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Subscribe to RSSChina's 7.6 percent growth rate is the lowest in three years – but the country's economic problems appear more dire than the latest numbers indicate. Some believe the government will counter the downturn with a massive stimulus package, a strategy that has left China's local banks saddled with bad debt in the past. NBC's Ian William reports from Beijing.
BEIJING – China's economy grew at its weakest pace in three years, the government reported Friday.
According to the National Bureau of Statistics, Gross Domestic Product grew at a 7.6 percent rate in the second quarter of 2012, down from a 8.1 percent pace in the first quarter and marking the sixth consecutive quarter of slowing growth on the mainland dating back to 2009.
The data were in line with official government projections for the quarter although they serve as another reminder that China's economy is slowing faster than the government had hoped.
China is under enormous pressure from abroad and at home to maintain steady economic growth. Amid worrying economic numbers out of the European Union and the United States, China is increasingly viewed as one of the few motors strong enough to power the global economy through this financial turmoil.
Meanwhile, here on the mainland, the ruling Communist Party has seemingly staked its legitimacy to an unspoken pact with its citizens: give up some social freedoms for continued economic prosperity.
“For the past 30 years, the Communist party derived a lot of its legitimacy from delivering the goods: better economy, better living standards,” says Patrick Chovanec, a professor of economics at Tsinghua University in Beijing, “If the perception is that's changed, then it introduces a real element of uncertainty.”
This relationship was probably best manifested at the end of 2008 when global trade ground to a halt and the country hemorrhaged nearly 20 million jobs. Beijing responded with a 4 trillion yuan ($635 billion) stimulus program that opened up lending from Chinese state banks.
The move helped kick off growth across the country as local governments went on a construction frenzy from new ports and airports to ambitious housing developments.
Internal problems
But the free-wheeling loan binge – often to state-owned enterprises with opaque accounting practices – may have helped foster the environment for today’s economic slowdown by providing a potential crush of bad loans that might very well brutalize the economy.
“In 2008, the big problem was external, a slowdown in exports.”Chovanec told NBC News, “This year the problem is internal. It's bad debt, and the burden the bad debt is placing on the economy.”
With the government having to prepare to potentially step in and fill the holes in the national balance caused by bad debt, there is simply less money available in Beijing’s coffers to propel the economy out of its current doldrums.
“In many ways, they've pinned themselves to a corner,” says Chovanec, “They had this big stimulus over the past three years that kept China's GDP growth higher compared to the rest of the world, in the face of the global slowdown… But that caused twin problems of rising inflation and bad debt.”
“Particularly with bad debt right now - that problem's coming home.”
Believe the numbers
In addition, although the GDP shows a growth rate that would be the envy of any developed economy right now, there is growing cynicism over the veracity of the official economic figures being released by Beijing.
“There's a lot more skepticism today about Chinese official numbers, and I think it's reflective of the fact that you've got a very clear and very serious slowdown taking place in China,” says Chovanec, who noted that while figures show extraordinary high rates of private sector investment and profit gains this year, the numbers simply don’t jibe with what he’s seen in the field.
Nowhere is this disconnect more apparent than in China’s housing and construction industry.
A mere 75 miles away from Beijing resides the foundations for one of the grand-scale property developments that have been the hallmark of the boom times here in China. Conceived in 2004, Jing Jin City derived its name from the ambitions of its developers who envisioned constructing a city between the capital Beijing and the important nearby port town of Tianjin that would attract rich investors with business in both cities.
Touted by the developers as the biggest villa development in China, Jing Jin City was a $3 billion investment designed to eventually become home for half a million people. Really a satellite city of Tianjin, the city government there had aspirations of Jing Jin eventually becoming a new Manhattan.
However, as credit has dried up and speculators have now shown reluctance to sink money into risk property developments, Jing Jin City is effectively a ghost town, a surreal mixture of luxury homes that would look natural in any tony suburb in the United States and the ghostly skeletons of those only partly-built.
Surrounded by farmland, Jing Jin City’s wild underbrush and small lakes on the outskirts have become a popular place to water and feed the dairy cows from a nearby dairy.
“I haven’t seen many people around here,” said one farmer who was tending to his cows this week outside one unfinished construction phase, “I guess people think it's too far away from the cities.”
With a primary Chinese engine of economic growth via construction in trouble, those economic woes spill over into the over 40 industries that are tied to the property industry.
As a result, local governments are said to be facing increased pressure to cook their books in order to offer a rosier view of the economic environment in their regions.
That this doctoring of economic figures may be occurring is not a surprise in China where economists and even senior Communist Party officials –mostly famously the expected future Prime Minister, Le Keqiang – have long believed that the provincial economic numbers are unreliable.
