Either China is trying to manufacture a Comic Book villain or, they really need to work on their safety standards
"Zhao Xijin was an ordinary employee at a chemical company. The explosion left him badly burned, but gave him incredible pyromaniac powers....and a unquenchable thirst for VENGENCE!"
Makes me wonder if there's minor fires going on at chemical plants there all the time and they just don't make the news til a big one happens.
The former. This is one of those situations where the media starts paying attention and realizes that "Oh yeah, there are a whole lot of industrial accidents and factory explosions in China!"
Makes me wonder if there's minor fires going on at chemical plants there all the time and they just don't make the news til a big one happens.
Chinese chemical plants are apparently as flammable as Spinal Tap drummers.
First they came for the Muslims, and we said NOT TODAY, MOTHERFUCKERS
0
AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
North and South Korea have come to an understanding. If all goes well it looks like everybody saves a little face and everybody wakes up alive in the morning, which is the best you can hope for in these kinds of situations.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
The Chinese government is trying their best to fix environmental and economic issues with the country, but at this point it's something of a damage control mode to prevent collapse. It may or may not work, but even in the worst case they're trying to mitigate consequences. The problem is that many measures should have been started much earlier.
We'll see how successful they will be at keeping the country running in the long term.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
They are both potentially right and that is a quirk of finance.
Economically the risk to China is a increase in value of the yuan. They export a lot and this is due to the low value of their currency. They keep their currency low artificially. When you do this it has a real cost because it makes your exports cheaper and your imports more expensive. This is like a siphon of value that the U.S. benefits from.
When it ends, a lot of Chinese may find themselves out of work. Especially if it happens fast. Ok so why are the Chinese doing this? Well because low wages attract capital investments and these will not go away when things readjust. So China will be, in real terms, better off. Basically they're trading labor for materials and knowledge. If that cycle disrupts itself China will get little out of the yuan sell off and be forced more or less, to end it.
But at the end of the day the strength of your economy does not depend on finance. The knowledge and capital accrued will not go away and China will start producing more for the internal market; provided that things work out financially, but I bet that the govt would kickstart such a process if it were needed. China's bureaucrats seem to have better grasp on this (or ability to execute it) than ours do.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
They are both potentially right and that is a quirk of finance.
Economically the risk to China is a increase in value of the yuan. They export a lot and this is due to the low value of their currency. They keep their currency low artificially. When you do this it has a real cost because it makes your exports cheaper and your imports more expensive. This is like a siphon of value that the U.S. benefits from.
When it ends, a lot of Chinese may find themselves out of work. Especially if it happens fast. Ok so why are the Chinese doing this? Well because low wages attract capital investments and these will not go away when things readjust. So China will be, in real terms, better off. Basically they're trading labor for materials and knowledge. If that cycle disrupts itself China will get little out of the yuan sell off and be forced more or less, to end it.
But at the end of the day the strength of your economy does not depend on finance. The knowledge and capital accrued will not go away and China will start producing more for the internal market; provided that things work out financially, but I bet that the govt would kickstart such a process if it were needed. China's bureaucrats seem to have better grasp on this (or ability to execute it) than ours do.
I've always got the sense that Chinese leaders understand and make use of global commercial and financial systems for China's own ends, but they do not believe in them the same way Western leaders do.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
They are both potentially right and that is a quirk of finance.
Economically the risk to China is a increase in value of the yuan. They export a lot and this is due to the low value of their currency. They keep their currency low artificially. When you do this it has a real cost because it makes your exports cheaper and your imports more expensive. This is like a siphon of value that the U.S. benefits from.
When it ends, a lot of Chinese may find themselves out of work. Especially if it happens fast. Ok so why are the Chinese doing this? Well because low wages attract capital investments and these will not go away when things readjust. So China will be, in real terms, better off. Basically they're trading labor for materials and knowledge. If that cycle disrupts itself China will get little out of the yuan sell off and be forced more or less, to end it.
But at the end of the day the strength of your economy does not depend on finance. The knowledge and capital accrued will not go away and China will start producing more for the internal market; provided that things work out financially, but I bet that the govt would kickstart such a process if it were needed. China's bureaucrats seem to have better grasp on this (or ability to execute it) than ours do.
There is a problem with this at the moment.
