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    Economy of China:

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    Mike E
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    Re: Economy of China:

    Post  Mike E on Mon Nov 10, 2014 6:46 pm

    lol1

    That is what he gets...

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    Re: Economy of China:

    Post  George1 on Mon Jan 19, 2015 5:44 am

    Stock Market Crash in China Biggest Since 2009, Rest of World Set to Rally

    Beijing’s attempts to crackdown on speculative trading in the overheated mainland stock markets have triggered a sell-off, panic among investors and ultimately, a stock exchange crash today, triggering significant spillovers for the global economy.


    MOSCOW, January 19 (Sputnik), Kristian Rouz – The long-anticipated doom landed today as stock markets in mainland China and, to a lesser extent, in Hong Kong, experienced a sharp decline after regulatory bodies in Beijing made a conscious attempt at curbing margin trading, as they were concerned with escalating risks to the nation’s financial system. Consequently, the Chinese stock market, overvalued on cheap credit, crashed in its biggest drop since 2009, driving a global demand for safe havens among investors. Japan’s markets have grown as a result, and Europe and the US are posed for gains today on the expected influx of capital, leaving mainland China.

    The Shanghai Shenzhen CSI 300 Index slumped 7.56% by 1 p.m several hours before the end of trading. The Shanghai Composite dropped 7.42%, Shenzhen Composite lost 3.11%, while Shenzhen Component declined by 6.68%. Hong Kong’s Hang Seng also suffered, in part due to the existence of the Stock Connect scheme with Shanghai bourses, and also in part because of the political dependence on Beijing. Asia’s flagship stock exchange lost 1.58% by 1 p.m.

    The rest of Asia-Pacific gained as investors’ money rushed in Japan, Taipei and Singapore. Tokyo’s Nikkei 225 added 0.89%, TOPIX rose by 0.64%, Taiwan Stock Exchange added 0.39%, Korea’s KOSPI edged up 0.77%. Singapore’s Straits Times Index added 0.18%. However, the general sentiment in Asia-Pacific is gloomy, as mainland China has been the principal source of growth in the region due to it’s huge volumes of resources consumption. Given that, the MSCI Asia Apex 50 Index slid by 0.73%.

    Despite the newly found optimism in Japan’s stock markets, the crash in China is negatively affecting the former’s economy. The yen rose 0.3% to 117.15 against the dollar on the influx of investment money in Japan, hitting exporters and adding to the deflationary pressure of cheap energy.

    “The slide in Shanghai stocks is leading to yen buying,” Yuji Saito of Credit Agricole in Tokyo told Bloomberg. “With risk sentiment deteriorating right now, anything obscure will lead to reducing positions.”

    Tomorrow China is releasing a report on GDP growth, and it is expected to have slowed down to 7.2% in Q4, meaning the expansion of mainland’s economy in 2014 fell short of the government target of 7.5%, the lowest since 1990. China’s stock markets are likely to shrink further if such allegations are confirmed.

    In Europe, the Swiss franc slid against 16 major currencies, easing concerns of the capital flight from the Eurozone. The franc retreated 0.9% to 0.8662 against the dollar after it skyrocketed by 21% on January 15. A scheduled policy meeting of the European Central Bank (ECB) is due Thursday, and most investors are still almost certain the regulator will launch a stimulus program of sorts, though the recent developments in Asia-Pacific will yield some moderate optimism in Europe; the hawks in Brussels might be adamant in their push for the reform as well. The possible ECB stimulus is speculated to be limited in its initial scale to 500 bln euros, small in scale for the struggling nations of the Mediterranean to be satisfied and for the investors to change their attitude to the Eurozone radically.

    Some observers believe the ECB will not directly buy Eurobonds at first, rather providing only credit guarantees to the nations in need in total volume not exceeding 3 trln euros.

    The US dollar and oil prices were flat, with latter retreating $0.26/bbl of Brent crude, down to $49.91/bbl.

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    Re: Economy of China:

    Post  George1 on Mon Jan 19, 2015 7:18 pm

    China's GDP growth expected to be lowest in 24 years

    China's economic growth rate is likely to cool further this year, restrained by sluggish lending, a housing slump and weak global demand, a Reuters poll showed.China's economic growth rate is likely to cool further this year, restrained by sluggish lending, a housing slump and weak global demand, a Reuters poll showed.

    China's economic growth rate is likely to cool further this year, restrained by sluggish lending, a housing slump and weak global demand, a Reuters poll showed.

    The world's second-largest economy is predicted to grow 7 percent in 2015, and slow further to 6.8 percent next year, according to the median consensus of over 40 economists polled Jan. 15-19.