However, the New York Times last month reported that many of the economic indicators that economists and the Chinese government rely on to determine GDP growth – electricity usage, coal stocks, freight movement, etc. – may also be altered by local governments.
More world news from msnbc.com and NBC News:
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Romney! Here is your opportunity. Please use Bain or any other secret corporation you may own to export more American Jobs to China. I am sure they will be forever greatful, and you can keep getting an even larger tax cut for doing it.
Obama Jobs Council Packed With Outsourcing Companies
There’s General Electric, whose CEO Jeffrey Immelt has served as chair of the advisory board since January 2011.
Since Immelt took over GE in 2001, the company has lost 37,000 American jobs, and added 25,000 jobs overseas, according to filings with the Securities and Exchange Commission.
MaoZeObama
Can you provide any reputable source in which Obama publically endorses moving American Jobs to China?
Does anyone know the "real" story anymore?
IF, and I agree it is a MAJOR IF, everyone would boycot GE until they brought those 25K jobs back to America you would see them turn around REAL QUICK... Same for companies like Dell where EVERY service center is located outside the United States... Tell Dell bring those jobs back to America or I won't buy your products... See how fast service centers AND jobs would open up in America... But, we Americans are too lazy and/or too stupid to do ANYTHING that requires sacrifice... We want, no we DEMAND CHEAP PRODUCTS AND SERVICES and we get what we pay for... JOBS OVERSEAS... WAKE UP AMERICA... We are heading down the proverbial toilet and as we do our influence around the globe goes with us... You can see it every day in the news... Russia and China block votes to HELP out the Syrians who are fighting for their freedom and being SLAUGHTERED by the Al Asad regime... NATO took action in Lybia but for some reason is willing to let the Syrians be MASACRED... and make no mistake about it they ARE being MASACRED!!!! I am NOT for military intervention around the globe as we can NOT AFFORD ANOTHER WAR... However, we have a MORAL OBLIGATION to help out ANYONE around the globe that is fighting for their freedom... We need all the allies we can get at this point in time... WAKE UP AMERICA... Before it is TOO LATE!!!!
Can you provide any reputable source that claims politicians always publicly endorse their actions?
From where shall we suckle once this nipple runs dry! Momma!!
He he. I've said it before. China is the worlds financial wizards greatest sham.
Itsabout time...
hmmmm obamas job council head, outsourced jobs by that council head, obama's silence (lack of condemnation) on GE's outsourcing and obama's condemnation of romney by insisting that romney was personally responsible for outsourcing. Now you want to know where obama publicly said he sponsor's outsourcing?
LMAO on your reasoning abilities. Next you will be telling us that the obama campaign hasn't outsourced some of its call centers.
Source? Information out of your behind doesn't count. That sounds like a senile rant.
Things you should know about Mitt Romney:
Under Romney’s leadership, Massachusetts manufacturing declined by double the national rate, and was the third-worst overall in the country.
Governor Romney left behind a $1 billion budget deficit for the next governor and saddled Massachusetts taxpayers with more debt per person than any other state.
During Romney’s term as governor, state budget spending increased every single year.
The Washington Post reports that as CEO, Mitt Romney advised companies that were “pioneers” in outsourcing jobs overseas. As governor, Romney drew from the same playbook and outsourced state jobs. And today, Romney has proposed eliminating all taxes on companies’ foreign profits—which would actually encourage companies to send jobs overseas
Jobs. 47th out of 50 states in job creation
Taxes and Fees. Increased by $750 million per year.
Long term debt. Increased more than $2.6 billion.
GE closed down it's X-ray division and shipped it to China. It's been all over the news.
http://www.snopes.com/politics/business/ge.asp
So one corporation, that Obama doesn't run, ship jobs to China. Mitt Romney oversaw the operations of Bain Capital while they purposely outsourced jobs, but not as bad as Obama to you. I guess that makes sense if you're senile.
GE is a corporation, if the government told them who and where to hire, you would be crying socialism.
President Obama is good!
Not only has he, and the Democrats in charge for the past 6 years, ruined the American Economy but they are screwing the Chinese too!
Dick Cheney would be proud Mr. President...
thestuffmaker25
President Obama is good!
A black man was elected President in the United States because Bush did such a wonderful job. Just admit GWB messed up. Even George W. Bush agrees the downturn started while he was in office. On September 24, 2008 he went on TV to tell us we were all screwed. Did you forget:
http://www.youtube.com/watch?v=YsDmPEeurfA
Oh, to be senile and losing your mind. It's funny to me that you can blame Democrats in Congress and absolve the President then, but now it's all the fault of the current President. Cognitive Dissidence...
jpjohnson
"Oh, to be senile and losing your mind. It's funny to me that you can blame Democrats in Congress and absolve the President then, but now it's all the fault of the current President. Cognitive Dissidence..."
