whats going on with China

This evening I've had a talk with a Chinese guy with a good insight into the situation in his country. He told me that things are getting bad over there economically. The export has dropped dramatically due to the global recession and consumer crisis, so much that a huge number of factories in China are about to close down, or have already done that.
That scenario could potentially have huge consequences on international political, economical and military scene. Anyone has any news about it?

 

I saw an interview with some banker/economist on the BBC business news section of BBC24 last night...saying the same thing!

 

China has neglected the domestic consumer, thats the biggest issue and why China will suffer from a massive slowdown.

The country's industries rode a growth wave of expansion based on exports with tax rebates and or govt subsidies to flood overseas markets.
But with EU euro woes, UK slowing and US ecconomy at a standstill China's markets dissapeared.

The govt, industry leaders and foreign owned industry (Japan, US etc) in China colaborated to keep labour costs down so the domestic market suffered.

I can hire a ABS certified aluminium welder for $4.00hr, charge out his time at $6.00hr - compared to Aus/US$25.00 but the Chinese welder is paying prices for food, clothing, rent, power at prices almost the same as ANZ.

Gravity works in reverse with money in China, nothing trickles down

 

Both imports and exports a dropping in China.

Bad news for China and without an increase in domestic consumption.... bad news for countries who export to the Chinese market.



upload pics

 

50% drop in both import and export.

...

If it comes from a reliable source, that graph is not showing just a recession trend. It is a photography of a disaster. Or economical apocalypse, you choose.
China is a country with 1.4 billion people, 20% of the world population. And is producing 20% of the goods sold or used as assembly parts worldwide. So we are talking about a potential world-scale bomb ticking over there.

 

But all economists have know this will happen . No country can have continuous growth.

Its unfortunate China is experiencing its growth problem at the same time as Europe and the US.

Perhaps Russia and Africa can get there act together, grow, stimulate demand and relieve some of the burden.

The BBC singled out Nigeria...160 million people with decent growth potential for the next ten years.

In Europe Slow growth is bad for the present generation of unemployed and deadly for older citizens preparing to receive the benefits they paid for. .

I read somewhere that Spain needs 10 years of 3 percent growth to return to pre crisis level prosperity

 

The problem is not in the fact that they are experiencing a decline in growth. The problem is - this is close to a dead stop of their manufacture. And, considering the current world economic situation and the state of Chinese internal market, they have no means to get out of it any time soon. It means that millions of people will be left without job and with no money for their basic needs. A situation which can (or, should I say - will) lead to massive unrest of the population throughout the country, with unpredictable consequences. Chinese people have shown through the recent history that they fear no police or military when they get really pissed off.

That's why Watchkeeper has been left without some foreign TV channels and with heavily censored info from the internet. The later the population gets to know the facts, the more time the government has to try and find some solution.

All this is a consequence of their government's choice to make China become the cheap factory of the World. Now the question is - how far can this process go? And if it gets too far, in which way shall we, the rest of the world, become involved into an eventual Chinese economic and social breakdown?

 

That graph looks scary but is really just a return to the long line.
Here is the expression of that trend over more time:



http://www.tradingeconomics.com/china/indicators

 

The two graphs do not correspond. Michael Piertzga's graph shows a dramatic drop in both import and export, which is not visible in Bntii's graphs.
What are your sources, folks?

 

Look at the date line & the site is listed.

 

They do correspond. Pierzga's graph stopped in 2009, while Bntii's continued into 2012.

 

You are correct, my fault.

 

An article from the Council on Foreign Relations

http://blogs.cfr.org/setser/2009/03...t-up-in-part-with-the-fall-in-chinas-exports/

Social Unrest will be thru the same drivers as the Arab Spring.

Communication, Educated Middle class, lack of economic opportunity , unrepresentative government.

The writing is on the wall.

China spends the same on Defense as it does on internal security.

I see that new rules have just been adopted for internet users .

 

A graph may illustrate a trend from the past not what may happen in the near future... There are some measures that are referred to as leading indicators, but as always, the context and timing are critical...

One broad leading indicator is export of Australian raw materials, and where in China they are headed, - - (what for) - - and because of the leading impact, many reports tend to discuss general trends and try to smoothe the numbers by assessing, 'is the good for stockpiles or production and how much is already held in stockpiles?' - Has the middle class in China the capacity, desire, and likelihood of becoming the engine to drive consumption inside China?

A good leading indicator may include the container numbers full and empty and to where also similarly dry bulk cargo tonnage booked and to where with what and of course how many million barrels of oil where moved from where to where... (I may be wrong but I think most food is shipped by containers now...

My reading suggests a slowdown in growth for China, as the export markets are almost flatlined and there is no international capacity to use a defibrilator to jerk some buying anywhere in the "western world" - as the derivative market has scared the life out of any seeking to increase their debt level...

The "invisible elephant" in the room is the pile of toxic derivatives out there and no one wants to risk being caught holding some of that 1.5quadrillion... (How many zeros is that?) - - I think, if a million is 6, - a billion is 9, - a trillion is 12 :?: so is a quadrillion some 15 ZERO's...... That MUST be settled before any recovery can be put in place - as no one will trade for fear of getting a derivative as settlement for a real debt, - and a derivative is a bet with nothing behind it, - yet is classified as an AAA asset in some cases... :!:

Another 'report' derived from a careful analysis of the assets of the "big four banks in Australia" suggested that since most of their asset wealth is in Australian mortgages and other business 'advances' against assets, that if the real-estate values and share values of the major businesses to which they are exposed, fell by another 6.5% then the banks would all be technically insolvent...

The Australian banks are diminuative when lined up against the 8 or so majors in USA which are now TOO BIG TO BAIL OUT - so another TARP will not be possible as there is NO CONSORTIUM of banks (reserve or otherwise), that could print enough money to settle the collapse of one of these major USA banks without the real and immediate hyperinflation event striking globally and instantly...

Just sit and think about it... All banks are so deeply interconnected they would have to shut their doors whilst things were counted and the books balanced... THAT MEANS NO ELECTRONIC TRANSACTIONS until some settlement is reached... That could take months, - or longer, - - or even a nasty false flag started war by the biggest debtor...

 

Debt is the devil. If China stops purchasing Treasury Bills with its excess cash the game is all over.

I dont know how raw materials work. None of Australias Chinese mineral exports are purchased by private companies. Its the state... Supply and demand is not clear.