Banking in China (political)

Politics Taiwan Politics
41

[quote=“cctang”]

I think the emphasis on the NPL ratio (and possible negative equity) is a little myopic. Total NPL as a percentage of GDP is more than manageable, far more manageable than Gordon Chang predicted only 3-4 years ago. [/quote]
Using the easily refuted hack (Gordon Chang) to bolster your argument, eh? Gordon Chang is a nutjob, but that still doesn’t change the present reality where nobody can claim to have accurate figures on NPLs as a ratio of GDP.

[quote]
I had 200 RMB in cash + government ID, and walked into the local branch of BOC in a non-first-tier Chinese city. I waited in line about 10 minutes, filled out a form, talked to the service rep at the counter for about 10 minutes, pressed a button indicating whether I was “pleased” with his service (he was pleased I gave him 4/4 stars), and walked out with my debit card. I walked to the store next door just to check it out, and was able to pick up for my cousin a nice fake-leather jacket for 100 RMB, paying with a swipe/sign.[/quote]
No sensible person would argue that improvement in retail services means nothing, but this is only a small part of what banks do. Until lending decisions on the mainland are made based on market principles rather than political edict and connections, improvements in retail service will only be seen as cosmetic changes by the long-term investor. Improved retail services do not a well functioning capital market make.

42

Can anyone get an idea what also NPL’s are doing for China.

Imagine this case:

“I am medium-big guy CCP. I own a factory producing towels. The total cost per towel are at about 1RMB. The total production this year was of 1.000.000 towels, which I sold at an average 0.6RMB, because I just had to sell them. So I ended up loosing 400.000RMB this year. As I need the money to get going next year, and my assets are allready all bad from previous loans that I am finding dificult to pay, I have to use my guanxi again in the local bank to get some more money, otherwise I will have to close and fire all the 200 employees my company has.”

In the end, what banks do is nothing more than establish a kind of subsidy to production to help the competivity of the Chinese companies. Because we all know that is so completelly normal that Chinese products show up below cost price, that somehow somebody must to be putting money to cover up with the gap. And a reason why NPL’s are and should be accounted for the GDP, is that a NPL for a company and a subisdy are not that different in the end. And if most of the government money is put to help the companies to sell at a lower price, that creates an inbalance between China and the rest of the countries. The problem goes also to the fact that this is very dificult to prove, as we all know that accountancy in China is the equivalent to a novel writing.

43

And furthermore, China needs a better way to fund government projects than directed lending at state-owned banks. It is part of the old old story of the centre trying to control the provinces. The retail, commercial, and government departments of the banks need to be demarcated before anyone can even begin to guess at what these banks are doing, have done for the past 10 years, or might do in the next ten. Retail banking in a teeny weeny portion of their business, and genuine lending to private businesses is also tiny. In reality the governments, central and provincial, maintain a great degree of control over the financial industry via connected people operating in the private sector as well as the public sector. For example, securities firms and mutual trusts. Who knows who really owns these firms or are the real beneficial investors in these funds? In the same way that the Taiwanese government and many Taiwanese people put money into the Taiwan market from abroad, and are classified as “foreign investors”. The private sector is not as private as it looks in China. Not necessarily a terrible thing, and not surprising (who really thinks the CCP is going to release control of the economy to all and sundry, and who would want it to?) However, in the banking industry, this is not really efficient. There are other channels for the movement of public money. Or there should be. Using commercial banks is of course all fine and dandy, but public money should not be dressed up as private money. Of course, the old culture of secrecy is still there, but it is holding back private retail banking, which needs to do a lot more with people’s savings than give the 0.5% returns a year. The nascent Chinese middle class can definitely afford a bit of leverage, and domestic consumption would benefit from cheap money backed by high savings and decent returns on them. NPLs in China are a synonym for “corruption” and theft (as it is government and Party lackeys and their bent companies who generate the NPLs, not “private” business or consumers) and that is why the CCP did its nut over the E&Y report.