It's funny to me that you can blame the current House Republicans and absolve the President, but ignore the fact that Bush lost the House and Sentate in November 2006, before the downturn, to Democrats and absolve them for the past 6 years economy.
See ya in November...
To date, the 112th Congressional Republicans have introduced;
46 Bills on Abortion
113 Bills on Religion
73 Bills on Family Relationships
36 Bill on Marriage
72 Bills on Firearms
604 Bills on Taxation
467 Bills on Government Investigation
And BLOCKED the American Jobs Act.
Not a bad deal for someone who only works 9 days a month for full pay & benefits!
They have made repealing Obama Care AGAIN a priority this week!
What ever happened to Boehner's 2010 battle-cry; "Where are the J-O-B-S Mr. President"???
It couldn't happen to more deserving people.
Dude, you're gettin a pay cut.
CuongDNguyen "And BLOCKED the American Jobs Act."
You mean the one that Obama couldn't even get his Democrat controlled Senate to pass?
ItsAboutTime-3704531 "Can you provide any reputable source in which Obama publically endorses moving American Jobs to China?"
Politicians don't 'publicly' endorse any unpopular actions - they always hide it.
Case in point - Obama touted Obamacare as a 'penalty', not a tax increase, but when the had his case presented before the Supreme Court, it was called a TAX, which is why it was found to be legal. Now he's back to saying "It's not REALLY a tax, it's a penalty".
How do you spell H-Y-P-O-C-R-I-S-Y?
And when Obama was providing $Billions in taxpayer loans to his SOLYNDRAS, those companies were merely assembling components 'Made in CHINA'.
I like how you avoided saying anything about the link. That was cute. An ostrich would be jealous of your skills. Sure dude, Democrats caused Bush to take down the economy is less than 2 years? What exactly did they do to overpower Bush? What legislation did they trick Bush into signing? Your argument is "THEY WERE THERE FOR TWO YEARS!", seriously?
This is good news. Supply and demand baby, the less we buy the more they lose. LMAO let's keep it up.
JPJohnson "What exactly did they (Democratic Congress) do to overpower Bush? What legislation did they trick Bush into signing? Your argument is "THEY WERE THERE FOR TWO YEARS!", seriously?"
Isn't that the same reasoning that you use to 'Blame Bush' - that "HE WAS THERE FOR TWO YEARS", seriously?
Can you name a single policy by Bush that caused the financial collapse? I can find lots of examples of the Democrats in Congress blocking Bush's attempts to control reckless sub-prime mortgage lending.
"Democrats caused Bush to take down the economy is less than 2 years? What exactly did they do to overpower Bush? What legislation did they trick Bush into signing? Your argument is "THEY WERE THERE FOR TWO YEARS!", seriously?"
After 2 years of Democrats in control of Congress the Economy was in a ditch. After 6 years of Democrats in control, the Economy is still in a ditch but now on fire and the wheels have been stolen.
I hope I have been clear enough about how I see this coming election.
See ya in November...
Chinese have ZERO immigration and zero population growth. This means 7.5% increase in GDP equals 7.5%increase in living standards. Their worst in years is far better than our best. 2% growth in the US, just means keeping up with population growth. 2% US GDP means we are living no better, there are just more of us.
If immigration makes us so rich, then why does China have the best GDP with zero immigration? All we do each year is build new infrastructure for more immigrants. Our GDP offers no increase in standard of living.
What this really means is no hope for a better life for most people. Of course people in the US want income distribution as it is the only way they will live better. They cannot expect the rising tide to help them.
The Chinese do not waste their money on:
endless wars in other countries, make-work tax system, make-work health care system, make- work legal system, and endless make-work papers form the government.
If it was my job to screw up the country, I couldn't do a better job than the government we are forced to pay "to make things better for us"
Bill--got to agree with you that our disastrous immigration policy serves to LOWER the standard of living for the citizens of the US. Whenever anybody yammers about 'comprehensive immigration reform, I just want to SCREAM that that reform should NOT include increased numbers, an easier path, or chain migration.
It SHOULD, however, include MUCH stricter standards for potential immigrants, including their ability to CONTRIBUTE to this country by offering economic skills/assets, rather than being 'economic' "refugees" from another country's (s) failed ability to educate their OWN citizenry, and to also limit their birth rate to sustainable levels.
Instead, most of those who want comprehensive immigration 'reform' just want it to be easier for THEIR 'homies' to come here nearly at will, and become a burden on out economy and infrastructure.
Roy Wilson, if more people thought like you, we would have a better govt. Unfortunately we have stupid people that believe everything radical politicans on the left says.
Notice not one word said by this news source about Obama exercising his executive priveledge, he has control over the internet in times of emergency. http://www.newsmax.com/Newsfront/Obama-seize-internet-emergency/2012/07/11/id/445083?s=al&promo_code=F713-1
If Bush did something like this, the left would be going crazy.
bill s-374237:
Qatar has the highest GNP at 17.9% and zero national income tax .
