Changing China Set to Shake World Economy, Again

[News_Editor]

The Jianwai SOHO residential and commercial complex in Beijing stands as evidence of China's rapid economic rise. (Photo: Reuters)

BEIJING/LONDON” Long after concerns about tightening US monetary policy have faded, a more profound issue will still dog global policymakers: how to handle the second stage of China's economic revolution.

The first phase, industrialization, shook the world. Commodity-producing countries boomed as they fed China's endless appetite for natural resources. Six of the 10 fastest-growing economies last decade were in Africa.

China's flood of keenly priced manufactured goods hollowed out jobs in advanced and emerging nations alike but also helped cap inflation and made an array of consumer goods affordable for tens of millions of people for the first time.

The second stage of China's development promises to be no less momentous.

Consumption will take over the growth baton from investment. Services will grow as a share of the economy, while industry shrinks. Commodity-intensive mass manufacturing based on cheap labor will give way to greener, cleaner ways of making things.

More of the value added by a better-educated, more productive workforce harnessing new technologies will stay in China instead of going to multinational companies.

That's the plan, anyway.

China will remain the most powerful engine of global growth for the next couple of decades, but it will no longer be just processing imported raw materials and components for re-export, said Li Jian with the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry's think tank.

"China has realized that it cannot blindly rely on investment and exports as the main drivers of growth. So China's demand will be more balanced,"Li said.

High Stakes

To show it is serious about more sustainable growth, China deliberately engineered the first-half slowdown that unnerved markets in order to address these longer-term structural priorities, according to President Xi Jinping.

Xi and the other new leaders of China's Communist Party are expected to approve a blueprint for reform at a plenum in November. Overcoming vested interests opposed to the new economic model will be a stern test of their credibility. A lot is at stake for the global economy too. Philip Schellekens, an economist with the World Bank in Washington, said the importance of the reforms Beijing intends to make cannot be overstated. As China changes, so will the rest of the world.

"The structural transformations that we think are going to happen in China over the next two decades will matter far more than the near-term vulnerabilities," he said.

On balance, commodity-exporting developing economies stand to be affected more than rich nations an obvious exception being Australia, where the end of a China-driven mining boom was a big issue in Saturday's election. China buys a third of Australia's exports.

Commodity demand should stay strong, especially as China's capital stock per head is only 10 percent that of America's and urbanization has a long way to go. But rebalancing will favor commodities more closely tied to consumption than to investment.

Economists fret that too many emerging markets spent their windfalls from surging raw material prices instead of plowing them into infrastructure and other investment. As a result, growth is slowing now that China's demand is softening.

China's appetite for agricultural commodities and energy should hold up well but Capital Economics, a London consultancy, said it was concerned about large metals exporters that have not saved their extra income and so are running current account deficits.

It singled out South Africa, Zambia, Chile and Peru as being particularly vulnerable.

Winners and Losers

Of course, lower raw material prices should boost growth and lower inflation for commodity importers.

Take iron ore. With no other country coming close to being able to absorb the slack left by China, which imports about two-thirds of the world's ore, prices risk years of decline as a major oversupply swamps demand, with some forecasting prices to be cut in half by 2015.

Another bonus is that big emerging markets such as India and Indonesia will have a chance to move into basic manufacturing sectors that China is vacating. Bangladesh has quickly become the world's second-biggest textile exporter.

Brazil stands out as an example of a country that has already been under intense pressure from China in low-skill industries such as footwear and will increasingly be going head to head with China in higher-value markets too. Policies to boost competitiveness thus become more imperative than ever.

After largely missing the chance to reform during the boom, Brazil also risks squandering the opportunities thrown up by China's transition slip unless it improves its infrastructure, cuts red tape and overhauls its tax system, economists say.

"Some of the underlying structural shortcomings of the economy were covered up during the bonanza. It's only as the commodity boom has slowed that the supply side constraints have become more visible," said Jens Arnold, who tracks Brazil for the Organization for Economic Cooperation and Development (OECD) in Paris.

In the case of advanced economies, China's transition is a double-edged sword, according to He Yifeng, an analyst at Hongyuan Securities in Beijing.

"For the United States and Europe, China's rebalancing could create more competition for them. But they can take the initiative by focusing on the higher end of the value chain, relying on knowledge and technology exports," he said.

Services Bonanza

Already a lucrative market for European purveyors of luxury goods, China will increasingly present opportunities for foreign firms as incomes rise and consumers grow more discriminating.

Safety-conscious parents' choice of foreign-made baby milk formula is a case in point, said Haibin Zhu, chief China economist for JP Morgan in Hong Kong.

"We will probably see a shift in the consumption basket," Zhu said. "The increased focus on product quality is positive news for many international exporters, particularly from advanced economies."

Another rich seam for advanced economies is services, which account for just 43 percent of Chinese GDP, the smallest share of any major economy.

James Emmett, global head of trade finance at HSBC in London, said urbanization and the rise of China's middle class offered openings to firms in Britain and beyond in sectors such as health, education and tourism.

"We are seeing a change in the nature of China," he said.

As services blossom, foreign companies could reap a windfall of up to $6 trillion by 2025 in everything from retail trade and transport to hotels and finance, said Yale University's Stephen Roach, a former chairman of Morgan Stanley Asia.

