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Economic Tremors In The West Reach China

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http://business.timesonline.co.uk/tol/busi...icle4368529.ece

A slowdown in the flow of containers through the giant ports of southern China is providing an amber warning light that all is not well in the vast workshops of China's eastern seaboard.

Container traffic growth in Shenzhen and Shanghai, China's biggest ports, slowed in June as weakening demand took its toll on trans-Pacific trade. Traffic at Shenzhen, the world's fourth-largest port, fell in June by 0.6 per cent from the previous month and grew only 3.5 per cent against the same month last year. Throughput in the first half of the year was up 7 per cent, half the rate of growth last year.

The slump in traffic to the West Coast of the United States is hitting the massive Yantian container terminal operated by Hutchison Whampoa. It is suffering volume declines for the first time. A majority of Yantian's traffic is from shipping lines servicing routes to North America, where demand has been driven down by the American property slump and dwindling consumption of household consumer goods. It is expected to report a drop in volumes for the first half, having declined for five consecutive months.

Shanghai's container throughput is slowing, too. Growth in the first half of the year slowed to 10.4 per cent, half last year's rate of increase, and analysts are predicting hard times ahead. “We've seen the peak. Container terminal shipments are now in a downtrend,” Geoffrey Cheng, an analyst for the Daiwa Institute of Research, said. “It's unusual that throughput in June, the peak season for container shipping, would slow from May.”

Can China really survive the US not buying it's products?

Has the West's appetite for cheap products that we don't really need come to an end. Will consumers now want quality rather than built in redundancy?

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http://business.timesonline.co.uk/tol/busi...icle4368529.ece

Can China really survive the US not buying it's products?

Has the West's appetite for cheap products that we don't really need come to an end. Will consumers now want quality rather than built in redundancy?

IMO China's mercantilist policy of boosting export though state-sponsored counterfeiting, massively subsidised energy/raw material prices for Chinese firms and industrial spying (not to mention cynical economic colonisation of large parts of Africa) is reaching its limits.

Their masterplan to use the Beijing Olympics as a launchpad for Chinese companies (as opposed to products) could also be ill-timed as recession starts to grip US and Europe, especially if there are some negative stories in the western media about that pollution generated by Chinese producers.

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Generally speaking, the Western consumers have now had several years to "test" chinese products.

They've had enough of their sh1t.

I personally will pay three times the price of a Chinese product to buy a european or similar product that will last ten times as long. Basic economics.

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in most cases the plasma screens, plastic tat etc was purchased on 42 month interest free GE money deals.... GE loaned money cheap from chineese etc etc etc

no money no honey as they say in asia :lol:

china will become unstable, may even return to communism

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http://business.timesonline.co.uk/tol/busi...icle4368529.ece

Can China really survive the US not buying it's products?

Has the West's appetite for cheap products that we don't really need come to an end. Will consumers now want quality rather than built in redundancy?

Chinese stock markets are down by over 50% this year:

http://uk.finance.yahoo.com/q/bc?s=000001.SS&t=1y

I suggested many months ago that the Chinese economy was heading into some deep trouble and it seems a 50% drop in the valuye of shares may be a warning signal that all is not well in the People's Republic despite the huge wealth being poured into relatively few hands.

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http://www.telegraph.co.uk/money/main.jhtm.../22/cndp122.xml

DP World, the Dubai-based container terminals operator, betrayed no signs of a slowing global economy with a 21pc rise in first-half volumes.

Traffic through the 25 of its 44 terminals where it has majority ownership or operational control increased to 13.6m TEU - twenty-ft equivalent units - as the company capitalised on its strong presence in faster growing emerging markets.

DP World, which acquired P&O for £3.92bn in 2006, said the growth was "driven by excellent performance from our terminals in Australia, India and Middle East regions".

Question is why has there trade increased? What are they shipping.

I agree that China is going to be in for some very difficult times, however the Chinese govt is going to regret waiting until after the Olympics to sort it out.

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I agree that China is going to be in for some very difficult times

Yeah, growth might drop back from 10-11% to their planned 8% which would take the pressure off inflation. Terrible! LOL.

amazing how arrogant people in the west still are with regards to Asia.

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Yeah, growth might drop back from 10-11% to their planned 8% which would take the pressure off inflation. Terrible! LOL.

amazing how arrogant people in the west still are with regards to Asia.

I think the West has seen it all before. Sudden influx of wealth, stock market bubble, wealth in the hands of the oligarchs, peasants still dirt poor, another Mao rise up to right the wrongs, and the beat goes on......

