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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Taikun who wrote (2782)	12/21/2005 6:31:41 PM
From: TobagoJack	Read Replies (2) \| Respond to of 217792

yes, but yamana is loved, and so special :0) btw, stratfor admits no error in its past ways, being the most vociferous in claiming china numbers are reported to the high side, and now sees more dark clouds, adding wrong-read stupidity to idiotic bias - they are such fun, thinking that china is a viper's nest of corruption and scoundrels not pulling off an astounding transformation unprecedented, period ;0) of course, they had forecasted moronicaly that oil will slip below 20something during 2005 because china would blow up and iraq would not - if they are wrong on that critical call on oil price, their entire world view is then suspect i would imagine stratfor, if they even know what gold is, would forecast a gold drubbing to 250 ... suits me, for i am enthusiastic for gold to go to 250 or 1,000 Geopolitical Diary: Wednesday, Dec. 21, 2005 China's National Bureau of Statistics (NBS) on Tuesday unveiled the results of a yearlong survey and reassessment of the nation's 2004 gross domestic product (GDP). The result: a 16.8 percent upward adjustment, bringing China's total 2004 GDP to some $1.98 trillion, overtaking Italy to become the world's sixth-largest economy. Given that China's GDP growth for 2005 will again exceed 9 percent, this places Beijing in the clear running to overtake France and the United Kingdom to rank fourth in GDP. The news was not unexpected -- The survey has been going on for a year, and the general consensus has been that Beijing was underestimating economic growth, despite the regular reports of rates of 8 percent and 9-plus percent. According to the NBS, 90 percent of the GDP adjustment comes from a reassessment of tertiary industries -- the service sector -- which, according to revised figures, now comprises 40.7 percent of the national GDP -- up from the previous 31.9 percent estimated for 2004. While this is not as high as in other economies, it does soften the traditional view that China is excessively dependent upon foreign trade and investment. Now, as we have said many times before, growth does not equal either sustainability or health. While the new figures do seem to fit more closely with the anecdotal evidence of a growing domestic economy in China, they offer little evidence that China's economy is in any better shape than previously thought. Targeted growth remains a goal, not a practice. Inefficiencies in the deployment of foreign investment monies continues to be the norm, along with redundancies across provinces and cities -- and even as these are addressed, they simply expose the depth of corruption while exacerbating unemployment and the associated social instabilities. For Beijing, the release of new numbers is intended to offer a few points of light. It highlights the growing domestic service economy. It emphasizes the recognition -- and attempted rectification -- of improper and patently false statistics of the past. And it adds a point of pride around which China's government can try to rally patriotism. That will help as Beijing launches the next five-year plan, which officials have already warned will require sacrifice from the wealthy to better distribute wealth among China's 1.2 billion people. But the numbers also create new troubles for China. The 16.8 percent readjustment of the GDP figure suggests China's growth rate has been much faster than originally reported (though as Beijing carries out its reassessment of statistics back through 1994 as planned, the increase may be spread out over 10 years). This is a somewhat ironic problem for a country that, in the past, intentionally tried to exaggerate its growth figures. It now tries to under-report them to avoid giving the impression of a bubble. As usual with China, the release of statistics leaves just as many questions on the table as answers. The reliability of the numbers is still a matter of debate -- and for Beijing, this sort of ambiguity is both bad and good. Moving up the ranks of GDP will bring increased attention to China's trade and fiscal practices. This may increase pressures on trade and currency issues, intensifying international political strains right when China is facing significant internal social strains -- social disruptions have already reached the point where the government is sending the message that the hammer may drop on protesters and instigators. The higher growth rate may also spur a new surge in much-needed investment dollars -- which, however, could easily fuel a new round of inefficient and redundant investments managed by corrupt officials and entrepreneurs. Economic restructuring plans are being overturned as their social impact becomes apparent. Just to keep the people employed, Beijing is finding it necessary to maintain, if not increase, the flow of investment monies to roll over loans and keep inefficient and redundant industries afloat -- something that the current leadership had hoped it was moving beyond. Revised GDP figures do little to prove that the boom times will go on. In the end, the main question remains: How soon and how hard will the Chinese economy hit the wall?