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(Forbes) Scary The wheels are coming off of China's cheaply constructed economy   (forbes.com) divider line 90
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6763 clicks; posted to Business » on 28 Nov 2011 at 10:40 AM   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»   |    Get this fabulous T-Shirt and impress the methane out of your friends! shirt it!



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2011-11-28 09:32:05 AM
A couple of status updates from a friend of mine that lives in China:

Even Chinese styrofoam bowls suck. I just had one disintegrate in my hand. Good thing the contents were inside a plastic bag. I quickly grabbed a German styrofoam one and saved the whole dish. 'Quality' is not translatable into Chinese. It might as well be an idiom.

I had a belt I bought in China fall to the floor from a chair, about a foot and the buckle smashed into pieces! I thought all my change fell on the floor. I bought a shirt in Jingdezhen. Put in on and it disintegrated the first time I wore it. I had a stapler (yes a stapler) disintegrate in my hand, too. I even bought a flashlight from Walmart that I had to 're-buy' because IT decided to commit suicide, too.

Oh, and did I mention that after a 400RMB root canal and 'crown' it fell out 2 weeks later while I was on the bus...
 
2011-11-28 09:33:52 AM
Scary indeed. I wonder - is this what happens when you fuel bubbles with a persistently devalued currency?

The angles our government has engaged have been all wrong - we've been chastising them for a devalued currency because it causes trade imbalances. I would think Chinese policy makers might be a bit more receptive to evidence that currency manipulation causes economic (and political) instability. The upper class can and have sensibly protected themselves by investing in foreign currencies and equities. It hurts those who can't hedge against yuan devaluation (lower and middle class) the most. If the economic and political situation gets nasty enough for the lower and middle classes, the Chinese state will be forced to nationalize foreign assets held by Chinese nationals, and then where are they going to be? I'll tell you exactly where: living in a van down by the river!
 
2011-11-28 10:00:40 AM
jaylectricity: A couple of status updates from a friend of mine that lives in China:

Even Chinese styrofoam bowls suck. I just had one disintegrate in my hand. Good thing the contents were inside a plastic bag. I quickly grabbed a German styrofoam one and saved the whole dish. 'Quality' is not translatable into Chinese. It might as well be an idiom.

I had a belt I bought in China fall to the floor from a chair, about a foot and the buckle smashed into pieces! I thought all my change fell on the floor. I bought a shirt in Jingdezhen. Put in on and it disintegrated the first time I wore it. I had a stapler (yes a stapler) disintegrate in my hand, too. I even bought a flashlight from Walmart that I had to 're-buy' because IT decided to commit suicide, too.

Oh, and did I mention that after a 400RMB root canal and 'crown' it fell out 2 weeks later while I was on the bus...


400 RMB ~= $60 you get what you pay for.
 
2011-11-28 10:05:56 AM
As far as quality goes, I'm glad eBay has a feature that blocks items outside of North America to be displayed - I find it more and more necessary to filter out the crap from China (sadly, it blocks items from Europe as well). Last Chinese item I bought was a pair of scissors that lasted about a month before the handle broke and blades were rusting.
 
2011-11-28 10:21:37 AM
jaylectricity: Oh, and did I mention that after a 400RMB root canal and 'crown' it fell out 2 weeks later while I was on the bus...

I've seen some Chinese root canals. They would be considered a pulpotomy here (think a temporary start of a root canal). Shiatty crowns too. But then again, I've seen some things here too, so...........
 
2011-11-28 10:46:04 AM
For years after WWII, "Made in Japan" was equivalent to "piece of shiat".

The powers-that-be in Japan realized that they needed to begin producing high-quality goods they could be *proud* of.

In a relatively short time, the Japanese succeeded. I expect the Chinese will soon get a clue and follow the same trajectory. The market will tell...
 
2011-11-28 10:49:13 AM
gopher321: As far as quality goes, I'm glad eBay has a feature that blocks items outside of North America to be displayed - I find it more and more necessary to filter out the crap from China (sadly, it blocks items from Europe as well). Last Chinese item I bought was a pair of scissors that lasted about a month before the handle broke and blades were rusting.

