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Posts: 2587

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Q: How will the Chinese handle a recession?

Every economy must take a downturn.  Even artificially boosted ones.  It seems China is headed in that general direction.  Not that the numbers will reflect it, but when you're spending billions on ghost cities to keep up your growth figures, it could be argued that soon parts of China might be effectively in a recession, if not technically.  However you label it, it will certainly have a considerable affect on the Chinese.  Chinese workers who aren't used to being efficient or competitive will be faced with market conditions that have a tendency to weed out the weak companies.  Chinese have a distant memory of starving, but have been promised prosperity for so long.  Can they overcome the disappointment?  What would a recession mean for Chinese society?

9 years 27 weeks ago in  General  - China

 
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In many ways I hope it happens. Chinese society is highly stratified and people worship money shamelessly. Most business is done with guanxi and this guanxi seems to benefit "established/elite" families. A recession would be the perfect purge for these idiots. Not only would they lose a lot of their wealth, but they would lose face having to sell the black audi that they leveraged the (failing) family business even further by using it as collateral for a loan to impress the classmates of the "lady" of the family.

 

If you want to get rich quickly in China, buy some demolition equipment and start wining and dining the government officials. The opportunity cost is high but once you're in the work is simple and the returns are exponential.

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9 years 27 weeks ago
 
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The problem is that the CPC has built it's legitimacy (LOL) on economic growth, so  the people are reasonably satisfied during the good economic times. And a recession could be the end of the CPC, which is a good thing.

 

As for the people, if you read the news here you can see how Chinese people react to adversity like gambling debts, getting laid off, cheating spouses, Japan existing and so on. Millions of short tempered, greedy people with nothing to lose? Yeah that's a recipe for disaster.

 

ilcornalito:

hahha "Japan existing" 

 

loved it

9 years 27 weeks ago
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9 years 27 weeks ago
 
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this thought looms in my mind whenever i wonder if this is a safe place to live. it's a close contender to education - the main reason to leave when you have kids.

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9 years 27 weeks ago
 
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jump in suicide rates and gangs with pitchforks roaming the streets

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9 years 27 weeks ago
 
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At least for the early phase

* Protectionism full throttle, pushing national producers and crippling foreign businesses

* Promotion of nationalism

* Injection of cash to dampen things a bit. The central government have a lot of cash and not much debts.

* Deflects the blame on local governments, some are already quite indebted.

 

It will slow down things a bit and keep the appearances without solving the issues. China will enter a period of stagnation at the same time they will enter there papy boom. Maybe they will implement welfare schemes and encourage limited local civil life, enforce rule of law, liberalize cultural expression bit, and actually improve the education system... I wish so but I don't believe it will happen. It could have happened in the early 90's.

ilcornalito:

I agree, I believe we should be careful with the money we keep in the banks here. First thing they'll do is close the money exit. 

9 years 27 weeks ago
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laowaigentleman:

But it was the last administration that told the local governments to spend for the obvious reason that any money sent from the national coffers would have been heavily embezzled.

 

They'd have to blame former premier Wen for that, unless of course they rely on a zombie-like docility from the Chinese people.

9 years 27 weeks ago
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andy74rc:

Point 3: they could have 3000% Debt to GDP ratio and still it would mean absolutely nothing. It's a financially closed economy and they can print their own money. Which is what they massively do, much more than the "usual" official numbers.

9 years 27 weeks ago
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9 years 27 weeks ago
 
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The same way they handle all problems........by denying there is a problem.

 

laowaigentleman:

Premier Li was in England about a month ago and he said that China's economy was stable and didn't need any stimulus measures to prop it up. NZ's prime minister was there about three months ago where he sat with the Chinese president in the Great Hall of the People and expressed his concerns about stability. He was reassured that there were plenty of options and things were fine. Mr Key walked away assured. Possibly because he assumed that men of such stature couldn't possibly be so arrogant and childish about such a potentially serious situation which could easily spin out of their control.

9 years 27 weeks ago
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DrMonkey:

@laowaigentleman Yeah, right... Financial stimulus last week, injection of cash in state banks. But ok, their debt level at the national level would make many countries dream.

9 years 27 weeks ago
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laowaigentleman:

Yes, but they can't allocate it anywhere without it being embezzled.

9 years 27 weeks ago
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9 years 27 weeks ago
 
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I don't know where you get your info that the market in China is heading for a crash, nooooo, China needs to slow things down first so they can begin a market scheme. The next 30 years will be bright for China. Slowing the old scheme down was the plan man.

DrMonkey:

But what is the next step then ? Xi's "Chinese Dream" ? I don't see a nation of people who can innovate and make their own path rather than following trends. I think they will slowly blow their steam over a decade or two in an increasingly static environment, and an aged population. The generation born in the 90's is not the hard-core survivor bunch their parents are. More like the fat lazy kids of the richest merchant in the town.

9 years 27 weeks ago
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laowaigentleman:

No-one runs China. They just talk. Most of that smog you see in the air isn't from the factories, rather it comes from the people's congress.

