China - News & Discussion

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chetak
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Re: China - News & Discussion

Post by chetak » Thu Nov 08, 2018 7:12 pm

Well, if true, this came much sooner than I thought it would.


Caixin Global Verified account @caixin

China think tank head Li Yang says nation's economy may be entering a long-term "downward spiral"

Economy at Risk of Long-Term ‘Downward Spiral,’ State Researcher Says
The head of an influential state-backed think tank has forecast that China’s economic expansion may be entering a long-term “downward spiral” as all three engines of growth — investment, exports and consumption — slow down.

The comments by Li Yang, head of the National Institution for Finance & Development (NIFD) and the former deputy head of the Chinese Academy of Social Sciences, come against the backdrop of increasing concern among the country’s top policymakers about the outlook for the world’s second-largest economy and the impact of the trade war with the U.S. Gross domestic product (GDP), a measure of all goods and services produced in an economy, rose by 6.5% year-on-year in the third quarter, the lowest in almost a decade.

“GDP (growth) is slowing, investment (growth) is slowing, export (growth) is slowing and consumption (growth) is slowing” and the growth rates are slowing at the same pace or faster than GDP growth, Li said in a speech at the Chinese Institutional Investors Summit on Saturday in Beijing.

“There’s a lot of musing about what’s really going on with the numbers, but in short, we need to pay extremely close attention because it might mean that the economy is in a kind of downward spiral,” Li said. “The recent meeting between the central authorities and private enterprises also suggests that the situation (of the private sector) is quite serious.”

President Xi Jinping held a seminar with private entrepreneurs on Thursday in Beijing to assure them of the government’s and the Communist Party’s support for the private sector as the entrepreneurs struggle amid a cooling economy and an unfavorable financing environment. The event followed a meeting of the Politburo, a committee of the Party’s top 25 officials chaired by Xi, which also emphasized support for the private sector.

Employment worries

In addition to his academic roles, Li is a delegate to the National People’s Congress — the country’s legislature — and a member of its financial and economic committee. He also advises a number of provincial and municipal governments, according to his biography on the NIFD website.

Li’s speech touched on several economic challenges facing China, including job creation; monetary policy and the changing dynamics of credit creation; the relationship between the country’s financial system and the real economy; and the potential impact of the trade war between China and the U.S. and its geopolitical significance.

Although government data show that the target for job creation this year was met ahead of schedule in October, evidence is starting to emerge that the employment situation could become more challenging in 2019 or 2020, compounded by the U.S.-China trade friction, Li said.

“As the economy cools, it’s possible new job creation will soften, companies who are in difficulty will cut wages, the growth rate of salaries will decline, and we will see an absolute fall in pay,” Li said. “We may even see people lose their jobs. This is the impact of Sino-U.S. trade friction passing through into the labor market.”

Li also highlighted weak credit creation by financial institutions and how the credit impulse, which is the change in new lending by banks as a percentage of GDP, has weakened significantly. Although the People’s Bank of China can influence the money supply and can add more money to the financial system by cutting banks’ reserve requirement ratio, for example, financial institutions also influence money supply by increasing their lending.

But the process of money creation has stalled or contracted because demand for loans from companies is insufficient and profitable investment opportunities are limited, Li said. This has become a prominent problem and a sign of economic contraction, he said.

Although the PBOC has adjusted the way it calculates total social financing (TSF) — the broadest measure of credit in the economy that includes bank loans, “shadow banking,” and bond and equity issuance — growth in TSF has lost steam and continues to slow, Li said, adding that the Chinese Academy of Social Sciences estimates the increase in the measure will be “even worse” next year, he said.

Economic aggression

Li also raised the alarm about the economic slowdown in Guangdong, Jiangsu, Shandong and Zhejiang provinces in the first half of 2018. These are China’s most developed regions, and they showed a slide in growth that was higher than the national average, he said.

Turning to the deterioration in relations between China and the U.S., Li said this is not a short-term problem that can be solved anytime soon. Washington’s China policy has undergone a fundamental change from one of engagement and negotiation to one of containment.

China’s call for its relationship with the U.S. to be based on a new model of great power relations, which in effect signals China does not acknowledge the U.S. as the world’s No. 1 superpower, somehow crossed a red line with Washington, he said. The U.S.’s aim is now to stifle China’s ability to develop its technological strength, and this is a form of economic aggression, Li said.

China should not give in to the U.S., and while it should not go on the attack, neither should it be afraid of a fight, Li said. Beijing should stick to its position but also seek to reduce friction by offering reasonable solutions.