My wife (a naturalized US Citizen, but born and raised in China for the first 28 year of her life) refuses to buy anything made in China if she can avoid it because of the quality concerns. She also will not even consider moving back to China because of the environmental catastrophe China has become..
 
2011-11-28 10:50:47 AM
EvilEgg: jaylectricity: A couple of status updates from a friend of mine that lives in China:

Even Chinese styrofoam bowls suck. I just had one disintegrate in my hand. Good thing the contents were inside a plastic bag. I quickly grabbed a German styrofoam one and saved the whole dish. 'Quality' is not translatable into Chinese. It might as well be an idiom.

I had a belt I bought in China fall to the floor from a chair, about a foot and the buckle smashed into pieces! I thought all my change fell on the floor. I bought a shirt in Jingdezhen. Put in on and it disintegrated the first time I wore it. I had a stapler (yes a stapler) disintegrate in my hand, too. I even bought a flashlight from Walmart that I had to 're-buy' because IT decided to commit suicide, too.

Oh, and did I mention that after a 400RMB root canal and 'crown' it fell out 2 weeks later while I was on the bus...

400 RMB ~= $60 you get what you pay for.


I live in China. That can be said for just about everything.

If this guys stuff is falling apart, he should buy better stuff. Try spending more than 100 RMB on a shirt, for example.
 
2011-11-28 10:59:56 AM
jaylectricity: A couple of status updates from a friend of mine that lives in China:

Even Chinese styrofoam bowls suck. I just had one disintegrate in my hand. Good thing the contents were inside a plastic bag. I quickly grabbed a German styrofoam one and saved the whole dish. 'Quality' is not translatable into Chinese. It might as well be an idiom.

I had a belt I bought in China fall to the floor from a chair, about a foot and the buckle smashed into pieces! I thought all my change fell on the floor. I bought a shirt in Jingdezhen. Put in on and it disintegrated the first time I wore it. I had a stapler (yes a stapler) disintegrate in my hand, too. I even bought a flashlight from Walmart that I had to 're-buy' because IT decided to commit suicide, too.

Oh, and did I mention that after a 400RMB root canal and 'crown' it fell out 2 weeks later while I was on the bus...


What are they making this shiat out of, marzipan?
 
2011-11-28 11:01:39 AM
Is this the thread where I biatch how they make exterior items, like the lights outside by my doors, out of metals that rust?


/remember when "Made in Japan" meant this kind of thing?
 
2011-11-28 11:02:50 AM
some.old.lady.: For years after WWII, "Made in Japan" was equivalent to "piece of shiat".



stop copying me

;)
 
2011-11-28 11:15:02 AM
I know there's a lot of cheap, poorly-constructed housing here in the US that was thrown up during the housing boom. I wonder what China's bubble-built apartments are like.
 
2011-11-28 11:26:41 AM
Buffet crowsed, you go now.

Nice Amelicans have no mo money fo you.

You go now, glow nice lice an bamboo shoots.


/You red Chinese slobs.
 
2011-11-28 11:27:50 AM
Is it just me or did anyone else think you need to be a CPA to understand the entirety of that article? I know it's Forbes, but he could have dumbed it down just a tad for us peons, don't ya think?
 
2011-11-28 11:31:01 AM
It is really hard to tell what is actually going on in China because all of the official figures are fabrications to make China's economy look better than it is, and because of the difficulty in factoring in corruption which is maybe a third of their economy. It is hard to even get an idea of what the real unemployment rate is for example. All we know for sure are the export numbers since we buy the stuff.
 
2011-11-28 11:31:48 AM
senzasord: I know there's a lot of cheap, poorly-constructed housing here in the US that was thrown up during the housing boom. I wonder what China's bubble-built apartments are like.

Picture a Jenga game with 4 players lasting an hour and the resulting tower being situated in a hurricane on the back of a monkey navigated, jet-propelled table with three legs and casters ... you get the picture.

In all seriousness, from what I hear, if a contractor can cut a corner, then the question becomes why hasn't that corner been cut yet. If you can get away with 20% less concrete, do it. If a floor will hang with 15% of the strengthening materials excluded, then do it. I shudder to think how they must act when a major storm happens by. It's a good thing no one can afford to live in them.
 
