The fear of further yuan devaluation.
Chinese companies, consortia, and investment funds representing the wealthiest individuals have been splurging, with the encouragement of their government, on acquisitions and investments overseas. But now the government, which has long been trying to crack down on smaller forms of capital flight, is getting nervous about these deals. The yuan is diving, foreign exchange reserves are dwindling, the debt-burdened economy is facing breath-taking risks, and it’s time to crack down on the big league of capital flight.
So far this year, Chinese buyers have announced $213 billion of acquisitions in other countries. The biggest of them is the $43-billion acquisition of Swiss-based Syngenta by China National Chemical Corp.
Anbang Insurance Group rose from obscurity to make a slew of real estate and hotel deals in the US and Canada, including the $6.5 billion acquisition of Strategic Hotels & Resorts in the US.
A consortium, Sino-Europe Sports Investment Management Changxing, has been trying to buy Italian soccer club AC Milan from Silvio Berlusconi for $825 million. The deal is hung up due to an allegedly forged bank document and other issues.
Dalian Wanda Group, the main holding company of Chinese billionaire Wang Jianlin, spent $1 billion to acquire Dick Clark Productions which owns numerous annual TV shows, such as the Golden Globe Awards, the American Music Awards, and the Billboard Music Awards. Earlier in 2016, Wanda had acquired a majority stake in Hollywood studio Legendary for more than $3 billion.
Midea, a Chinese maker of heating, ventilation, and air conditioning systems, is trying to acquire German robotics specialist, Kuka, for €3 billion, against considerable political resistance in Germany.
Another Chinese investment group, this one controlled by Zhendong Liu, a Chinese businessman, is trying to acquire Aixtron, a German maker of semiconductor equipment used in LED lighting, for about €670 million, which has caused some hissy-fits at the US Committee on Foreign Investment for security reasons.
A Chinese investor group, according to Reuters’ sources, is in talks to buy privately held International Data Group, a technology publishing company with hundreds of tech websites and magazines, including PCWorld and market research firm IDC. The company has put itself up for sale earlier this year at a valuation of $500 million to $1 billion. The investor group is headed by Hugo Shong, chairman of IDG of Greater China.
China Oceanwide Holdings Group, a privately held investment firm that started out as a property developer founded by Chinese businessman Lu Zhiqiang, acquired US insurance carrier Genworth Financial for $2.7 billion. It has been active in US commercial and residential real estate over the past two years. Its third deal in California is in San Francisco, where it acquired the site on First St. and Mission St. to develop it. Plans show a group of buildings with about 2 million square feet, including the second tallest tower in the city.
And so on…
These deals represent capital outflows from China. This has pushed the yuan down. Expecting the yuan to decline further, super-wealthy Chinese are trying to get their money out in large chunks, which is driving the yuan down even further…. The yuan has now fallen to the lowest level in eight years against the dollar.
And China’s foreign-exchange reserves are evaporating. In October, they dropped $45.7 billion to $3.12 trillion, the lowest since March of 2011 (via TradingEconomics.com)
Net outflows from China reached $207 billion in Q3, according to estimates by the Institute of International Finance, cited by the Wall Street Journal. And this despite the efforts by authorities over the past year to stem the flow:
Those measures included a suspension of a quota-based program intended to allow more Chinese to buy foreign stocks and bonds and a ban on purchasing most types of foreign insurance policies with domestically-issued credit cards.
Attention on outbound investments has broadened recently. Officials at China’s foreign-exchange regulator warned in September that some companies as well as individuals may have fabricated deals as a way to circumvent capital controls and move money offshore.
Earlier this week, the central bank announced it will use a new risk-control system to monitor capital flows through Shanghai’s much promoted free trade zone, which previously was hailed as a bold experiment to liberalize China’s financial markets.
A five-page action plan released by the Shanghai branch of the People’s Bank of China stresses efforts to ensure that currency inflows exceed outflows in the zone – a backhanded suggestion that more money may be moving out of the zone than coming in.
So China is going to crack down on capital flight with new methods, in addition to all the methods that are already not working. This time, it’s going after the big ones, the ones that might be using the overseas acquisition binge to dodge capital controls. This time, “according to people with direct knowledge of the matter and documents reviewed by The Wall Street Journal,” the State Council is planning to impose reviews and controls on big overseas deals.
