the China risk is impossible and impractical, it is very important to stress-test a portfolio against that risk, one stock at a time. Industrial commodities and companies that produce them are likely to be the first casualties of the bubble bursting. Oil stocks like Chevron (CVX), Exxon Mobil (XOM), Conoco Phillips (COP) and many others were great performers in 2005, up in double digits. Their run is likely to end when Chinese economy goes into a tail spin

The Great Bubble of China? -- Seeking Alpha

 

[grey boy 2]

I'm waiting for Mr Shchinese to say Chinaman landed on moon and we americans faked it...

Americans? Please enlighten me how someone suddenly shift from

an Indian to American every other day?

Stop trolling! This thread is about the the match up between China

and India.

 

[shchinese]

Hey, how come the sign outside the building says "Embassy of the United States of America"?

Just kidding....

I love China!

the sign says "&#22270;&#20070;&#39302;"&#65292;that is the same words you can find on those 3 thousands years old books.

 

[praveen]

Not mine but an interview by a famous sinologist

China: Fragile Superpower
New Book by UCSD Political Scientist Takes a Look at the New China
Susan Shirk
Professor Susan Shirk, UCSD China scholar

Susan Shirk, director of the University of California system-wide Institute on Global Conflict and Cooperation, first traveled to China in 1971 and has been doing research there ever since. She served as Deputy Assistant Secretary of State for relations with China during 1997-2000. Now, Shirk has published a new book entitled "China: Fragile Superpower" that looks at how the country's internal politics could derail its peaceful rise. The book is published by Oxford University Press. Shirk is a a professor in the Graduate School of International Relations and Pacific Studies. Here, Barry Jagoda sits down to talk with Shirk about her views on the political challenges China faces.

This Week (TW): You write of a paradoxical China, one that is “strong abroad but fragile at home.”

Shirk: China has a very large economy and it will be the largest economy of the world by the middle of this century, but in per capita income terms it is still a very poor country. It is near the bottom of the rankings in terms of the living standards of its 1.3 billion people.
China: Fragile Superpower

The domestic political challenge is really what my book is about. In 1989, when pro-democracy demonstrations occurred in Beijing’s Tiananmen Square and 132 other cities, the Communist Party almost fell but remained standing only because the military stayed with the Party. At almost the same time, the communist parties in the Soviet Union and Eastern Europe fell. So, ever since then, the leaders have felt that their days were numbered. They have felt a tremendous sense of insecurity. They could see that economic reform had turned society upside down. The Communist Party does not control what people see and do very much anymore. You have the same authoritarian rule but now people are living in a society which is open to the world and very much changed. The fragility is the political fragility of the government and of the Communist Party.

TW: You describe China’s governing process as less than a dictatorship but what is meant by this term of yours, “reciprocal accountability” referring to the Communist Party process?

Shirk: It’s kind of like the Catholic Church in the Vatican. The Pope appoints the cardinals but when its time for a new Pope, the College of Cardinals choose the Pope. The relationship between China’s leaders and the Communist Party Central Committee is like that. The 300 officials in the Central Committee are appointed by and accountable to the top leaders, but the Central Committee also has the power to choose the top leaders.

TW: How would you compare the current leaders with Mao, Zhou Enlai and the revolutionary founders?

Shirk: Regardless of what you think of what a tyrant Mao was, or what you think of Deng Xiaoping, who succeeded him and was the architect of China’s economic reform but still focused on keeping the Communist Party in power, they were the founding fathers, members of what is called “the Long March generation. They were like George Washington, Thomas Jefferson, James Madison. They had tremendous personal authority as a result of that history. But today’s leaders did not go on the Long March, did not fight in the revolution. These are people who joined the Party when it was already in power. They are technocrats, organization men. They don’t have a personal following throughout the country. They rule by virtue of the posts they hold and people don’t have the same personal feeling for them or the same respect for them.
Communist Political Leaders of China
Left to right: Mao Zedong, Deng Xiaoping, Jiang Zemin and Hu Jintao

TW: Are there term limits now?

