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Chinese Exports Slump Most Since 2009
Equity futures markets (US and Asian) and AUD are sliding off overnight highs amid the worst YoY exports performance in China since October 2009.
The 3.1% drop (compared to expectations of a 3.7% gain) is the biggest miss in a year and the first negative print since January 2012 - making the second big miss in a row as the 'fake' trade data driven by the shadow-banking-arbitrage is unwound out of historical data.
- *CHINA JAN.-APRIL TRADE DATA REFLECTS ARBITRAGE TRADE: ZHENG
Notably, related to the CCFD debacle, copper imports fell 20% in H1 2013 compared to H1 2012 - which helped to create another huge miss in China imports data overall (-0.7% vs expectations of a 6.0% jump). It is perhaps no surprise - given the sheer size of these misses, that China Customs officials stated that 'the country faces serious challenges in exports and imports."
They blame weak external demand, higher labor costs, and a strong Yuan as the vicious export-driven economy-slowdown drags on industrial production's import demand.
But:
- *EXPORT MANAGER INDEX FELL IN JUNE, SIGNALS WEAK 3Q TRADE: ZHENG
Equity markets are recovering their knee-jerk reaction - as this must be good for moar printing? Though adversely gold is slipping lower.
but China (and Hong Kong) are not bouncing...
and AUD is not happy...
Perhaps - just perhaps - that 3% hard-landing is not as unrealistic as the mainstream seems to think?
Charts: Bloomberg
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this basically guranteed waking up tomorrow morning to see dow futures up a modest 80 pts and s&p futures up a modest 7 pts.
why am i so confident this will be the case tomorrow, despite this horrendous data?
this was not just a miss, this was a disaster for china.
not breaking news to us, but they r fucked over there.
The Chinks are going down the drinks. (my chink friends would not find this offensive)
Stan Druckenmiller says that capacity is way ahead of demand in China with investment to GDP at 47%. According to Druckenmiller Japan and Korea peaked out at 36-38% of GDP.
http://www.planbeconomics.com/2013/07/interview-with-stan-druckenmiller-...
Those worker safety nets surrounding the "housing" units are going to get some serious use. Good thing they weren't made in China.
Our Chinese bearings have been selling very well in Peru so far in 2013. Price!
Did I read recently that many Chinese made goods cost less in other countries than they do in China? Is that your experience?
I don't know! What I do know is that Chinese bearings are something like 60% cheaper than Japanese, the quality is variable... You need to try various factories and see who makes OK product. We have a fair amount of experience in sourcing from Korea, Japan and China. Well over 50% of our sales ($ value) are Korean pieces. But, we have a Chinese brand that is kicking a$$ in China this year, very few defective pieces. Our customers are gobbling them up. Next to arrive will be our first full 40' containerload from China (wheel bearings and hub & bearing assemblies), our biggest purchase of bearings ever.
EDIT:
For many Japanese products your remark is spot-on. Japanese bearings cost (the average wholesaler) more there than what we pay. Consumers too. We pay less for a Japanese auto part here than a Japanese guy would for the same piece there.
Word to the wise -- if you are doing business in the U.S and have assets in the U.S., buy lots of insurance. Our current model allows China to sell sub-standard product without exposure to liability when shit goes wrong. When it goes wrong, the aggrieved parties look to importers/distributors.
It is almost always the US publicly traded corps purchasing manager calling the shots there. They make the decision to get the substandard product so they can get extra margin. But what are you really going to do when retail is $20 and Walmart is only willing to pay $5.
You want to kill your kid, buy him a Rawlings or Wilson baseball helmet. One 75mph fastball and you'll watch your kids head crack like an egg. Sure the helmet passed the NOCSE standard, but not the one sold in the store. The ones sent for testing are completely different.
If there's profit to be made in the short-term, there are people to be killed in the long-term. Ask the head of the plant at Fukishima.
And as a general rule, it's not chicken, it's never chicken.
Now with real food flavoring!
.
"kicking a$$ in China..." should be "kicking a$$ in Peru"
Here are our top 21 sellers this year. "02" prefix is Korean. "11" prefix is Korean. "13" prefix is Japanese. "50" prefix is Chinese. All Chinese pieces in this short list are "Hub & Bearing Assemblies", bearings in a big & heavy steel housing. All of the OEMs want their suppliers to provide them with more assemblies and fewer itty-bitty pieces, the OEMs pretty much just assemble now, although some make their own engines and a few other large parts.