Currently, companies going after overseas M&A only have to register with Chinese authorities, but there’s now drawn-out review. Under the new rules, the Commerce Ministry and the top economic planning agency can subject larges deals to more scrutiny. These deals include:
- Foreign acquisitions of $10 billion or more
- Property investments by state-owned companies of $1 billion or more
- Investments of $1 billion or more in an overseas entity that is unrelated to the acquirer’s core business
- Overseas direct investments made by limited partnerships
- Investments of less than 10% in companies traded on overseas stock exchanges
- Chinese capital trying to participate in the delisting of overseas-listed Chinese companies.
And there’s a political wrinkle. The Journal:
The new controls, once in place, are to remain in effect until the end of September and thus are intended as a temporary tool to stabilize outflows ahead of a major reshuffle of the top echelon of the ruling Communist Party late next year, the people familiar with the matter said. That’s in keeping with other efforts by Beijing to try to keep the economy on an even keel before the leadership change.
These are the Top Ten financial-escape cities in the US and globally that Chinese investors seek out. Read… Yuan Devaluation Triggers Exodus of Wealthy Chinese, US West Coast Primary Target
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I may not China that well, but these new measures seem hardly dealbreaking. In fact they look a whole lot like the kind of propaganda the Communist Party of China has been producing for years, all of it aimed at Westerners.
It’s no big secret Beijing is not opposed at all to these huge capital outflows, since they help weaken the yuan against foreign currencies without the People’s Bank of China having to openly intervene. But Chinese rulers have always feared chaos and disorder, hence they want both the capital outflows and the yuan devaluation to happen in orderly manner: think of it, to use an image dear to traditional Chinese art, as mighty river calmly flowing to the sea instead of, to use an image common in Chinese history, the chaos and disruption of a large-scale rebellion.
One thing these acquisitions are doing is making the large US and European companies, which fought tooth and nail to “keep the Chinese out” by lobbying for asinine legislation which has cost customers piles of money, look like fools.
Scratch that: they look like the village idot, since they have been selling off the family jewels to Johnny Foreigner (to quote Jeremy Clarkson) to pay higher dividends and bonuses to top management and to plow more money into M&A deals and stock buybacks.
Chinese companies are buying the car component industry, the lightning industry and now have set their sight on agri as well. And I am sure people will provide many more examples.
Readers here often liken China’s buyout spread to Japan’s in the 80’s, but this is much different. Back then the keiretsu had none of the active collaboration we are seeing today. Granted, they were not exactly hampered in their actions, but the spectacle of the big Western groups genuflecting in front of the wealthy foreign buyer while selling out the family silverware was at least kept private.
China has been buying the “lightning industry”? I thought they were only rumblings…..
But they were ominous rumblings. ;-)
Earlier this year Philips spun out its lightning division and sold it to Go Scale Capital for $2.8 billion.
As we speak Osram is in talks with Shanghai based Feilo Acoustics to sell them their lightning division. Valuations of the deal vary wildly, from €400 million all the way up to €1 billion.
Once Philips and Osram are gone, there isn’t a whole lot of light left outside of China.
Maybe it’s time to invest in whale oil and kerosene lamps…
Philips and Osram are originally from Netherlands and Germany, but Philips ceased to be a real Dutch company years ago and has already moved much of it former production and development to China and other faraway countries. Don’t know about Osram but it’s probably much the same, probably with a bit more production in former eastern block countries. Philips is officially still Dutch but only because the Netherlands is a tax paradise for multinationals.
Philips still has a LED production facility in my town but I have no idea if they are really producing anything there, probably more for collecting subsidies and tax exemptions ;-)
Those who oppose this deal cited a previous acquisition of a German company that was supposed to open the Chinese market to it’s product, and resulted only in technology export to China.
I believe, these acquisitions are as much about tunneling out money from China, as they are about acquiring technology by China Inc.
The Chinese government probably issued a guideline to private and public enterprises: be bold and assertive, leave things to us to sort out.
Given that market orthodoxy and political correctness dominates the west, they have a reasonable chance of success.
We are still seeing regular container shipments, changing hands in our local currency. In cash.
This stuff is all shipped CIF unencumbered load.
The volume of chinese product no longer shipped on LC is growing daily.
Not only does china have an over invoicing problem through HK, it also has a complete nonpayment problem.
As people are getting their money out of china, by simply shipping everyday consumables. Detergents, Tyres, Etc.
They are not trying to make a profit, simply to move money, which allows a lot of retailers to increase their profits by buying from them at under regular wholesale.
