China is Dubai times 1,000 — or worse

[ocrenter]

The problem with China-nay-sayers is they do not understand the Chinese playbook, which was pirated word for word from the South Korean and Taiwanese editions. The scary part for most folks is that South Korea + Taiwan = a single province in China in population size.

The Chinese is following the same pathway paved by the South Koreans and the Taiwanese. Both of those countries were under what we would call “capitalist authoritarian regimes” who guided growth and development until the economy took off.

If you look at the South Korean and Taiwanese GDP growth chart from the 60’s, both were showing steady upward trend, then both took off in the 90’s, but instead of continued skyward trend (which was what happened to Japan and its bubble), both nations then bended back to slow upward trend after reaching developed nation status in 00’s. That second bending of the curve received a lot of bad press in both countries, but it was the right course in retrospect. If you count, we are looking at 40-50 years post development for that 2nd bending of the curve to develop.

If you are afraid of a Chinese bubble, that is what you watch for. If you see that skyward trend continuing even after the average Chinese PPP per capita reach beyond $20-25k, then yes, you got a bubble forming. But it goes deeper then that. Because China is so big, you got to look at its ~40 provinces/municipalities as 40 countries individually.

For example, Shanghai (population of 16 million) currently has a PPP per capita of $20k. we should start to see Shanghainese growth rate slowing down over the next decade as that municipality reach “developed status.” If it doesn’t, then there’s a problem. What should happen is Shanghainese growth rate will flatten as investors depart Shanghai and attack inland provinces next door (kinda like how Hong Kong investors went to Guangdong and how Taiwanese investors went to Fujian).

[img_assist|nid=12585|title=|desc=|link=node|align=left|width=446|height=275]

The graph here shows the Shanghainese GDP growth. now the 2008 decline from 14% growth to 9.7% may be due to the global recession. but the idea here is we should be seeing a slowing from double digit growth to single digit growth for the city. But the rest of China will continue high flying at double digit growth and that is ok, and not indicative of a brewing bubble.

[34f3f3f]

There used to be two certainties in life, now there are three, death, tax, and asset bubbles (unless you include a speeding ticket in Arizona), and the latter is a game of musical chairs. If it’s China’s turn next, it might be a bit harder to see coming.

[34f3f3f]

There used to be two certainties in life, now there are three, death, tax, and asset bubbles (unless you include a speeding ticket in Arizona), and the latter is a game of musical chairs. If it’s China’s turn next, it might be a bit harder to see coming.

[34f3f3f]

There used to be two certainties in life, now there are three, death, tax, and asset bubbles (unless you include a speeding ticket in Arizona), and the latter is a game of musical chairs. If it’s China’s turn next, it might be a bit harder to see coming.

[34f3f3f]

There used to be two certainties in life, now there are three, death, tax, and asset bubbles (unless you include a speeding ticket in Arizona), and the latter is a game of musical chairs. If it’s China’s turn next, it might be a bit harder to see coming.

[34f3f3f]

There used to be two certainties in life, now there are three, death, tax, and asset bubbles (unless you include a speeding ticket in Arizona), and the latter is a game of musical chairs. If it’s China’s turn next, it might be a bit harder to see coming.

[briansd1]

I pretty much agree with OCrenter.

If you look at America back you’ll see periods of strong growth in certain regions while other regions stagnated.

Economic growth is not evenly spread out.

China is a very big country. There are many “countries” within the country.

Sure an asset bubble burst in China will be 1000 greater than Dubai because of the size of the country. But I can see how Shanghai might crash hard while Chengdu and Urumuqi grow and thrive.

[briansd1]

I pretty much agree with OCrenter.

If you look at America back you’ll see periods of strong growth in certain regions while other regions stagnated.

Economic growth is not evenly spread out.

China is a very big country. There are many “countries” within the country.

Sure an asset bubble burst in China will be 1000 greater than Dubai because of the size of the country. But I can see how Shanghai might crash hard while Chengdu and Urumuqi grow and thrive.

[briansd1]

I pretty much agree with OCrenter.

If you look at America back you’ll see periods of strong growth in certain regions while other regions stagnated.

Economic growth is not evenly spread out.

China is a very big country. There are many “countries” within the country.

Sure an asset bubble burst in China will be 1000 greater than Dubai because of the size of the country. But I can see how Shanghai might crash hard while Chengdu and Urumuqi grow and thrive.

[briansd1]

I pretty much agree with OCrenter.

If you look at America back you’ll see periods of strong growth in certain regions while other regions stagnated.

Economic growth is not evenly spread out.

China is a very big country. There are many “countries” within the country.

Sure an asset bubble burst in China will be 1000 greater than Dubai because of the size of the country. But I can see how Shanghai might crash hard while Chengdu and Urumuqi grow and thrive.

[briansd1]

I pretty much agree with OCrenter.

