BRIC+ News & comments

My first hand experience is that Chinese are very good at structural modeling/ simulation and analysis...
Guess where this two year old bridge is. This design because roads on the far side could not go straight. They had to immediately be curved along the river's shore.


It's a nice bridge but I hate separating the city's pedestrians from the waters edge with highways. It would be better to knock down buildings further from the water's edge and submerge the highway there.
It's a nice bridge but I hate separating the city's pedestrians from the waters edge with highways. It would be better to knock down buildings further from the water's edge and submerge the highway there.
I agree that river edges should be parks. Unfortunately, long before that bridge was built, commuter rail and hi-ways had claimed the water margins.

Sao Paulo does have many streets lined with large old trees and local parks plus two or three as large or larger than NYC's central park. SP is the 3 or 4th largest city in the world and has terrible traffic and bad pollution, but exclusive bus lanes and a good and growing subway system help you get around. (Both are free to students and people 65 or older.)
Some data (1/1/10 til 30/9/10), mainly for the record, on Brazil's exports and China's investments in Brazil:

Sugar topped meat (first time, I think) Sugar 8.9 vs meat's 8.1 billion dollars as Sugar exports grew 60% YoY but meat only by 25%.
All agricultural exports were up 15% YoY with soy leading at 14.7 billion dollars. 33.6 million tons (metric, I think) of soy were produced but only 29.8 were exported, mainly to China. (Some of the 3.8 million tons not exported were exported in the form of chickens and pork as most Brazilians do not eat much soy directly but they do eat some as chicken and pork.)

Coffee exports were 3.4 billion dollars, up 26%, but I think much of that is due to price, not volume increase. Corn is cheaper this year in Brazil and the government encouraged exporting it so 1 billion dollars exported was a 33% increase YoY. Again, all data is for the first three quarters of 2010.

-------------- China buying in Brazil -----------------

Wisco invested 5billion expanding a port and $400 million to buy 40% part of MMX (oil and steel producer, I think)
Sinochem bought 40% of the oil basin of Campos for 3.1 Billion
State grid, paid 177 billion for seven different electric power facilities, (mainly transmission lines, but some generation too)
China Mineral paid 1.2 billion for Itaminas. (I am not sure what mineral, but think it is iron ore)
Honbridge Holdings paid 390 millions for a mine of Votorantim (again not sure what minerals that is)
Cherry Motors is spending 700 million to build it first car plant in Brazil. They have a much smaller one in Argentina.
(2 Otober10 news see next post also) Sinopec paid 7.1 billion for 40% of Repsol of Brazil which owns 25% of 14 billion proven barrels of pre-salt oil now producing (The big new find is below salt layer) PetroBras owns 40%, Shell, Chevron and BG (British Gas) own the reminder. This field(s) produced 49.03 billion Euro of oil last year for profit of 1.74 billion Euros
Cnooc is currently negotiating to buy 30% of seven development blocks in the Campos oil field (owned by Brazilian Eike Bastista, one of the top 10 most wealthy in the world) price not yet firm but will be about 14 billion dollars.
Also China lent PetroBras 10 billion dollars in 2009, which will be paid back only by oil deliveries. (200,000 BARRELS PER DAY UNTIL 2019)

Adding this up you get: 228 billion investment dollars China spent (or will) in Brazil in a little more than one year. I am not too happy about this as China is paying with dollars - Brazil will get stuck with paper China is getting rid of before its value collapses. This total does not include the dollars China spends for import of Brazilian grains, etc. This influx of about 1/4 trillion dollars is large part of why there is a surplus of dollars in Brazil (plus PetroBras's receint IPO, the world largest ever) is making the Real much too strong.