Shirk: There are. It’s a non-democracy, an authoritarian regime, but it has more rules and regulations than before and one of those rules is that you can only serve in a senior government position for two five year terms. Also, there are retirement ages in order to move the next generation up. The previous president, Jiang Zemin, actually stepped down in 2002 and that was the first time a leader of a large Communist Party had actually walked away from his office and retired, bringing in the country’s current party leader and president, Hu Jintao.

TW: You have suggested some main considerations for survival of the Party and its leadership?

Shirk: There are some precepts they follow to stay in power. Much of this comes from the close call of the Tiananmen demonstrations of 1989. First, they have to forestall large scale popular protests. The second rule is to keep the leadership publicly united so there is no opening for people to mobilize popular opinion to oppose the party. And the third thing is to keep the army loyal so if push comes to shove there is no gun to back up opposition.

TW: Why does nationalism play such a large role in today’s China?

Shirk: This occurs for two reasons. Chinese was an historically important country for 2000 years, but from the mid-19th century on until just recently, for about 150 years, the country was weak, internally divided, and on the sidelines internationally Now that the country’s power is reviving, people naturally feel very proud and also have a sense of resentment of the countries that kicked them when they were down, particularly of Japan. But nationalism is also being engineered by the Communist Party because nobody believes in Marx and Lenin and Mao Zedong ideology anymore. So, the Party has had to find a substitute source of legitimacy and they’ve turned to nationalism.

TW: What steps can American leaders take to make China a more stable society?

Shirk: There is not much we can do related to China’s domestic politics, but what we can do is to be sure that the fragility of China’s domestic situation does not lead to aggressive behavior internationally. We have to worry that in distracting their people from domestic problems, or in response to provocations from Taiwan and Japan, China’s leaders might make threats that their domestic situation makes them feel that they are compelled to follow through on. I have focused on what can be done to prevent a war with China and these issues are discussed in the book

TW: Is it true that as a student you met Premier Zhou Enlai?
Susan Shirk and Zhou Enlai
Susan Shirk and Prime Minister Zhou Enlai, July, 1971

Shirk: I had the opportunity to visit China in 1971 as part of a group of American PhD students. We were doing research in Hong Kong because we couldn’t get into China. At that point, ping-pong diplomacy came along, with the planned visit of President Nixon, and we were a handy group to also invite in. We met with Zhou Enlai for four hours one evening.

TW: You dedicate this book to your husband and children. Where are the three of them now and why do you refer to your son as the newest China hand in the family?

Shirk: My husband, Sam Popkin, is a political science professor at UCSD, he’s my colleague. My daughter is a lawyer in New York. She went to kindergarten in China during one of my research trips there. My son, after years of my suggesting, decided to study Chinese. He finally succumbed not because of me but because his girlfriend decided to go to China and he followed her and now, of course, he’s hooked and he loves it and he’s studying Chinese at Duke.

TW: Congratulations on publication and thank you for this introduction.

Shirk: My pleasure.

China: Fragile Superpower


If you can think this is not credible enough you can also see this link


COVER STORY: CHINA 2008
The Rise of a Fierce Yet Fragile Superpower

The much-heralded advent of China as a global power is no longer a forecast but a reality. Now we, and they, must manage its triumph.

For Americans, 2008 is an important election year. But for much of the world, it is likely to be seen as the year that China moved to center stage, with the Olympics serving as the country's long-awaited coming-out party. The much-heralded advent of China as a global power is no longer a forecast but a reality. On issue after issue, China has become the second most important country on the planet. Consider what's happened already this past year. In 2007 China contributed more to global growth than the United States, the first time another country had done so since at least the 1930s. It also became the world's largest consumer, eclipsing the United States in four of the five basic food, energy and industrial commodities. And a few months ago China surpassed the United States to become the world's leading emitter of CO2. Whether it's trade, global warming, Darfur or North Korea, China has become the new x factor, without which no durable solution is possible.