    On Tuesday, data are likely to show China's economy expanded 7.2 percent in the final quarter of 2014, the weakest in 24 years.

    Beijing is in the midst of its worst downturn in a generation, induced in part by government efforts to transform the economy away from a heavy reliance on investment and exports and towards consumption and services.

    But a falling property market, brought on by oversupply and overinvestment fuelled by an unprecedented borrowing binge that helped China through the worst of the global crisis, was not planned.

    If the Reuters consensus forecast for fourth-quarter growth is met, that would mean full-year growth for 2014 will have undershot the government's target of 7.5 percent and mark the weakest annual expansion in nearly a quarter century.

    While only a matter of sums now that 2014 is over, that would increase the clamour for Beijing to ease policy even further.

    Economists in the poll predicted the People's Bank of China will cut banks' reserve requirement ratio (RRR) by 50 basis points each quarter until October, to free up more cash for banks to lend.

    That follows an interest rate cut to 5.6 percent late last year. Economists predict the benchmark lending rate will likely be lowered again to 5.4 percent in the second quarter.

    A further slowdown in China could throw into risk chances of a revival in global growth in 2015, which right now is being led by what the World Bank calls the "single engine" of strong hiring and economic activity in the United States.

    Indeed, economists in a Reuters poll last week said weaker growth than previously forecast in China and the euro zone were the biggest risk to the global economy this year.

    "Even with continuing public sector investment and the significant benefits accruing to lower-priced oil imports, the softening in real estate activity alongside efforts to rein in lending highlight the risk of even slower growth," said Sacha Tihanyi, economist at ScotiaBank in Hong Kong.

    Investment flows into China are an important gauge of the health of the global economy. They rose just 1.7 percent last year, sharply lower than the 5.3 percent growth in 2013.

    Credit growth has also lagged expectations despite the surprise rate cut by the central bank in November as cautious banks remained reluctant to lend due to a spike in companies' debt levels and bad loans.

    Beijing has traditionally relied on credit to fuel the economy but the broader slowdown has also diminished industries' appetite for fresh loans.

    The central bank on Friday said it would lend 50 billion yuan ($8.1 billion) to banks for the purpose of lending the money on to farmers and small businesses, areas of the economy that are usually short of cash.

    The protracted slowdown is also compounded by fears China's property market correction might turn into a crash that would ripple through the highly leveraged economy.

    The housing sector makes up about 15 percent of the economy and cooling activity there has crimped demand in 40 sectors ranging from steel to cement and furniture, becoming the single biggest drag on domestic activity.

    Since September, house prices in China's largest cities have on average been falling on a year-earlier basis and data on Sunday showed new home prices fell significantly last month.

    Consumer price inflation is also likely to remain muted through the year, largely due to sluggish domestic demand and a slump in global energy and commodity prices.

    The poll showed inflation will likely average 2 percent this year and 2.5 percent in 2016.

    That mirrors a disinflation trend currently gripping the largest economies - prices have begun falling outright in the euro zone - and could pose a threat to economic activity, economists said.

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    Re: Economy of China:

    Post  GarryB on Tue Jan 20, 2015 1:49 am

    Economists are idiots... slowest growth in 24 years means nothing when the last few years they have had the highest growth in their last 5 or 10,000 years.


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    Re: Economy of China:

    Post  George1 on Wed Jan 28, 2015 4:52 am

    China’s Yuan Joins Top Five Payment Currencies

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    Re: Economy of China:

    Post  George1 on Sat Jan 31, 2015 2:44 am

    China Passes US to Become World's Top Foreign Investment Destination

    China became the world's leader in foreign direct investment (FDI) volume in 2014, according to the report of the United Nations Conference on Trade and Development (UNCTAD).

    MOSCOW, January 30 (Sputnik) — China passed the United States to become the world's leader in foreign direct investment (FDI) volume in 2014, the United Nations Conference on Trade and Development (UNCTAD) report showed.

    China's FDI volume grew by three percent in 2014 to $128 billion, while the United States dropped to $86 billion, a fall of almost a third since 2013. The decrease of US FDI volume is due, in part, to share buybacks from UK Vodafone by the US telecommunications company Verizon, the report suggested.

    China's economy has posted annual GDP growth reaching 7.7 percent in 2010-2014, according to the World Bank.

    Globally, FDI volume dropped eight percent in 2014 to $1.26 trillion. This drop is said to be a result of general economic uncertainty and geopolitical risks associated with regional conflicts, according to the report.

    FDI in the European Union rose 13 percent while Russia, as a result of poor economic outlook, dropped to $19 billion, a 70 percent decrease, UNCTAD said.