9 years 27 weeks ago
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9 years 27 weeks ago
 
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Shifu

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In the 30 odd years that China has opened up it hasn't been through a single recession. All they have experienced is growth and yet more growth. When (not if) recession finally comes around, you will see many people going bankrupt, commit suicide and taking advantage of the downturn. People here don't know what it's like to have a economy meltdown. I can't imagine a country as massive as China going into recession. The impact within and outside the country will be huge. In my opinion, China's economy is running on borrowed time. Something's got to give soon.

Eorthisio:

The entire world's economy is running on borrowed time, all exchanges at the stock markets are done by machines that can think a bazillion times faster than humans, it's not about the market and human exchanges anymore because no human could ever do this as fast, it's about immediate profits and the one with the fastest algorithm (a few nanoseconds faster than the concurrence). We constantly compress the time in order to make more profits, the world runs in economic time, not in real time. There is a urgent need to slow down.

9 years 27 weeks ago
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louischuahm:

Good point. But how can the world slow down? After the U.S. subprime meltdown we'd think we learnt to slow down and take stock of what's happening but in reality things are as they were before. 

9 years 27 weeks ago
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Eorthisio:

The elites can't and won't stop, they are the winners in our society, they don't see the downsides of it. However a growing number of individuals across the world reject the established system (aka. modern capitalism or neo-liberalism or globalization), little changes in our behavior can make a big difference, consuming locally produced food, restricting the area of origin for the goods we buy to the county/region/state, fixing broken things instead of replacing them, not following the trends (Apple, Vuitton, ...) and instead buying brand less things, and so on... it is sadly very complicated in China where there is no law enacted to trace the products' origin, but back home and in most other countries there are laws forcing producers to clearly state the place of origin on their products.

9 years 27 weeks ago
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andy74rc:

@Eorthisio: +1, thumbs up!

9 years 27 weeks ago
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9 years 27 weeks ago
 
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Shifu

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With class and dignity, the same way Chinese handle everything. 

 

Just kidding. The only thing that is sacred to the Chinese is money. It is the solitary thing that dictates a Chinese person's behavior. Will they work? It depends on whether they will personally make money from it that they would not make otherwise. Is something ethical? Ethics don't matter, the bottom line does. If the money goes, people won't respond rationally. I wouldn't want to be in this country when the inevitable happens.

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9 years 27 weeks ago
 
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Shifu

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Pretend there is no problem, until it is impossible to ignore, then blame Japan and/or those barbarians from the evil land of Weiguo. 

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9 years 27 weeks ago
 
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Not only Chinese, even I can't handle it. If only China goes to recession then fine. Unfortunately it is taking and it will take many other countries deep down to the three gorges dam and burst.

 

laowaigentleman:

I'm not so sure. China is no longer the world's factory. It's percentage of world exports dropped from 39% in 2009 to 23% today. They are definitely a house of cards on the verge of blowing over. This is what all the crackdowns and strongman posturing are concocted for: making people think the country is powerful and significant when it's just a big housing project filled with people who chat on social media during work hours or watch sitcoms which cater to the lowest common denominator during class.

9 years 27 weeks ago
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9 years 27 weeks ago
 
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' PANIC'  as they do with most things at effect they're lives. Maybe even ask Africa and India for the return of the $20 billion each they have just invested. And then reintroduce the green trains and rickshaws.

Nessquick:

such a big face loss ? impossible ...

9 years 27 weeks ago
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9 years 27 weeks ago
 
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In next 20 years, BRICS in 'green-ish', and West in 'Japan-ish' or 'red' per my 'tin foil hat'.

mattsm84:

You're fooling yourself if you think that those greens are going to be green enough. Remember that a huge portion of India, China, and Brazil's economy has to be dedicated towards building new infrastructure so while these countries might see growth rates at around 5 or 6%--the days of a 10% growth rate in China are as dead as disco-- it may not be enough, so to speak. As for Russia, look at the emigration numbers. Worse yet, look at the emigration numbers for Russians with University degrees. A nation of bureaucrats working at SOE isn't going to be push the Russian economy into the future as the world becomes less dependent on Oil. Meanwhile the US should see growth at around 3-5% but doesn't need to dedicate nearly as much of its economy towards infrastructure, has some of the best universities in the world, and has a tax base more reliable than all of the BRICs put together.

9 years 27 weeks ago
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icnif77:

I'm convinced in US decline in next 10-20 years (according to the charts and Reserve currency graph), and replacement with 'some sort' of BRICS.

Russian thingy is 'restructuring' together with China. Any run away Russian (or Chinese) 'intelligence' can (will) return, when economy improve. 

9 years 27 weeks ago
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laowaigentleman:

@icnif. I disagree. I used to think this way, but the fracking boom has driven production costs in the United States down so low that China can no longer compete with its cheap labour. Russia is a giant gas station, but hey tin pots, we don't need your crap anymore! None of those BRICS kleptocracies has a hope of competing with liberal democracies with new growth opportunities. The best and brightest minds of these BRICS countries are all trying like hell to get out of them, and I'm certainly not talking about their financial elite, rather their actual innovators and natural captains of industry.