On the other hand, set-ups like the Shanghai Pudong Development Fund show that the government is happy to direct funds for showcase public works. But how does the PLA get paid? Or the space programme? How is the money moved about for some of the more dodgy stuff China gets up to? Oh, look. Happy Chan’s Lizard Pet Food Shop in Guangzhou just got a loan for Rmb23.7 million billion trillion from the Guangdong People’s Private and Not-at-all-Related-to-the-Government-in-any-way Credit Union Company Limited Corporation plc ! They must be building a new plutoniu… I mean “pet food canning factory”! What about the “companies” that accept the payments for good made with prison labour, sometimes on behalf of foreign firms? I don’t expect to see an account at the Bank of China called Shanghai No.1 Prison Factory (Shoe Dept.) (See what I mean?)

44

[quote=“mr_boogie”]

In the end, what banks do is nothing more than establish a kind of subsidy to production to help the competivity of the Chinese companies. Because we all know that is so completelly normal that Chinese products show up below cost price, that somehow somebody must to be putting money to cover up with the gap. And a reason why NPL’s are and should be accounted for the GDP, is that a NPL for a company and a subisdy are not that different in the end. And if most of the government money is put to help the companies to sell at a lower price, that creates an inbalance between China and the rest of the countries. The problem goes also to the fact that this is very dificult to prove, as we all know that accountancy in China is the equivalent to a novel writing.[/quote]
Sorry, but your analysis is wrong for one very simple reason: the exports are almost all from joint ventures with Taiwanese, HK or foreign companies or the stronger local non-SOEs. These companies don’t do much banking on the mainland. Their inputs are almost all paid for in hard currencies, not the funny money they can get from mainland banks. They can get real money from the banks in their home countries. The NPL problem has nothing to do with cheap exports. China’s banking problem is one of propping up SOE’s and mostly local market serving industries that don’t have to compete with foreign participants. The real losers are Chinese consumers and the local business that’s operating in an industry that isn’t part of the government’s designated flavor of the month. If the Chinese export boom were based on cheap funny money from mainland banks, the country would have gone bust long ago. You seem to be in denial that a substantial part of the mainland’s growth is real and based on sound economic principles.

45

Quite a common occurrence here in Forumosaland. I’d definitely encourage more folks in Taiwan to go and see for yourself what’s going on. I was very much a China sceptic until I moved to HK and started travelling to China. Of course I also happen to work in the finance industry in a China research team. Still, seeing it first hand is mind-boggling. It’s also quite refreshing to emerge from the shadow of those PLA missiles and realise most people in China don’t give a shit about Taiwan.

HG

46

I am not in denial, as I know very well that. I just adverted for a fact that as been mostly ignored in the thread. And if you doubt about the things that I say, look at the anti-dumping measures that are being put everywhere against chinese products. If it was all correct, there was no need for them, was it? So either they are Taiwanese or Chinese or whatever (who really cares, all you need is guanxi) the fact that they can use NPL’s to gain an advantage over others is not that unreasonable.

47

Yes, I’m sure that the only reason why US or European politicians would impose import barriers is that the other side doesn’t play fair. What a crock of BS.

You have no clue what you are talking about. Do you know how completely inaccessible mainland capital markets are to Taiwanese and HK businesses, or for that matter local private businesses operating on the mainland? Save for a few exceptions, no loans, whether they end of as NPLs or not, are given by mainland banks to these sorts of businesses. Even if they could get them, the Taiwanese and HKers wouldn’t want them anyway because it is funny money. Their inputs and capital are at least 80%, and in most cases more than 90% paid for in US dollars or HK dollars. These companies are able to do well precisely because they rely in no way on mainland banks. The whole banking sector could crash tomorrow and these companies would likely feel no effect at all.

48

[quote] Save for a few exceptions, no loans, whether they end of as NPLs or not, are given by mainland banks to these sorts of businesses…

The whole banking sector could crash tomorrow and these companies would likely feel no effect at all.[/quote]

Kind of like the stringent loan granting policies adopted by state-run banks during the KMT administration. It was not easy for SMEs to receive loans. Very few of them were granted loans. They had to rely mostly on their own capital.

