China is Indias biggest enemy. They are doing everything possible to harm and undermine India

[dial_100]

Actually it is a mixed thing. Those who are educated, can speak better english they have this superiority complex. This is only common with pak. They always want to think they are superior because they have fair skin. I find these people very shallow.

 

Having said that I have met normal chinese and Pakistani and they were humble. Actually i was very popular amongst chinese women in my team. They were never rude and they respected me over many other indian men in my team. Chinese men were fine as well except those who could speak better english. Not exactly better than me but just better than the lot. It was very weird to observe that.

 

I worked with 2-3 Pakistani, both men and women. Those educated guys were very humble and good to deal with. 1 Pakistani girl I found was somewhat rude. A weird, "I am superior to you" type of $hit.

[randomGuy]

Can't china easily convert all the corporate debt into government debt... I mean the overall debt in US, EU, Japan is also 250%+

For example, mtnl, bsnls debt gets converted to Indian governments debt. 

It's a conscious decision by China I guess.... Coz the US, EU, Japan have grown their debt over decades... N so can China... Coz they have so much trade surplus.. 

[randomGuy]

So governments arnd the world keep inflating their currencies via central banks  expanding  balance sheets (QEs)... 

 

What can people do to protect against maybe hyperinflation? Crypto currencies? I don't think so, coz there can be 1000 different cryptos. Gold? But governments have added so much tax on buying gold... 

 

Let me know your thoughts... 

 

Edited January 31, 2018 by randomGuy

[mishra]

19 hours ago, Turning_track said:

Can somebody explain to me the Chinese logic of building so many cities/towns which is currently known as GHOST CITIES?
Was it made to house millions of Chinese for near future or was it a failed initiative by CPC?

PS: I'm a novice regarding economic policies.

I am not good at it either but allways try to relate things in simple manners. Think like this.

What do China get by maintaining trillions of dollars as cash reserve apart from some leverage in currency economy? Afterall its just paper printed in America! What if dollar devalues significantly?

So what does it do with money from its International trade surplus? Buy gold, Build Infra, Buy land, Buy Sea, Buy Port, Buy Rail, because it doesnt need to buy any day today stuff.

So its just another way of spending on themselves, securing their earning.

 

Ghost cities came up because population aged and started declining by the time cities came into existence. Chinese official realised a lil later that the population has crossed such a threshhold in terms of age and number that there are no takers of the cities

Edited January 31, 2018 by mishra

[narenpande1]

On 1/30/2018 at 7:05 PM, randomGuy said:

Can't china easily convert all the corporate debt into government debt... I mean the overall debt in US, EU, Japan is also 250%+

For example, mtnl, bsnls debt gets converted to Indian governments debt. 

It's a conscious decision by China I guess.... Coz the US, EU, Japan have grown their debt over decades... N so can China... Coz they have so much trade surplus.. 

No, because the debt is mostly private retail debt taken ( 90 % of bad debt is here ) and state owned enterprises debt which is nothing but the govt. 

[narenpande1]

On 1/30/2018 at 7:20 PM, randomGuy said:

So governments arnd the world keep inflating their currencies via central banks  expanding  balance sheets (QEs)... 

 

What can people do to protect against maybe hyperinflation? Crypto currencies? I don't think so, coz there can be 1000 different cryptos. Gold? But governments have added so much tax on buying gold... 

 

Let me know your thoughts... 

 

 

Economic growth is always accompanied  by inflation- no exception.  Govts have to print money to facilitate transactions as a result of increasing incremental  economic activity.

 

cryptocurrencies have no legs from a macro economic perspective although the underlying block chain technology is very useful. There is no underlying value to a crypto currency. They will be regulated and are being regulated to a death spiral.

 

 

[Muloghonto]

14 minutes ago, narenpande1 said:

No, because the debt is mostly private retail debt taken ( 90 % of bad debt is here ) and state owned enterprises debt which is nothing but the govt. 

I have asked you on this and I didn't get a response so I will ask again:

In China, its a common phenomenon for a lot of people, especially the rich - if they run afoul of the government, they straight up go into their personal bank accounts and clean it out.