The Chinese, specifically the CCP, has been looking at producing for that internal market for about 5 years. Pushing towards it. But thanks to recent capital losses, unstable yuan and a few other factors including saving culture and lack of ways to hold money the internal consumption stay around 30% of GDP. Which right now is completely non-sustainable if China's economy is going to survive long term.
This is a pretty heavy correction but a lot of China's growth since the economic collapse of 2008 has been due to investment and the government pouring money into they system to prop it up. Lots of infrastructure. Lots of just moving cash from x to y. And a lot of probably shady dealings. This is all coming to roost now and will do some damage. Doesn't help we are guessing at the actual growth rate. I have heard from some areas negative to around 5%. Both are anemic to dangerous in China and the CCP legitimacy.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
They are both potentially right and that is a quirk of finance.
Economically the risk to China is a increase in value of the yuan. They export a lot and this is due to the low value of their currency. They keep their currency low artificially. When you do this it has a real cost because it makes your exports cheaper and your imports more expensive. This is like a siphon of value that the U.S. benefits from.
When it ends, a lot of Chinese may find themselves out of work. Especially if it happens fast. Ok so why are the Chinese doing this? Well because low wages attract capital investments and these will not go away when things readjust. So China will be, in real terms, better off. Basically they're trading labor for materials and knowledge. If that cycle disrupts itself China will get little out of the yuan sell off and be forced more or less, to end it.
But at the end of the day the strength of your economy does not depend on finance. The knowledge and capital accrued will not go away and China will start producing more for the internal market; provided that things work out financially, but I bet that the govt would kickstart such a process if it were needed. China's bureaucrats seem to have better grasp on this (or ability to execute it) than ours do.
There is a problem with this at the moment.
The Chinese, specifically the CCP, has been looking at producing for that internal market for about 5 years. Pushing towards it. But thanks to recent capital losses, unstable yuan and a few other factors including saving culture and lack of ways to hold money the internal consumption stay around 30% of GDP. Which right now is completely non-sustainable if China's economy is going to survive long term.
This is a pretty heavy correction but a lot of China's growth since the economic collapse of 2008 has been due to investment and the government pouring money into they system to prop it up. Lots of infrastructure. Lots of just moving cash from x to y. And a lot of probably shady dealings. This is all coming to roost now and will do some damage. Doesn't help we are guessing at the actual growth rate. I have heard from some areas negative to around 5%. Both are anemic to dangerous in China and the CCP legitimacy.
And the end of the day money is a creative fiction and it's people and buildings that matter. Building infrastructure they "can't use" isn't a bad thing. And so long as the Chinese government is willing to support it it will be just fine. They aren't going to run out of food or shelter and that is the only real risk the y have
Edit: in a free market its finance that lubricates economic activity. In that people need capital to start businesses but they need businesses to get capital. So they get loans instead.
But nothing forces this structure to be necessary. If a government is willing it can just put people to work by providing that capital itself. Because it is the government and can literally can force person A to feed person B and force person b to build for Person a.
The issue of real problems that result from financial systems going is only a real problem if the government is unwilling to step up. It's what we did during the Great Depression (and to a greater extent the war) and money didn't matter because it's working that matters.
China won't increase domestic consumption until they revalue the yuan. Goods are too expensive and that means saving is too valuable. But that isn't a bad thing because they're still working. And even if bad things do happen the government will step in and keep people working.
Edit: I think that the idea that China has a negative growth rate is kind of dumb. No one has a real negative growth rate. You only have negative growth if you have lubrication problems or if you've been lying the entire time about how much stuff you've made of if a whole bunch of shit exploded/a whole lot of people died.
I find it unconvincing to suggest they've been lying. This isn't like the Soviet Union* where people could lie and the west would never figure it out because no one could actually see what was going on. We would know! There would literally be holes on our shelves where the Chinese goods never were in the first place.
I find it equally unconvincing that a lot of people in China just died and all their buildings exploded. We probably would have heard of a war if they were fighting one. Especially that large.
So then we are left with finance. And the Chinese govt is unwilling to let that be a problem and so it will not be
*and even then in the early part of the Soviet Union the growth was legitimately staggering.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
They are both potentially right and that is a quirk of finance.
Economically the risk to China is a increase in value of the yuan. They export a lot and this is due to the low value of their currency. They keep their currency low artificially. When you do this it has a real cost because it makes your exports cheaper and your imports more expensive. This is like a siphon of value that the U.S. benefits from.