Zhu at JP Morgan expects investment to drop from 48 percent of GDP to 35 percent by 2018-20 as consumption (household and government) rises to 60-65 percent from 50 percent.

At the same time, GDP growth is likely to slow toward 6.5 percent a year by 2016-20 from 7.7 percent in 2012 and 10 percent a year on average since the late 1970s.

Yet market worries about the transition need to be kept in perspective. Even if growth slows to 5 percent a year by 2030, Schellekens with the World Bank said China will still be adding output every year equal to the size of the South Korean economy.

“Even though China is facing quite a transformation, the long-term future is still a very positive one,†he said.

Source: Irrawaddy.org

[Publicus]

Whomever is writing the Beijing PR presented above needs to be reality checked for being a 100% propagandist. Just the two articles below are among the many that present the realities of the present in the CCP-PRC.

This is a particularly telling quote:

Last week, the crisis was announced with a flourish. First, The New York Times columnist and Nobel Prize-recipient Paul Krugman penned a piece titled Hitting China's Wall. He wrote, The signs are now unmistakable: China is in big trouble. We're not talking about some minor setback along the way, but something more fundamental. The country's whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be.

And this quote:

Later in the week, Ben Levisohn authored a column in Barron's called "Smoke Signals from China." He wrote, In the classic disaster flick 'The Towering Inferno' partygoers ignored a fire in a storage room because they assumed it has been contained. Are investors making the same mistake with China? He goes on to answer his question, saying, Unlike three months ago, when investors were placing big bets that China's policymakers would pump cash into the economy to spur growth, the markets seem to have accepted the fact that sluggish growth for the world's second largest economy is its new normal.

'You Must Confess': China's Red Campaign Against Multinationals

Beijing’s Maoist revival, roiling Chinese society and politics, is now beginning to poison China’s business environment as well

On Wednesday, Reuters reported that in late July the powerful National Development and Reform Commission brought together representatives from about 30 foreign companies—including GE, Microsoft, IBM, Intel, and Qualcomm—and tried to force them to write confessions of violations of China’s anti-monopoly law. Chinese officials then, incredibly, showed the multinationals the “self-criticisms” of other companies as a means of pressuring them to follow suit.

NDRC officials, during the two-day meeting, also browbeat and threatened the foreign firms and warned them not to defend themselves. “The message was: if you put up a fight, I could double or triple your fines,” said one participant at the session, reporting the remarks of the NDRC’s Xu Xinyu, a division chief in the antitrust bureau.

Xi Jinping has been conducting a series of Maoist-inspired “rectification” and “mass line” campaigns since he became China’s leader last November, and Marx is enjoying a Beijing-sponsored revival at the moment. China, unfortunately, is beginning to resemble the neighboring state run by the Kim family, and as a consequence Chinese netizens have started to call their own country “West Korea.”

http://www.forbes.com/sites/gordonchang/2013/08/25/you-must-confess-chinas-red-campaign-against-multinationals/?utm_source=followingdaily&utm_medium=email&utm_campaign=20130826

Recognizing the End of the Chinese Economic Model

Over the past couple of years, the ranks of the China doubters had grown.

But the past few months have seen a sea change. We have gone from China the omnipotent, the belief that there was nothing the Chinese couldn't work out, to the realization that China no longer works.

Read more: Recognizing the End of the Chinese Economic Miracle | Stratfor

[Publicus]

The CCP Central Committee plenum will be held in November so we'll see what promises the new leadership have to make in the face of an economic model that really hasn't ever worked well, disguising its own fundamental flaws behind a lot of property and infrastructure development and associated corruption that has created bubbles in housing and real estate, banking and finance, and has created local government debts that are frighteningly out of this world due to the local governments' use of the shadow banking system, which poses yet another imminent threat to the CCP-PRC economy.

Previous CCP Central Committee plenums were the occasions by Deng Xiaoping announcing in 1978 the opening up of the country's economy and in 1993 where PM Zhu Rongji announced the oxymoron "socialist market economy" with, of all things, Chinese characteristics.

The coming plenum almost assuredly will contain a lot of empty promises because the vested interests that have become entrenched over the past 30 years aren't going to surrender their grip on both money and power. The CCP cares only for itself and for its own self-enrichment at the expense of the people of the People's Republic.

Can the Chinese Communist Party Still Reform?

Unfortunately, there are compelling reasons to believe that the present-day Communist Party, and its associated governing apparatus, no longer retains the ability of its predecessors to deliver bold system-wide reform.

Rather, it appears its own preoccupations and the major imbalances and vested interests that have emerged in China's politics, economy and society over recent years have critically weakened the Party's reforming prowess.

This suggests another crucial issue is resistance to policy. In particular, this often appears to come from two of the country's most powerful and entrenched vested interests: state-owned enterprises (SOEs) and the Party's own local-level cadres.

http://thediplomat.com/2013/09/18/can-the-chinese-communist-party-still-reform/?all=true

Edited September 19, 2013 by Publicus

[boomerangutang]

Looking at the accompanying photo, I shudder to observe how China is building mega-cities wherever it can. If the Yosemite Valley were in China, it too would be packed with concrete apartment complexes, wall to wall.