This is something virtually no other major economy does- ever. 
So if China's economy does death-spiral due to debt, what is preventing them from taking billions of liquid cash from personal bank accounts of their people and balancing their debt this way ?

 

[randomGuy]

36 minutes ago, narenpande1 said:

 

Economic growth is always accompanied  by inflation- no exception.  Govts have to print money to facilitate transactions as a result of increasing incremental  economic activity.

 

cryptocurrencies have no legs from a macro economic perspective although the underlying block chain technology is very useful. There is no underlying value to a crypto currency. They will be regulated and are being regulated to a death spiral.

 

 

Ya but from 2008,  US govt. started printing money at a pace never seen in history... After Over a 100 years, base money (M0) was just arnd 1 trillion dollars in 2008.... Today it is 4.5 trillion....base money has a relation with  m1, m2, m3 monies obviously...i vaguely remember reading somewhere m2 is 4 times m0 for USA... 

 

Europe and Japan have also been doing the same... 

 

There's no real economic growth to be had my friend... All we have seen in the west is the effect of QEs... 

 

So china would have been thinking, all these countries have overall debt of 250%...so let me also get my overall debt over there by encouraging debt through various policies.. 

 

 

Edited February 1, 2018 by randomGuy

[randomGuy]

And of course the negative real rates.. say inflation is 2% and you give 0% to Savers in banks

[narenpande1]

4 hours ago, randomGuy said:

Ya but from 2008,  US govt. started printing money at a pace never seen in history... After Over a 100 years, base money (M0) was just arnd 1 trillion dollars in 2008.... Today it is 4.5 trillion....base money has a relation with  m1, m2, m3 monies obviously...i vaguely remember reading somewhere m2 is 4 times m0 for USA... 

 

Europe and Japan have also been doing the same... 

 

There's no real economic growth to be had my friend... All we have seen in the west is the effect of QEs... 

 

So china would have been thinking, all these countries have overall debt of 250%...so let me also get my overall debt over there by encouraging debt through various policies.. 

 

 

Yes, that is because millions of Home owners lost their equity when the housing bubble collapsed. Money that could have been cash sitting in the bank and it would have been okay , but it was down payment plus mortgages that included an equity/principal component that all got cleaned up. Banks who lent to these home owners as a result lost their capital /bad debt too.  As the housing bubble was building, homeowners used the inflated equity due to the home prices increasing to increase credit card debt and student debt  from banks. Banks got killed here due to the domino effect when Home prices collapsed.  In short to a large extent capital worth trillions of dollars got destroyed, for both retail individuals and banks - and it had to be turned around by US issuing unprecedented treasury bonds and borrowing externally. US govt was obligated to do this, because most Home loans were guaranteed by quasi govt agencies like Freddie Mac, Fannie Mae. Yes And printing that money and arming the banks again  - but this time with much more stringent borrowing criteria. It was a requirement to get the economy back on track.

 

No other economy on the face of the earth can print money like the US - they do it because they have a gargantuan tax base  - both retail and business - and the most efficient tax collection system in IRS in the world - to use to extract what it takes to service external debt.

 

Pre 2007, the home loan approvals were ridiculously easy - this promoted the housing bubble. Not so much now 

Edited February 1, 2018 by narenpande1

[narenpande1]

4 hours ago, Muloghonto said:

I have asked you on this and I didn't get a response so I will ask again:

In China, its a common phenomenon for a lot of people, especially the rich - if they run afoul of the government, they straight up go into their personal bank accounts and clean it out.

This is something virtually no other major economy does- ever. 
So if China's economy does death-spiral due to debt, what is preventing them from taking billions of liquid cash from personal bank accounts of their people and balancing their debt this way ?

 

Most of Chinese savings are in real estate and stocks and not idle cash sitting in banks - where the deposit rate is less than 2 %. What ever is sitting in banks is a very small % of net worth. It is not uncommon for every other Chinese in metropolitan China to own a second or third apartment as investment because credit was dirt cheap just like US before the 2008 crisis and because construction and building had to  go an at a frenzied rate to meet GDP figures, this cheap credit was allowed. 

 

ThIs has fueled an unprecedented asset bubble. It will meet the fate of all bubbles.