02-6007-RS 11-IJ-212001 13-38BWD22 02-6000-2RSC 50-E90A/40202 02-68149G/11 11-IJ-111001 02-6204-2RS 02-6205-RSC3 11-IJ-113002 50-NAVARA 4X4 02-6302-2RS 02-33005-JG 50-3DACF026-20 02-DT-255237 50-3DACF026-20W 02-DT-498448 13-510055 13-MB0814 02-6002-2RS 50-54KWH02Korea and Japan have trade agreements to stand up for their products if they cause economic or other loss in the U.S., yet they are still competitive. That says a lot to me. It's too bad that the Chinese model is becoming the favored one for international trade.
I have found that the Chinese have been kicking ass with QC lately. There is so much excess capacity that they know they need to step up controls to keep customers.
I used to throw out 20% of my plastic parts from a Chinese supplier, bad flow, but now it is hard to find bad parts, I'd say less than 5%.
I made a small error exporting a CAD file and the factory caught it and called me. A few years ago I would have received 5000 units with a double wall.
Pretty much the same thing happened with the Japanese in the 70's. I am old enough to remember when "made in Japan" was a joke, then it became the superior product.
@ adr
Less than 5% of our Chinese pieces are defective, my guess would be less than 2%. Our Korean and Japanese have less than 0.5% bad (less than half of 1%)
wow- this increasing Chinese quality at low prices really sounds good for US manufacturing -like the pablum about the "rebirth of US manufacturing" that spews forth from the US MSM. at some point in the US we will ALL just work for the govt or be recipients of govt welfare largesse.
A lot of the resources companies in Australia have plant, modular housing and rolling stock built in China. I worked in Zhongshan up until 18 months ago as a QC inspector for a US based EPCM company. Quality was shit to start with but with constant rejection of product and the inevitable cost implications, the factory started to improve its standards. They opened a dedicated QC department and six months later I was out of a job (after 2 years). The hotel I was staying in was full of western QC overseers from clothing companies to supermarkets. Even the USMC had a full time QC monitoring rolling stock and container production. China has gone way beyond making crappy plastic toys and pressure vessels that explode. We have taught them how to make quality goods and how they can charge a premium for quality. I now work in steel fabrication in Australia and the only thing keeping us going is the government "local content" guarantee (Chevron etc. have to sign up to give a percentage of work to local suppliers before they are granted extraction licences). Ironically, in order to compete and make a decent profit, we now sub some of our work to Chinese companies.
Depends on where you buy. Some Chinese goods for the home market are far better quality than the goods for export. The Chinese are actually far more capable of making a quality product than most factories in the USA.
Most products in China sell for more than they do to international wholesalers, but for far less than the 90% margin kings like Walmart.
The most amazing thing is batteries. Most are made in China now, Walmart, Target, Home Depot, etc will sell a pack of two batteries for $5 but you can go online and buy a pack of 50 from a Chinese wholesaler for the same $5.
Where did the extra cost come from? Surely not shipping if you can get 50 batteries from China for $5. Can't be manufacturing, same exact battery. So it is just you getting ripped off plain and simple.
Like any Crown Bolt product at Home Depot. $1.35 for an S hook, really? A$.05 manufactured part at most. $.25 represents a huge profit per unit, $1.35 is just extortion.
I have come to the realization that outside a very small minority, all people are either incompetent or a thief. Some are both.
I can't even shop anymore or call anyone to repair anything, it just pisses me off.
you are spot on about the massive markups on everything- HD drives me crazy.
Agree 100%
Hence my personal and corporate capex are virtually non-existent. Everything is overpriced. This is not the time to make investments or expansion. Minor maintentance and repairs. Just bare minimum.
Exactly. Take a peek on sites like alibaba to get an idea of actual costs.
A bulk unit price might be $5, it's the same exact thing but without say, a "Kenmore" or "Cuisinart" label slapped on it. Hell, lots of companies with essentially the same exact item, but slight variations to try and hide that fact. Of course, once it hits the US, they are tacking on a warranty, marketing, all the salaries of everyone involved, logistics, advertising and location placement in the stores, people on the sales floor, the manager at the store and all the bosses above him, store rent, taxes, operating costs, etc. Not to mention the health and other various insurance premium at every single level, and of course there's the profit margins demanded. So magically, that $5 item jumps to $100+. In low volume, even single-unit orders. You can contact that factory and they'll be more than happy to accept $10 for it plus another buck or two for shipping. Or you can go to taobao with the model number and find a reseller who'll get it to you for $8 shipping included, maybe even less if they are trying to clear out inventory.