China did not find huge pools of oil under ther land. They do not import people.
100% of their growth was caused by their own intelligence and hard work. Their government managed to create a set of conditions so that this hard work and intelligence resulted in an increased strandard of living.
Either we are less intelligent, less hard working , or our government is destroying the results of our labor.
MaoZeObama banned, rereg of JamesInSeattle.
Roy you liar, Obama's Jobs Act is sitting on John Boner's desk.
Valhalla Phil
GE closed down it's X-ray division and shipped it to China. It's been all over the news.
http://www.snopes.com/politics/business/ge.asp
..................
....Well people, Valhalla Phil has proved why the replacements of the once respectable GOP, whom I used to support, can no longer be trusted. If you click on his provided URL from Snopes, you will see that GE did NOT close down its WI operations at all, AS HE SAID, only that they transferred their headquarters for xray to China, while NOT reducing their staff in Wisconsin. They did this to put their headquarters closer to where their projected sales are, and although I don't feel real good about it, it certainly is not as bad as what the bull feces spouting Valhalla Phil, and his ilk, are posting here and would have you believe. Hey people, check things out, and don't believe the first thing you are told, otherwise you are just Fox News fodder, lining the pockets of Limbaugh and Beck, laughing at your stupidity as they make tons of money off of it. No wonder this country is so F'd up.
say tyler, how about Rod Father calling Roy Wilson a LIAR?
Doesn't seem very polite or respectful to me.
Is it ok because they are left leaning? Is that the standard? Sure seems that way sometimes, with all the nastiness spread by the Redhead and her sycophants, with nary a moderator speaking a word.
Meanwhile conservatives are held to the actual rules.
That's the impression you are giving anyways. Just thought you should know.
Anywhoo..... The best part is that Roy Wilson was in fact correct.
If Rod Father knows this, then HE is in fact the Liar.
If Rod Father does NOT know this, he is simply an uninformed blind party Hack.
See, The President spent a great deal of time, and considerable tax dollars, flying around the country waving his arms and shouting "Pass This Bill NOW!!!!"
Remember?
However, being as arrogant as he is, he never worked with his own party to get support for the bill in the Senate.
When the republicans called his bluff, and called for a vote, no democrats supported it.
Harry Reid had to squash the vote with procedure to avoid even more embarrassment for The President.
The President looked foolish.
Not because of the republicans.
Because Obama did in fact act foolishly.
then the administration turned around and tried to blame the republicans.
Sadly, the low information voters seem to have eaten that horse dung right up.
It's too bad really, the complete lack of education about the issues displayed by many here.
But Rod Father, for you to go so far as to call Roy Wilson a Liar, without at least taking a few moments to use Google, well......
That speaks volumes abut YOU, and the knowledge you use to decide whom you support.
Alil Common Sense
say tyler, how about Rod Father calling Roy Wilson a LIAR?
.........
Grow up and get over it, and if it was me, liar would have been tame.
I see..... so rather than respond to the facts, you choose to attempt to discredit me by claiming I am somehow immature and need to "grow up"..... interesting.
Very Rovian of you.
And, Sadly, Typical.
By the way, calling him a liar was a LIE.
Yet you endorse it.
Sad fail.
The bill you state no democrats supported and voted no on is simply untrue, you're either uninformed or in typical republican fashion willing to twist anything to make a point. Republicans forced a vote because they knew there wasn't enough support for it to pass. Democrats refused to cast a vote even though most supported it because they wouldn't play the republicans game casting a vote that wouldn't pass. Anytime a vote is taken and a member doesn't cast a vote it's automatically recorded as a no. No democrat cast any vote on this bill. I hope you're just a typical republican twisting the truth for some supposed gain and not someone posting nonsense when he hasn't a clue. Reid tried to stop the vote because votes are seldom taken unless they know the outcome and it's considered bad form to force a vote simply for political reasons. But then republicans were never worried about bad form.
Larry, what you are saying doesn't even make sense.
The President flew all around the country making a spectacle of himself, saying "Pass this bill now!!!"
The Republicans brought it up for a vote in the Senate.
The Democrats, specifically H.Reid, had to squash it BECAUSE IT DID NOT HAVE ENOUGH SUPPORT TO PASS.
And no, a member not voting does NOT get recorded as a "no" vote.
I love this when you said "I hope you're just a typical republican twisting the truth for some supposed gain and not someone posting nonsense when he hasn't a clue. Reid tried to stop the vote because votes are seldom taken unless they know the outcome and it's considered bad form to force a vote simply for political reasons. "
Can you even appreciate the delicious irony?