    UNCTAD is a United Nations institution researching global economy and promoting dialogue between countries on economy and development issues. UNCTAD currently has 194 member states.

    Read more: http://sputniknews.com/business/20150130/1017561747.html#ixzz3QO2PI2Ry

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    Re: Economy of China:

    Post  George1 on Fri Feb 06, 2015 4:31 pm

    Chinese Currency Devaluation Prospective Grossly Exaggerated

    The Chinese currency volatility does not mean the yuan will be hit by the depreciation trend.

    Although the Chinese yuan has been falling against the US dollar since the beginning of this week, concerns over the currency fluctuation are grossly exaggerated according to China's experts

    As the yuan continued its slide against the US dollar nearly reaching the alarming two-percent flotation ceiling, the question raises whether the Chinese currency will be hit by the longstanding devaluation trend.

    However, China's economic experts dismiss the speculations as groundless, explaining that the yuan's recent volatility was caused by the European Central Bank (EBC) quantitative easing and interest rate cuts in Australia, Denmark and Canada, aimed at prevention of recession risks. According to

    The International Monetary Funds' estimates, in 2015 developed countries will face deflation accompanied by slowdown in consumption growth.
    While a weaker currency may bolster the country's economic development and boost its exports, Beijing is not interested in the sharp decline in the yuan, citing concerns over possible capital outflow.

    Analysts point out that while the yuan was falling against the dollar, it concurrently surged up against such currencies as the British pound, euro and Japanese yen. The trend indicates that while the yuan is generally preserving its positions the US dollar is growing fast. Experts foresee that the ECB monetary easing will lead to further devaluation of euro and Japanese yen, adding that the yuan will obviously "grasp the chance" and continue its rise against them.

    The Chinese currency has been consistently growing against the dollar since July 2005, bolstered by China's major foreign exchange reform. After the temporary slump the yuan will regain its leading positions over the next year due to the country's trade surplus.

    Read more: http://sputniknews.com/business/20150206/1017906644.html#ixzz3R0Tj5nOb

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    Re: Economy of China:

    Post  George1 on Thu Mar 05, 2015 4:05 am

    China may Sign Free Trade Zone Agreements With South Korea, Australia

    Read more: http://sputniknews.com/asia/20150305/1019079465.html#ixzz3TVJu1BGv

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    Re: Economy of China:

    Post  George1 on Tue Mar 17, 2015 9:52 pm

    Key EU Countries Join China-Backed Bank Despite US Protests

    Three more European countries have decided to join the Asian Infrastructure Investment Bank (AIIB), proposed by China.

    France, Germany and Italy made a decision to join the financial institution, following the British announcement to become a founder member of AIIB last week.

    The AIIB is a multilateral financial institution initiated by China in October 2013. The bank is designed to provide financing for infrastructure projects in the Asia-Pacific region and is sometimes viewed as a competitor to major development institutions as the World Bank and the IMF.

    “China needs this project […] to protect its financial system from possible economic fluctuations on the international arena,” Graziani Tiberio, President of the Institute of Advanced Studies in Geopolitics and Auxiliary Sciences in Rome, told Sputnik Italia, adding that the bank would give Beijing an opportunity to strengthen its position among BRICS countries.

    Nearly 30 states have declared their participation in the new financial institution, which expected to start its work in 2015.

    However, the increasing support for the new bank from leading European countries has dissatisfied the United States.

    Participation of several EU countries in the AIIB, the Italian expert claims, creates serious competition with the US. “The US goal is to achieve full economic hegemony in the EU, on the one hand, and to contain China, on the other” Tiberio said. “Ultimately, [it] seeks to determine all economic dynamics in the East,” the expert added.

    The US recently expressed concerns that China may use the bank to expand its influence in the region and that the standards of governance in the newly established institution may be insufficient. In response to the US concerns, Chinese Foreign Ministry spokesman Hong Lei stated last week that all operations carried out by the AIIB will be open and transparent.

    Read more: http://sputniknews.com/asia/20150317/1019603199.html#ixzz3UhopMSI4

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    Re: Economy of China:

    Post  George1 on Sun Mar 29, 2015 7:47 am

    China to invest $500 billion in other countries’ economies by 2020 — President Xi Jinping

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    Re: Economy of China:

    Post  George1 on Mon Mar 30, 2015 7:28 am

    China’s Potential Deflation Threatens to Overthrow Global Monetary Order

    Mainland China could soon implement a full-scale economic stimulus due to the threats of deflation and stagnation, adding to the piles of cash being printed by Japanese and European mints, rendering monetary equivalent less valuable and investment less powerful across the globe.