When it ends, a lot of Chinese may find themselves out of work. Especially if it happens fast. Ok so why are the Chinese doing this? Well because low wages attract capital investments and these will not go away when things readjust. So China will be, in real terms, better off. Basically they're trading labor for materials and knowledge. If that cycle disrupts itself China will get little out of the yuan sell off and be forced more or less, to end it.
But at the end of the day the strength of your economy does not depend on finance. The knowledge and capital accrued will not go away and China will start producing more for the internal market; provided that things work out financially, but I bet that the govt would kickstart such a process if it were needed. China's bureaucrats seem to have better grasp on this (or ability to execute it) than ours do.
There is a problem with this at the moment.
The Chinese, specifically the CCP, has been looking at producing for that internal market for about 5 years. Pushing towards it. But thanks to recent capital losses, unstable yuan and a few other factors including saving culture and lack of ways to hold money the internal consumption stay around 30% of GDP. Which right now is completely non-sustainable if China's economy is going to survive long term.
This is a pretty heavy correction but a lot of China's growth since the economic collapse of 2008 has been due to investment and the government pouring money into they system to prop it up. Lots of infrastructure. Lots of just moving cash from x to y. And a lot of probably shady dealings. This is all coming to roost now and will do some damage. Doesn't help we are guessing at the actual growth rate. I have heard from some areas negative to around 5%. Both are anemic to dangerous in China and the CCP legitimacy.
And the end of the day money is a creative fiction and it's people and buildings that matter. Building infrastructure they "can't use" isn't a bad thing. And so long as the Chinese government is willing to support it it will be just fine. They aren't going to run out of food or shelter and that is the only real risk the y have
Edit: in a free market its finance that lubricates economic activity. In that people need capital to start businesses but they need businesses to get capital. So they get loans instead.
But nothing forces this structure to be necessary. If a government is willing it can just put people to work by providing that capital itself. Because it is the government and can literally can force person A to feed person B and force person b to build for Person a.
The issue of real problems that result from financial systems going is only a real problem if the government is unwilling to step up. It's what we did during the Great Depression (and to a greater extent the war) and money didn't matter because it's working that matters.
China won't increase domestic consumption until they revalue the yuan. Goods are too expensive and that means saving is too valuable. But that isn't a bad thing because they're still working. And even if bad things do happen the government will step in and keep people working.
Edit: I think that the idea that China has a negative growth rate is kind of dumb. No one has a real negative growth rate. You only have negative growth if you have lubrication problems or if you've been lying the entire time about how much stuff you've made of if a whole bunch of shit exploded/a whole lot of people died.
I find it unconvincing to suggest they've been lying. This isn't like the Soviet Union* where people could lie and the west would never figure it out because no one could actually see what was going on. We would know! There would literally be holes on our shelves where the Chinese goods never were in the first place.
I find it equally unconvincing that a lot of people in China just died and all their buildings exploded. We probably would have heard of a war if they were fighting one. Especially that large.
So then we are left with finance. And the Chinese govt is unwilling to let that be a problem and so it will not be
*and even then in the early part of the Soviet Union the growth was legitimately staggering.
The problem is how the government is funding those infrastructure projects through that capital you are talking about. Between possibly inflationary pressures(China has had numerous mega-inflationary periods in the '80's and '90's due to some similar circumstances) and how it is developing debt through local government investment banks and the graft take on top of that it isn't actually say like the New Deal or even TARP in the US. The Ghost City phenomenon is actually hurting people not helping and this is more of that. Part of this is due to government control of the banking system and how the CCP and oligarchs control much of not just finance but commodity sales and other major holdings. There are little to no way for people to safely secure their funds.
Also I am guessing you have never heard of the hidden province? If you take China's GDP and then compare it to the GDP of the provinces added up you come to a mismatch usually estimated about the size of the province of Guangdong. I have worked with Chinese bureau of statistics numbers and they do not match most estimates from other more reputable groups when looking at Chinese consumption. Lying with statistics isn't just common but considered normal. Especially thanks to procedures put in from the Great Leap Forward on.
Thing is we have figured out they fudge their numbers. So we adjust our projections when doing economic studies and futures work on China for that.
I think you are ignoring a lot of the structural issues that are at hand in the Chinese economy beyond "finance."
