China and its growing debt issues

[JimH52]

Special report: China's debt pileup raises risk of hard landing | Reuters

Very, very interesting.

 

[waltky]

Granny just got a Chinaman rickshaw 2-1 stock split...

China reports solid economic growth. Should we believe it?
January 18, 2012 - China announced that GDP growth in the last quarter of 2011 was 8.9 percent, which suggests China will have a soft landing as its economy cools. But what's behind the numbers?

When you want to know what is going on in the Chinese economy, where do you look? Paul Cavey studies excavator sales. What might seem an arcane detail is actually “a real indicator” of economic trends, says Mr. Cavey, a China analyst at Macquarie Bank. Digger sales point to likely construction, which is a big driver of Chinese economic growth, he notes. “You can’t draw macro conclusions from those figures,” he acknowledges, “but they serve as a sense check of official data.”

That’s important when the official data paint a conveniently rosy picture, such as Tuesday’s announcement that GDP growth in the last quarter of 2011 was 8.9 percent, marginally more than expected, which suggests China will have a soft landing as its economy cools. That news was good, and it mattered: It lifted stock markets across Asia. But was it true?

Not for Derek Scissors, a researcher at the Heritage Foundation in Washington who dismissed the figure as invented “nonsense … just a PR exercise and a piece of theater.” Mr. Scissors pointed to discrepancies between reportedly solid GDP growth last year and sharp slowdowns in the growth of auto sales, ship orders, and oil imports.

Other experts who also earn their living by poring over Chinese government figures are less dismissive. “Economic statistics are more of an art than a science, but Chinese statistics are reliable enough for practical purposes,” says Arthur Kroeber, head of the Dragonomics economic consultancy in Beijing.

Can you trust the data?

 

[sparky]

A bubble works the same in any economic format......~S~

 

[waltky]

Obama standin' up to the Chinese economic onslaught...

Barack Obama confronts the China challenge
25 January 2012 - A year ago, China was a model of development for the US. Now, it is very different.

A year ago US President Barack Obama was holding up China as an example of what a country can achieve if it invests in infrastructure, education and innovation. But, at the start of this election year, his State of the Union address has painted a wholly different image of China, as a place that does not play fair, that steals intellectual property and gives huge handouts to its manufacturers. America, President Obama said, is not going to stand by while that happens, and he has promised to take action. It is tempting to put this clear shift in his tone towards China down to American electoral politics. But it also appears to be driven by the desire to reverse the image that America is clearly in decline, while China is inexorably rising. In both of Mr Obama's State of the Union speeches in 2011 and 2012 China has been prominent, getting four mentions each time.

Different rules

A year ago the references to China were positive by contrast to America. This year, his mentions of China were almost exclusively negative. "I will not stand by when our competitors don't play by the rules. We've brought trade cases against China at nearly twice the rate as the last administration - and it's made a difference," said Mr Obama, to applause from his audience. The idea that China is an unfair competitor and a threat to American jobs and businesses has a powerful appeal in the US. On the evidence of this speech, it is going to be a recurring refrain in the coming US presidential election. "Over 1,000 Americans are working today because we've stopped a surge in Chinese tyres. But we need to do more. It's not right when another country lets our movies, music and software be pirated. It's not fair when foreign manufacturers have a leg-up on ours only because they're heavily subsidised," the president said.

Mr Obama's Republican rivals have already singled out China and its trade practices for criticism, now he too is picking up this theme. Perhaps to show he means action the president said he is creating a new body tasked with looking into unfair competition. "Tonight, I'm announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China." That will not go down well in China, where it is almost certain to be seen as little more than populist electioneering, an attempt to blame China for America's woes and it's lack of competitiveness. America, many will point out, has serious problems of its own to address if it wants to end its trade deficit with China. But lambasting China is likely to be something you hear from all sides in the coming US election.

Strategic shift