    Kristian Rouz – People’s Bank of China (PBOC) governor Zhou Xiaochuan, speaking at a forum of the nation’s high-ranking officials and top businesspersons on the Chinese island of Hainan in Sunday, admitted the Communist nation is falling into the mire of deflation at a faster pace than might be expected.

    Coupled with the dramatic slowdown in the nation’s real economy, the threat of deflation might prompt the Chinese central bank to implement a full-scale stimulus, also known as ‘quantitative easing’ or QE, in the nearest future. Despite the fact that stock markets would eagerly welcome such a scenario, the Chinese QE, coming against the background of similar policies in Europe and Japan, might have dire effects on the global economic outlook, significantly impairing living standards all across the globe.

    Despite this, Beijing has undertaken several limited-effect policies of monetary easing, such as allowing more renminbi-denominated liquidity in the economy by lowering the reserve ratio requirements (RRRs) for certain banks, the deflatory pressure has eased only somewhat with prices at the factory gate still declining and the overall economy slowing far below the demographically-dictated minimum growth threshold of 8%. The PBOC even cut its base interest rate twice since November, but, as the economy weakens further, full-scale QE is looming as the only solution

    "Inflation in China is also declining. We need to have vigilance if this can go further to reach some sort of deflation or not," Zhou said, rendering the nation’s top policymakers considering further monetary easing moves, necessary to fend off the deflation and spur the overall economy.

    Zhou’s comments suggest that China is now moving into the territory of a constant near-deflation and a stagnant economy where Japan had been for nearly 20 years, from the early 1990s to the early 2010s, until ‘Abenomics’ allowed for the island nation’s gradual return to a normal growth as a post-industrial society.

    As the Eurozone and Japan are increasing the volume and pace of their QE programmes, and the US is only gradually exiting the era of their own ultra-easy monetary policy, the addition of China to the ‘QE club’ entails serious risks for the global economy. From the very advent of the global economic meltdown in 2008 up to this point, China has been doing well economy-wise through excessive borrowing, having accumulated a total debt of 280% its GDP, as well as having nurtured a vast and uncontrollable sphere of shadow banking and grey economic activity. Now this debt-fueled model does not seem to work as global demand for the made-in-China goods has shrunk to the point where a lot of output is piled up at the factory gate with an ever-fading price tag.

    A structural reform, aimed at attracting investment money and technology from outside the mainland might have become an answer for China, but such a reform, also labeled as ‘liberalization’ by its opponents, would jeopardize the political dominance of the Communists in Beijing, something they can’t have happening to them. Nonetheless, the PBOC head Zhou remarked that a certain liberalization is a must, namely a liberalization in the interest rate. Deposit rates might be freed of the excessive governmental supervision within a year or two, he said. However, there is no timetable possible as the totalitarian regime cares the most about its own survival more than anything else, even in dire economic environment.

    That said, QE is a perfect solution for the Communists in Beijing. Monetary Easing would spur inflation by devaluing the population’s real income, something America had witnessed in 2008-2013 and what Japan and the Eurozone might have experienced had they not been the huge exporters of industrial and hi-tech goods that they are.

    Given that mainland China is the world’s second-biggest economy and also the one of the greatest global debtors, a vicious round of money-printing might disrupt the existing balance between the world’s monetary-conscious economies (the US, the UK, Switzerland) and the easing-reliant economies (the Eurozone, Japan, Australia). With China aboard, the easing-reliant part of the equation will prevail, resulting in the global economy producing amounts of money liquidity far exceeding the investment-absorbing capacity of the more healthier economies. Consequently, a lot of the non-backed by the real growth money will be kicked back and forth, ultimately impairing the cost of human labour and economic ventures.

    “The long-term consequences of global QE are likely to permanently impair living standards for generations to come while creating a false illusion of reviving prosperity,” the recent Bank of America Merrill Lynch implies. According to the BofA, estimated, global economic growth might dip into negative in 2015 for the first time since the recession of 2009 due to the excessive worldwide use of unorthodox monetary policies. Encouraged by America’s successful QE experience, policymakers in Brussels and Tokyo have been eager to pump more money into their own economic systems, but add China here, and everything is deteriorating.

    Unless the monetary-conscious side of the global equation in joined by a certain global economic heavyweight, like Brazil, or Russia, or – which is a most likely prospect, ‘the next big thing’ – India.

