China in transition

[JohnB]

an interesting Forbes article on the Chinese economy is a 5 year transition from
an export country to building up a vibrant Chinese middle class.
http://www.forbes.com/sites/kenrapoza/2015/03/22/next-five-years-will-bring-huge-changes-to-chinas-commodity-demand/?utm_campaign=yahootix&partner=yahootix
I guess that Willy has a front row seat.

In 5 years, per capita income projected at $20,000...twice what it is today.
I think it may be a good time soon to start up an American marriage agency to slop up the extraordinary surplus of Chinese males that dominate the country. 

[Willy The Londoner]

Yes I am definately looking at the next five years and further just to see what this country can achieve.

I certainly have had a ringside seat over the past 6 years.  300 million people taken out of poverty in that time. Still a way to go there but the middle classes are rising in numbers.   The number of new cars on the road. And smaller things like fewer babies being carried on adults back and more being pushed in strollers!

The prices of homes fell by 5% on average but it has not deflected the thousands of tower blocks that are still going up around me.  Some in the West say housing is a 'bubble' waiting to burst!    But I think not, homes are not easy to buy here. Large deposits are needed and with higher wages year on year means that very few home buyers are likely to walk away from a home because they cannot afford the repayments. In the West, before the financial crash, mortgages over 25 - 35 years and with deposits as low a 5% fueled the bubble.  This will not happen in China.

Even those 'lost cities' built by property speculation and having laid empty for years are coming to life as more people leave the high price areas such as Beijing and Shanghai.

What we must remember that the New China is only just over 30 years old.  My father in law is 90 this year and he was over the now retiring age before this new phase in the life of this country took place.

I wish that I had 30 years left in me to see just how this country will develop I know that is unlikely but whatever I have left then i look forward to being amazed

Willy

[Pineau]

What Fiona noticed during her last trip to Guangzhou was inflation. Prices at the Chinese markets and restaurants  are rising. Food, material and durable goods have gone up.

[maxx]

Gerry my mother in law has ben talking about the rise of inflation for the last seven ears. Willy the ghost cities still exist.And  they are still building more apartment buildings that most people can't afford.And to build those apartment buildings the are tearing down people's houses.And giving them nothing in return.

As far as the automotive business in China.They have cut production in half because those that have bought cars.Have already bought the latest and greatest.And there are very few new purchase like there were a few years ago. And they can't export there cars because the don't meet the safety requirements of most of the other countries.

In my opinion it is just basic economics. When you produce more then you can sell.You are going to loose money.you do it to many times and you will collapse the market.Just like the Arabs did with the oil.

[David E]

Interesting topic !

Many of the doomsayers here in Aus are bemoaning the end of the "Mining Boom" and blaming China's falling prospects as a reason why this is happening.
Naturally, if and when the quantity and value of the export minerals we send from here falls, then our revenue will suffer...

Many so-called experts see this as the beginning of a catastrophe and basically signals the end of the World as we know it.

What none of these Gurus sem to understand was that the Mining Boom was in the main a capital fuelled excercise in increasing capacity and reducing the actual cost of production. So even though volumes have fallen from the dizzy heights of the last 10 years, our capital expenditure has enabled most substantial Miners to make adequate profits in this falling market.

China has accepted that from here on, their growth rate will be modest...about 7 % p.a. !! instead of the double digit growth we have experienced.

I ask you...if ANY Western economy announced that it would achieve a 7 % growth over the next 5 years they would be killed in the rush to invest...but for China, the Gurus see this as a negative sentimant.

Hey-ho....I guess economists cant see the wood for the trees...

[Pineau]

I watched a documentary about the rise of China. Although there were some biases in the film it is clear that China is out to dominate the USA. 

http://www.netflix.com/WiPlayer?movieid=70247540&trkid=13462100&tctx=-99%2C-99%2Cada739fc-e43e-4550-a487-be706a922e61-83297293

Its on Netflix or your can purchase the DVD. I think it is worth while for anyone to watch.

[Willy The Londoner]

Well the news today that Pirelli tyres have accepted a Chinese takeover is just one more step to that domination.

We bought a General Motors Chinese built car and although it is nice and comfortable it probably would not pass the Western Worlds higher standards. But heck as I am never driven above 30 mph then thats no problem for me.   Vehicle sales have increased year on year since 2008 with only the sales of commercial vehicles falling slightly in 2014. Already in the first two months of this year nearly 4 million more vehicles have been sold.

Ghost cities!  Maybe China is very astute in having housing ready for the higher population they will need to rely more on home consumption of products rather than export!!!!

No tearing down of houses here. Just empty land on which is springing up China's next large New City.  From my new home I can see about a dozen cranes working away. All creating work for thousands. If they do not sell then the speculators will dip out and offset losses against something else.

Pessimist - Optimist - whatever - I am having a great time watching things unfold from here. My GB Pounds are going much much fuuurrrttthhheeerr.

I am one happy immigrant.

Willy

 

[JohnB]

http://www.expatistan.com/cost-of-living/zhuhai
I tied this article, the 'cost of living' in Zhuhai China, to the subject title...all money things being relevant
to disposable income. I suppose the accuracy of the information is more- or- less what someone enters
and when. But I am thinking living costs certainly are on the up.

I picked Zhuhai because I picked Zhuhai, but any large city hosting ex- pats presents it's own unique
information. It would be an interesting exercise to do cost comparisons.
 
 
 

[JohnB]

excellent BBC article, 21Sept15, on China growth in perspective. kind of funny, is titled
"Cement and pig consumption reveal China's huge changes".

http://www.bbc.com/news/world-asia-china-33802777

When China's President Xi Jinping visits the US this week, it will be a meeting of the world's two biggest economies. Yet,
compared with America, China's economic expansion has happened at breakneck speed. It has sparked mass urbanization
and led to tens of millions of rural workers heading to the cities to find work. This is the story of China's astounding
transformation - in pictures, interactive graphics and video.

According to UN data, the number of urban centres in China with a population of one million or more has leapt from 16 in
1970 to 106 in 2015. This compares to 45 in the US, and about 55 in Europe.

interesting graphs & pics. some but not all complimentary.

The Communist Party began to introduce capitalist market principles in 1978. After opening up to foreign investment in the 1980s,
China became one of the world's largest manufacturers, as factories took advantage of low labour costs.
China's economy grew at an average rate of 10% a year for the three decades up to 2010, although growth has since slowed down.
In recent years it overtook Japan to become the world's second-largest economy - although its GDP per capita remains well below
those of the US, Japan, Germany and the UK. Dramatic stock market falls over the summer have prompted questions about the lasting
strength of China's economic transformation.

China's growing GDP has been accompanied by rising disposable incomes - China has the world's highest number of outbound tourists,
and its visitors rank first in the world for expenditure, spending $165bn during holidays.
Popular destinations include Hong Kong, Japan, France, South Korea, the US and Thailand. 

makes you think again about the brilliance of Nixon in 1972 as he stepped off the plane in China, becoming the first American president to visit there, 
and today, where Xi Jinping will take China, the country of my wife.   https://history.state.gov/milestones/1969-1976/rapprochement-china