China says "You're not in trouble, it's only $430 billion"

[Vulcanl]

$Pripps,

You lazy bunny...

See reply #67 here: http://www.expatsingapore.com/forum/index.php/topic,50189.60.html

[Definition]

Vulcan thinks decoupling is a re-balancing of power from the West to Asia/EM.  He does not use the same definition as the rest of us, mortal beings. That is why when people tell Vulcan about correlation between the world economies he does not seem to either understand or to acknowledge the concept.

[Vulcanl]

Definition,

"...Vulcan thinks decoupling is a re-balancing of power from the West to Asia/EM..."

No, I DON'T.  See my link above and don't put words in my mouth

"....He does not use the same definition as the rest of us, mortal beings. That is why when people tell Vulcan about correlation between the world economies he does not seem to either understand or to acknowledge the concept..."

Ha HAH!!! I LOVE it!!! in the final throes of defeat you desperate saps will reach for ANYTHING at all to stave off doom..even literally defining away Vulcan's victory! 

Vulcan will have none of this.  If you clowns had any problems at all with the definition you should have piped up in early 2009.  It's just too late now, lads...

In any event, the Economist agrees with my definition:

Asia decoupling?

Jul 23rd 2010, 13:01 by S.C. | LONDON

My colleague has been lamenting the lack of positive economic data in recent times. Ben Bernanke’s testimony to the Congress this week, in which he admitted that the American economy faced “unusual uncertainty”, wasn’t very encouraging either. And the results of the stress tests for Europe’s banks, due out today, may provide only short-lived relief. If most banks pass, markets will question the rigour of the test, especially given the challenges facing a number of banks in Spain, Greece and Germany.

But Asia seems sunnier, with indicators revised upwards. The Asian Development Bank has released its economic update for the region, in which growth for emerging East Asia this year is projected to be 8.1%, up from 7.7%. The bank believes that most economies in the region are assured of a sharp V-shaped recovery this year. Does this mean that Asia is now fully decoupled from the West?

There is some evidence to support this. The bank’s data show that the Asian recovery has been driven by the region’s own economic demand - there has been a rebound in intra-regional trade. The region is also less dependent on foreign capital than before. The impact of the European debt crisis has been minimal, with bond yields falling as capital continues to flow in. The chart below shows that CDS sovereign spreads of East Asian countries are now level with or lower than some euro zone members.

Yet the region is still vulnerable to shocks from the West. Despite an increase in domestic demand, Asia depends heavily on exports. Most countries in the region continue to undervalue their currencies, making it difficult to move away from developed-world demand and toward domestic consumption. Stimulus spending has driven much of Asia’s blistering growth this year, but if America and Europe continue to face sluggish growth, no amount of fiscal or monetary pump-priming can prevent a slowdown.

[Vulcanl]

Hey look!! so does HSBC!!
 


http://www.aseanaffairs.com/asean_news/economy/asia_decoupling_itself_from_western_economies

Asia decoupling itself from Western economies

03 Sep 2010

HSBC says Asia is decoupling itself from the Western economies.

With domestic demand surging in Asia, the bank says the region will be less reliant on trade with the West.

Asia's rising prominence is also supported by growing deflation and risk aversion in the West with western economies unlikely to return to their pre-crisis state any time soon.

The EU has been plagued by fiscal crises in Spain and Greece, while economic recovery in the US remains patchy.

To contain high public debts, some western economies have introduced austerity measures and kept interest rates low to stimulate borrowing.

Interest rate in the US is at 0.25 percent, and it is 1 percent in Europe.

But this has led to growing deflation and higher risk aversion, which means the West could continue to stagnate.

Stephen King, Group Chief Economist, HSBC, said, "As people become increasingly risk averse, more are worried about how asset markets are performing, they go for safety.

"Once you enter this business of deleveraging and deflation, life becomes more challenging and more likely to be associated with economic stagnation, deflation, disinflation, all these nasty things that central bankers struggle to deal with."

According to HSBC, Asia does not have share these concerns.

HSBC says the bulk of the region's trade come from emerging economies and that is set to grow.

"These changes will be a new impetus for growth which once again reflect the diminishing importance of the States and Europe, and the growing importance of emerging markets all over the world," King said.

With low interest rates, HSBC says the increase in the borrowing of US dollars or Euros for investment into Asia will unlock more progress for the region.

The International Monetary Fund projects that the Asian economy will grow 8 per- cent this year, compared to 4.5 percent for the global economy.

Despite concerns of falling trade with the US, China continues to pull in growth figures of 9 per cent annually.

[The fact_remains]

The fact remains - asia is decoupling.  And fast.   I am back in Europe at the moment and the whole place is in in poor shape.

