tag:blogger.com,1999:blog-5838647.post4241680533296295673..comments2009-10-17T09:00:44.590+02:00Comments on China Economy Watch: China's Manufacturing Industry Expands In April While Prices Fall (Updated)Unknownnoreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5838647.post-20943232646870879592009-06-05T13:24:14.318+02:002009-06-05T13:24:14.318+02:00INDIA + CHINA = More than 2,4 billion people
IND...INDIA + CHINA = More than 2,4 billion people<br /> <br />INDIA has its toughest decision ahead.<br />A huge impact decision on future events that will determine the next hegemony period in the globe.<br /><br />The decision to take is very clear:<br /><br />INDIA..., Are you going to join CHINA in your future developments , ... or are you going to lean on US as your ally,... or in a third place, you are going to decide to continue to run the race to world´s most powerful country, independently ???<br /><br />A) Joining CHINA:<br />INDIA+CHINA would be the end of US power, not only as the biggest economy on earth, but militarily, socially, and politically.<br />USDollar would lose its status as the reference currency in worldwide markets, and a new ASIAN power would emerge.<br />Tight collaboration between INDIA and CHINA is not an easy task. Obviously, the beginning would be in economic terms, that is, to become the world biggest "outsourcing" area.<br /><br />Second, and very obvious, the highest domestic market in terms of consumer rates, 2.4 billion people is a much bigger chunk than any other individual market in the world.<br />Big international corporations would be interested in playing their strategies there, and obviously, the jobless claims in these 2 countries would fall to minimums, allowing a much better domestic consumer performance, and the erradication of poverty and transition from countryside to cities, with almost no public spending from these 2 governments, would be a fact.<br />CHINA has made the first step in this idea, asking INDIA to share the prominent and lucrative OUTSOURCING market.<br />INDIA is the OUTSOURCER by excellence. Good engineer schools, meaning an incredible added value to big decentralized foreign corporations, depending on INDIA as its main OUTSOURCING supplier.<br /><br />b) US as an ally:<br />US cannot lose this train.<br />USSR cold war is over, but a fiercest one is beginning. The battle to determine who is going to become the next most powerful nation during the next centuries.<br />This is a democratic battle. A social, political and economic battle, in a now bipolar world.<br />JAPAN will soon lose its position in the ranking, and CHINA, INDIA will be running behind US .<br />US will have to use PAKISTAN matter to get closer to INDIA. But, I think this will not be enough. There must be more joining agreements in terms of manufacture, defense, IT, and infraestructure projects.<br />US must use all its influence power to convince INDIA they must run this race together.<br /><br />c) INDIA running independently:<br />INDIA has also the choice to continue developing its economy, serving either CHINA and US as main and preferred customers.<br />It can become the referee of the "2 big" match.<br />INDIA alone has 2,1 billion people. So, it is not a little market to feed. And it is not a little market either to focus on its domestic consumer rates future evolution.<br />INDIA has shown the world why BOLLYWOOD produces now more films than US HOLLYWOOD STUDIOS, it has also shown us the incredible MUMBAI development in terms of financial and industrial power, the high class ENGINEER SCHOOLS, the steel industry, the technology-edged IT companies born in the last 5 years, etc...<br />A good engineer work base, value added workers, and a political change in the horizon.<br />Farewell to the old politicians, let´s welcome the "blackberries" !!!. Rahul Gandhi, is the best example of this new generation of politicians, that in 5-6 years, will be ready to lead.<br />Till now, indian politicians have been well above 70 year old average, INDIA must change this issue to really launch itself into the race of the world hegemony.<br />This is another big decision for INDIA. Maybe the critical one.<br /><br /><br />Jose Luis Revilla Escudero<br />Chairman & CEO<br />WWShares, Inc<br />-Global Wealth Management-<br />www.worldwideshares.blogspot.comJOSE LUIS REVILLA ESCUDEROhttp://www.worldwideshares.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-5838647.post-53590814305912973442009-06-05T13:21:14.269+02:002009-06-05T13:21:14.269+02:00CHINA, ready to lead...?
