<sigh> breathing a sigh of relief! I wish I had a way to send your answer to Roubini!!! Maybe he just doesn't know enough about China to make such wild predictions.
What we saw on Teevee yesterday were many hundreds of thousands going home for New Year celebration, family meals and fireworks, but what we were told is that there are many worried people in the countryside because they have no money and no jobs. I hope that the government is able to spread the jobs around soon. It will be an example to Washington of what an economic turnaround can accomplish. On Jan 30, 1:51 pm, "[email protected]" <[email protected]> wrote: > Thank you very much for your message Justice. > > I guess that your question to me is related to the second part of your > message, Roubini comments. Therefore that is what I will answer. > > He is partly right, but with all my respect, he is absolutely > inconsistent. I explain why. > > 1.- China uses the same methodology always, year on year. It is not > the only country that uses it, it is the most used methology in Europe > too. Each methodology has advantages and disadvantages. Quarter on > quarter, even seasonally adjusted, as he proposes does not reflect the > real trend of the economy, it just reflect what happened in that > particular quarter. Year on year misses information about that > particular quarter, but helps to see the long term trend of the > economy. Which is better and which is worse? I think that it depends > on what your culture tells you, if you are very short term oriented > use the American one, if you are long term oriented use the Chinese > one. > > But if he does not want to look like a hooker who tries to justify > that he was wrong in his predictions, he should be consistent. If he > used year on year 6 or 12 months ago, he should not change it now to > try to prove that his prediction was not wrong. > > 2.- It is interesting that he invents a new definition of recession > "negative growth in one quarter and presumibly two in some key > indicators such as electricity in manufacturing oriented economies". > Let us see if he applies that definition hereinafter for all economies > always, consistently quarter after quarter, or he uses his invented > definition just for China and just for Q4 2008 with the same aim that > I described in the former paragraph, to try to prove that his > prediction is not wrong. According to any traditional definition of > recession, by far China is not into a recession and will not be in Q1 > 2009 presumibly. Even more, no serious institution predicts a > recession for China (nor for many other countries) in 2009 and of > course in 2008. For example, the IMF which prediction I posted > yesterday uses the word recession for developed economies and slow > down for emerging and developing economies. That is accuracy between > definition and data. That prediction could be right or wrong, we will > see it in some months, but it is accurate with data. > > I am sorry for him if his prediction fails, the way to fix it is easy, > he should make his predictions more carefully. In December you posted > an article from him where he predicted that this crisis would reach > its bottom in the second half of this year, I added a question to your > message "based on which data is made such prediction?", furthermore I > added, we have not data yet to predict when we will reach the bottom. > Last week, at it is already impossible according to mathematics that > we will see its rebound in 2009, Roubini delayed his prediction to > 2010, my instinct tells me that it could be possible, but to be > accurate I still have to add the same, neither him, nor I, nor anybody > have data yet to predict when we will reach the bottom and its > rebound. > > 3.- It seems that he did not understand the change in the strategic > economic policy of China. China has been an export oriented, > manufacturing oriented economy. Chinese government has told several > times (in English too, so he should understand it) that the long term > trend which milestone was 2020 and which title was "harmonious > society" must be accelerated and deployed inmediately. China tries to > be harmonious according to government, I prefer to use the word > balanced. It means to balance exports with domestic consumption, it > also means to decline private savings and to raise private > consumption, it also means to boost farmery, construction and services > versus to relax manufaturing, it also means to balance our economy > geographically rural areas versus urban areas, etc. Therefore he is > parrtly right, China´s GDP is no longer 40% manufacturing, > manufacturing collapsed and therefore electricity consumption. Also, > therefore any prediction based on that percentage is wrong. It is true > that migarnt workers left factories and returned to their home > provinces. But on the other hand it is also true that they