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Phat Dragon Questions

Phat Dragon Questions

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Published by: economicdelusion on Dec 18, 2012
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12/21/2012

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1
a weekly chronicle of the Chinese economy 
Phat dragon
# 144
Past performance is not a reliable indicator of future performance. The forecasts given above are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based arereasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The results ultimately achieved may differ substantially from these forecasts.
Alright class, it is time for some productive procrastination, or per-haps a little cynical wagering with knowledge-poor but opinion-richcolleagues. The answers are in the separate pdf file in the originalemail.
Phat Dragon
will return in mid January.Question
one
tests your knowledge of the development of thecredit cycle in China. And to show that
Phat Dragon
is a goodinternationalist (stop tittering up the back please) the metric ofanalysis is the well known, BIS certified ratio of bank loans out-standing to nominal GDP. So the question is: if a linear trend linewas fitted to the aforementioned ratio for the period Mar-1997 to Jun-2004, and then cast forward to Sep-2012, the current ratiowould be roughly how far from the extrapolated trend estimate?
a)
within +/– 5ppts of the trend.
b)
more than 5ppts above thetrend line, but less than 10.
c)
More than 10ppts above the trendline
d)
More than 5ppts below the trend line. If you are strugglingto visualise the question, see the chart across.Question
two
is an easy one. It tests your knowledge of the devel-opment of China’s international competitiveness. By how muchhas China’s trade weighted real exchange rate appreciated (on arelative consumer prices basis) since the de-peg in 2005?
a)
less than 5%.
b)
more than 5% but less than 10%.
c)
More than10% but less than 20%.
d)
more than 20%.
Bonus:
on a relativeunit labour costs basis, has China’s real exchange rate moved bymore or less than on a relative consumer price basis?Question
three
is about relative living standards. Which of thefollowing is true:
a)
China is the second wealthiest of the BRICSeconomies.
b)
China’s GDP per capita is yet to exceed thoseof Malaysia or Thailand.
c)
China’s GDP per capita is aroundthe same level as Korea’s was at the time of the Seoul OlympicGames.
d)
All of the above.Question
four
is the obligatory comparison with India (using GKPPPs, for the boffins out there). When was the last time that Indiaenjoyed a higher GDP/capita than China?
a)
1963
b)
1973.
c)
1983.
d)
1993.Question
five
and
six
are on elite politics.
Five.
There is a viewthat the CCP is divided into two broad factions. Which of the fol-lowing pairings is the best stylized description of these two fac-tions?
a)
Hawks and Doves.
b)
Elitists and Populists.
c)
Maoistsand Dengists.
d)
Xenophobes and Internationalists.
Six.
Incoming Premier Li Keqiang has a PhD in economics.What was the main subject of his doctoral thesis?
a)
The mid-dle income trap.
b)
Preobrazhensky’s new economic policy.
c)
Urbanisation.
d)
Governance and development
e)
Inequality.Question
seven
is about relative sectoral performance. Which ofthe following indicators increased the most in percentage termsbetween 2001 and 2010?
a)
The number of automobiles.
b)
Thevolume of steel output.
c)
The volume of housing completions.
 d)
The volume of power production.Question
eight
is about China’s importance in commodity mar-kets. Between 1990 and 2008, world steel output per headrose by 36%. If you take China out of those figures, global steeloutput per head would have ... ?
a)
Been roughly unchanged
b)
 Increased by less than 10%.
c)
Risen by more than 10%.
d)
Fallenby less than 10%.
e)
Fallen by more than 10%.
17 December 2012
Westpac Institutional Banking Group Economic Research economics@westpac.com.au www.westpac.com.au
Question seven: global steel output per head
507510012515017520022525050751001251501752002252501950196019701980199020002010Kgsper headKgsper head
Sources:IISI, Maddison,WestpacEconomics.
80901001101201301401501601708090100110120130140150160170Mar-97Mar-00Mar-03Mar-06Mar-09Mar-12%GDP%GDPLoans to GDP
Sources: Westpac Economics, CEIC
Trends fitted toMar-97 to Jun-2004sub sample
Option a) within +/-5ppts of the trend.Option b) more than 5ppts above the trend line, but less than 10.Option c) More than 10ppts above the trend lineOption d) More than 5ppts below the trend line.
Question one: the credit cycle
Questions eight through eleven relate to the household sector.
Nine
: How large is mortgage debt as a proportion of GDP,(approximately)?
a)
15%
b)
30%.
c)
45%.
d)
60%.
Ten
: What is the
standard 
minimum down payment for an owneroccupied housing purchase?
a)
10%
b)
20%.
c)
30%.
d)
40%.
Eleven
: Is the average monthly minimum wage in China closer to
a)
$US100
b)
$US200.
c)
$US300.
d)
$US400. (Assuming aUSD/CNY rate of 6.25).And some general topics to close.
Twelve
: What proportion of fixed investment was undertaken bystate-owned enterprises in 2011?
a)
one eighth
b)
one quarter
c)
 one third
d)
two fifths
e)
one half.
Thirteen
: What is the average size of a new dwelling in China,noting the US averages roughly 230 sqm?
a)
80 sqm
b)
110sqm
c)
140sqm.
d)
170sqm.
Fourteen
: How many migrants reside in cities outside of theirprovince of registration?
a)
Less than 100 million
b)
Between 100and 150 million.
c)
Between 150 and 200 million.
d)
More than200 million.
Fifteen
: Which of these foods is the major source of meat proteinin China?
a)
Beef
b)
Pork.
c)
Chicken.
d)
Sheet meat.
Sixteen
: What China related factor do all these countries havein common? Argentina; Australia; Belarus;
 
New Zealand;
 
Chile;Malaysia; Singapore.

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