You spin and accuse me of spinning at the same time! You accuse me of not being knowledgable about the legislative process, while you yourself spew inaccuracies, clearly demonstrating that it is in fact YOU who are ignorant of how it works!
Thanks Larry. You made me laugh today.
Later, when I remember that you vote,
I will be sad.
China's growth is likely much less than the 7.6% they publicly reported.
"By most measures China's economy has slowed quickly since
the last quarter of 2011. Electricity production, the National Bureau of
Statistics reports, grew 1.7 percent in April and May from last year. Over the
past decade the annual growth rate was 12 percent. Also in April and May, the
railroad ton-kilometer figure grew by 1.3 percent compared to the same months
last year, down from the 6 percent growth seen from 2005 to 2011."
...an excerpt from an article by Andy Xie 6-29-12
The 1 big problem with GDP is it's tied to the rest of the world. Almost all of Chinas production is exported and as the rest of the world slows its buying Chinas GDP wil continue to shrink. Deflation or inflation pick your poison, but be assured one of these are coming to us all.
Jay, probably so but most industrialized nations would love to have half of that number.
Good to hear.
He's the blame, No he's the blame. Enough already! We the people that are suffering right now are the blame. In the late 70's and early 80's we the American public was warned that if we continued to purchase products made from overseas we would end up unemployed. Guess what? It came true. Now we need to get off of our whineing asses and do something about it ourselves and quit depending on our government to take care of things.We the people are stronger than any government, but we cannot get along with each other long enough to fix this mess we are in. It is a shame.
What? You mean by exporting all our jobs there, people can't afford to buy as much of what is made there? Say it isn't so!
Gotta have someone to sell all their manufacturing to, and it's not like they pay enough for many in their country to buy it.
Bush got unemployment down to 4.6% with the exact same trade policies. That's what the democrat congress inherited. China isn't the problem, socialist democrats are.
Note to China: You've got all the dollars .... buy your own crap.
Wages for the middle class started going in the crapper under Reagan when he attacked Unions. Reagan went after air traffic controllers and repubs went after Unions ever since. The attacks on Unions lowered wages and stagnated raises across the board. The rich got richer and started exporting jobs overseas with the tax breaks given to companies through NAFTA etc. Manufacturing in the U.S. is at its most PRODUCTIVE level in history, yet wages are held down on the workers because the rich have the greed of getting richer.
Solution simply is to remove the tax breaks for the companies that took jobs overseas....Repubs including Romney will not allow this, they block all bills.
Solution is to give tax breaks to companies who return their business back to America. Repubs including Romney are against this also and block those bills.
Why? Because repubs pledged to take the economy down the night of President Obama being sworn in. They pledged to vote against every bill that would help the economy recover just to make Obama a one term president.
Obama/Biden 2012
@Valhalla Phil - Your "facts" are not factual. www .factcheck.org/2012/04/romney-fundraising-pitch-skews-stats/
Remove the space after www.
starsailing--sorry, but 'wages'that started going in the crapper under Reagan were bloated UNION wages. I know way too many examples of Union workers sitting on their duffs doing NOTHING while getting paid bloated salaries/bennies for a job that requires little or no special talent.
I agree that giving tax BREAKS to those who bring jobs BACK is a good idea (less taxes ALWAYS stimulates productivity, but find it amazing that you are still pushing that 'crapola' about the pubs vowing to take down the economy to make Obama a 1 termer.
I believe that they PREDICTED that his POLICIES would do that.
The Unions have only themselves to blame. I know because I am in a Union. They are the same now as they were 30 years ago. The last job I was on made me realize that Unions will never make a come back because of the Brain washing that is instilled in the young men and women that go threw the apprenticeship program. All I heard on that job is how they were going to break this company. I was amazed and just asked why would you want to break a company that was paying you 7 dollars an hour more on your check than any other company working on this project and 10 dollars more an hour for your benefit package which pays your insurance and retirement. And of course anybody that isn't in the union is the enemy. The unions started out to be a good thing but it shouldn't be involved in government jobs, only in the private sector.
Bush's unemployment rate january 1st, 2009 was 7.6% and bleeding 700,000 jobs a month.
Kjunme: You were making $7 a hour more in pay and $10 an hour more on benefits with your union job versus non union and you bash unions? You should quit and go to work for the other companies. Give the union job to someone who likes more money.
You'll be happy with Romney. He proposes on bringing in 1,250,000 tech workers who'll work for lower wages than american techies giving them all green cards and legal status. He claims these new workers will increase employment by creating support jobs. Like selling them Big Macs and cleaning their houses.
look at the label on anything you buy and it will say made in china. this rediculos analysis is just part of the msm's agenda to fabricate and self conclude a positive economic outlook. china will soon be the worlds number one economy thanks to obama . obama promised to cut the trade deficit between china and us. the reality is our defict has reached new highs under obama. and speaking of obama , where the hell is he . today bill i can't shut the fk up clinton is back with his guru like analysis on the economy. obama on the other hand has completly given up on jobs and the economy and will now spend his remaining time giving speeches to highschool and community college kids while his super pacs spew fabricated and self concluded hate rants. omg is bain capital all they got to talk about or what?
