By Anonymous, 10-28-08, 07:44 AM Will China come out to rescue the world? Are chinese


china
#1
Will China come out to rescue the world?

China National News
Tuesday 28th October, 2008
(IANS)


Moscow, Oct 28 (RIA Novosti) China is a true island of stability amid the raging financial crisis. There are no chances of a large-scale crisis in the Chinese economy. An economic shock, let alone a recession, is unlikely in China because of its solid economic health and reliable protection from external risks.

Given its huge international reserves at $1.9 trillion, it can maintain its own stability, but it can also help developed countries overcome the crisis.

Is it ready to offer the money? And will anyone take it?

Bad loans make up only five percent of Chinese banks' assets, which work mainly with the domestic market. The figure was 50 percent in 1997-1998, when Asia was hit by a severe financial crisis.

China's dependence on exports is not as heavy as may seem at first glance. Officially, exports account for 37 percent of its revenues and seem to be the driver of the Chinese economy.

But independent surveys by Dragonomics, an advisory firm specializing in China, put its 'true' export share at just under 10 percent of its GDP.

It is internal investments, which account for 40 percent of its GDP, that are the driving force of China's economy. Although part of them is channeled into export-oriented projects, the global financial crunch will not slow China considerably.

Chinese companies' foreign debts are not large, only $87.6 billion as of March 2008, and their domestic debts do not worry international economists. China's budget surplus was approximately one percent in 2007 and will be almost the same this year.

According to Arthur Kroeber, managing director at Dragonomics, the absence of structural problems make a 'hard landing' for the Chinese economy highly unlikely.

Even if it happens, the worst possible scenario for China will be one year of very slow growth and average annual growth rates of 6.25-6.5 percent for the next five years.

Kroeber thinks 'a global slowdown - if tempered - could help China stage a soft landing for its breakneck economic growth.'

This means a fall in economic growth rates between eight percent and 8.5 percent. At the same time, a decline in consumer activity in industrialized countries may have a positive effect on China's exports, with Western consumers opting for cheaper Chinese goods.

Given its strength and international reserves, China could have gained much more from energetic actions on the world market. But Chinese authorities seem unready for action, and the West is not eager to allow Chinese money in.

Evidence of this are the modest international achievements of the China Investment Corporation (CIC), China's sovereign investment fund set up last year to manage as much as $500 billion.

In 2007, the CIC spent $3 billion to buy into US investment company Blackstone Group, and paid $5 billion for a 9.9 percent stake in Morgan Stanley.

As a result of the current crisis, the value of these two assets has plunged by at least two-thirds.

Several days ago, the Ping An insurance company announced the termination of a planned deal to buy 50 percent stake in the Fortis banking and insurance group.

Ping An, which holds five percent stake in Fortis, has lost $2.3 billion due to the financial crisis.

China's losses from its foreign investments have shocked the officials who had made the 'buy' decisions. The bureaucratic psychology is a powerful hindrance to investment decisions.

China's current skepticism is fuelled by political considerations. The Western public and politicians are seldom happy with Chinese corporations buying into their companies.

The anti-Chinese propaganda campaign launched in the US to prevent China from buying Unocal infuriated China.

No wonder the Chinese are now considering foreign projects in the light of Deng Xiaoping's warning, 'Cross the river by feeling the stones.'

Seeking to keep its foreign transactions maximally secret, China is buying relatively small stakes, below the three percent threshold at which shareholdings are required to be disclosed.

The most frequent buyer is SAFE Investment, the Hong Kong-based subsidiary of the State Administration of Foreign Exchange (SAFE), an arm of the People's Bank of China.

According to The Sunday Telegraph, SAFE Investment owns minority stakes in more than half of the FTSE100 companies, including Aviva, British Energy, Cadbury, the London Stock Exchange, Hong Kong and Shanghai Banking Copr., Marks & Spenser, and Tesco.

China has spent over $9 billion on the acquisition of minority stakes, ranging between 0.75 and one percent in Britain.

Like the Americans in the case of Unocal, the British wonders what the political motives for the implicit Chinese actions could be.