“They are not trying to make a profit, simply to move money, ”
I think this is key here- the typical Chinese historical dynamic around a collapsing dynasty is internal closure by the Han peasantry (less an ethnicity than a cadastral designator of people paying taxes to the current dynasty) and fragmentation of the periphery (the Zomnian plateau contains dozens of groups who at one time or another fled the Chinese state into the SEA uplands)- see GW Skinner’s “Chinese Peasants and the Closed Community” on this.
The modern dynamic appears to have rather different features- rather than a peripheral fragmentation of the Yunnan-Xinjiang Western front, we see heightened state repression. Instead of a commercial diaspora of marginal Southern groups excluded by language or culture from the ruling elite, we have the ruling elite themselves fleeing with their capital in what looks to be a blow-out scam. The peasantry, as always, is left to return from the cities to their villages, but it’s not clear that they can resume the ancient cycle of turning inwards- 30% of China’s agricultural land has been laid to waste as its population reaches record highs. It’s hard to see how this pans out.
Please correct your article…I believe the reserves have dropped to
3.12 Trillion…not billion…
Thanks
Oops. Thank you!
I guess, what you subconsciously wanted to say is: what was trillions yesterday is only worth billions today.
Haha! It must have been a Freudian slip!
As a certain gentleman has been saying for some time now, “The business of China is business, the business of the USA is dropping bombs …”
Chinese man walked into the currency exchange in San Francisco with 2500 yuan and walked out with $425. The following week, he walked in with another 2500 yuan, and was handed $350. He asked the teller why he got so less money than the previous week. The teller replied, “Fluctuations.” The Chinese man became enraged and began to step away, turned around and shouted, “Fluc tu Amelicans, too!”
As I understand it, largely from REAL China expert Anne Stevenson-Yang, China is heading for a crash perhaps unprecedented in history.
No where in history has expanded credit like this, allowing China to pour more concrete from 2007 to 2015 than the US did in the ENTIRE twentieth century. ( Sorry for caps, don’t know how to get italics)
As I commented on Wolf Street some time ago, in a comparison ‘borrowed’ by the CBC, China’s discovery of capitalism resembles Mickey Mouse discovering magic in The Sorcerer’s Apprentice. They thought credit was a magic wand.
Now that exports have begun to flat- line, the regime has made a virtue our of a necessity and announced a switch to a consumer economy. Jobs in concrete, mining, steel, aluminum etc. will be replaced in Bloomberg’s words with: ‘baristas, barbers and (my favorite) baby sitters’
You can’t make this stuff up, although I’m surprised Bloomy did.
I’m an admirer of Chinese energy and guts but not of the CCP, which still holds the cloak of psychotic Mao, whose real character is well documented in books banned in China.
When you hear over and over the number 6.7 for Chinese GDP growth, note how repetitive that stat is. Where is the spread typical of quasi- independent research? Why is no one saying 6. 4 or even 6.8?
(I hesitate to say 6.9 because when the CCP realized they couldn’t keep up the 7, 7 , 7 mantra, they briefly tried 6.9)
When you hear 6.7 from CNN, CNBC, the South China Post, even (sob) the BBC, you are hearing a number from the CCP.
According to Ann Stevenson-Yang, as of Feb. 2015, Chinese GDP growth was flat to negative.
Short sellers should have listened. A few months later Chinese stocks crashed 50%.
A recent comment from Anne S- Yang: ‘We are amazed how many analysts buy into the idea of Chinese Exceptionalism.’
“A recent comment from Anne S- Yang: ‘We are amazed how many analysts buy into the idea of Chinese Exceptionalism.’”
Mizz yang should know
A large number of annalist, are told to analise the data they are provided with, not with the real data that is out there.
Which gives a publishable GIGO situation, which makes the houses, a lot of money.
The same thing is happening here in Istanbul Turkey amazing amount of concrete being poured daily and it doesnt ever seem to slow down Ive wondered many times where all the wealth is coming from for all this mega development Your saying its cheap credit that explains alot
Quote from Jim Ricards book the ‘Death of Money’ (roughly): The parasitic elite in China resembles the French aristocracy before the Revolution.
He also the numerous ways that money can be shipped out of China to get around the legal limit of 50K dollars (as of 2014)
A manufacturer (many of those who have got rich from cheap labor) can under- invoice a shipment of tires to a relative in Panama. This causes wealth to disappear in China and appear in Panama, where the tires are sold for full value.