And yet the Chinese do not quite see themselves this way. Susan Shirk, the author of a recent book about the country, "The Fragile Superpower," tells a revealing tale. Whenever she mentions her title in America, people say to her, "Fragile? China doesn't seem fragile." But in China people say, "Superpower? China isn't a superpower."

In fact it's both, and China's fragility is directly related to its extraordinary rise. Lawrence Summers has recently pointed out that during the Industrial Revolution the average European's living standards rose about 50 percent over the course of his lifetime (then about 40 years). In Asia, principally China, he calculates, the average person's living standards are set to rise by 10,000 percent in one lifetime! The scale and pace of growth in China has been staggering, utterly unprecedented in history—and it has produced equally staggering change. In two decades China has experienced the same degree of industrialization, urbanization and social transformation as Europe did in two centuries.

Recall what China looked like only 30 years ago. It was a devastated country, one of the world's poorest, with a totalitarian state. It was just emerging from Mao Zedong's Cultural Revolution, which had destroyed universities, schools and factories, all to revitalize the revolution. Since then 400 million people have been lifted out of poverty in China—about 75 percent of the world's total poverty reduction over the last century. The country has built new cities and towns, roads and ports, and is planning for the future in impressive detail.

So far Beijing has managed to balance economic growth and social stability in a highly fluid environment. Given their challenges, China's political leaders stand out for their governing skills. The regime remains a dictatorship, with a monopoly on power. But it has expanded personal liberty in ways that would be recognizable to John Locke or Thomas Jefferson. People in China can now work, travel, own property and increasingly worship as they please. This is not enough, but it is not insignificant, either.

But whether this forward movement—economic and political—will continue has become the crucial question for China. It is a question that is being asked not just in the West but in China, and for practical reasons. The regime's main problem is not that it's incurably evil but that it is losing control over its own country. Growth has empowered localities and regions to the point that decentralization is now the defining reality of Chinese life. Central tax collection is lower than in most countries, a key indicator of Beijing's weakness. On almost every issue—slowing down lending, curbing greenhouse-gas emissions—the central government issues edicts that are ignored by the provinces. As China moves up the value chain, so the gap between rich and poor grows dramatically. Large sectors of the economy and society are simply outside the grip of the Communist Party, which has become an elite technocracy, sitting above the 1.3 billion people it leads.

Political reform is part of the solution to this problem. China needs a more open, accountable and responsive form of government, one that can exercise control in what has become a more chaotic and empowered society. What such reform would look like remains an open question, but one that is being debated within the seniormost levels of the regime. In the current issue of Foreign Affairs, John Thornton, an investment banker turned China expert, traces how Beijing is taking hesitant but clear steps toward greater rule of law and accountability.

China's sense of its own weakness casts a shadow over its foreign policy. It is unique as a world power, the first in modern history to be at once rich (in aggregate terms) and poor (in per capita terms). It still sees itself as a developing country, with hundreds of millions of peasants to worry about. It views many of the issues on which it is pressed—global warming, human rights—as rich-country problems. (When it comes to pushing regimes to open up, Beijing also worries about the implications for its own undemocratic structure.) But this is changing. From North Korea to Darfur to Iran, China has been slowly showing that it wants to be a responsible "stakeholder" in the international system.

Some scholars and policy intellectuals (and a few generals in the Pentagon) look at the rise of China and see the seeds of inevitable great-power conflict and perhaps even war. Look at history, they say. When a new power rises it inevitably disturbs the balance of power, unsettles the international order and seeks a place in the sun. This makes it bump up against the established great power of the day (that would be us). So, Sino-U.S. conflict is inevitable.

But some great powers have been like Nazi Germany and others like modern-day Germany and Japan. The United States moved up the global totem pole and replaced Britain as the No. 1 country without a war between the two nations. Conflict and competition—particularly in the economic realm—between China and the United States is inevitable. But whether this turns ugly depends largely on policy choices that will be made in Washington and Beijing over the next decade.