Even had Taiwan’s banking sector crashed during the 1997 financial crisis, the SMEs that generate a majority of the island’s output would have felt no effect at all since they did not need to rely on these banks in the first place.

49

And anti-dumping legislation against Chinese textiles will of course hurt the US and European companies that are exporting them.

Basically what happens in a joing venture in China is that the foreign party ponies up a big pile of US dollars and the Chinese government values some old crock of shit state-owned factory at the same amount of US dollars and one cent. Then you have a JV with the Chinese party (invariably a government or party man) holding 51% and having control of the board, although the foreigner will insist on hiring the MD to actually make sure the guy who’s running the business is on his side.

Then the workforce is hired from a government agency which supplies them to you, although you can hire who you want, they must be employed by this agency. You pay the agency US dollars for the workers who are paid a tenth of that by the agency in renminbi. Then you buy your inputs in US dollars, process them using equipment paid for in US dollars, and then sell them abroad for US dollars.

I still have to work out how renminbi revaluation is going to curb the American trade deficit as most big exporters only work in US dollars, or euros.

Maybe things have changed since I was there. Well, things have definitely changed, but my meaning is that the big chappies causing the trade deficit never see a renminbi. It’s all done in US dollars. Indeed, that’s why the foreigners are there. To bring in US dollars and transfer technical know-how. And to prevent a Chinese middle class, which can’t be kicked out if it becomes politically necessary.

And another thing. Oh, I’ve forgotten. Oh yes. I’m sure the spate of bank buying for no good reason is the result of high level discussions on the economy. There’a a high-level discussion about Treasury Bonds, exchange rates, and dumping, and the softener of allowing foreigners to get more retail and commercial banking action. They’ve not bought those banks for nothing. We don’t know why, and the shareholders of the purchasing banks don’t know why, but a nod has been given or there has been a wink in the direction of bank ownership liberalisation, and we’re going to see some evidence before the year is out.

50

A report has just crossed my desk reminding me that companies are still organising themselves around the Five-Year Plans. We got some good reports in about the latest one, all the blether from the Party telling us what it was going to do. Anyone remember the Tenth FYP? Or the Ninth? What they were going to do? I have a feeling the 9th one was about the environment and the 10th one was about modernisation or technology or something. Anyway. There’ll be another one along soon. Can’t wait.

I know that in 1998 when setting up a JV you had to get the project recommendation listed (li xiang) on the central plan of Things to do for the Year. Centrally planned economy, you see. The setting up of your JV had to be listed in The Plan. Seriously. Wonder if that is still going on. There will come a time when people will get all teary-eyed and romantic about the Five-Year Plans and old communist era habits, practises, and usages. Obviously, there won’t be many tear shed over the passing of the struggle session and being denounced as a capitalist roadster (“You sir, are nothing but an E-type Jaguar!”) but I miss the posters already and the nonsensical Party slogans already.

51

Nothing about the environment has never received any kind of significant mention in any 5-year plan. The 11th plan like the 10th plan are about continuing reform. The 9th 5 year plan (1995-2000) was about privatization. During the course of that plan, tens of millions of urban Chinese were thrown out of the only jobs they had ever known and told to sink or swim. Simultaneously, a few thousand ambitious and connected mid-level managers were able to become instant billionaires by having the audacity to grab assets from collapsing SOES. The 1995-2000 period, IMO, remains the most difficult era in Chinese economic reform within the last 25 years.

As long as state tax revenues are growing at a nice clip of 25%+ annually, the Chinese government will get plenty of attention when it lists its 5-year plans. The emphasis this time around is on the economic gap, with spending on rural China and lower-income urban Chinese being the priority. Smart companies should organize themselves around this plan. Companies who were quick are taking advantage of the new policies which favor low/mid-income urban housing (in the 3000-5000 RMB/m2 range). Developers working on luxury residential projects are going to get creamed. If it’s been more than 3-4 years since you’ve been there, it’s time for a refresher Lord Lucan. That’s not to say China reinvents itself that quickly, but you don’t do China 2006 justice by drawing lessons from China 2001. The almighty dollar is no longer the almighty dollar. The days of exchanging US dollars for RMB at a premium in front of any Chinese bank are long gone. Dollar-denominated assets have been unpopular for the last 3 years.