“This causes wealth to disappear in China and appear in Panama, where the tires are sold for full value.”
These days they pay for them in china with borrowed CNY, and sell them for dollars in Panama, Then bank it in one of many quiet places, before reinvesting it in property somewhere.
Then the company that borrowed the money in china fails. Or in some cases the chinese supplier simply dosent get paid. All export shipments no longer need proof of payment in foreign currency, by the purchaser,before export clearance is granted..
The under and over invoicing games were, and still to some extent are, played by companies moving funds to expand their profits as opposed to straight capital flight.
yes, it does seem there is an explanation for everything that is wrong.
A smart move : dump US TREASURIES before the carnage
in the bond market began.
The left over of bond holding, in UST, fell less than other
holdings, because of the strength of the US$. OR, OR…..
For a while, China central bank (PBOC), supported the big
Chinese banks, desperate to pay US$ debt, by selling UST, or
providing UST as collateral for REPO. No more. The big
Chinese banks buy US$ in the market and the WANT of $ grow, globally.
The world is starving for $, yes, the US$ and % rate will cont’
to rise. 6% for $UST10y is a target.
Chinese latest buying spree is a dead cat bounce, before the wholesale pipeline, that provide US$ @ low %, will be clog
and shut down completely.
Am I wrong when I suspect that Chinese entities’ foreign investments may be a new mercantilism, intended to build a Chinese empire worldwide?
Yeah, probably.
NO not at all, and POTUS Elect 45 is going to isolate America to make it easy for them.
Only Americans could be so stupid, as to not see it, written on the wall, in letters 100 feet high.
The Chinese problem is their lack of innovation. They are buying or ripping off technology but have not evolved to the next level. Now that Trump is going to shut the door on them, it will take them even longer, if ever to become a true economic engine. Until now they have only been sellers of excess capacity. I’m not holding my breath because there is no such thing as controlled imagination.
If that is true how did German engineers develope so much high technology under the national socialist regime? ie Jet planes (Me 262) ballistic missiles(V2) cruise missiles(V1)
as well as coal to liquid fuel technology all developed under a very repressive regime
The best example of the Nazis forfeiting an opportunity to develop an effective high-technology weapon was the development of the atomic bomb by the UK/USA, despite the fact that atomic fission was discovered in Germany just before the war.
When Einstein wrote a letter to a government to suggest a program to make a bomb, it was addressed to Roosevelt rather than Hitler.
Quite a few atomic scientists were refugees from Europe who were either Jewish or married to Jews (Fermi from Italy, for example). They wanted to drop the first one on Hitler’s head.
Easy, JEW’S.
After Dunkirk the nuclear and V weapon programs were slowed, as Adolf though he could do it all with Armour, more importantly the vast majority of the development scientist were JEW’S.
The British nuclear weapon, was built in America, with Jewish brain’s.
NEVER FORGET THAT.
WHO invented the Neutron bomb, the most efficient nuclear device to date ? JEW’S.
Adolf’s obsession with removing Jew’s from Germany. Cost him the war and the world. Without his obsession he would have tested the nuclear weapon in early 1942 in Russia, at the latest, then taken Moscow.
With that weapon system, at that point in time, he would have been unstoppable.
“most efficient nuclear device” – because it kills soft targets and leaves the loot mostly unharmed?
I would call a nuclear device aimed at producing maximum EMP most efficient, because it hopefully kills most of the weapon technology and keeps the damage to human lives at a minimum. But sure, I can understand why certain scientists would consider that inefficient ;-(
In 2015 (data are published yearly) US-based companies and individuals were at #1 position as far as international patent filings go. Japan came a honorable second.
Surprisingly enough China came in third, albeit a distant one, beating South Korea for the first time.
If we look at individual companies, the list of international patent filings for 2015 came as following:
1)Huawei (China) 3898 patent filings
2)Qualcomm (USA) 2442 patent filings
3)ZTE (China) 2155 patent filings
4)Samsung (South Korea) 1683 patent filings
5)Mitsubishi Electric (Japan) 1593 patent filings
Notice the patterns?
All top five companies are in the electronics business and, if you take Qualcomm out of the picture, they are all East Asian.
Even more shocking, while the US are keeping their top position, European companies are being served the proverbial thrashing by their Asian competitors at global level: remember we are talking international patent filings here.
As an European I must say I am in awe at the pace European companies are selling off to China Ltd. We’ve lost Volvo, Pirelli, Syngenta, Goldoni, Philips (lightning division), Arbos… and we’ll soon lose so much more.
