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Qantas Aroused Over China? Think Again!

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Qantas Aroused Over China? Think Again!

Old 1st May 2012, 20:00
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Qantas Aroused Over China? Think Again!

Interesting post at Zerohedge on the Chinese economy that I more or less agree with. China is not going to become the Leprechauns pot of gold.

...............The Chinese economy is overallocating capital to investment in real estate, capital goods and infrastructure. But the result will not be the burst of a bubble but rather a longer term continuous decline in the marginal productivity of capital. As a result, the torrid GDP growth exhibited by China will gradually slow down.............

Guest Post: A Different Way Of Looking At China | ZeroHedge
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Old 1st May 2012, 20:23
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Silly silly knigget

I've said it before, Mini Me may be in his mind the king of the castle in the pacific but in China he will be just another little kid bullied in the school ground into handing all of his lunch money over to the bigger kids.

As unpleasant a thought as it is I am starting to feel he is truly into sadomasochism because that is how China are going to treat him and his little toy QF.
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Old 1st May 2012, 21:07
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Hugh Henry provides another piece of the puzzle in his latest newsletter Eclectica Fund, April 2012 - unfortunately I can't embed it directly in the page, so you will have to click through. I would consider this a must read for China, & as a derivative of the Chinese economy, Australia watchers.

Ironically, he uses large cap Japanese stocks as his trading vehicle. He is extremely pessimistic on both China & Japan. Japan Airlines gets a specific mention.

There a quite a few very entertaining youtube video's around of Hugh, well worth seeking out.
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Old 1st May 2012, 22:45
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The Chinese don't just think or plan for today as western society does. They plan ahead, so don't worry about what they were doing yesterday or today, think outside the box to 5 or 10 years down the track.

Big Clive and Gina should make good use of their mining profits as it won't last. And here is why - The Chinese have a thirst for steel and need our resources to feed it. But what they do is a simple case of mathematics. Lets say the purchase price is around $160.00 AUD per metric tonne for iron ore. They will buy it at around that price (give or take the normal cycles), do this for say 5 - 10 years. Clive, Twiggy and Gina get excited over their massive profits and spend up on soccer clubs, Rolls Royces and regular lashings of caviar and McDonalds.
In the meantime Swanny is talking up our 'robust economy' in which everyone is 'making it big' (well everyone meaning pretty much the mining industry only).
While this is taking place the Chinese are actually not chewing through all of that ore they bought from us. They use 60% of it and stash the other 40% (bit like an old Chinese mining camp).
After 5 - 10 years of buying at $160.00 per metric tonne they tell Clive, Twiggy and Gina - 'Umm, we don't need your resources anymore, or at least we want to cut back on the buying volume because we have plenty, plus we have bought in to mines in Africa and they don't have all those pesky OHS laws and expensive Miners wages'. But we will buy it from you for $62.00 per metric tonne instead, for the next 10 - 15 years'!!
That is how China operate and that is what will happen. Today they
are our bitch for a short time, tomorrow we are their bitch for decades.

So yes, QF may be aroused over China, but it is China who have 'the bedroom dominance' over QF.
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Old 1st May 2012, 23:48
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So we have talked about China, but what about the plans in Japan?

I posted something similar a few weeks ago but the post was removed for some reason (it was an accurate unbiased news article)
so I will try posting this updated article as these things DO effect an airlines plans and viability:

During a recent Congressional delegation trip to Japan, Oregon Senator Ron Wyden witnessed with his own eyes the horrific aftermath of the Fukushima Daiichi nuclear disaster, which we have heard very little about from the media in recent months. The damage situation was apparently so severe, according to his account, that he has now written a letter to Ichiro Fujisaki, Ambassador of Japan, petitioning for more to be done, and offering any additional support and
assistance that might help contain and resolve the situation as quickly as
The letter, which many experts see as the ominous writing on the wall for the grave severity of the circumstances, offers a disturbing glimpse into what is really going on across the Pacific Ocean that the mainstream media is apparently ignoring. While referencing the fact that all four of the affected reactors are still "badly damaged," Sen. Wyden seems to hint in his letter that Reactor 4, which has reportedly been on the verge of collapse for many months now, could be nearing catastrophic implosion.
Imminent collapse of Reactor 4 could create a mass extinction event of both humans and animals According to Christina Consolo, an award-winning biomedical photographer and host of Nuked Radio, Reactor 4 has remained in such bad shape that even a very small earthquake could quickly level the building, sending the fuel from more than 1,500 unused fuel rods into the environment. And with Reactor 4 still filled with the highest levels of radioactive MOX and other fuels, the consequences of this potential collapse could be far worse than anything that has happened thus far as a result of the earthquake and tsunami.
"[S]itting at the top of [Reactor 4], in a pool that is cracked, leaking, and precarious even without an earthquake, are 1,565 fuel rods (give or take a few), some of them 'fresh fuel' that was ready to go into the reactor on the morning of March 11 when the earthquake and tsunami hit," writes Consolo. "If they are MOX fuel, containing six percent plutonium, one fuel rod has the potential to kill 2.89 billion people."

Sen. Wyden is also asking U.S. Secretary of Energy Steven Chu, Secretary of State Hillary Clinton, and Chairman of the U.S. Nuclear Regulatory Commission Gregory Jaczko to assess how much additional assistance their agencies might be willing to provide to help Japan, and the entire world, avoid a nuclear catastrophe of Biblical proportions.

