Chinese Economics Thread

[Jiang ZeminFanboy]

China eyes demand-side reforms over stimulus measures to boost domestic consumption, economy

• New policy focus is in line with China’s dual-circulation economic strategy, as nation seeks to rely more on domestic demand and home-grown innovation
• But China’s top leadership has pointed to a lack of quality in the supply of goods and services as being incompatible with people’s desire for a better life

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Beijing has initiated a new push to unleash the economy’s domestic consumption potential, pledging to institute a series of reforms to overhaul long-standing structural problems in the economy.

The new focus on “demand-side reforms” would mean greater efforts on addressing difficult structural issues, such as unequal income distribution, improving the social safety net, and reforming land-use and ownership policies as an alternative to large-scale government-provided consumer subsidies and investment stimulus measures, which have been, until now, Beijing’s preferred methods to support growth, according to analysts.

Demand-side reform was first mentioned at the December 11 meeting of the Politburo, China’s top decision-making body, headed by President Xi Jinping. This puts the initiative on par with supply-side structural reforms such as curbing industrial overcapacity and reducing financial risks that have dominated China’s economic policymaking over the past five years.

Retail sales down by 4.8% after 11 months of this year.
And some guys were chest dumping there that Chinese consumption is booming. It's not booming. Q4 numbers are better and in 2021 the economy again will bounce back to pre-covid consumption growth but still, China needs to rebalance and make some structural reforms. The consumption should be up by at least 15 pct points in GDP distribution. The low and middle-income populations consume almost nothing. The minimum wage is a joke.

 

[NiuBiDaRen]

Retail sales down by 4.8% after 11 months of this year.
And some guys were chest dumping there that Chinese consumption is booming. It's not booming. Q4 numbers are better and in 2021 the economy again will bounce back to pre-covid consumption growth but still, China needs to rebalance and make some structural reforms. The consumption should be up by at least 15 pct points in GDP distribution. The low and middle-income populations consume almost nothing. The minimum wage is a joke.

Well it's definitely not booming. But a 4.8% dip is not bad at all all things considered, much better than other nations. We're still in recovery phase after all. But certainly consumption is lagging other sectors, which is cause for concern. You're right about lower classes not increasing their consumption as much as expected. That's why central government is promoting demand side reform

 

[Hendrik_2000]

There seem to be shortage of LNG gas all over Asia now It is good that China has locked in cheap long term supply of natural gas from Russia and Central Asia (Turkmenistan)

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SINGAPORE (Reuters) - Surging spot prices for liquefied natural gas (LNG) are exacerbating a gas supply crunch in key fast-growing emerging markets in Asia just as a cold spell in other parts of the region boosts demand for the fuel.

Companies from Pakistan to China have cancelled a flurry of LNG tenders this week, several trade sources said, as lofty prices risk pushing up the input costs of industries, which could make energy more expensive for consumers.

Benchmark Asia spot LNG prices have soared sevenfold since May to six-year highs, driven by production losses in Australia, Malaysia, Norway and Qatar combined with accelerating use in China, India and elsewhere.

"Buyers with no alternatives are now paying top-dollar for prompt cargoes in January," said Chong Zhi Xin, a director at consultancy IHS Markit.

The state buyer for Pakistan - one of the fastest growing LNG markets - did not award an emergency tender seeking three cargoes for delivery in January after it received high prices, according to sources.

Power plants may opt to burn dirtier but cheaper fuel oil instead, the sources said, but are also facing rising prices in that market.

In India, Gujarat State Petroleum Corp (GSPC) and Indian Oil Corp did not award tenders seeking cargoes for January to February delivery, trade sources said.

In Bangladesh, gas shortages are already apparent.

"We don't have gas for cooking until (the) afternoon during the winter season. There is hardly any gas. I can't even boil water, let alone cook food," said Sumi Akter, a mother of two in the capital, Dhaka.

 

[NiuBiDaRen]

China rethinks the Jack Ma model
Alibaba, Tencent and a host of internet giants face new scrutiny from the Party

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It's worth reading this long article.