9 years 27 weeks ago
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DrMonkey:

@laowaigentleman I agree that China's is ain't cheap as it used to be, while US workers are getting cheaper (and also have worsening conditions)... Also, Vietnam, Thailand and Indonesia are now cheaper and less problematic.

But fracking ? From what I read, most of it is not profitable yet (ie. huge investments, what is drilled is not enough to recover the initial investment), the only companies that are profitable are the drilling companies...

9 years 27 weeks ago
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mattsm84:

That's a lot of magical thinking there. Look at the tax base in Russia, China and India.These currencies just aren't reliable enough to constitute a basket reserve, while the dollar is comparatively much more stable. And hoping that the well educate are going to return "once the economy improves" ignores just how far behind these countries are, even with the recent their economic boom and the recession in the west. Russia's GDP per capita is roughly where the United States was 60 years ago, and China is even further back than that. They are both two generations behind by any reasonable metric. That's just too much to make up before their economies run out of steam. Unless the doomsday scenario that the Austrians have been predicting for the last 35 years or so materializes, and lets be honest broken clocks are right more often than these people, then that's just going to be too much to make up in too short of period of time. Brazil, Russia and India are all going to level off at under 8% of the worlds GDP, with an eventual retrenchment in store for Russia, China will hang out at around 10%, S. Africa will continue to be surpassed by other African economies, the EU will stagnate until it drops the Euro or gives control of its currency back to its member states, and the US won't drop to under 20% of the world's GDP, although purchasing power is likely to wane slightly. 

9 years 27 weeks ago
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9 years 27 weeks ago
 
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"  Chinese workers who aren't used to being efficient or competitive will be faced with market conditions that have a tendency to weed out the weak companies. "

 

Nope  - that won't happen! The most useless members of a company or business are the people at the top - and all their relatives who are employed there. It's a very rare Chinese person who would fire their incompetent aunt when they\ve got a room full of strangers! And no boss has the guts to admit they might be wrong (and then hire an expert!!)

xinyuren:

I meant that the most inefficient companies would go out of business.

9 years 27 weeks ago
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laowaigentleman:

In China the most inefficient companies are bought out by successful companies and given a lifeline at the behest of government officials.

9 years 27 weeks ago
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9 years 27 weeks ago
 
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My guess is very badly, economic growth and (false) promises of wealth for everyone are the only two things holding China together nowadays. Remember Deng's promise to legitimate the CCP.

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9 years 27 weeks ago
 
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Shifu

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On the other, it over estimates the amount of the US debt that China owns. You want to know how much it is as measured against the total debt? Ready for it? Ok! It's 8%. Wop-Wah (sad trombone noise.) The article you'rhack wrote can't even get the number right. It's only 1.3 trillion, not the 3 Trillion he supposes. http://www.factcheck.org/2013/11/who-holds-our-debt/

 

 

icnif77:

Large part of FED's & SS debt belongs to China's column, or it's just 'printing press'. I can't dig proofs for that, it's just my opinion.

9 years 26 weeks ago
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mattsm84:

Maybe if you really, really, really believe in your opinion that might make it a fact.

9 years 26 weeks ago
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mattsm84:

Do I really even have to explain this to you? No, China cannot receive Social Security payments. That you would even entertain the notion is kind of giving me a headache. Nor can it own part of the Fed. The Federal Reserve is not owned by anybody, and is not a private business that exists to turn a profit. It is an independent institution within the US government. 

9 years 26 weeks ago
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9 years 26 weeks ago
 
Posts: 1420

Shifu

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Hey, do you think Coca-Cola would like me to buy a coke? And which OS do you think Bill Gates prefer I use. I mean honestly.

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9 years 26 weeks ago
 
Posts: 5732

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https://www.youtube.com/watch?v=j656W9sMAuA

 

 

Vietnam arrests hundred of Chinese illegally searching for work and food in the country.

 

Oh, how the mighty have fallen, KARMA with your coffee.

ambivalentmace:

https://www.youtube.com/watch?v=-ycRORW8f10

 

no harmanious relationships at the top, I'm shocked, must be an urban legend.LOL

3 years 33 weeks ago
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Answer of the DayMORE >>
A:  "... through ..."?  Only "through" comes to mind is "S
A: "... through ..."?  Only "through" comes to mind is "Shenzhen agent can connect you with an employer, who's authorized to hire waigouren ... and can sponsor Z visa." It's not like every 10th person you meet in Shenzhen's hood can sponsor work visa ...  The only way to change from student to labourer visa is just a regular way by: 1. Finding an employer, who'll apply for an Invitation letter; 2. Exit China and apply for Z visa in your home country's Chinese embassy; 3. Enter China in 30-days after Z visa was stamped into your travelling instrument ...As I am aware, you won't be able to switch to Working permit by remaining in China....,so make ready for a return to your home .... -- icnif77