In another Foreign Affairs essay, Princeton's John Ikenberry makes the crucially important point that the current world order is extremely conducive to China's peaceful rise. That order, he argues, is integrated, rule-based, with wide and deep foundations—and there are massive economic benefits for China to work within this system. Meanwhile, nuclear weapons make it suicidal to risk a great-power war. "Today's Western order, in short, is hard to overturn and easy to join," writes Ikenberry.

The Chinese show many signs of understanding these conditions. Their chief strategist, Zheng Bijian, coined the term "peaceful rise" to describe just such an effort on Beijing's part to enter into the existing order rather than overturn it. The Chinese government has tried to educate its public on these issues, releasing a 12-part documentary last year, "The Rise of Great Nations," whose central lesson is that markets and not empire determine the long-run success of a great global power.

But while the conditions exist for peace and cooperation, there are also many factors pointing in the other direction. As China grows in strength, it grows in pride and nationalist feeling—which will be on full display at the Summer Olympic Games. Beijing's mandarin class is convinced that the United States wishes it ill. Washington, meanwhile—sitting atop a unipolar order—is unused to the idea of sharing power or accommodating another great power's interests. Flashpoints like human rights, Taiwan or some unforeseen incident could spiral badly in an atmosphere of mistrust and with domestic constituencies—on both sides—eager to sound tough. Two thousand eight is the year of China. It should also be the year we craft a serious long-term China policy.


http:

//www.newsweek.com/id/81588/page/3



Well Two different countries two different dynamics ,two different philosophies.You can't compare apples with oranges.

Most important of all two different types of governance

 

[Romanch]

had a look at your suggested ranking list and I was rolling on the floor. in your suggested list:

Asiaweek.com | Asia's Best Universities 2000 | Overall Ranking

it is a "Science and Technology Schools" list, which means these "schools" are not even "universities" according to our standard and that is the reason why our dozens of best universities are not on that list at all while stupid second class Chinese universities like Hohai are on that list.

the above list goes on much longer if you want. Now please just ask you a very simple question:

when you see your IIT on that list, where are those best Chinese universities like Peking/Tsinghua/Shanghai Jiaotong/Zhejiang/Nanjing? how that can be possible they are out when Hohai (ranked about 30-40 in China) is there??

because institutions like IIT are not even considered a university in Chinese standard.

Neither do I have the time, nor the motivation to continue with this debate. But there were some things you said which were quite funny -

Of course the IITs are not "universities" because they offer degrees in specific streams and not in a variety of subjects like liberal arts to management.

What is up with "IIT are not even considered a university in Chinese standard"? They are not even considered to be a university by Somalian standards. Who said they are a university in the first place? The concept of 'universities' as such is not very widespread in India. Top technical and management institutes in India operate individually and are not affiliated to any university - for example, IIMs, IITs, ISc Bangalore, ISB Hyderabad, AIIMS etc. are not associated with any university. Therefore, they will never feature in that 'top 100 university' list.

for example, I graduated from Shanghai Jiaotong University which contributed numerous engineers that built China's nuclear bombs, satellites, rockets, spaceships, do you seriously believe Shanghai Jiaotong University has no place on that list? You can count on a single hand on how many universities in Asia have experience in developing above engineering stuff and I can honestly tell you -

1. rockets that is comparable to our 20 years old CZ-2/3.
2. manned spaceship.
3. ICBM
4. data relay satellite
5. navigation satellite

if you want to have more troll, let's have a look on the high tech sector:

1. which is the first Indian university that accomplished the first Indian designed 32bits/64bits general purpose CPU?
2. which is the first Indian university that contributed the first Indian designed core internet backbone router (>40Gbps)?
3. which is the first Indian university that contributed the first Indian designed electrical car?
4. which is the first Indian university that contributed the first Indian design 3g communication standard approved/accepted/commercialized by the mobile industry around the world?

sorry, none of the above engineering stuff is within your current capacity.