It is reported that SAFE Investment plans to spend $85 billion to purchase cheap foreign assets, the amount by which China's foreign currency reserves increase monthly.

But nobody knows what it is going to buy.

Gao Xiqing, CIC's general manager and chief investment officer, said in one of his rare interviews with a Western media: 'We are already getting too much, almost unfair amount of attention. You know, the Chinese culture is being self-effacing. We don't stick our head out for people to knock on.'

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Comments on this story

By Anonymous, 10-28-08, 07:44 AM Will China come out to rescue the world?

Are chinese government officails responsible people? Are they working for their own or for their country’s benefit? Are they stepping onto other to progress? The last question is relevant because almost all previously developed countries have dark history of robbing lesser one by colonization, or force selling drugs to weaken their opposition. By the way, Christie is auctioning chinese artifact looted during the boxer uprising hundred years ago, in Paris this week. By Wang Lu, 10-28-08, 08:25 AM Socialism saves Capitalism

In the long run China will win...
Last edited by Kreskin; Oct 28th, 2008 at 10:21 AM..
 
Avro
#2
China could help by not selling us crappy products anymore and making sure their food doesn't kill people. Besides Canada, with it's strong banks, surpluses and resources we don't need human rights depraved commies helping us out so piss off Mao the murderer.
 
china
#3
Quote:

China could help by not selling us crappy products anymore and making sure their food doesn't kill people. Besides Canada, with it's strong banks, surpluses and resources we don't need human rights depraved commies helping us out so piss off Mao the murderer.

I,ll remember what you've said.
 
Kreskin
#4
Two things : Avro, stop the personal attacks. China, don't post advertising banners in your threads please.

Thank you
 
Lester
#5
Canadas had it's fair share of food issues(listeria and tainted tuna) and faulty products -heparin comes to mind. The Chinese are in exponential growth it is fully expected that they will have f*ck ups somewhere along the road. The only thing communist about China is the communist dictatorship and I would go further saying the States is more socialist now after they crossed the line on that 700 billion(and counting) bailout. You really have to put into context the size of China both land and population wise, and the fact that thev'e had such phenomenal growth over the last thirty or so years. To me, it's easy to draw conclusions- China has trillions in the bank...we have nothing.
 
Avro
#6
Quote: Originally Posted by Lester View Post

Canadas had it's fair share of food issues(listeria and tainted tuna) and faulty products -heparin comes to mind. The Chinese are in exponential growth it is fully expected that they will have f*ck ups somewhere along the road. The only thing communist about China is the communist dictatorship and I would go further saying the States is more socialist now after they crossed the line on that 700 billion(and counting) bailout. You really have to put into context the size of China both land and population wise, and the fact that thev'e had such phenomenal growth over the last thirty or so years. To me, it's easy to draw conclusions- China has trillions in the bank...we have nothing.

Listera, according to a friend of mine is a common thing in China, like getting a cold.....except you die.

What a great counrty China is. Pile of crap that makes cheap crappy products on the backs of the poor.....I spit on china.
 
Lester
#7
I'm not extolling Chinas virtues, simply stating facts. They have done in thirty years, what it took the west one hundred to do. In ten or twenty years they will surpass us in almost everything. Look how fast they reacted to that earthquake and then look how the States handled Katrina- People can spout all the propaganda they want, but facts are facts.
 
Avro
#8
Quote: Originally Posted by Lester View Post

I'm not extolling Chinas virtues, simply stating facts. They have done in thirty years, what it took the west one hundred to do. In ten or twenty years they will surpass us in almost everything. Look how fast they reacted to that earthquake and then look how the States handled Katrina- People can spout all the propaganda they want, but facts are facts.

They will surpass nothing and it took them thousands of years, they are older than us by far.

China can kiss my ass.
 
Lester
#9
Unfounded rantings- Thirty years ago it was a collection of mud huts, now they build twenty new cities a year. Point out ANY country on this planet who can claim the same. you can't close your eyes, plug your ears and pretend it's not happening, just because it doesn't mesh with your ideas of western supremacy in all things. 90% of the growth theyv'e experienced has been since Mao died.
 