    Read more: http://sputniknews.com/business/20150329/1020170687.html#ixzz3VsJw489B

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    Re: Economy of China:

    Post  George1 on Sun Jul 19, 2015 5:18 pm

    Another Policy Challenge: China’s Corporate Debt Soars Beyond $16 Trln


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    Re: Economy of China:

    Post  George1 on Wed Aug 12, 2015 6:34 pm

    Yuan Devaluation Attempt to Counter Weakening Euro, Yen - Think Tank

    A report by US-based Stratfor (Strategic Forecasting) think tank says that the devaluation of China's yuan is an effort to neutralize the impact of a stronger dollar against the euro and the Japanese yen.

    WASHINGTON (Sputnik) — China's devaluation of its national currency, the yuan, is an effort to neutralize the impact of a stronger dollar against the euro and the Japanese yen, according to a report by US-based Stratfor (Strategic Forecasting) think tank.

    On Wednesday, the People's Bank of China (PBC) devalued the yuan for a second consecutive day.

    "In Europe and Japan — home of the other two paramount global currencies — quantitative easing and other forces have resulted in a depreciation of the euro and yen against the dollar. The yen has fallen by about a third since the last half of 2012, and the euro has fallen by a fifth since early 2014. This means that the yuan's real effective exchange rate, or its exchange rate weighted against its trading partners, has appreciated dramatically over the past year," Stratfor report obtained by RIA Novosti read.

    According to the report, PBC move had a negative impact on China's trade surplus, its macroeconomic indicators and triggered economic slowdown.

    "China is clearly signaling that it will not move in step with the United States and will allow its currency to trade lower if need be," the report added.

    Stratfor analysts stressed that China's actions on the currency market have caused concern among international traders. They also recommended Beijing to change its economic policy in order to enhance the credibility of the country in the global financial arena.

    On Tuesday, the PBC allowed the yuan to fall 1.9 percent against the US dollar to boost the country's economy, precipitating the biggest one-day exchange rate adjustment for the currency in a decade. Wednesday's dollar-yuan exchange rate showed a further 1.6-percent decrease.

    The International Monetary Fund (IMF) has welcomed China’s move to devalue the yuan, but indicated that the Chinese currency must float freely to gain market relevance and effectiveness.
    00

    Read more: http://sputniknews.com/business/20150813/1025685141.html#ixzz3ie8rFzkK


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    Re: Economy of China:

    Post  George1 on Thu Sep 10, 2015 6:47 am

    China Will Never Seek Currency War, Plans to Keep Yuan Stable


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    Re: Economy of China:

    Post  George1 on Thu Sep 17, 2015 5:26 pm

    Reform of China’s public companies to fuel economic growth

    MOSCOW, September 17. /TASS/. China’s just-unveiled government plan for reforming large public companies is expected to raise their profitability and competitiveness, fuel economic growth and draw private investors, including foreign ones, polled experts have told TASS.

    The public companies are focused on all key industries of the Chinese economy - aircraft-building, ship-building, energy, auto manufacturing, steel, chemistry, construction and coalmining industries. On Monday, China’s President Xi Jinping said it was the public sector that he saw as the key factor for national economic growth.

    In accordance with Chinese government plans the watchdog supervising and managing the assets of more than 100 largest public companies will be reformed first thing. The public companies’ assets in 2008-2013 were up by 90% to 25.1 trillion yuans, while profitability was at a tiny 11.6%, in contrast to 25.7% profitability in the private sector. Promising public companies will be allowed to be more active in borrowing private capital and participating in public-private partnership schemes, the Central Committee of the Communist Party of China and the State Council said in a joint statement.

    The deputy director of the Institute of World Economy and International Relations under the Russian Academy of Sciences, Yevgeny Gontmakher, said the Chinese authorities’ intention to reform state corporations was a natural mode of action for a country that really sought to achieve economic growth. "The Chinese economy has demonstrated stable growth of 6-7% a year, but now it has hit the ceiling and in an attempt to invigorate it the Chinese government made a decision to decontrol the public sector a little bit more to make it more effective," Gontmakher told TASS.

    "China’s economic sector over years was related with the development of small businesses in agriculture, the light industry and trade. At the same time the state preferred to keep a tight grip on the strategic industries - oil, gas, and machine building. As a result they lost effectiveness. The same phenomenon had been observed in South Korea before. That country managed to turn itself into one of the most successful ‘Asian tigers’ only when Seoul abandoned the model of comprehensive state control of all industries," Gontmakher said.

    He believes it is not accidental China keeps quiet about the details of the plans for reforming the public sector or the deadlines when they might be implemented. It merely states that certain results are to be achieved by 2020. "The point at issue is drawing investment, in particular, foreign; the public companies must be ‘streamlined’, their budget made transparent, and some managers replaced before investors can be invited. This process will take a while," Gontmakher said. "Besides, this is not the right time for selling stakes in public companies on the world market. The situation is poor. It would make sense to take a pause," he added.