started to > build buildings, roads, railways, etc. Unemployment slightly rose > 0.2%. > > This strategic policy is not made because of the crisis, it started to > be applied at the end of 2007. The change now is just to accelerate > its deployment. The stimulous package goes in that direction and its > priorities, infraestructure and cheap houses in rural areas are > designed to allow further steps. > > Roubini is free to believe based on his faith that either it will fail > or it will succed, not based on data because it is too early to judge > its success. It is true that manufacturing is declining sharply, but > on the other hand it is also true that domestic consumption is rising > sharply (preliminary data suggest as much as 20% "year on year"). To > be a good professional, I prefer not to make any prediction yet. I > told here that in my humble opinion the official prediction of growth > for 2009 (8%) is too high even after my superboss told that it is > achievable, right now I see more accurate predictions from > international institutions ranging from 6% to 7%, that obviously is > far from a recession and are more accurate to the 6.8% of Q4 2008. > Yes, that is why Chinese methodology is useful for, although it is not > enough to make a serious prediction, that 6.8% tells us that growth > along next quarters and at the end of 2009 reasonably could be between > 6% and 7%. > > Conclusion about China´s economy disregarding Roubini. This will be an > extremely hard year for China and for all countries. More for China > because to turn a country of 1.3 billions is not easy. To turn it so > fast is extremely difficult. But, even if we have a disaster and China > ´s economy would grow just 3% or 4%, or even 0%, or even negative, > then what? It would mean that we could not change in one year and we > need more time, but the change is the right direction, that is what > matters. That is one of the many advantages of having foreign > reserves, lot of savings, state owned corporations, or province or > city owned corporations plenty of reserves, etc. we can use them in > these circumstances. > > Peace and best wishes. > > Xi > > On 30 ene, 17:28, Justice <[email protected]> wrote: > > > > > The title, of course, refers to a movie in which Meryl Streep plays > > the Editor of Vogue Magazine. She may have been the woman who coined > > the phrase, "60 is the new 40" meaning that women of 60 now have the > > sex appeal, bodies and minds of 40 year olds. In any case, whether > > she said it or not about age, she certainly is part and parcel of the > > clothing size changes we've seen over the years. > > > Marilyn Monroe is purported to have purchased size 12 dresses, which > > would be equivalent to a size 6 or 10 today. In some circles, 12 is > > considered Large or Large Medium, whereas 6 or 10 is a perfect size > > for "real" women and size 0, which never existed 40 years ago are what > > most runway models wear and teenage oriental girls wear today. (Back > > then they were wearing petites and there were no zero, twos or fours > > available. You bought children's clothing.) > > > Oh well! Now that we know the historical reference, here's the > > nutshell. > > > Xi -- what do you think about this? > > > The Chinese Devil Wears Prada: Why 0% Growth is the New Size 6.8% > > PrintShare > > Delicious Digg Facebook reddit Technorati Nouriel Roubini | Jan 22, > > 2009 > > The Chinese came out today with their 6.8% estimate of Q4 2008 growth. > > China publishes its quarterly GDP figure on a year over year basis, > > differently from the U.S. and most other countries that publish their > > GDP growth figure on a quarter on quarter annualized seasonally > > adjusted (SAAR) basis. > > > When growth is slowing down sharply the Chinese way to measure GDP is > > highly misleading as quarter on quarter growth may be negative while > > the year over year figure is positive and high because of the momentum > > of the previous quarters’ positive growth. > > > Indeed if one were to convert the 6.8% y-o-y figure in the more > > standard quarter over quarter annualized figure Chinese growth in Q4 > > would be close to zero if not negative. > > > Other data confirm that China was in a borderline recession in Q4 and > > that it may be in an outright recession in Q1: production of > > electricity plunged 7.9% in y-o-y basis; the Chinese PMI has been > > below 50 and close to 40 for five months now. > > > And with manufacturing being about 40% of GDP , manufacturing is > > certainly in a sharp recession (negative growth) and the overall > > economy may be close to a recession > > > So the 6.8% growth was actually a 0% growth – or possibly negative > > growth – in Q4; and the Q1 figures look even worse. So China is in a > > recession regardless of what the highly massaged official numbers > > claim.- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
