Let’s have some humility and definitely stay away from the mushrooms—they’re not good for you!
Okay, to re-hash what should be the truth about growth potential to the Chinese economy, it was what the CCP thought about in those last months of the pandemic.
It has been a while, so I forget, but it is pretty basic.
We should just consider, what are the growth drivers to the Chinese economy? We can just list a few.
- consumers
- real estate
- manufacturing
- exports
- high-tech manufacturing
- infrastructure building
- lower interest rates
- fiscal policy stimulus
There are probably more, but we get the point. I remember reading about such discussions, blah blah blah.
What is the point?
Imagine ourselves as the CCP, like in a video game. How are we going to stimulate the economy after the pandemic?
Well, that is the point. Chinese government had a lot of policy choices, and they were in position to act out on any of them. In contrast, with inflation brewing and the national debt and the budget deficit, the US government has far more constraints to consider when they think about monetary and fiscal policies.
To say the Chinese economy is struggling, is truly brain dead.
Sure, in economics, nothing is ever perfect. When it is perfect, that is the exact moment the market goes down.
If the CCP wanted to solve deflation, just go for it, flood the system with money, reflate the property market, and that will get things going.
However, is that really a good idea? Probably better just live with the deflation for the next little while.
That is the point. The CCP has many policies or tactics available to them to readjust the Chinese economy. They do not have to use all of those levers at the same time.
They can use one CCP lever for now, then use another CCP lever for later. It depends. No rush. The future will come soon enough.
All this talk about the Chinese economy doing badly, which suggest the CCP is helpless, well, we can see how good a job comrade Chang does.
