# CHINA: What more needs to be said!



## YOUNG_TRADER (11 July 2006)

It seems like theres no stopping China!

Looks like the stronger for longer Resources Theory is holding up!

China says feed me I'm hungry!!!!!!
Austalia should keep all this inflation mumo jumbo quiet and feed the great Red Dragon all the Iron Ore, Oil, Uranium, Zinc, Copper, Nickel heck whatever it needs!


China’s Exports Just Keep Booming: So Too Car Sales
July 11 2006 - Australasian Investment Review – (AIR) 

China has just recorded its biggest ever trade surplus: a record $US14.5 billion ($A18.7 billion) in June as exports surged.
That was up from May's figure of $US13 billion and came on the back of a 23 per cent jump in exports, compared to June 2005.

Exports totalled $US81.3 billion in the month, while imports rose 18.9 per cent to $US66.8 billion. 

*China's surplus with the rest of the world has jumped a massive 55 per cent to total just over $US61 billion for the six months to June, which puts it on track to easily top last year's record of $US102 billion.*

*This surplus has risen despite paying more for products like coal, iron ore, oil, copper, aluminium, zinc and a host of other commodities.*
*
The 3.5 per cent revaluation of the Renminbi, China’s currency, a year ago has had no impact*

The Chinese government however is trying to curtail the economy: reserve requirements have been lifted on property deals, interest rates have been increased and banks told to lend less.

Another sign of this hot economy was also given yesterday with the latest figures for car sales.

*They rose almost 50 per cent in the six months to June: the China Association of Automobile Manufacturers reported total sales in the June half of 1.8 million units, up 46.9 per cent from the first half of last year.

The increase was equal to around 11 months of car sales in Australia, from all sources. * 

Recent figures have shown a continued revival in sales following a slump in early 2004. Vehicle sales rose 21 per cent last year and 15 per cent in 2004 after that early slow down.
The surging car sales is a symptom of the boom across China (just wait until the pollution from all those cars is added to the existing levels of pollution in the country.) which is causing problems for the government.
*
And all that Australian iron ore, aluminium, copper and zinc being used in all those cars: its one very good example of what our exports to China will continue to boom.*

The foreign exchange earned from booming exports has seen China's reserves to $US 875 billion (more than a trillion $A), the world's largest: an updated figure is due for release within the next week.

In turn the immense liquidity has financed and continues to finance this investment boom, car sales and the soaring level of consumer purchases.

Chinese demand has driven the boom in commodity prices over the past 18 months, which in turn has lead to an outbreak of inflation in countries like the US, in Europe and here in Australia.

It's not the only reason: Iran, the Middle East generally and North Korea are helping unsettle oil markets and drive prices higher but that strong Chinese demand (and rising demand from India and indeed the US and Japan) have helped underpin commodity prices.

Some analysts expect the trade surplus to reach $US130 billion by December (that would be around $A180 billion at current values for the Australian dollar).

The trade surplus will accelerate in the next six months as retailers in the US, Europe, Australia and elsewhere take delivery of goods for the big end of year holiday period when retail sales peak.

But while Americans are benefiting from the low-priced Chinese products, American manufacturers are not happy. They are continuing to lobby for controls or extra duties on Chinese imports because of China's controls on its currency.

But like so many muddle heads, these US businesses are missing the point: labour cost, plus the rising use of new technology, is why Chinese products are still cheap, not a relatively fixed currency.

China is running a huge trade surplus with the US (it was $US200 billion last year); it’s a mid-term election year with the campaign for the November poll about to swing into top gear: watch out for more China bashing.


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## Sean K (2 August 2007)

Interesting article in The Australian.



> *China close to turning point*
> Rowan Callick, China correspondent | August 02, 2007
> 
> AUSTRALIA'S most influential economist, Ross Garnaut, forecasts in a report that China is at an historic economic and social turning point that will lead to an even bigger appetite for resources at higher prices.
> ...


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## CanOz (2 August 2007)

There is no doubt in my mind that this place will keep growing at a rapid pace. There will be however, normal business cycles taking effect. 

One interesting thing here now is the increase in the prices of everyday needs, such as food, gas, coal....people are complaining about the increases they are seeing....its inflation...welcome to capitalism.

Cheers,


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## >Apocalypto< (2 August 2007)

CanOz said:


> There is no doubt in my mind that this place will keep growing at a rapid pace. There will be however, normal business cycles taking effect.
> 
> One interesting thing here now is the increase in the prices of everyday needs, such as food, gas, coal....people are complaining about the increases they are seeing....its inflation...welcome to capitalism.
> 
> Cheers,




Totally true Can I even noticed it this year compared to 04 when I was in shanghai.

Prices of general shopping needs have risen and taxi fares is another one.


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## CanOz (2 August 2007)

Trade_It said:


> Totally true Can I even noticed it this year compared to 04 when I was in shanghai.
> 
> Prices of general shopping needs have risen and taxi fares is another one.




Went to Shanghai just this past weekend. Its expensive there hey! Its almost no different to Australian prices at western bars and restaurants, i was relieved to get back home to sane prices.

Cheers,


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## Rimtalay (4 August 2007)

*The West Australian (Perth) *

August 2, 2007 Thursday 

* 
China?s boom to last 20 more years *

SHANE WRIGHT 


The Chinese economic boom, which has fuelled WAs unprecedented economic strength, will run for at least another 20 years and be unlike anything in world history, a report by leading Australian economist Ross Garnaut has found. 

Professor Garnaut, who has been commissioned by the ALP to compile a report on the cost to the Australian economy of doing nothing to stop climate change, uses a special paper commissioned by mining giant Rio Tinto to claim the Chinese boom fuelling the surge in the WA economy is going to intensify.