You see the same thing happen on Amazon. I bought some simple AC adapters that were about $1 each. Same exact, and I mean EXACT things.... amazon had a seller wanting no less than $20, ebay was around $15.
Batteries are another funny thing here. All depends on where you buy them and what brand they are. Buy em at the wrong place, and they'll want $1~$2 a pop and probably break open the packs to sell them as singles. Buy a full brick from a place that deals in volume, and they cost nothing.
My rule for shopping as an informed consumer: If the company is pumping out ads and marketing in my face, you're paying for a brand, not a product. Legitimate quality stuff doesn't have to rely on advertising and bullshit. I basically boycott any brand that tries this tactic, because it's a good sign that you're buying worthless shit. Would rather take that money, buy something real. Only exceptions being for household goods with hookups that resell "samples". For example, I buy my Tide detergent in 500ml bags. About 9 of them are equal to a 150 fl oz thing in the US. US price: $20+, My price: $4 with free shipping. Seller gets pretty much all of the profit and P&G is left with their dicks in their hands. It's not like there's any loyalty for it either. I'll always choose the cheapest option as long as it does what I need.
Has to do with market demands more than anything else. If I go to a store and try to buy an identical product that is made here odds are it's gonna cost more. VAT and other taxes are one of the reasons, logistics are the other. If I ignore that store though, I can go either factory-direct or snap it up with only a single middleman between us and I pay approximately fuck all.
Then there are items which are manufactured without any real interest in domestic distribution, typically the IP is controlled by a foreign company and anything that ends up domestic is a re-import with all the associated costs added on after it has passed through the US and an exporter who wants their cut, and the importer who wants their cut and the sales guy who wants their cut as well. These tend to be niche items that would barely sell here and there are almost always alternatives. Another factor in it is when it's foreign controlled (specifically the US), where they make it here, export to anywhere outside China, slap their labels on it and then dump it in China at a stupid price. Seeing this more with household products that go up in price while in the US they go down. It's a CPI manipulation tactic. There is more advantage to suppress CPI in the US than there is in China for them, so they use the Chinese market as a means to subsidize the US market while keeping the net profit and keeping beneficial subsidies in the US associated with low CPI. It's a shell game, but there are ways around it if you have half a brain.
Just FYI, your posts are great. I can tell, even without looking at the user name, when I'm reading a post of yours. Always very facetious, but at the same time, shedding light upon what we should all expect when following these "markets." Bravo, sir.
I'm thinking this will trigger a HUGE sell-off on the Dow tomorrow- 10-15 points?
I'm pretty sure a "sell-off" now means that the Dow will only be up 10 or 15 points.
Maria Fart-aroma will stop gobbling knob long enough to spew forth from her piehole-" stocks are well off their lows"
And as she wipes her chin, she will note with a smirk, "and gold is taking a beating."
One of the great things about you, LTER, is your great sense of humor.
Thanks DoChen. Gotta laugh in the face of the abyss.
+1 for the verbiage and alliteration otto.
They had that casting couch tart who wears the same dress everyday on in Maria's place today; Maria may be on a G-6 with Dimon to somewhere.
CNBC today was posting the points and percentage away from the all time high: "Only 50 points from the high!"
If these people fell into a time machine and wound up in the Old West they would be selling opium laced snake oil and rusty lancets within a couple of months.
if I listen to the CNBC shit that flies out of my tv speakers for more than a minute I feel the overwhelming urge to lance my eardrums with a knitting needle.
somehow, and i know its early, but how chinese equities are still in the green, i jus can not figure out to be honest.
it would be 1 thing if the data was just slightly under expectations, but this was the kind of data that should send equities down 2-3 percent.
right now, although off the highs, still in the green.
i really believe tomorrow will be a flat day until 2 pm when the fed minutes are released ( 11 am or possibly already to the bankers) and then the market will prob go down a bit, only to be up thursday and friday when bill dudley will tell us how we misunderstood the fed minutes.
I'm slowly getting my head around the fact that there is no market based on earnings or free cash flow or macro economic events, but that those have been replaced by Fed buying and selling. It's hard for me to hold that understanding steady as I see TV, radio and web still talking about fundamentals and economics. But it's true.
The # 1 goal of most people I know, is that the US house of cards comes crasshing down under Obama's watch before the end of his 2nd term, so the world sees what a pathetic leader we had.
the crash better happen under this assholes watch.
i dont see anyway it holds off until his term is up.
if this bubble does not burst within the next year if not sooner, i will be shocked.
its going to be great when obama has to answer for all this shit that he has been supportive of.
although the stock market as we all know is no longer an indicator of the economy by any means, once it crashes, people will wake up and start looking at the real culprit for this shit, bernanke and obama, and all the bankers.
