Chinese Migration

A nice little video on Chinese migration from the economist.

Shanghai 1990 and 2010

http://www.theatlantic.com/business/archive/2011/01/picture-of-the-day-shanghai-in-1990-and-2010/69959/

H/T Brad DeLong for the link

China's growth compared

Great chart highlighted by Paul Kedrosky. China just slightly outgrowing other countries at similar stage of developments though not by much. GS expects a path similar to Taiwan's.

EIA on Chinese Oil Demand

Econbrowser has an interesting guestpost on Chinese Oil Demand.
Noting that Japan and Korea's oil consumption per capita are currently 1.4 and 1.9gallons per day this could imply over 50m bpd oil consumption for China, way more than EIA's forecasts of 16m bpd in 2030. The author concludes: "Is the EIA sure it has the numbers right?"

GMO on China

Edward Chancellor from GMO has a very interesting white paper on China "China's Red Flags". He argues that past manias and bubbles can be identified by the following characteristics:
(1) A compelling growth story
(2) A blind faith in the competence of the authorities
(3) A large increase in investments
(4) A surge in corruption
(5) Easy money or low interest rates
(6) Fixed currency regimes
(7) Fast credit growth
(8) Moral Hazard
(9) Fragile financial structures with high leverage and marginal returns on projects barely covering the financing costs
(10) Rapidly rising property prices

He then goes through the list with China's latest numbers, ticks the box by most and concludes:
"Were China's economy to slow below Beijing's 8% growth target, bad things are liable to happen. Much of the new infrastructure would turn out to be otiose; excess capacity would linger in many industries; the real estate bubble would burst and the banking sytem would face a rash of non-performing loans. Investors who are immersed in China Dream ignore this scenario. When the China juggernaut eventually stalls, they face a rude awakening".

The article contains a lot of interesting sources notably on China's urbanization and demographics. I have been warned!

Chinese Savers

Here is a short summary of the reasons why Chinese are such great savers (ca50% of their income or 2.5tn USD per year). The author goes over Confucianism (Not it reading Chinese philosopher Mozi), the lack of safety nets, demography and finally their undervalued currency.

China and the World

Econbrowser has the charts:

At PPP:



In current dollars:

"The Color of China"

A tad long but still a very insightful exchange on China's prospects between Minxin Pei and Jonathan Anderson in the March 09 issue of the National Interest.
Pei argues for looming stagnation citing a number of issues such as China's ageing population, the resulting decrease in savings, increasing social costs, rising environmental problems and inequality.
Anderson on the other hand has a more optimistic view. In his case for Beijing's exceptionalism he first sums up the country's achievement: "in strict macroeconomic terms, so far China is unambiguously the most successful emerging economy of the postwar era. And at the current pace of development, China’s “rise” is not some hazy prospect shimmering on the distant horizon, but a concrete reality only twenty years down the road." He notes that roughly a third of Chinese growth came from factor productivity and that the corporate sector (SOE or purely private) has shown increasing margins in the past 15 years. This bodes well for savings and investments going forward. He explains that there is not much "state" left in SOEs as many sectors are truly competitive in spite of state ownerhips (many automakers, airlines, utilities, telcos etc.). Overall SOEs which still represent ca 25% of GDP are as exposed to market forces as kleiretsu in Japan and chaebol in Korea were if not more. Hence worries about missallocation of capital by an inefficient State are overstated. As for ageing Anderson notes that China has 73m underemployed people in the countryside which will help alleviate the issue.
His conclusion: "The bottom line is that China has seen considerable structural and largely market-driven changes that are already fundamentally altering the rural income balance, and should go a long way toward addressing the economic problems leading to the recent unrest. This year and the next will be tough, to be sure, as weak export markets and, especially, falling construction demand take a toll on migrant employment—but as I argued above, these are cyclical issues that are unlikely to prevent a return to trend growth in the near future and over the long term."

China: Electricity Consumption and GDP growth

Floyd Norris posts the China's year-over-year increases in its gross domestic product and electricity consumption for the first quarter of each year.

2002: Electricity up 9.4%, G.D.P. up 8%
2003: Electricity up 14.7%, G.D.P. up 10.3%
2004: Electricity up 16.7%, G.D.P. up 9.8%
2005: Electricity up 14.3%, G.D.P. up 9.9%
2006: Electricity up 13.4%, G.D.P. up 10.4%
2007: Electricity up 12.4%, G.D.P. up 11.7%
2008: Electricity up 16%, G.D.P. up 10.6%

China Q1'09 GDP was up 6.1% YoY while in the first two months of the year electricity consumption was down over 9% from last year.

This reminds me of this story of provinces overstating their GDP estimates.

"How China Sees the World"

Via AbnormalReturns an interesting look at the following Economist's cover

China

Travelling in China, I should have read this before leaving. Lots of talk about tougher economic conditions. Shenzhen, a big hub of export oriented industries, appears particularly affected with real estate prices down sharply year on year. Coming back after a few years it is hard to notice the slowdown. The city seems so much richer and more modern. In Shanghai and Shenzhen most taxis have been upgraded to "Santana 3000" models and I did not remember the traffic beeing so bad. Beware of silent electric scooters' attacks!