Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (40590)	11/4/2005 10:20:47 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

rest assured it is not. I would not have known to be honest, I saw some discussion on it. For starters the commentary on Nixon was about something that happened in his first term not second at least that is what I recall from the discussion. Perhaps I can find the link. There were numerous things wrong. Mish

To: CalculatedRisk who wrote (40590)	11/4/2005 11:00:28 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Global: China and the Worldview Stephen Roach (New York) .... But the conclusion that hit me hardest from this world spin was the belief that nothing could shake the China boom. Whether it is urbanization, industrialization, or infrastructure imperatives, the world seems increasingly convinced that very rapid Chinese growth in the 8-9% range is here to stay. Implicit in that conclusion is the belief that the Chinese economy has now developed a new immunity to the ups and downs of the global business cycle. That may be wishful thinking. As I pointed out to the groups I spoke with, China’s growth dynamic remains heavily skewed toward exports and export-led fixed asset investment. These two sectors now account for more than 85% of Chinese GDP and continue to grow at nearly a 30% y-o-y rate. By contrast, the Chinese consumption share of GDP seems set to fall further this year from the record low of 42% hit in 2004. This structure of the Chinese economy speaks of a stealth vulnerability that the worldview refuses to consider. China’s main source of end-market demand is not internal consumption but the American consumer. Fully 35-40% of Chinese exports currently go to the United States. The investment dynamic is also dependent on the need to expand export-producing capacity. Consequently, a lot obviously hangs on the staying power of US consumption. Therein lies the risk -- both for China and for an increasingly China-centric Asia-Pacific. Despite negative personal saving rates, record household sector debt burdens, and a lingering shortfall of labor income generation in the US, few in the world believe that a decade of nearly 4% real US consumption growth is at risk. Should that view turn out to be wrong, then Asia-Pacific would be in for a rude awakening. That would be true of Korea, Taiwan, Malaysia, Thailand, and Singapore -- all of which have become tightly intertwined in a China-centric supply chain. It would also be true of Japan, whose largest export market is now China. And it would have a major impact on Australia, where Chinese exports have become a major source of growth over the past several years. .... morganstanley.com