Browse content similar to 01/01/2013. Check below for episodes and series from the same categories and more!
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Welcome. The epicentre of the financial crisis, at least at the | :00:24. | :00:28. | |
moment, maybe in Europe, but its effects are being felt as far away | :00:28. | :00:35. | |
as China. The world's second- slowest pace in three years. Can | :00:35. | :00:39. | |
the new political line-up to live that a prosperous and stable | :00:39. | :00:49. | |
:00:49. | :00:53. | ||
Sachs management. And the chairman of a research company. | :00:53. | :01:00. | |
Has a soft landing be achieved in China? What China? Whatt mean? | :01:00. | :01:08. | |
whole soft versus hard is very simplistic. Given al | :01:08. | :01:12. | |
in the future. To think of China and landing is probably a mistake. | :01:12. | :01:20. | |
It will keep travelling. A soft landing is broadly seen as an | :01:20. | :01:24. | |
economy slowing down. But sustainable at a lower rate of | :01:24. | :01:32. | |
growth. There is more evidence to support the soft landing crowd | :01:32. | :01:38. | |
rather than the hard landing crowd. But I would also add that one of | :01:38. | :01:43. | |
the reasons China has slowed, the slowest in many years, is because | :01:43. | :01:47. | |
the policy makers deliberately slowed it. Their biggest battle has | :01:48. | :01:54. | |
been inflation. Would you agree with that? We should not worry | :01:54. | :01:58. | |
about it? And it has very little to do with the European financial | :01:58. | :02:06. | |
crisis. Not really. We calculate Chinese GDP. Many do not believe | :02:06. | :02:12. | |
the official figures, in terms of real growth. Last year, it was 4%. | :02:12. | :02:19. | |
By Chinese standards, he is a hard landing. That sounds quite | :02:19. | :02:25. | |
ambitious, measuring the growth. Reduce their numbers and | :02:25. | :02:34. | |
recalculate the inflation rate. -- we used their numbers. Let's | :02:34. | :02:40. | |
address this issue for the needs of China to be balance is economy if | :02:40. | :02:44. | |
it is to move forward. What is the main priori main priorimore | :02:44. | :02:50. | |
domestically generated. It is funny how I get two people to look as | :02:50. | :02:56. | |
something and they have such different views. For a long time, I | :02:56. | :03:03. | |
was leading a group are calculated China's GDP. We have had this one | :03:03. | :03:09. | |
for 15 years, it is somewhere between six -8. I do not agree much | :03:09. | :03:17. | |
with what Charles has said. Chart - - consumption has started to rise. | :03:17. | :03:21. | |
This need to rebalance the economy, is it something a new political | :03:21. | :03:27. | |
line-up can achieve? Prices have come down a long way. Wages have | :03:27. | :03:34. | |
come down a bit, but not enough. The difference between the two, it | :03:34. | :03:41. | |
has gotten wider. Why do you one wages to go down? The businesses | :03:41. | :03:47. | |
compared compared to where they were before. | :03:47. | :03:53. | |
Labour costs are up 2% but the prices are down to present. There | :03:53. | :03:59. | |
is a squeeze on margins. They are paying much higher interest rates. | :03:59. | :04:07. | |
It is 6% but the inflation rate is -3 %. That is plus 9%. People do | :04:07. | :04:12. | |
not want to spend. Businesses will go into it a burn mode. It means | :04:12. | :04:18. | |
reducing wages as well as everything else. China has to | :04:18. | :04:24. | |
become an economy which has more value anywh value anywhannot just be a | :04:24. | :04:33. | |
cheap manufacture. Is it going see that as a problem. The days of | :04:33. | :04:38. | |
China been the low-value producer of the world is behind us. It is | :04:38. | :04:43. | |
the natural stage of evolution and development. He see it relocating | :04:44. | :04:50. | |
to other pa to other pae world. Mexico is a big winner of it. And because | :04:50. | :04:54. | |
of the leaked -- the low energy costs, the US is showing some | :04:54. | :04:58. | |
modest signs of benefiting as well. I do not worry about that from a | :04:59. | :05:04. | |
Chinese perspective. That was inevitable. The rise of income is | :05:04. | :05:08. | |
wide the consumer is already starting to do better. One it comes | :05:08. | :05:14. | |