"The scope of damage to the plants and to the surrounding area was far beyond what I expected and the scope of the challenges to the utility owner, the government of Japan, and to the people of the region are daunting," wrote Sen. Wyden in his letter, dated April 16, 2012. "The precarious status of the Fukushima Daiichi nuclear units and the risk presented by the enormous inventory of radioactive materials and spent fuel in the event of further earthquake threats should be of concern to all and a focus of greater international support and assistance."

Sources for this article include:

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Old 2nd May 2012, 01:44
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gobbledork = the clive palmer of economics
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Old 2nd May 2012, 04:03
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Gobbledock is correct with the concept, but spanner twister is closer with the time frames. My understanding is even longer time frames though. The Chinese are setting up for their great grandchildren, something we as westerners don't really give a rats ass about.

That's exactly why the leprechaun will fail. Question is: does he care, or is that what he is after?

Last edited by balance; 2nd May 2012 at 07:53.
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Old 2nd May 2012, 04:40
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Good call Balance.
China don't really have to pay us any more for our ore.
They already own half of our land and the most productive at that.
All they have to do is come down and take it.
What's stopping them, a few clapped out subs!

You see the new gen "little kings" driving around in their brand new Beamers and ferrari's, now.
Wait for the next generation.
Old 7th May 2012, 12:03
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I believe it was attributed to Zhou Enlai when asked about the significance of the French Revolution.

'It is too early to tell'.
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Old 7th May 2012, 12:30
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Whilst AJ's focus remains on all things orange & oriental.

What's his plan on the pacific?

Hasn't United got 787's on order for delivery from 2012?

United will kick off it's expansion with Houston direct Auckland 5 times a week to link with AirNZ & Star Alliance Services in NZ. Flying direct Houston will connect with Continentals network & bypassing congested LAX.

United's CEO has stated the 787 will be game changer, allowing the replacement of older 747 & the deployment on thinner routes that were previously not profitable with the 744.
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Old 7th May 2012, 13:54
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Coincidentally the last Qantas long-haul aircraft across the Pacific via Auckland landed in Sydney this afternoon.
Taxying out in AKL we passed an Emirates 777 followed by a 380.

737s only to NZ now.
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Old 9th May 2012, 02:49
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You guys accredit waaayyyy too much forward planning to the Chinese.

Their children, let alone their grandchildren, will struggle to live in the environmental disaster they are busy inflicting upon themselves in the eastern factory cities where 90% of them live. If they do, they'll probably all be born with two heads, four arms, spend their lives on asthma nebulizers, and have a life expectancy of about 20 years

Their population is aging super fast and the demographic -up that is the one-child-per-family policy is already causing the working age population to be in decline by tens of millions per year.

Not enough workers to go round = massive increase in the wages they have to pay to get the staff = massive reduction in appeal to the western companies that used to build factories there = all the new investment is going to Indonesia, Thailand and Vietnam.

They've had a few good decades, so did the Japanese in the '50s '60s and '70s, everyone was saying the same thing about them then, they've been going pretty much nowhere on that treadmill for the last 20 years now and seem to have no real plan to get their growth going again.

The Chinese emperors all thought they had thousand-year-plans to keep their respective family dynasties in power as well, but the cultural revolution kind of put paid to that, and the social injustices of modern day China are certainly just as great if not greater than they were under the emperors. The corruption is unbelieveable. If you lot really think the communist party elite are sitting up there and benevolently planning a better China for the benefit of everyone, as opposed to thinking about how they can ensure perpetual wealth and power for their own grandchildren and the select few, then I say you're deluded. I can't see any way the situation will change in the foreseeable future, but if we are talking about lifetimes and generations and people's grandchildren, then I can say with absolute confidence that there's only one way these things tend to end, and it's with violence. Normally accompanied by economic collapse for a good few years afterwards.

I'm not saying the Chinese aren't absolute masters of the art of taking money off gullible westerners, and I'm not saying Qantas wouldn't get chewed up and spat out, it probably would. But I absolutely reckon that what we're seeing is not the result of some grand thousand-year-plan to screw the West, it's more like a bunch of gangsters who grabbed power at the right time, and they are all hell bent on making money while the sun shines and damn the consequences to their own people and their own country.
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Old 9th May 2012, 07:31
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You are wise beyond your years Luke.

However you did forget to mention they, as well as having a 1 child policy, are killing the females, sometimes at 12 weeks, sometimes much later.
Now THAT'S smart and forward planning, killing the only ones that can breed
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Old 9th May 2012, 08:10
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as having a 1 child policy, are killing the females
After all these years of doing so, imagine the amount of gay bars popping up!
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Old 9th May 2012, 08:53
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Agreed Luke, I can't imagine that lot running the world in my lifetime. I think they are having their 'good decade' now, and economic factors, corruption, the Internet and their environmental degradation will end the dream of 'The Chinese Century'.

I directly experience the shambles of their ATC system about a dozen times a year. Words fail to describe how bad it is.

BTW a very cynical article in the Hong Kong business press about Jetstar HKG last week.

They'll get eaten alive.

Last edited by Captain Dart; 9th May 2012 at 09:25.
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Old 11th May 2012, 17:27
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Luke's on the money. Having lived and flown there for some time I support his assessment of it all. The kids are too busy blinding themsleves at computers over studying or gaming for X hours daily that they will never reach the perfect health requirements of CAAC anyway.


P.S. The Chinese in fact don't plan that far ahead, that's not to say they don't have a plan - but their drama is sticking to the commitment of a plan. In my own experience of Large GA - they stumble from one shimozzle to another - then when they "make a plan" on the run they will find someone to blame if it doesn't work or over congratulate themselves and accredit the result to the great cultural champions running the place if it does. Success by concealment and volume of effort/events.

Last edited by PO dust devil; 11th May 2012 at 17:36.
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