If you look at America back you’ll see periods of strong growth in certain regions while other regions stagnated.

Economic growth is not evenly spread out.

China is a very big country. There are many “countries” within the country.

Sure an asset bubble burst in China will be 1000 greater than Dubai because of the size of the country. But I can see how Shanghai might crash hard while Chengdu and Urumuqi grow and thrive.

[briansd1]

[quote=Allan from Fallbrook][quote=briansd1]
The central government top levels of leadership is very competent. [/quote]

Very much so. They handled the fallout from Mao’s “Great Leap Forward” with considerable aplomb. Of course, the millions upon millions of dead Chinese peasants were a problem…

Every level of Chinese government is a joke. The upper echelons simply do a better job of covering their ineptitude. From SARS to the Uighurs to the environmental catastrophe that is Chinese manufacturing to ginning up economics numbers, you have all the same type players that wrecked Soviet Russia, just of different ethnicity.
[/quote]

That used to be true in the past because the leadership was old and uneducated revolutionaries who had essentially come out of the jungle.

But the new generation of leaders is well-educated and very competent.

Do you realize that China has a new $200 million embassy in DC? They are getting very competent at lobbying us.

I wouldn’t dismiss China as a corrupt inept country about to implode.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803710.html

[quote=Allan from Fallbrook]
I refuse to work in China, but know quite a few companies that do security and force protection work there and it is bad news. [/quote]

Bad news is good news for security companies. More bad news means more work for them. I doubt that security companies will ever report good news.

[briansd1]

[quote=Allan from Fallbrook][quote=briansd1]
The central government top levels of leadership is very competent. [/quote]

Very much so. They handled the fallout from Mao’s “Great Leap Forward” with considerable aplomb. Of course, the millions upon millions of dead Chinese peasants were a problem…

Every level of Chinese government is a joke. The upper echelons simply do a better job of covering their ineptitude. From SARS to the Uighurs to the environmental catastrophe that is Chinese manufacturing to ginning up economics numbers, you have all the same type players that wrecked Soviet Russia, just of different ethnicity.
[/quote]

That used to be true in the past because the leadership was old and uneducated revolutionaries who had essentially come out of the jungle.

But the new generation of leaders is well-educated and very competent.

Do you realize that China has a new $200 million embassy in DC? They are getting very competent at lobbying us.

I wouldn’t dismiss China as a corrupt inept country about to implode.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803710.html

[quote=Allan from Fallbrook]
I refuse to work in China, but know quite a few companies that do security and force protection work there and it is bad news. [/quote]

Bad news is good news for security companies. More bad news means more work for them. I doubt that security companies will ever report good news.

[briansd1]

[quote=Allan from Fallbrook][quote=briansd1]
The central government top levels of leadership is very competent. [/quote]

Very much so. They handled the fallout from Mao’s “Great Leap Forward” with considerable aplomb. Of course, the millions upon millions of dead Chinese peasants were a problem…

Every level of Chinese government is a joke. The upper echelons simply do a better job of covering their ineptitude. From SARS to the Uighurs to the environmental catastrophe that is Chinese manufacturing to ginning up economics numbers, you have all the same type players that wrecked Soviet Russia, just of different ethnicity.
[/quote]

That used to be true in the past because the leadership was old and uneducated revolutionaries who had essentially come out of the jungle.

But the new generation of leaders is well-educated and very competent.

Do you realize that China has a new $200 million embassy in DC? They are getting very competent at lobbying us.

I wouldn’t dismiss China as a corrupt inept country about to implode.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803710.html

[quote=Allan from Fallbrook]
I refuse to work in China, but know quite a few companies that do security and force protection work there and it is bad news. [/quote]

Bad news is good news for security companies. More bad news means more work for them. I doubt that security companies will ever report good news.

[briansd1]

[quote=Allan from Fallbrook][quote=briansd1]
The central government top levels of leadership is very competent. [/quote]

Very much so. They handled the fallout from Mao’s “Great Leap Forward” with considerable aplomb. Of course, the millions upon millions of dead Chinese peasants were a problem…

Every level of Chinese government is a joke. The upper echelons simply do a better job of covering their ineptitude. From SARS to the Uighurs to the environmental catastrophe that is Chinese manufacturing to ginning up economics numbers, you have all the same type players that wrecked Soviet Russia, just of different ethnicity.
[/quote]

That used to be true in the past because the leadership was old and uneducated revolutionaries who had essentially come out of the jungle.

But the new generation of leaders is well-educated and very competent.

Do you realize that China has a new $200 million embassy in DC? They are getting very competent at lobbying us.

I wouldn’t dismiss China as a corrupt inept country about to implode.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803710.html

[quote=Allan from Fallbrook]
I refuse to work in China, but know quite a few companies that do security and force protection work there and it is bad news. [/quote]

Bad news is good news for security companies. More bad news means more work for them. I doubt that security companies will ever report good news.

[Author]

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