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China is REALLY screwed...

Discussion in 'General Discussion' started by Quigley_Sharps, Jan 1, 2009.

  1. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member


    Wonder if their govt will survive this one?


    Rising desperation as China's exports drop
    By Keith Bradsher Published: January 1, 2009

    HONG KONG: At the docks here, the stacks of shipping containers that used to loom above the highway overpass are gone. Logistics managers say they negotiate deeper discounts every week on ships that are leaving half empty.

    In nearby Guangdong Province, so many factories are closing without paying employees that some workers are resigning pre-emptively and demanding immediate pay before their employers go bankrupt.

    In Sichuan and other interior provinces, municipal officials are desperately searching for ways to provide jobs for millions of out-of-work migrant laborers whose families no longer need them for farming.

    Those are the effects of millions of Americans' cutting their spending.

    American retailers, after suffering a dismal holiday shopping season, are delaying payment for Chinese goods 90 or even 120 days after shipping, in contrast to the usual 30 to 45 days, requiring their suppliers to try to borrow more money to cover the difference. Some Chinese suppliers who cannot raise the money - many already operate on thin margins - are going out of business.

    A better 2009 for global investors?Gazprom shuts off gas links to UkraineA bad year to own stocksAt the same time, retailers are demanding that exporters show that they have strong balance sheets and will not go bankrupt before completing orders. Exporters, worried the retailers will fail before paying for their purchases, are reluctant to let goods be loaded onto ships. And banks, for the same reason, have cut back on guaranteeing retailers' payments to exporters.

    "Trade finance is collapsing," said Victor Fung, the chairman of the Li & Fung Group, the giant supply chain management company that connects factories in China with retailers in the United States and Europe. "We've got orders we can't ship right now."

    Fung estimates that 10,000 of the 60,000 factories in China owned by Hong Kong interests have closed or will close in the coming months.

    Other business leaders say that the toll may be even higher and that factory closings are an even bigger problem among mainland Chinese businesses because these tend to be smaller and more poorly capitalized than those owned by Hong Kong businesses.

    Government statistics show that Chinese exports slipped 2.2 percent in November when calculated in dollars, after seven years of rapid growth. But dollar figures do not come close to capturing the real depth of the downturn.

    Convert the export figures into China's own currency, a much better measure of the effect on the Chinese economy, and exports plunged 9.6 percent in November. Factor in inflation over the past year and the plunge was 11.4 percent.

    Indications are that the December data will be even worse.

    Consumer electronics manufacturers have been hit the hardest, according to customs data. "No one has any money anymore, so demand for our mini hi-fi systems has declined a lot," said Lion Yuan, the sales manager at Shenzhen Yidashi Electronics, where exports have dropped 30 percent in a year.

    In the past two weeks, Chinese officials have announced a series of measures to help exporters. State banks are being directed to lend more to them, particularly to small and midsize exporters.

    Government research funds are being set up. The head of the government of Hong Kong, Donald Tsang, plans to seek legislative approval by late January for the government to guarantee banks' issuance of $12.9 billion worth of letters of credit for exports.

    Particularly noteworthy have been the Chinese government's steps to help labor-intensive sectors like garment production, one of the industries China has been trying to move away from in an effort to climb the ladder of economic development, moving to more skilled work that pays higher wages. But now China has become reluctant to yield the bottom rungs of the ladder to countries with even lower wages, like Vietnam, Indonesia and Bangladesh.

    China has been restoring export tax rebates for its textile sector, for instance, which it had been phasing out. Municipal governments have also stopped raising the minimum wage, which doubled over the past two years in some cities, peaking at $146 a month in Shenzhen, which abuts Hong Kong.

    "China will resort to tariff and trade policies to facilitate export of labor-intensive and core technology-supported industries," Li Yizhong, the minister of industry and information technology, said at a conference Dec. 19.

    Increased export incentives by China have the potential to create a trade issue for the incoming U.S. administration of Barack Obama, particularly regarding textiles.

    U.S. quotas on the import of a wide range of Chinese garments expired Thursday. Even before the Chinese began announcing their latest programs for exporters, the United States filed a legal challenge Dec. 19 at the World Trade Organization, accusing China of having already provided illegal subsidies to exporters in a long list of industries as part of a program of trying to build recognizable export brands
  2. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    That'll teach 'em to buy us up and invest in US real estate and companies. They've linked themselves so deeply they'll go down with us.
  3. RouteClearance

    RouteClearance Monkey+++ Site Supporter

    I remember a few months ago when the MSM said that China would be able to "decouple" from us easily because of their growing middle class, hmm, sounds like they miscalculated that one big time.
  4. Quantrill

    Quantrill Monkey++

    Bwaahahahaha, that will teach those bastards to send crappy stuff over here that needs assembly and short me 1 or 2 screws. [coffee2]
  5. Valkman

    Valkman Knifemaker Moderator Emeritus Founding Member

    Sorry, no love here. We had to put together a dollhouse made in China for XMas and that thing was shit. That's what you get for $100 nowadays.
  6. toemag

    toemag Monkey++

    I don't really care for the Chinese problem right now, my problems are greater, as I don't know if I'll have a job in the near future. Which will make for some interesting election results here (Germany) in September.