Firstly, please tone down the rhetoric. It is very childish... really.

Secondly, in India, government and private agencies are more directly related with research and development rather than universities or other educational institutes as such.

Now for some bragging -

*I'm not aware of the specifications of the Long March series of rockets, but Indian rockets are doing fine. Thank you very much -

PSLV launches 10 satellites, blasts world record

GSLV soars after hiccup- Hindustan Times

Geosynchronous Satellite Launch Vehicle Mk III - Wikipedia, the free encyclopedia

*Manned mission? ISRO has almost everything ready -

http://www.foxnews.com/images/503403/1_21_space1_450.jpg

Talking about space exploration, -

China hasn't landed a probe on moon, but India has -

AFP: India rejoices over moon probe landing

*ICBM? Planned test in 2010

ICBM test to launch India into Big Five - Worldnews.com

*Navigation satellite?

Indian Regional Navigational Satellite System - Wikipedia, the free encyclopedia

*CPUs and what not?

The Hindu : Front Page : Fourth fastest computer in the world

*Electric car?

Reva Electric Car is the highest selling electric car in the world

I could have mentioned more. But seriously, India vs. China debate can go on forever. Besides, I do think highly of China... so chill!

 

[shchinese]

I'm waiting for Mr Shchinese to say Chinaman landed on moon and we americans faked it...

no troll please.

Two greatest men, Neil Armstrong and Buzz Aldrin, landed on the moon 40 years. For me, that is THE GREATEST achievement in human history. Americans (and a lot of crazy Germans) contributed that, together with another amazing invention - computer and the internet.

but yes, we will catch up, we see America as our mid term trouble maker, while Indians are our long term enemies. Since the 17th century, history has proved again and again that superpower is always replaced by another one which has larger population.

 

[praveen]

Trolling only show you were beat, hurt!

Typical Indians mentality, weak!!

Now let see whether you got the balls for a civil debate with facts!!

bring in the facts

What are we going to debate about Environmental issues?Taiwan?about
what.

Adobephotoshopping? about what

 

[grey boy 2]

rpraveenkum; Posting an article dated in 2006 is just incredible!

But thanks for proving it wrong for China, since we are still doing

great in 2009 going on to 2010.

BTW, Where is the bubbles?? Get real man!!:smitten

 

[RPK]

rpraveenkum; Posting an article dated in 2006 is just incredible!

But thanks for proving it wrong for China, since we are still doing

great in 2009 going on to 2010.

BTW, Where is the bubbles?? Get real man!!:smitten

Here you go new one

PARIS, Aug. 17 (UPI) -- Any assessment of China's economic prospects has to begin with the fact that the Beijing political authorities may be the world's best governing elite in terms of their economic record. But they may be running into trouble.

They have proven themselves over the last 30 years to be extraordinarily accomplished, delivering sustained economic growth and higher living standards. The country is now poised to overtake Germany as the world's leading exporter and to overtake Japan as the world's second-largest economy.

China's leaders have combined dazzling economic performance with political stability and so far have negotiated dramatic social change with ruthless skill. All this constitutes an alternative model for other developing nations to the traditional Western form of free market liberal democracy. The Beijing model is authoritarian export-led growth.

The question is whether this model can comfortably continue when its main export markets in North America and Europe have sharply reduced their appetites for Chinese imports.

The other severe challenges for the Beijing authorities are well-known: the shortage of arable land; the even worse shortages of water; the growing dependence on imported energy; an environmental crisis so severe that it has become a major health problem; and the demographic nightmare that will soon result from 30 years of the one-child policy.

All these are sobering difficulties that lie ahead. But the immediate concern must be the vast amounts of credit that have been pumped into the economy. This was Beijing's strategy to escape the global recession. China's economy has experienced what looks to be a recovery during the past six months, with the country on target to meet the 8 percent GDP growth target for 2009 (though statistics in China are notoriously dubious).

