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  #61  
Old 30.06.2011, 16:20
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Re: China, India, U.S. and future of global economy

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Actually he might be right. The Chinese have a system for dealing with NPL's, which typically range from 40% to 60% of loans at the end of the lending cycle. Then the government entity in charge of buying these loans basically give the real estate away for 20c on the $. That means you have a $40,000 apartment that cost them $200k to build. The government directs this toward having full occupancy.

Quality is an issue, but so is the loan book.
That's what some experts argue who think the property bubble in China is "only" a price bubble, with little effect on the real economy, and is certainly a widely held position. I disagree for the following reasons:
Currently the rents for appartments are so low in relation to property/construction prices that owners leave their units vacant for months, sometimes years, simply because depreciation of said units would be higher than rental income. But even the rent of these units is too high for the population segment where the largest demand comes from, and they have to live further and further away from the center or their workplace. So I don't think that a burst of the price bubble will automatically realign the market and a lead to a better match of supply and demand, or rather only to a smaller extent.
There is, in my opinion, demand for cheap housing that cannot be met by lower prices of existing properties alone, and therefore housing construction, subsidized or not, could continue even after a burst as urbanisation will continue either way.

edit: Re: Food. This is my opinion of the food in Shanghai after having spent a couple of months there, apologies if you disagree or you're offended by it, it's just the general opinion I picked up while living there. I still insist that food found in the coastal regions of the South (that includes Shanghai in the Chinese understanding) pales in comparison to most other Asian cusines but that is my purely subjective opinion.

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Old 30.06.2011, 16:36
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Re: China, India, U.S. and future of global economy

I once met a Chinese business man resident in Spain who told me that what China has today - communism combined with capitalism, it's the worse thing ever. Should we not finished those bottles of wine, I could have get more info on that.
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Old 30.06.2011, 16:36
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Re: China, India, U.S. and future of global economy

Here's a nice goodbye round-up reporting China from NPR's Rob Gifford- he is moving form NPR to the Economist.

Just aside- Sarkozy has just been tackled to the ground.

China's Growing Reach Spans Continents


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n terms of the second point, corruption is a problem here, no doubt about it. It's one of the biggest problems here, and the government knows it. What can you do in a one-party state? It's going to be one of the biggest problems. I mean, there's corruption, of course, all over, in places where it's not a one-party state. It's a problem in the developing world.

But in China, when you don't allow checks and balances, where you don't have any kind of oversight, independent oversight of officials, you know, it's relatively easy for them to skim things off, take containers, whatever it is that this gentleman has had problems with.

And the thing is, at the moment, the economy is booming so much that so many people are benefitting that they can get away with it. It's only when the economy stalls - people will put up with a lot of corruption, as long as their life is getting a little bit better here in China.

It's only when the economy stalls, and there are real problems, and people are losing money - for instance, like in Indonesia in the late 1990s, people put up with President Suharto for a long time. As soon as they were being hit by the corruption, by the economic downturn, they were no longer to put up - able to put up with him, and he was overthrown. So corruption could be a key thing here in China.
http://www.npr.org/2011/06/27/137451...ans-continents
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Old 30.06.2011, 16:40
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Re: China, India, U.S. and future of global economy

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I have to disagree with you there, you have a huge demand for property in China, but it is very segmented, and even with a burst in property prices the lower middle-class and workers from the provinces won't be able to afford most of the vacant property, these appartments are simply too spacious and expensive in the upkeep.
To my knowledge, that demand is underpinned by reasonably wealthy domestic individuals who want to have a property portfolio for their retirement, i.e. they are not planning to keep it or even rent it out, they are planning to sell it with a good profit. If the prices start to flatten, many will put them up for sale because they want to cash in their profits, and some because they need access to their savings (that massive peak of Chinese population pyramid is in their fifties now). As you mention, the apartments are actually not that practical to live in, so at some stage the prices will start coming down because there are more people in dire need of their retirement money than people buying the sort of apartment the retirees sell. When the prices have fallen enough to reach a level where renting them out - to a villageful of people, if necessary - generates decent returns, buy-to-let investors will buy them, but at a much, much discounted price. -Well, this is the way it went on both occasions when I was following a major housing crash from a close distance, anyway. Of course, it is always possible that "this time is different" :-)


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Due to poor construction standards my guess is that a lot of these vacant buildings will simply be torn down again, with a big markdown for the speculators.
I agree, many of them will be torn down, but not until the price collapse is well underway, or maybe not until 20-30 years from now.