Every Chinese who moves from a village, automatically gets drawn to the nearest mega-city - which are are popping up nearly everywhere in China. Once oriented in a mega-city, they quickly realize rents are astronomical. No matter that occupancy rates are often in the single digits %. Landlords would rather wait, than rent for a reasonable price.

Chinese don't care for preserving natural habitat, and they think there are just two choices in life: live like a serf in a village, or live like a prince in a shiny clean apartment in a giant city. Of course, few can afford the apartment, so they wind up packed in to hovels in the city, hoping for a lucky break.

One of the last refuges of un-ruined habitat are pockets of nature in SW China, but even those regions are being encroached upon. Chinese have scant notion of National Parks or reasons to create and maintain them. The 2 main reasons that region hasn't yet been citified/urbanized is: {A} it's remote, and {B} it has steep hills. Give it a few more years, and that region too will be covered in asphalt and cement.

[Gulfsailor]

Looking at the accompanying photo, I shudder to observe how China is building mega-cities wherever it can. If the Yosemite Valley were in China, it too would be packed with concrete apartment complexes, wall to wall.

Every Chinese who moves from a village, automatically gets drawn to the nearest mega-city - which are are popping up nearly everywhere in China. Once oriented in a mega-city, they quickly realize rents are astronomical. No matter that occupancy rates are often in the single digits %. Landlords would rather wait, than rent for a reasonable price.

Chinese don't care for preserving natural habitat, and they think there are just two choices in life: live like a serf in a village, or live like a prince in a shiny clean apartment in a giant city. Of course, few can afford the apartment, so they wind up packed in to hovels in the city, hoping for a lucky break.

One of the last refuges of un-ruined habitat are pockets of nature in SW China, but even those regions are being encroached upon. Chinese have scant notion of National Parks or reasons to create and maintain them. The 2 main reasons that region hasn't yet been citified/urbanized is: {A} it's remote, and {B} it has steep hills. Give it a few more years, and that region too will be covered in asphalt and cement.

Of course mega cities look awful, but compared to agricultural land use, they only have a tiny footprint in regards to land usage. Farmland is mainly responsible for the destruction of natural habitat, not the cities. Imagine sticking all 1.5 billion Chinese in tower flats. 40 stories high, and with 50m2 living space per person, you'd need less than 2,000 km2 of land. Double that for infrastructure, shops and offices, and the entire Chinese civilisation would fit in an area half the size of New Jersey State.

If you want to save nature, be against agriculture.

[tw25rw]

If you want to save nature, be against agriculture.

Modern. industrial agriculture, definitely.

[boomerangutang]

That 'half the size of NJ' analogy is conjecture to the 10th degree. Look at any recent satellite shot of any of China's cities, and you'll see them sprawling like giant squashed octopusus. You'll also see yellow and/or gray haze hovering over each metropolis. The answer is; a dire need lessen population growth coupled with sensible ways to handle the immense overpopulation.

There's a mention of less farmland. Actually, mankind can adapt, for the near future to less farmland, because of changing eating habits. Most people are steering towards fabricated/snack food-stuff and away from the types of foods their grandparents ate (real fruit, real veges, whole grains, etc). One example: Top Ramen is insanely popular all over Asia, and beyond. It contains more MSG than anything fresh. Asians are powered by MSG, caffeine, sugar, fermented sugars, and deep fried oil, with a bit of nicotine and hot pepper sauce mixed in for balance.

[LawrenceChee]

I am happy to see this new model for the Chinese economy as it is more substantial in terms of the right structures needed for longer termed growth with lesser dependency on low end exports.

Li Keqiang the moderate prime minister has strong support from the local business leaders including HK Li Kashing to make this short term painful adjustment and drop the country obsession with GDP growth numbers

Singapore was a prime example of a city state with impressive GDP growth but of late have come under heavy criticism from its own citizens that the pursuit has led to a dramatic drop in living standards and balance of life.

China has delegates there to study the model and know the 8 % target is not that important in the big scheme of things anymore.

There has been a recent crackdown on western companies who along with the first wave has taken advantage of the pricing structure and enhanced themselves monopolizing the markets with their products and pricing

I am happy to the Chinese government getting serious about making sure foreign companies while having an opportunity to expand into this important market do not do anything illegal they would not try back home.

This is an important part of engaging the consumer confidence in this 2nd wave of the economy re-structure

The recent exposures with regards to medicine pricing, milk powder bribing in Tianjin hospitals has the consumers rightfully angry in china as they deserve no less than any markets around the worlds.

Companies foreign or Chinese has to make money ....however artificially influencing the price or brands is not acceptable.

[Gulfsailor]

That 'half the size of NJ' analogy is conjecture to the 10th degree. Look at any recent satellite shot of any of China's cities, and you'll see them sprawling like giant squashed octopusus. You'll also see yellow and/or gray haze hovering over each metropolis. The answer is; a dire need lessen population growth coupled with sensible ways to handle the immense overpopulation.

