BatteriesNotIncluded wrote on Jul 31^st, 2012 at 9:26pm:


I don't know. You can always encourage your sons to become rickshaw drivers for the wealtthy chinese tourists and your daugthers could get a job as rocket polishers in a chinese massage parlour

I mean it's not much of a career prospect but it's still a job !!

China will outsource to the Africans when they get sick of doing the menial tasks, then rich, developed Africa will outsource to us.

China slowdown could also mean the end of our mining boom.
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Well there's something you don't see every day. Actually, it's something you haven't seen in 11,315 days, to be precise. Chinese steel production will decline on an annual basis for the first time in 31 years at current production levels, according to Angus Grigg in today's Australian Financial Review.

--Chinese steel mills crank out steel faster than Rio, BHP, and FMG can dig up iron ore in the Pilbara. A slow-down in steel consumption — Shanghai steel purchases fell 15% in July from June — probably means lower iron ore prices. How much lower? And more importantly, are lower prices already factored into Aussie producers?

The enabler/crack dealer in this whole scheme is the banking sector. Somebody has to subsidise loss-making ventures. That somebody in China is the state-owned banking sector. And that sector may be running up against the limits of loss-making loans. Three years of making loans to local Chinese governments for infrastructure projects are now coming home to roost.

--There are over 54,000 loss-making enterprises in China as of June 2012, according to Tom Orlik in today's Wall Street Journal. That's a 34% increase year over year. According to the Journal (emphasis added is ours):

'Nonperforming loans rose to 438 billion Yuan ($66 billion) in March, from 407 billion Yuan in September 2011. Lenders are preventing a bigger increase by rolling over loans to local-government borrowers. In 2011, banks played pretend and extend with 2.2 trillion Yuan in debt, equivalent to 29 per cent of new loans for the year.

'There could be worse to come. China's ratio of credit to gross domestic product rocketed from around 134 per cent in 2008 to 174 per cent in 2011. If Beijing wants to head off a financial crisis, the stock of credit needs to grow at a slower rate than the overall economy. Given this, the rate of growth for bank loan books could drop closer to single digits.'

--Can you see the problem now? China may not have the 'policy flexibility' to ramp up stimulus spending in the way that many analysts breezily claim.

(link not available at Daily Reckoning site as yet. Will post it later)

Postmodern Trendoid III wrote on Aug 20^th, 2012 at 3:38pm:



Don't bother me none.

That's the way the system works, there's always someone poorer to do the low paid jobs.

The west will have their turn at pulling the rickshaw, so to speak. It might be sooner than we think, the way Australian manufacturing is going.

What goes around, comes around.

Postmodern Trendoid III wrote on Aug 20^th, 2012 at 4:20pm:

Please don't try and pretend you care.

Postmodern Trendoid III wrote on Aug 20^th, 2012 at 4:24pm:
Personally I think that a taste of our own medicine will actually be beneficial in the long run.

... wrote on Aug 20^th, 2012 at 4:51pm:

At least female strippers like you will always have a job.