China ruin Western technology and expensive labor

On "Finmarket" referring to the agency «Bloomberg» was published a new forecast economist Chinese Academy of Social Sciences Yuan Ganmina regarding the sad situation of China's economy.

Chinese forecaster believes that the decline in the growth rate of the economy of his native country, most likely, will be much longer than during the financial crisis of 2008. Declines in the middle of the circumstances referred to as the deterioration in demand for external markets (we would add: the first in the EU, where the raging crisis, including debt. EU — a big consumer of Chinese consumer goods and other products), and a limited amount of small business lending in China .

China's economic growth may slow down the ninth quarter in a row and to reach a level below 7% in the first quarter of 2013.

China will destroy Western technology and expensive labor

According to the views of the Yuan Ganmina, the expected length of the decline will encourage new favorites of the Communist Party of China (their names will be announced in today's year) to expand the list of incentives: for manufacturing activity in China falls eleventh month, the central bank is focused on controlling inflation — to the detriment of economic growth.

Meanwhile, the head of the Municipal Committee of China Development and Reform Commission Zhang Ping urges the general public that economy China in order, and even the unfortunate "bubble" in the property market slowly deflates. "State policy in the field of economics in the near future has been very effective. The economy stabilized and began a leisurely growth. The size of speculative investment declined because the government failed to act on the real estate market ", — said Zhang Ping.

But in the 2nd quarter of China's economy grew by only 7.6% compared to the same period last year: the reduced dynamics of growth — the lowest in the last three years. This year, China's economy is expected to grow by 8% (municipal forecast), that will be the most feeble index since 1999

In order to stimulate economic growth in Beijing increment investment in infrastructure projects, reduced the scope of mandatory bank reserves and lowered the discount rate by 150 pt.

But the stimulus measures have come under a barrage of criticism of experienced Chinese economists.

Wu Jinglian, a senior fellow at the Center for research and development of the State Council, said that the Chinese authorities programm economic stimulus is not just bad, but not feasible. In his view, this programm will have dire consequences. By the way, 82-year-old Wu Jinglian known for being outspoken in their eyes, and Chinese media called it "an economist with the nezapyatannoy conscience."

Chinese programm economic stimulus — a package of anti-crisis measures vkladyvatelnyh. In 2008, when the monetary crisis broke out, China has invested 586 billion. U.S. municipal funds in infrastructure, health, education, construction of cheap housing, etc. Some Chinese economists have criticized the government for such large-scale action — because of the "gotchas."

Wu Jinglian said that local governments have submitted vkladyvatelnye projects worth 2.7 trillion. U.S. The question is not only in the projects, and in where to get these great tools.

As of the 1st of examples of non-rational economist led the project, drawn up in one of the Chinese provinces. According to the project, with its introduction of GDP in the coming years will have a growth of 14-15%. But, and the amount of investment each year will increase. In 2011, the level of investment in the province was 89% of GDP, and for the first half of this year is already headed for 120% of the local GDP.

If the investment is greater than the GDP and is not enough, grow up, and then the project is not just unprofitable, he promises huge losses in the future.

Municipal panacea against wasteful or directly unprofitable projects in China are known (something she really looks like a Russian economic lechuschee agent). On the Chinese government to stimulate the economy is going to waste economical surplus. At the Global Economic Forum in Tianjin, China's Premier Wen Jiabao said that by the end of July, the surplus amounted to $ 1 trillion. yuan ($ 158 billion)., and it can be used to stabilize economic growth.

Independent analyst Hu Saymen warns: PDA is a dead-end direction by trying to maintain the legitimacy of the growth of government. The result will be the opposite of what the party wants to achieve.

Populist measures add, which will be spent surplus could affect economic growth, but in the short term, while at the same time can serve as a short-term strengthening the position of the Communist Party. In the long term, this will result in "freezing" the inertia of government policy — and while maintaining low levels of domestic consumption in China and the decline of Western economies will stagnate and then decline.

Bad influence on the situation and rather brutal foreign policy of China. One example — this is a dispute over the Senkaku Islands in Japan. As said not so long ago, Shen Danyang, a spokesman for the Ministry of money, a dispute about the islands bad effect on trade with Japan. China became naikrupneyshim market for Japanese exports in 2011, while Japan was the fourth largest market for Chinese exports. What about today? Japanese investment in China increased by only 16.2% in 8 months of 2012 compared with the same period of 2011, and in fact in the last year in the same period showed a 50-percent increase. As for China's investment in Japan, in January-August 2012, they fell by 11.1%.