To return to earlier topics from others above, I think we’re on the same page as to the significance of retail banking changes. That is, they’re important because they reflect what is hopefully a willingness and determination to reform, but this specific type of reform isn’t worth a lot of dollars. The key is absolutely risk management and scientific commercial lending from here on out, which no one but a banking insider can really judge. (Even anecdotal evidence of who was/was not able to get a loan doesn’t tell us the big picture.)

I don’t think anyone denies there was a problem in terms of poor lending decisions, but I really don’t believe it’s at all reasonable to believe these major Chinese banks are in danger of insolvency due to these past poor lending decisions (especially not after the equity injection due to the IPOs, $11b in HK and $2.3b in SH for BOC). The important thing is what happens over the next 24-36 months. By then, either the Bank of China begins to offer me competitive commercial lending rates, or the Bank of America’s Nanjing branch will. (Again, WTO requirement for international bank entry.) The market will determine what happens to the BOC. If the Bank of America is making better economics-driven lending decisions, then it will reward depositors with higher deposit rates and the Bank of China will collapse. The story isn’t existing NPLs; it’s whether the BOC has managed to reform its lending structure to grow its portfolios in a healthy manner.

None of us here have a crystal ball, and none of us here are on the director’s of the BOC… so we’re all just speculating. But if the IPOs of these Chinese banks suggest anything, it’s that international investors/banking partners are betting that these Chinese banks will be able to grab significant market share. We’ll see.

PS. The mention of the nutjob Gordon Chang isn’t just about discrediting his already discredited reputation. He talked about more than banking, of course. He also predicted that the Chinese auto industries would be destroyed by Korean/Japanese imports, and that Chinese SOEs would be destroyed by more efficient foreign competition after trade barriers dropped. Whether it’s banking or cars or textiles or any other industry, his world-view is shaped by his over-riding assumption that the Chinese economy is centrally planned, inefficient, fragile, and cracking from the inside… a view that’s still being repeated by many. We already know he was horribly wrong about the Chinese auto industry + international trade as a whole; why should I give him any credibility on the banking/NPL issue?

52

Wasn’t one of the requirements of China joining the WTO is that they have to open its retail banking sector to foreign banks in 2007 including full access to the credit card market? I remember this was discussed awhile back. I would think it would be a big concern to the CCP since Chinese consumers are known to have a trillion dollars +/- in household savings (even if this is only a drop in the bucket as mentioned by LL). It would seem, given a choice, that many Chinese would prefer to put their cash in a bank that is better regulated/protected and offers more investment/insurance opportunities. I know in Hong Kong the BOC and other china banks are big at the retail level, but aren’t the HK branches managed separately from the mainland? Also, isn’t one of the reasons why the Chinese banks want the foreign experts to come in (grudingly) is to help securitize the NPL’s and turn them into some type of derivative as a way to manage the NPL problem? Won’t this also force the state owned banks to revalue state property if they want to offer these same types of bank services using Chinese assets?

From what I know the unregulated US derivative market (Citigroup, MorganChase, BOA, HSBC) is on extremely shaky grounds. Is this one of the reasons the m3 is no longer published? Is another bailout coming like after the LTCM fiasco? occ.treas.gov/ftp/deriv/dq405.pdf This pdf shows over $100 trillion in financial bets in 2005. With the housing market~fannie mae, foreign debt, etc. going bust, it makes one wonder. Its also interesting the GoldmanSachs CEO became Treasury secretary.

