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Strategies & Market Trends : China - The Next Great Stock Market ? -- Ignore unavailable to you. Want to Upgrade?

To: pibi who wrote (26)	1/3/2003 3:34:32 PM
From: Stephen O	Respond to of 140

Excellent post, shows that my posting about buying shares of raw materials suppliers is correct. Buy copper and zinc and nickel mining companies.

To: pibi who wrote (26)	1/3/2003 7:43:36 PM
From: Garden Rose	Respond to of 140

pibi, great article, continue to enlighten us. It was the best data on China that I've read. Thanks, GR

To: pibi who wrote (26)	1/4/2003 12:44:59 PM
From: RealMuLan	Read Replies (1) \| Respond to of 140

It is true that this global economy-free trade thing is doing some damage for the job market and workers' wage in the developed countries. but I have some questions though: 1) Why there is no strong (social) movement to lobby your congressmen to regulate the companies which export the jobs relentlessly? To the contrary, all I see from the US congress is making more laws which only benefit the CEOs and multi-national corporations and encourage them to export even more jobs to the developing countries. Is this the way how democracy works here? 2) Market economy - the essence of the Capitalism - requires to maximize the profit. And how are you going to do it with a saturated, over-supplied domestic (in developed countries) market, and a aging population (excluding the US thanks to the immigration policy over the years). Yes, it would be ideal to only sell the product made domestically to those have-nots in the developing countries, but how can those people afford them if their wage is so low, or if they do not even have a job? For the poor people/nations, cheap goods do more good than harm, I have to say.

To: pibi who wrote (26)	1/6/2003 8:49:13 PM
From: Seeker of Truth	Respond to of 140

The phenomenon that you describe so vividly, the replacement of expensive labour in the developed countries by the cheap labour of Chinese people is surely in progress and will continue. Cheaper goods batter down tariff walls. However, that doesn't mean we will have deflation. If the government decides to cut taxes wildly as appears to be true for the Bush administration, then the normal and abnormal(war) expense have to be paid sooner of later by the printing press. In other words, inflation looks sure with these "conservative" Republicans. To make a simple hypothetical example, U.S. made cars costing 100,000 dollars will be replaced by Chinese made cars costing say 50,000 dollars, But that will still be more expensive then today's cars. Forty years ago Japanese labour began to replace U.S. labour in electronics and car manufacturing. And Japanese labour replaced more expensive European labour in shipbuilding etc. But after a while Japanese labour became more expensive. Success brought penalties. Of course the population of China is so great that it will be many more decades before the price of Chinese labour approaches that of developed countries. However as Chinese in China get more affluent their taste for services and other things from other countries will increase. The U.S. and Europe seem to have survived the competition of Japan somehow. Manufacturing shrunk and industries like tourism, software,video games, telecommunications, wine growing, began to grow alongside the shrinking steel industry, for example. I have similar feelings about the future. Maybe Chinese people will visit Europe and/or North America on their holidays. The U.S. is far superior to China in medicine and maybe affluent Chinese will fly to the U.S. for their operations. The treasure box of science is only partly open. I think it possible for China's development to be an economically tolerable event for the "West" whatever that is. Only backward peoples who spend their days reading their bibles and praying will lose out.

To: pibi who wrote (26)	1/16/2003 3:38:59 PM
From: dvdw©	Respond to of 140

I enjoyed this post; I think you enjoyed writing it as well. The main text after the positioning reminds me of something that is important within the context of your surmise. First, the migration of jobs to mainland China is happening specificly for the reasons you described but the effects of those transfers of labor are as you stated leading to lower cost products for Consumers no matter where they are purchased ( this completes your equation). Within this context I would remind you that the cause and effect here are covered in economics by a law called Comparative advantage. So the migration to China, is happening because of this law, and not some social engineering, there for it's a Choice made within the framework by the capitalists of all contingencies associated with production. Therefore the labor flow to China is a choice by capitalists to advantage themselves of a favorable economic condition.If the Capitalists customers were in fact a static pool of workers, who will now be unemployed and unable to buy these same producer goods, than the capitalist erred in determining his moves ahead of the results. The Contributory content required to produce the products that flow there from, are also as you stated imported by China, this is more true in areas where intellectual property is a key component in the finished goods. Rapid changes in application specificity, and consumer preference play the defining role in demand changes, therefore characterizing future production needs is directly linked to the export markets demand dynamics. Your overall surmise has a marked sense about it that IMO, does not reflect accurately the role of the other factors of production besides those doing the labor. Therefore IMO your surmise is missing enough details, that the reader is lead to your set of assumptions, which IMO wont stand the test of a complete analysis. I am not anxious to come right out and say what is wrong, but if your good enough, you'll keep trying.

To: pibi who wrote (26)	1/16/2003 4:19:09 PM
From: dvdw©	Respond to of 140

I wanted to set apart one conclusive surmise that your article posited I'll copy it here so it's clear what I am addressing: You concluded... "We also need to accept that specialist services such as insurance, banking and cutting-edge technological research really do seem to be the only thing that the West has to offer China. And that, apart from an awful lot of Western investment capital going into Chinese enterprises, there are few ways in which China could ever hope to balance its current account with Europe or the US. In the long term, China will suck wealth out of Europe and America – but nobody’s daring to explain that to the voters just yet. Least of all in expensive, industrial Germany, where the deflationary impact will probably be greatest." I would consider this statement to be False. Understanding the role of Capital, Labor, Intellectual Property, raw materials, and certain other value added factors of production, China is being given a leg up in world economic affairs not because of something characteristicly chinese, but by the simple fact of comparative advantage as it relates to certain factors of production. By turning your surmise about China into something else, you effectively lost touch with the fact of demand creation and the elasticity of your comparative advantage as it relates to some future. These are not separate things or ideas that go on without end, they are product and market specific existent in a melieu of circumstances, which your surmise neither controls nor ownes in any way accept as it relates to a current contributory advantage of a factor of production relating to specific product demand. While the numbers look great, they are not telling even a fraction of the real story. I sensed that you'd prefer we look at china as an inevitable fact of all life, I wont because as a Capitalist, I know I cant; without opening myself to huge potential losses from miscalculation. This is not a value judgement on any part of China, what it is IS. China has joined the global economy, it existed pre chinas participation, and it will exist if china choses to withdraw from it, therby lossing it contributory comparative advantage in the field of labor for the period that follows. Is that Clear enough? Therein lies your challenge. Now lets see what you can do with it.