The China Boom is OVER!

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The CCP is DOOMED

Surrey, Canada

#1 Jun 24, 2013
China's Other Big Problem: Debt
TheStreet.com By Richard Cox | TheStreet.com – 14 hours ago...

BEIJING (TheStreet)-- The world continues to look at progress in China as a barometer for the global economic recovery and recent headlines have been less than encouraging. For the first quarter, Chinese GDP growth was seen at 7.7%. While numbers like these would be great for most countries, a performance like this is viewed largely as a disappointment, when Chinese growth rates of 10%(and above) have been seen for the last 30 years.

But the main question going forward is not whether China will encounter a hard or soft landing. It's also not an issue of the government's commitment to stimulate growth by injecting economic stimulus. The key point that most of the discussion fails to address is the fact that the era of elevated growth in China has peaked, and it is unlikely we will see anything like it again.

Recent drop-offs in Chinese growth cannot be explained away as cyclical weakness or as a temporary side-effect of the sluggish global recovery. The Chinese economic model is structurally flawed and there is no easy fix in sight.
Roots in Government Stimulus
Capitalist reforms in China started in the 1980s, as the government devoted resources to modernizing infrastructure in roads, apartment buildings and factories. The country quickly rose to prominence as the world's first choice for low-cost manufacturing and China's version of state-capitalism has been a boon for favored industries ever since.
But this approach has a limited life span. The wide labor base that lifted companies like Foxconn into prominence has been compromised by China's one-child policy. An aging population has reduced the number of available workers and state-sponsored investment systems have wasted resources, ruined the credibility of the financial sector, and built a large number of crumbling, obsolete factories.

The reality that China faces today is a stark one, and significant overhauls will need to be undertaken if its goals to increase domestic consumption have any chance of being met.

Excess Investment
Always hoping -- by hook or by crook -- to gain an edge on future markets, China has set its sights on green energy as the next target. Chinese banks have pumped billions into the solar-panel industry, creating the world's largest market for what is essentially a moderately efficient source of power. But these excess investments have generated company balance sheets that are unsustainable, and failures like the Suntech Power bankruptcy can be viewed as one of many examples of misplaced allocation.
Other instances can be seen in the losses steel company investors have encountered, as the industry continues to ignore rising debt environments and pour more money into new capacity. Local factories in China are backed by officials that (at best) are overly concerned about generating jobs growth. But investments in these areas miss many of the larger costs involved. When state-owned companies are given subsidies, credit resources are directed away from private enterprises that are often run more efficiently.

...
The CCP is DOOMED

Surrey, Canada

#2 Jun 24, 2013
...
Rising Debt
The country's biggest problems are starting to become apparent in its debt levels, which have risen at an alarming pace. For 2012, numbers from Fitch suggest that credit rose to nearly 200% of GDP, well above the 125% reading that was seen in 2008.
Government debt at the local level is now seen at $2 trillion (roughly 25% of GDP). Additional risks are created by the influence of "shadow banking." Here, unconventional lending sources go uncited on bank balance sheets in a practice that sounds disconcertingly similar to what was seen with the toxic securities traded during the subprime mortgage crisis.

The real challenge for China's leadership will be to avoid these deepening threats to economic stability. But similar examples of debt increases in recent years have sent major economies into financial turmoil. This occurs as markets start to accumulate more and more debt as the only way to generate output comparable to what was seen previously. Scenarios like these are unsustainable and, at this stage, it is highly unlikely China will be able to implement sufficient policy measures to keep its growth model running at a consistent pace.
Dependence on Foreign Investment
One area where consensus can be found is in the idea that China needs to move past its dependence on foreign investment and re-balance its economic models to allow consumption to drive growth. Private consumption levels in China (relative to GDP) continue to hold at the lowest rates when compared to the globe's major economies. Government reforms have done little to address these issues, as badly stuctured health care and pension programs encourage household savings in low interest rate environments.
From a policy perspective, two potential paths can be seen. China's leadership will choose either to enact consumption-supportive reforms at a faster pace or maintain its reliance on outside markets (in exports and investment).

The likely outcome in both scenarios is a slowing economy as any transitions will take time (and meet political resistance); any adherence to the old model will only exacerbate the problems the country currently faces. In either case, the days of double-digit growth in China have come to and end, creating more attractive emerging market opportunities in other areas of the world.
CCP CHINA in DECLINE

Surrey, Canada

#3 Jun 24, 2013
"...similar examples of debt increases in recent years have sent major economies into financial turmoil. This occurs as markets start to accumulate more and more debt as the only way to generate output comparable to what was seen previously. Scenarios like these are unsustainable and, at this stage, it is highly unlikely China will be able to implement sufficient policy measures to keep its growth model running..."

Yep.
Old Jew

San Francisco, CA

#4 Jun 24, 2013
I will take my cash and invest it in China soon. They will bounce right back up. The Chinese economy is the strongest amongst major countries. You must be a white Canadian, Miro. You could not possibly be Asian, you are too dumb.
CCP CHINA in DECLINE

Surrey, Canada

#6 Jun 25, 2013
Good! Then you'll get wiped out!

