China is largest auto market

[DanS]

We should build the Alpha Centauri colony ship soon, or they'll win!

Excerpt...

China Ends U.S.’s Reign as Largest Auto Market (Update2)
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By Bloomberg News

Jan. 11 (Bloomberg) -- China supplanted the U.S. as the world’s largest auto market after its 2009 vehicle sales jumped 46 percent, ending more than a century of American dominance that started with the Model T Ford.

The nation’s sales of passenger cars, buses and trucks rose to 13.6 million, the fastest pace in at least 10 years, according to the China Association of Automobile Manufacturers. In the U.S., sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.x_r_l9NZE

[Kitschum]

Are they gonna drive there in their Volvos?

[DanS]

They'll win on points after time has run out.

[Kitschum]

Sounds like time to disband all those caravans then! So now we know the real reason for American dominance in the Middle East.

[BeBMan]

Also, they have stolen the "biggest exporter" title from us. Cheaters!

[Dinner]

I read that they sell more units but each unit costs something like $8k compared to the US where each unit costs around $30k so I know which market I'd rather be dominate in.

[Kitschum]

The one that's growing?

[HalfLotus]

I for one welcome our new production overlords, and suggest we capitulate and trade for the Sound Money tech asap.

There's still time to rebuild before Global Warming turns completely USA into desert.

[Theben]

Contrarian Investor Sees Economic Crash in China


By DAVID BARBOZA
Published: January 7, 2010

SHANGHAI — James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

James Chanos made his hedge fund fortune predicting problems at companies and shorting their stock.

Now Mr. Chanos is betting against China, and is promoting his view that the China miracle has blinded investors to the risks in that economy.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

“Bubbles are best identified by credit excesses, not valuation excesses,” he said in a recent appearance on CNBC. “And there’s no bigger credit excess than in China.” He is planning a speech later this month at the University of Oxford to drive home his point.

As America’s pre-eminent short-seller — he bets big money that companies’ strategies will fail — Mr. Chanos’s narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers.

Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell cement, coal, steel and iron ore.

Mr. Chanos, 51, whose hedge fund, Kynikos Associates, based in New York, has $6 billion under management, is hardly the only skeptic on China. But he is certainly the most prominent and vocal.

For all his record of prescience — in addition to predicting Enron’s demise, he also spotted the looming problems of Tyco International, the Boston Market restaurant chain and, more recently, home builders and some of the world’s biggest banks — his detractors say that he knows little or nothing about China or its economy and that his bearish calls should be ignored.

“I find it interesting that people who couldn’t spell China 10 years ago are now experts on China,” said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. “China is not in a bubble.”

Colleagues acknowledge that Mr. Chanos began studying China’s economy in earnest only last summer and sent out e-mail messages seeking expert opinion.

But he is tagging along with the bears, who see mounting evidence that China’s stimulus package and aggressive bank lending are creating artificial demand, raising the risk of a wave of nonperforming loans.

more

[Theben]

Jim Chanos Is Wrong: There Is No China Bubble

Shaun Rein, 01.11.10, 03:53 PM EST

He misunderstands basic facts about income, real estate and the currency there.

The famed short-seller Jim Chanos has been making waves lately by saying he thinks China is in a bubble and ready to collapse in 2010. He argues that easy credit has let real estate and stock market prices shoot upward. He also says the Chinese government is cooking the numbers to show 8% growth in gross domestic products, when actually China can't keep growing when the rest of the world has been hit so hard by the financial crisis.

Chanos called it right on Enron and Tyco ( TYC - news - people ) before they collapsed. He is no lightweight observer of the economic scene. However, he is wrong about China. For once I agree with the famed investor Jim Rogers, who cofounded the Quantum Fund with George Soros. He says China is not in a bubble and adds that he finds "it interesting that people who couldn't spell China 10 years ago are now experts on China."

Betting against China in 2010 is a bad mistake for investors and companies alike. Here are three reasons why Chanos is wrong and Rogers is right about the strength of China's economy:

Chanos' first error is his belief that China's real estate sector soared in 2009 because of speculation triggered by a loosening of credit by China's banks. Lending in China doubled to $1.35 trillion in the first 11 months of 2009. Real estate prices rose sharply throughout the country and almost doubled in cities like Shenzhen. Chanos calls that a bubble--"Dubai times 1,000--or worse"--that could lead to fallout like the subprime mortgage mess in the U.S.

There are, however, fundamental differences between China's real estate and consumer finance markets and those of the U.S. and Dubai, which Chanos compares them to.

da rest

I can't really comment since I don't know enough about China's economy. Both sides also have financial reasons to say what they're saying. Under the circumstances I'd guess that the world economies won't let China crash until they themselves have solid footing again, but once that happens they'll try to force the yuan to appreciate.

[DanS]

Rein's a little hard to follow. All government-produced or government-influenced figures -- including lending numbers -- coming out of China should be taken with a great deal of caution. This goes for both bulls and bears.

[Spaced Cowboy]

To the OP, about 1/2 of the vehicles on the road in China are trucks or buses.

A car is a status symbol, here it is a necessity unless you live in the City.

My friend bought a car last year, but still uses his electric bike to go to work and shopping. The streets are crowded and there is no place to park.

They outlawed motorcycles a few years ago, might have something to do with it. Edit: In some cities.

[DanS]

It appears that the vehicle market in China is evolving rapidly. It may be true that 1/2 of the vehicles on the road in China are trucks or buses, but the new sales appear to be mainly cars.

I have heard that in the last few years, China has spent -- and is continuing to spend -- an enormous sum on highways. As you say, parking is another factor. Do the new highrises going up have parking? Where does your friend park while at home? As a compare/contrast, any new mid-rise construction in DC must have underground parking.

[Kidlicious]

This is good news I suppose. At least there's a way to pay back our debt (in automobiles). Is there a used cars market?

[DaShi]

Not a strong one. Chinese who can afford a car generally scoff at the idea of buying a used one. One thing you will quickly notice is that vehicles outside of commerce or industry are immaculate in China, regardless of how ****ty the rest of the surroundings are.