The number of patent filings is much less important than the quality of never-published trade secrets. I have clients with technologies 50 years old that have never been replicated or patented.
Do you remember the WD40 spray? The company encouraged all sorts of silly rumors about it, from it containing fish oil to the exact formula not being patented for fear of “imitators”.
Back at the Uni somebody brought a can of WD40 to the students’ analytic lab, sprayed some in a test tube and put it in a mass spectrometer. Very interesting findings we had. Over 90% of the composition was short chain or minimally branched hydrocarbons in the C9-C11 range with the rest composed of a few peaks in the C16-C20 range, mostly Hexadecane (the stuff that makes diesel fuel self-ignite) and Eicosane (a very common short-chain paraffin).
This was done by a bunch of university students, not all of them bright, using an already obsolete mass spectrometer, on a particularly slow afternoon. Imagine what can be done by large companies, well funded universities or State-run research institutes.
Agree, and of course part of the difference comes from differences in the patent system. There are many things that can be patented in the US but not in Europe (e.g. in biotechnology or software) so EU companies are more likely to protect their technology in other ways.
For really innovative companies it is often better not to file patents and simply keep innovating and moving ahead of potential competitors. Patenting is great for paper shufflers who get much of their income from lawyers and financial engineering etc.; just think about the infamous patent trolls who are mostly a US phenomenon.
True but how are those small innovators to be protected from state sponsored Hacking, Spying, and straight out breaking and entering theft’s.
All of which china regularly engages in.
The gretest transfer of wealth in history, has been the illegal IP transfer, from the west and Japan, to the CCP in the last 25 years.
Notice the pattern, all technology stolen from Apple and Nokai.
Its not new type of tire, simply a slightly different tire compound.
You cannot patent stolen technology. ;-)
Huawei is simply filling in the void left by Cisco System and other Western manufacturers of telecom and networking equipment which are now more concerned with financial engineering than with telecom engineering.
“You cannot patent stolen technology.”
“Its not new type of tire, simply a slightly different tire compound.”
Meaning they have not patented what the have stolen, simply derivatives of it. which you can do.
don’t get me started about technology stolen by Apple from small companies and patented as Apple invention. They just have the largest lawyer army, innovation amounts to very little lately.
Just remember, Microsoft taught APPL, by doing it to them.
What American Tech has done, is nothing compared to what the CCP chinese have done and are still doing.
The CCP policy of not recognizing international IP, unless it is paid for in china first. Is a deliberate policy of, international already patented IP, theft.
Then if you patent it in china, they copy it any way, as the CCP has it in its patent office, and will supply it to the chosen CCP owned corporate.
At least most of what the American’s stole, was not already patented.
The only way to deal with CCP IP theft today, is through aggressive tariff’s
It is the culture and Asian mindset. Call me racist, but it’s true. It is easier/safer to learn by rote memorization than to think imaginatively. A few examples. I have two antique motorcycles. To buy original Japanese parts is next to impossible, and very expensive. I can buy Chinese knock-offs for 20% of the cost of original parts (even though they are still manufactured by Honda), including delivery to Canada via California. They look exactly the same in all respects, and bolt right on. The Chinese simply reverse engineer the product and copy them. It is also the case with almost all tools. In fact, their knock-offs are so identical you have to stipulate for OEM parts or products. The other example is the nice VFR approach landing at SF intl. You know the one, CAVU day (ceiling and visibility unlimited), and the controller wanted to expedite a VFR approach. The problem was the Korean pilots didn’t actually know how to fly the plane visually and did not have enough judgement about approach/flying basics and how to set up, (something taught in Canada and US after about 5 hours of training). Anyway. They plowed in short of the runway, clipping approach lights and jetty in the process. All this on a beautiful sunny day. They did not know how to fly the plane without automated systems!!
” In addition, Asiana’s automation policy emphasized the full use of all automation and did not encourage manual flight during line operations. ” In other words, they did not know how to actually fly the plane.
https://en.wikipedia.org/wiki/Asiana_Airlines_Flight_214
I taught high school for 17 years. I have had many many Chinese and Korean exchange students. Where I live a Korean education company bought an old youth prison near Campbell River BC, (actually quite a nice facility), and turned it into student barracks. The kids went to public school all day, and then did homework for another 4 hours. Lights out was 9:00 pm….after a 1 hour supper break and an exercise program. The kids were often beaten, and our local teacher’s Union lodged complaints with upper management about being complicit with the practice by accepting the students for the money used to offset reduced Govt. funding. If these kids thought outside the box and/or showed a little spirit, they got the cane….pure and simple.
