Author: greendragon

The coming shock, let's be prepared! [Copy link] 中文

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Post time 2010-6-23 12:52:54 |Display all floors

Guangdong-Hong Kong 2010!

Guangzhou Automobile Industrial Group - Automobile sales in 2010 expected to be 700,000 units (with motorcyles, bus) worth Rmb150 billion!

BYD Company - Automobile sales in 2010 expected to be in the range of 800,000 units!

That means Guangdong produces 1.5 million units of Automobile!
Guangdong alone possess some 12% of China's automobile market, number 1.6 million units in 2009!
To move to higher a income level, it would need to double the "higher value added industry", allowing the "assembly industry" to move to lower income provinces surrounding it!

This means BYD, and GAIG would need to produce more than 4.0 to 5.0 million units by 2015-2018 period! With surplus units availble for export to it's surrounding provinces and in the export markets!

GUANGDONG blazes the trail again in China's grand economic remaking!

cheerios!

Green DRagon
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Post time 2010-6-24 05:55:14 |Display all floors
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Post time 2010-6-24 12:32:37 |Display all floors

Reply #44 jordan_c_fan's post

That should be the game plan!

Otherwise Guangdong will suffer from trade defisit!
It does not have the CREDIT CREATION of central government!

hmmmm

not so true since LOCAL GOVERNMENT used land sales to create credit equal to 100% of GNP!

wa ha ha ha


Green DRagon
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Post time 2010-6-29 11:32:43 |Display all floors

STRESS time for Guangdong, and Yangtze Delta!

Change, fast change coming!

SAIC is raising money to increase production capacity and investment on a domestic label model. GAIC will be introducing it's domestic label automobile this year! - Wonder when we will see the unveiling of the new models as promised!

hmmmmmm

Foxconn moving away up to 150,000 post from Shenzhen!
blurrrfffff!

Marvellous!

Green DRagon
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Post time 2010-6-30 13:14:39 |Display all floors
The shock better comes sooner than later - the longer the current unhealthy development goes on, the bigger the shock will be. And, I'm afraid, the shock is about to come, as it looks like:

The chinese housing market is currently the biggest bubble in the world. Chinese government (esp. Wen Jiabao) was smart enough to see that and took measures to prvent the bubble from growing even bigger. Now, in a lot of Chinese cities, the real estate prices are collapsing - in Shanghai, for instance, more than 20% per month! That might be a nice thing for those vast amoung of people who are willing to buy houses - but in the short term, it's a big threat to Chinese economy (while in the long term, it will help China to develop healthier). In 2009, 62% of China's GNP was created by building houses - that's nearly two third. Now if prices are droping and at the same time, less credits are available, there are not incentives anymore to go on building.
But what happens with those 60 Percent of China's GDP? Will it collapse?
It would. But the Chinese goverment is not stupid and invests billions in building infrastructure, which helps to reduce the impact. Anyway, billions won't be enough to keep a trillions industry alive... In addition, the local governments are earning much less, as they've made a lot of money with the real estate bubble - and can't go on doing so.

So that's why currently, appreciating the Yuan would be stupid - and dangerous. Not only to China, but to the whole world - including america.

The good thing is: China gradually emerges from a cheap economy to a more sophistivated economy (as the gov calls it: "economic upgrading"). This is painful now for a few years and the GDP growth the government is reporting is just based on inflation. So therefore, Chinese people are currently poorer than like one year ago and there is less investment capital available.
But in like 5 years, when the whole process is finished, everyone in China will be richer - people can afford houses again and the economy concentrates on more sophisticated products. We can just hope that the Shock won't have a too big impact on people's life.

However - the shock today is the growth of tomorrow. And that growth will be the wealth of tomorrow. So the shock today is tomorrow's fortune.

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Post time 2010-6-30 13:30:18 |Display all floors

Reply #47 Everynowhere's post

Construction is not as high as 60% of GNP - don't be crazy!

Wa ha ha ha

More like now the CENTRAL GOVERNMENT has at least fiscal income of equivalent to10% of GNP to further improve thecondition of the State! China has State Revenue of at least 22% GNP and can spend additional 3% more of GNP to expand the economy!

Thank goodness, China's exports are mostly in the lower end, so the effect will not be so great if there is foreign credit squeeze!

Wa ha ha ha


Green DRagon
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Post time 2010-7-1 12:28:38 |Display all floors

The game is getting exciting as Americans rethink their plans!

ON new conditions in China!

900 giga electricity production in China, on 25 to 27 million vehicle market in China + Asian Trade Route States!
and 1.0KW capacity/citizen in most of the Asian Trade Route States except Thailand - short of hydro, gas, nuclear plants or domestic energy source!

hmmmmm

Consider, consider at the Obama Administration!
High unemployment, What impact to China?

hmmmmm
Where's the PROZAC?

ha ha ha

Green DRagon
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