IS THERE A BUBBLE IN CHINA’S ECONOMY?
24 August 2010 by Staff
8 Comments
There has been a great deal of chatter in recent months regarding the Chinese real estate bubble and the general economy. Stephen Roach, Morgan Stanley, Jim Rickards, Omnis Gourp, and John Rutledge, Chinese Academy of the Sciences hash it out:
I’m a little confused about the assurances people make about China and how the government can allocate capital so well. How can one honestly expect a few mandarins to properly allocate capital, and if so, do it without corruption?
Uhm, corruption is rampant in China. Bribes, tax evasion, and keeping multiple sets of books happen all the time. I don’t have any references offhand, but you could probably find some on Mish’s blog.
Funny thing. Mish’s Blog is blocked in China. But there are plenty of unblocked bearish blogs on China out there.
I don’t think anyone really knows what is going on in China’s economy. Only a bunch of govt officials in some back office know the real story there. My mom taught me that when something seems too good to be true it probably is and the Chinese economy seems too good to be true.
2nd that. I’ve done business in China for over 12 years, what struke me at first is everyone I did business with always lied really heavily, at first it offended me, but I came to relize it was part of their culture, I did’nt view it as bad or good in the end, it’s just different. In the end I got used to it and therefore it did’nt matter anymore, I just needed to know the reality and I was somewhat fine.
Don’t mean to offend anyone but that was my experience.
GB, my experiences mirror your experiences. I’ve been to China over 30 times since 1998 while working for 3 multinationals. Which part of China do you visit? I spend most of my time in SZ/ZH/DG.
The definition of “done” or “completed” can be very elusive. Outright lying is of norm and somehow accepted. Influence peddling via lavish dinners, saunas, KTVs and of course paid friends. I used to decline the saunas/massages and KTV girls spending nights in my hotel room gratis but frankly got hooked on the freebie actions.
I am mainly in Shanghai area and Guangzhou/Shenzhen. Many problems importing, many.
If you can manufactuer it here and deliver with some choices you should do ok, buyers want on time shipments from reliable suppilers, with no ocean freight rate inceases at the drop of an hat and strikes from doc and rail workers,lots of plus’s to making here, though I would be very careful with capex at this moment in the econ situation.
I geuss Asia is not as cheap as it was and negatives are out weighing the positives that used to exist in Asia. I believe it’s coming back here, certain manufactuering that is. I will be looking for manufactuers here in North America and UK over this next 12months.
Don’t know if your industry feels the same
everyone post here is so courteous, is it a shill. why concern yur goodself with the china man whos been thro century of depress suppress, which i surmise is toughening them so they would come thro fine. look at the whole smear we got here. sure would love to see postings of anecdotals how are coping here right here.
hard ball