At China Era, the last chapter in a six-part essay "The Rise of a New Power":
For all its talk about market magic, China’s overpopulated state sector is a massive job bank compared with western governments, which leaves some of the Beijing’s byzantine ministries woefully inefficient. One Indian software supplier, for instance, tried to sell the Chinese government a program to automate parts of the state-owned railroad industry, which employs 20 million people. The idea flopped. "Greater efficiency creates a social problem," explains an executive for a major American software company. "Yes, 20 million are inefficient, but a more efficient system lops off heads."
Sun Bin offers a fine extended post on the Yuan’s guidance basket and an illuminating item on China’s distorted oil prices:
The gasoline prices are RMB4.14-4.62/liter in a middle tier city like Chongqing on Jul23 (after the RMB revaluation), for RON 90-97 (Research Octane Number, corresponding to Pump Octane Number PON 87-93 in US); Using conversion factors of 1Gallon=3.785L and 1USD=8.11RMB, the gasoline prices translate into USD1.93-2.16/Gallon
According to eia.doe.gov, average price in US is US$2.289/Gallon on July 25th
If we factor in the un-tradable cost in operating a retail gas station, we could say the prices are pretty much the same in these two countries
The lack of competition should mean higher retail price and less efficient operation, which might have annihilate any cost gap in labor and rent costs
This means China, being a country of much less access to oil fields domestically and internationally and one that car travel is not a survival essential as in US, is as generous as US in oil tax/etc. It surely has one of the lowest price for oil for a net importer.
Again, the next time someone mentions that China’s environmental regulations are better than those of the US, remember to mention that China subsides the use of fossil fuels.
And that includes Coal:
Meanwhile the death toll (from mining disasters) continues to rise, while people such as me benefit from cheap power, 2/3 of which comes from coal. I figure my wife and I pay about 1200 yuan a year for electricity in Beijing, or about $150 bucks. And we have a big fridge and TV, air conditioning and a washer/dryer. In Singapore I typically had US$100 monthly bills. Singapore had to import all its energy, and I’d expect prices there to be higher for other reasons as well.
China’s economy in 2005 is not what it was in 2000.:
China always has depended on export-led growth. It is a core reason why China has been so successful. China is just trying to hold on to the core of its success in the face of political pressure from Washington DC
China always has saved a lot. It is cultural - all of East Asia saves a lot.
I hear those arguments a lot.
I think they miss a key point. Even by Chinese standards, China is now exceptionally dependent on exports. Exports are now about twice as large a share of China’s GDP as they were in 2000. And even by Chinese standards, China now saves a lot. By my calculations, savings are up by more 15% of GDP relative to 2000.
The Big Yuan has further reaction to the aborted CNOOC bid for Unocal, including this noteworthy quote.:
From the article: One executive summed up how some in the oil industry felt about political involvement. Lee Raymond, chief executive for Exxon Mobil, said early in the takeover battle that it would be a big mistake” for Congress to interfere with the Cnooc bid because it might backfire for American companies seeking to do business abroad. “If you start to put inefficiencies in the system, then all of us pay for that,” Raymond said.
Simon has further updates on China’s currency basket, something that David Atig calls another step forward,