Wang Xiaolu, a journalist with Caijing magazine, was detained by Chinese authorities following China's recent stock market crash. He was held for fabricating and spreading fake information on securities and futures markets, according to news agency Xinhua.
According to the report, Mr Wang "confessed" his "false information" had "caused panics and disorder at [the] stock market, seriously undermined the market confidence, and inflicted huge losses on the country and investors".
...
The news agency also reported 197 people had been punished in a special campaign by Chinese police targeting online rumours about China's stock market, the recent fatal explosions in Tianjin and "other key events."
No details of the punishments were given, but according to the report the crimes punished included claiming a man had jumped to his death in Beijing due to the stock market slump, falsifying the number of people who had died in the Tianjin blasts, and circulating "seditious" rumours about China's upcoming commemorations of the 70th anniversary of the end of World War II.
As much as it makes for good copy, the Shanghai index tanking isn't like the NYSE tanking here. It's much much smaller relative to the size of their economy. The total valuation there is something like 30% of their GDP, whereas in most developed country economies it's 100%+. There's a theory that part of the reason for the selloff comes from a slightly panicked misunderstanding of China's last currency adjustment. Apparently there is a disconnect between how China assumed or wanted the market to interpret the revaluation and how the market viewed the economy in light of the revaluation.
This sort of thing is likely to occur more frequently as China's economy becomes more integral to the global financial markets, and I think it has the potential to cause some real problems if China ever does have serious economic issues. The fed's remarks re: interest rate movement and the like are studied heavily for months in advance of any adjustments. The fed knows this and so tries to act with caution and prudence with its pronouncements. The Chinese equivalent of the fed may not have the ability or willingness to do this yet. Who knows if they ever will.
I think NPR's Marketplace had one of the better summaries of what the Shanghai Index is verse a traditional stock market like the NYSE or the Hong Kong stock market or "fill in the blank market".
China’s stock market was conceived with an entirely different purpose than stock markets of large economies elsewhere, says Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies.
“The purpose of China’s stock market is to raise capital for state-owned enterprises and other privileged companies,” he says. “It is not to act as a way for investors to find highly efficient and profitable companies to put money into and provide external oversight of these companies by allowing investors to have information and voting power.”
It is very much a controlled facsimile of a market not a real market. Which is why its ripple effects surprised me so much. But also then again it is showing some really strong weaknesses in the Chinese economy especially since the property bubble has been bursting and there aren't a lot of choices for the middle class to invest in.
It would will be interesting to see the growth numbers out of China this year. Both the official and unofficial estimates. If they are below 6% that is huge. And also really bad for the CCP. If they are below 7% that is a hit to the CCP.
I think NPR's Marketplace had one of the better summaries of what the Shanghai Index is verse a traditional stock market like the NYSE or the Hong Kong stock market or "fill in the blank market".
China’s stock market was conceived with an entirely different purpose than stock markets of large economies elsewhere, says Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies.
“The purpose of China’s stock market is to raise capital for state-owned enterprises and other privileged companies,” he says. “It is not to act as a way for investors to find highly efficient and profitable companies to put money into and provide external oversight of these companies by allowing investors to have information and voting power.”
It is very much a controlled facsimile of a market not a real market. Which is why its ripple effects surprised me so much. But also then again it is showing some really strong weaknesses in the Chinese economy especially since the property bubble has been bursting and there aren't a lot of choices for the middle class to invest in.
It would will be interesting to see the growth numbers out of China this year. Both the official and unofficial estimates. If they are below 6% that is huge. And also really bad for the CCP. If they are below 7% that is a hit to the CCP.
How open has China to its investors that were putting their money into something that's "Like a stock market, but not really"? My suspicion is that they were quite happy taking the money of people who thought they'd get rich on the Chinese stock market just like the Americans and Europeans do on theirs, and no one was going to all that much trouble to explain to them the difference.
That might also explain the contagion. Altough international investors probably knew the fix was in but expected the Party to keep them whole for appearances sake.
I think NPR's Marketplace had one of the better summaries of what the Shanghai Index is verse a traditional stock market like the NYSE or the Hong Kong stock market or "fill in the blank market".
China’s stock market was conceived with an entirely different purpose than stock markets of large economies elsewhere, says Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies.