Currently you get only 1.685R$ for your dollar. When left wing Lula was running for president 8 years ago and polls began to show he would win all the rich Brazilians became desperate to buy dollars they could send out of Brazil. I had plenty and few Real, so I sold dollars to them on the legal black market getting more than 4R$/ USD. Once even 4.5R$/ USD.
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"... China Petrochemical Corp. is paying a premium to take a stake in Repsol YPF SA’s Brazilian unit, betting that Latin American offshore oil reserves will help meet demand in the world’s biggest energy user.

Sinopec Group, as China’s second-largest energy company is known, agreed Oct. 1 to pay $7.1 billion for a 40 percent stake in Madrid-based Repsol’s unit, which has reserves in the same area as the biggest oil discovery in the Americas this century. That amounts to $15 a barrel, or 76 percent above the $8.50 Petroleo Brasileiro SA paid last month for assets in Brazil, said Neil Beveridge, an analyst at Sanford C. Bernstein & Co.

“This shows the importance that China places on securing oil resources overseas,” Beveridge said by telephone from Hong Kong. “This is a key emerging deepwater basin, and there are a lot of developments taking place. Sinopec has a good position established, but the price it has paid is very high.”

Chinese companies spent a record $32 billion last year buying energy and resources assets abroad. Sinopec Group’s investment is the country’s second-largest overseas acquisition and follows the company’s purchase of Addax Petroleum Corp. for C$8.3 billion ($8 billion) last year to gain reserves in Iraq’s Kurdistan and West Africa. Cnooc Ltd. and state-controlled Sinochem Group have paid about $3.1 billion each for stakes in oil producers in Argentina and Brazil. ..."


Billy T comment:
While that overpayment is probably true the article fails to mention that getting assured future oil supplies (by owning them) is only part of the reason China pays high prices:
(1) they have a lot to spend, especially on the decreasing amounts of oil and need to as they sell more cars than any other nation now (true since Nov 2009) and
(2) China is convinced, as I am, that the dollar is going to be trash, so best to spend it now, even overpay, for real assets, instead of hold paper promises.

BTW that $8.50 was a gross over payment by the government controlled PetroBras to the government. Today is the presidential election and Lula's hand picked candidate will win (but perhaps only with the second round of voting.) It was very important to be able to claim to her left-wing supporter that the nationally owned oil was sold at a very good price.

Independent evaluation of its worth now deep below the ocean and below a thick layer of salt were all about $5/ barrel. PetroBras stock took a big hit when it was leaned how much they would pay to own a fix volume of oil. In fact only BP of all the oil companies took a bigger hit. Most have seen their stock climb in value. Thus in fact China paid three times more than it should have, mainly IMHO, because they too think the dollar will lose more than 2/3 of its current value before they can spend all of the 2 trillion or so they hold.
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China has made rapid progress in energy generation and production process efficiencies:

"... "Due to the unremitting efforts of central and local governments, the target of a 20-percent reduction in energy consumption relative to economic output is within reach," said Xie Zhenhua ...

In the four years from 2006 to 2009, small thermal power plants with a total capacity of 60 million kilowatts were shut down. For the first seven months this year, small thermal plants with another 10 million kW were eliminated.
"The high energy-intensive power generation capacity eliminated during the four years and seven months in China is more than the total installed power generation capacity of the whole United Kingdom, which stands at 60 million kW," said Xie.

During the four years, the authorities phased out inefficient production capacity of 87.12 million tonnes of steel, 60.38 million tonnes of iron and 214 million tonnes of cement, said Xie.

The total eliminated outdated production capacity from 2006 to 2009 was equivalent to 110 million tonnes of standard coal saved, he said.

This year, the government was aiming to save energy of another 16 million tonnes of standard coal by shutting down small thermal power plants with a total capacity of 10 million kW and phasing out inefficient production capacity of 25 million tonnes of steel, 6 million tonnes of iron and 50 million tonnes of cement, said Xie.

The government had also allocated 128.5 billion yuan ($19.22 billion) ... plus 83.3 billion yuan from the central budget represented only 10 to 15 percent of China's total investment in energy saving and emissions cutting in the five years, Xie said. ..."