I also read Price Alwaleed of Saudi Arabia was able to get $400m ~ 20% of the BOC IPO stock and he wanted to buy much more. He is well connected to many biz ventures including being the one of the largest shareholders in Citigroup and the Carlyle group *the Carlyle link is a bit dated and one of many that can be found, it has some interesting tidbits about Taiwan defense)

And where does gold fit into this in regards to chinese holdings, Morgan Chase is supposedly heavy exposed to gold derivatives. Since the price has skyrocketed, are they overextended (similiar to the Chinese copper trader guy)? Is this why bush is trying to bring back the privative Social Security scheme again - To keep JPMorgan from defaulting on its gold bets and contribute to the big crash?

Add this for general reference if anyone is interested: Sinking Banks
[i]In all the corporate disasters breaking out in the United States, two names keep cropping up with uncanny regularity: J.P. Morgan Chase & Co. and Citigroup. Both were major lenders to Enron, and according to a report by the U.S. Senate Permanent subcommittee for Investigations, both banks were active participants in Enron’s fraud, using offshore affiliates to help Enron disguise loans as energy trades. Both banks lent heavily to the energy-pirate and telecom sectors, and are undoubtedly facing losses in the billions of dollars as those sectors vaporize.

J.P. Morgan Chase is the result of the acquisition of J.P. Morgan & Co. by the bigger Chase Manhattan. The deal, which closed on the last day of 2000, has been an absolute disaster as measured in ordinary-and therefore misleading-market terms. The market capitalization of the combined Morgan Chase is now less than that of Chase alone on the day before the merger, with Morgan (or at least its equivalent value) having simply vaporized. This is not surprising, as it was likely a bankruptcy at Morgan, and perhaps Chase as well, which led to the takeover of the aristocratic Morgan by the commoners at Chase. The merger only bought a few months. Indications are that Morgan Chase blew up in mid-2001 and was secretly taken over by the Fed, similar to the way Citigroup’s predecessor, Citicorp, was in 1989. During the fourth quarter of 2001, Morgan Chase combined its two lead banks, Chase Manhattan Bank and Morgan Guaranty Trust. As part of that process, $125 billion in assets and $7 trillion in derivatives simply disappeared from the combined banks’ books, suggesting major financial problems. Still, with $24 trillion, Morgan Chase has more derivatives than any other bank in the world, and more than enough to make a spectacular explosion.

Citigroup may be under Fed control as well, as rumors of major derivatives losses circulate. Citigroup is the result of the 1998 takeover of Citicorp by Travelers Insurance, creating what is now the largest bank in the United States, with just over $1 trillion in assets and $9 trillion in derivatives. On July 18, Saudi Prince Alwaleed bin Talal, Citigroup’s largest individual shareholder, said that he had invested another $500 million in the bank, raising his holding to $10 billion. Alwaleed, a nephew of Saudi King Fahd, obtained his initial stake in the bank shortly after the Fed took it over in 1989 and began arranging a bailout. The latest cash infusion raises suspicion that Alwaleed is performing a similar service for Citigroup.

Not to be left out is Bank of America, whose $620 billion in assets puts it third behind Citigroup’s $1 trillion and Morgan Chase’s $713 billion. Bank of America’s $10 trillion in derivatives puts it solidly on the hot seat in any financial crisis, and it has also loaned heavily to bankrupt companies. Rumors are flying that Bank of America has applied to the Fed for a secret bailout. If the Fed winds up running the three biggest banks in the country, who’s going to bail out the Fed? Mutual funds, pension funds, and insurance companies are also big holders of stocks and have been hard hit by the decline. There’s a lot more damage out there than has been admitted so far, and the hemorrhaging is continuing.[/i]

Links maybe of interest:

Economic Mass Murder Primed - the Adam Hamilton Derivative Monster part is good.
The New York Stock Exchange Goes Global - US/global bank history
Yen Carry Trade - cheap money no more
Fed Governor Ready To Defend Dollar - not used just for inflation?
Global Credit Ocean Drys Up
Machiavelli - article about bush/democracy.

