Comments on: China Continues to Fall Short of Market Economy http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html This is China Mon, 01 Dec 2008 19:49:38 +0000 http://wordpress.org/?v=2.5.1 By: nanheyangrouchuan http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html#comment-1746 nanheyangrouchuan Sun, 22 Jun 2008 18:05:47 +0000 http://cupofcha.com/?p=312#comment-1746 The promise of China is nothing but a lie. The promise of China is nothing but a lie.

]]> By: allroads http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html#comment-1735 allroads Sat, 21 Jun 2008 15:49:33 +0000 http://cupofcha.com/?p=312#comment-1735 Josh, nice post. I just put one together myself on the issue, and where I would disagree to some extent is that 1% of GDP is simply a cost of doing business, a cost of stability if you will.... however, those in power are realizing that the Chinese economy needs to wean of sibsidizies and begin standing on its own. I call the paying the China price: the real China price. Taking a look at other policy changes recently, you have seen Beijing walk away from VAT rebates, you have seen the removal of corporate tax subsidies, you have seen the implementation of a labor law (reduction of labor subsidy), you have the recent energy subsidy removal, but more important than all these you are seeing that Beijing is not longer willing to subsidize the economy through pollution and environmental degradation... this is the one that will be the most costly for all involved. At the end of the day, the removal of all these subsidies is simply making industry pay all the costs of doing business, something every developing economy must do to continue developing. Have a good weekend R Josh,

nice post. I just put one together myself on the issue, and where I would disagree to some extent is that 1% of GDP is simply a cost of doing business, a cost of stability if you will…. however, those in power are realizing that the Chinese economy needs to wean of sibsidizies and begin standing on its own.

I call the paying the China price: the real China price.

Taking a look at other policy changes recently, you have seen Beijing walk away from VAT rebates, you have seen the removal of corporate tax subsidies, you have seen the implementation of a labor law (reduction of labor subsidy), you have the recent energy subsidy removal, but more important than all these you are seeing that Beijing is not longer willing to subsidize the economy through pollution and environmental degradation… this is the one that will be the most costly for all involved.

At the end of the day, the removal of all these subsidies is simply making industry pay all the costs of doing business, something every developing economy must do to continue developing.

Have a good weekend
R

]]> By: Josh http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html#comment-1732 Josh Sat, 21 Jun 2008 06:25:32 +0000 http://cupofcha.com/?p=312#comment-1732 So basically you're saying that it's not a problem because the US and EU have idiotic price subsidies that have disastrous effects on Africa and cause food shortages. I'd classify those as policy blunders as well. So basically you’re saying that it’s not a problem because the US and EU have idiotic price subsidies that have disastrous effects on Africa and cause food shortages. I’d classify those as policy blunders as well.

]]> By: Oli http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html#comment-1731 Oli Sat, 21 Jun 2008 02:36:56 +0000 http://cupofcha.com/?p=312#comment-1731 Get you facts right before whining: - China only imports 1/3 of its oil consumption - the rest is locally produced; the impacts of the price-hikes on world-wide demand is thus going to be very small; - Oil demand in China is relatively inelastic: not many people own cars (contrary to what the streets of Beijing may suggest) and most of the demand is industrial. A hike in prices is not going to affect that significantly - it will rather drive up end-user prices of manufactured goods. - Subsidies of one form or another are common in all countries, even in (shock, horror!) the US. The US government subsidies its defence industry with large "research" efforts, its oil industry with low taxes, etc, etc... The Chinese government has done it via the oil price, which may not be the best way in terms of environmental impact, but is certainly no reason for one of the usual "unfair competition" whines! The same subsidies apply across many Asian countries, as well as Russia. I suggest you stop using words like "policy blunder" before you know what you are talking about. Get you facts right before whining:
- China only imports 1/3 of its oil consumption - the rest is locally produced; the impacts of the price-hikes on world-wide demand is thus going to be very small;
- Oil demand in China is relatively inelastic: not many people own cars (contrary to what the streets of Beijing may suggest) and most of the demand is industrial. A hike in prices is not going to affect that significantly - it will rather drive up end-user prices of manufactured goods.
- Subsidies of one form or another are common in all countries, even in (shock, horror!) the US. The US government subsidies its defence industry with large “research” efforts, its oil industry with low taxes, etc, etc… The Chinese government has done it via the oil price, which may not be the best way in terms of environmental impact, but is certainly no reason for one of the usual “unfair competition” whines! The same subsidies apply across many Asian countries, as well as Russia.
I suggest you stop using words like “policy blunder” before you know what you are talking about.

]]> By: Bobby http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html#comment-1729 Bobby Sat, 21 Jun 2008 02:17:25 +0000 http://cupofcha.com/?p=312#comment-1729 @Jen Iran produces oil, so not quite the same. Plus, are you saying what Chinese does is smart, or that the other countries are foolish too? @Jen

Iran produces oil, so not quite the same. Plus, are you saying what Chinese does is smart, or that the other countries are foolish too?

]]> By: jen http://cupofcha.com/2008/06/21/china-continues-to-fall-short-of-market-economy.html#comment-1728 jen Sat, 21 Jun 2008 02:11:29 +0000 http://cupofcha.com/?p=312#comment-1728 How many other countries subsidize oil? I'm pretty sure Iran does and I know Malaysia does (they also recently reduced subsidies). How many other countries subsidize oil? I’m pretty sure Iran does and I know Malaysia does (they also recently reduced subsidies).

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