50% of toy firms 'gone in 2 years

[shan]

I agree with Polly, slump is the best time for retooling and innovation .

Large enterprises must understand that in times of economic recession , they need to invest MORE into innovation in order to harvest when the economy bounces back ,since the labor costs and the overheads all come down during the slump .


From a positive point of view, in fact, every crisis is an opportunity. Because your competitors and you suffer the  same in the economic downturn , if your competitors choose the exit strategy, it's entirely possible for you to take this opportunity to expand your market share.

Visionary CEOs don't only consider how to survive an economic slump, but also make blueprint for the greater development after the recession .

[The Smoking Man]

Visionary CEOs???

You mean the guys dropping melanine into milk? The guys substituting lead based paint in Children's toys? How about the drug companies substituting DEG for glycerine?

How about the businesses and Party members who just got nailed for dumping untreated arsenic into the waterways???

You two have read too many books. This is CHINA we are talking about.

Try working in the real world for a while.

For example ... There was an article on CCTV this afternoon on taxi drivers in the UK. They are all deciding to replace their cabs once every three years instead of every two years. Cab production was just hit by a 33% slowdown.

Never mind what the 'ideal' is. Reality is that in an uncertain market people tend to back off and/or liquidate. ESPECIALLY THE CHINESE who are notorious for SAVING even when the economy is good.

How many are going to leap back into investing when the market has taken a 40% hit and they really are not sure of what they are doing.

As another article recently stated ... The Chinese government really has to start building the social infrastructure before the people will feel safe enough to throw around money in a country that can bankrupt you for a lengthy illness.

In other words, the government has to start leading by example before they can convince the population to do what they are failing to do themselves.

[shan]

NO , YOU ARE WRONG .

Chinese economy driven more by domestic forces           


Agence France-Presse . Washington

The surging Chinese economy has been largely driven by domestic forces and not as dependent on exports as some US officials contend, according to a new US study.

The study released Monday by the Carnegie Endowment for International Peace with the International Cooperation Center in China's National Development and Reform Commission, contradicts many assumptions about China's economic performance.

Economist Albert Keidel, who authored the report, wrote that China's stunning growth of around 10 per cent annually since 1990s 'has been overwhelmingly domestic in origin.

'Trade and foreign investment clearly became increasingly important as sources of foreign technology and management skill transfers; but unlike many other East Asian economies, China's own fast and slow cycles have not followed the fortunes of US economic growth and recession — quite the opposite,' he added.

He said that China's recent inflation surge 'is the product of domestic rural structural problems, not excessive monetary growth linked to trade surpluses or foreign reserves.'

The report comes amid a growing chorus of protests in Washington about Chinese economic management, claiming that Beijing uses an artificially low currency to gain an edge in exports to keep its economy rolling.

US officials have argued that China needs to stimulate more domestic demand to help ease dependence on exports that create global trade imbalances.

But Keidel's report said China already is driven to a large extent by domestic demand.

'US government analysts need to correct the popular misperception that Chinese growth is export-led and hence exchange-rate dependent — it is not,' he said.

'US commercial and diplomatic thinking regarding China's commercial behavior and long-term prospects needs to shift to account for this conclusion.'

[The Smoking Man]

Huh???

What has that got to do with what I said?

Chinese save even during boom times ... is that related to foreign investment or trade?

Chinese poison their own milk ... foreign trade?

Cardboard Baozi ... foreign trade?

Poisoned lakes ... foreign investment?

Government corruption ... Foreign trade?

No social programs ... foreign investment?

Real estate bubble ... foreign trade (Foreigners can't own apartments except one principle residence)?

Market crash losing 40% ... that WAS the Chinese investing abroad. EVEN ILLEGALLY.

Face it shan ... the CHINESE are their own worst enemies based on selfishness and a willingness to poison, kill and cheat one another in pursuit of what they believe to be their money.

Some of the above has merely overflowed into foreign markets but until people in the countryside here earn comperable salaries to city workers the market will be limited to essential goods.