2011-11-28 11:32:43 AM
Cymbal: Is it just me or did anyone else think you need to be a CPA to understand the entirety of that article? I know it's Forbes, but he could have dumbed it down just a tad for us peons, don't ya think?

It was simple, clear and to the point, I thought.
 
2011-11-28 11:33:10 AM
senzasord: I know there's a lot of cheap, poorly-constructed housing here in the US that was thrown up during the housing boom. I wonder what China's bubble-built apartments are like.

i.telegraph.co.uk
 
2011-11-28 11:33:57 AM
KarmicDisaster: It is really hard to tell what is actually going on in China because all of the official figures are fabrications to make China's economy look better than it is, and because of the difficulty in factoring in corruption which is maybe a third of their economy. It is hard to even get an idea of what the real unemployment rate is for example. All we know for sure are the export numbers since we buy the stuff.

Even that is a bit suspect, given that the balance of trade across the planet is off by $332 billion. Someone is cooking the books somewhere and a good candidate (not accusing though) is China.
 
2011-11-28 11:39:29 AM
Cymbal: Is it just me or did anyone else think you need to be a CPA to understand the entirety of that article? I know it's Forbes, but he could have dumbed it down just a tad for us peons, don't ya think?

Let's simplify it then...

China's been able to weather prior economic storms using specific tactics.
Those tactics are not going to work given the nature of the current economic clusterfark.
The details of the situation in terms of money on hand, currency valuations, etc means that the central gov't of China only has a few options that might actually work... and history has shown those options kinda suck.

Take away is... China has some serious farking problems.
 
2011-11-28 11:42:27 AM
farkin_Gary: Cymbal: Is it just me or did anyone else think you need to be a CPA to understand the entirety of that article? I know it's Forbes, but he could have dumbed it down just a tad for us peons, don't ya think?

It was simple, clear and to the point, I thought.


Can you tell me what M2 stands for, as well as the definition of a command economy without googling?
 
2011-11-28 11:49:20 AM
Azmodan Kijur: KarmicDisaster: It is really hard to tell what is actually going on in China because all of the official figures are fabrications to make China's economy look better than it is, and because of the difficulty in factoring in corruption which is maybe a third of their economy. It is hard to even get an idea of what the real unemployment rate is for example. All we know for sure are the export numbers since we buy the stuff.

Even that is a bit suspect, given that the balance of trade across the planet is off by $332 billion. Someone is cooking the books somewhere and a good candidate (not accusing though) is China.


Yeah, I read about that, countries are spinning their import and export figures to make their economies look healthier. I have a family member that just got back from China where they were trying to do a research project on an aspect of this, but it is almost impossible to get any real data on anything. They may be heading for a huge crash and don't know it themselves since each sector lies to the next, but it is really hard to know. What is amusing is that China has been divesting itself of US bonds, and reducing their hoard of dollars and now the Euro is going to pop. Oops.
 
2011-11-28 11:49:21 AM
the euro could be gone in weeks. the chinese could be gone next year.

what's left besides switzerland and singapore? the entire world economy is going to head towards bartering in rat pelts and children.

now, i dont want to say its time to stock up on guns and ammunition, but stock up on guns and ammunition.
 
2011-11-28 11:50:13 AM
>> The wheels are coming off of China's cheaply constructed economy

It was bound to happen when they went capitalist.
 
2011-11-28 11:50:35 AM
Sounds good!

ChingChongChang!
 
2011-11-28 11:51:18 AM
Father_Jack: the euro could be gone in weeks. the chinese could be gone next year.

what's left besides switzerland and singapore? the entire world economy is going to head towards bartering in rat pelts and children.

now, i dont want to say its time to stock up on guns and ammunition, but stock up on guns and ammunition.


I probably should get more buckshot shells, I only have 2 boxes.
 
2011-11-28 11:54:13 AM
KarmicDisaster: Father_Jack: the euro could be gone in weeks. the chinese could be gone next year.

what's left besides switzerland and singapore? the entire world economy is going to head towards bartering in rat pelts and children.

now, i dont want to say its time to stock up on guns and ammunition, but stock up on guns and ammunition.