[the other fact remains]

Your average unemployed person has a higher income than the average chinese person and will do long after you, I and vulcan are all dead.

Rebalancing is one thing and it will be slow. Asia consumption satisfying its own production, no time soon. As well margins are so low china is now outsourcing to india as it can't afford its own costs.

At any rate, I reckon vulcan can claim he wins, in about 50 years. Right now he is smoking crack.

[gram]

I'd disagree with the idea that it should take anything like 50 years for the average person in China to match average Western income levels or living standards, let alone those of the unemployed.
It did not take that long for Taiwan and S.Korea to increase their gdp levels about 200-fold and China is well along the path of economic development, having increased its gdp by about 100-fold in the past 30 years. It only needs another 5-10 fold increase for the average person to basically match Western income levels.
The only complication might be that due to its large population, this next 5 to 10 fold increase could prove a huge drain on the world's resources and the world might not be able to support such a large economy, of roughly 30-50 US trillion dollars in GDP.
So, by rights, China should match western living standards in about 10 years if it follows its current growth path but due to its large size, that is not a foregone conclusion.

[10 to 15 years]

So, by rights, China should match western living standards in about 10 years if it follows its current growth path but due to its large size, that is not a foregone conclusion.

The IMF says China's GDP will surpass the US around 2025 - in just 15 years.

[GDP <> living standard]

So, by rights, China should match western living standards in about 10 years if it follows its current growth path but due to its large size, that is not a foregone conclusion.

The IMF says China's GDP will surpass the US around 2025 - in just 15 years.

total GDP is not equivalent to living standard.
When China has same GDP it is still based on 5x more people. Each one is 20% an American. (waiting now for PPP smartass to chime in any moment....)

[the fact_remains]

The fact remains - The west has had its day.  Asia leads the world now.

[Plus ca change]

We'll all be moving to Brazil and learning Portuguese in 10 years time. Or Swahili, depending on wherever the people with cash decide to start manufacturing stuff.

[the fact is China]

The fact remains - The west has had its day.  Asia leads the world now.

Actually, it's China, not Asia. They act purely on own self interest, not asia's.
Sorry to pop your sinkie bubble. They are not here to protect or help you - but use you in their own self interest.
Ask George Yeo from his recent China trip

They (Cosco) are already investing heavily in Greek ports to bypass Singapore on the trade route to europe. When that happens who's day will have been had? Suggestion, invest in a mirror.

[hello gram]

You mean total gdp or gdp per capita.

Rather huge difference given population size.

[Deifnition]

Vulcan, following the link to your post, this is what you said

"What is Decoupling
*The World is undergoing a paradigm shift where the economic center of gravity is moving from the West back to the East.  This is a  reversion to where it resided for hundreds, perhaps thousands of years prior to the Roman Empire and it is nothing to be afraid of.  Europe and the USA will still be around, doing what we do
*Some choose to call it 'rebalancing' ..."

Then you get angry when I told you that you define it as rebalancing and go on your ranting:

Definition,

"...Vulcan thinks decoupling is a re-balancing of power from the West to Asia/EM..."

No, I DON'T.  See my link above and don't put words in my mouth

"....He does not use the same definition as the rest of us, mortal beings. That is why when people tell Vulcan about correlation between the world economies he does not seem to either understand or to acknowledge the concept..."

Ha HAH!!! I LOVE it!!! in the final throes of defeat you desperate saps will reach for ANYTHING at all to stave off doom..even literally defining away Vulcan's victory! 

it seems you wish to be taken seriously...but you and your ideas are really shallow. Of course that won't keep you going on forever posting endlessly, claiming victory like a child, and irritating some...but entertaining many others (like me). Please continue

[gram]

You mean total gdp or gdp per capita.

Rather huge difference given population size.

I mean GDP per capita. Bear in mind that US living standards and GDP per capita are considerably higher than what is necessary to be in the region of a developed economy. The nominal GDP per capita in the EU is only about 60% of that of the US. If you take NZ, its nominal per capita income in the past 30 years has been as low as 40% that of the US and at that point, it was still generally considered a developed economy, although some people do not view NZ as being a developed country.

So, I'm expecting that by rights, China should match around 40% of current US GDP per capita in the next 10-15 years, which would be about 30-35% of US GDP per capita at that time, assuming that the US does manage some economic growth over the next 10-15 years. By rights it should do this if it follows the traditional East Asian economic growth path but due to its large size, there may be issues because its economy would have to be around 30 US trillion dollars in size to achieve this outcome and that's very large. The IMF may have decided to be conservative for this reason.