“The purpose of China’s stock market is to raise capital for state-owned enterprises and other privileged companies,” he says. “It is not to act as a way for investors to find highly efficient and profitable companies to put money into and provide external oversight of these companies by allowing investors to have information and voting power.”
It is very much a controlled facsimile of a market not a real market. Which is why its ripple effects surprised me so much. But also then again it is showing some really strong weaknesses in the Chinese economy especially since the property bubble has been bursting and there aren't a lot of choices for the middle class to invest in.
It would will be interesting to see the growth numbers out of China this year. Both the official and unofficial estimates. If they are below 6% that is huge. And also really bad for the CCP. If they are below 7% that is a hit to the CCP.
How open has China to its investors that were putting their money into something that's "Like a stock market, but not really"? My suspicion is that they were quite happy taking the money of people who thought they'd get rich on the Chinese stock market just like the Americans and Europeans do on theirs, and no one was going to all that much trouble to explain to them the difference.
That might also explain the contagion. Altough international investors probably knew the fix was in but expected the Party to keep them whole for appearances sake.
The Shanghai Index is not open to international investors.
A large amount of that money still flows through Hong Kong or other vehicles.
It is kind of both. Think of it like the May parade in Russia where they have ICBMs roll down the streets of Moscow. It is a show of pride, strength, and power.
Edit:
Best infographic though of article.
Mazzyx on
0
KadokenGiving Ends to my Friends and it Feels StupendousRegistered Userregular
I thought I read some Chinese personnel was 5 million
Can't you have negative growth if factories shut down, companies fold and people become unemployed?
I mean that is literally less production than before.
Yes it's possible to have financial troubles cause temporary disruptions and shifts to other industries.
But people don't "just become unemployed" and factories don't just shut down. Just like our own Great Recession, these things are not permanent, and can be ameliorated by government acting.
0
TraceGNU Terry Pratchett; GNU Gus; GNU Carrie Fisher; GNU Adam WeRegistered Userregular
Chinese Navy ships entered U.S. territorial waters off of Alaska last week, coming within 12 miles of the coastline, multiple defense officials told CNN Friday.
The Chinese ships were doing operations "consistent with international law," U.S. officials told CNN, under the maritime rule of "innocent passage," where ships are permitted to enter territorial waters and are not challenged so long as they keep moving directly and expeditiously. U.S. officials emphasized that Russian warships exercise "innocent passage" around Alaska with regularity. However, this is a first for Chinese naval ships -- and the transit took place while President Barack Obama was in Alaska.
U.S. Northern Command, whose area of responsibility includes all air, land and sea approaches to the continental U.S. and Alaska, told CNN it is not aware of any communications between the U.S. and Chinese military during the passage. When a CNN crew was aboard a U.S. P8 surveillance aircraft near manmade islands off the coast of China -- islands the U.S. does not recognize as Chinese territory -- the Chinese military warned the flight crew eight times to leave Chinese territory immediately.
Asked about the difference, a defense official told CNN that as a matter of policy, the U.S. does not challenge ships executing safe transit through U.S. territorial waters, in part to be consistent with its history of challenging other nation's excessive territorial claims.
really China?
ten to one each one of those ships had a missile with its name on it pointed right at them.
Chinese Navy ships entered U.S. territorial waters off of Alaska last week, coming within 12 miles of the coastline, multiple defense officials told CNN Friday.
The Chinese ships were doing operations "consistent with international law," U.S. officials told CNN, under the maritime rule of "innocent passage," where ships are permitted to enter territorial waters and are not challenged so long as they keep moving directly and expeditiously. U.S. officials emphasized that Russian warships exercise "innocent passage" around Alaska with regularity. However, this is a first for Chinese naval ships -- and the transit took place while President Barack Obama was in Alaska.
U.S. Northern Command, whose area of responsibility includes all air, land and sea approaches to the continental U.S. and Alaska, told CNN it is not aware of any communications between the U.S. and Chinese military during the passage. When a CNN crew was aboard a U.S. P8 surveillance aircraft near manmade islands off the coast of China -- islands the U.S. does not recognize as Chinese territory -- the Chinese military warned the flight crew eight times to leave Chinese territory immediately.