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There is still a massive aggregate demand for cheap housing in China, but due to several reasons in the local investment and property market building them is simply unattractive for the private sector so far, as they make so much more cash with better apts., even if they eventually remain vacant they are still being sold!
Whenever there is an abundance of empty apartments, the situation is not sustainable, and implies that the prices will come violently down. However, notice that I am not claiming to know when this happens - the earlier prediction of 12 months might be correct, but then again, it might be off by five years, or ten.

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True, but transportation and extraction cost of these commodities is a big enough factor to allow for a lasting competitive advantage I think, even if more players enter the market.
The further AUD appreciates, the higher the labor costs of those executive-salaried miners will rise, though. However, I must mention that I failed to make myself clear earlier - the Australians will not lose the advantage of world-class mining infrastructure in a year or two, maybe not even in a decade. My guess is that they will be hit by the Chinese collapse first and by increased competition later, possibly much later. But of course I do not have the gift of clairvoyance, so I'll just have to grab the popcorn and wait what happens.
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  #65  
Old 30.06.2011, 17:20
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Re: China, India, U.S. and future of global economy

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I totally agree. China for me is a ticking time bomb and could soon go the Russian way. You cannot oppress 1.3 billion people for a long time.
Chinese have always been oppressed. That is, living under some form of dictatorship.

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Some Chinese I know can't afford to return because of the one-child policy. I understand the reasoning behind the one-child policy in the short-term, but wonder how this will work out long-term economically with one child to support 4 aging grandparents. Or the fact that there will be an over-abundance of men.
Words like "brother" and "sister" fall into disuse also.

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The entire economy of Australia will collapse in the next 12 months my friend. China is set to implode, iron ore prices will likely collapses and the AUD had daily, weekly, and monthly dmark counts on it.

This is a replay of Australia 1990... Remember? Like when everyone in Double Bay and Balmain wanted their children to learn Japanese? Then Oz went into the biggest recession its ever seen and the government debased the currency. Anytime an Asian country accounts for 30% of Aussie exports it has always signaled the top in the market for Oz. China is now at 30% of exports. Or is it different this time?

India has plenty of Iron Ore in Orissa. They could boost coking coal demand, but it wont cover a China drop in demand.
Not to say that you are wrong, but correlation is not the same as causation, though in economics it's often used that way. Can you "prove" that assertion?

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Iran has a great demographic back-drop, while China is elderly...... Id put my money in Iran any day. They have the best performing stock market in USD terms for the last 2 years running.
What is the symbol for the Iran stock market ETF?
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  #66  
Old 30.06.2011, 17:31
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Re: China, India, U.S. and future of global economy

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Not to say that you are wrong, but correlation is not the same as causation, though in economics it's often used that way. Can you "prove" that assertion?


What is the symbol for the Iran stock market ETF?
The chart of Aussie house prices is the exact same as that of copper/iron ore.... If China were to drop FIA by 10% that would correlate to a 30% drop in Aussie exports of raw materials to China. Last time that happend was 1990 when Japan fell ill.

ETF? This is Iran mate. I have the index values but the TEPIXD isnt a western investment. Trades at a PE of 7 and a dividend yield of about 12. Physical investment returns about 40% on invested capital, with no leverage. The problem is that interest rates are very high in USD terms (8 to15%) so any investment needs to throw off lots of cash to attract investment (unlike these PE wankers in the West who try to borrow at 5% to buy a company that returns 6.2%)....

I can try to put a chart of the index together for you if your keen. But no ETf that I know of.
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Old 30.06.2011, 18:59
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Re: China, India, U.S. and future of global economy

We're going way off topic now...