I probably should get more buckshot shells, I only have 2 boxes.


buckshot aint gonna do SHEEEEEUT.

you need something to hit a guy at least further than your mail box. i recommend the czech vz58 for under 300 yards and the swiss k31 for 300-600.

ok racist joke time:

Two chinese guys walk into a bar. Bartender says "hey, why the same face?"

/ i'll get my coat.
 
2011-11-28 11:56:10 AM
Cymbal: farkin_Gary: Cymbal: Is it just me or did anyone else think you need to be a CPA to understand the entirety of that article? I know it's Forbes, but he could have dumbed it down just a tad for us peons, don't ya think?

It was simple, clear and to the point, I thought.

Can you tell me what M2 stands for, as well as the definition of a command economy without googling?


M2 is a segment of the money supply. A command economy is a centrally-planned economy.

/not an economist
 
2011-11-28 12:10:01 PM
Father_Jack: KarmicDisaster: Father_Jack: the euro could be gone in weeks. the chinese could be gone next year.

what's left besides switzerland and singapore? the entire world economy is going to head towards bartering in rat pelts and children.

now, i dont want to say its time to stock up on guns and ammunition, but stock up on guns and ammunition.

I probably should get more buckshot shells, I only have 2 boxes.

buckshot aint gonna do SHEEEEEUT.

you need something to hit a guy at least further than your mail box. i recommend the czech vz58 for under 300 yards and the swiss k31 for 300-600.

ok racist joke time:

Two chinese guys walk into a bar. Bartender says "hey, why the same face?"

/ i'll get my coat.


If they are 600 yards away, I doubt that I'll want to shoot at them yet. If we get into a mode where you have to shoot everyone at a third of a mile as soon as you see them, then we are doomed anyway. Besides, I have a small rifle for that.
 
2011-11-28 12:18:49 PM
Azmodan Kijur: the balance of trade across the planet is off by $332 billion

????
 
2011-11-28 12:18:58 PM
KarmicDisaster: Azmodan Kijur: KarmicDisaster: It is really hard to tell what is actually going on in China because all of the official figures are fabrications to make China's economy look better than it is, and because of the difficulty in factoring in corruption which is maybe a third of their economy. It is hard to even get an idea of what the real unemployment rate is for example. All we know for sure are the export numbers since we buy the stuff.

Even that is a bit suspect, given that the balance of trade across the planet is off by $332 billion. Someone is cooking the books somewhere and a good candidate (not accusing though) is China.

Yeah, I read about that, countries are spinning their import and export figures to make their economies look healthier. I have a family member that just got back from China where they were trying to do a research project on an aspect of this, but it is almost impossible to get any real data on anything. They may be heading for a huge crash and don't know it themselves since each sector lies to the next, but it is really hard to know. What is amusing is that China has been divesting itself of US bonds, and reducing their hoard of dollars and now the Euro is going to pop. Oops.


That's the biggest problem with China's economy. No one, not even the Chinese, really know what's going on there. Every single supplier of any good lies to every single purchaser of any good, and the middlemen lie to both sides and any corner that can be cut, has been, often to the other side of the safety margin.

What's scarier is that the central bank is lowering the amount of reserve banks are required to have to 16%. Of course, that just means the banks have to say they have 16% reserve, not that they actually need to have that money. If there were a run on the banks in China, their entire economy would collapse overnight. If it looked like there would be a run on the banks, the government would have no problem shooting anyone who decided to take their money out. It could get very hairy, very quickly.

The $62,000,000,000,000 question is what happens when China's economy, and potentially government, falters? Is that good news for the economies of Europe and the United States? Are the Chinese crazy enough to do something stupid like start a war to prop up their economy and better maintain control of their populace?

(Prediction: In 50 years, China will be more-or-less democratic with a reasonable body of civil law, environmental protection, worker protections, etc, or it will be split into regional, warlord-controlled states. In either case, manufacturing will have moved to another country that doesn't mind going through massive environmental and human rights catastrophes.)
 
2011-11-28 12:19:55 PM
meyerkev: Azmodan Kijur: the balance of trade across the planet is off by $332 billion

????


When you add up all the exports reported by all the countries and subtract all the imports reported by all countries, then we've apparently shipped $332 billion in goods off the planet somehow. Or, you know, someone's lying about how much they've been exporting or importing.
 