Asked about the difference, a defense official told CNN that as a matter of policy, the U.S. does not challenge ships executing safe transit through U.S. territorial waters, in part to be consistent with its history of challenging other nation's excessive territorial claims.
really China?
ten to one each one of those ships had 20 missiles with its name on it pointed right at them.
Fixed that for you.
We believe in overkill.
+1
Just_Bri_ThanksSeething with ragefrom a handbasket.Registered User, ClubPAregular
edited September 2015
We believe strongly that there is no such thing.
Just_Bri_Thanks on
...and when you are done with that; take a folding
chair to Creation and then suplex the Void.
Posts
God, a war in Korea is the last thing we or they need right now.
Sigh.
"Zhao Xijin was an ordinary employee at a chemical company. The explosion left him badly burned, but gave him incredible pyromaniac powers....and a unquenchable thirst for VENGENCE!"
WoW
Dear Satan.....
The former. This is one of those situations where the media starts paying attention and realizes that "Oh yeah, there are a whole lot of industrial accidents and factory explosions in China!"
Chinese chemical plants are apparently as flammable as Spinal Tap drummers.
Over the last few years, I've heard people call China one of the biggest emerging economies and an economic house of cards that's inevitably going to collapse. I guess at least one group was sort of right.
Anyway, I don't know anything about finance, but what are the odds that this stock market buffoonery is going to lead to an international financial crisis? Again.
We'll see how successful they will be at keeping the country running in the long term.
They are both potentially right and that is a quirk of finance.
Economically the risk to China is a increase in value of the yuan. They export a lot and this is due to the low value of their currency. They keep their currency low artificially. When you do this it has a real cost because it makes your exports cheaper and your imports more expensive. This is like a siphon of value that the U.S. benefits from.
When it ends, a lot of Chinese may find themselves out of work. Especially if it happens fast. Ok so why are the Chinese doing this? Well because low wages attract capital investments and these will not go away when things readjust. So China will be, in real terms, better off. Basically they're trading labor for materials and knowledge. If that cycle disrupts itself China will get little out of the yuan sell off and be forced more or less, to end it.
But at the end of the day the strength of your economy does not depend on finance. The knowledge and capital accrued will not go away and China will start producing more for the internal market; provided that things work out financially, but I bet that the govt would kickstart such a process if it were needed. China's bureaucrats seem to have better grasp on this (or ability to execute it) than ours do.
I've always got the sense that Chinese leaders understand and make use of global commercial and financial systems for China's own ends, but they do not believe in them the same way Western leaders do.
There is a problem with this at the moment.
The Chinese, specifically the CCP, has been looking at producing for that internal market for about 5 years. Pushing towards it. But thanks to recent capital losses, unstable yuan and a few other factors including saving culture and lack of ways to hold money the internal consumption stay around 30% of GDP. Which right now is completely non-sustainable if China's economy is going to survive long term.
This is a pretty heavy correction but a lot of China's growth since the economic collapse of 2008 has been due to investment and the government pouring money into they system to prop it up. Lots of infrastructure. Lots of just moving cash from x to y. And a lot of probably shady dealings. This is all coming to roost now and will do some damage. Doesn't help we are guessing at the actual growth rate. I have heard from some areas negative to around 5%. Both are anemic to dangerous in China and the CCP legitimacy.
And the end of the day money is a creative fiction and it's people and buildings that matter. Building infrastructure they "can't use" isn't a bad thing. And so long as the Chinese government is willing to support it it will be just fine. They aren't going to run out of food or shelter and that is the only real risk the y have
Edit: in a free market its finance that lubricates economic activity. In that people need capital to start businesses but they need businesses to get capital. So they get loans instead.
But nothing forces this structure to be necessary. If a government is willing it can just put people to work by providing that capital itself. Because it is the government and can literally can force person A to feed person B and force person b to build for Person a.
The issue of real problems that result from financial systems going is only a real problem if the government is unwilling to step up. It's what we did during the Great Depression (and to a greater extent the war) and money didn't matter because it's working that matters.
China won't increase domestic consumption until they revalue the yuan. Goods are too expensive and that means saving is too valuable. But that isn't a bad thing because they're still working. And even if bad things do happen the government will step in and keep people working.
Edit: I think that the idea that China has a negative growth rate is kind of dumb. No one has a real negative growth rate. You only have negative growth if you have lubrication problems or if you've been lying the entire time about how much stuff you've made of if a whole bunch of shit exploded/a whole lot of people died.