    "Should Russia follow in China’s footsteps to reform its own public corporations is a matter requiring further studies and public discussion. Russian public companies, just as their Chinese counterparts, are ineffective and need systematic budget subsidies. But each of them requires individual treatment. Even though 100% stakes in some Russian companies belong to the state, it should be analyzed first whether they should be privatized entirely or selling a 20% stake would be enough. There should be no time-serving considerations," Gontmakher believes.

    The chairman of the VTB bank’s observer council, Sergey Dubinin, has said that until just recently the Chinese authorities had allowed private investors only into special zones and certain branches of the economy, while the state retained all commanding positions in the economy. "Western economists and bankers have long doubted China’s economic growth rates and the effectiveness of public companies with their high costs. ‘Who will ever need them?" some were asking. In the end China made a decision in favour of cutting spending on support for the public sector and raising its profitability and shareholder value. It should not be ruled out that the news of the forthcoming reforms was announced on the eve of the forthcoming state visit the Chinese leader is to pay to the United States on September 22-25. China keeps its main assets in US treasuries," Dubinin told TASS.

    "However large China’s reserves may look, the country still lacks resources for social programs, science and education. The Chinese authorities may have now decided time is ripe to slash budget infusions into the economy, which is now expected to grow at the expense of private investment. It is quite possible the reforms of public companies will result in some sort of privatization of infrastructural branches and the banking sector. This will benefit China’s own economy, as well as the world and Russian markets," Sergey Dubinin said.

    Vneshekonombank’s deputy president, Sergey Vasiliev, told TASS: "As a representative of a public corporation I find it much easier to do business with Chinese public companies, and not private ones. The main problems of cooperation with China stem not from different types of ownership, but from cultural dissimilarity and the language barrier."


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    Re: Economy of China:

    Post  max steel on Wed Oct 14, 2015 9:30 am

    China's Middle Class Overtakes US as World's Largest




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    Re: Economy of China:

    Post  max steel on Thu Oct 15, 2015 12:32 pm

    China beats US in dollar billionaire table

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    Re: Economy of China:

    Post  George1 on Mon Oct 19, 2015 3:34 pm

    Сhina’s GDP Growth Falls Below 7% in 3Q15 – Statistics Agency


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    Re: Economy of China:

    Post  max steel on Sun Nov 01, 2015 2:21 pm

    China Will Get Rich Before It Grows Old



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    Re: Economy of China:

    Post  max steel on Fri Dec 25, 2015 5:33 pm

    IMF Greenlights Addition Of Chinese Yuan To SDR Basket


    While none of the currencies globally are viable under the current debt based monetary system but there is no viable solution yet on how to make people around the world use something/anything as a medium of exchange that is divisible and 'trusted' and is 'legal tender'.

    Having said that, finding a new system and the costs associated with it will also be very challenging in current difficult times.

    We have come thus far post the GFC mainly due to money printing, QE and whatever wars had to be fought.

    We must remember that EUR was just born in 1997 and implemented in electronic form in 1998 and from Jan 1999 it became legal tender in currency notes form.

    It is my view that China will keep rising, and IMF's SDR inclusion is just paving the way forward and strengthening the currency. As US loses it's grip on the global monetary system, it is hard for the American Govt hegemons to accept it thus China had to wait until now. If it was me, Chinese yuan would have been in IMF SDR about a decade ago when the manufacturing prowess of China was at it's peak.

    We shall have many crises in the years ahead but inclusion of Chinese Yuan in the IMF led SDR basket which is the monetary system AS ON DATE will not make it any worse but slightly better because this will bring stability.

    Global trade and spneding is increasingly being done in yuan and most goods are made in China whether we like it or not, and hence all the 210 countries need to have yuan available in their banking systems in order to continue trading with China.

    In fact, this will make things slightly cheaper because globally, the wholesalers will not need to price in the FX fluctuations which they currently do when remitting to China.

    Screw the big G-7 banks, they always have an agenda of their own survival. Usually they always lie and most analycysts are a pain in the butt anyways.

    I am waiting for the day within the next few months when Saudi (post OPEC break up?) will announce acceptance of yuan for oil which will be the last day of the connection between the world's USD based monetary system as we know it and the new monetary system where Yuan will rule the roost over the next few decades.

    Every single day, oil remains below USD 50-60 level, the neeed for the world's top 10 oil producers rises more and more and they are choking by this USD based system especially when US is no longer the world's top oil importer.......Why are the Chinese forced to pay in USD when they can simply use CNH....hence Chinese have stopped buying from Saudi and Saudi exports of oil to China have dropped 35% over the last decade.....

