China's 3rd Plenum: what the "smart money" thinks

Forbes ^ | 11/10/2013 | Bill Fischer

[TexGrill]

For most of the thirty-five or so years that I’ve been in the China-watching business, the easiest question of all to answer has always been: “Tell us what will happen next?” Easy because the best answer has consistently been: “Pick a point sufficiently high on the chart, ten years out, and China will reach that.” It might not have followed a straight path in actuality, but at the end of the ten years, the extrapolation – which was always somewhere between 8-10% — was pretty nearly always essentially right. True, some years, 1989, for example, were more challenging than others, but over the long run, the past was always a good predictor of the future. That was, until recently.

The last few years have proved more difficult for China. Growth has been less reliable, and linked to Western economies by its reliance upon exports, and infrastructure investments tied to those same exports, China’s economic fortunes have to some extent been held hostage to our own anemic growth. In addition, internal social issues over environmental degradation, labor conditions, corruption, heavy-handed local administration and economic inequities, etc., have made China an even more complex place to govern. All in all, day by day, managing China is less and less easy for the guys at the top. Which raises the question: what are they going to do about it? There is good reason to believe that in the next few days, we’ll get a glimpse, or maybe more, of what’s in store for China in the near-term future.

[TexGrill]

Global business tip

[1rudeboy]

Thanks for the “global business tip.”

[TexGrill]

You’re welcome. Last week I was in Malaysia getting sunburned on a beach and today I’m in Beijing in below freezing weather. But even on the beach I wanted to read Free Republic. Does that make me a Freeper addict?

[Yo-Yo]

How many ghost cities can China afford to build to maintain their targeted growth rate?

[TexGrill]

China builds ghost cities on account of ChemChina a state-owned enterprise. ChemChina produced a glut of steel and need Beijing to pay inflated prices for steel so that’s why ghost cities get built. Meanwhile, China’s GDP fugures are fake. Last night on Chinese news, a newscast accidentally showed the real GDP for 2 seconds before catching the mistake and showing fake GDP growth rates. Apparently, China’s current GDP is -3.4% for the year.