Bones...
Wrong! As much as I think obama is incompetent on so many levels as potus, chinas eventual rise to the number 1 economy is based on their having over 1 billion consumers and their efforts to be a more consumer based economy rather than just export. Think of all their investments in living structures, energy and transportation infrastructures.
BTW - India may very well become the #2 leader for the same reason, over 1 billion consumers.
One and done 2012 -OMG.
bones--have seen Clinton on SEVERAL news interviews, and he has to really dance around when they ask if he thinks that Obama's policies have helped or hurt this country.
Me, I find this article to be telling: A country, faced with a slowing economy, decided to throw 'federal' money at the problem, with little planning or regulation as to how it was to actually be spent.
The results were predictable. Billions were wasted, questionable business practices were rampant, and some months later, it has been proven that the 'stimulus package' has FAILED.
The government (any government) has NEVER been a good manager of projects.
Ironically, the SAME results could have been predicted in China had they merely paid attention to the old saying about 'those who don't pay attention to history being doomed to repeat it."
It's a lot easier to increase an economy 7.6% when your average worker makes $200 a month than 48K a year. Electing a republican who's made 1/4 billion dollars making products overseas is unlikely to help eaither, especially one who's pledged to import another 1,250,000.
Romney proposes bringing in 1,250,000 tech workers who'll work for lower wages than american techies giving them all green cards and legal status. He claims these new workers will increase employment by creating support jobs. Like selling them Big Macs and cleaning their houses.
Obama's fault my a$$....that is just plain stupid, this has been building for years, ever since China garnered most favored nation status.
I have been wondering for years now what the business leaders of our country were going to do once they realized that the American consumer was tapped out. It had to happen at some point, and it has finally hit home. They are making cheap products with no one to buy them !!!!!!
nothing is this clowns fault.
You are the CLOWN, Mao...........
How is China "Powering the global economy?" As far as I know, they just make and SELL stuff, they hardly BUY anything that wasn't already made IN CHINA! China, too cheap to fail!
I believe they have a trade deficit with much of the world, that is of course except for the USA.
"Give up some social freedoms for continued economic growth..." Sounds exactly like the rest of the (non-communist) world, doesn't it? When China hits the financial wall, it will be just like what happened to Japan a number of years ago. Suddenly the rich will be the only ones able to support their families and many people will fall behind on rent, mortgages, food and healthcare payments. Sound familiar?
Under liberals, we are giving up some social freedoms WITHOUT economic growth!
Phil.....Under republicons we are giving up all freedoms WITHOUT economic growth, and repubs want to kill all puppies and kittens.!
Starsail . . How can you say repubs are trying TO KILL ALL PUPPIES .& KITTENS?? Why the LIES??
TIME FOR YOUR DAILY TEABAGGING STARSAIL!!!!
I haven't lost any freedoms maybe it's just yours they're taking or maybe you're just delusional.
7.6% growth? Maybe Obama should send some people over there to see what they are doing right.
There have American corporations supplying their citizens with jobs that pay lower than minimum wage here and if you read the article, a large part of that was state funded through a stimulus.
They have embraced capitalism with a vengeance while we demonize it, despite the fact that it's what made us the greatest nation on earth.
Until we stop socialist crony capitalism and return to true free market capitalism, we will remain China's bitch.
YEA!. Who do we Americans think we are to expect jobs that pay better than minimum wage.
Alan wrote....."Maybe Obama should send some people over there to see what they are doing right"
China has the jobs Romney and Bain sent to them all these years and repubs block dems and Obama from getting them back.
starsailing--you DO know that not all the companies that Bain saved sent jobs over seas?
and that those that did were going BELLY UP without that move? Which STILL would have resulted in those jobs ALL being lost.
And the pubs have done NOTHING to block Obama offering tax breaks to lure those companies back. So where is Obama's or the Senate Dem's proposals to do that?
China protects their industry with a passion. They manipulate their currency, require companies that want to sell there to partner with a Chinese company which of course then they must share their trade secrets with their new Chinese partners. We on the other hard give them most favored status basically allowing them to ship us anything they want with few tariffs and fewer restrictions. Romney as a businessman wants one of his first acts as president to be approving 5 more countries for free trade agreements including Panama and Columbia, not sure what the other 3 are. At the rate we're going in another 30 years we'll have free trade agreements with everyone and an average wage of $5 a day. We'll finally be competitive.
