China

Could there be a China crisis? Has the China's economy really survived the global financial crisis?

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Originally published by QFINANCE

By political commentator Ian Fraser

Last year very few commentators saw a doomsday scanario developing for the Middle Kingdom. These few included some lonely hedge fund managers such as Eclectica's Hugh Hendry and Kynikos's Jim Chanos. The country’s property bubble, troublesome banking sector and credit tide caused the most concern.

The China-bashers were given a pause for thought when second quarter data showed that China's economy grew at 9.5% in the second quarter -- meaning its economic engine has shown unexpected consistency over the past 12 months. However, wrapped up in the figures were warning signs, including that consumer price inflation reached 6.4% for the year to June. And, as The Economist pointed out, despite a state-sponsored slowdown on bank lending, overall credit availability has actually increased thanks to increased use of "social financing", including corporate bonds and some loans repackaged by “trust” companies. The Economist said:

"China seems to be getting less bang for its financial buck. In 2007, Fitch reckons, it took 1.28 yuan of extra financing to produce an additional yuan of GDP. Now it takes 2.38. China’s growth may be remarkably even. But its financial system is having to pump harder to maintain the pace."

It's fair to say scepticisim about China, its post-crisis success and the nature of its economic miracle has been growing in recent weeks.

China's Five Year Plan

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12_5_year.jpgDid you know China has a five year plan? They do and it's a doozy according to a U.S. – China Economic and Security Review Commission. Yup, China has a strategy in play and it's on Indigenous Innovation and Technology Transfers, and Outsourcing. From the opening statement:

Since 1953, the Communist Party of China has used a series of five-year plans to guide China’s economic and social development. In its newly-adopted 12th Five-Year Plan China makes clear that it hopes to move up the manufacturing value chain by making explicit mention of Strategic Emerging Industries, which the Chinese government would like to see dominated by Chinese firms. These industries are: New-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars, energy conservation and environmental protection, alternative energy, and biotechnology. China’s goal is to take the Strategic Emerging Industries from a current combined share of 3% of Chinese GDP to 8% by 2015 and 15% by 2020.

Anyone name America's 5 year plan? Beyond destroying the U.S. middle class and American workforce, can anyone even think of one? China, on the other hand, is methodically going about dominating a host of advanced technology industries and capturing our jobs in that process.

Friday Movie Night - Interview with U.S.-China Economic & Security Review Commissioner

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hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

If you haven't heard of the U.S.-China Economic and Security Review Commission you should. If you care about our massive trade deficit and U.S. jobs, this commission has written some absolutely frightening reports on China trade and security.

Tonight's movie is a long interview with the Commission member Patrick Mulloy, giving an overview on some of the commission's findings.

 

Mulloy, Part I

 

China Ripoffs Cost U.S. $48 billion and 923,000 Jobs in 2009

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How Stupid Can America Be? Pretty damn stupid according to a new report by the United States International Trade Commission. In 2009, the United States lost $48 billion dollars and 923,000 jobs due to brazen theft by China. Yet, companies routinely think the great answer is to manufacture in China, due to lower costs.

Saturday Reads Around The Internets - Banksters & Bad Trade

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shocknews
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.

No Charges....Again for the Banksters

AIG, Goldman Sachs, Countrywide...the list goes on and on. To date there have been no real consequences or criminal charges for the people who committed the biggest fraud in history which brought the globe's economy to it's knees. The latest is Lehman Brothers:

The U.S. government's investigation into the collapse of Lehman Brothers Holdings Inc. has hit daunting hurdles that could result in no civil or criminal charges ever being filed against the company's former executives, people familiar with the situation said.

In recent months, Securities and Exchange Commission officials have grown increasingly doubtful they can prove that Lehman violated U.S. laws by using an accounting maneuver to move as much as $50 billion in assets off its balance sheet, which made it appear that the securities firm had reduced its debt levels.

SEC officials also aren't confident they could win any lawsuit accusing former Lehman employees, including former Lehman Chief Executive Richard Fuld Jr., of failing to adequately mark down the value of the large real-estate portfolio acquired in Lehman's takeover of apartment developer Archstone-Smith Trust or to disclose the resulting losses to investors, according to people familiar with the matter.

WTO Rules in China's Favor

China Gears Up to Repress Their People

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China really doesn't like the Populist uprisings in the Middle East. Today a state run newspaper blasted the protests:

A Chinese Communist Party-run newspaper on Saturday attacked anti-government protest movements in the Middle East and dismissed the possibility of something similar happening in China.

Such movements have brought nothing but chaos and misery to their countries' citizens and are engineered by a small number of people using the Internet to organize illegal meetings, the Beijing Daily, published by the city's party committee, said in a front-page editorial.

"The vast majority of the people are strongly dissatisfied (with the protests), so the performance by the minority becomes a self-delusional ruckus," the newspaper said.

The editorial appeared amid anonymous calls posted on the Internet for Middle East-inspired protests in dozens of Chinese cities the past two Sunday afternoons.

While drawing few outright demonstrators, the appeals have deeply unnerved authorities constantly on guard for any sign of challenges to Communist rule. Police and security agents shooed away onlookers and assaulted and detained journalists who turned up at the designated protest sites in Beijing and Shanghai.

Saturday Reads Around The Internets - Inflation, China, Exchange Rates, and Outrage

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shocknews
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.

Food Inflation

The World bank reported food inflation put 44 million more people into extreme poverty as wheat prices have increased 75% in some countries.

Bernanke Say What?

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Federal Reserve Chair Ben Bernanke gave one hell of a speech at the G-20 implying emerging economies are to blame their own inflation and currency manipulation could lead to another global financial crisis.

Firstly, Bernanke's speech, Global Imbalances: Links to Economic and Financial Stability, is reprinted below, in it's entirety. The reason to reprint the speech in total is too many in the press are interpreting his speech, many incorrectly, so I suggest reading what he said directly first.

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