I have spent the last m...CHINA, ready to lead...?<br /> <br />I have spent the last month travelling around ASIA to try to find an answer to this question. Just now, when we are in the middle of a global crisis, with almost all foundations of economy in danger, I wanted to answer myself about the role that each country is going to take to lead the world out of this recession period.<br />I travelled to Hong Kong, Shanghai, Taipei and Seoul. I spent a certain time reading the local press, involving myself with their domestic issues, and watching and asking about the role of Hong Kong, China, Taiwan and South Korea in the future recovery process.<br />China latests are focused on the opening of Shanghai Stock exchange listings to foreign companies, but still with the limitation of doing it only with yuan currency, and still being not convertible.<br />Hong Kong, who belongs to China, but with a S.A.R. ( special administrative regime ) is deciding now its own future, since Shanghai and itself must now compete to become the financial centre of the "new" China.<br />Taipei celebrates that for the first time in six decades, a mainland company, China Mobile is due to acquire a 20% stake in a local communications carrier, breaking with this step, the so long disputes among these 2 asian states. Nevertheless, some old nationalists from Taiwan see into this movement from mainland, the challenge of a new adhesion process, similar to the one carried with Hong Kong.<br />And finally, Seoul is focused on recovery the way they best know. That is, working tough and smart to become again what two years ago it really was... an still unknown, but highly effective and productive capitalist economy.<br />China strategy along the years has been to manufacture goods at a low work labour cost, and sell them mainly to the US and Europe. Now, with 1,3 billion people living in the mainland, they realise that their real market may be inside, may be domestic. But to go along with this change in the way exports are handled, is not an easy task... but you can see already some interesting movements, such as the recently signed collaboration with India, to get a chunk into the OUTSOURCING market, as well as, the already mentioned opening of Shanghai Stock index to foreign companies.<br />My opinion resides on the idea that in a not so long future, we will start looking at Shanghai index closings the same way we do it with Wall Street now.<br />If China converges into a more open performance, USA supremacy as the first economy in the world may be in danger.<br />China will try to joint Hong Kong current power and international presence, with Shanghai newest challenges. At the same time, it will break old and stupid disputes with Taiwan and even South Korea, to walk along a new asian world, capable of assuming the role of leading it.<br />That decision is going to become critical for India in the very near future.<br />But, for sure, we do not expect China president to become a worldwide "prime time TV star" the same way the US does with its presidents. We will never know if China president has bought a dog called "Bob" to his daughters... we even won´t know if he has kids at home,... or if his wife is dating another men ...<br />We must expect a new role, focused on discretion, hard work, no discussions, but highly effective and consumer oriented strategies.<br />If the US unveils its secret CIA files, ... China will continue with its secrecy in domestic critical matters.<br />If the US continues fighting muslims in Afghanistan, China will stretch its ties in a peaceful way with its long time disputed neighbors, trying to consolidate its presence in Asia.<br />If the US continues with prime time interviews, China will present only specific topics of its politicians activities.<br />This does not mean OPEN economies vs CLOSED ones, but it means, to be focused on real issues and leave marketing or branding for others.<br /><br /><br />Jose Luis Revilla Escudero<br />President<br />WW Shares, Inc <br />-Global Wealth Management-<br />www.worldwideshares.blogspot.comJOSE LUIS REVILLA ESCUDEROhttp://www.worldwideshares.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-5838647.post-41571266484924881592009-05-13T14:48:00.000+02:002009-05-13T14:48:00.000+02:00Hi again Nobody,
"Interesting because I remember ...Hi again Nobody,<br /><br />"Interesting because I remember many, including I think you, pointing to sharp drop in imports."<br /><br />Yep, well there are two different things here. One are the imports for re-export. That is the things that go into the production process, and these are all horrifically down.<br /><br />Then there are imports for direct Chinese consumption, and these are more stable, even if they are hardly going to set the rest of the world (apart from Argentian and Brazil for soya, and perhaps Russia for steel) on fire.<br /><br />The soya thing is interesting, since China can't feed itself. The export boom has also caused internal structural distortions, and many young people have left the land to go and work in factories, and in a country where families only have one child this means land going fallow. <br /><br />Basically, the stimulus programme seems to be doing the same thing that Obama is trying to do, and that is maintain living standards via government sponsored (or guaranteed in the case of banks) borrowing, and the need for soya reflects the fact that living standards are being maintained (and even improving, see also retail sales data, oh, and btw, I have added more charts to the post again) since the soya goes to feed pigs and produce more meat.<br /><br />"By the way, how this paradox of falling imports amidst rising domestic demand was eventually explained?"