China next for an economic crisis?

China will struggle when the West can't afford, or indeed want, the cheap stuff they make any more.
 
Purple said:
China don't just make cheap stuff, they make everything.
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Very important point. I've heard too many times people commenting on cheap Chinese stuff with the indication being towards crap made of plastic that you find in crappy Christmas crackers.
But it doesn't take much to point out the obvious by just mentioning laptops, iPads, iPhones, electronic components for luxury cars, designer clothes and accessories, the list is endless.
The cheap crap is a minuscule part of Chinese exports.
 
When discussing the quality of Chinese goods you need to distinguish between goods made in China where a foreign multinational controls the quality process of the factory and the suppliers, as against goods made by Chinese companies that do not have the quality systems that the multinationals require.
A product from a Sony factory in China has the same quality as from a Sony factory in Japan.
 
And computers made by Chinese company Lenovo are of good enough quality to be used by many multinational corporations. The Chinese tyres on my car, made in China by a company that originated there, are as good as the Eurooean ones that my car came with.
Components in electrical equipment are often made in factories that their customers have no influence on; their customers have the ability to choose from hundreds of companies to get the quality they need without directly running quality control. The same goes for factory assembly line equipment.
 
In the 1350's almost half of the manufacted goods in the world were made in China. They are returning to what's normal for them, not becoming something new.
 
The 20 year plan for China hitting the right point. When they can do the change from an exporting country and build up their consumer market (cf. "Purple")
 
China economy is unpredictable and need to see what they will do to overcome from this.
 
Purple said:
In the 1350's almost half of the manufacted goods in the world were made in China. They are returning to what's normal for them, not becoming something new.
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The Chinese miracle is beginning to get stuck on several fronts, companies in the US re-shoring or moving to lower cost centres notably Mexico as it's closer to market with shorter runs, workers being replaced by robots with Fox Conn losing one million workers to robots (robot penetration in China is about five times lower compared to the US or Japan ), Chinese banks hiding the mother of all debt bombs, wage rises making the country uncompetitive, foreign companies concerned about copyright infringements, overpriced property market, power supply issue to factories (this is a problem throughout Asia though) and today the World bank markdown on growth by 50bps to 7.5% even though better than expected US retail sales and jobs data announced was then offset by an unexpected fall in prices for US imports and exports signalling cooler economic growth worldwide (cargo grew 6% on the Baltic Index last year to 16.3 TEU containers - so it's not all bad out there, the worlds still spinning).

But the Chinese miracle to continue needs growth rates in excess of 10% with the huge numbers moving to the East coast. Still it's a very impressive country, daily new cars sales greatly exceeds the yearly amounts for Ireland. They love there Western goods and it's been bumper times for many quality German manufacturers that have been dug out of a hole with European sales sliding down the drain yoy.

Btw Ringledman- have been watching Japan closely and the fundamentals are amazing. The topix index has been soaring, but have been put off by the expectation of Yen a depreciation, and also the fact net government debt as a proportion of GDP remains off the chart and worse than Irelands or Greece!

What’s going on? Seems strange considering the JP GDP figures are acknowledged as being much better than expected when considered against de-population over the last 10 years, and many wondered why confidence was good, shops busy but this did not reflect in the statistics. What's you viewpoint on Japan. It had been in the wilderness for years, spiked recently, and not suffered from the profit taking sell-off at the moment in most emerging markets.
 
Very interesting views; From a Donegal View China has .
1. Too many people.
2. Not enough arable land.
3. One child policy has skewed the Demographics.
4. Not enough natural resources.
5. Not enough water.
6. Are creating a 2nd class citizenship on the people migrating to towns.
Bad so far , but this China, has
1.Taken 700 million out of poverty.
2. Has maintained social cohesion.
3. Has vastly improved infrstructure.
4. Has catapulted itself into a manufacturing collosuus.
5. Now are setting up a space station.
6. Changed leadership without upheaval .
7. Their people seem to be happy enough.
8. Their people seem to generally accept their style of Communism.

I wish them well.
 
Watching BBC New at 10 last night and they were making the claim that due to the slowdown in China, the Chinese were dumping steel on the international market at a loss, which is being blamed for the lay-offs in Port Talbot...
 
Firefly said:
Watching BBC New at 10 last night and they were making the claim that due to the slowdown in China, the Chinese were dumping steel on the international market at a loss, which is being blamed for the lay-offs in Port Talbot...
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Between the downturn in the Chinese economy and the oil industry (a massive user of steel) the price of steel has plummeted and so Chinese producers are flooding the world market. To put it in context China produces half of all the steel in the world, 5 times as much as the entire EU. The EU taken as a unit is the second biggest producer with Japan and the USA third and fourth. Up until 2014 China consumed about 90-95% of it's own production.
 
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