As far as I’m concerned the Chinese economy works by swiping products and processes from other cultures, and displaces markets through the use of desperate and displaced peasantry. The resulting elite skim, is then reinvested overseas in order for the elites to escape the looming revolt. You know the one; when the music stops and the workers pick up their pikes and pitchforks.
You’re not a racist, you’re just an ahistoricist. China, Korea, et al. have almost without exception gone through a period of rapid industrialisation under brutal Western-inspired (communist/capitalist) dictatorships whose education programmes looked little different from those extant in Prussia during Europe’s period of rapid industrialisation- rote learning, produce functionaries for administration, labourers for factories, and soldiers for the military. IP theft is characteristic of early industrial economies.
If you want to stop apologising for being a racist because you want to ascribe the kind of student that the PRC systematically produces to “the Asian mindset”, you could, say, read any volume of Needham’s “Science and Civilisation in China” and disabuse yourself of the notion that it has anything to do with “Asian culture” in some abstract sense.
My favorite China story is about a NY bank I worked for that got bought out by HSBC in Hong Kong. I got out of there the minute they took over but my ex-colleagues kept me informed. They were coding a big funds transfer upgrade and the Chinese coders were producing code by the ton and making NY look really bad. When the day for the first scheduled test of the system arrived, none of the Chinese code would even compile(turn into usable code). It seems the Chinese coders coded to spec without ever testing one line of the code. None of it was usable. It would never occur to an American computer programmer to not test the code they write. The NY team was just stunned. This is still my favorite China story.
Since the Ming they have been wiping out, and driving out, innovators and entrepreneurs. Mao was particularly vicious and successful, at it.
Now however they have the money to buy up Europe and pakistan when they get locked out of America. Which is what they have laid the ground work for already.
As Europe goes broke and Germany holds on to its technology, italy will sell them its Hydraulic industry’s, which will give them cheap,Tires, Lighting, Detergents, Textiles, and Hydraulics.
Even a big county can live on those commodity export industry’s.
China raced to meet the 20000 Western millennium deadline, and succeeded in launching the first mag-lev train system, (yes, with the help of Germany, whose archaic bureaucracy had blocked such a system there. The news was practically blocked in the U.S. Three months ago, China launched the world’s first quantum satellite, designed to establish ultra-secure quantum communications by transmitting uncrackable keys from space to the ground. Nothing vaguely like it exists in the West, where Americans on a daily basis are subject to extortion by on-line hackers masquerading as the IRS- or even the FBI itself. And yet people such as this lady inform us they are merely copycats- “yeah, yeah, stop yelling me they invented gunpowder and spaghetti- what have they done since?”
But one Chinese invention, fiat currency, has been a real disaster, and the world people’s failure to control it is creating the amazing financial nightmare we are now seeing: what is described here as “capital flight” could simply be the accumulation of real-world assets abroad coming off a printing press! They were just hailed as worthy of inclusion into the magic SDR “market basket” and promptly devalued the yuan- which means “printed up another sh*tload of money to buy stuff with.” And this is supposed to be a problem for them? No, it is a problem for everyone else.
At least you understand that they are buying up the world, with their now SDR acceptable pretty toilet paper.
Have you research the fact that how much toilet paper they say is in circulation and on bank balance sheets is about 10% of what it actually is.
My impression from the biotech/medical field is that the main problem is that most Chinese have learned not to challenge authority. Innovation is not just being ‘brilliant’, in reality many inventions are not new or brilliant at all and the ‘inventor’ was just the first one to file the patent or forge ahead because they managed to get the money or convince customers that they had something useful. Innovation requires a mindset that has been discouraged in China for some time (and probably is being discouraged in the West now too …).
I’m sure the Chinese are at least as clever as people in the West, but if people with new ideas don’t dare to vent them much of it will remain unused. I think China is aware of this problem but it is difficult to change; hopefully they will not try to solve it by copying the education system of the West which is getting more dysfunctional by the day especially when it comes to ‘independent thinking’.
I think some people “fob off” China as a joke that will collapse. But they already have a space station and they are already putting people on that space station. They are building huge infrastructure across Central Asia towards Europe and Africa with their “One Belt, One Road”. This project is already 12 times larger than the Marshall Plan that reconstructed Germany after WW2.