After having been through 9/11 and the 2007 - 2009 financial crisis, I am amazed that the whole thing has not come down already. But, I have been bearish since Jimmy Carter, so my bad!
Every month we are delayed gives me another month to make further preps, and I have a long way to go. But, the longer it is delayed, the worse it is going to be.
You all very well might get your dream:
http://www.economicpolicyjournal.com/2013/07/warning-simulated-street-wi...
"A source provides me with this internal advisory put out by the Depository Trust & Clearing Corporation:
Kind of depends on ones definition of "worse". Total and complete global collapse is my nirvana. Que sera sera.
Patience, Grasshopper. Patience. The financial world will continue to revolve for another 3 years. Collapses usually happens at the end of a presidential term when the political cost of a bailout is irrelvant. Up to that point- just lie your ass off and pretend it isn't happening. You are young. You will live to see further bailouts, despite all promises to never do it again.
"its going to be great when obama has to answer for all this shit that he has been supportive of."
And as for that shit.... don't hold your breath. Nobody in the elite EVER pays the price. You think this is the middle ages or something? Peasants storming the palace and all that shit? Even if the White House was burned to the ground in the middle of a violent protest, none of the people really in charge would be affected because they aren't in the White House.
Stop thinking Red/Blue and start thinking Green. As in money (and power). That's all that matters. That's what the game has always been about.
My friend doing manufacturing business in china and selling goods to Caterpiller say's that both CAT's orders are way down, and the chinese, who he had to chase for his small 2-3 million purchase orders are now chasing him for they business as their orders are down 60%
Now if we can just get our Korean suppliers to cut their prices some (in strong competition with Japan and China), then that would be very good for us.
If I could convince ONE of our Korean suppliers to bid for making Cat bearings (and get a cut for my help), oh man,,, who would need $55,000 gold?!
Agreed. /ES down 1.5 at 1 am EST. Not much of a worry there. Oh, and Shanghai? Up .50%. All news everywhere is good news!!
Isn't everything that happens under the sun--or moon--another reason for Bernanke to keep passing his Wall Street mafia buddies the cash. Not a question.
Start the Clock! How long until Benny Print Bucks, takes the "taper" scare OFF the table and unleashes the animal spirits in Wall Street!!
bullish- first
Donkey meet Kong, the game is almost ON
Starland Vocal Band - AFTERNOON DELIGHT(1976) - AMERICA'S TOP SINGLE OF 1976
http://www.youtube.com/watch?v=tpGRdX5sUAs
that song sucks and so did the 70s.
The 70s did suck. But not as bad as now. This SUCKS. And it will continue to SUCK for a very very long time.
Sounds like what the red light girls will be screaming after checking their retirement accounts next year.
There were some greats, like Federal Night Fever: "Well you can tell by the way I use my bank, I'm a printin' man, no time to thank. Print, print, print, print, Stayin' Alive. Stayin' Alive."
Ok, ok. That was pretty fucking funny. And now stuck in my head for the rest of the night. Thanks.
that song sucks agreed. but some of the best fun and music came out of the 70's. I don't wish for a return to President Peant but as a young adult I miss the discos and girls from then. Compared to the crap music now and the plastic women, the 70's were awesome. (I know the economy sucked , I lived through it.) In fact, dazed and confused was my life in 1977. Man, with all of the shit going on now what I wouldn't give to be 17 again.
70s porn was good- bring back the bush.
They have no capability of calculating anything. All data coming from the provinces is always false.
Their data is simply propaganda. It is in their interest now to show slow growth in order to implode shadow banking there and in the west
As if our data wasn't all false propoganda.
At least the Fed/Gov are looking at real data and then lie
But chinese have no clue about the real situation
are you talking about the US or Europe or... I'm confused.
yes ekm. they completely control the numbers without any pretense....why is it when the numbers are good, the chinese are making it up...but when the numbers tank, all of a sudden the truth is revealed...suddenly the chinese have begun to tell the truth!!.........bullshit.....they rig it both ways to suit them.... im not sure if they are looking to implode shadow banking, but they definitely want to slow things down....they fear inflation more than anything.....they dont need the wires running red hot......chinese pork prices out of reach means civil war..........as opposed to america, uncle sam foots the bill for anybody that cant afford pork........
the shadow banking system may be triggered to implode, but there is zero evidence of it right now. Zero evidence of a collateral shortage. For now it's just moar of the same shit.