Li also called for the government to take a market-oriented approach to managing the economy, such as abandoning the policy of handing out massive subsidies to encourage innovation, and to expand reforms.

“There are important reforms such as property rights, especially the issue of non-state ownership, intellectual property rights,” as well as accelerating fiscal reform, Li said.

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Re: China - News & Discussion

Post by vishvak » Wed Dec 26, 2018 9:49 am

X-posting from earlier
quote=vishvak post_id=15306 time=1543252115 user_id=545]
Chinese checkers:
Some details on BRI.
Read it all.

China is building local courts for 'international' dispute resolution for BRI.

Also Chinese are using same mechanisms, prolly same people too. Meaning chances galore for corruption and pulling towards Chinese interests indirectly in other forums too, and showing off otherwise.

Not to mention putting BRI in Chinese constitution thereby increasing its pitch for support in some way or another.

The authors wonder in the second paragraph why not much is done to study certain aspects. Who else is going to do that otherwise?!
to influence the world — if not directly control it — by making the rules on which it functions. This normative determination to achieve a far greater objective has hardly been addressed when analysing China’s BRI and its impact.
[/quote

Don't let anyone talk big and slightly about how non-card-holding-members of other countries benefit due to Chinese loose monies and kind considerations.

And more importantly this is recent and ongoing thing.

vishvak
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Re: China - News & Discussion

Post by vishvak » Wed Dec 26, 2018 10:10 am

Another report of Ecuador in debt due to Chinese dam that is built somewhere near volcano spewing ash.

Now cracks started appearing in the dam too. Wonder what were they thinking.

chetak
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Re: China - News & Discussion

Post by chetak » Tue Jan 08, 2019 7:16 am

India, Iran, Russia look for new trade corridor


India, Iran, Russia look for new trade corridor

7 Nov 2018

Image
India, Russia and Iran explore new route

India, Russia and Iran are meeting next month to work out the details of a massive project to open a new sea-land transport corridor that would be a cheaper and shorter alternative to shipping oil and other goods through the Suez Canal.

According to RT, the North-South Transport Corridor (INSTC), the name for the new transit route, will connect India to Russia and Europe via a combination of sea routes and an overland passage through Iran, according to Iranian state-owned news outlet Press TV. The 7,200-kilometers long corridor will reduce the time and costs of shipping by up to 40%. Transport time between Mumbai and Moscow will fall to 20 days. The annual capacity of the transport artery is expected to reach 30 million tons.

Indian logistics companies presently need to route shipments through China, Europe or Iran to access Central Asian markets. Already, routing shipments through Iran is the least time-consuming option. But the INSTC will have the ancillary benefit of allowing Indian companies to forge a new trade route to Afghanistan without having to travel through Pakistan, as tensions over Kashmir are once again on the rise. The passage corridor through the Persian Gulf will mean billions of dollars in trade for Afghanistan, cutting its dependence on foreign logistics.

Already, India has committed $500 million for developing the Iranian port of Chabahar, which will be a crucial trans-shipment point for transitioning cargo from sea to land. What's more, the arrangement has the blessing of China, which could potentially incorporate the passage into its multi-trillion-dollar 'One Belt, One Road' initiative to build new trade routes connecting China to Europe, Asia and Africa.

Indian officials said they're hoping to start building out the infrastructure required for the route to function as swiftly as possible.

"All issues may be resolved in order to operationalize the (INSTC) route as early as possible," according to Indian Commerce Minister Suresh Prabhu, as quoted by the media.

The alliance of these four countries should unnerve the US. As it stands, the rise in bilateral trade denominated in rubles, yuan and rupees, while modest so far, is set to grow, with plans to eventually undermine the dollar's hegemonic grip on global trade settlement. And with US sanctions on Iran set to take effect on Nov. 4, the Iranian regime only stands to benefit by encouraging the blooming economic partnership between Russia and India, as Russia implements its plan to circumvent the dollar, and, by extension, Treasury Department sanctions.

Russia and India have recently announced that they had sealed a long-discussed $6 billion arms deal despite threats of economic sanctions from Washington.

Singha
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Re: China - News & Discussion

Post by Singha » Wed Jan 16, 2019 3:58 am

india - 1.6m, russia - 1.5m and iran - 1.4m(euro std gauge) seem to use different gauges of rails but nevertheless, all should be able to tranship std 20 and 40 feet containers.
with a journey across the caspian sea the logistics is complex. would have been better if iranian train could directly travel to russia via azerbaijan but the gauge is not compatible.

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Re: China - News & Discussion

Post by vishvak » Wed Jan 16, 2019 2:00 pm

Chinese military capabilities increasing..
Includes non war mission capabilities. Read it all.

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