Xi says 'without reform' no progress for business in China

[webfact]

Xi says 'without reform' no progress for business in China
GENE JOHNSON, Associated Press
PHUONG LE, Associated Press

SEATTLE (AP) — Chinese President Xi Jinping on Wednesday addressed Amazon founder Jeff Bezos, billionaire investor Warren Buffett and other top American and Chinese business leaders, vowing that his country would work to remove barriers to foreign investment and improve intellectual property protections.

Xi's conference with the business leaders in Seattle marked the beginning of a busy day. He also toured the Boeing production facility in Everett and was to visit the Microsoft campus along with a high school in Tacoma.

Apple Chief Executive Tim Cook, Microsoft CEO Satya Nadella and Jack Ma of Chinese e-commerce giant Alibaba also were among the 30 executives who attended a closed-door discussion moderated by former U.S. Treasury Secretary Henry Paulson that preceded Xi's address.

Xi told the group in a speech that was open to media that China's economy has "big potential" and leaders will continue to remove barriers to foreign investment.

"Without reform, there will be no driving force; without opening up, there will be no progress," Xi said through an interpreter, echoing remarks he made during a speech Tuesday. "There is good news and I believe there will be more good news in the future."

Xi attributed the Chinese economy's "moderation in speed and downward pressure with some ups and downs in the stock market" to three factors — world economic problems, proactive Chinese efforts at regulation and "protracted structural problems" in China.

But, he said, "I believe in the long run that the fundamentals of the Chinese economy are good."

A big item of concern for the American CEOs was a treaty that would provide a framework for broader investment in the economy of each nation.

All of the American CEOs participating in the forum signed a letter to Xi and U.S. President Barack Obama urging them to support an agreement, and they heard encouraging words from Xi on the topic Wednesday.

"Once concluded, the treaty will further ease market access and put in place more open and transparent market rules," he said.

Bilateral investment treaties provide rules for companies doing business in other countries. The agreements can help ensure the rights of foreign investors are protected and that foreign companies operate on a level playing field with domestic ones.

An agreement with China could open up more of that nation's massive market to American companies, provide clearer rules for Chinese investment in the U.S., and create jobs in both countries, supporters say.

Such treaties "can be a powerful catalyst for more economic growth," said Evan Feigenbaum, vice chairman of the Paulson Institute, which co-hosted the meeting.

Representatives from Twitter, Facebook and Google were notably missing from the event. China blocks those companies' websites.

Earlier Wednesday it was announced that Chinese companies have agreed to buy 300 jets from Boeing.

In addition, state-owned Commercial Aircraft Corp. of China signed a cooperation agreement with the aerospace giant to build a 737 aircraft assembly center in China.

Xi arrived in Seattle on Tuesday for a three-day visit before he heads to the White House later this week.

In the speech Tuesday, Xi told dignitaries such as former U.S. Secretary of State Henry Kissinger, former Treasury Secretary Hank Paulson and Commerce Secretary Penny Pritzker that reaching agreements to ensure robust international trade was a priority.

"China will never close its open door to the outside world," Xi said.

U.S. Treasury Secretary Jacob Lew has said the two nations have a long way to go in negotiating a treaty but had agreed to narrow their respective lists of sectors that would be exempted from foreign investment by this month.

Xi also said China and the U.S. could work together to address cybercrimes, a problem that has sparked mutual tension. He said China was a staunch defender of cybersecurity and also had been a victim of hacking.

Acknowledging that the countries don't always see eye to eye, Xi said China is ready to set up a joint effort to fight cybercrimes.

American officials say hacking attacks originating from China are approaching epidemic levels.

A meeting Tuesday with governors from five U.S. states and local Chinese officials produced a deal to work on clean energy.

-- (c) Associated Press 2015-09-24

[empireboy]

No rocket science here. Good news.

[Expat1]

Sorry boys and girls. After working almost 3 decades with Chinese I can emphatically say that none of what is written in the above will eventuate. However, the Chinese do love face enhancing rhetoric, even when hollow.

[Publicus]

Agreed with the old China hand in the post.

What is happening instead is that the CCP opponents of reform are now sabotaging reforms openly, most spectacularly in the stock market crashes and the explosions in Tianjin which among other turds in the punchbowl have stripped the facade from Xi of his being in control. The timing of the newly open sabotage was made to undercut Xi going in to his September 3rd grand military parade when Xi was supposed to be symbolically crowned emperor in a business suit.

The Maoists anti-reformers are right in the fundamental dogma the Chinese people will never support a consumption based economy as exist in the West and much else of the region. The Chinese people are savers, in a large part because they have no social safety net, and in their historical custom to save money because they don't and haven't ever trusted their leaders.

BNP Paribas earlier this year issued a seminal report that confirms rebalancing the economy to consumption from infrastructure and trade is failing. Only 34 cents of each dollar value shifted from infrastructure to consumption went to GDP growth. Conversely, every dollar from infrastructure to consumption has reduced GDP by 66 cents. This is the primary factor leading the falling GDP growth rate since 2010.