who knows fonz.....but im only speaking of the chinese economy in general.........the govt doesnt need an out of control inflationary shit storm.....they temper as needed............unlike the u.s. govt, who is desperate to show the world there is still growth..........................
btw fonz, if you concede defeat now in our bet, i will only order the sammich and jettison the 60 ounce super soda with the pizza pie sized cookie..........
your buddies are not telling you the truth
http://www.realclearmarkets.com/blog/off_the_street/2013/06/10/repo_market_sends_a_warning_sign_100387.html
or probably they don't know anything about it
ekm if we get a 10 - 15% correction, and then grind higher, would you change your thinking? That is if we even get one. There is a big one out there for sure, i just don't see evidence that it is happening anytime soon.
More importantly, do you believe kito could drink a 60oz soda?
http://www.youtube.com/watch?v=67UUgRDpdzY
anonymity is key ekm, I am horrified that you would post kito's identity (obviously the guy on the right) on this site. If Kito wins the bet do you think he will dance like he did at the end of that video?
oh those were the days...............soda drinking contests..............making it to 2nd base...................biggest problem in life was the runaway zit.............
it can't be any worse than your faggy hamptons look.
you did not like my white shorts with the blue stripe? It's not like i wear it after labor day.
ekm is right, the paradox of moar QE is the extraction of liquity that is occurring every single day
liquidity is like oxygen....you don't realize how important is is until the very seond you don't have it
ever see a drowning person flail to get air...they will pull anyone down around them to breathe
the only thing I take issue with is the ardent belief that is is just about to happen. It's coming. No doubt. But we could still be having this debate a year from now.
A year...or two....or three....or four......or five.....or......ten.....or twenty....or......
"soon"
the global economy is about to completely crap out later this year
how much of a slowdown can the financial system take? slowdown in asset purchases, slowdown in tax revenues, slowdown in cash flow and so on? remember Greece anyone?
yes, frustrating as it appears I believe there is a shitstorm right now under the surface, there is evidence all around
market prices lie right now....there is no real price discovery and it is masking the problems at hand
keep your eye on rates as I think we have another big leg up at hand
Chuck Berry - Roll Over Beethoven (1956)
http://www.youtube.com/watch?v=EOrMg3pY7hw
Thanks noob, Chuck Berry rocks.
It doesn't matter where their economy is going, as long as they are buying all the gold in the world
are the common peeps melting it down into bullets?
Gold will be down tomorrow. Bloodbath because this and Mr. Ben Shalom's speech.
Any news are bad for gold now and bullish for the Dow.
Until they aren't.
hory shite, the /es is down .75 points. que up the deer photo.
1.5 now, margin calls and bankers jumping off the roof. ppt in 3, 2, 1............................
Europe can't save us, the Middle East can't save us, Africa..... South America, and now China. We are so fucked.. Where are those damn aliens when we need them?
It's just you against your tattered libido, the bank and the mortician forever, man.
Having friends helps. Beer helps more. Real growth would be a tremendous help, but I'm afraid we've see the last of that in our lifetimes.
Eliot Spitzer? He's gonna be New York City's comptroller! dont' worry...i hear he's incorruptible!
Lets taper like no tomorrow
Worlds in fine fucking shape
One last time
Nothing has changed but the bullshit
PS. And where pray tell is the taper talk?
The MSM
Go figure
Knukles...That is the key....nothing has changed.
U.S.payroll taxes went up 2% .. what did China expect with less purchasing power from the major class of Americans that buy cheap chinese made stuff?
my wife likes to drag me along to some of the stores full of chinese-made home goods shit and they are like fucking ghost towns with tumbleweeds blowing down the aisles.
the Chinese are by far the biggest freakin' Champions in the discipline of misallocation of capital - EVER!
I believe that their stupid centrally planned gong show has singlehandedly cost the planet a few decades worth of resources that could very well be the factor between life and death for billions of people.
You've got to be kidding. How much talent, resources and time have been poured into the US military industrial complex and financial engineering. Never has a such a great country in the history of the world gone so totally and abhorrently to pot in such a short time due to nothing more than the ancient human vise of greed and power. It's hard to believe the nation that gave us the Declaration of Independence, the Constitution, womens rights, public schools, Apollo, Voyager, the Shuttle, Curiosity, the PC, etc is now dominated by corrupt congressmen and women, power hungry and corrupt lobbyists, insane and mypoic central bankers, power hungry, greedy and psychotic investment bankers, an ex-president named George W Bush (how the fuck did that guy ever get near the White House) and a negro, who the wealthy power elites decided to let play with the toys for awhile to pacify the dumb public for another couple of presidential terms. Where does one stop, Dick Cheney, Donald Rumsfield, Hank Paulson, Ken Lay, Fuld, Corzine, that bald Goldman Sachs fuck whose name escapes me, Jamie "My fucking surname rocks" Dimon . . . . . . . . . . . the list of corrupt, compromised, power hungry, greedy, pyschotic, mad and evil mother fuckers to grace one country in one short period of time, it's historical in the making is all I can say.
