Interesting Article about China's Economy

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Cloud Surfer

All Roads lead to Trantor
http://www.nbcnews.com/business/economywatch/chinas-economy-will-be-no-1-less-20-years-us-1C7511557

Found this on MSNBC today, and I thought I should share it with the JC community. Any thoughts on how this might impact global aviation growth, especially in regard to expatriate flying in Asia for Westerners? How would it affect hiring at legacy carriers and corporate flight departments? I'm sure that we've all heard of the forecast that Boeing recently released claiming a future need for 466,650 pilots and a likewise huge demand for mechanics. Here's to hoping that Asia will bear some potential. :)
 
IF, and that's a big if, the U.S. can continue, and revive, innovation through R&D and development of new technologies, it may be able to keep up with the 'emerging superpowers'. The Chinese and Indian GDP's are growing so quickly due to foreign investment and production demand rather than it's own internal growth, i.e. there's a huge subjugated lower class in China. If China doesn't begin to deal with its internal problems, then their economy may stagnate.

As for aviation, it would seem that it will continue to grow in the region at the rate that China's economy is, but, once again, stagnation may occur if a large percentage of their population cannot be brought out of poverty.
 
Everything in China is a façade designed to foment the image of prosperity within the global mindspace. Everything in China that they point the cameras at looks pretty, because you see it from the front. Huge buildings, daring architecture, technological magnificence ... but behind the scenes there are people paid to stand in one place and hold up the foundations all day long ... and that's only slightly metaphorical.

China is playing a great game, and eventually--given enough time--they will solidify their foundations and become the power that they appear to be. They are not our friends -- they are an enemy that is dancing their troops before us to conceal their numbers, working to make us thin our forces to prepare for a massive attack on all points.

Which we are.

Sun Tzu, anyone?

~Fox
 
Acrofox said:
Everything in China is a façade designed to foment the image of prosperity within the global mindspace. Everything in China that they point the cameras at looks pretty, because you see it from the front. Huge buildings, daring architecture, technological magnificence ... but behind the scenes there are people paid to stand in one place and hold up the foundations all day long ... and that's only slightly metaphorical.
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Ever been to China?


TP
 
Any entity that holds U.S. Treasury Notes or Bonds can cash them in. I don't want to come off like a jerk by assuming knowledge or ignorance of how that system works, but China currently owns $1.15 Trillion in U.S. Bonds. Once these bonds reach maturity, they can, theoretically be cashed in as I understand it. (Edit: I may be wrong, but this is based on how I understand the system)


"
Despite all the concerns about U.S. ​
debt default, China has been increasing its holdings, so it must not be too worried. It still sees the U.S. as a safe investment. More important, China wants to keep the value of the dollar high. This makes its own currency, the yuan, relatively cheaper by comparison. That helps China's exports to the U.S. seem more affordable, which helps its economy grow. That's why, despite China's occasional threats to sell its holdings, it's happy to be America's biggest banker, and largest owner of U.S. debt"​

http://useconomy.about.com/od/monetarypolicy/f/Who-Owns-US-National-Debt.htm
http://www.treasurydirect.gov/forms/sav0022.pdf
http://www.guardian.co.uk/news/datablog/2011/jul/15/us-debt-how-big-who-owns
http://en.wikipedia.org/wiki/United_States_Treasury_security#Treasury_bond
 
jrwit said:
Any entity that holds U.S. Treasury Notes or Bonds can cash them in. I don't want to come off like a jerk by assuming knowledge or ignorance of how that system works, but China currently owns $1.15 Trillion in U.S. Bonds. Once these bonds reach maturity, they can, theoretically be cashed in as I understand it. (Edit: I may be wrong, but this is based on how I understand the system)