    Same for India or any other major oil importer, if they buy oil in USD, it makes things that much more expensive due to exchange rates. The day the exporters move away from USD, they have to go closer to CNH being their largest importer of oil which is why inclusion of CNH in IMF's SDR is very important step for China who have got this approval to occur on Nov 30 this year instead of the date announced by IMF a few weeks ago of Oct 2016 for which in all likelihood, US was involved in pushing the day further.

    We should hear the news on Dec 1 when the CNH will be included in IMF's SDR and this will be a major game changer because all Govt's will need to hold trillions in CNH in order to assist their domestic banks/importers to pay China in yuan.




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    Re: Economy of China:

    Post  max steel on Fri Dec 25, 2015 5:46 pm

    China's contribution in Africa :








    Meanwhile Zimbabwe adopts Chinese Yuan


    Zimbabwe already had multiple currencies but now it is kind of formalising the yuan and is relieving the USD from such a heavy responsibility! Smile (rather kicking the USD out as 2015 slides into history).

    USD is losing a battle worldwide from Angola to Russia to Iran to Zimbabwe to Venezuela and many more nations who are choosing the yuan and dropping the USD for trade, reserves, investments etc!

    The main decision has to be made by Saudi/OPEC and that day should come any time (sooner they do it, better it will be for them, because at least they will get to keep their reserves else in 2 years the reserves will be gone and the currency will need to be depegged from the USD anyways) who have to choose yuan instead of USD for sale of oil.

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    Re: Economy of China:

    Post  max steel on Fri Dec 25, 2015 6:08 pm

    World's 20 Largest Economies in 2030

    Get ready for a new economic order. In the world 15 years from now, the U.S. will be far less dominant, several emerging markets will catapult into prominence, and some of the largest European economies will be slipping behind.

    That's according to the U.S. Department of Agriculture's latest macroeconomic projections that go out to 2030, displayed in the chart below. The U.S. will just barely remain the global leader, with $24.8 trillion in annual output. The gray bar represents the $16.8 trillion gross domestic product projected for 2015, and the green bar shows how much bigger the economy is expected to be 15 years from now. The country, worth 25 percent of the world economy in 2006 and 23 percent in 2015, will see its share decline to 20 percent.

    China's GDP will grow to more than twice its size today, helping the Asian powerhouse to almost entirely close its gap with the U.S. India, ranked eighth for 2015, will climb past Brazil, the United Kingdom, France, Germany and Japan to take third place in the world ranking. The International Monetary Fund calls India "the bright spot in the global landscape." The country will have the largest workforce in the world within the next 15 years, the IMF notes, and among the youngest.

    Other nations won't be so lucky, particularly among developed economies. Japan, which was a roaring economy until its asset bubble burst in the early 1990s, has already slogged through decades of stagnation and will likely continue to see very little growth over the next 15 years. That will push Japan down a spot in the rankings by 2030, according to the USDA estimates.

    Japan is "an important lesson in how quickly you can downshift your status of what a structure of an economy delivers," said Bruce Kasman,JPMorgn's chief economist. France will slide three spots, while Italy drops two.

    In the overall ranking, Jamaica will surrender the most ground, bumping down 13 places to 136. Countries with the biggest advances -- like Uganda, which will climb 18 spots to rank 91 -- are concentrated in Africa, Asia and the Middle East. It's important to take estimates stretching out so far with a note of caution, though.

    "There are lots of uncertainties," said Kasman. "Whether China grows at 4 percent or 6 percent matters an awful lot for where it looks like it's going to be in the global economy. Whether India grows at 3 percent or 8 percent -- these are huge differences when you compound them over long periods of time." The USDA is not the only -- and hardly the most widely-followed -- ranking of global economic growth, though it does offer the advantage of particularly long-term outlooks. The International Monetary Fund's economic outlook only projects out two years.

    Look out for it later this month.And if 15 years is too far out for you, take a look at the fastest-growing economies just for this year.









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    Re: Economy of China:

    Post  max steel on Fri Dec 25, 2015 6:25 pm

    The doomsayers have it wrong about China

    Celebrate the rise of flawed, febrile China.For all the risks, we should celebrate its rise to the world’s second-largest economy.It is easy to imagine China’s economic freight train going off the rails. When I came to Asia 14 years ago, many people in Japan, where the economy was then three times the size of China’s in nominal terms, were predicting precisely that. Surely, they reasoned, the system must crumble under its own contradictions.
    It was, after all, a state-managed economy prone to misallocation of capital and dependent on wasteful investment. It had a repressive political apparatus that spent more on internal security than on national defence.