There's a mention of less farmland. Actually, mankind can adapt, for the near future to less farmland, because of changing eating habits. Most people are steering towards fabricated/snack food-stuff and away from the types of foods their grandparents ate (real fruit, real veges, whole grains, etc). One example: Top Ramen is insanely popular all over Asia, and beyond. It contains more MSG than anything fresh. Asians are powered by MSG, caffeine, sugar, fermented sugars, and deep fried oil, with a bit of nicotine and hot pepper sauce mixed in for balance.

yes, asians eat different food than westerners. But which of the two regions has more cardiovascular and heart disease? Cancer? Parkinson's? Alzheimer's? Obesity?

Sugars and all carbs in general are not meant to be eaten in large quantities by humans. Saturated fats on the other hand are great! The once dreaded palm oil is making a comeback as health food.

And the more our food comes from factories and the wild, the less nature we ruin by massive agriculture. So humans should stop eating bread, potatoes, sugar and rice, and the world will be nicer with healthier people in it. The earth can sustain tens of billions of people easily, as long as we start living smart. A nice crunchy deep fried grasshopper anyone?

[Publicus]

Looking at the accompanying photo, I shudder to observe how China is building mega-cities wherever it can. If the Yosemite Valley were in China, it too would be packed with concrete apartment complexes, wall to wall.

Every Chinese who moves from a village, automatically gets drawn to the nearest mega-city - which are are popping up nearly everywhere in China. Once oriented in a mega-city, they quickly realize rents are astronomical. No matter that occupancy rates are often in the single digits %. Landlords would rather wait, than rent for a reasonable price.

Chinese don't care for preserving natural habitat, and they think there are just two choices in life: live like a serf in a village, or live like a prince in a shiny clean apartment in a giant city. Of course, few can afford the apartment, so they wind up packed in to hovels in the city, hoping for a lucky break.

One of the last refuges of un-ruined habitat are pockets of nature in SW China, but even those regions are being encroached upon. Chinese have scant notion of National Parks or reasons to create and maintain them. The 2 main reasons that region hasn't yet been citified/urbanized is: {A} it's remote, and {B} it has steep hills. Give it a few more years, and that region too will be covered in asphalt and cement.

Of course mega cities look awful, but compared to agricultural land use, they only have a tiny footprint in regards to land usage. Farmland is mainly responsible for the destruction of natural habitat, not the cities. Imagine sticking all 1.5 billion Chinese in tower flats. 40 stories high, and with 50m2 living space per person, you'd need less than 2,000 km2 of land. Double that for infrastructure, shops and offices, and the entire Chinese civilisation would fit in an area half the size of New Jersey State.

If you want to save nature, be against agriculture.

A touch of realism and reality is in order.

Shandong province in the northeast of the CCP-PRC has a peninsula smaller than Texas but which has more people living on it than there are in the whole of the United States.

Only 14 percent of he land in the PRC is arable.

Let's look at some CCP-PRC cities - ghost cities and ghost high rise apartment buildings in cities throughout the PRC which remain unoccupied.

Scary New Satellite Pictures Of China's Ghost Cities

China's notorious ghost cities are a disaster waiting to happen, according to a new report from 60 Minutes.

Take it from the CEO of Vanke, the country's largest residential real estate developer, who tells 60 Minutes that developers are deep in debt, projects are being abandoned, and things could get ugly fast. The nightmare scenario could be like America's housing crash but worse.

"It's like walking into a forest of skyscrapers, but they're all empty," financial analyst Gillem Tulloch said of another ghost city, Chenggong

Read more: http://www.businessinsider.com/satellite-pictures-of-chinese-ghost-cities-2013-3?op=1#ixzz2fSxAX0iO

[Publicus]

That 'half the size of NJ' analogy is conjecture to the 10th degree. Look at any recent satellite shot of any of China's cities, and you'll see them sprawling like giant squashed octopusus. You'll also see yellow and/or gray haze hovering over each metropolis. The answer is; a dire need lessen population growth coupled with sensible ways to handle the immense overpopulation.

There's a mention of less farmland. Actually, mankind can adapt, for the near future to less farmland, because of changing eating habits. Most people are steering towards fabricated/snack food-stuff and away from the types of foods their grandparents ate (real fruit, real veges, whole grains, etc). One example: Top Ramen is insanely popular all over Asia, and beyond. It contains more MSG than anything fresh. Asians are powered by MSG, caffeine, sugar, fermented sugars, and deep fried oil, with a bit of nicotine and hot pepper sauce mixed in for balance.

yes, asians eat different food than westerners. But which of the two regions has more cardiovascular and heart disease? Cancer? Parkinson's? Alzheimer's? Obesity?

Sugars and all carbs in general are not meant to be eaten in large quantities by humans. Saturated fats on the other hand are great! The once dreaded palm oil is making a comeback as health food.

And the more our food comes from factories and the wild, the less nature we ruin by massive agriculture. So humans should stop eating bread, potatoes, sugar and rice, and the world will be nicer with healthier people in it. The earth can sustain tens of billions of people easily, as long as we start living smart. A nice crunchy deep fried grasshopper anyone?

Some of the new headaches of the contemporary CCP-PRC.

Cancer is now the leading cause of death in China

Cancer is now the leading cause of death in China. Chinese Ministry of Health data implicate cancer in close to a quarter of all deaths countrywide.