"
Despite all the concerns about U.S.
debt default, China has been increasing its holdings, so it must not be too worried. It still sees the U.S. as a safe investment. More important, China wants to keep the value of the dollar high. This makes its own currency, the yuan, relatively cheaper by comparison. That helps China's exports to the U.S. seem more affordable, which helps its economy grow. That's why, despite China's occasional threats to sell its holdings, it's happy to be America's biggest banker, and largest owner of U.S. debt"

http://useconomy.about.com/od/monetarypolicy/f/Who-Owns-US-National-Debt.htm
http://www.treasurydirect.gov/forms/sav0022.pdf
http://www.guardian.co.uk/news/datablog/2011/jul/15/us-debt-how-big-who-owns
http://en.wikipedia.org/wiki/United_States_Treasury_security#Treasury_bond
Click to expand...
And in theory we could tell them to F off. Or if they did anything remotely hostile to us(economic or militarily), we could just delare bonds owned by the Chinese null and void. It isn't real remember. It's not like they have our gold in their hands. It's paper that only means what we say it does.
 
The thing that everyone forgets to mention, is that the U.S. already has defaulted on our debts. In 1971 then President Richard Nixon defaulted on our debts when he refused to honor the Bretton Woods agreement.


http://triplecrisis.com/a-first-default-closing-the-gold-window/

Forty years ago this month, on August 15, 1971, President Nixon “closed the gold window”, refusing to let foreign central banks redeem their dollars for gold, facilitating the devaluation of the U.S dollar which had been fixed relative to gold for almost thirty years. While not strictly a default on a US debt obligation, by closing the gold window the US government abrogated a financial commitment it had made to the rest of the world at the Bretton Woods Conference in 1944 that set up the post-war monetary system. At Bretton Woods, the United States had promised to redeem any and all U.S. dollars held by foreigners – later limited to just foreign central banks — for $35 dollars an ounce. This promise explains why the Bretton Woods monetary system was called a “gold exchange standard” and why many believed the US dollar to be “as good as gold”. When Nixon refused to let foreign central banks turn in their dollars for gold, and encouraged the devaluation of the dollar which reduced the value of foreign central bank holdings of dollars, the Nixon administration effectively “defaulted” on the United States’ long-standing obligations ending once and for all the Bretton Woods System.
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If Nixon was able to get away with it, what's to say we aren't purposefully allowing China and Saudi Arabia to load up on American debt, only to give them the finger down the road when it gets so bad they try to cash out?
 
typhoonpilot said:
Ever been to China?
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I was reading back to see what could have triggered your response. If you're talking about the "looks" of things, I'm more referring to China's "public" face -- what they're selling the world, what we're trying to "compete" with economically (despite the fact that .cn is a communist fackin' country...). Beijing is chock full of "beautiful" architecture and "high-tech" companies; they tout their technological development, their technology industry, their "space" program ... all of the "big boy" toys. They host the olympics and build a spectacle to show off a powerful country.

It's a façade, but they're going to put in a lot of work under the hood if we allow them free rein within our country. I'm still in the "protectionism, fackin' now- yesterday!" camp.

Eh, tonight isn't the night for me to try and make this particular rant... perhaps at some point in the future when I feel more articulate.

~Fox
 
China continues buying our debt because they must. Without them buying our debt we couldn't continue buying their imports. $30 billion or so a month right now. Of which we send about $10 bil back. A quarter trillion a year trade imbalance.
 
Acrofox said:
I was reading back to see what could have triggered your response. If you're talking about the "looks" of things, I'm more referring to China's "public" face -- what they're selling the world, what we're trying to "compete" with economically (despite the fact that .cn is a communist fackin' country...). Beijing is chock full of "beautiful" architecture and "high-tech" companies; they tout their technological development, their technology industry, their "space" program ... all of the "big boy" toys. They host the olympics and build a spectacle to show off a powerful country.

It's a façade, but they're going to put in a lot of work under the hood if we allow them free rein within our country. I'm still in the "protectionism, fackin' now- yesterday!" camp.

Eh, tonight isn't the night for me to try and make this particular rant... perhaps at some point in the future when I feel more articulate.

~Fox
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So if you've been to China do you interact with Chinese people there? I mean the real people who live in the cities and in the countryside.

I've been travelling in China extensively since the mid 90s. I speak pretty fluent Mandarin. I have had serious relationships with mainland Chinese women and both of my sons are half Chinese.