    Anger was growing at Communist party officials, many of whom were neck deep in corruption and engaged in land grabbing on an epic scale. Crudely measured, the economy was churning out astonishing growth. Yet it was poisoning the air, the water and, not infrequently, China’s own citizens.
    None of that analysis was wrong. The conclusion, however, that the inherent stresses would lead to social chaos and bring the system crashing down was born of wishful thinking.


    It underestimated the Communist party’s achievements in bringing tangible improvements to the lives of hundreds of millions of people. It underestimated, too, the strength of its patriotic message: that, after more than 100 years of humiliation, China had, finally, in the words of Mao Zedong, “stood up”.


    Instead of collapsing, by some measures China has gone from strength to strength. Its output is more than twice the size of Japan’s. In purchasing-power parity terms, it overtook the US last year, making it the world’s biggest economy. In just 15 years, its gross domestic product per capita has jumped from 8 per cent of the US level to 25 per cent.

    In Japan, many secretly hope that China will fail. Not without reason, they fear a vengeful, powerful neighbour with history book in hand. Yet in America and Europe, too, some have been guilty of assuming it is a house of cards.

    Books with titles such as The Coming Collapse of China have been staples for years. It is possible to point out the flaws and gross injustices of the authoritarian system without predicting its imminent demise. At some point, the Communist party will yield to something else. All dynasties fail. Yet in all likelihood it will stay in power longer than many expect.

    China’s rise is the most important event of our epoch. In the minds of many westerners, it is overshadowed by the threat of terrorism and by a technological revolution bearing the binary gifts of opportunity and destruction. Yet the consequences of the rejuvenation of a nation containing one-fifth of the world’s people will be profound, drawing the globe’s centre of gravity from west to east.

    Economically, it has already transformed the prospects of raw-material producers from Angola to Australia, notwithstanding the recent fall in commodity prices born of China’s slowdown.

    Politically, it has changed the calculations of almost every nation. The US has pivoted to Asia even as its diplomats ponder the continued feasibility of unconditional security guarantees with the likes of Japan and Taiwan. Drawn by the magnet of business and power, the UK has defied Washington by joining a Chinese bank designed to challenge a postwar order epitomised by the Bretton Woods institutions.China has shown that Japan’s success can be emulated, if not yet matched, on a much larger scale.


    There are risks to China’s rise. Two stand out. The first is war. Humanity’s record in adjusting to rising powers is not good. As it grows stronger, Beijing will not accept Pax Americana, at least in what it considers to be its natural sphere of influence. Sino-US posturing around artificial islands in the South China Sea is a sign of things to come. So are bouts of angry nationalism aimed at Japan.


    The second is environmental. Understandably, Chinese people aspire to US living standards, with American-sized cars and fridges. So do 1.3bn Indians, and hundreds of millions more in Asia, Africa and Latin America. It is not clear the planet can sustain such ambitions. Without significant technological breakthroughs, plausible but hardly preordained, something might have to give. That brings us back to conflict.For all the risks, China’s rise should be celebrated. Postwar Japan proved to the world that prosperity and modernity were not the preserve of white Europeans and Americans. China has shown that Japan’s success can be emulated, if not yet matched, on a much larger scale.


    This might seem an odd time to celebrate. Is the Chinese model not coming apart at the seams? Growth has fallen more quickly than many had imagined. It could slow much further still. That could precipitate a financial crisis. Debt has doubled since 2009. It was not hard to paper over cracks in the system with double-digit growth. At 3 per cent, it might not be so easy.

    Even if it avoids outright crisis, China may simply get stuck. Its labour force is shrinking. Its population is ageing rapidly . In just 15 years, nearly a quarter of its people will be over 65. Don’t the doomsayers now look like soothsayers?

    In truth, China does not have to do that well to change the world. Because of the scale of its population, if its people attain only half the living standard of the US, its economy would be twice the size.

    The Rise and Fall of Great Powers, by Professor Paul Kennedy of Yale University, suggests that military and diplomatic power will follow. Those seeking fissures in the system will find them aplenty. Those imagining that “the China threat” is about to disappear will be disappointed.

    The consequences of the rejuvenation of a nation containing one-fifth of the world’s people will be profound, drawing the globe’s centre of gravity from west to east.'






    World's largest economies GDP


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    Re: Economy of China:

    Post  max steel on Fri Dec 25, 2015 6:46 pm

    China stock market outperforms S&P despite wild swings


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    Re: Economy of China:

    Post  max steel on Sun Dec 27, 2015 4:09 pm

    Yuan reserves set to rise by $500 billion over 5 years








    U.S. runs out of investor visas again as Chinese flood program


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