The rapid pickup in the economy has been largely a result of a massive increase in state-mandated bank lending. In the first half of the year new loans reached an incredible $1.1 trillion, almost double the total lending for the whole of the previous year. At this rate, China's banks will lend this year around half the country's GDP. This is without precedent, in China or elsewhere.

Most of this has gone to local government-backed entities to help finance their stimulus-related infrastructure projects and to state-owned enterprises, rather than to the usually more productive small and medium-sized private enterprises. Wei Jianing, an official at the State Council's Development and Research Center, said nearly 1.2 trillion yuan of loans are suspected to have been illegally invested in stocks and a lot more is going into speculative residential construction.

A property bubble is forming fast. Analysts at Mitsubishi UFJ Financial Group have reviewed recent land auctions to demonstrate that a square meter of unused land now costs more than the same space in adjacent existing condominiums. So the price of those condominiums is now also soaring, over 10 percent in a month. Large plots in recent big land auctions in Shanghai's Qingpu district and in Beijing's Guangqu Road have gone for more than three times the reserve price, with state-owned enterprises like Sinopec as the buyers.

"The cause of the dominance of the large state enterprises has been their ability to obtain huge levels of finance from the banks, which they have passed onto the real estate companies in their groups," commented MUFG. "Private companies remain at a major disadvantage to state enterprises in terms of access to funding."

There is a lot of anecdotal evidence of completed but empty housing blocks and half-built shopping malls. One recent report, cited by Professor Michael Pettis of Beijing University's Guanghua School of Management, noted "$10 billion of non-performing loans in unfinished or empty apartment blocks in the single city of Guiyang."

But local governments are all in favor of such speculative construction since much of their income comes from land sales. They give 5 percent of the proceeds to the central government and keep the rest.

"The bubble is getting bigger and bigger," warns Alan Chiang, head of mainland Chinese residential property in Shenzhen for property broker DTZ. Veteran Morgan Stanley analyst Andy Xie says: "Chinese stock and property markets have bubbled up again. It was fueled by bank lending and inflation fear. I think that Chinese stocks and properties are 50 percent to 100 percent overvalued. "

A recovery that depends on re-inflating an asset bubble may work in the short term, but it is very risky. Shanghai-based Michael Kurtz, head of China research for Macquarie Securities, warns that it "could exacerbate politically destabilizing wealth disparities, cause misallocation of savings and physical resources, and create the threat of widespread wealth destruction if policymakers misjudge the exit strategy and have to step hard on the brakes."

The China Banking Regulatory Commission is trying to restrain credit, requiring banks to raise their bad-loan reserve ratio to 150 percent at the end of the year, forcing the lenders to set aside more funds. It may be too late. Agricultural Bank of China, one of the Big Four state lenders, could need an additional 247.9 billion yuan for loan losses, 378 percent of its pre-tax profit last year, according to the Fitch ratings agency.

On top of all this, wage inflation in China has been significantly higher than other countries (15 percent over the last 18 months compared with 2.4 percent in Brazil, for example).

But then politics is deeply involved. The infighting is well under way for the post of President Hu Jintao's successor in 2012, and he very much wants to protect his legacy by ensuring that his supporters form a majority of the future politburo. So this is no time to turn in a bad economic report. By hook or by crook, Beijing may be expected to meet its self-imposed target of 8 percent annual growth -- even if the consequent bubble defers the need to tackle China's other looming problems.


Walker's World: The China bubble - UPI.com

Please do some googling called China Bubble!

 

[praveen]

rpraveenkum; Posting an article dated in 2006 is just incredible!

But thanks for proving it wrong for China, since we are still doing

great in 2009 going on to 2010.

BTW, Where is the bubbles?? Get real man!!:smitten

I see a bubble right now

But thanks for proving it wrong for China, since we are still doing

great in 2009 going on to 2010.