As is common with many countries as they industrialize, the usual plagues of poverty — infectious diseases and high infant mortality — have given way to diseases more often associated with affluence, such as heart disease, stroke, and cancer.

http://grist.org/pollution/2011-05-25-cancer-now-leading-cause-of-death-in-china/

China's Diabetes Rates Highest In The World

Nearly 12 percent of Chinese adults (about 113.9 million people) are suffering from diabetes, according to a new study published in the Journal of the American Medical Association (JAMA) on Tuesday.

Based on nearly 99,000 samples taken in 2010, the study estimates that 11.6 percent of Chinese adults are diabetic, making China's rate of prevalence of the disease the highest in the world.

"The prevalence of diabetes has increased significantly in recent decades and is now reaching epidemic proportions in China," the researchers write.

http://www.huffingtonpost.com/2013/09/04/china-diabetes_n_3867778.html

[Publicus]

Yeah, so, as I was saying, let's get current on the facts and with reality.

And Now China Has A Gigantic Obesity Problem, Too

Reuters

China's economic prosperity has led to a health crisis growing with alarming rates in the country – obesity.

19 million Chinese are considered obese and millions more are overweight.

More and more fat reduction hospitals are springing up all over the country using fire treatments, acupuncture and cupping treatment to help obese Chinese lose the weight

Read more: http://www.businessinsider.com/china-obesity-2010-6?op=1#ixzz2fT63K5NQ

Edited September 20, 2013 by Publicus

[boomerangutang]

Interesting to note the direction this thread is leaning. The lead article focuses on finances and economics, as if that's the top measure of how well a country is doing. Economics are important, yet it's just one measure of how well things are going. To me, it's of lesser importance than 'quality of life' 'health of people' and 'health of natural environment'

It's similar to comparing how Asians view higher education and attaining degrees. To Asians, it's paramount, because (in their view) getting a U degree is essential, on the path to making as much money as possible. With the popularity of the internet, among other things, that mind-set is shown to be hollow. A self-motivated, intelligent young person can garner all sorts of knowledge via the internet. Personally, I favor apprenticeship (with a master) over University rote learning, but perhaps that's an archaic outlook.

Even professors at Chinese U's will admit that the most their students achieve is memorizing factoids which they'll need to pass crucial tests. Innovative thinking and 'problem solving' is not given credence.

Two of the richest silicon entrepreneurs in recent history, Gates and Jobs, never got U degrees. The reason tens of millions of Chinese students choose to study business and economics is because they think it's the surest way to get rich. Perhaps that's true, but economic specialists contribute nothing useful or tangible to society. At best, they just push other peoples' money around on speculation.

[Gulfsailor]

Yeah, so, as I was saying, let's get current on the facts and with reality.

And Now China Has A Gigantic Obesity Problem, Too

Reuters

China's economic prosperity has led to a health crisis growing with alarming rates in the country obesity.

19 million Chinese are considered obese and millions more are overweight.

More and more fat reduction hospitals are springing up all over the country using fire treatments, acupuncture and cupping treatment to help obese Chinese lose the weight

Read more: http://www.businessinsider.com/china-obesity-2010-6?op=1#ixzz2fT63K5NQ

I like the headlines you use to capture attention.

At 19 million obese Chinese, against total Chinese numbering 1.5 billion, the percentage of obese people is thus less than 1.3%. that would make it near the absolute bottom of obesity incidence rates in the world.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2228rank.html

[LawrenceChee]

Interesting to note the direction this thread is leaning. The lead article focuses on finances and economics, as if that's the top measure of how well a country is doing. Economics are important, yet it's just one measure of how well things are going. To me, it's of lesser importance than 'quality of life' 'health of people' and 'health of natural environment'

It's similar to comparing how Asians view higher education and attaining degrees. To Asians, it's paramount, because (in their view) getting a U degree is essential, on the path to making as much money as possible. With the popularity of the internet, among other things, that mind-set is shown to be hollow. A self-motivated, intelligent young person can garner all sorts of knowledge via the internet. Personally, I favor apprenticeship (with a master) over University rote learning, but perhaps that's an archaic outlook.

Even professors at Chinese U's will admit that the most their students achieve is memorizing factoids which they'll need to pass crucial tests. Innovative thinking and 'problem solving' is not given credence.

Two of the richest silicon entrepreneurs in recent history, Gates and Jobs, never got U degrees. The reason tens of millions of Chinese students choose to study business and economics is because they think it's the surest way to get rich. Perhaps that's true, but economic specialists contribute nothing useful or tangible to society. At best, they just push other peoples' money around on speculation.

I agree with you on this as well. The last 30 years have seen a huge focus on infrastructure and economic success and while it served china well then to bring the country out of an agriculture dependence, it's good to look ahead at the future.

Since coming into power, Xi & Li have shown encouraging signs that the country will move into a next phase where there will be more emphasis on people development and quality of life.

While there will always be doubting Thomas out there, the recent moves to crib corruption and stop gift giving, close labor camps, opening shanghai new free trade zone where the yuan will be given more freedom to trade are all good moves from a govt for the next 10 years.

It's the right step and in many of the speeches given so far by Li, the government seems determined to steer the people off achievements of GDP numbers alone and try to manage or plan ahead for a nation that is aging, pollution indexes and clean energy while building a strong nation.