Avro
#10
Quote: Originally Posted by Lester View Post

Unfounded rantings- Thirty years ago it was a collection of mud huts, now they build twenty new cities a year. Point out ANY country on this planet who can claim the same. you can't close your eyes, plug your ears and pretend it's not happening, just because it doesn't mesh with your ideas of western supremacy in all things. 90% of the growth theyv'e experienced has been since Mao died.


Still took them thousands of years to get to where they are now which is still a vast area of poverty deprived of human rights and freedoms bound by a dictarship of the murderous legend of Mao to keep people poor to make cheap crappy products for the walmart mammas of the west.
 
Twila
#11
I guess we had better hope they don't pull out of the US economy entirely and decide to cash in on their investements...they could very well topple it further...
 
Lester
#12
Theyv'e existed as a civilised Nation for thousands of years- again no other country can claim this. You wanna see poverty go look in Arkansas or a few of the other southern states. and it never took them thousands of years it's all happened in the last thirty. By your reasoning you could say it took the States 200 years to come up with nuclear weapons???
 
Twila
#13
Lester, have you read that book 1421 the year China discovered America?

I haven't yet, but I've heard oodles about it (thanks to a friend who is an avid reader).
 
Kreskin
#14
Quote: Originally Posted by Twila View Post

I guess we had better hope they don't pull out of the US economy entirely and decide to cash in on their investements...they could very well topple it further...

What would be in it for them? They're factories are reliant on the US economy.
 
Twila
#15
Quote:

What would be in it for them? They're factories are reliant on the US economy.

Currently? or future? They'll be looking towards the future...that may not include the US economy...there is a void. It will be interesting to see who fills it. Or what fills it.
 
Kreskin
#16
Quote: Originally Posted by Twila View Post

Currently? or future? They'll be looking towards the future...that may not include the US economy...there is a void. It will be interesting to see who fills it. Or what fills it.

Nothing stays the same. Sooner or later China will be paying more than slave wages, giving the rest of the world an opportunity to sell to them.

Right now GDP of the US is double that of China. Some expect that by 2050 that might be reversed. However, on a per capita basis it would still be behind. And by then hopefully emerging economies like India and China will give North Americans an opportunity to create homemade jobs to export goods to them.
 
Avro
#17
Quote: Originally Posted by Lester View Post

Theyv'e existed as a civilised Nation for thousands of years- again no other country can claim this. You wanna see poverty go look in Arkansas or a few of the other southern states. and it never took them thousands of years it's all happened in the last thirty. By your reasoning you could say it took the States 200 years to come up with nuclear weapons???

I'm not comparing China to the U.S. even though they are better as well on every single level, I was comparing them to us, the greatest country in the world.

I, if no one else on this site, will defend my country against a crap hole like China.
 
scratch
#18
Quote: Originally Posted by Avro View Post

I'm not comparing China to the U.S. even though they are better as well on every single level, I was comparing them to us, the greatest country in the world.

I, if no one else on this site, will defend my country against a crap hole like China.

Right, if there is money in it for you!
 
Avro
#19
Quote: Originally Posted by scratch View Post

Right, if there is money in it for you!

What the hell does that mean?

Umm, yes, I do things for money as do most people, it's called work and earning a living.

I also do things for free in my comunity and run a charity for free.
 
scratch
#20
Quote: Originally Posted by Avro View Post

What the hell does that mean?

Umm, yes, I do things for money as do most people, it's called work and earning a living.

I also do things for free in my comunity and run a charity for free.

You are good. As slick and slippery as Harpo & B.O.
 
Avro
#21
Quote: Originally Posted by scratch View Post

You are good.

Unlike some, I try to be.
 
Lester
#22
Quote: Originally Posted by Twila View Post

Lester, have you read that book 1421 the year China discovered America?

I haven't yet, but I've heard oodles about it (thanks to a friend who is an avid reader).

I haven't read it yet either , but I think I will check it out - thanks for the tip I'm always looking for a good read
 
china
#23
Kreskin,
Quote:

Two things : Avro, stop the personal attacks. China, don't post advertising banners in your threads please.

Thanks Kreskin .