 

[Tyler]

Work smarter not harder.
I suspect they have a higher degree of automation.
Also, I wouldn't put much faith into those OECD numbers.

They just sell more higher valued luxury fashion. China is ahead of Italy in robotics.

 

[AssassinsMace]

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Europe and the US will never buy a Chinese aircraft in the first place so why are they worried over Chinese aircraft makers being subsidized? It's because they want to prevent Chinese from buying their own aircraft. Without the China market, Boeing's commercial aircraft business will most likely go bankrupt because Chinese are buying their own aircraft and not theirs. As the US and Europe hurl accusations of subsidies at one another, somehow they both agree and want to prevent any other country from creating their own aircraft industry because it will most likely be subsidized just like their industry to give it a leg up because that would be wrong.

Again they like to threaten "decoupling" as if they were in the superior position but as usual the reality says they're bluffing. If they were anticipating decoupling, then they wouldn't be worried over a future where they can't beat a subsidized Chinese aircraft when there's no trade. They need the Chinese market because like I said their greed is more important than the things they say they believe in more to make them look honorable. That's why they hide behind romanticized principles that are only cheapened by what really motivates them hence why they're caught in this dilemma. Even in their fantasy of a decoupled future where they're in power because they need no one but everyone needs them, they still want to be in control of China. Do they even understand what "decoupled" means?

 

[horse]

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I would forget about it.

It does not have a chance to reach an agreement to that.

If they do pass it, what difference does it make.

All signs of a world that passed these people by.

 

[gadgetcool5]

Well it's definitely not booming. But a 4.8% dip is not bad at all all things considered, much better than other nations. We're still in recovery phase after all. But certainly consumption is lagging other sectors, which is cause for concern. You're right about lower classes not increasing their consumption as much as expected. That's why central government is promoting demand side reform

U.S. retail sales are up

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. (Nov)

Chinese retail sales are up

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. (Nov)

Not much of a big difference, especially considering China controlled Covid months ago. China's economy has done better overall this year but retail sales it has done about the same as the US. Considering China's lower per capita base it's really unimpressive. Xi is doing the right thing here by focusing on raising demand.

 

[weig2000]

U.S. retail sales are up

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. (Nov)

Chinese retail sales are up

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. (Nov)

Not much of a big difference, especially considering China controlled Covid months ago. China's economy has done better overall this year but retail sales it has done about the same as the US. Considering China's lower per capita base it's really unimpressive. Xi is doing the right thing here by focusing on raising demand.

The biggest difference is that the US has implemented large stimulus bill, including direct payments to individuals and families. They have kept the consumer spending from falling. China has not given much demand-side support meanwhile. So China's recovery is more driven by supply-side. The demand side should show stronger performance next year.

 

[BlackWindMnt]

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Europe and the US will never buy a Chinese aircraft in the first place so why are they worried over Chinese aircraft makers being subsidized? It's because they want to prevent Chinese from buying their own aircraft. Without the China market, Boeing's commercial aircraft business will most likely go bankrupt because Chinese are buying their own aircraft and not theirs. As the US and Europe hurl accusations of subsidies at one another, somehow they both agree and want to prevent any other country from creating their own aircraft industry because it will most likely be subsidized just like their industry to give it a leg up because that would be wrong.

Again they like to threaten "decoupling" as if they were in the superior position but as usual the reality says they're bluffing. If they were anticipating decoupling, then they wouldn't be worried over a future where they can't beat a subsidized Chinese aircraft when there's no trade. They need the Chinese market because like I said their greed is more important than the things they say they believe in more to make them look honorable. That's why they hide behind romanticized principles that are only cheapened by what really motivates them hence why they're caught in this dilemma. Even in their fantasy of a decoupled future where they're in power because they need no one but everyone needs them, they still want to be in control of China. Do they even understand what "decoupled" means?

I find that decoupling story so weird, if I think about it the western industrial companies went into heavy debt to buy back their own stock.
So that means they need a pre decoupling level of money flow to pay off their debts,
if the money flow shrinks they can't no longer pay back their debts. They will go broke and can be bought for pennies on the dollar.

This is just me thinking in a on the back of the envelop kind of way.