I would think the moderates would agree its a formidable task to balance all of that and get all the policies right

I have always been asked why is reform is slow on china, the scale of the population and the lack of consensus among the groups with various interests make it hard for a central government to make big strides quickly.

The intention on the big scale is clear for the moment, keep the light industries to the south and the democracy experiments of freedom.

Engage shanghai as the financial hub, continue to develop the north for heavy machinery and keep the northern coasts for shipping hubs.

[Publicus]

One should never underestimate the impact of economics, especially in the collapsing economic model of the CCP-PRC.

If such great changes and reforms are in the offing in the CCP-PRC, they are extremely dim for many to see who are involved daily in human rights issues. We're talking about the CCP here, to which human rights are regarded subversive and seditious.

First there's this:

According to information compiled by Chinese media expert and online activist Wen Yunchao, and Xu's friend and legal scholar-activist Teng Biao, more than 100 dissidents have been detained or arrested in the first six months of this year. About a fifth of them took part in the New Citizens' Movement, while 38 others were taken into custody for organizing and participating in other public collective actions not directly related to the New Citizens Movement. The number of detained activists is increasing, with the latest being well-known Guangdong rights activist Guo Feixiong, aka Yang Maodong, who was detained on August 8 on suspicion of "disrupting public order." Guo had helped organize a signature campaign to urge the National People’s Congress to ratify the International Covenant on Civil and Political Rights in March.

And then there's this:

This wave of arrests and detentions of activists that emphasize citizens’ rights and call for greater government accountability is telling. China has been experiencing a slowdown in economic growth for the last five quarters. Projected fears of what the future holds for China’s economy might explain heightened sensitivities to grassroots demands to deal seriously with seemingly intractable governance issues that are likely to drag seriously on growth when investment-led strategies are no longer feasible

Which gives us this:

The Human Rights Implications of China’s Slowdown

Since Chinese President Xi Jinping and Premier Li Keqiang took power in March, activists in China have come under increasing pressure from authorities.

As more and more detentions and arrests took place over the summer, human rights defenders have come to expect further violations of civil and political rights.

The pattern of recent violations and its correspondence with a slowdown in economic growth seems to suggest that any further economic trouble is likely to have a negative impact on human rights in the near term..

http://thediplomat.com/2013/09/20/the-human-rights-implications-of-chinas-slowdown/

[Publicus]

The True Believers, and they do exist, will assure us that everything in the CCP-PRC is fine, on schedule as planned and is fully under control. The True Believer even will say he's happy about the present and future state of things. Happy, happy, happy.

Who's to worry that the CCP's economic model is collapsing under the weight of a huge bubble in the real estate and property market, that there's a huge bubble in banking and finance, that there is a shadow banking system that is out of control, and that local governments throughout the country have run up debts - mainly through shadow banking - that can't ever be repaid.

Investment houses around the world see the debt to GDP ratio of the CCP-PRC as 200%, some among them see it at 220%.

A bubble never has a good outcome. And the CCP-PRC has several bubbles. Each bubble is huge, enormous, unprecedented in its size and scale. When the first bubble bursts there will be a humongous cascade of bursting bubbles that will shake the world economy and crush the CCP under the enormous weight of its own folly of a command economy and political dictatorship.

The Chinese Dream From Mao to Xi

For any political party, it is vital to have a vision for the future that serves to provide compelling ethical or moral motivations to inspire people to participate in the party’s cause.

Lacking the procedural legitimacy of democratically selected leaders, it is even more important for the Chinese Communist Party (CCP) to create its own narratives and stories to bolster its legitimacy and to mobilize mass support.

Even though Xi Jinping is probably the first Chinese leader to use the term “dream” in his new signature narrative, the CCP has a long tradition of providing its people with a rosy picture of the future.

http://thediplomat.com/china-power/the-chinese-dream-from-mao-to-xi/

[Publicus]

Yeah, so, as I was saying, let's get current on the facts and with reality.

And Now China Has A Gigantic Obesity Problem, Too

Reuters

China's economic prosperity has led to a health crisis growing with alarming rates in the country obesity.

19 million Chinese are considered obese and millions more are overweight.

More and more fat reduction hospitals are springing up all over the country using fire treatments, acupuncture and cupping treatment to help obese Chinese lose the weight

Read more: http://www.businessinsider.com/china-obesity-2010-6?op=1#ixzz2fT63K5NQ

I like the headlines you use to capture attention.

At 19 million obese Chinese, against total Chinese numbering 1.5 billion, the percentage of obese people is thus less than 1.3%. that would make it near the absolute bottom of obesity incidence rates in the world.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2228rank.html

It's the rate of growth in obesity that's the killer.

[Publicus]

Looking at the accompanying photo, I shudder to observe how China is building mega-cities wherever it can. If the Yosemite Valley were in China, it too would be packed with concrete apartment complexes, wall to wall.

Every Chinese who moves from a village, automatically gets drawn to the nearest mega-city - which are are popping up nearly everywhere in China. Once oriented in a mega-city, they quickly realize rents are astronomical. No matter that occupancy rates are often in the single digits %. Landlords would rather wait, than rent for a reasonable price.