China & S.Korea:

"... Already a popular destination for Japanese tourists for many years, Korea is now also becoming a top destination for Chinese travelers. ... Chinese are now the fastest growing group of visitors to Korea, {BT insert: up 45% in first 8 months of 2010 vs last year's first 8} according to the Korea Tourism Organization. ...

A recent survey found that Chinese tourists are spending about double what Japanese visitors are spending at large department store chains. ... Learning Chinese is becoming a must for retailers not only in Seoul’s popular shopping areas, but throughout Korea.

Some affluent Chinese tourists are also buying vacation homes in Korea. Half of all available units at a new resort development on Jeju Island, one of Korea’s most popular tourist destinations, were bought by Chinese nationals.

Affluent Chinese buyers are attracted to the island not only for its clear waters and calm weather but also for its proximity to China—an hour and a half plane ride from Beijing. In addition, Jeju’s provincial government offers permanent resident status to foreigners who invest more than US$500,000 and reside on the island for at least five years. ..."

From: Matthews Asia Funds <> in an Email to me.

Billy T comment:
Nice to be the upper class in a country with rapidly growing wealth.* About a year ago I read that when they made a long weekend shopping visit to Japan on average they spend more than $10,000 but with the current tension between Japan & China over some islands that may have oil, perhaps few do their luxury shopping in Japan now. I also read back then that there are more million plus dollar homes being constructed in China than any other country. Ain't communism grand! :rolleyes:
* If you doubt this ask the top 2% in USA, many of whom are investing in Asia their great GWB tax reductions, not in the USA.
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US currency flooding world hurts the responsible governments:

"... Brazilian Central Bank President Henrique Meirelles said a currency agreement {BT insert: at this weekend meeting of the IMF in DC} is unlikely in the short term and blamed recent gyrations on an excess of dollars generated by loose monetary policy in the U.S. and other industrial nations. That’s fuelling capital flows into emerging markets such as his. {BT insert: Making real too strong, destroying exporters} “Brazil cannot pay an excessive price for the fact it’s doing well while others are doing badly,” he said. “Brazil needs to take its measures to protect itself from these imbalances. ..."

{Brazil has taken a small step: raised the tax on hot funds coming into fix investments in Brazil from 2% to 4%. Brazil is responsibly controlling inflation with the world's highest real interest rates on bank accounts. Brazil is not running its currency printing press, making thin air money as the US is.}

Quote from:

Billy T comment:This "growing currency war" may make it impossible for Obama to delay the depression until he leaves off at end of first term.
A very quotable sentence pair from Bloomberg:

"Anyone who stops by China can’t help but be wowed.
Its high-speed trains and airports make America look like a theme park celebrating antiquated technology.


Goldman Sacks predicts that China, now 1/3 the economy of the US, will have a larger economy than the US by 2027.
I (Billy T) think much sooner as the US & EU sink into GWB's deep long lasting depression. However, the US theme park is more exciting as bridges, dams and dikes collapse and 100 year old water mains rupture etc. But don't let facts confuse you - keep your arrogant POV that the US is the greatest.

Here are photos of the world's fastest trains and the largest (1 Km long) most modern airport, built for the Olympics in less time that England spent on public hearing about the expansion of one terminal at London's Heathrow!


In a few years, China will have more high-speed train system (Km of tracks) than the rest of the world's total - high speed trains are a major part of China's stimulus program as they make jobs all over the country - boosting living standards in the interior and of course increase the economic efficiency of China.
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" China's second unmanned lunar probe, Chang'e-2, has successfully completed its final braking Saturday, which allowed satellite to enter a 100 km-high lunar orbit. "
From: ChinaDaily.
It is hard to tell when that report was made. The news streamer at bottom speaks of US State Dept protesting the arrest of 7 in Burma and also of a mine disaster in the US. It really only gives the opinions of China Labor Watch people, (not exactly a neutral source) without any supporting evidence and not one picture of the poor as you promised.