    We the western world have lost the ability to make most electrical goods that we use on a daily basis, and when I say lost the ability, we no longer have the company's, production facility's, machine's or the trained staff to run them.

    In the end we will have to re-think our position and correct or balance that problem one way or another.

    I fear that the time for correcting the home made discrepancies has long since come and gone, even Government intervention which is unwanted and unwise will do nothing to save the day, and the private sector has lost enough of its capital recently.

    The economy will just continue on it's way down the bottomless pit, dragging the social infrastructure as we know it, with it.

  7. SLugomist

    SLugomist Monkey++

    Buy only American Made and watch em all goto pot while we recover. Although, I've heard it's quite hard to do these days.
  8. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    Buying American takes some looking (sadly). It can be done and is well worth the quality difference!!
  9. Seawolf1090

    Seawolf1090 Adventure Riding Monkey Founding Member

    Maybe the US companies that went overseas for their manufacture will come back. I bought a Chinese-made pocket knife sold by Winchester - it lost a screw and OPENED in my pocket......

    I got lucky - it could have resulted in a bad accident.....
    too close to 'the boys'. :oops:

    Replaced it with a US-made classic. No worries.

    I'm dreading when the Chinese begin importing cars to the US - gonna be carnage on the highways...... [rofllmao]
  10. RouteClearance

    RouteClearance Monkey+++ Site Supporter

    We have well reached the point of no return with our economy. American consumerism is "dead in the water" and moving all our factories back here and training the required people to run and operate them would take years to accomplish. It took close to twenty years to move our production facilities over there to begin with.

    The average American lived high off the hog durring the roaring 20's, and what were the results. Today the conditions that exsist are much worse. Last year was our "Crash of '29" and the full ramifications of the "Great Depression" was not realized intill 1933.

    Buckle up, things are going to get real interesting.
  11. WestPointMAG

    WestPointMAG Monkey++

    Lives are like the tangled vine
    All intertwined
    Dependant on one another for support
    To move or remove one
    Could caused the failure of another.

    Replace lives with international economies and you will have a picture of what is happing in the world.
  12. Seawolf1090

    Seawolf1090 Adventure Riding Monkey Founding Member

    It may sound odd, but the fact the entire world economy is going down the Great Toilet makes me far less worried about the near future......

    If the other nations militaries are broke, they can't invade us.
    If our economy is so bad living is as hard here as there - they won't be crossing our borders for our money and jobs.
    Equality on a worldwide scale......
    We are all turds floating in the same cesspool. [lolol]
  13. RouteClearance

    RouteClearance Monkey+++ Site Supporter

    American consumerism and materialism DOA, October 2008.
  14. toemag

    toemag Monkey++

    I just got this in the email.

    Joe Smith started the day early having set his alarm clock (MADE IN JAPAN ) for 6am.
    While his coffeepot (MADE IN CHINA ) was perking, he shaved with his
    electric razor (MADE IN HONG KONG).

    He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN
    SINGAPORE) and tennis shoes (MADE IN KOREA)

    After cooking his breakfast in his new electric skillet (MADE IN INDIA) he
    sat down with his calculator (MADE IN MEXICO) to see how much he could spend today.

    After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) filled it with GAS (from Saudi Arabia) and continued his search for a good paying American job.

    At the end of yet another discouraging and fruitless day checking his
    Computer (MADE IN MALASIA), Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL) poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can't find a good paying job in the United States.

  15. Brokor

    Brokor Live Free or Cry Moderator Site Supporter+++ Founding Member

    Although we have a scientifically created depression, and the results of which are anything less than scientific -the spending and borrowing and increased lending are only added weights to the already cumbersome Federal Reserve (who own all of the money). The United States is in debt because of the same fraudulent usury scheme which has been going on since before the inception of this very nation.

    And now we are surprised that China is running out of work? C'mon, folks! We all know that the global market and even our own stock market are 90% influenced by perception (corporate media hyping an event) -what the people see, they will come to expect, and massive amounts of money change hands at the slightest whim. The fact that this "Economy" is so strongly dependent upon the disposable, shop till you drop mentality, is because of the growing debt (deficit), which can never be paid off.
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