China will destroy Western technology and expensive labor

China will destroy Western technology and expensive labor
On «Finmarket» referring to the agency «Bloomberg» was placed new forecast economist Chinese Academy of Social Sciences Yuan Ganmina concerning the sad situation of the Chinese economy.

Chinese forecaster believes that the decline in economic growth in his native country, most likely will be much longer than during the financial crisis of 2008. Declines in the midst of the circumstances referred to deterioration in demand for external markets (we would add: first, in the EU, where the raging crisis, including debt. EU — a large 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.

By Yuan Ganmina views, the expected length of the recession will encourage new favorites of the Communist Party of China (their names will be announced today year) to expand the list of incentives: for manufacturing activity in China falls the 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 convince the general public that China’s economy in order, and even the unfortunate «bubble» on the real estate market slowly deflates. «State policy in the field of economy in the near future was very effective. The economy stabilized and began leisurely growth. Size speculative investments 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 with the same period last year: the reduced dynamics of growth — the lowest in the last three years. This year, the Chinese economy is expected to grow by 8% (municipal forecast) that will be the most feeble indicator since 1999

To stimulate economic growth increment Beijing investments in infrastructure projects, reduced the scope of mandatory bank reserves and reduced 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 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 that openly expresses his eyes, and Chinese media called it «an economist with the conscience of net.»

Programm Chinese economic stimulus — a package of anti-crisis measures vkladyvatelnyh. In 2008, when the monetary crisis struck, China has invested 586 billion. U.S. municipal funds in infrastructure, health, education, construction of cheap housing, etc. Some economists criticized the PRC government for such sweeping measures — because of «gotchas.»

Wu Jinglian said that local authorities 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 irrational economist led project, drawn up in one of the Chinese provinces. According to the project, with the introduction of its 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 reached the already 120% of the local GDP.

If investments surpass GDP and not enough, and grow further, the project is not just unprofitable, it promises huge losses in the future.

Municipal panacea against irrational either directly unprofitable projects in China is known (something she really looks like a Russian economic lechuschee means). To stimulate the economy, the Chinese government is going to spend the surplus economical. At the Global Economic Forum in Tianjin, China’s Premier Wen Jiabao said that the end of July a surplus of $ 1 trillion. yuan ($ 158 billion.), and it can be used to stabilize economic growth.

Independent analyst Hu Saymen warns CCP is in a dead end direction, trying using economic growth to maintain the legitimacy of the government. The result will be the opposite of what the party wants to achieve.

Populist measures, add, which will be spent surplus may affect economic growth, but in the short term, and at the same time can serve as a short-term strengthening of the position of the Communist Party. In the long term, this will lead to «freeze» the inertia of government policy — and while maintaining a small level of domestic consumption in China and the decline of Western economies will cause stagnation and then decline.

Bad influence on the situation and rather brutal foreign policy of China. One example — it is a dispute over the Senkaku Islands in Japan. As recently stated Shen Danyang, 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 past year compared to the same period showed a 50 percent growth. 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 influx of foreign investments will worsen the current economic slowdown of the country», — says Joy Yang, Chief Economist «Mirae Asset Securities». He believes that the Chinese authorities 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, rising China and prevents rigid increasing competition in Southeast Asia, and at the same time and in some countries in Africa, where the creation of moves too.

Head of the analytical department of the IR «Trade Portal» Alexey Rybakov shows that in the region draw in China, Indonesia, Bangladesh and Vietnam. Profits of industrial companies in China 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 fell by 1.7% in May profit decreased by 5.3% (yoy). Do foreign companies, recalls analyst also lowered profitability — due annually increasing cost. More expensive in China are: labor, raw materials. And this is happening against the backdrop of weakening global demand.

Well, if the labor force in China more expensive, 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 can go back to the old economic model is much more aimed at domestic demand, if at outside (if not to talk about the export of raw materials, which in the bowels of the planet, too, not for 200 years).

Deutsche Bank economists and PWC are convinced that economic weights rassredotachivanie soon stabilized: the world will return to the structure of the economy, which dominated until the industrial revolution.

It complements the other world. Created by him, apparently negative attitude to «copying» the Chinese economy.

George Magnus, senior economic adviser to UBS, has defined its own definition of the «Asian miracle»: these countries, in his view, moving «back to the future.» West, therefore, is facing forward, and the Chinese — too forward, but the ass. And because soon they stumble here and there.

So far, says Comrade Magnus, the world is divided into two parts: Asia is growing rapidly, but the West is slowing down. But it — fast. The main risk for the Asia-Pacific countries and in particular China — the development of new technologies in the West. Technological advances at one point led to a Hassle-free progress of the West, and great opportunity, do it again.

There are several sverhtehnologichny areas in which, according to Magnus, the Chinese will not catch West: 1) products that change the life (phones, tablets); 2) new industrial technology (disruptive technologies of the near coming — like 3D-printers); 3) shale revolution (cheap raw materials, which the United States received by the revolution in shale gas and oil, should benefit from this system and chemical companies).

Asian countries will inevitably lose out in the latest technological struggle. In particular, China will suffer immediately involved in a complex global supply chain of global supply. Destruction of the existing complex chains — one of the main long-term risk for the PRC.

In support analyst leads subsequent facts. Enthusiasm companies to China fizzles — as with the development of high technology, and because of constant appreciation of the Chinese workforce. A modern example: 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 on their own productions.

So Makar, soon companies generally will not need to organize assembly plants in China and then splurge on their delivery to their country.

In Chinese ports it’s all perfectly realized.

Rui Chenkan leading economic commentator and China Central Television, September 1 in the microblogging wrote: «The economy continues to go down. PMI PMI reached the new low of 49.2%, below the critical strip. PMI steel industry was 40%, which is the lowest in 4 years. Substantially reduced port operations in the Pearl River Delta. It says the weakening of production. Customs operations decreased by 30%. Significantly deteriorated in the business of freight. We simply do not have thousands of truckers work. At Zhongshan port terminal two-thirds of containers — empty. «

A CEO «Beijing Sunway Imp. & Exp. Co., Ltd. », A large Beijing import and export company, said that at 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 firmly compete with neighbors who want to grab your own piece of the world economy. China will also provide an answer to the technological challenges of the West. Specialists range that China — the country of assembly and copying facilities — able to get to the forefront of progress and, therefore, in a competitive battle Chinese concede the U.S. and Europe. After a couple of decades or a bit later, when about the Chinese «economic miracle» forget the world will return to the old, less open economic management model, which will be linked with sverhtehnologichnym mechanized production process. However, economists do not they say that unemployment in Western countries remains the same: to create products because from this point on will be bots, not people (collect bots probably also be bots, and then see the movie «Terminator» in Chapter . role — Arnold Schwarzenegger). In general, the weakening of «Asian» and depending on the return home of large enterprises will have great economic and geopolitical victory of the West over China.


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