[randomGuy]

5 hours ago, narenpande1 said:

Yes, that is because millions of Home owners lost their equity when the housing bubble collapsed. Money that could have been cash sitting in the bank and it would have been okay , but it was down payment plus mortgages that included an equity/principal component that all got cleaned up. Banks who lent to these home owners as a result lost their capital /bad debt too.  As the housing bubble was building, homeowners used the inflated equity due to the home prices increasing to increase credit card debt and student debt  from banks. Banks got killed here due to the domino effect when Home prices collapsed.  In short to a large extent capital worth trillions of dollars got destroyed, for both retail individuals and banks - and it had to be turned around by US issuing unprecedented treasury bonds and borrowing externally. US govt was obligated to do this, because most Home loans were guaranteed by quasi govt agencies like Freddie Mac, Fannie Mae. Yes And printing that money and arming the banks again  - but this time with much more stringent borrowing criteria. It was a requirement to get the economy back on track.

 

No other economy on the face of the earth can print money like the US - they do it because they have a gargantuan tax base  - both retail and business - and the most efficient tax collection system in IRS in the world - to use to extract what it takes to service external debt.

 

Pre 2007, the home loan approvals were ridiculously easy - this promoted the housing bubble. Not so much now 

Last I checked Chinese government debt is 45% n US, 100%+...government debt is the aggregate of all years' fiscal deficits..

[narenpande1]

1 hour ago, randomGuy said:

Last I checked Chinese government debt is 45% n US, 100%+...government debt is the aggregate of all years' fiscal deficits..

You are confusing between external debt and total  debt.  China’s total  debt is close to 300 % of GDP, of which external debt is a small %

 

https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/28/chinas-debt-surpasses-300-percent-of-gdp-iif-says-raising-doubts-over-yellens-crisis-remarks.html

Edited February 1, 2018 by narenpande1

[randomGuy]

2 minutes ago, narenpande1 said:

You are confusing between external debt and total  debt.  China’s total  debt is close to 300 % of GDP, of which external debt is a small %

 

https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/28/chinas-debt-surpasses-300-percent-of-gdp-iif-says-raising-doubts-over-yellens-crisis-remarks.html

No. I have clearly mentioned what I meant. Please read again... I am not talking about external or internal. Total debt = government + private (corporate + household).. 

 

  Why do u single out China? It's a 1. trade surplus country 2. Self reliant country 3. Doesn't depend on investments (net investments are outflows from China rather than inflows) 

 

 

[narenpande1]

15 minutes ago, randomGuy said:

No. I have clearly mentioned what I meant. Please read again... I am not talking about external or internal. Total debt = government + private (corporate + household).. 

 

  Why do u single out China? It's a 1. trade surplus country 2. Self reliant country 3. Doesn't depend on investments (net investments are outflows from China rather than inflows) 

 

 

I single out China because :

Heavy capital expenditure into building bridges, ports, roads, high speed rails, new cities every year + Govt stimulus to meet gdp targets has kept their economy afloat.

 

where are they going to employ the millions of workers now that they have built everything at neck break speed in 2 decades what took developed countries a century.

 

that is why they are desperate to accomplish belt and road initiative so that they can export these workers and their excess capacity. Almost all of Chinese construction projects overseas involve Chinese workers - they have run out of work at home. 

 

Atleast 20 % of the 33 Trillion USD total debt in China is may be bad debt according to their own conservative estimates.

 

 

 

[narenpande1]

28 minutes ago, randomGuy said:

No. I have clearly mentioned what I meant. Please read again... I am not talking about external or internal. Total debt = government + private (corporate + household).. 

 

  Why do u single out China? It's a 1. trade surplus country 2. Self reliant country 3. Doesn't depend on investments (net investments are outflows from China rather than inflows) 

 

 

And ofcourse they have to have net out flows by buying US treasuries ( selling yuan) to keep the yuan artificially low so that their exports remain competitive.

[randomGuy]

35 minutes ago, narenpande1 said:

I single out China because :

Heavy capital expenditure into building bridges, ports, roads, high speed rails, new cities every year + Govt stimulus to meet gdp targets has kept their economy afloat.

 

where are they going to employ the millions of workers now that they have built everything at neck break speed in 2 decades what took developed countries a century.