If you haven't read this: http://www.usagold.com/goldtrail/archives/another1.html read it, from cover to cover. If nothing else it is a truly fascinating perspective on gold.
No kidding! The U.S. government is the biggest resource sink in the history of mankind. Everything it does is an utter waste of resources and misallocation of precious capital. It's the Clown Whore.
http://www.youtube.com/watch?v=jfiZb4Wo_tE keep your emotions in check folks. this can become Government business very quickly and i'm not talking mere gold confiscation.
with waylon I'll stick w/ good hearted woman. I always wanted to make one of his backdrop light-up signs.
he's the best. "we knew we were screwed in the 70's." this time around it's like a mystery wrapped in a horror movie. we've been given hope. "could it be any worse?" i say only if you truly believe the ending will somehow be different. http://www.youtube.com/watch?v=2sAHiR0rkJg
Boom goes the dynamite!
"JPMorgan Buys Korean Stocks Trading at Cheapest Since 2009"
http://www.bloomberg.com/news/2013-07-09/jpmorgan-buys-cheapest-korean-stocks-since-2009-as-profits-rise.html
Seriously, since 2009? Global markets were probably around their lowest by 2009. Somebody in Korea isn't hitting the buy button....
They meant north Korean.....
silly me for backing off being long the totally ridiculous and absurd. there can be no worse form of investing strategy that using reason or fear! the goal IS to lose everyting! ALWAYS! http://www.youtube.com/watch?v=nEjLMEV-MyA
China is taking a hammer to it's own ecomomy. Very interesting, means they don't give f*ck about the rest of the world. Commie 101: just close up shop.
Maybe now we can start re-activating our own industries, relying on China now is a death wish.
USD bids and inflows means QE was a huge failure. If China shuts down, all the QE world won't do anything.
New leadership that recognizes that there needs to be some pain to achieve goals. China wants to move up the value chain, a big part of accomplishing that is forcing the low-value sectors to adapt or die while boosting more domestic brands. The best strategy to ensure this is:
1) Strategic JVs and buyouts of troubled foreign companies that have desired tech. This is happening all the time now.
2) Institute market changes that encourage the majority to see domestic products as good quality. This is ongoing. Hard crackdowns on quality problems are happening. Foreign brands that are actually shit are being laid out for all to see. There are some major brands emerging that are, indeed, world class
3) Poaching underpaid talent from foreign companies and paying them more than said foreign companies were willing. Happening everywhere now, to the point where overseas Chinese are coming back with great packages because this is where they have real advantage.
4) Targeted investment in developing countries that desperately need jobs and infrastructure. Introduction of low-value sector jobs to those economies with a mindset to develop reliable trading partners in the future... without the problems that western imperialism left as a legacy. It's a form of offshoring, but it's targeted offshoring that is for the most part planned for the majority of sectors that matter. Investments are being made in USD, with the payback in resources on very generous terms (because it's a better return than you'll ever see from USD).
5) Domestic logistics and transit improvements are still booming. High speed rail is being pared back now that the majority of major lines are either constructed and operating or will be soon. Current shift is to subway system development and improvement which, in combination with improvements to other mass transit systems will allow for easier domestic travel. Nuclear has some major projects going on and China is leading the way with "safe" nucelar research in the form of Thorium. Wind and solar is out there as well, but the grid needs to be upgraded to handle the output. There is pushback from the coal bosses who make stupid amounts of money, but there is effort to consolidate them into state-owned/controlled operations that will be forced to diversify. Highways are also being upgraded and expanded in a major way, spurring a new culture of "the road trip". Absolutely great for smaller economies that crave tourist money.
6) Water security. Everyone's laughing, but the South->North water transfer project is possibly one of the greatest engineering feats in the history of the world. With further plans to expand the network to historically arid regions this will end the flooding down south while improving harvests up north providing a sustainable water solution for most of the country in the process.