2011-11-28 12:22:51 PM
Lord Dimwit:
What's scarier is that the central bank is lowering the amount of reserve banks are required to have to 16%. Of course, that just means the banks have to say they have 16% reserve, not that they actually need to have that money. If there were a run on the banks in China, their entire economy would collapse overnight. If it looked like there would be a run on the banks, the government would have no problem shooting anyone who decided to take their money out. It could get very hairy, very quickly.


Yes, this exactly is what happened in the US, banks lobbied and got the government to lower the reserve rate because uh, socialism, and then later when they were stressed almost all started to croak and needed secret bailouts.
 
2011-11-28 12:28:27 PM
KarmicDisaster: Lord Dimwit:
What's scarier is that the central bank is lowering the amount of reserve banks are required to have to 16%. Of course, that just means the banks have to say they have 16% reserve, not that they actually need to have that money. If there were a run on the banks in China, their entire economy would collapse overnight. If it looked like there would be a run on the banks, the government would have no problem shooting anyone who decided to take their money out. It could get very hairy, very quickly.


Yes, this exactly is what happened in the US, banks lobbied and got the government to lower the reserve rate because uh, socialism, and then later when they were stressed almost all started to croak and needed secret bailouts.


Well, except for the shooting part and the fact that the United States can, in theory, afford the secret bailouts.

(Can afford them, if they are accompanied by reasonable increases in regulation to prevent that sort of thing from happening again.)

(You know, like the regulations we created during and after the Great Depression. The ones that worked really well until the S&L crises in the 80s and the further deregulation in the 90's and 00's. The deregulation that somehow was...better? Because...socialism?)
 
2011-11-28 12:31:15 PM
some.old.lady.: In a relatively short time, the Japanese succeeded. I expect the Chinese will soon get a clue and follow the same trajectory. The market will tell...

The Japanese had one thing going for them the Chinese don't: they respected intellectual property. Once Japanese brands started going global they were fierce in protecting their assets. The Chinese have, to put it kindly, absolutely no cultural understanding of intellectual property or why it's a good idea. They steal ideas like teenagers steal music.
 
2011-11-28 12:38:24 PM
About time.
 
2011-11-28 12:38:36 PM
some.old.lady.: In a relatively short time, the Japanese succeeded. I expect the Chinese will soon get a clue and follow the same trajectory. The market will tell...

The difference is that in Japan they had Kaizen pushed down their throats by the US Occupation and it stuck.

China has no similar philosophy, also before WW2 Japan was an innovative industrial power like France but only for the domestic market, before WW2 China was a fragmented agricultural economy. Japan built the Yamato and Long Lance torpedo without help, China builds knockoffs that don't work as well as the original.

The Great Leap and liberalization of the market might have put lipstick on the pig that is Chinese quality, but that won't last forever.

http://en.wikipedia.org/wiki/Kaizen
 
2011-11-28 12:44:01 PM
Lord Dimwit: In either case, manufacturing will have moved to another country that doesn't mind going through massive environmental and human rights catastrophes.

As Brazil rises, manufacturing is going to South America and then to west Africa. Cheap crap plants in Nigeria and Sierra Leone make for shorter supply chains all the way around, from the oil to the metals to shipping that crap to Europe and the Americas. That way you also get to bypass the choke points like the Straight of Malacca, Horn of Africa and Suez.
 
2011-11-28 12:50:54 PM
Here is some amazing photos of entire residential cities in China that the government is not allowing anyone to occupy because they need to keep supply out of the market.

Here are equally amazing photos of the world's largest shopping mall that is completely vacant.
 
2011-11-28 12:54:13 PM
senzasord: I know there's a lot of cheap, poorly-constructed housing here in the US that was thrown up during the housing boom. I wonder what China's bubble-built apartments are like.

If the used the same Chinese drywall they used here, they all reak of sulphur.
 
2011-11-28 12:58:13 PM
Cymbal: farkin_Gary: Cymbal: Is it just me or did anyone else think you need to be a CPA to understand the entirety of that article? I know it's Forbes, but he could have dumbed it down just a tad for us peons, don't ya think?

It was simple, clear and to the point, I thought.

Can you tell me what M2 stands for, as well as the definition of a command economy without googling?


