Will China go down with developing economies of South East Asia?

[Shotgunner51]

India is shining like solar fusion. Wear sunglasses.

LOL ...

YOU ARE WRONG.
India now is growing at 25%!
Indian economy can double in three years: Suresh Prabhu - The Economic Times

25%!!!? .... Wow incredible!

 

[TaiShang]

Recently, a statue of a bull riding on a lying bear was found in front of a gallery in Xiamen, East China’s Fujian province.

6.1 meters in length and 3.4 meters in height, the bronze statue weighs 3 tons. The owner of it has confirmed that the statue wishes for a triumph of bull market over bear market.

Many stock buyers come from afar to light incense in front of the statue.

In the meantime, many netizens squeeze an odd smile at it.

“Am I the only one who’s being evil here? The position is classic.” one commented.

“Does this have anything to do with procreation worship?” another asked.

Stock Buyers Worship Statue of Bull over Bear in Xiamen - People's Daily Online

 

[Götterdämmerung]

US is the richest nation in the history of planet earth and the most technologically advanced. It did that by letting markets decide the prices of goods and services.

The fabulously working Soviet economy which didn't believe in market forces and thought a few men in the government knows what millions of producers and consumers should pay each other and how much output to produce. That's why Soviet brands dominated the world economy.

China abandoned the Soviet model in 1978 in favour of markets.

I'm not saying there is no role for the government but the biggest problem in the Chinese economy is there is not enough market forces determining the prices of goods and services. The state owned banks are not lending to SMEs. There is no competition in the financial industry in China. The financial sector is supposed to support the real economy but the Chinese financial system is dominated by state owned banks and the stock and bond market plays a small role in helping SMEs raise funds. Even private banks are a rarity. This means SMEs are starved of funding for their operations. They are at a disadvantage when competing with global companies.

What a shallow understanding of the economic development of the US.

The US economy was at its best for most Americans when it was less free and more regulated. Not to forget that the US had the tools to exploit the Banana Republics by means of blackmail, threat and outright murder of head of states in many parts of the world if they don't bent to US economic demands.

Regardless how big the US economy was, it never surpassed the living standard of social economies of the northern Europeans. But ever since the "free" capitalistic fever infected Europe, we, too, experience social decline and economic stagnation.

 

[tranquilium]

Hi Chinese friends,

I am worried. Since devaluation of your currency USD/INR went up from 63.36 to 66.64 . EUR/INR 69.70 to 77.43.

I am scared . In spite of strong economic result , (IIP growth four month high @3.85% , strong FDI , huge forex reserve) why is ruppe taking the hit?

China please do something.Today our index SENSEX lost over 1600 point in a single day. Wall street is bloody. Is this another 2007/2008?

And how come EURO with a sham economy is strengthening against all currency and not taking a hit?

About one month ago, CCTV-1 reported after briefly boosting SHA back to 4000 point, the central government considers the effort sufficient. At the time I have wrote the piece of new is essentially the central government letting small accounts make a graceful exit, anyone who stayed afterward has no one to blame but themselves. (Not that they really have any ground to blame in the first place, but it is government's job dealing with unreasonable people) I have also predicted SHA will go down to 2500s eventually and it looks to be going that way.

Look, stock market has a pattern and what goes down will come back down to a more manageable level, especially in a country like China where the central government has a lot of tools making adjustment to the market. Stock market boom is also not that good in reality. Sure, people can make a quick buck there, but as long as long term economy goes, a stable stock market is a lot more desirable than a booming one.

I am not sure how Rupee comes into all of this though.

 

[tranquilium]

US is the richest nation in the history of planet earth and the most technologically advanced. It did that by letting markets decide the prices of goods and services.

The fabulously working Soviet economy which didn't believe in market forces and thought a few men in the government knows what millions of producers and consumers should pay each other and how much output to produce. That's why Soviet brands dominated the world economy.

China abandoned the Soviet model in 1978 in favour of markets.

I'm not saying there is no role for the government but the biggest problem in the Chinese economy is there is not enough market forces determining the prices of goods and services. The state owned banks are not lending to SMEs. There is no competition in the financial industry in China. The financial sector is supposed to support the real economy but the Chinese financial system is dominated by state owned banks and the stock and bond market plays a small role in helping SMEs raise funds. Even private banks are a rarity. This means SMEs are starved of funding for their operations. They are at a disadvantage when competing with global companies.

No it isn't. Complete free market economy died by the time 20th century rolled around because people discovered it is a lot closer to anarchism. It also sucked very badly for anything that requires large group effort and coordination, such as modern infrastructure building or war. Most modern day economy is a mixture of both socialist and capitalist economic models.

US' economic success has several historical reason. The biggest one is geography. Like China, US is a nation with greater than 9 million square km of territory and unlike Brazil or Australia, it actually have a lot of fertile land. No offense to Brazilians, but their piece of real estate really isn't the most hospitable place on earth. While the rain forest produce some nature resources, both the output and sustainability is very poor comparing to forest lands in temperate regions. Temperate region forest also becomes decent farm lands after deforestation and it is easy to replant the forest too. The same can't be said about rain forests. Myself was only made aware of this recently, which goes a long way to explain why it is actually Argentina instead of Brazil that flourished in the 50s.

The ocean barrier also meant than the rest of the world setting itself on flame in the two world wars, US received A LOT of capital and technological transfer in form of people fleeing to its safety. Much of US' modern infrastructure is actually constructed when the Federation government has more control. Among engineers, one of the most talked problems today is that after the federal government gradually losing control of the economic, US infrastructure has been slow crumbling instead of improving like many "free market" enthusiasts like to claim.