Chinese don't care for preserving natural habitat, and they think there are just two choices in life: live like a serf in a village, or live like a prince in a shiny clean apartment in a giant city. Of course, few can afford the apartment, so they wind up packed in to hovels in the city, hoping for a lucky break.

One of the last refuges of un-ruined habitat are pockets of nature in SW China, but even those regions are being encroached upon. Chinese have scant notion of National Parks or reasons to create and maintain them. The 2 main reasons that region hasn't yet been citified/urbanized is: {A} it's remote, and {B} it has steep hills. Give it a few more years, and that region too will be covered in asphalt and cement.

Of course mega cities look awful, but compared to agricultural land use, they only have a tiny footprint in regards to land usage. Farmland is mainly responsible for the destruction of natural habitat, not the cities. Imagine sticking all 1.5 billion Chinese in tower flats. 40 stories high, and with 50m2 living space per person, you'd need less than 2,000 km2 of land. Double that for infrastructure, shops and offices, and the entire Chinese civilisation would fit in an area half the size of New Jersey State.

If you want to save nature, be against agriculture.

A touch of realism and reality is in order.

Shandong province in the northeast of the CCP-PRC has a peninsula smaller than Texas but which has more people living on it than there are in the whole of the United States.

Only 14 percent of he land in the PRC is arable.

Let's look at some CCP-PRC cities - ghost cities and ghost high rise apartment buildings in cities throughout the PRC which remain unoccupied.

Scary New Satellite Pictures Of China's Ghost Cities

China's notorious ghost cities are a disaster waiting to happen, according to a new report from 60 Minutes.

Take it from the CEO of Vanke, the country's largest residential real estate developer, who tells 60 Minutes that developers are deep in debt, projects are being abandoned, and things could get ugly fast. The nightmare scenario could be like America's housing crash but worse.

"It's like walking into a forest of skyscrapers, but they're all empty," financial analyst Gillem Tulloch said of another ghost city, Chenggong

Read more: http://www.businessinsider.com/satellite-pictures-of-chinese-ghost-cities-2013-3?op=1#ixzz2fSxAX0iO

Things in the CCP-PRC just aren't getting any better.

And they won't get any better because it's in fact the CCP-PRC.

Two Years After That Famous Report On Chinese Ghost Cities, Things Might Be Getting Even Worse

China's ambitious urbanization plan has helped create many ghost cities.

Two years after visiting some of China's most infamous ghost cities and malls, Australian reporter Adrian Brown revisited them for SBS Dateline, to see if they had changed.

His tour of Tianducheng, the Paris replica that we reported on; the South China Mall; and Kangbashi in Ordos, China's most famous ghost city, showed that they were still empty.

Read more: http://www.businessinsider.com/revisiting-chinas-ghost-cities-2013-9?op=1#ixzz2fUu4OJqy

[LawrenceChee]

Having looked at the governments of most nations, west or east ...it seems most of them promise a rosy future in return for the electoral vote.

I don't really see any differences here in doctrines, democratic or communist.

China should not be treated any differently, it should be offered an opportunity for the government to provide the best livelihood for its people. It's current economy model is due for a change and both leaders are rightly steering the country in hopefully the right direction to counter the bubbles.

If in due time, the economy does crack and become a burden to its people, the practicality of the Chinese will see another nationhood formed or the economic model changed.

The world of economics has changed tremendously in the last 20 years and I would bet china is not the only government in the world trying to battle that to change things for the betterment of its people.

[onionluke]

http://firstwefeast.com/eat/20000-kilos-of-fake-beef-seized-in-xian-china/

The food safety issues of cheating and shortcutting , if you will excuse the pun , continue .

[Credo]

No, Lawrence, I think you might be wrong. A lot of gov'ts promise to preserve the way of life that we have. But these are democratic countries and they have elections with a debate. It's a little like comparing apples and oranges.

[boomerangutang]

After looking at the link for 'ghost cities', specifically the Paris-look-alike: it reminded me how commonplace copying is in Chinese culture. Indeed, at an antique market, an adept craftsman is commended on his skills at copying and deception, rather than arrested for cheating buyers.

Then, the article on fake beef made from pork. Another example of fakes. The fake parade goes on. I wouldn't be surprised if they make fake pharmaceuticals also, though the real items are dodgy also. Up until recently, Chinese didn't make rock climbing and safety equipment. Now they do. Climbers beware.

It also relates to armaments. You figure, if a Chinese company can't make decent quality power tool or a reliable power strip, how reliable are their missiles, planes, rockets, guns and ammo?

[RubbaJohnny]

Interesting to note the direction this thread is leaning. The lead article focuses on finances and economics, as if that's the top measure of how well a country is doing. Economics are important, yet it's just one measure of how well things are going. To me, it's of lesser importance than 'quality of life' 'health of people' and 'health of natural environment'

It's similar to comparing how Asians view higher education and attaining degrees. To Asians, it's paramount, because (in their view) getting a U degree is essential, on the path to making as much money as possible. With the popularity of the internet, among other things, that mind-set is shown to be hollow. A self-motivated, intelligent young person can garner all sorts of knowledge via the internet. Personally, I favor apprenticeship (with a master) over University rote learning, but perhaps that's an archaic outlook.