His report puts him at odds with Opposition Leader Kevin Rudd, who said in Perth yesterday that the resources boom would eventually end, forcing Australia to look at other ways to develop its wealth.

*But the new report shows Professor Garnaut expects demand for WA commodities such as iron ore and nickel to grow to extraordinary levels and that prices will remain high.*

If correct, Professor Garnauts report has huge implications for WA economically and socially. Such a prolonged economic expansion would put more stress on already-stretched labour and housing markets.

He finds that once the average per capita income in a country hits $US2000, demand for metals and energy increases rapidly. Per capita income in China has just reached $US2001.

"China is entering a per capita income bracket where demand for metals and energy relative to population is likely to increase dramatically," Professor Garnaut and fellow report author Ligang Song said.

*"If the expected relationship between income per capita and metal and energy demand is maintained over the next 20 years of Chinese growth, then the country is entering a period of resource-intensive demand unique in world history.*

"In 20 years, assuming there is no dislocation to this growth process, China is likely to consume more energy and metals than all of the industrialised economies today."

Rio managing director Charlie Lenegan, in a preamble to the report, said the authors had found that the China boom, far from being about to end, might just be gathering pace.

"Chinas growth will be vastly more resource intensive," he said. "This implies that the pressure of Chinese demand on global resource markets is now only in its early and moderate stages. Minerals prices will remain, on average, much higher in real terms than has been the case in the last quarter of the 20th century."

The reports findings are in stark contrast to warnings from Mr Rudd this year that the resources boom is likely to come to a halt.

Campaigning with the ALP candidate for Stirling, Peter Tinley, yesterday, Mr Rudd said all booms had to end.

"You simply have to prepare for the day when the boom is finished," he said.

"And you know something, if you read economic history, you know that booms come and booms go.

"Do we want it to continue? Of course we do. But what we know from economic history is that its not infinite and therefore smart, long-term economic planning lies in this."  

Kevin Rudd: A Labor report is at odds with his views on the economy. 

August 2, 2007


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## noirua (4 August 2007)

The recent toy saga in the US this week may be just the start of an anti-China drive. The US can see the growth rate of China at 11% per annum and this could put China increasingly closer to the US's $6.5 trillion worth. 
Fair enough for now, as China has only just passed the UK to take 5th position in the World and needs to rise 560% to pass America.

Interestingly, the two riches countries in the world, when population is divided into area, is not America, Japan, Germany or China. It is infact Canada and Australia.


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## noirua (10 August 2007)

Cough, cough, cough as they breath in the Olympic fog or is it smog or interestingly we could have a peasouper (dry ice fog) as the games start. Probably, and more likely, it's all jealousy as the Pyramid like solid progress continues.

Now what for China though, as the USA stares recession in the face and Europe catches a cold.


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## chops_a_must (22 August 2007)

CanOz said:


> One interesting thing here now is the increase in the prices of everyday needs, such as food, gas, coal....people are complaining about the increases they are seeing....its inflation...welcome to capitalism.
> 
> Cheers,




What is China's economic growth rate?

What is China's inflation rate?

Should I rest my case?


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## uhu (22 August 2007)

Breaking news...

Chinese goverment allows chinese citizens to buy hongkongian currency and buy    stocks in the hongkongian market.
The "H-stocks" (chinese stocks in HK) are undervalued 20-30% if wee see their prices of the sanghajien market.

So, in middle-time rising of H-stocks is likely, at least my broker says this.

However, I won't buy stocks in Sanghaj and HK...I don't trust chinese gov., I am not enough brave...


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## Temjin (22 August 2007)

I'm still interested to know how much of the growth in China rely on the US consumers? What happens if US goes into a recession or even a depression? Both of which are likely to come either from the recent credit crisis or if not, the baby boomers  rapidly cashing out their assets and bankrupting the US government on medicare and pensions. 

Obviously, if external environments aren't negatively affected for the next 20 years, no one is going to doubt that China will continue to grow with the demand of natural resources to increase even further. But by making the assumption that the WHOLE world will continue to run in a booming mode for the next 20 years and that China is NOT dependent on external factors at all for their growth rate is simply stupid and naive.


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## drillinto (23 August 2007)

Scan your Chinese stocks:

www.chinesebulls.com

www.HongKongBulls.com

www.TaiwaneseBulls.com


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## Shane Baker (23 August 2007)

Hi Temjin

The article at the beginning of this thread might help.



https://www.aussiestockforums.com/forums/showthread.php?t=8013




Cheers

Shane


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## Flipper15 (25 August 2007)

There will always be competing views as no one can absolutely predict the future with certainty.

So for this reason if you are looking 10 to 20 years ahead there must be a small risk to the China, India etc story. But in my view only a small risk.

On balance of things I believe that it is highly likely that it will last for many years to come. Possibly for numerous decades.

The biggest risks to these Asian juggernauts are likely to be environmental.  Pollution to air, rivers etc could if they can't control it slow the growth up.

But once these people get a taste of a better life they will not and would be reluctant to go back to their previous style of living.

As I heard Chip Goodyear say, once the jennie is out of the bottle it is going to be hard to get it back in. Over 2 billion people in the world industrialising at around the same time surely has never happened in history before basically because of the shear numbers involved.

Also the world has so many more products than ever before in history.

Plasma's, LCD TV's, mobile phones etc did not exist 50, 100 etc years ago.

So we are in unprecedented times relative to the past (which is the only thing we can try to compare to).

So while I acknowledge that there are some risks to this growth, if governments can manage these risks to some extent then good times should continue.

In this environment Australia will continue to dominate as we have an abundant supply of what these countries want and need.

What do others think ?

Flipper


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