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.



Guest Post: A Different Way Of Looking At China | ZeroHedge

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.

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.

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.

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:

gobbledork = the clive palmer of economics

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?

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.

I believe that our society these days as in pretty much any Western society is that we want it now, not in 50 yrs time.We have grown at an unbelievable rate since the industrial revolution & have an ever increasing need,make that greed for everything fast in life inc time frames for infrastructure for our very busy lives.
We are or are fast becoming incredibly selfish me included where stress, poor unemployment prospects is rife, where big business & banks are running the economy not the out of touch Pollies (even though they'd like to think they are)are what's driving our lifestyles!
It's ugly, we live in a fake ugly world where reality TV shows are portrayed as being 'normal':ugh:

China/Japan on the other hand have huge populations compared to our few scattered souls amongst this burnt brown wasted land of ours so they think for the masses, not the privileged few (Pollies etc)
We also have become lazy, expect everything & won't be told anything. Our society is being run by the crims out on the streets & our judicial system is a joke ! Discipline is out the window at the education level,there's a whole other story why we have an out of control contemptible society!

The likes of QF are just here to make money for the privileged few on a short term basis, the employees are just tools in their box to make it so!
The Leprechaun is no different to any of them he's also short term he's not there for anybody but himself, very typical of a lot of CEO's, & why not lets rape & pillage while we can:ugh:. Am sure there are some CEO's that have a genuine belief if their Co or the Co they run but they would be drowning in the cesspool!

The Fuku Nuc disaster was a wake up call but as usual we shall go about our business as if it never happened!

phew....rant over:-(

Wmk2.

I believe it was attributed to Zhou Enlai when asked about the significance of the French Revolution.

'It is too early to tell'.

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.

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.:hmm:

737s only to NZ now.:(

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 :uhoh:

Their population is aging super fast and the demographic :mad:-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.

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

After all these years of doing so, imagine the amount of gay bars popping up!:cool:

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.

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.

DD

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.