7) Rise of the RMB. China's not stupid. You'll be seeing loans coming out of China soon, that are demonimated in RMB, not USD or Euros. This is the way out of allegations of manipulation, as it will be in trading partners best interest to support China. It's going to become a reserve currency, and it's going to skip out on the USD-forex middleman scam that the US runs.
The simple fact is that China is going through a transitionary stage right now in terms of what powers the economy. Weaning itself off of the export sector and focusing more on domestic. Highly regarded domestic brands that control all their IP and are exported makes for a profit capture far far exceeding what is captured now and that's the goal.
As far as the Shanghai stock market? No one actually cares about it, it's an insider game and it's pointless. It's indicitive of nothing. GDP numbers? Live here a while and again, you'll see that GDP is a meaningless number. It's calculated based on tax receipts and most business here goes cash with no receipt. Hell, most people are buying their food at the markets, where it's all tax-free and goes entirely unreported, and that's only the tip of the iceberg.
If I were a typical farmer with a plot of land.. here's what I do: I produce food, keep some for myself and sell the rest at the market, with a portion of it being sold to bundlers who may or may not end up paying taxes on it, or I barter with it for other staples from neighbors. I take that money and give it to the local concrete plant and brick yard in cash, who comes and lays some slabs and walls for my new home I am slowly building. Once the shell is complete, I take my money and go to the nearest renovation market and get everything done without receipts. My income is all tax free. My water heater is pretty much guaranteed to be solar. My water is coming from a combination of wells and irrigation ditches that I pay nothing for. Probably have an illegal satellite hookup that no one cares about, and my electricity usage is minimal. Heating in the winter? Buying that coal from a local source that most likely mines it illegally. How much have I "contributed" to the GDP? Essentially nothing until I have to make some payments for legitimate services and products. It's essentially a meaningless number that only applies to legitimate business, and the vast majority of the Chinese economy is powered by individuals who deal in cash only.
Thanks for the post, very informative.
From the West we can see what China is doing (cleaning up it's markets), I actually commend it, but I am not a fan of globalization at all. The human race isn't ready for it, maybe one day, in some-form. But not now. I am for countries repatriating and bringing assets, monies and industries home. China should have, for the West, never been our factory. It's stuffed up your country: pollution, corruption, exploitation and made us lazy, uncompetitive and weak. I think that a degree of isolationism will be healthy for all of us. Also I think China with water research and technologies is the best thing to come out of Asia, export that tech and you will be respected.
Great post! Only trouble is that your IQ is probably 10x that of the most senior members of the political class! You're smart and they're stupid! Big problem, laomei! Your political class wants to brag and shine and be the best and biggest in the world. Big problem, laomei! Your country is not coming along for the dream ride. Most smart Chinese have stashed their money overseas. They know the fast money is coming to an end. So better have a house in California with a good bank account and watch China implode from the beaches of Big Sur! Good luck, laomei!
The senior political class in China tends to be very good at their jobs. The amount of time it takes to reach the top, and the amount of demonstrated proven competence required is uncanny. It's not electoral apart from the very lowest levels. The shitbags tend not to get very far. Actual competency is far more legitimate than an election which relies on the public not being stupid (the public is always stupid).
Here's a decent and recent primer:
http://www.ted.com/talks/eric_x_li_a_tale_of_two_political_systems.html
The good thing about an export slump is that next time they rig the figures it will appear to be a massive export surge.
chump QE enabled the greatest transfer of wealth on the planet. It was a huge success, just not for us.
Maybe they feel like they have grabbed enough, and will now torch the place. I don't think we are there yet. but who knows.
The crony trade? Of course. But the Fed couldn't get rates down nor kill the USD (makes the crony trade even more crony), plus even if they go 100% balance sheet. China still plays the rates like a chess game. I got a bet that Bernanke 'retires' before the Fed balance sheet *bloodbath. Could be any-day. With oil, USD and yields going upwards, plus a deflationary pull from China...It will tear Wall Street, the Fed and ECB apart.
I kinda live for that day...
*The real reason for 'tapering' comes from The Fed taking a hit and reducing interest payments.
Bernanke will either retire or shit himself in a congressional hearing. i've seen mental patients with less facial ticks. I'm waiting for him to develop Tourette syndrome before he has a stroke.
watch for him to buy a ranch in South America as soon as he steps down.
"i've seen mental patients with less facial ticks"
lol
,... a currency war of attrition can't really hurt 200-500 million chinese migrant farmer/laborers making 18cents/hr wage with a total population of 1.4 billion vs. $20/hr US with ~40% feeding off the USSA non-productive gov't handout-programs, with the remaining other-half [30% of 60%] of the 320 million "TEMPS"!
perhaps China is just feigning the bad numbers as in a grand reverse psychology data-dump. who really knows? afterall the ussa and eu have the longest "Pinnocho", in the Global Economic Crisis pissing contest... just ask Cartman from Southpark?