When it finshed, I clicked on this "related link"

It is a visit during a 10 day vacation period to several dormatories, with lots of evidence of the living conditions shown - Facts instead of opinions presented.

As I already knew, the dorms are very crowded with shared cooking facilities and clothes lines everywhere. Typically at least 6 beds to a room, or just along a corridor. One must understand that the occupants are from the interior (most have gone back home during this 10 day break), do not know anyone when they arrive in the coastal city and do not want to have their own private room. They need close contact with others, in a busy, cluttered environment as they have always had at home. Living in the well ordered environment of a typical US college dorm would be psychologically disturbing to them.

The dorms, picked at random by the visitor, were not the large factory owned dorms where thousand live in one multi-story building in less cluttered conditions. That has caused psychological problems as they lose their sense of identity as they become just hard-working cogs with no social life in a huge production machine. The smaller dorms visited in this video are more human environments which permit friendships to form. They have a rich social environment. More like a college fraternity house living does, but admittedly are not attractive to the college bound US student, who had their own private bedroom, etc.

Do you know that in China, the common interior hotels (for Chinese, not tourists) often have all guests sleeping together in close contact, stranger next to stranger, on one large hard, slightly elevated, floor? (The floor is elevated about two feet so the exhaust from a fire can circulate under it in winter.) Their concepts of "personal space" etc. are quite different from those of Americans. Despite this close public contact they are more reserved and prudish than Americans. Many are virgins when they marry.

The one worker who did not go home told his pay. He gets about $10/ day for a 12 hour day. He was there as this is much better than possible at his interior home.

You said you could post pictures all day long of the Chinese poor but your link does not show even one. - Only US reporters interviewing people from China Watch organization. I asked you to post two photos taken within the last 12 months. I agree a decade or more ago, there were Chinese starving.
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You said you could post pictures all day long of the Chinese poor but your link does not show even one. - Only US reporters interviewing people from China Watch organization. I asked you to post two photos taken within the last 12 months. I agree a decade or more ago, there were Chinese starving.
Its not hard...all you have to do is type the words CHINA POVERTY into google and you'll get as many images of the reality as needed, to cure anyone of the prevailing propanganda.
Its not hard...all you have to do is type the words CHINA POVERTY into Google and you'll get as many images of the reality as needed, to cure anyone of the prevailing propaganda
Thanks for the link. I went there and the most representative (general data) graph there was:
but it only goes to 2004. If extended it would show far less "poverty" than exists in the US, by each country's "poverty standards."

Yes it is easy to find individual photos of homeless people, people with rags on their feet instead of shoes etc. in any country. In the US these are often people with some mental problems (or alcohol problem if that is not included in "mental problems"). A few decades ago, before the availability of modern psychotic drugs, they were warehoused in mental institutions (or sometimes the local jail). These drug have cured more than 2/3 of the inmates so they were discharged, but now living on the streets, most fail to take their medicine.

My father was head of clinical services in two of the largest state-wide facilities; first in West Virginia and then in Maryland. Both those institutions are now converted into hotels. The MD one is a luxury vacation resort, on the banks of the beautiful Choptank River with an abundance of crabs, fish, and boating for the guests.

If you want to cure the “prevailing (anti-China) propaganda” do your search again, but for “Poverty in America.” Where in addition to many photos of unfortunate individuals you will also get, from first hit more factual statistics like:”

(1) 45 million Americans were living in poverty in 2009 (a much higher percentage than in China.)
Read more:

(2) The U.S. poverty rate is now the third worst among the developed nations tracked by the OECD
Read more:

(3) Household participation in the food stamp program has increased 20.28% since last year
Read more:

(4) The number of Americans on food stamps surpassed 41 million for the first time ever in June {2009}
Read more:
In China, as in Brazil, there is no “food stamp” program.
Instead there is a sense of community that shares the food available. I had a cattle ranch in Brazil and a very honest hard working man who took care of its pastures. At noon he would return to the shade of the porch to eat his lunch. If I was there he always offered to share his meal with me. It is a cultural thing in both countries.
In China & Brazil, you do not eat in front of others without offering to share your food. No longer true in Brazil's bigger cities where "soup kitchens" exist.