Just a note on Gordon Chang - many write him off as a hack or a nob, probably relating to some predictions, but I found his cc of china book very interesting. I read it a 4-5 years ago and remember some good chapters on explaining the GITAC crisis, the power struggle between the south and north provinces in china, the consolidation of the airline and phone industries (which happened), the scheme the banks use to funnel money to non-performing SOEs, etc. I read his second book a few months ago, Nuclear Showdown (about north korea), but didn’t really learn anything new. It just reinforced the idea that most (all) Koreans hate the Japanese (and Americans) and the Japanese hate the NKoreans especially due to the kidnappings. Another issue is Japan is worried that Nkorea has its nukes targeted at Tokyo. (Perhaps under china’s guidance as a threat to Japan to stay out of any future China/Taiwan conflict). I know, take it for what it’s worth, it just something to think about.

53

[quote=“4nr”]Wasn’t one of the requirements of China joining the WTO is that they have to open its retail banking sector to foreign banks in 2007 including full access to the credit card market? I remember this was discussed awhile back. I would think it would be a big concern to the CCP since Chinese consumers are known to have a trillion dollars +/- in household savings (even if this is only a drop in the bucket as mentioned by LL). It would seem, given a choice, that many Chinese would prefer to put their cash in a bank that is better regulated/protected and offers more investment/insurance opportunities.
[/quote]
Right, that is exactly the point and the big unknown. That’s the bottom line of what we’re discussing, and what the BOC IPO is about. It’s just a repeat of the same story that’s confronted every other Chinese enterprise facing international competitoin for the first time. How will these big four Chinese banks respond to foreign competition? Have they been reformed enough that they can offer quality services at competitive rates?

[quote]I know in Hong Kong the BOC and other China banks are big at the retail level, but aren’t the HK branches managed separately from the mainland? [/quote]The BOCHK is a separate corporate structure and listed on the HK exchange 5 years ago. I believe BOC is still its largest equity holder, at least all of its management is still appointed from Beijing.

EDIT: 65.78% owned by BOC.

This is a slightly different issue. The central government has already taken out most of the existing, antiquated NPLs out of the Chinese banks. This is what’s being disposed off via securitization or straight-out acquisition by strategic foreign investors.

The disposal of this class of NPLs doesn’t have a direct relationship with today’s Chinese banks… except for the fact that it was these banks that originally created the NPLs.

54

I think there was a section of the 9th FYP devoted to the “environment”. When people laugh at me for being a hippy, I just ask them where they think the Chinese dispose of their used lithium or cadmium mobile phone batteries. Yup, the household garbage. That’s a lot of highly poisonous heavy metal seeping right into the water supply.

Anyway. In relation to banks, I would just like to reiterate my point that retail banking in China is one thing, and lending to SOEs, government-invested JVs, and the government and government/party connected people is another entirely. I suppose it’s fair to say that Western banks know they can do little to alter a political decision to grant and then not repay a loan, but that if this must stay on the books of their bank, then the growth in retail business, where repayments can be collected more easily, will make up for that.

CSFB did a long report on the Chinese consumer about a year ago which involved a lot of their own research (as government figures are all rubbish) and it is an interesting read. Out of date the moment it was published of course, but if anyone wants a copy I’ll put a copy on the internet somewhere for download. Consumer attitudes to debt, spending, and foreign banks are what matters. The hideous nouveau riche oiks in Shanghai and Beijing are not what matters - if every farmer in China borrowed a tenner that would be more like it. The kids of today in China know nothing about China or the world and want to know less. The want instant money. However, the peasants seem to me to be a much more cynical lot, having been promised the earth but still living in the middle ages. How do they feel about getting a Standard Chartered Gold Card?

55

I for one would be very interested in reading the report, thanks for offering.

56

If you have access to ThomsonOneAnalytics or whatever it’s called this week, searcg for “The Chinese Consumer” by CSFB, published about the beginning on 2005. In the meantime I’ll try and find my copy. Three pdf files. Very big. Quite dull, actually, but very few people do any original research in China, preferring instead to rely on the comedy numbers supplied by government agencies, such as the National Bureau of Sadistics inter alia. (“Record Harvests in Hunan! Again!”)