<br /><br />Officially you mean? I don't think it ever was.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-81298603736299529372009-05-13T11:12:00.000+02:002009-05-13T11:12:00.000+02:00Interesting because I remember many, including I t...Interesting because I remember many, including I think you, pointing to sharp drop in imports. By the way, how this paradox of falling imports amidst rising domestic demand was eventually explained?Nobodyhttps://www.blogger.com/profile/09952955021226297401noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-73355244361410900012009-05-12T09:50:00.000+02:002009-05-12T09:50:00.000+02:00Also, Argentina seems to be getting some benefit f...Also, Argentina seems to be getting some benefit from the stimulus. Soya bean imports are at record levels. This, from Bloomberg:<br /><br />China, the world’s largest soybean buyer, posted a 36 percent jump in imports of the oilseed in the first four months with shipments gaining to a record. China bought 3.71 million tons soybeans in April, bringing total imports to 13.86 million tons in the first four months, according to the customs data released today. That’s a record for the period, Wu Jiaxi, analyst at Jinshi Futures Co. said.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-39302990250895011902009-05-12T09:40:00.000+02:002009-05-12T09:40:00.000+02:00Hi again,
"I mean in my link they say the exports...Hi again,<br /><br />"I mean in my link they say the exports are in a freefall. You are saying the decline in export orders moderated."<br /><br />The apparent inconsistency comes from the fact that one number is month on month and the other year on year. The level of exports is way down on a year ago, but of course month on month the situation is improving.<br /><br />"Is it possible as some seem to imply that the stimulus package is ramping up production capacity without consideration for who is going to buy all this stuff?"<br /><br />Well, it is doing two things. It is ramping up long term capacity in the export sector, and they don't have any clear idea what the level of demand for all this will be one year from now. They are just crossing their fingers and hoping.<br /><br />But internally they are increasing output (they are giving - literally - fridges and TV sets to people in rural areas, rather like Europeans a (half-) giving cars. And they are carrying out infrastructure activities which are useful in the longer term, so it isn't all wasteful by any means.<br /><br />The question is for how long they can finance all this. The economy IS export dependent, and they do need a recovery in external demand. So the big issue is when they will get it.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-35439249055407582862009-05-12T09:32:00.000+02:002009-05-12T09:32:00.000+02:00Is it possible as some seem to imply that the stim...Is it possible as some seem to imply that the stimulus package is ramping up production capacity without consideration for who is going to buy all this stuff?Nobodyhttps://www.blogger.com/profile/09952955021226297401noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-91244685170128226072009-05-12T09:30:00.000+02:002009-05-12T09:30:00.000+02:00I mean in my link they say the exports are in a fr...I mean in my link they say the exports are in a freefall. You are saying the decline in export orders moderated. By how long the actual exports trail the orders?Nobodyhttps://www.blogger.com/profile/09952955021226297401noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-45443634254624580892009-05-12T09:05:00.000+02:002009-05-12T09:05:00.000+02:00Hi Nobody,
Thanks for this.
"I am not sure what...Hi Nobody,<br /><br />Thanks for this. <br /><br />"I am not sure what decline in export orders means...."<br /><br />It means, nobody, that world trade is NOT taking off at this point, so really China is coming under pressure. In March overseas sales declined 17.1 percent from March 2008 - to $90.29 billion. In April exports were at $91.9 billion, very slightly up on March, but 22.6% down on April 2008.<br /><br />Basically internal demand is largely being maintained by increasing government spending - hence the fact that investment in factories and property jumped 30.5 percent from a year earlier in the first four months of the year, thanks largely to the wave of bank loans for government stimulus projects - but this is only a stop gap. <br /><br />China will have to await a rebound in global trade (and we have no idea when that will come, or how) and grit its teeth in the meantime. Right now, as mentioned in the post, internal price deflation is setting in and the rate of new loan growth is slowing. So, hold tight everyone.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-5838647.post-26516744480139445822009-05-12T07:32:00.000+02:002009-05-12T07:32:00.000+02:00Hi Eduard
I am not sure what decline in export or...Hi Eduard<br /><br />I am not sure what decline in export orders means because this is what I was reading a few minutes ago:<br /><br /><EM>By ELAINE KURTENBACH, AP Business Writer – 54 mins ago<br />SHANGHAI – China's exports plunged 22.6 percent in April from a year ago, the sixth straight monthly decline, the government said Tuesday, while a torrent in bank lending meant to boost the economy lifted spending on factories and other fixed assets.<br /><br />April's decline in exports, to $91.9 billion, is bigger than March's 17 percent drop and suggests China's trade sector has yet to see much relief from the prolonged drought in demand brought on by the global downturn.<br /><br /><A HREF="http://news.yahoo.com/s/ap/20090512/ap_on_bi_ge/as_china_trade" REL="nofollow">Source</A></EM>Nobodyhttps://www.blogger.com/profile/09952955021226297401noreply@blogger.com