FEATURE PRINT | TEXT SIZE | EMAIL | SINGLE PAGE
The China Bubble's Coming -- But Not the One You Think
Forget about a Shanghai stock bubble. The whole Chinese economy's getting ready to burst.
BY VITALIY KATSENELSON | JULY 23, 2009


Financial commentators are obsessively debating whether the recent rise in the Chinese stock market means there's a bubble -- and if so, when it's going to burst.

My take? Who cares! What happens to the broader Chinese economy is what we should really be watching. It will have a far-reaching impact on the rest of the world -- much more far-reaching than a decline in stocks.

COMMENTS (7) SHARE:
Digg

Facebook

Reddit

Bookmark and Share More...

Despite everything, the Chinese economy has shown incredible resilience recently. Although its biggest customers -- the United States and Europe -- are struggling (to say the least) and its exports are down more than 20 percent, China is still spitting out economic growth numbers as if there weren't a worry in the world. The most recent estimate put annual growth at nearly 8 percent.

Is the Chinese economy operating in a different economic reality? Will it continue to grow, no matter what the global economy is doing?

The answer to both questions is no. China's fortunes over the past decade are reminiscent of Lucent Technologies in the 1990s. Lucent sold computer equipment to dot-coms. At first, its growth was natural, the result of selling goods to traditional, cash-generating companies. After opportunities with cash-generating customers dried out, it moved to start-ups -- and its growth became slightly artificial. These dot-coms were able to buy Lucent's equipment only by raising money through private equity and equity markets, since their business models didn't factor in the necessity of cash-flow generation.

Funds to buy Lucent's equipment quickly dried up, and its growth should have decelerated or declined. Instead, Lucent offered its own financing to dot-coms by borrowing and lending money on the cheap to finance the purchase of its own equipment. This worked well enough, until it came time to pay back the loans.

The United States, of course, isn't a dot-com. But a great portion of its growth came from borrowing Chinese money to buy Chinese goods, which means that Chinese growth was dependent on that very same borrowing.

Now the United States and the rest of the world is retrenching, corporations are slashing their spending, and consumers are closing their pocket books. This means that the consumption of Chinese goods is on the decline. And this is where the dot-com analogy breaks down. Unlike Lucent, China has nuclear weapons. It can print money at will and can simply order its banks to lend. It is a communist command economy, after all. Lucent is now a $2 stock. China won't go down that easily.

The Chinese central bank has a significant advantage over the U.S. Federal Reserve. Chairman Ben Bernanke and his cohort may print a lot of money (and they did), but there's almost nothing they can do to speed the velocity of money. They simply cannot force banks to lend without nationalizing them (and only the government-sponsored enterprises have been nationalized). They also cannot force corporations and consumers to spend. Since China isn't a democracy, it doesn't suffer these problems.

China's communist government owns a large part of the money-creation and money-spending apparatus. Money supply therefore shot up 28.5 percent in June. Since it controls the banks, it can force them to lend, which it has also done.

Finally, China can force government-owned corporate entities to borrow and spend, and spend quickly itself. This isn't some slow-moving, touchy-feely democracy. If the Chinese government decides to build a highway, it simply draws a straight line on the map. Any obstacle -- like a hospital, a school, or a Politburo member's house -- can become a casualty of the greater good. (Okay -- maybe not the Politburo member's house).

Although China can't control consumer spending, the consumer is a comparatively small part of its economy. Plus, currency control diminishes the consumer's buying power. All of this makes the United States' TARP plans look like child's play. If China wants to stimulate the economy, it does so -- and fast. That's why the country is producing such robust economic numbers.

Why is China doing this? It doesn't have the kind of social safety net one sees in the developed world, so it needs to keep its economy going at any cost. Millions of people have migrated to its cities, and now they're hungry and unemployed. People without food or work tend to riot. To keep that from happening, the government is more than willing to artificially stimulate the economy, in the hopes of buying time until the global system stabilizes. It's literally forcing banks to lend -- which will create a huge pile of horrible loans on top of the ones they've originated over the last decade.