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The chart of Aussie house prices is the exact same as that of copper/iron ore.... If China were to drop FIA by 10% that would correlate to a 30% drop in Aussie exports of raw materials to China. Last time that happend was 1990 when Japan fell ill.
Fair enough. Oz is in a bear market at the moment anyway.

http://www.stock2own.com/S2OPro_Indu...ner.aspx?cc=AU

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ETF? This is Iran mate. I have the index values but the TEPIXD isnt a western investment. Trades at a PE of 7 and a dividend yield of about 12. Physical investment returns about 40% on invested capital, with no leverage. The problem is that interest rates are very high in USD terms (8 to15%) so any investment needs to throw off lots of cash to attract investment (unlike these PE wankers in the West who try to borrow at 5% to buy a company that returns 6.2%)....
The ETF remark was kind of tongue in cheek.

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I can try to put a chart of the index together for you if your keen. But no ETf that I know of.
No need to go to all that effort to make a chart. I was interested how to maybe buy in as a retail investor.

Last edited by BeastOfBodmin; 30.06.2011 at 19:00. Reason: Added "We're going way off topic now...2
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  #68  
Old 30.06.2011, 23:20
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Re: China, India, U.S. and future of global economy

Short article on China's military aims in the South China Sea...they want a blue water Navy and at least 2 aircraft carriers from what I read before, so they can push America out of the South China Sea and back to Okinawa, North of Taiwan...

http://www.foreignpolicy.com/article...reams?page=0,1

they are developing the world's first anti-ship ballistic missiles to do it.
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Old 01.07.2011, 02:12
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Re: China, India, U.S. and future of global economy

As an Indian, I would not like to see my country being called a super power, and I don't believe we will ever be one . It simply is not our priority.

I just would like to see a corruption free India.
I just would like to see India bring her people out of the poverty line.
I just would like to see India resolving her border disputes with its neighbours China and Pakistan in the near future.
I just would like to see India shed her paper democracy and embrace the real democracy ( we have to look up to United States in this respect - the only real free nation ).
I would just like to see an India without the caste system.

I hope to live untill that day :-).
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Old 01.07.2011, 09:43
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Re: China, India, U.S. and future of global economy

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I just would like to see India shed her paper democracy and embrace the real democracy ( we have to look up to United States in this respect - the only real free nation ).
I felt tempted to thank your post until I read this. Care to elaborate on that point? The US certainly doesn't rank on the top in either economic or social/individual freedom.

http://www.stateofworldliberty.org/report/rankings.html

As always, these rankings have to be taken with a grain of salt, but I wonder why you only consider the US a free country.
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Old 01.07.2011, 10:37
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Re: China, India, U.S. and future of global economy

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As an Indian, I would not like to see my country being called a super power, and I don't believe we will ever be one . It simply is not our priority.

I just would like to see a corruption free India.
I just would like to see India bring her people out of the poverty line.
I just would like to see India resolving her border disputes with its neighbours China and Pakistan in the near future.
I just would like to see India shed her paper democracy and embrace the real democracy ( we have to look up to United States in this respect - the only real free nation ).
I would just like to see an India without the caste system.

I hope to live untill that day :-).
I like the good wills you demonstrated in your wishes, however I don't know how US can be seen as the poster boy of democracy - All democratic systems we have now in this world are representative democracy, meaning people have 3 seconds of say to decide who will govern them, then be enslaved for N years until the next 3 seconds come; Even within this seriously handicapped form, the US model is probably not the better ones. The more you look at their election system and their international behavior, the less you will have trust in it.
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Old 01.07.2011, 10:40
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Re: China, India, U.S. and future of global economy

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Short article on China's military aims in the South China Sea...they want a blue water Navy and at least 2 aircraft carriers from what I read before, so they can push America out of the South China Sea and back to Okinawa, North of Taiwan...

http://www.foreignpolicy.com/article...reams?page=0,1

they are developing the world's first anti-ship ballistic missiles to do it.