to the leadership, their job is to sort of make sure it does not steal | :05:14. | :05:19. | |
off course too much. Luckily for them, the incoming leadership | :05:19. | :05:22. | |
appeared at a time when there is evidence of this adjustment taking | :05:22. | :05:29. | |
place. They have a nice deck of cards that has been given to them. | :05:29. | :05:35. | |
Let's talk about some of the obstacles, notably banking. Some | :05:35. | :05:45. | |
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people say they are highly liquid. hidden. I take the bad loan view. | :05:48. | :05:56. | |
where commission mac income is earned a half of the total output. | :05:56. | :06:05. | |
It is unusual. Business and government income is much higher. | :06:05. | :06:09. | |
Half of up port in the government income and just under half of up | :06:09. | :06:14. | |
are being invested. Yet, the money does not get there it easily. It | :06:15. | :06:18. | |
has to go through the banking system. It means China is taking | :06:18. | :06:23. | |
away money from the probable places, inside the corporate state, and | :06:23. | :06:27. | |
giving it to a bunch of provincial people who set up plants that do | :06:27. | :06:37. | |
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plagued other plants. A low was the return of capitals. -- it results | :06:40. | :06:50. | |
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in a low return. Shine that engages in a state capitalism. -- China | :06:50. | :06:59. | |
engages. Dame did not have the a way | :06:59. | :07:09. | |
:07:09. | :07:11. | ||
a democracy can. -- des do not. How long can that model sustain China? | :07:11. | :07:20. | |
It former's -- it forces a limitation. It is very tricky. You | :07:20. | :07:26. | |
look at some of the dilemmas in the West at the moment. Alternative | :07:26. | :07:31. | |
energy and energy efficiencies, for example. By the end of this decade, | :07:31. | :07:35. | |
China may have made of progress and some of these areas than in the | :07:35. | :07:42. | |
to give the capital that is needed. In some areas, it is a distinct | :07:42. | :07:52. | |
advantage. Battery-operated cars, for example. They have a much | :07:52. | :07:56. | |
better chance of getting somewhere dead than elsewhere because it is | :07:56. | :08:02. | |
not private capital having to deal with stock market risks. If you | :08:02. | :08:06. | |
listen carefully to what those close to the leaders are saying, | :08:06. | :08:15. | |
dismantling the degree of dominance corner. It is part of the | :08:15. | :08:25. | |
:08:25. | :08:26. | ||
implementation of this five-year These | :08:26. | :08:36. | |
:08:36. | :08:37. | ||
These big organisations will not be quite as dominant. I think it is a | :08:37. | :08:47. | |
:08:47. | :08:51. | ||
distinct advantage. Dr Gray, Charles? -- do you agree. I like to | :08:51. | :08:55. | |
hear companies like Goldman Sachs explaining the advantages of state | :08:55. | :09:05. | |
capitalism. No, is the short answer. They need better allocation of | :09:05. | :09:10. | |
capital. If the look of the growth rate of China, which is 10%, it | :09:10. | :09:14. | |
depends more and more on capital employed and less and less on | :09:14. | :09:24. | |
:09:24. | :09:24. | ||
genuine productivity. Jim is right in the centre of the stability. | :09:24. | :09:32. | |
But they want to reduce the capital input. You have to raise the growth | :09:32. | :09:35. | |
of real productivity and that means proper allocation of capital, and | :09:35. | :09:40. | |
that is what you do not get when you get the government telling you | :09:40. | :09:49. | |
what to do. Corruption is a big is that capital spending pops the | :09:49. | :09:54. | |
economy up. We are looking backwards again. It is quite clear | :09:54. | :10:04. | |
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in the econ in the econ weakened significantly. That is | :10:08. | :10:15. | |
part of the reason why the economy has closed. The consumer has | :10:15. | :10:22. | |
accelerated. Winup get -- we cannot tomorro | :10:23. | :10:27. | |
tomorrow. It is something that takes time, but we are moving in | :10:27. | :10:37. | |
:10:37. | :10:44. | ||
deep right direction. One of the spend any time with the leaders of | :10:44. | :10:48. |