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Yeah, growth might drop back from 10-11% to their planned 8% which would take the pressure off inflation. Terrible! LOL.

amazing how arrogant people in the west still are with regards to Asia.

it's not just some western disregard for asia, I would say that a lot of the same things apply to some western countries like Ireland.

lots of growth through export, but not all that much internal structural change, so as the exports start falling off, things start heading for some grim times.

or the carribean countries that boomed off of western tourism during the good times, and are now facing anarchy as it dries up.

China is in a lot better position than most though, and to me, it really depends on how the government reacts to any future downturns that will dictate how well they will be in the future.

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Yeah, growth might drop back from 10-11% to their planned 8% which would take the pressure off inflation. Terrible! LOL.

amazing how arrogant people in the west still are with regards to Asia.

So rampant inflation can be ignored? They have around 8% growth this year with about 8-9% inflation. Growth is going to have to come down to around 1 or 2% or maybe even go negative to curb inflation. The Chinese also have a problem with the price of oil, as do most of the developing Asian nations, China's other major concern is food high prices will threaten govt stability. The outlook for what will happen in China is uncertain.

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it's not just some western disregard for asia, I would say that a lot of the same things apply to some western countries like Ireland.

lots of growth through export, but not all that much internal structural change, so as the exports start falling off, things start heading for some grim times.

or the carribean countries that boomed off of western tourism during the good times, and are now facing anarchy as it dries up.

China is in a lot better position than most though, and to me, it really depends on how the government reacts to any future downturns that will dictate how well they will be in the future.

It's also true that economic growth has been substituted for political reform. So a recession could see more protests..

There's also the surplus few dozen million men that they have due to the 1-baby policy.

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Chinas growth is actually nearer 10% and inflation 7%. Anyone know the percentage that exports contribute to chinas economy? May help in understanding the story over there.

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It's also true that economic growth has been substituted for political reform. So a recession could see more protests..

There's also the surplus few dozen million men that they have due to the 1-baby policy.

the hard part about guessing China for me is that they really are in a different position culturally/socially than a lot of western countries.

the big switch from agricultural to urban living is still fairly new, they are a communist state, and the standard of living (while getting a lot better) is still a lot lower than in the west.

like others have been saying, food price rises in the west are a big inconvenience, in China, it's more a matter of survival.

the effects of inflation etc there are likely to lead to a lot more dynamic responses (riots etc) from the people since everything is closer to the bone.

I still think it's very possible China could end up the major superpower of the future (in 30 years) if the EU doesn't gell, and they can keep everything together during their growing pains.

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Chinas growth is actually nearer 10% and inflation 7%. Anyone know the percentage that exports contribute to chinas economy? May help in understanding the story over there.

Hi rettah,

These links might provide some helpful information:

http://www.economist.com/finance/displayst...ory_id=10429271

http://www.moneymorning.com/2008/06/12/chi...et-decelerates/

Best,

L

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Chinas growth is actually nearer 10% and inflation 7%. Anyone know the percentage that exports contribute to chinas economy? May help in understanding the story over there.

I totally agree. I think the majority of posters knowledge of China goes as far as a news paper article in THe Times...You obviously know the bigger picture within the Asea region. China is actually running a current account deficit with some countries in the region. Imports are up from the USA this year by 35%. Exports are down to the US...by 40% or something I was reading in a report the other day. This is due to the US consumner being for want of a better word bankrupt...The Chinese can continue to make goods if they want...Someone also alluded to the stock market being down 50%. Big deal. Its up 600%. Also it is not the real economy. Only 7% of the Chinese own shares as opposed to the UK where 95% of us have exposure to shares in some way.

You should also look into currency fundamentals and what that means for a country with a high savings rate. As the RMB increases relative to other currencies such as the USD, goods become relatively cheaper. That increases consumption. China is waiting until they see signs of the domestic consumer starting to spend, before letting the RMB rise..They have seen the signs, and now the Yuan will rise over the next 2 decades...and I mean rise!!!

Domestic demand is increasing, there can be no doubting that...The one track records on here who always cite Chinas dependence on the US and Europe, and the populist media crap don't actually realise that there are more than 3 Billion people that side of the world...in a huge trade with each other. China have increased also electronic and gadget sales by 20% this year, and surpassed Europe as the second biggest consumer market place for these goods...Some points to consider below..

China's imports on the rise

12th June 2008, 10:52 GMT

China's foreign trade surplus dropped ten percent in May compared to last year as import growth surpassed export growth. According to Chinese customs officials, China's trade surplus was 20,2 billion dollars (13 billion euros) in May.

Imports increased 40 percent last month from the same period last year. In April, imports registered a rise of 26 percent, Shanghai Daily says.

China's export companies have not yet been affected by the global economic slowdown and rising production costs. Exports increased by 28 percent last month.