Your first post is inaccurate. The quality of life and income level of the average Chinese person has grown dramatically over the last 15-20 years.

It's not just a facade. They started from a position where most of the citizens lived in abject poverty with no way out and have now grown to where most people have opportunity. They've gone from living in dirt floor mud brick homes without plumbing or air-conditioning to much nicer and bigger homes made of concrete with reasonable plumbing and air conditioning. Their kids have gone from attending only a few years of school to being able to graduate from high school and go on to college. They've gone from walking/riding bicycles to riding motorcycles/driving cars. They've gone from never leaving their farm to travelling overseas as tourists. All in the space of one generation.

That is all pretty amazing. And while I agree that some of the glitz and glamour is for show, their infrastructure has improved dramatically with highways, railways, and airports over just the last 10-15 years. I routinely ride the train, take buses, and fly domestically. I enjoy the 5 star hotels on Hainan island. They aren't just facades. Yalong Bay is one of the nicest beach resorts I've been to.

I wouldn't underestimate the capability of the Chinese. They still have a ways to go, that is for sure, but they are rapidly catching up to the Western world and will soon surpass us.



Typhoonpilot
 
typhoonpilot said:
So if you've been to China do you interact with Chinese people there? I mean the real people who live in the cities and in the countryside.
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They were not the subject of this discussion.

I've been travelling in China extensively since the mid 90s. I speak pretty fluent Mandarin. I have had serious relationships with mainland Chinese women and both of my sons are half Chinese.
Click to expand...

I acknowledge that your expertise vastly exceeds mine on the social aspect.

Your first post is inaccurate. The quality of life and income level of the average Chinese person has grown dramatically over the last 15-20 years.
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A- what about my first post was inaccurate, and
B- Where did I say the average quality of life or income of the average chinese person hasn't grown?

It's not just a facade ... <snip> ... That is all pretty amazing.
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While amazing, it doesn't justify the former.

And while I agree that some of the glitz and glamour is for show, their infrastructure has improved dramatically with highways, railways, and airports over just the last 10-15 years.
Click to expand...

My comments are not about improvement. My comments are about the face China shows the world versus the true nature of what's under the hood. In general, your comments appear to agree with mine? In Beijing, there is at least one person who is a human power regulator. He sits in a room, all day long, with one knob, regulating the uneven line voltage to a voltage acceptable to the machines.

That's not the picture they present to the western world, but that's the reality. I'm not saying that that guy's life isn't far better than it used to be -- that's not what's at issue. What's at issue is that the infrastructure, while steadily improving, is nowhere near the standard we hold in the western world.

I wouldn't underestimate the capability of the Chinese.
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I don't think I am. I foresee them becoming a powerhouse, but mostly because they're playing on the faults of an economy (ours) that's increasingly built on the short-term greed of the wealthy. As long as the wants of the few outweigh the needs of the many, we will be politically vulnerable. They're playing a rather cohesive long-term game of strategy while we whittle ourselves away with divisive little short tactical gambits.

That is my point, and that is my focus.

-Fox
 
jrwit said:
Any entity that holds U.S. Treasury Notes or Bonds can cash them in. I don't want to come off like a jerk by assuming knowledge or ignorance of how that system works, but China currently owns $1.15 Trillion in U.S. Bonds. Once these bonds reach maturity, they can, theoretically be cashed in as I understand it. (Edit: I may be wrong, but this is based on how I understand the system)
Click to expand...

The way Obama is spending, this would add just another trillion to the already 16, yes SIXTEEN trillion in debt we already have.

So, no biggy.
 
Wake me when the majority get indoor plumbing.

If you owe the bank 100,000, you have a problem.
If you owe the bank 100,000,000, the bank has a problem.

Mexico got Mexico'd by China and China will get China'd by any number o'countries.
 
TheFlyingTurkey said:
The way Obama is spending, this would add just another trillion to the already 16, yes SIXTEEN trillion in debt we already have.

So, no biggy.
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Remember who had a budget surplus?

bill-clinton-playing-saxophone-300x225.jpg
<--- This guyyyyyyyyyyyy! :D
 
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