Xi fears that if he and PM Li Kejiang, both economic reformers, have to resort to the kind of shock therapy that convulsed Russia during the 1990s, they will lose everything to a CCP Chinese Putin.

[Harsh Jones]

Agreed with the old China hand in the post.

What is happening instead is that the CCP opponents of reform are now sabotaging reforms openly, most spectacularly in the stock market crashes and the explosions in Tianjin which among other turds in the punchbowl have stripped the facade from Xi of his being in control. The timing of the newly open sabotage was made to undercut Xi going in to his September 3rd grand military parade when Xi was supposed to be symbolically crowned emperor in a business suit.

The Maoists anti-reformers are right in the fundamental dogma the Chinese people will never support a consumption based economy as exist in the West and much else of the region. The Chinese people are savers, in a large part because they have no social safety net, and in their historical custom to save money because they don't and haven't ever trusted their leaders.

BNP Paribas earlier this year issued a seminal report that confirms rebalancing the economy to consumption from infrastructure and trade is failing. Only 34 cents of each dollar value shifted from infrastructure to consumption went to GDP growth. Conversely, every dollar from infrastructure to consumption has reduced GDP by 66 cents. This is the primary factor leading the falling GDP growth rate since 2010.

Xi fears that if he and PM Li Kejiang, both economic reformers, have to resort to the kind of shock therapy that convulsed Russia during the 1990s, they will lose everything to a CCP Chinese Putin.

the Chinese people will never support a consumption based economy as exist in the West and much else of the region. The Chinese people are savers, in a large part because they have no social safety net, and in their historical custom to save money because they don't and haven't ever trusted their leaders.

Germany has the highest savings rate in the western world by far. It also is the biggest exporter per capita in the western world. Switzerland is not far behind.

Your Keynesian theory that saving in China is a bad thing and that socialist safety nets are good for capitalism has no place in reality. The only thing that is retarding consumption in China is caused by the central bank pegging its currency too low, thus making necessities in China more expensive on world markets which gives them less discretionary income to spend on consumption.

[FangFerang]

Max Planck, discussing the politics of science, summed up many problems in Asia (and other parts of the world) as well. He said "science progresses one funeral at a time."

Only when the Old Guard is dead can new idea grow.

Same-same almost everywhere.

[Publicus]

 

Agreed with the old China hand in the post.

What is happening instead is that the CCP opponents of reform are now sabotaging reforms openly, most spectacularly in the stock market crashes and the explosions in Tianjin which among other turds in the punchbowl have stripped the facade from Xi of his being in control. The timing of the newly open sabotage was made to undercut Xi going in to his September 3rd grand military parade when Xi was supposed to be symbolically crowned emperor in a business suit.

The Maoists anti-reformers are right in the fundamental dogma the Chinese people will never support a consumption based economy as exist in the West and much else of the region. The Chinese people are savers, in a large part because they have no social safety net, and in their historical custom to save money because they don't and haven't ever trusted their leaders.

BNP Paribas earlier this year issued a seminal report that confirms rebalancing the economy to consumption from infrastructure and trade is failing. Only 34 cents of each dollar value shifted from infrastructure to consumption went to GDP growth. Conversely, every dollar from infrastructure to consumption has reduced GDP by 66 cents. This is the primary factor leading the falling GDP growth rate since 2010.

Xi fears that if he and PM Li Kejiang, both economic reformers, have to resort to the kind of shock therapy that convulsed Russia during the 1990s, they will lose everything to a CCP Chinese Putin.

the Chinese people will never support a consumption based economy as exist in the West and much else of the region. The Chinese people are savers, in a large part because they have no social safety net, and in their historical custom to save money because they don't and haven't ever trusted their leaders.

Germany has the highest savings rate in the western world by far. It also is the biggest exporter per capita in the western world. Switzerland is not far behind.

Your Keynesian theory that saving in China is a bad thing and that socialist safety nets are good for capitalism has no place in reality. The only thing that is retarding consumption in China is caused by the central bank pegging its currency too low, thus making necessities in China more expensive on world markets which gives them less discretionary income to spend on consumption.

My post discusses structural economic reform and consumption with a reference to savings, and the internal factional power struggle inside the CCP, but your post discusses savings in Germany, John Maynard Keynes, the Austrian school of economics passion to eliminate central banks.

The savings rate in the CCP China has been 50% of income. The rate in Germany is 12%. The post by you neither changes nor addresses anything I said in my post. That's because the Chinese have always saved for the inevitable fall of whatever government or dynasty happens to rule at a given time.

There are many factors that influence savings and there are many that influence consumption, to include central banks. In the CCP China the central bank, the People's Bank of China needs to be renamed the "Party's personal fun and good times bank and bankers"