Stephen Green, an economist for Standard Chartered Bank (China) Ltd., told Shanghai Daily that China benefits from the appreciation of the yuan against the US dollar, the currency used in oil and other raw material pricing.

"China is gaining buying power and the accelerating export growth that suggests the notion that China's exports are collapsing is wrong," Shanghai Daily quotes Green as saying.

In the first five months of this year, China's overall trade value grew 26 percent year-on-year.

The EU remained China's biggest trade partner, before the US and Japan.

And so much for the demand destruction thats been occuring in Asia...

Major US, European and Japanese automakers said their sales in China's auto market had seen a rapid growth in the first six months of this year, an inspiration for most of them who have experienced a slowdown in sales in their home markets.

The international brands recently reported a rise in sales in the China market during the first six months of this year:

GM, the largest US automaker, sold 590,126 vehicles, up 12.7% year-on-year.

Volkswagen AG's sales rose 23.3% to 531,612 units.

BMW increased sales by 28% to 30,325 units.

Toyota, the biggest Japanese car brand in China, sold 34% more cars compared with a year earlier, adding to 285,000 units.

Ford's sales rose 21% to 172,411 units.

Honda Motor sold 21.3% more year-on-year to 186,991 vehicles.

Meanwhile, China's passenger-car sales rose 15% last month to 588,300 units, bringing the first-half total to 3.61 million units, according to China Association of Automobile Manufacturers.

China's auto market has been largely unaffected by high global oil prices because government controls have kept retail gasoline and diesel prices at levels that are among the world's lowest.

Huge investment to expand production

"The Chinese auto market would continue booming, despite the rising prices of raw materials and fuel," said Zhu Linjie, an executive with Honda China, in a statement reported earlier.

He added that Honda was expecting 20% growth in annual sales this year in China, the fastest-growing market for Honda.

President and CEO of Ford Motor China, Robert Graziano, said they were still able to achieve healthy growth through the first half year, despite soaring production cost and keen competition.

Besides, some auto giants are investing to expand production and sales in China, the world's second-largest vehicle market after the United States.

Toyota, the third-biggest foreign car brand in China, said that it was investing RMB $3.6 billion to double the production capacity of one of its plants.

Volkswagen also plans to raise its production capacity in China by adding a new Audi assembly line with a total investment of RMB $1 billion.

BMW will kick off the construction of its second plant later this year, targeting the luxury car market in China.

Other emerging markets include Russia and Latin American, which are top priority for automakers hoping to compensate for the slowdown in the United States and Europe.

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http://news.mongabay.com/2005/0531-tina_butler.html

Back in 1999, Wen Jinbao, a Chinese deputy prime minister, warned of the dire water situation in China and of looming water shortages. Since then, Mr. Wen has assumed the post of prime minister and predgled to provide clean water for his people. His administration has guaranteed an additional $240 million this year to achieve this end. However, this amount may not be nearly enough to satisfy China’s massive demand. The country has long suffered from alternating periods of severe flooding and drought. Combined with high pollution levels and a history of heedless and haphazard policies, the country is witnessing a precipitous drop in this most essential supply. High ranking officials and international agencies alike are deeply concerned about the situation and with good reason.

According to hydrologists, government officers and industrial leaders, water and waste pollution is the single most serious issue facing China. Presently, one in three rural inhabitants lacks access to safe drinking water. The urban situation is not any more heartening. More than a hundred large cities are short of water and half are considered to be seriously threatened by the shortage. In the northern region of the country, the water table has dropped more than a meter. Even in the capital city of Beijing, the water supply per individual is only 300 cubic meters (66,000 gallons) per year. The country’s water resources are among the lowest in the world per capita and concentrated in the south, so that the north and the west experience regular droughts.

Due to inadequate investments in supply and treatment infrastructure, even where water is not scarce, it is rarely clean. Close to 600 million people have water supplies that are contaminated by animal and human waste. Pan Yue, the deputy head of the State Environmental Protection Administration (SEPA), China’s environmental watchdog ministry, has called the shortage and its associated problems ‘the bottleneck constraining economic growth.’ China does not have the water resources to sustain the rapid economic growth it aspires to. What is more, the nation’s current policies make future sustainability even less likely.

http://www.nytimes.com/2007/09/28/world/asia/28water.html

SHIJIAZHUANG, China — Hundreds of feet below ground, the primary water source for this provincial capital of more than two million people is steadily running dry. The underground water table is sinking about four feet a year. Municipal wells have already drained two-thirds of the local groundwater.

Above ground, this city in the North China Plain is having a party. Economic growth topped 11 percent last year. Population is rising. A new upscale housing development is advertising waterfront property on lakes filled with pumped groundwater. Another half-built complex, the Arc de Royal, is rising above one of the lowest points in the city’s water table.