You are also limited on your raw materials. You're not an island.

[The Smoking Man]

And now ... Here your Chinese hero speaks:

China's Wen calls for 'every means' against crisis


By CHRISTOPHER BODEEN, Associated Press Writer – Sat Oct 25, 1:11 pm ET

BEIJING – Chinese Premier Wen Jiabao on Saturday acknowledged his country was feeling ripple effects from the global financial meltdown and pledged robust government spending to keep the economy from stalling.

While the direct impact of the crisis on China has been relatively light, the accompanying global slowdown would "inevitably have an impact on China's economy," Wen said.

"We need to use every means to prevent the financial crisis from having an impact on the growth of the real economy," he said.

Chinese institutions held relatively little of the toxic sub-prime mortgage debt hobbling Western institutions, and were as such largely unscathed by the collapse of the U.S. housing market.

However, the Chinese economy overall is slowing and will be further hit by a decline in demand for Chinese exports ranging from toys to rolled steel. Growth in the third quarter slowed to 9 percent — down from 11.9 percent for all of 2007 — still the fastest rate among the world's largest economies.

Wen's remarks were delivered at the close of the two-day Asia-Europe Meeting in Beijing, where leaders of 43 nations issued a statement calling for new rules to guide the global economy and on the International Monetary Fund to take a leading role to aid crisis-stricken countries.

While short on details, the statement calls on the IMF and similar institutions to help stabilize struggling banks and shore up flagging stock markets. "Leaders agreed that the IMF should play a critical role in assisting countries seriously affected by the crisis, upon their request," it said.

They also agreed to "undertake effective and comprehensive reform of the international monetary and financial systems," the statement said.

Participants said the statement would provide the basis of a joint Asian-European approach at a Nov. 15 summit on the crisis in Washington involving the world's 20 largest economies.

The document is one of the strongest endorsements yet for the Washington-based IMF, long known as the international lender of last resort, to take a leading role in the crisis.

French President Nicolas Sarkozy said the Beijing summit had raised expectations for solid results at the Washington summit.

Beijing participants "have all expressed their willingness for the Washington summit to be a place where we make some decisions, and we have all understood that it would not be possible to simply meet and have a discussion, we need to turn it into a decision-making forum," Sarkozy said.

German Chancellor Angela Merkel called for the IMF to become a "guard for the stability of the international finance system," and said there was unanimous agreement that it needed to take on a supervisory role.

The IMF, whose loans normally include strict provisions, is discussing loan packages with close to a dozen countries from Iceland to Pakistan, and is examining ways to speed up the process.

Speaking to reporters separately, Japanese Prime Minister Taro Aso suggested a stronger global agency was needed to monitor complex international financial deals and restore public confidence battered by the crisis.

"The problem is that the damage has been done and some people feel they have been taken for a ride," Aso said. "They feel this was a problem with supervision."

Asia and Europe have thus far responded rather differently to the crisis, with Europe focused overwhelmingly on propping up its financial institutions.

The 15 Eurozone countries and Britain have agreed to put up a total of $2.3 trillion in guarantees and emergency aid to help banks. Meanwhile, South Korea, China, Japan and the 10-country Association of Southeast Asian Nations have merely recommitted themselves to jointly establishing an $80 billion emergency fund to help those facing liquidity problems — to be established by next June — even while their stock markets tumble and export markets dry up.

[shan]

Is this guy an idiot???

Here's the answer.


Beijing - Two or three times a year, Cargill's joint-venture fertilizer plant in China's remote Yunnan province has to shut down, usually for weeks at a stretch. That's when there aren't any railcars available for shipping its fertilizer to customers across China. Without railcars, the factory's warehouse fills to overflowing, and production has to halt. "There's a huge demand for shipping, but the railroads can only meet 30% of the demand," says Zhang Hong, sales manager of the plant, which shut down yet again in October.