Well it has been a while since Macro 101, but M2 is the measure of how much money is in an economy, it is a different measure then M1, which is also a measure of the amount of money in an economy, but includes M1. Command economy is where the government can command firms or individuals to produce or buy goods and services.

How did I do?
 
2011-11-28 01:08:25 PM
KarmicDisaster:
Yes, this exactly is what happened in the US, banks lobbied and got the government to lower the reserve rate because uh, socialism

More like crony capitalism, which has almost nothing to do with actual capitalism (as in "free market capitalism"). It's closer to corrupt corporatism, which is pretty much the enemy of free market capitalism - even more so than socialism.

The variation on corporatism they're using now is "the government will do things to favor huge companies, as long as those huge companies return the favors by either giving us huge stock tips and great deals on IPOs, or hire our relatives - and later, us. And if the big companies don't help us out, we're going to shut them down, like Gibson Guitars."
 
2011-11-28 01:10:58 PM
clovis69: As Brazil rises, manufacturing is going to South America and then to west Africa.

What Africa doesn't have that China did over the last 20 years is the sheer power at the center. There's enough violence and intimidation to go around, yes, but not in the same concentrated "fark with us and you disappear in an execution van and no one speaks your name again" sense. Western business interests have loved being in bed with that kind of power. No one is really that strong in Africa. The strongmen are more interested in nest-feathering than power for its own sake.
 
2011-11-28 01:16:29 PM
Boxcutta: Here is some amazing photos of entire residential cities in China that the government is not allowing anyone to occupy because they need to keep supply out of the market.

Here are equally amazing photos of the world's largest shopping mall that is completely vacant.


Here are amazing photos on the decline of Detroit. You are meant to infer from them that the whole of the US is a third world shiathole.
 
2011-11-28 01:21:51 PM
sendtodave: Here are amazing photos on the decline of Detroit. You are meant to infer from them that the whole of the US is a third world shiathole.

False analogy is false.
 
2011-11-28 01:27:24 PM
Boxcutta: sendtodave: Here are amazing photos on the decline of Detroit. You are meant to infer from them that the whole of the US is a third world shiathole.

False analogy is false.


You can't argue with scary photos.
 
2011-11-28 01:39:03 PM
If they built their 'ghost cities' with their lousy drywall then they probably can't occupy them.
 
2011-11-28 01:40:26 PM
jaylectricity: A couple of status updates from a friend of mine that lives in China:

Even Chinese styrofoam bowls suck. I just had one disintegrate in my hand. Good thing the contents were inside a plastic bag. I quickly grabbed a German styrofoam one and saved the whole dish. 'Quality' is not translatable into Chinese. It might as well be an idiom.

I had a belt I bought in China fall to the floor from a chair, about a foot and the buckle smashed into pieces! I thought all my change fell on the floor. I bought a shirt in Jingdezhen. Put in on and it disintegrated the first time I wore it. I had a stapler (yes a stapler) disintegrate in my hand, too. I even bought a flashlight from Walmart that I had to 're-buy' because IT decided to commit suicide, too.

Oh, and did I mention that after a 400RMB root canal and 'crown' it fell out 2 weeks later while I was on the bus...


eater.com

I'd be careful with Chinese dairy products too.
 
2011-11-28 01:46:57 PM
sendtodave: Boxcutta: Here is some amazing photos of entire residential cities in China that the government is not allowing anyone to occupy because they need to keep supply out of the market.

Here are equally amazing photos of the world's largest shopping mall that is completely vacant.

Here are amazing photos on the decline of Detroit. You are meant to infer from them that the whole of the US is a third world shiathole.


Well not yet anyways. Give us time, we're working on it.
 
2011-11-28 01:49:54 PM
sendtodave: Boxcutta: sendtodave: Here are amazing photos on the decline of Detroit. You are meant to infer from them that the whole of the US is a third world shiathole.

False analogy is false.

You can't argue with scary photos.


Either you did not bother to click on the links or you are being intentionally obtuse. The point is that China undertook massive building projects on an almost unimaginable scale to boost its economy and create jobs. The government is so worried about the damage a housing bubble could do that these cities remain vacant years after being constructed. This is, at the very least, a big red flag, (pun intended), about the state of economy the China.
 
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