Here is a link to a very in depth article about the whole project:
http://larouchepub.com/hzl/2016/4348hzl_peru_econ.html
Or is this “fake news”. Who knows any more. The only book I know that isn’t fake is the Bible and that one line should start a whole heap of mud slinging and fake news on its own.
You’re a little ahead of our times. The Chinese are PLANNING a space station. They don’t have one yet, and obviously, they have not yet sent anyone to that space station that doesn’t yet exist.
And that rail link across Asia to Europe has existed for a long time. I know, I traveled on it in 1996, and it was already old by then :-)
Now they’re trying to build a faster one … but it’s just in the early stages and it’s going to take a while. Its main benefit will be to tie Asian nations commercially more to China.
This must be fake news. Add BBC to the list.
http://www.bbc.com/news/world-asia-china-37700404
Remember how the BBC female reporter was seen on live TV reporting the collapse of building 7 on Sept11th 2001 while it was still standing in the background Talk about “fake” news They take the cake And wasnt the monsterous Jimmy Saville afiliated with them as well?
That is not a long term habitat, it is a short term cramped even by space standards facility.
But yes they are reinventing the wheel.
OK this thing might not yet be an official “space station” as presently it is a “space laboratory”. It was launched on 15th September 2016. On October 18th 2016 two taikonauts docked with the space laboratory and will spend 30 days at the “lab” carrying out experiments.
https://www.nasaspaceflight.com/2016/10/shenzhou-11-docks-tiangong-2-latest-chinese-space-station-mission/
Maybe NASA are fake news as well. So just where are you going to draw the lline ?
Sounds right.
For sure the current Chinese train system is miles ahead of what we have in Europe. Our trains are still running at the same speed as 50 years ago, about 150 km/h max or slower. And the service is far less reliable than 50 years ago. Yes, there are some high speed trains in France, Germany and a few other locations but most of them are very expensive (for the elites) and not efficient due to all kinds of political meddling. e.g. in Netherlands and Belgium there were some experiments with high speed trains which in reality were only a bit faster than a normal train because they mainly connected the two political power centers and skipped several of the big cities. The latest Dutch high speed rail project ended with no trains at all and a huge cost to the tax payer all thanks to politics.
Probably some parts of the Chinese system are outdated but much of what they have is far ahead of my part of Europe. Just watch the millions of ordinary citizens traveling huge distances on high speed trains for Chinese New year …
The Chinese are looting the fed and no one has any idea its going on?
The fed calls it inflation the Chinese call it deflation?
The gods call it “the primal forces of nature”?
Its not capital flight if the stewards at the fed thank the Chinese for the added liquidity?
It’s kind of crazy how open it’s getting, which I think means that the inner circles in China are now talking often enough about the end of growth and the onset of serious resource constraints that snatches are leaking out to the upper levels of the klepto- and techo- (techne-?) crats of the CCP (business leaders, generals, well-connected functionaries and cadres). The CCPcrats are then moving assets out of the country both on an institutional level (mergers, acquisitions, rights deals, trade agreements) and personal (kids to universities overseas, buy property on West Coast NA or “Global City”- anyplace with large financial or industrial concerns).
At some point I think it’s going to become generally realised that the B-school line on China has been a bunch of chaff produced by people who spent most of their time there in Beijing and Shanghai (perhaps diverting to Suzhou if they’re getting Cultural). I haven’t been there for 10 years but it was clear even then that the local line on the alarmingly polluted rivulet called “the Yellow River”, which I will paraphrase as “This is China, We Will Build Another Yellow River”, was not going to do well pitted against Reality. Since then things have gotten MUCH worse. Water is a problem. Food is a problem. China is entirely dependent on imports of food to avoid major shortages. Chinese production quality is spotty and overcapacity is rampant. The capital buildout has been conducted almost entirely from an engineer’s perspective- what we need is more logistics, more capital formation, more urbanisation, more accretion of easily-gamed infrastructural categories that let you build potemkin structures at a fraction of the cost of a safe one!!
So, this is going to get resolved somehow. My bet is that as the global trade chill sets in and people start to look to reducing their dependencies on what are increasingly perceived as unreliable partners, China is going to have to expand its imperial domain by military force. SEA will be bullied into becoming tributaries again, bits of India may be chipped off, the Aksai Chin will receive special high-altitude shelters for year-round occupation, etc. This will be coupled with overseas ventures (“soft” African colonialism etc) which may extend the life of the CCP until contention by other regional powers and (domestic + colonial) environmental destruction put and end to the profitability of these activities. At that point, attention turns inward as unrest sets in and a warlords period sets in. That’s one possible trajectory, anyway.