 

that is why they are desperate to accomplish belt and road initiative so that they can export these workers and their excess capacity. Almost all of Chinese construction projects overseas involve Chinese workers - they have run out of work at home. 

 

Atleast 20 % of the 33 Trillion USD total debt in China is may be bad debt according to their own conservative estimates.

 

 

 

Ya so convert it into government debt... Rescue  the investors and Savers whose money these companies have borrowed 

 

In India also, government is recapitalizing psu banks coz they have bad loans and these banks can't fail with the depositors' money.... 

 

Please appreciate  China’s  trade surplus, self reliance, no need for  foreign investment, huge foreign reserves etc. These factors lend it the stability. 

Edited February 1, 2018 by randomGuy

[narenpande1]

23 minutes ago, randomGuy said:

Ya so convert it into government debt... Rescue  the investors and Savers whose money these companies have borrowed 

 

In India also, government is recapitalizing psu banks coz they have bad loans and these banks can't fail with the depositors' money.... 

 

Please appreciate  China’s  trade surplus, self reliance, no need for  foreign investment, huge foreign reserves etc. These factors lend it the stability. 

The debt with State owned enterprises which make the largest CHinese companies IS GOVT DEBT.

 

You are saying the same thing in different words - Trade surplus is building their USD foreign reserves. A subsidized manufacturing /export oriented country cannot be called self reliant. Their economy relies heavily on exporting to North America and Europe.

 

China is an industrial powerhouse, stronger than any economy on the planet.

 

But they have built so much supply side excesses - there is sequentially lesser demand to absorb what they are producing.

 

As I said and cited in 1 of my earlier posts - they used more cement in 3 years than america did in a century. This level of construction and capacity is not sustainable. 

 

 

[randomGuy]

6 minutes ago, narenpande1 said:

The debt with State owned enterprises which make the largest CHinese companies IS GOVT DEBT.

 

You are saying the same thing in different words - Trade surplus is building their USD foreign reserves. A subsidized manufacturing /export oriented country cannot be called self reliant. Their economy relies heavily on exporting to North America and Europe.

 

China is an industrial powerhouse, stronger than any economy on the planet.

 

But they have built so much supply side excesses - there is sequentially lesser demand to absorb what they are producing.

 

As I said and cited in 1 of my earlier posts - they used more cement in 3 years than america did in a century. This level of construction and capacity is not sustainable. 

 

 

If it is govt debt, then it looks small coz china's total government debt is just 46% https://tradingeconomics.com/china/government-debt-to-gdp

(India's govt debt is 70%of GDP) 

 

This(govt debt being just 46%) is the reason why I thought it(debt of state owned cos.)  may have been categorized differently (as corporate debt etc.) 

 

Ya, overcapacity is an issue for them. They need to work less... 

[narenpande1]

14 hours ago, randomGuy said:

If it is govt debt, then it looks small coz china's total government debt is just 46% https://tradingeconomics.com/china/government-debt-to-gdp

(India's govt debt is 70%of GDP) 

 

This(govt debt being just 46%) is the reason why I thought it(debt of state owned cos.)  may have been categorized differently (as corporate debt etc.) 

 

Ya, overcapacity is an issue for them. They need to work less... 

 

 

Whereever you are getting your info from ..it is incorrect.

 

China's total debt has been reported to be over 33trillion USD or over 300 % of their 11 trillion GDP and expected to  touch 330 % of GDP by 2022 if they dont already have a asset bubble crash followed by yuan crashing. The problem is not the high % total debt standalone  - it is how quickly it is accelerating - if it were not to increase at such a pace, Chinese economy would grow at 3 % or less .

 

https://www.bloomberg.com/news/articles/2017-11-21/china-s-debt-surge-may-increase-risk-of-financial-crisis

 

https://www.cnbc.com/2017/06/28/chinas-debt-surpasses-300-percent-of-gdp-iif-says-raising-doubts-over-yellens-crisis-remarks.html

 

Overcapacity is severe and dangerous problem for China, because all the industries that supported the historically unprecedented pace of  infrastructure development - had built all this capacity to keep factories running 24*7. Now that they have built everything - what will happen to these factories and their workers ?

 

Edited February 2, 2018 by narenpande1