“Tim Geithner was the Treasury line officer who wrote the IMF program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis [..] It takes a gigantic fool to mess that up. But the IMF messed it up.”
http://www.nakedcapitalism.com/2009/03/former-a...

“Tim Geithner was the Treasury line officer who wrote the IMF program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis [..] It takes a gigantic fool to mess that up. But the IMF messed it up.”
http://www.nakedcapitalism.com/2009/03/former-a...

Sometimes its hard for westerners to understand why things happen in Asia through their tinted glasses, and when they observe a data point, immediately draw the conclusion familiar to them in western economies. Asia is obviously command economies. Governments control a large part of the economy outside of exports, and even for exports, tariffs often distort the true economic picture. Real estate, stock markets (this one is common with the US which has a largely manipulated stock market), salaries, infrastructural development and social benefits (where they exist) are hugely government directed and accounted for in the GDP using more datapoints provided by governments. The Chinese government PMI often offers contradictory numbers to private numbers, and even then, all the government needs to do is make a discrete enquiry and the private PMI numbers fall in line the next time to correlate nicely with official figures. Chinese banks lent much in 1Q 2009, much of it to companies who then use it to speculate in stocks or pay off long-term creditors to keep suppliers alive, and of course state-owned companies like AVIC who were “asked” to take the loans first then decide what to do with the billionsfrom banks. Small companies are closing by the droves but they are not included in state statistics, China is like Indonesia, the “gre” economy which em[ployes millins or rural workers are unaccounted for and have no access to credit. SOme bigger companies obtained loans recently and made good business on-lending them at higher interest rates to the grey market. Some western analsysts say the surge in loans is pent-up demand after the tightening in 2008, actually it is just propping up zombie companies who are still standing. The only similarity between east and the west is the impact of rising stock market and real estate prices on the pyschology of the consumers. If you understand the role of real estate and stock market and understand the role of governments, then it is not difficult to see that command economies can “engineer” quick turn around. And mind you, unlike Japan, the Chinese government has the resources to engineer this upturn for at least another 5 years. So no one is holding their breathe here waiting for US and urope to tunr. While exports were thriving, there is little need to engineer any extra growth, but when it rains, countries like Korea, Singapore, Taiwan and China all have the resources to pump their economies for many years.

China asked for a postponement of an ADB board meeting on March 26-27, which was set to discuss the 2009-12 strategy for India. On the table was an Indian request for a US$2.9 billion loan approval. What appears to have got China's goat was the inclusion of a $60 million flood management, water supply and sanitation project in Arunachal Pradesh.

http://www.atimes.com/atimes/South_Asia/KE05Df0...

I wondered whether any country would realize what bunch of incompetent idiots IMF really is. And here it comes at last!

I saw Pettis' piece and I thought it was very much to the point (although you should be aware of his bias). If the money is spent and wasted, then it is not sustainable. Pettis suggests this is what is happening. Quite frankly, it is too early to call.

I would say, however, that Asia looks to be circling the wagons in a way that could portend an incipient internal demand dynamic. This pattern will take years to develop, so it is probably unlikely that Asia-internal demand can replace demand from the West, but if Asia spends enough now and waits for the West to pick up the slack down the line, they can make the bridge to an internal demand model.

http://www.rgemonitor.com/asia-monitor/256515/w...

http://mpettis.com/2009/05/distortions-in-the-c...

The idea the China, or any Asian economy, can decouple is similar to Drucker's old view of a decoupled financial and real economy in the US. When one views China's economic structure – i.e. a near absence of an internal consumer economy and huge dependence on exports – any decoupling must be temporary at best.

Neither China nor Japan, the world's number 4 and 2 largest economies, has any appreciable internal consumer economy in relation to its exports. With world trade stagnating just how long can these two “decouple? Stimulus will go only so far. If Europe and North America do not start buying the “decoupling” will soon become an intense “coupling” and shared economic pain.

China and Japan must be crossing their fingers and hoping for a rapid recovery in their trading partners before this “decoupling” becomes what it really is: a short term stimulus bump before a looming contraction due to an export crash.

a. The employment rate only counts for those have an “account” in city. Those who come from rural area even though are not working, will not be counted.
b. If you work as a causal insurance or Amway agent, even if you only get paid every few months, you are not counted as unemployed.
c. A lot of companies pay their employees for peanut as the basic salary like hundred yuan per month (this amount of money is not enough to maintain the basic expenses these days). These employees stay at home but no need to work, are not counted as unemployed.
d. A message from a Shanghaiese, he said if you are unemployed, you need to report to the government that you are unemployed. If you do not report to the government for three months, you are not unemployed. However, even if you report to the government, the government won't hand out any money or help to you. So why be bothered to report?

Moreover, think about it, if there is not really a big threat to the economic downturn in China, why the chinese government let their banks to relentlessly lent money out in the last few months?
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Started from last week, a lot of web blogs in china are seriously screened. Much much much heavy handed than usual.