For decades, China has neglected investment in railroads in favor of building highways. With less than 49,000 miles of rails, China has roughly a third of America's track for an area of similar size. The nation's rails carry a quarter of global train cargo and passenger traffic on only 6% of the world's track, making its system the busiest on the planet. "China's strained railroads have already become a bottleneck for the economy," says Yu Tengqun, secretary of the board of state-owned China Railway Group, which has built two-thirds of China's railroad network since 1949.


China is now undertaking the world's biggest railway expansion since the U.S. laid its transcontinental line in the 1860s. Beijing plans to spend $248 billion through 2020 on 75,000 miles of new track, for both freight and high-speed passenger lines. At that point, China's high-speed passenger network will likely be the biggest on earth.

[The Smoking Man]

It's also the anser to why the rest of China has not developed ... just cities near the coast.

LOGISTICS ... can't move product ... can't sell it.

[Polly]

Very bad use of representation, I doubt if anybody can tell, but the fine red lines are supposed to be the new extension of railway network in China.

[The Smoking Man]

From the NY Times... Saying exactly what I said:

As China Goes, So Goes ...

As the world tips into recession, China’s economic decisions could affect how other countries fare in the downturn.

Over the last 30 years, China has hitched its economy to the industrial world, exporting cheap goods to the United States and other developed nations, building up an enormous trade surplus that will hit about $400 billion this year. As those industrial economies sputter, China is now in a position to pick up some of the slack: selling more of its own goods at home and buying more from the rest of the world.

To get China’s consumers to spend, the government will need to spend more at home, investing in public works projects and providing more social benefits — including health insurance and pensions — so its citizens don’t feel they have to save so much for a rainy day.

This is clearly in Beijing’s interest, though China’s leaders are still clinging to the old export strategy.

China is already feeling the impact of a slower world economy. Both economic growth and export growth have braked sharply. The slowdown threatens job creation, direly needed to absorb millions of rural Chinese seeking employment in the cities.

Over the summer the Chinese central bank put an end to its short-lived policy of allowing the yuan to gradually appreciate against the dollar, a policy aimed at reducing inflation that would also raise the price of Chinese exports. Last week, the Chinese government announced that it would increase its rebates on taxes charged to exporters — giving them a further boost.

But trying to capture a bigger share of shrinking markets in the United States, Europe and Japan — just as they tip into recession — won’t provide China much of an economic lift. What it will do is contribute to the slowdown in the rest of the world by hogging demand. China would get much more bang for the buck if it focused on stimulating its own domestic markets for goods and services.

Given the desperate mess Washington has made of its own financial system, few countries are eager to take American advice these days. After years of Congressional China-bashing, Beijing may be especially resistant.

Still, it is in China’s interest to change. China has grown 13-fold over the last 30 years, thanks to hypercharged exports and white hot investment. But its economy is lopsided. Consumer spending amounts to little over a third of economic production, probably the lowest share in any country in the world. And its overwhelming dependence on exports has made it overwhelmingly vulnerable to changes in world demand.

The government in Beijing, which is running a huge budget surplus, also has money to spare.

The government has announced some measures to fuel domestic spending —including a tax cut on home purchases to revive an ailing housing market and a vague plan to invest in public works. But it must do more to unlock the savings of its citizens and encourage them to spend.

To do that it needs to rebuild the system of social insurance that fell apart when state-owned industries collapsed and were replaced by the private sector. Government investment in things like health care, education and pensions would help develop China’s middle class and its domestic market.

A boost to consumer spending would undoubtedly help China weather the economic storm. But by raising Chinese imports and reducing its dependence on exports, it would also help the rest of the world.

[shan]

From the NY Times... Saying exactly what I said:

is that what you said?

YOU said the only way we can do is to encourage people spend their money in their pocket
but it's not , the main measure is GOVERNMENT Spending .

[The Smoking Man]

As another article recently stated ... The Chinese government really has to start building the social infrastructure before the people will feel safe enough to throw around money in a country that can bankrupt you for a lengthy illness.

In other words, the government has to start leading by example before they can convince the population to do what they are failing to do themselves.

Do you need further explanation???