Sure took the middle men long enough to get caught at pawning off Chinese junk to the rest of the world.
Fuck China and the globalist traitors they rode in on.
WHAT!?!?
The World is buying less shit!?!?
This can't be possible; the recovery is here!?!?
Heavy shit. This explains why they clamped on bank lending. Without export growth, lots of loans going bad fast.
None of these stories, be they good or bad, even matter anymore. It is all about Benny and the FED and that is it. Markets to test highs this week as everything is perceived as positive for the economy. Dow 66,000 by the end of Hillary's second term.
I hate dems and repubs but history has shown its tough for 1 party to hold onto prez power for more than 8 years- exception being Raygun/pappy bush.plus everybody thought that dyke was a shoo-in in 2008.
Barry McGuire - Eve of Destruction
http://www.youtube.com/watch?v=ntLsElbW9Xo
The great ETF outflow (China).
https://www.scmp.com/sites/default/files/2013/07/07/dbf4c54a7448c1550c92...
The PRC/US export numbers seem to be real. Our internal numbers on USWC imports down 1/3 over last 3 months and sliding.
Could be as simple as 'unemployed folks don't by shit', but clearly the US economy is bifracating high and low end. Without high end consumer spending we'd grind to -0 thru out 2013.
Clearly the slide is accelerating.
People with temp work don't buy shit either. Part timers don't buy a house, probably not even a new car. They might travel but only to see family, not to spend a lavish week at a resort in Mexico.
Temp and part time workers are killers of the consumer driven economy. Slaves don't squander money.
slaves don't pay taxes, what is happening to low income people in this nation harkens back to england's debt slavery of the dicken's era.
The slaves are being taxed to pay for their subjugation. The boot on their throat demands we buy it shoes to choke them with.
The great unravelling ensures the corporate government erases all memories of prosperity so the slaves will rest quietly with the burden of the rich upon their backs.
Nobody F'ing worry! Ted Nugent might be gunning for the White House! Typical! I mean one minute it's Sarah Palin.......next it's a douchebag like Nugent! My god can America produce any worse leaders and shittier talking heads? Ted Nugent really? What, doesn't this clown have like 9 kids by 10 different wives? I love how people love the guy when in reality he's just a right wing idiot. Where was he when we had the biggest expansion of Federal Government since FDR under Georgie Booshie.....TSA, Patriot Act, DHS????? Oh but he loves to hate on Obama! Typical right wing left wing zombies!!!!!
Ted Nugent for Prez! YEEHAWW!!!
Your words are irrelevant and dim, much like most of CONgress, and your lil playground fight which is of no use to the USA or any other land.
You write like an apparatchik, fearful that others might stop paying you.
I concur Ted Nugent's got fuckall to do with China. Some government paid consultant wasting our tax dollars spamming zerohedge.
The Party Bosses in Beijing are trying to cool down China's consumer price inflation a little bit before they resume ghost city building project full-speed ahead later in the year.
The Politburo feasts at the famine. Central banksters do that, and China is no different this time.
China, the world's oldest continuous and innovative civilisation is ruined again by thieving bureaucrats, wed to Western central bank, the opium trader Rotchilds of Britain and Europe.
Buy physical gold and silver. The latest fiatsco is ending.
my single data point that proves china's economy is slowing - bought a bit of chinese electronics for a project. Usual lead time is 10 to 21 days. received it 5 days after I ordered it including a weekend. I'd say not much backlog of orders. it must have shipped the day I ordered it from china.
inventories must be climbing.
in the good all gulag of the uSA - everytime I call someone to query about price and availability of a replacement part, they spend 5 minutes thanking me for calling and for my business.
the economy is mighty shaky on both sides of the pacific.
Is that with lies priced in or no?
So...if market continues its climb in the face of bad news it's because TPTB are attempting to convince everyone that QE is NOT off the table in the near future, that they are betting on escape velocity predicated on bull$hit versus tanking the market and letting Tom, Dick and Harry take over for the FED and rolling into safe haven Tbonds. Probably a combination of the two strategies, each triggers based on the exhaustion of sellers or buyers.
As goes Chinese exports - so goes Japanese profits....
http://nipponmarketblog.wordpress.com/
so Hong Kong futures suddenly rally 400 points with the US futures at 6:00am GMT to save the market just like the last four weeks