News Source Integrity: China
How do we know their GDP figures arent fictional? and how do we know that the people they get their figures from, aren't polishing the figures they submit to central government to hide from. Are they actually capable of publishing numbers that might not come across as China is the greatest country alive?
Waiting for the markets to stablilise in its recent "illogical" growth, and then shorting luxury companies that are being kept up by china, miners, and the aussie dollar.
I'd like to say hi to my subscribers from the 50 cent party who will see this and attempt to hack my email again that has the same username as my WSO username, and not my actual email address because you're bad at hacking and have the imagination of a person that grew up being told what to think.
P.S. is there any demand for a longer post as to why I'm taking this viewpoint on why the economy is about to tank?
Rant coming because I'm hungry and my pizza is still cooking.
GDP numbers, and any numbers for that matter out of China, are complete bullshit. Local bureaucrats, keen to protect their own asses and advance their careers, massage the numbers as necessary to suit whatever the next guy up the chain is looking for. The top leadership says "we need to deliver X% growth." And if you're the local party boss and you don't deliver that X% one way or another, you'll find yourself quickly 'reassigned' to a different position. It filters from the party cronies out to the local banks branches, manufacturers, shippers, etc.
Are there people really naive enough to think that the highest the book-cooking goes is to the stupid reverse merger companies? The reverse merger frauds are just the tip of the iceberg. They are representative of the whole country, the whole system.
This also goes for the banks. Anybody who believes that their capital ratios are anywhere near where they claim to be is a fool.
The legitimacy of the Party is dependent on the appearance that they are making life better for the people. The common folk put up with the rampant corruption and all the other bullshit because they have been convinced that although life may be better under a different system and that the Party does have its faults, well the Party seems to deliver and make life better.
My pizza is done, so I'll conclude my rant here. And OP, I would also be interested in hearing what more you have to say.
Also a happy Friday to my 50-cent friends as well. :*
Spot on. Here's my silver banana, eat it.
The statistics are exaggerated because local officials at all levels have incentive to inflate the numbers so that they can hit their targets. But then everybody knows this already. The Chinese leadership knows this as do international investors. The reason the markets still pay close attention to these numbers is that they are the best proxy on a national level of the actual performance of the PRC economy.
Also there are a host of other data such as coal production, electricity generation etc. that are much more difficult to falsify. Xi Jinpin and others in the leadership do look at these figures and if they diverge too greatly from the official stats on economic growth etc. then they would know. As such while official figures like GDP are most certainly inflated to a certain extent, they are not completely conjured out of thin air and I certainly would not go as far as to dismiss all numbers coming out of China as "bullshit".
Having said that, those of us who invest in China gather our own data at local level for every specific region where we have positions. You can't expect to do well investing in China without first building an extensive local infrastructure on your own.
honestly, coming back from asia just recently, i think this thread is horse shit. have any of you been to china? okay bj and sh airport don't count. i'm talking about the new communities and areas under development. last time i went on a site visit to this new development in shaanxi, there was an entire CITY under construction to support the new factories building up. then i saw another of these under construction cities between bj and tianjin area.
i agree the future for china will have many question marks, but honestly - tired of hot heads who watch cnn and think they know what the world is like.
Have you seen the gigantic ghost cities in China?
to bromance: building a ghost town still counts for GDP. also, i said before i believe future prospects are questionable. ghost town theory is absurd. obviously during any period of economic expansion, mistakes are made, so yes, there are sometimes buildings built up that serve no purpose and are completely retarded
The economic figures of China are definitely a lie because even the Chinese ambassador to the US said so in cables that were leaked by Wikileaks.
"The U.S. cable reported that Li, who is now a vice premier, focused on just three data points to evaluate Liaoning's economy: electricity consumption, rail cargo volume and bank lending.
"By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth. All other figures, especially GDP statistics, are 'for reference only,' he said smiling," the cable added."
http://www.reuters.com/article/2010/12/06/us-china-economy-wikileaks-id…
i don't know how long you've been following the issue, but more needs to be said if one thinks the Chinese economy is about to tank because while the mainstream view is that China is going to become rich, there has always been a significant minority whom have been forecasting China's doom for 30+ years. At this point, just saying it's screwed is like a broken clock guessing, i.e. it'll be correct eventually. For example, Gordon Chang wrote a book about how China will collapse in 5 years in 2001 (2006 collapse) with reasons such as China going into the WTO (an untenable argument now) and he's still saying it's going to collapse. If Mr. Chang is correct about China collapsing, his reasons are wrong and he just got lucky.
Not just that, but you need to give reasons as to WHY your position is correct as compared to other people who have said this repeatedly. Much has been said and written and argued about so why are these coming years any different?
How is this different from 1989 or 2001? I'm not saying it's wrong or right, but I'd like it if you answered that point.
crap legal system, and when economic growth slows down, social unrest will become more prevalent due to lack of civil liberties. the usu. shiz
also, about GDP numbers, i guess i do concede it may be inflated some, though i don't think it's that far off in that there is significant growth
Let's see it.
typical working class losers talking shit
Messr outsider and his comrades are paid 50 cent per post regardless of its quality or insightfulness (much like a lot of government directed investments in China). I don't think he would be too concerned about making meaningful contributions to discussions. I wonder where is the rest of the army thou. Maybe they are already off for the Chinese New Year break.
I have always been of the mind that post-1990 China is a lot like Cold War era USSR. No one on the outside REALLY has any idea what's going on in there, good or bad.
Would definitely be interested in a long form elaboration.
China is growing... question is how much....
Unless you lived there for a few years, you would not be able to understand.
Yeah there are failed projects here and there (ghost town). In Western countries building a ghost town might sound like a lot of money wasted, but it is really a drop in the bucket in china. Property market is still in high demand especially in the major cities. Income is on the rise, including the factory workers. (some faster then others though)
I don't care who you ask in China, their standard of living is much better then it was 5, 10, 15, 20 years ago. Just not as "good" as others. Social unrest is small and bullshit... people are angry, but so are everyone else in the world. People today have simply too much too lose to go F things up. The amount of people who "act" on the social unrest is tiny compare to the population.
Lets say 100,000 people riot in China... which is a lot anywhere... that is less than than 1 bps in china.
Lets say 1,000,000 individual goes ape shit in China... actionable unrest... that is like 1 in 1000 or about one person in the whole GS HK office. ... every had someone in your office do something nuts... did your office collapse?
Just offering some perspective, and my 2 pennies...
The problem is that much of the failed projects in China are financed through bad bank loans or corporate bonds guaranteed by LGFVs or trust products funneled through the shadow banking system (and again implicitly guaranteed by local governments). As tradeoff for this gross inefficiency of the financial system, ordinary, mom and pop Chinese people are forced endure very negative real interest rates on their hard earned and hard toiled life savings, the money that was supposed to help them get through old ages especially since China has yet to develop a social security and medicare system for the elderly (incidentally this also explains why the Chinese expect the children to take care of their parents in their old ages because, what else can they rely on to provide for them?).
As to the property market, that is another can of worms. The younger Chinese people who are buying homes nowadays are not just pouring in their own money but also the savings of their parents and grandparents. If the property market were to crash, the implication would be a lot more severe than in the U.S.
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