They now also have this



Asia Pacific will definitely have some major shake ups in the decades to come.
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Old 01.07.2011, 11:03
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Re: China, India, U.S. and future of global economy

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They now also have this

Asia Pacific will definitely have some major shake ups in the decades to come.
Yes, but I am not sure if that won't lead to a further isolation of China.
Look at China's ridiculous position in its sea claims:


And it's not just a theoretical claim either, China has war ships patrolling the area and increasingly often provokes incidents 1'500km off its coast. So much for peaceful rise and harmonious cooperation.
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Old 01.07.2011, 11:53
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Re: China, India, U.S. and future of global economy

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The ones who don't want to return home are not the university educated ones, but the poor. Working as a cleaner in Switzerland is probably not the most comfortable life, but you have enough to eat, a place to live and can send the kids to a school. Not the case in poor countries. Most Arabs in Europe are more on the latter side, definitely not scholars. Why would they want to go home?
Culture also come into it. Most Arabs I know attach great importance to their culture and are both proud and defensive of it. They see themselves as being part of something bigger than themselves and try to serve that in some way, sometimes putting this before their own financial gain. Chinese are less like that and more interested in their personal progress and don't have a problem if they shed their Chinese identity in the progress of integration, somthing an Arab is much less likely to do.

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Old 01.07.2011, 12:13
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Re: China, India, U.S. and future of global economy

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...we have to look up to United States in this respect - the only real free nation
I also have to disagree with this statement. For one thing, if the US truly was a democracy, then Bush never would have taken office, since it was Al Gore who won the popular vote.

Sudhasus... I do sincerely hope that your dreams for India come true -- especially the break-down of the caste system.
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Old 01.07.2011, 12:16
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Re: China, India, U.S. and future of global economy

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I also have to disagree with this statement. For one thing, if the US truly was a democracy, then Bush never would have taken office, since it was Al Gore who won the popular vote.

Sudhasus... I do sincerely hope that your dreams for India come true -- especially the break-down of the caste system.
I don't think, that there are any true democracies left....companies have been running countries for a while now.
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Old 01.07.2011, 12:45
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Re: China, India, U.S. and future of global economy

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I felt tempted to thank your post until I read this. Care to elaborate on that point? The US certainly doesn't rank on the top in either economic or social/individual freedom.

http://www.stateofworldliberty.org/report/rankings.html

As always, these rankings have to be taken with a grain of salt, but I wonder why you only consider the US a free country.

Welll.. I checked your list.
1 Estonia 85.25 79.63 8 76.26 6 99.86 5 2 Ireland 83.34 82.25 3 67.81 16 99.95 2 3 Canada 82.34 79.38 9 68.06 15 99.59 9 4 Switzerland 82.33 79.88 7 67.16 18 99.95 2 5 Iceland 82.27 79.25 10 67.61 17 99.95 2 6 Bahamas 82.12 67.75 31 81.17 2 100.00* 1 7 United Kingdom 81.96 81.25 5 65.10 22 99.53 11 8 United States 81.96 80.50 6 66.24 20 99.13 19

Seriously, I dont see any other country in the above accepting & integrating immigrants / skilled workers except Canada , UK and US.

I dont like monarchy ( even if its just on paper)..so rule out Canada and UK..

Leaves out US.
US is a country of immigrants and where people like me would feel most welcome.

Or maybe its just my percpetion ( coming out of my stay in the US ), I consider US to be the land of oppurtunities.
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Old 04.07.2011, 15:34
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Re: China, India, U.S. and future of global economy

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Seriously, I dont see any other country in the above accepting & integrating immigrants / skilled workers except Canada , UK and US.
Or maybe its just my percpetion ( coming out of my stay in the US ), I consider US to be the land of oppurtunities.
I think you will find that all these countries have a much higher % of (recent) immigrants than the US, where the naturalisation rate is actually fairly low.

But a recent article about China about the huge demand for low cost housing:
http://europe.chinadaily.com.cn/busi...t_12828283.htm
What's interesting for those unaware how expensive housing has become in China:
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According to Zhou, the price of the affordable houses is expected to be 3,500 yuan ($541) per square meter, while the average price of real estate in the city was 7,299 yuan per sq m in June.
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Old 19.01.2016, 10:22
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Re: China, India, U.S. and future of global economy

It's time for Africa, Europe or other continents?

China economic growth slowest in 25 years
http://www.bbc.co.uk/news/business-35349576
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