MoMaid: Acquiring a company and looting it's assets isn't saving it even if it survives. Most of the 77% of the companies that Bain acquired that didn't end up in bankruptcy had huge amounts of money paid to them in special dividends and fee's most borrowed on company assets. The fact 3/4 survived this rape is in spite of Bain not because of them. You're statement they were going belly up without Bain is ridiculous. Bain never acquired any companies that had debts that exceeded their assets they'd be fools to do so.
as long as it helps lower the price of gas at the pump, tis good news to me!.
Every cloud has a silver lining! :<)
might wanna check the pump prices...it has gone up 10% in central Tx in 15 days
John C. Mayer--hmmm--after about a week of minor lowering of gas prices in MY state, they are on the way back UP again.
Just sayin.
I thought gas flowed out of the ground in Texas.
Don't worry be happy (listen to Monty Python sings), just eat you noodle bone soup. All the injuns are being used and never for the betterment of human kind. No consciousness towards their fellow man, just like rest of us being lead by the top to the bottom, for their greedy joy. Mama China (others too) don't even consider BIG MAMA EARTH and she is getting tired of breast feeding the big babies!!
Kharma's a real beech, eh China ?
Don't listen to fools like Flip that 'pioneered' that giant sucking sound Ross Perot warned us about. When we take back our jobs, we take back our freedom.
Rocco--unfortunately, until those jobs we take back become a more reasonable portion of the bottom line, it ain't happening.
When you have to pay a manufacturing worker who attaches widget B to thingy C, and his union demands more an more benefits on top of higher and higher wages, with NO accompanying increase in production, the only way the company can survive is to raise prices (which priced Levi Strauss out of business) or cut labor costs.
That is what labor unions NEVER get. You cannot do a low skill job all your life and expect to get all the perks that someone who has gone out and improved their skills/training/education to increase their value to the job market gets.
"That is what labor unions NEVER get. You cannot do a low skill job all your life and expect to get all the perks that someone who has gone out and improved their skills/training/education to increase their value to the job market gets."
We did for 200 years and had the greatest industrial production in the world, all blue collar jobs that paid 3 to 5 times minimum wage to start. It ended when we entered free trade agreements and offered most favored nation treaties with countries who still protect their industry while we try to compete against workers in Zimbabwe making $1 a day. People like you who thinks unions are evil for wanting workers to make $12 an hour and do away with a $7 an hour minimum wage probably make a lot more. It isn't our workers who got greedy our manufactuers sold the jobs to China for a $1 an hour. Union or not you can't compete with that so i guess you'd just let them have all manufacturing?
Chinese are saying, "Thank goodness we had that huge order from the US Olympic Committee".
I thought communist countries don't grow their economy? Sounds like we have some leaders here that think a communist country that has an elite class ruling their other 90% is OK to be invited into the free world of free trade and marketing...oh is that why Nixon visited first?
China hasn't been communist for years. They gave in to Capitalism a long time ago.
Big:
10 % ruling 90 % is lot better than our 1 % ruling 96 %.
At least their leaders have clear commitment to their people and unlike our both candidates want to kiss asses of rich and powerful.
That is lot to think about.
Again, they brag they are more capitalist than we are and they're right. They urge people to get rich and make money over there, here the rich are practically stoned in the streets.
Hey guys, you have been caught, I always wanted to trap a repub into saying they wanted to be more like China...what's next, you want to be in Russia too? Dr. Strangelove is turning in his grave.
There are a multitude of problems facing the Chinese economy.
First, the labor cost has in some cases quadrupled over the last several years. It is not nearly as attractive as it once was for US companies.
They simply over-built. They had a "if you build it, they will come" misconception. I have stayed at 5-Star hotels that had a 25% occupancy rate at best.
There are several other reasons, but it all adds up to a coming storm for them.
Walk:
Yet China has manufacgturing c apacityand infrastructure in place to do so. We will have to bend over backward and pay the higher prices. It is still nto going to be easy for us to build factories with any level of confidence when Governement, Fed , skill level, quality of employees and shortage of talent factors are considered. Our eduication cost is so high, the wages we have to pay will cripple us.
GODGRAVITON--
As long as you recognize that our education costs are so high partly because Education is big UNION, and also because most education institutions get a lot of their money from the government, which funds projects that pub shrimp on a tread mill, or that determine that if a woman has to pee, if she squeezes her thighs together it helps 'hold it'. (True projects.)
And by the way, another reason education has become so "expensive'' is that NO ONE seems to understand that when you give birth to a child, ONE of your responsibilities is to begin SAVING money for their education, and another is to TEACH those kids from the beginning of their formal education that SCHOOL is their 'job' and that it is essential that they WORK HARD at it in order to win scholarships.
Those are good life lessons--NO one owes you anything...you have to EARN it.
I can remember when I was a growing up one of my friends grandfather told us that the stock market will ruin this country. He went on and explain that when a company is owned by an individual he can become rich with a 30 % profit and still pay his employees a middle class wage with benefits, when a corporation has thousands of owners it will need to make 300% profit to spread around to it owners which leaves little left to pay its employees which leaves no room for a middle class.
I think most of the posters here miss the point of the article.
Yes, China's growth is the envy of the world. The problem is that they have made big big promises to their people when it was almost twice that number. Now things are slowing down and China is not going to be able do deliver and they are asking their people to sacrifice for the greater good of the country. The problem is how much of a sacrifice will the Chinese people be willing to bear before they turn on those in charge.
Don't know...but it will be entertaining to watch.
Common breakdown......The American consumer is finally too broke from a lack of jobs to buy the cheap junk that is made overseas by foreign workers maning American industries that moved American jobs overseas to produce cheap junk to sell to American consumers that no longer have any money to spend because we no longer have jobs to earn the money to consume with because all of our jobs were outsourced overseas so the business owners could double their profits by paying slave wages and operate without any regulations while they produce cheap junk that needs to be disposed of after one or two uses to sell back to American consumers who have no jobs and therefore NO buying power any longer. Moral of the story........Just like the tom cat that crossed the railroad tracks when a train was coming and got the end of his tail clipped off, then turned around and went back across and lost his head for a little piece of tail. When we allow greed to overtake the senses we usually get what we bargain for in the way that it comes back around to bite us in the A$$!!!
Both Apple and Dell build there, that is not cheap junk. Don't underestimate the Chinese, "Made in Japan" used to be a joke also.
Bush got unemployment down to 4.6% with the exact same trade policies, since democrats took over congress it's been all down hill.
I hear you Midnightridr, well said.
Unlike USA China will do what is essential and will be realistic how world situation affects them. It is unlikely that Chinese people going to hold leaders responsible when whole global economy in in dump.
Sometime these reporters and pmany people think that Chinese people are not logical. That will be fallacy.
We are stuck in regulation and complexity that we do not know how to manage. We are making rules, regulations, operations so complex the talent we have in this country cannot understand how to navigate.
Unless we fix this, nothing will work. Even JP Morgan is not able to manage complexity..they are surviving due to bigness and gutless fed and regulators, President and Congress all of them are clueless and will bend over backward to let banks have their way and survive at any cost.
Like a virus killing its host, China's inexpensive exports have doomed the West to econmic ruin.
John:
Why not take responsibility for our own misdeeds, wanting to buy more than we have in pocket..and our own greed.. anddumb politicians who want to get re-elected , screw the people. That includes Obama and us who elect them
John--in the 50's and 60's, my town had a "Town & Country" shoe factory. Union, of course. Now, in the mid sixties, shoes began hitting the states from places like Spain, Italy, and Brazil, that were better made, more stylish, and cheaper than the T&C ones were.
Now, I'm as much a patriot as the next guy, but NOT so much so that I'd keep buying T&C shoes.
And BTW--it is ABSOLUTELY true that we want to buy more than we have 'in pocket' to pay for.
But we also just want to buy MORE.
MY family was decidedly middle class growing up, and my mom and I SHARED a closet that was less than 4 feet of hanging space, and I had ONE 4 drawer chest.
Now everyone complains if their apartment doesn't have walk in closets. We have become a 'consumer society' who wants to keep consuming even if we don't NEED it, have room to STORE it, or seldom USE it.
Much less have the CASH IN HAND to pay for it.
Chinese politicians lying about their economic numbers? The heck you say. Well there's one thing we have in common...politicians suck everywhere.
JP Morgan Chase banks hedge loss is now at $5.8 billion dollars. Started at $2.0 billion. These people know enough to charge me $20 for using a debit card but cannot calculate their losses?
And let the REAL crisis begin...
That's not the half of it.
They are apt to lend to whoever pays big bribes and sends their kids to American universities.
In China when they say they have a 35% 'bad loan ratio', they mean the money and the people who borrowed it have flat out disappeared and there's no security to even up the debt.
That's a lot different than the U.S., where a bad loan just means the bank might face a partial loss.
But so what? In a centrally-controlled economy like that, they can print more money and arbitrarily fix it's value, so they can go downhill a lot farther until they hit bottom.
Outstanding, could not happen to a better bunch of thugs. They forgot who came to the rescue in WII, and in return they have done nothing but crap on the USA, they can go to Hell.
If China falls, the US will fall with it.
Confucius say: Chinese quite a bunch of characters!
One can only hop that this is a result from smarter American shoppers, starting to look for American made goods and the American people start to understand buying foreign made goods is contributing to the downfall of our own Democracy!Supporting the Chinese prosperity while the American nation falls farther behind!