Asia’s days as engine of growth numbered, warns Harvard duo

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#11
Looking from history is very suggestive like looking in technical analysis. You can make very different conclusion if you take 50 years history or 500 year history. And worse, history will not simply repeat itself. Anyone can make their own prediction. At least some will them will be right.

Over the last 20 years, there are thousands of analyst saying that China will collapse very soon. Nothing happened unit today. Nothing happened doesn't mean it can't happen. But just don't take prediction too serious. it is just another one out of the thousands.
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#12
This article argues that low growth would be a good symptom as China shifts to a consumption based economy. GDP must drop 1-2 points each year for around 5 years, as part of a mechanism to transfer wealth from producers to households. The resulting 3-4% GDP growth does not mean a "hard landing" and may not lead to unemployment if they can kick start consumption. Whether this can be done or not depends on politics against vested interests, and will be determined over the next 2 years.

Michael Pettis, Sep 2014:
What does a good Chinese adjustment look like?
http://blog.mpettis.com/2014/09/what-doe...look-like/

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It is a long article, snippets are below.

"China will either choose a “long landing”, in which growth rates drop sharply but in a controlled way such that unemployment remains reasonable even as GDP growth drops to 3% or less, or it will choose what analysts will at first hail as a soft landing – a few years of continued growth of 6-7% – followed by a collapse in growth and soaring unemployment."

"It seems pretty clear to me that the great distortions in the Chinese economy that led both to rapid but unhealthy growth and to the consumption imbalance (by forcing down the household income share of GDP) are gradually being squeezed out of the system....If China can reform land ownership, reform the hukou system, enforce a fairer and more predictable legal system on businesses, reduce rent-capturing by oligopolistic elites, reform the financial system (both liberalizing interest rates and improving the allocation of capital), and even privatize assets, 3-4% GDP growth can be accompanied by growth in household income of 5-7%. "

"...the idea that slower GDP growth will cause social disturbance or even chaos because of angry, unemployed mobs is not true."

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I wait until there is money lying in the corner, and all I have to do is go over there and pick it up.
Jim Rogers
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#13
China focus on 2 primary matrix since Deng: employment as its population urbanises and GDP per capita doubles every 2x5 years one regime's timespan

Employment is critical because a small problem multiplied by a billion is a huge problem. They are really paranoid about unrest. That will also help one to understand why their focus is on FDI and quantity rather than quality. It's all about jobs. But urbanised china just overtook the rural in 2012 for the first time, so the most crucial part is over. They can now focus on quality and more value added jobs.

7% growth rate as baseline is not plucked from the sky. It is the growth rate for the GDP per capita to double in 10 years. That is how china plans to be an elephant in the room. It is actually not that dissimilar to Buffett's long term strategy. Obviously it cannot continue forever. But if RMB will continue to appreciate once internationalised, this target should be met in US$ terms for the current regime. Growth will be tougher for Xi's successor.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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