USSR's problem was never that they don't believe in market force. On the contrary, USSR has a very thorough understanding of economy. (This may be a surprise for a lot of people. Stalin was actually quite proficient at economy and understand both theory and applications very well. Though in retrospect this is not that surprising, this is actually the man who propelled USSR from an agrarian nation to one of the most powerful industrialized nation in the world.) USSR's later day economic problem is the result of several factors:

1. Military overspending: By 80s, USSR has no major allies with US, Europe and China all cooperating to contain USSR. Towards the end of USSR days, a quarter of its GDP is devoted to the defense sector. In comparison, modern US is feeling the strain of military spending and it only devote between 3% to 4% of its GDP to military. Countries like China actually spend only about 1% of its GDP in military spending. This means percentage wise, in one year USSR would spend about two decade worth of military spending of modern day China.

2. Political chaos: After Brezhnev, USSR went through two other leaders very quickly. Historically, any nation would spend its first few decades sorting out leadership and succession chaos. If the nation managed to successfully establish a clean method of leadership transfer in these years, it will go on to last for quite a while. If it fails, then the nation will disintegrate quickly. In modern day China, this can be observed from the rather chaotic transition from Mao Zedong to Hua Guofeng and to Deng Xiaoping. Then The transition from Deng to Jiang is much smoother and Jiang to Hu is smoother still. By the time Xi comes along, Chinese leadership transition has already established a stable and smooth process. US leadership transition is the same thing. The early day of US presidential succession consists of a lot of political struggle, but after a century, the process becomes stable. USSR never managed to reach a stable method of leadership transition and disintegrated as the result. Frankly, this is a way bigger factor in the disintegration of USSR than all other factors combined.

3. Other miscellaneous factors: While we likely to blame Gorbachev's poor decision, the truth is, comparing to the 2nd factor, Gorbachev's blunders are not that significant.

 

[opruh]

China is just restructuring the economy, the end result will be a stronger and better China.

 

[ebony&ivory]

China needs to continue the purge of corruption for 5 years while moving manufacturing plants inland, move up the value chain with innovation & efficiency and build up better human capital in the ruling class.

 

[TaiShang]

The attached map purports to show countries in a scale according to their market capitalization.

Perhaps China's diminutive size on this map reflects the country's continued (relative) lack of integration into the international capitalist market - in other words, unlike the US and Japan, the capitalist market has yet to penetrate every nook and cranny of Chinese society. Not yet, anyway.

 

[mike2000 is back]

View attachment 250271

The attached map purports to show countries in a scale according to their market capitalization.

Perhaps China's diminutive size on this map reflects the country's continued (relative) lack of integration into the international capitalist market - in other words, unlike the US and Japan, the capitalist market has yet to penetrate every nook and cranny of Chinese society. Not yet, anyway.

Damn the Japanese have a slightly larger market cap than us.@nihonji. Bronze medal still not bad though for such a "small" island.

lets wait and see by next year how things unfold. Think last year we were ahead of Japan.

WTF?? U.S Figure is like more than all the world combined? Jesus christ....

 

[Economic superpower]

What a shallow understanding of the economic development of the US.

The US economy was at its best for most Americans when it was less free and more regulated. Not to forget that the US had the tools to exploit the Banana Republics by means of blackmail, threat and outright murder of head of states in many parts of the world if they don't bent to US economic demands.

Regardless how big the US economy was, it never surpassed the living standard of social economies of the northern Europeans. But ever since the "free" capitalistic fever infected Europe, we, too, experience social decline and economic stagnation.

The United States of America is the richest nation in the history of the world. They achieved that through market forces, not government-led economy.

More technological progress took place in the US in a few decades than what other countries achieved in millennia. It is because of the role of the market which allowed the US to become the richest and by far the most powerful country in the world only 100-120 years since its independence. Pretty much every major technology you use today is due to American technological progress which was because of its market economy where producers and consumers were left alone to decide on prices and output and not forced by the government.

Soviet Union was an economic joke compared to the US economy. They never posed even a challenge to the US economically or financially. It's economic failure was the reason it collapsed. Government-run economies are a flawed concept. That's why West Germany thrived while East Germany failed. That's why South Korea thrived while North Koeea failed. Deng realised the path China was headed was flawed and decided to move towards a market economy.

There is no such thing as 100% free market as there is a role for the government but to think that government-run economies are superior to Ma rket-based economies are beyond laughable.

China needs to reform its economy because the government is the biggest obstacle to China's economic, financial and technological progress.

China's state-owned companies are nearly always making losses while private companies are making profits.

The most vibrant sector in China is the Internet sector which is free of state-owned companies.

State-owned companies are big but they show very little innovation. Private companies are innovative as they must be innovative to survive as there are so many of them and they must come up with something special to thrive.

 

[INDIAISM]

US is the richest nation in the history of planet earthand the most technologically advanced. It did that by letting markets decide the prices of goods and services.

The fabulously working Soviet economy which didn't believe in market forces and thought a few men in the government knows what millions of producers and consumers should pay each other and how much output to produce. That's why Soviet brands dominated the world economy.

China abandoned the Soviet model in 1978 in favour of markets.

I'm not saying there is no role for the government but the biggest problem in the Chinese economy is there is not enough market forces determining the prices of goods and services. The state owned banks are not lending to SMEs. There is no competition in the financial industry in China. The financial sector is supposed to support the real economy but the Chinese financial system is dominated by state owned banks and the stock and bond market plays a small role in helping SMEs raise funds. Even private banks are a rarity. This means SMEs are starved of funding for their operations. They are at a disadvantage when competing with global companies.

It looks like you were used to bunking your history classes....