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Post time 2015-10-12 11:08:48 |Display all floors
This post was edited by abramicus at 2015-10-12 11:26


First of all, all the current economists advising and implementing the current "Consumption Driven, Service Dominated, Capital Account Surplus (Debt Burdened) Economic Model" should be FIRED, or sent back to school.

Second, the Deng Model of Growth by Production should be officially re-affirmed as the solid foundation of China's economic policy.

Third, with production leading consumption AT ALL TIMES, China should continue to generate a surplus over its consumption that China never needs to have any so-called "Capital Account Surplus" which in layman's terms means "foreign-denominated debts".  And not only that, China will always be a creditor country to other nations, earning INTEREST payments for the loans it made to other countries, including those that issued the currencies that China is lending out.  This is called "CAPITAL ACCOUNT DEFICIT".  YES, CHINA SHOULD ALWAYS BE A CAPITAL ACCOUNT DEFICIT COUNTRY BECAUSE IT MEANS CHINA WOULD HAVE NO NET FOREIGN-CURRENCY DENOMINATED LOANS, WILL NOT HAVE TO WORK ITS BACK OFF TO PAY THE INTERESTS ON THESE FOREIGN LOANS, FOREVERMORE.  

Fourth, to induce the Chinese public to consume more of local products, which is what true CONSUMPTION-DRIVEN-GROWTH SHOULD MEAN, China should LOWER THE YUAN EXCHANGE RATE TO 6.50 DOWN ALL THE WAY TO 7.00, which will make local products become cheaper than foreign products.  Even foreigners will want to buy Chnese products, but that is no longer the goal.  

Firth, to avoid exporting all of China's products to the world and leave the Chineses consumer with less to enjoy, China should impose an EXPORT TAX ON ALL PERSONAL CONSUMPTION PRODUCTS MADE FOR EXPORT.  Now, with the export tax, nobody can say China is lowering its exchange rate in order to boost its exports unfairly.  A ban on exports is nothing new, as many Western countries have bans on export of high tech to China, and even of oil to the rest of the world.  A tax on exports, and even a total ban on some exports, is par for the course in modern economies.

Never allow production to drop below consumption, which is the HERESY INHERENT IN THE CURRENT DRIVE TO OVERVALUE THE YUAN INSTEAD whcih will force down production and manufacturing, since all Chinese products will be overpriced in dollars abroad, and also overpriced in yuans at home.  WHAT CHINA NEEDS IS INSTEAD A LOWER EQUILIBRIUM YUAN EXCHANGE RATE OF 6.50 YUAN/DOLLARS THAT WILL STIMULATE AND SUPPORT PRODUCTION, PLUS AN EXPORT TAX ON ITEMS THAT CHINESE CONSUMERS NEED TO UPGRADE THEIR STANDARD OF LIVING.

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Post time 2015-10-18 06:09:50 |Display all floors
We are AMUSED to read some high-sounding articles calling China's SOEs "Zombies" and that the "restructuring of the Chinese economy" according to Western characteristics, by privatizing these SOEs is "necessary" to the sustainable growth of the consumer and service driven economy, sustained by borrowing from foreign banks (called CAPITAL ACCOUNT SURPLUS).  

Idiocy, to say the least.

SOES provide basic materials on which other industries build on.  If they are not there, these intermediate materials used for manufacturing, construction, and technology would have to be imported from abroad, because Chinese private companies are too small, too backward, and too inefficient to produce them in the quantities needed by the growth of the Chinese population and economy.  Ripping apart the SOES is like cutting out the spine from the Chinese people, a ghastly, bloody and brutal destruction of China, doable only by zombies whose minds are controlled by their foreign advisers, or domestic advisers "trained" in foreign universities.

There is nothing in REALITY that requires the privatization of the SOES, which is entirely frivolous, facetious and fallacious, that will never help China, only cripple it back to the Dark Ages.

A Chinese ex-pat now working for a foreign financial corporation, an ex-IMF economist, even ventured to say that the vestiges of the Deng Economic Miracle that Xi has not allowed to be dismantled, the manufacturing base that he has not allowed to be bankrupted yet, makes "his" policies the equivalent of Mao's Great Leap Forward.  On the contrary, it is the policy of the Consumer-Service-CapitalAccountSurplus model that is the true TROJAN GREAT LEAP BACKWARD MODEL.  It is this new "consumer driven, service-oriented, capital (foreign) account surplus" model, enforced by the overvaluation of the Yuan (we have pinpointed the pivot by which they are destroying China) that is the equivalent of Mao's Great Leap Forward, because it has ALREADY LOST MORE THAN A TRILLION DOLLARS COMBINED OF CHINA'S HARD-EARNED FOREIGN RESERVES AND FORFEITED CURRENT ACCOUNT SURPLUS FROM EXPORTS in the last two years.

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