“People who are buying apartments aren’t thinking about whether there will be water in the future,” said Zhang Zhongmin, who has tried for 20 years to raise public awareness about the city’s dire water situation.

For three decades, water has been indispensable in sustaining the rollicking economic expansion that has made China a world power. Now, China’s galloping, often wasteful style of economic growth is pushing the country toward a water crisis. Water pollution is rampant nationwide, while water scarcity has worsened severely in north China — even as demand keeps rising everywhere.

So China can cope with high oil prices and high water prices????

Water is even more of a volatile cocktail than food.

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http://news.mongabay.com/2005/0531-tina_butler.html

http://www.nytimes.com/2007/09/28/world/asia/28water.html

So China can cope with high oil prices and high water prices????

Water is even more of a volatile cocktail than food.

I agree, the water problem,especially in the north is a problem...I hope it doesn't end in widespread loss of life. The world is over-populated in my opinion. I know this sounds bad, but I think nature provides natural barriers to sustain itself...Sadly India will lose alot of people to AIDS...

I heard the other day that if the world population keeps growing at the same rate as today in 600 years there would be 1 person per square metre...and by the year 2300, 234 trillion people. Of course this wont happen...as I believe we are that the population will have to peak at some point. "Peak people" debate...I dont want,lol.

Anyone know the solution to this, or what is available? This goes beyond economics for me. I hope they can provide a way that will cause least loss of life.

Edited by VedantaTrader

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I agree, the water problem,especially in the north is a problem...I hope it doesn't end in widespread loss of life. The world is over-populated in my opinion. I know this sounds bad, but I think nature provides natural barriers to sustain itself...Sadly India will lose alot of people to AIDS...

I heard the other day that if the world population keeps growing at the same rate as today in 600 years there would be 1 person per square metre...and by the year 2300, 234 trillion people. Of course this wont happen...as I believe we are that the population will have to peak at some point. "Peak people" debate...I dont want,lol.

Anyone know the solution to this, or what is available? This goes beyond economics for me. I hope they can provide a way that will cause least loss of life.

one of the things that people forget, is that things will be vastly different even in 100 years.

very little of the technology that we have now was around 100 years ago, and things like nuclear reactors etc would just be astonishing from that viewpoint,

in 100 years there could be cities underwater for all we know, living off of vast farmed seafood supplies and seaweed "chicken" (only half joking).

trying to extrapolate the current situation much farther than 20-30 years into the future has ALWAYS been a losing proposition, which is why the people that were saying "THE EARTH CAN TAKE NO MORE" 100s of years ago when the population was 1/10 what it is now are so quaint and funny in retrospect.

Edited by Mr Nice

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Luminist & Vedanta, some good posts and links. I think the current mainstream press is obsessed with "end of the world" type reporting and unfortunatley a lot of people believe what they read in the mainstream without looking around the edges. I guess this is why this site exists as it was the mainstream media that got people sucked into the housing market bubble.

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I agree, the water problem,especially in the north is a problem...I hope it doesn't end in widespread loss of life. The world is over-populated in my opinion. I know this sounds bad, but I think nature provides natural barriers to sustain itself...Sadly India will lose alot of people to AIDS...

I heard the other day that if the world population keeps growing at the same rate as today in 600 years there would be 1 person per square metre...and by the year 2300, 234 trillion people. Of course this wont happen...as I believe we are that the population will have to peak at some point. "Peak people" debate...I dont want,lol.

Anyone know the solution to this, or what is available? This goes beyond economics for me. I hope they can provide a way that will cause least loss of life.

War is always a good way to get the numbers down, although not a popular one for some reason.

Famine also works as do flu pandemics and other fatal illnesses again these aren't particular popular.

China has gone with the 1 child per couple policy which is great apart from the fact you create a massive economic headache in the future when everyone is having to care for the elderly unless of course you start with euthanasia to get rid of old useless people.

You also have the problem that the one child policy has also created an imbalance in male/female with not enough females being born. http://www.chinadaily.com.cn/lifestyle/200...tent_812550.htm

China's imbalanced gender ratio and birth control measures enacted in and after the 1980s have resulted in young males far outnumbering young females between 24 to 34 in China. In addition, females have raised their expectations for a future spouse. Consequently, many young men will experience difficulty in finding a better half.

Not a major social problem yet but it will be. Again may not be a problem if those without females either become homosexuals or accept being single for life. Or you may get new social structures where some females have more than one partner and bigamy becomes acceptable. From a economic point of view this could be advantageous to the female, although it could trigger a rapid HPI as more income would be concentrated in households but this forum is already well versed in those problems.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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