I find it unconvincing to suggest they've been lying. This isn't like the Soviet Union* where people could lie and the west would never figure it out because no one could actually see what was going on. We would know! There would literally be holes on our shelves where the Chinese goods never were in the first place.
I find it equally unconvincing that a lot of people in China just died and all their buildings exploded. We probably would have heard of a war if they were fighting one. Especially that large.
So then we are left with finance. And the Chinese govt is unwilling to let that be a problem and so it will not be
*and even then in the early part of the Soviet Union the growth was legitimately staggering.
The problem is how the government is funding those infrastructure projects through that capital you are talking about. Between possibly inflationary pressures(China has had numerous mega-inflationary periods in the '80's and '90's due to some similar circumstances) and how it is developing debt through local government investment banks and the graft take on top of that it isn't actually say like the New Deal or even TARP in the US. The Ghost City phenomenon is actually hurting people not helping and this is more of that. Part of this is due to government control of the banking system and how the CCP and oligarchs control much of not just finance but commodity sales and other major holdings. There are little to no way for people to safely secure their funds.
Also I am guessing you have never heard of the hidden province? If you take China's GDP and then compare it to the GDP of the provinces added up you come to a mismatch usually estimated about the size of the province of Guangdong. I have worked with Chinese bureau of statistics numbers and they do not match most estimates from other more reputable groups when looking at Chinese consumption. Lying with statistics isn't just common but considered normal. Especially thanks to procedures put in from the Great Leap Forward on.
Thing is we have figured out they fudge their numbers. So we adjust our projections when doing economic studies and futures work on China for that.
I think you are ignoring a lot of the structural issues that are at hand in the Chinese economy beyond "finance."
I mean that is literally less production than before.
Old PA forum lookalike style for the new forums | My ko-fi donation thing.
Your stock market.
This sort of thing is likely to occur more frequently as China's economy becomes more integral to the global financial markets, and I think it has the potential to cause some real problems if China ever does have serious economic issues. The fed's remarks re: interest rate movement and the like are studied heavily for months in advance of any adjustments. The fed knows this and so tries to act with caution and prudence with its pronouncements. The Chinese equivalent of the fed may not have the ability or willingness to do this yet. Who knows if they ever will.
We certainly do live in interesting times.
http://www.marketplace.org/topics/world/chinas-struggle-free-stock-market
It is very much a controlled facsimile of a market not a real market. Which is why its ripple effects surprised me so much. But also then again it is showing some really strong weaknesses in the Chinese economy especially since the property bubble has been bursting and there aren't a lot of choices for the middle class to invest in.
It would will be interesting to see the growth numbers out of China this year. Both the official and unofficial estimates. If they are below 6% that is huge. And also really bad for the CCP. If they are below 7% that is a hit to the CCP.
How open has China to its investors that were putting their money into something that's "Like a stock market, but not really"? My suspicion is that they were quite happy taking the money of people who thought they'd get rich on the Chinese stock market just like the Americans and Europeans do on theirs, and no one was going to all that much trouble to explain to them the difference.
That might also explain the contagion. Altough international investors probably knew the fix was in but expected the Party to keep them whole for appearances sake.
The Shanghai Index is not open to international investors.
A large amount of that money still flows through Hong Kong or other vehicles.
I can't decide if its a propaganda piece or an arms fair.
It is kind of both. Think of it like the May parade in Russia where they have ICBMs roll down the streets of Moscow. It is a show of pride, strength, and power.
Edit:
Best infographic though of article.
I think that includes reserves. This is active duty.
Yes it's possible to have financial troubles cause temporary disruptions and shifts to other industries.
But people don't "just become unemployed" and factories don't just shut down. Just like our own Great Recession, these things are not permanent, and can be ameliorated by government acting.
really China?
ten to one each one of those ships had a missile with its name on it pointed right at them.
Fixed that for you.
We believe in overkill.
chair to Creation and then suplex the Void.
There is only open fire and time to reload.
If you wave your dick around too hard too often it eventually smacks someone in the face and things get complicated.
but it's still a -dick- legal move
That's really it. Russia does this kind of dick waving all the time. Don't hear it from China too often. More in recent years though.
Its not really too worrisome.
Its one that we probably pull all the time.
So, I'm not seeing the big deal in China doing what we already do.