57

Quick google search takes us to an interview, from 2006, with the author of CSFB’s “The Rise of the Chinese Consumer”:

emagazine.credit-suisse.com/app/ … 63&lang=EN

[quote]
Q. In your book, The Rise of the Chinese Consumer, you predicted that by 2014 China will be the second largest consumer market in the world. Did you have to change the prediction when you broke down the data of your second survey?

A. No. In fact, our confidence in our original base case has increased. By 2014 in US-Dollar terms we think that China will have become the second largest consumer market overtaking Japan.

… Housing is a very important topic. We have got 60 percent of our respondents living in a property that they own themselves resulting from the mass privatization in the late 90s. No less than 18 percent are planning to buy a property in the next year. Either to trade up or to buy for the first time. … Property is a very important part of Chinese consumer wealth. And they are quite unleveraged in the housing sector. Only about 10 percent of our respondents have any kind of a mortgage on their property.[/quote]

I was mostly curious in the survey if there was any indication of the bitterness you suggested might exist (for those who still live in the “middle ages”). The articles/reviews about the survey don’t seem to suggest this is a major theme of the research. Clearly in modern China there’s a large gap between rich/poor, but I’d venture to guess 99.99% of the Chinese populace are far richer than their parents were at the same age 25-30 years ago.

58

[quote=“cctang”]
I was mostly curious in the survey if there was any indication of the bitterness you suggested might exist (for those who still live in the “middle ages”). The articles/reviews about the survey don’t seem to suggest this is a major theme of the research. Clearly in modern China there’s a large gap between rich/poor, but I’d venture to guess 99.99% of the Chinese populace are far richer than their parents were at the same age 25-30 years ago.[/quote]

How many nations can you find in which the populace is poorer than their parents were at the same age 25-30 years ago? The argument that just because you’re richer today or much richer today despite still being much much poorer than the rest of the world, is sort of weak. China’s GDP PPP is around $7000 USD. However much your parents were making, anyone and anything could’ve improved on it.

59

Iraq is a country that was better off economically 25-30 years ago than present day.
Japan was better off economically 25-30 years ago than present day as well.

Economy is alwasy 1 part voodoo. And here is something interesting
goldsea.com/Asiagate/606/13china.html

81% of the people in the PRC, think their country is heading in the right direction. That kind of optimism usually translates to big bucks. But I think most people already knew that.

60

[quote=“ShrimpCrackers”][quote=“cctang”]
I was mostly curious in the survey if there was any indication of the bitterness you suggested might exist (for those who still live in the “middle ages”). The articles/reviews about the survey don’t seem to suggest this is a major theme of the research. Clearly in modern China there’s a large gap between rich/poor, but I’d venture to guess 99.99% of the Chinese populace are far richer than their parents were at the same age 25-30 years ago.[/quote]

How many nations can you find in which the populace is poorer than their parents were at the same age 25-30 years ago? The argument that just because you’re richer today or much richer today despite still being much much poorer than the rest of the world, is sort of weak. China’s GDP PPP is around $7000 USD. However much your parents were making, anyone and anything could’ve improved on it.[/quote]
Your ignorance knows no limits. The operative terms in my statement were:

  • 99.99%,
  • and far richer.

In precious few nations can you argue that 99.99% of the populace is far richer than their parents’ generation 25-30 years ago. In fact, I look forward to you naming one such nation. Is it the United States? No. Is it India? No. Is it Taiwan? No. Is it Brazil? No.

Your world perspective is limited to New Jersey, which reminds me of your prevoius argument that “anyone with the income of one cent could easily double that to two cents”. You know nothing about economic production. You don’t understand that money doesn’t grow on trees. You don’t understand that “wealth” increases due to productive economic assets. You represent everything that the critics mock the American education system for. Please, for your own benefit here, take an economics course.

I know this is probably a lost argument on you, ShrimpCracker. But since you have no ability to project your thinking to a third-world nation… think carefully about the question I pose for you here, a question which if you genuinely had any capacity for learning, might help you understand your false ways:

  • will it be easier for Donald Trump to make a million dollars in the next year,
  • or will be it be easier for ShrimpCracker to make a million dollars in the next year?

And… why?