Obviously you are a fake CCP Jew, as most Jewish people are good with investing!

HA HA HA HA HA!
Problem

Olney, MD

#7 Jun 25, 2013
How could a country survive with 1.3B mouths??

It takes a lot of resources and intelligence to keep 1.3B mouths and China has none!!!!!!!
OVERTHROW the CCP PIGS

Surrey, Canada

#8 Jun 25, 2013
I agree! The Chinese Communist Party dictatorship has NO INTELLIGENCE AT ALL!!!!!!!!!!

HA HA HA HA HA HA HA!
Old Jew

San Francisco, CA

#9 Jun 25, 2013
Big rebound in China, Euro and USA markets today, just as I told you. Good value time to buy.
OVERTHROW the CCP PIGS

Surrey, Canada

#10 Jun 25, 2013
Of course you are looking for buyers so you can unload your CCP China shares. It's only sensible.

But is it wise for ANYONE to buy into CCP China so soon before its banks collapse?
CCP needs a STUPID CHINA

Surrey, Canada

#11 Jun 25, 2013
Problem wrote:
How could a country survive with 1.3B mouths??
It takes a lot of resources and intelligence to keep 1.3B mouths and China has none!!!!!!!
I agree!

The Chinese Communist Party dictatorship has NO INTELLIGENCE AT ALL!!!!!!!!!!

But more detail please, on the TOTAL LACK OF INTELLIGENCE of the Chinese Communist Party!

HA HA HA HA HA HA HA!
Snowflake

San Francisco, CA

#12 Jun 26, 2013
I will have to agree with Old Jew, but I am more cautious.
Shanghai has been down

Silver Spring, MD

#13 Jun 26, 2013
Shanghai's market has been down hard and no one has seen that before. There are limits on resources like food, oil, gas,,,etc. If you have a population like India and China, you will face hard time soon or later unless you are smart and respectful like Japanese folks.

China and India will not survive because their people are weird/selfish and care about themselves thatlead to Big/Rich survive and small/poor die.
CCP China IN DECLINE

Port Moody, Canada

#14 Jun 26, 2013
India is a democracy and capable of working out long term solutions for all its people.

CCP China is a dysfunctional kletocracy held together by lies and political terror against its own people.

Ask yourself which will survive and prosper, and which is headed for a crash like ALL SIMILAR REGIMES.
Within next 10 years

Silver Spring, MD

#15 Jun 26, 2013
Within next 10 years, I will bet China will collapse!
OVERTHROW the CCP PIGS

Surrey, Canada

#16 Jun 26, 2013
I bet you are proven CORRECT within ten years!
OVERTHROW the CCP PIGS

Surrey, Canada

#17 Jun 27, 2013
Failing CCP China companies have ALL dropped out of the TOP TEN!

NOT ONE LEFT!

"Chinese companies have dropped out of the ranks of the world’s 10 biggest stocks by market value for the first time since 2006 amid a cash crunch, slower growth and the biggest U.S. stock rally in a decade.

PetroChina, the most valuable company in the world as recently as March 2010, has lost 28 percent this year in Hong Kong trading, wiping out $51 billion in value.

PetroChina Co.,(PTR) the state oil producer that was the world’s sixth-biggest company in May, lost $35 billion in market value this month to $214 billion, dropping to 12th, according to data compiled by Bloomberg based on closing prices yesterday. Industrial & Commercial Bank of China Ltd. fell four places to 13th after losing $28 billion. All of the 10 largest stocks are from the U.S. after Johnson & Johnson (JNJ), the top maker of health-care products, and Wells Fargo & Co.(WFC) overtook the Chinese firms."

http://www.bloomberg.com/news/2013-06-27/chin...
AZN

Toronto, Canada

#18 Jun 30, 2013
CCP China IN DECLINE wrote:
India is a democracy and capable of working out long term solutions for all its people.
CCP China is a dysfunctional kletocracy held together by lies and political terror against its own people.
Ask yourself which will survive and prosper, and which is headed for a crash like ALL SIMILAR REGIMES.
How long is the long term solution for India finally having toilets for all it's people going to take?
AZN

Toronto, Canada

#19 Jun 30, 2013
Old Jew wrote:
I will take my cash and invest it in China soon. They will bounce right back up. The Chinese economy is the strongest amongst major countries. You must be a white Canadian, Miro. You could not possibly be Asian, you are too dumb.
Miro is dumb because miro is indian.
OVERTHROW the CCP PIGS

Surrey, Canada

#20 Jul 2, 2013
AZN wrote:
<quoted text>How long is the long term solution for India finally having toilets for all it's people going to take?
How long is the long term solution for CHINA finally having toilets for all it's people going to take?

AFTER all of the Chinese Communist Party Cadres have 274 empty apartments each?

HA HA HA HA HA HA HA HA HA!
The CCP is DYING

Port Moody, Canada

#21 Jul 8, 2013
The mainland Chinese fake stock markets and Hong Kong are still FALLING ..........

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