From the foreign perspective- get ready for a lot more of those nervous sons and daughters of CCP officials coming over with briefcases full of cash. They’ll be anxious to get some kind of asset, fast- but it need not be real estate if that’s too difficult or if it’s fallen off a cliff. The great Chinese Asset Wave that has been sloshing around between stocks, commodities, RE, etc in China will begin to exert some serious wave action over here. God willing all of the Western powers will be too busy turning inward to deal with their own issues to start stupid regional scraps (or world wars) over China’s own need to undergo a round of capital destruction and political reformation.
At least China has some good plans to clean up their environment and build a sustainable economy and they have already made some promising changes e.g. with permaculture, reforestation, sustainable energy etc. But the problems are massive, they cannot be fixed in a few years and they first need more ‘money’ before they can tackle these issues throughout the country. It remains to be seen if they can solve the environmental problems before time runs out, but I’m sure the intention is there.
Incidentally, much of the pollution problem was produced by engineers and financial managers from the West (or educated in the West) who took advantage of the Chinese corruption and lack of oversight.
“Incidentally, much of the pollution problem was produced by engineers and financial managers from the West (or educated in the West) who took advantage of the Chinese corruption and lack of oversight.”
Never forget to falsely blame the west for all evils. Those engineers and developers did it that way, as they were encouraged to, by the Maoists. Now the Indians are doing the same.
Mainland CCP chinese come to our green country, and dump their industrial waste, anywhere, except where they are supposed to, as they dont want to pay, to correctly dispose of it..
Untill we had an immigrant CCP and Indian business population, we did not have an illegal waste dumping problem.
@d:
companies moved their production to China because of lower wages (then, no longer really the case) and because they could get away with pollution that was no longer tolerated in much of the west. Increasingly I see that type of activity now moving e.g. former Eastern Block countries and Ukraine that also have very lax environmental protection and sometimes lower wages nowadays than China.
You make it sound like the Chinese singlehandedly invented environmental pollution, but their current situation is similar to much of Europe (and probably the US) in the 1950’s or so, when they were growing quickly at a huge cost to the environment. And I predict that China will be faster than Europe in cleaning up.
The difference between china INDIA, and the west, is that they know/knew it is wrong, and do/did it any way.
Whereas in the west, Industrialization ran away, in an unregulated and genuinely ignorant environment.
There was no need to make the mess in china (which is huge) the Maoists simply chose (like india has) rapid development and greed over long term environmental damage. due to the short-term greed of a few.
Mao changed china negatively, for ever, and turned the mainland chinese people into Immoral, selfish, unethical, locusts, Very unpleasant ones. The Mainland chines today are not even vaguely related to the Pre Maoist taker over, society, or culture, except by Genetics.
You are of the school that blames America, the western industrialist, and bankers for all evil. Which is very wrong.
Make in india, WE DONT CARE . How much Environmental damage you do, or how many you kill, as long as THE INDIAN ELITE PROFIT.
Give any profit driven Globalized Vampire Corporate, that sort of invitation and they will take it. Just as they did in china.
You blame them for taking, it as opposed to blaming those in power, who knew it was wrong, and did it any way, as they wanted to skim the process..
Is the number/graph on China Forex reserves correct? In billions? In China everything is in the trillions (including NPLs :)). So please check that graph and figure.
Your blog is pretty advanced and good.
Thanks. Yes, but I fixed that first thing this morning. So I’m not sure why you’re still seeing the un-fixed page. Maybe it was cached.
On that subject, I’m gonna hazard a guess: actual assets that are insanely leveraged across an insane web of fake IOUs that will never can be redeemed when shit hits the fan but yet somehow counted as actual money.
Nope, that sort of arrangement will never become a problem. Right?
China’s billionaires and their corporations were on a major overseas shopping spree that got their cash out of the mainland and put it to work around the world.
Tip for XJP and the CCP, send a strong message to the populace, just like the Imperial Emperors and the old CCP used to do. Have a few well know culprits (billionaires and bankers) shot for continuing to ignore the rules. Maybe have a couple of expat banking and RE (laundering) expats shot as well and watch the popularity of XJP skyrocket amongst the average Chinese.