Note contrast with first graph: Poverty in China is rapidly being eliminated but it is rapidly increasing in the US (and was a far higher percentage of the population already a few years ago).

(5) One out of every six Americans is now being served by at least one government anti-poverty program
Read more:

(6) One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010
{Foreclosure essentially does not exist in China except for very high priced urban units. In the last month, in a few local districts, they are experimenting with the idea of introducing a real estate tax of about 1%. Most of the country has none.}
Read more:

(7) Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as in 2007
Read more:

(8) The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year
Read more:

(9) 28% of all U.S. households have at least one member that is looking for a full-time job
{There is a sever labor shortage in coastal Chinese factories. So much so that wages are rising (in purchasing power) at least 20% per year.}
Read more:

(10) Nationwide bankruptcy filings rose 20 percent in the 12 month period ending June 30th
Read more:

I will stop here, but see five more “Shocking facts about poverty in the US” here:

Yes I agree: Let's get the facts and stop swallowing “prevailing propaganda.”

BTW, the second hit of Google search on “Poverty in America” is:
It is more political as contrasts what is happening to US poor with the increasing concentration of wealth in the hands of a few.

SUMMARY: Poverty in China is rapidly being eliminated but fast growing in the US and already effects more than twice the percentage of the population as in China.
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On point (3) of last post I wanted to show:

But sciforum's computer thinks there were already three images in my last post.
I am currently working in China (Beijing) and I've also done some work in South China recently and while obviously the numbers behind China's growth and everything are very impressive, China has a loooong way to go before you can even begin to make comparisons between the US and China. The comparisons don't even make sense. What you call 'poverty' in the US and 'poverty' in China are not even close to the same meaning. So you can look at the new high tech trains and airports and look at the big cities and conclude that China is just like the US, but it is still undoubtedly a 'developing' country and is a far cry from developed.

Don't get me wrong, I think China is better on track than most other countries, including the US, and I believe that they will continue their development and will eventually attain a high standard of living for its people, but even with their tremendous growth, it's a long way off.

On the surface China appears to be just like the US in many places. In fact, before coming to Beijing, I was expecting an experience akin to New York, since by all appearances it looks like a big modern city. But even in the heart of the 'western' and 'business' areas where you see skyscrapers and shopping malls, most bathrooms are a hole in the ground, often without toilet paper or even plumbing and running water, people sleep on the streets next to a pile of various trinkets they are selling, construction workers labor all day and live in small portable houses right on the construction site, people wear rags, etc. In South China it's even worse - I was describing the 'rich' areas. Of course, there are high-end places in Beijing that make you almost believe you are in the US, but by and large, it is very very far off from that.

None of this is to bash China or how it is developing in any way. I love where China is headed and its pretty much impossible to grow any faster than they are. Their growth has listed hundreds of millions out of poverty, and it gets better every day. My only point is that people tend to get overly excited about what China is like today. I know I did - I had different expectations before I began working here. So just keep in mind that China is still a very poor country with millions living in poverty, and even in the affluent area, people who are employed and considered fairly well off have a far lower standard of living than much of the 'poor' in the US.

I'm not really adding to the debate, just something to keep in mind from someone who actually works in China currently.

edit: not to mention the unsafe to drink tap water, "hazardous" air quality (both the Beijing municipal government and the embassy declared the air quality as "hazardous" for the past few days. People who have been here 20+ years said it was the worst they have seen recently. I'm talking like a fog that you can hardly see through, and after you blow your nose the tissue is black), censorship of tv, internet, and media, lack of plumbing so there is soiled bathroom tissue in all of the trash cans so it smells like shit everywhere, and much more
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Thanks for your comments Jeff 152.