But don't confuse fast growth with sustainable growth. Much of China's growth over the past decade has come from lending to the United States. The country suffers from real overcapacity. And now growth comes from borrowing -- and hundreds of billion-dollar decisions made on the fly don't inspire a lot of confidence. For example, a nearly completed, 13-story building in Shanghai collapsed in June due to the poor quality of its construction.

This growth will result in a huge pile of bad debt -- as forced lending is bad lending. The list of negative consequences is very long, but the bottom line is simple: There is no miracle in the Chinese miracle growth, and China will pay a price. The only question is when and how much.

Another casualty of what's taking place in China is the U.S. interest rate. China sold goods to the United States and received dollars in exchange. If China were to follow the natural order of things, it would have converted those dollars to renminbi (that is, sell dollars and buy renminbi). The dollar would have declined and renminbi would have risen. But this would have made Chinese goods more expensive in dollars -- making Chinese products less price-competitive. China would have exported less, and its economy would have grown at a much slower rate.

But China chose a different route. Instead of exchanging dollars back into renminbi and thus driving the dollar down and the renminbi up -- the natural order of things -- China parked its money in the dollar by buying Treasurys. It artificially propped up the dollar. And now, China is sitting on 2.2 trillion of them.

Now, China needs to stimulate its economy. It's facing a very delicate situation indeed: It needs the money internally to finance its continued growth. However, if it were to sell dollar-denominated treasuries, several bad things would happen. Its currency would skyrocket -- meaning the loss of its competitive low-cost-producer edge. Or, U.S. interest rates would go up dramatically -- not good for its biggest customer, and therefore not good for China.

This is why China is desperately trying to figure out how to withdraw its funds from the dollar without driving it down -- not an easy feat.

And the U.S. government isn't helping: It's printing money and issuing Treasurys at a fast clip, and needs somebody to keep buying them. If China reduces or halts its buying, the United States may be looking at high interest rates, with or without inflation. (The latter scenario is most worrying.)

All in all, this spells trouble -- a big, big Chinese bubble. Identifying such bubbles is a lot easier than timing their collapse. But as we've recently learned, you can defy the laws of financial gravity for only so long. Put simply, mean reversion is a *****. And the longer excesses persist, the harder the financial gravity will bring China's economy back to Earth.

The China Bubble&#039;s Coming -- But Not the One You Think | Foreign Policy

This is from the prestigious foreign policy magazine

All the chinese stimulus package money is spent on speculative purposes

 

[shchinese]

I could have mentioned more. But seriously, India vs. China debate can go on forever. Besides, I do think highly of China... so chill!

you didn't mention anything useful.planned is nothing. we even have planned mars landing. you know, on books. show me something real please.

india never had any moon landing, by saying landing, it means soft landing in which your devices can survive the landing and keep working afterward. india's moon probe crashed onto the moon surface, same as the Chinese/Japanese moon probe.


big differneces between Indians and Chinese:

1. Chinese never showing off their stuff until everything is ready and more advanced stuff is in the pipeline. Indians start their "demonstrations" even when they don't have anything on hand.

2. Chinese are in general more honest and serious about science and engineering, e.g. moon landing and crashing have very clear definition in our minds.

btw, a top10 ranking supercomputer using Intel's processor and infiniband inter-connections is nothing, we are talking about 64bit multi-core processor general purpose processors. it is about 10 times more complicated than building a intel cluster, e.g. China's current top 1 (10th on the top500) "supercomputer" is built by engineers who never had any serious experience on "supercomputing" and it took them 6 months to build the system. however, the next generation will be built using China's own multi-core processors in 2 years and I have friends who have already spent 10 years on that project and they have already had their quad-core chips ready for commercial trials. this is very different.

 

[praveen]

IF the CCP had gone the democratic way in 1998-2000 period China could have truly become a superpower but not now.The was the time the economy was galloping and it was the right time