Foreigners do not believe the Chinese market is very attractive to invest capital. "The Fall of the inflow of foreign investments will worsen the current slowdown in economic growth in the country," — reads Joy Yang, Chief Economist «Mirae Asset Securities». He believes that the Chinese government should take steps to keep the economy growing, including specific measures to stimulate domestic investment and consumption.

In addition to falling demand in Western Europe and the United States as a result of the financial crisis, China's rise and prevent stiff competition in the growing South-East Asia, and at the same time and in some countries of Africa, where, too, is moving creature.

Head of analytical department "Trade Portal" Alexey Rybakov shows, that the region draw in China, Indonesia, Bangladesh and Vietnam. Profits of China's industrial companies has been falling for the fourth month in a row. In July 2012 revenues decreased by 5.4% over the same period a year ago, in June, falling to 1.7%, and profits fell in May by 5.3% (year to year). Do foreign companies, recalls analyst also lowered profitability — because of the yearly increasing costs. More expensive in China are: labor, raw materials. And this is happening against the background of weakening global demand.

Well, if labor becomes more expensive in China, so that leaves the creation of the Celestial Empire in the coming 10-20 years, when the cost of labor rises and Chinese rivals, the world may revert to the economic mod
el, far more targeted on domestic demand, if at external (not to talk about the export of raw materials, which is in the bowels of the planet, too, not for 200 years).

Economists at Deutsche Bank and PWC convinced that rassredotachivanie economic balance will stabilize soon: the world will return to the structure of the economy, which dominated until the Industrial Revolution.

This worldview complements the other. His Maker, apparently, has a negative attitude to the "copying" of China's economy.

George Magnus, senior economic Advisor to UBS, has identified its own definition of the "Asian miracle": these countries, in his opinion, are moving "back to the future." The West, therefore, is facing forward, and the Chinese — too forward, but the ass. And because soon they stumble here and there.

So far, reads Comrade Magnus, the world is divided into two parts: Asia is growing rapidly, but the West is slowing. But it — fast. The main risk for the Asia-Pacific countries, and in particular for China — the development of new technologies in the West. Technology advances at one point led to a Hassle progress of the West, and the strong possibility that this happen again.

Sverhtehnologichny There are several ways in which, according to Magnus, the Chinese will not catch the West: 1) the products that change lives (phones, tablets), and 2) new industrial technology (disruptive technologies the near future — such as 3D-printers), and 3) shale revolution (cheap raw materials, which the United States received thanks to the revolution in the production of shale gas and oil, should benefit from this system and chemical companies).

Asian countries will inevitably lose out in the newest technological struggle. In particular, China will suffer here, involved in a complex global supply chain of global supplies. The destruction of the existing complex chains — one of the major long-term risks for the PRC.

In support analyst gives the following facts. The enthusiasm of companies to China fizzles — as with the development of high technology, and because of the constant appreciation of the Chinese labor force. A modern example: the Taiwanese company «Foxconn», going to China machinery for «Apple», «Sony» and «Nokia», said that in the coming three years, plans to install one million bots in their own industries.

So makarom soon have company did not need to organize assembly plants in China and then splurge on their delivery to their country.

In the Chinese ports of all this is perfectly realized.

Rui Chenkan, a leading economic commentator and China Central Television, September 1 wrote in microblogging: "The economy continues to go down. The index of business activity PMI headed for a new minimum 49.2%, below the critical strip. PMI's steel industry was 40%, which is the lowest in 4 years. Significantly reduced port operations in the Pearl River Delta. It reads the weakening of production. Customs operations decreased by 30%. Significantly deteriorated in the business of freight. In thousands of truckers just no work. At the port terminal two-thirds of Zhongshan containers — empty. "

A CEO «Beijing Sunway Imp. & Exp. Co., Ltd. », Great Peking export-import company, said, in the port of Qinhuangdao accumulated mountains of coal, which has nowhere to go, and that "this has never happened since the founding of the PRC."

So, recently China has a hard to compete with neighbors who want to grab your own piece of the world economy. Celestial also have to give an answer to the technological challenges of the West. Experts range that the PRC — country assembly and copying industries — able to go out to the forefront of progress and, therefore, in a competitive battle of the Chinese concede the U.S. and Europe. After a couple of decades or a bit later, when the Chinese "economic miracle" forget the world will return to the former, the least open economic management model, which will be linked to sverhtehnologichnym mechanized production process. However, economists do not they say that unemployment in the West remains the same: to create products because from this point on will be the boats, not the people (to collect bots, for sure, will also be bots, and then see the movie "Terminator", in Chapter . role — Arnold Schwarzenegger). In general, the weakening of the "Asian" and depending on the return home of large enterprises will have great economic and geopolitical victory of the West over China.

Oleg surveyed Chuvakin
— Especially for topwar.ru

Like this post? Please share to your friends: