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China, the next Soviet Union?

http://www.businessweek.com/technology/content/jun2004/tc20040614_2176_tc121.htm

<<There's also speculation, impossible to substantiate, that they're subsidized by government sponsorship and/or excused from making any profit. >>

This is not the first time i am hearing something like this. Almost everyone has the same experience with China's government and its hardware/software industries. Apparently, factories are extremely easy to setup and since most of the loans are almost never repaid, its a disaster waiting to happen. Most of their banks are reportedly under huge amounts of debt. Of course, in a democracy like the US, these things come to light. Like Enron. The damage is thus minimized. But what Chinese government is doing is p**sing in its pants, covering up the smell with  perfume and strutting the catwalk as if nothing is wrong.  The Economist also had an article on this recently. Even their GDP growth rates are inflated by a couple of percentage points.

Someday, someone like Gorbachev in the Soviet union will soon realize that there is no money to carry on the circus anymore.

Karthik
Monday, June 14, 2004

Some more posts

An excellent article by Martin Sieff

http://www.upi.com/view.cfm?StoryID=29032002-114009-5774r

These are a bit biased articles. But points are relevant. The author is kind of jingoistic.

http://www.rediff.com/news/2002/jul/26rajeev.htm
http://www.rediff.com/news/2002/jul/29rajeev.htm

Karthik
Monday, June 14, 2004

The Economist says: 'Ultimately China's surplus rural workers will need to move into urban areas. But the government, fearful of creating its own versions of Mumbai with endless shanty-town sprawls, is hesitant to open the doors to peasant migration. The booming cities of skyscrapers and glittering shopping malls that so impress foreign visitors to China will, over time, begin to look more like cities in other developing countries as country dwellers move in. The shanty-towns will spread.'

Karthik
Monday, June 14, 2004

From the UPI link:
<> India has never suffered catastrophic civil wars such as killed at least 3 million people in Nigeria in 1967-70. It has never suffered any genocidal slaughters such as killed up to a million people in only a month in Rwanda in 1994, or up to 3 million people in the "Killing Fields" of Cambodia at the hands of the communist Khmer Rouge in the mid-1970s.<>

I thought that after Indian indepedence there were some major clashes between Indian muslims and Hindus which resulted in huge losses in lives and the splitting to Pakistan, Indian and later Bangladesh. And India and Pakistan are still fighting of Kashmir and both have developed nukes to be used against eachother.

About the rest of the article. Its possible that India will do better in the longterm then China. However the only products/services that I know of that come from India are IT related while China has a large and diverse industry and a lot of dollars and euros from trading with western countries, more then they can spend. I think the only thing China is importing is raw materials and food. However I think the importing of food is big problem that will get bigger.

Also its great that India has a great healthcare system but if you look at Cuba who has one of the best healthcare and education systems of south america. Well you know Cuba is pretty poor still but with healthy and educated people.

somemorone
Monday, June 14, 2004

About half a million were killed in a couple of weeks durng transition in 1947 and tens of millions at least were displaced, often by thousands of kilometres.

The present President of Pakistan was born in India, and the present Prime Minister of India was born in Pakistan.

A crash in China is quite likely but why they compare it to the Soviet Union I don't know. It'll be the typical crash you get when rampant capitalism is combined with political totalitarianism.

At least in India you know what is happening; the 20 million or so deaths in the famine in the 60's in China would never have occurred in India precisely because it was a democracy. Indeed the only known famines in India have happened under the British (1879 and 1943).

Mind you, if China does collapse, it might be better to call it the next India!

Stephen Jones
Monday, June 14, 2004

What does this have to do with software?! This thread should be deleted IMMEDIATELY!

Ok, back to blowing my boyfriend's pink trumpet....

Elephant
Monday, June 14, 2004

> Well you know Cuba is pretty poor still but with healthy and educated people

Pretty good going when its main market has been closed to it for the past, what, 40+ years.


Monday, June 14, 2004

<>About half a million were killed in a couple of weeks durng transition in 1947 and tens of millions at least were displaced, often by thousands of kilometres.<>

Well thats more problems then the article wants to tell

<>A crash in China is quite likely but why they compare it to the Soviet Union I don't know. It'll be the typical crash you get when rampant capitalism is combined with political totalitarianism.<>

Well if China crashes the US will crash you know why? They are one of the biggest consumers of the dollar.

Like I said south east asian countries have to many dollars and they invest them in governnment loans but what if they want to loose those? US loans go down by 20% and US government can't loan any money anymore and finance Iraq war.

And Chinese Economy is more diverse then Indian (at this moment) so they could withstand a crash in one sector or two.

<>At least in India you know what is happening; the 20 million or so deaths in the famine in the 60's in China would never have occurred in India precisely because it was a democracy.<>

I think this could be something for India they could sell food to China. Make China dependend on indian food.

somemorone
Monday, June 14, 2004

<<What does this have to do with software?! This thread should be deleted IMMEDIATELY!>>

I understand. But the original link had to do with the huge boom software/hardware industries think is going on. As the interviewee said, it appears many of them are being highly subsidized by the government.

I thought that it was fairly clear from the OP.

Karthik
Monday, June 14, 2004

China's "great economy" is one of the reasons (probably THE reason) we in the US are paying >$2 per gallon at the pump, a figure that Europeans would likely regard as the "good old days" but which has shocked Americans.

So, the "reach" of a Chinese banking collapse around the world isn't implausible.

Bored Bystander
Monday, June 14, 2004

>> This thread should be deleted IMMEDIATELY!

That comment was issued in conjunction with a remark about a pink trumpet. So somehow, I cannot take this request so literally...

Bored Bystander
Monday, June 14, 2004

"That comment was issued in conjunction with a remark about a pink trumpet. So somehow, I cannot take this request so literally..."

Why not? Where's your sense of adventure? :-P

Elephant
Monday, June 14, 2004

China is not longer a simple country where old isolationist philosophy closed itself down.  China has increasing become a global power by consuming massive amount of what the world supply.  Its leadership still needs improvement, but they have been going around the world to win good will, and showing China's possibility.  Consider this, China is the second largest U.S. currency holder behind Japan.  Why? Because chinese currency is pegged against dollar.  The only reason the dollar has dropped as signficantly is because Japan and China buy U.S. dollar to maintain a stable market in asia.
The biggest advantage that China has over India is its infrastructure.  During the 40 - 70s, chinese government build a tremendous reserve of civil engineers, go to any american school and how many students majored in civil engineer tells you the story.  Because the amount of engineers and scientists they have, they built a large and complex infrastructure (like the U.S.).
If China market crashes, believe me, you'll feel the pain, because you'll be paying more for common basic goods.  India still has a long way to go before it can seriously challenge China.

New window pr0pr0mer
Monday, June 14, 2004

A country with a massive amount of debt, where business owners and the government are deep in each other's pockets?

Yup, sure sounds like a scary place. I hear they're keen on state executions as well.

Shane
Tuesday, June 15, 2004

<>A country with a massive amount of debt, where business owners and the government are deep in each other's pockets? <>

Ooh ooh let me guess!!
---
Your talking about the USA?

somemorone
Tuesday, June 15, 2004

<>Yup, sure sounds like a scary place. I hear they're keen on state executions as well.<>

Ooh Ooh let me guess!
---
Is the country the USA?

somemorone
Tuesday, June 15, 2004

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