Even professors at Chinese U's will admit that the most their students achieve is memorizing factoids which they'll need to pass crucial tests. Innovative thinking and 'problem solving' is not given credence.

Two of the richest silicon entrepreneurs in recent history, Gates and Jobs, never got U degrees. The reason tens of millions of Chinese students choose to study business and economics is because they think it's the surest way to get rich. Perhaps that's true, but economic specialists contribute nothing useful or tangible to society. At best, they just push other peoples' money around on speculation.

I

Good points however may I add and I am not an economist but I think you are making what pedants call a category error,more simply put confusing apples with lychees.

Economics defined as the study of scarcity is an academic description of reality.

It provides insight,tools and methodolgies.Their application is pragmatic.

There are inter alia two prevalent schools in vogue the neo Keynseian and the Austrian school at present.

The abuse is from speculators,bankers and politicians if you are unhappy with the outcomes I think the implementaion is valid for criticsm.

Criticising morons for genetic theory is a jejeune way to enhance eugenics

Edited September 21, 2013 by RubbaJohnny

[Publicus]

After looking at the link for 'ghost cities', specifically the Paris-look-alike: it reminded me how commonplace copying is in Chinese culture. Indeed, at an antique market, an adept craftsman is commended on his skills at copying and deception, rather than arrested for cheating buyers.

Then, the article on fake beef made from pork. Another example of fakes. The fake parade goes on. I wouldn't be surprised if they make fake pharmaceuticals also, though the real items are dodgy also. Up until recently, Chinese didn't make rock climbing and safety equipment. Now they do. Climbers beware.

It also relates to armaments. You figure, if a Chinese company can't make decent quality power tool or a reliable power strip, how reliable are their missiles, planes, rockets, guns and ammo?

The Thai military has warehouses stacked with weapons purchased from the CCP-PRC that it doesn't use because they don't function properly.

Chavalit kept throwing money at Beijing for useless weapons, which made the corrupt CCP very happy and the corrupt Thais very happy too due to kickbacks.

Most Thai navy ships are PRChinese made rust buckets, thanks again to Chavalit whom Beijing already misses very much.

CCP corruption makes Thais look like Boy Scouts.

[LawrenceChee]

China will continue to shift its manufacturing hubs to suit what the customers want to make

In the 2nd phase of the economic reviews, there is hopefully a bigger shift into high end manufacturing such as your Volvo cars, iPhones and high end tablets and white goods.

Even the high end Vertu phone at a price tag @$11000 and proudly hand assembled in England has a humble battery and other parts made in China.

However there will be factories that will make the low end stuff like the the 30 baht car I just bought for the boy at the Talat to smack in the wall with no remorse...

[boomerangutang]

For all it's economic might (#2 in the world) and gargantuan population, China still has not one recognizable brand name. Quite a contrast to little countries like UK, Netherlands, Switzerland.

[LawrenceChee]

For all it's economic might (#2 in the world) and gargantuan population, China still has not one recognizable brand name. Quite a contrast to little countries like UK, Netherlands, Switzerland.

I agree with you at times it seems hard for the world to fathom and think china may be behind the world in innovation and inventing.

With a domestic market of 1.3 billion, there are at times little motivation to step into the international markets and the products are made for the Chinese market and have an extensive following

Those who have been following iPhone story within china and their inability to link a deal with china mobile will discover the local version called "xiaomi" it thumps the iPhone in price and apps catered for the Chinese market and is proving to be the phone of the masses who cannot afford a samsung and iPhone.

...almost a reminder how jolibee beats MacD in the Philippines just for catering to the locals.

Have a look at this link, these brands are well known in China and cater to the markets in china. The revenue is staggering for these brands.

http://www.businessinsider.com/top-chinese-brands-2011-10?op=1

[Publicus]

The CCP-PRC domestic market is huge but it is not 1.3 billion consumers.

Any global corporation doing business in the CCP-PRC will tell you, and it's no secret, that the actual market on the Mainland is 500 million. That's a huge market that any corporation abroad would love to access, and many do operate on the Mainland.

But the market is not 1.3 billion consumers nor will it ever be that many. After the 500 million are the rest of the PRChinese who live on between USD $2 a day to $5 a day.

The income disparity in the CCP-PRC is the worst in the world and it scares hell out of the CCP, but apparently not enough to actually do something real about it. The new Primer Li Kejiang talks a good game but his "urbanization" scheme has produced only ghost cities.

If Li wants to populate those ghost cities before they begin to crumble, he's going to have to throw out the traditional Hukuo system which, in effect, requires a PRChinese person (or family) to get a passport to relocate to another city or another province. Li's promising to do that, so let's see if anything real or effective happens at the Plenum in November and in reality afterward.

[LawrenceChee]

http://m.bbc.co.uk/news/world-us-canada-24039202

This report suggests for the USA that the income disparity has widen to its worst

Living on $2-$5 a day needs to be taken into context as you can find noodles or fried rice for $1 a bowl in most markets and a cup of bowl instant noodles is $0.30 in the supermarket hard to find that in developed countries where the only $1 menu items is found in McDonalds or TacoBell ...although a TacoBell would be very welcome in Chiang Mai :-)