You will note that I said "poverty" by their national standards." "Poverty" is always a relative concept and for good reason - If you only have ~15% of the average income, your feel poor. If it were an absolute standard at the current level most of the US was in poverty circa 1900. About two decades ago, the US poverty level was an income higher than the average in Canada.

Never have I suggested that China was the US's equal in wealth. In fact in the very post, a few back showing the high-speed trains and very modern airport, I noted (from Goldman Sacks) that China's economy was only 1/3 the size of the US's. However, I also quoted GS's prediction that by 2027 China's economy would be larger than the US's.

I went further, much farther, and I predicted that China would have a larger economy much sooner as US and EU would soon sink into deep, long-lasting depression. I have long ago, when GWB still had about 2 years as POTUS, predicted that there will be a run on the dollar by (or before) Halloween 2014, which is quickly (a few months) followed by the onset of this GWB depression. If I am correct on this, then China will have a larger and growing economy bigger than that of the US at least 11 years sooner (by Halloween 2016, to be more specific) than GS has predicted.

True China is CURRENTLY far behind the US but what is important, IMHO, is not the view backwards, but to the near term future.

PS If you are young and have Chinese friends who have recently come from the interior ask them if their is some error in my post 132 descriptions of interior hotels, and general attitudes towards living in cluttered crowed environments sharing cooking facilities etc. My information is both a little old and entirely third hand.

Do you read the China Daily, as I do, of if not what in English do you recommend?
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Billy T, I see the Chinese economy as the worlds largest in around the next ten years (2020), which means that the capital of the world is shifting from Washington D.C. in the United States of America, to Beijing in China, but it will take until around 2030 to 2040 for that shift to be consolidated as it will be in gradual steps. (You who know of economics can help me with that). So what USA was in its apogee, China will be in 20 to 30 years from now. But that is just my opinion after taking in consideration what is happening right now in the world. What I see is the global empire shifting its capital from USA to China.
China's next step in dumping declining dollars from reserves to buy real (non-paper) assets:

"China's state-owned energy company China National Offshore Oil Corp. (CNOOC) (NYSE ADR: CEO) late Sunday announced it would invest $2.16 billion in U.S.-based Chesapeake Energy Corp. (NYSE:CHK) to increase China's stake in unconventional gas resources like shale gas. It is the largest ever China-U.S. oil and gas deal. ..."

Another reason why China is buying:

"The deal highlights China's need to develop its shale-gas extraction techniques. The country has 26 trillion cubic meters of shale gas reserves that are largely unexplored due to a lack of drilling ability - and Chesapeake is a pioneer in the shale gas industry. ..."

Billy T adds more: A few years ago when China tried to oil company assets (UniCal, I think it was) the US government blocked them, but hard to see how US can stop them from buying listed stock. Also, China may want to learn how to do horizontal drill + "hydro fraction" before the EPA may stop that in the US (due to contamination of ground waters with toxic chemicals). China already has a lot of water contaminated. Perhaps they will be using nuclear power to dive reverse osmosis, etc. soon for drinking water anyway. In a few decades China will be at least twice as rich as any other country and its engineers love (and can do) big projects. Thus not impossible that they will cover many cities with domes as global air becomes more deadly to breath.
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Thanks for the link. I went there and the most representative (general data) graph there was:
but it only goes to 2004. If extended it would show far less "poverty" than exists in the US, by each country's "poverty standards."
Sure, and poverty in China is defined by the World Bank as living on less $1.25 per day. So comparing this to poverty in the US is not viable.

The Chinese government found out what 'the people' want in Tiananmen Square, and it terrifies them. They realize the importance of keeping the masses at the margins of existence, politically powerless, but nevertheless a powerhouse of production for the government's military ambitions.
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