5 ms·

If you believe that China, or Chinese corporations, play accounting tricks, would you accept that all countries and all corporations play tricks to boost their

by yapcguy 13y ago

If you believe that China, or Chinese corporations, play accounting tricks, would you accept that all countries and all corporations play tricks to boost their figures too? We know for a fact that Starbucks, Google, etc perform accounting tricks to shift sales from the UK to Ireland. In the end, doesn't this all trickery cancel each other out, meaning that the rankings are a fair reflection?

craftsman 13y ago
I'll let the accountants and economists weigh in on that. But I'd rather rely on data than the argument "they all play accounting tricks therefore it must all cancel out". In other words, I'd like to see a similar analysis of the US's trade numbers and see if the resultant 'trickery' adjustment results in a significant shift in the trade numbers.
afterburner 13y ago
Do I have to accept that China and all other governments are exactly the same in order to accept this?
skwirl 13y ago
It's possible, but the argument that Starbucks/Google shifting sales from the UK to Ireland implies that the United States is playing accounting tricks with imports and exports is non sequitur. And the implicit assertion that if all countries were playing tricks, they must be playing it equally enough to cancel each other out is also not valid without providing additional supporting evidence. The article provides an estimate that 1/3rd of Chinese imports were from China itself. I have never heard any kind of claim of that magnitude leveled against the present United States.
- iaw 13y ago
  This is a more articulate and well-thought out than I could have crafted, but it expresses my sentiment perfectly. The one point I'd like to add is that China incentivizes their companies to export through tax rebates and then incentivizes imports from HK through the absence of tariffs. The makes it profitable for companies to artificially boost exports. I have not seen similar mechanisms available in the US.
  - monsterix 13y ago
    That's a very interesting observation. It's important to note that China does have a dual system of Governance within itself: Democracy (Hong Kong) + Communist control (Mainland). Thus it can, and does, leverage best of both worlds to doing business efficiently. This also means that Hong Kong, for a city, is in a very strong position to grow up into a cutting edge city of future given the volumes it has to handle for mainland China.
InclinedPlane 13y ago
No, it doesn't all cancel out. China today is basically China, Inc. The people in charge of every aspect of the government are heavily motivated to manipulate this sort of data, just the same way as they try to cover up the pollution in their major cities. In contrast the economies and political systems in the US, Europe, etc. are far more open and not as easily vulnerable to this type of manipulation.
- yapcguy 13y ago
  Why do (some) people still assume that anything coming out of China and Russia must be bad and viewed with suspicion? How about LIBOR rigging? Or traffic lane closures to spite political opponents? If anything you could argue manipulation in the US and Europe is far more sophisticated than China. For example, there's manipulation in plain sight: focus on the U-3 unemployment number rather than the U-6, never mention the labor participation rate where 92 million people in the US have given up looking for work. And look at the news in the UK newspapers today: The corruption of Britain: UK’s key institutions infiltrated by criminals Secret report shows how organised crime infiltrated judicial system as well as police with prison service and HM Revenue & Customs also compromised. http://www.independent.co.uk/news/uk/home-news/the-corruption-of-britain-uks-key-institutions-infiltrated-by-criminals-9052617.html http://www.independent.co.uk/news/uk/home-news/the-corruptio...
  - InclinedPlane 13y ago
    Tu quoque? Yeah, there's corruption in the US/Europe/Japan et al, but that level of corruption is dwarfed by the deeply systemic corruption up to the highest levels in China and Russia, among other places. The fact is you can't even tell what China's GDP is within a factor of maybe +/- 50% due to that corruption.
  - deleted 13y ago
    [deleted]

by yapcguy 13y ago

craftsman 13y ago

I'll let the accountants and economists weigh in on that. But I'd rather rely on data than the argument "they all play accounting tricks therefore it must all cancel out". In other words, I'd like to see a similar analysis of the US's trade numbers and see if the resultant 'trickery' adjustment results in a significant shift in the trade numbers.

afterburner 13y ago

Do I have to accept that China and all other governments are exactly the same in order to accept this?

skwirl 13y ago

It's possible, but the argument that Starbucks/Google shifting sales from the UK to Ireland implies that the United States is playing accounting tricks with imports and exports is non sequitur. And the implicit assertion that if all countries were playing tricks, they must be playing it equally enough to cancel each other out is also not valid without providing additional supporting evidence. The article provides an estimate that 1/3rd of Chinese imports were from China itself. I have never heard any kind of claim of that magnitude leveled against the present United States.

iaw 13y ago
This is a more articulate and well-thought out than I could have crafted, but it expresses my sentiment perfectly. The one point I'd like to add is that China incentivizes their companies to export through tax rebates and then incentivizes imports from HK through the absence of tariffs. The makes it profitable for companies to artificially boost exports. I have not seen similar mechanisms available in the US.
- monsterix 13y ago
  That's a very interesting observation. It's important to note that China does have a dual system of Governance within itself: Democracy (Hong Kong) + Communist control (Mainland). Thus it can, and does, leverage best of both worlds to doing business efficiently. This also means that Hong Kong, for a city, is in a very strong position to grow up into a cutting edge city of future given the volumes it has to handle for mainland China.

InclinedPlane 13y ago

No, it doesn't all cancel out. China today is basically China, Inc. The people in charge of every aspect of the government are heavily motivated to manipulate this sort of data, just the same way as they try to cover up the pollution in their major cities. In contrast the economies and political systems in the US, Europe, etc. are far more open and not as easily vulnerable to this type of manipulation.

yapcguy 13y ago
Why do (some) people still assume that anything coming out of China and Russia must be bad and viewed with suspicion? How about LIBOR rigging? Or traffic lane closures to spite political opponents? If anything you could argue manipulation in the US and Europe is far more sophisticated than China. For example, there's manipulation in plain sight: focus on the U-3 unemployment number rather than the U-6, never mention the labor participation rate where 92 million people in the US have given up looking for work. And look at the news in the UK newspapers today: The corruption of Britain: UK’s key institutions infiltrated by criminals Secret report shows how organised crime infiltrated judicial system as well as police with prison service and HM Revenue & Customs also compromised. http://www.independent.co.uk/news/uk/home-news/the-corruption-of-britain-uks-key-institutions-infiltrated-by-criminals-9052617.html http://www.independent.co.uk/news/uk/home-news/the-corruptio...
- InclinedPlane 13y ago
  Tu quoque? Yeah, there's corruption in the US/Europe/Japan et al, but that level of corruption is dwarfed by the deeply systemic corruption up to the highest levels in China and Russia, among other places. The fact is you can't even tell what China's GDP is within a factor of maybe +/- 50% due to that corruption.
- deleted 13y ago
  [deleted]