Chinese Economics Thread

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voyager1

Captain
Registered Member
caudaceus said:
The current position of Chinese economy right now is I think free-riding the global mass stimulus. As long as others keep the stimulus flows, China will be in a good position. They don't have to share the systemic risk as well.
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Its not a total free-riding though, is it?

China is basically importing inflation right now, plus it is being paid by monopoly money for hard physical goods.

The one who is free-riding here is the US which has started its printing press, exporting inflation to the rest of the world (mainly China), and then paying for physical good with toilet paper money.

The FED can just insert another 0 to the printing press and China is still forced to accept the currency
 
C

caudaceus

Senior Member
Registered Member
voyager1 said:
Its not a total free-riding though, is it?

China is basically importing inflation right now, plus it is being paid by monopoly money for hard physical goods.

The one who is free-riding here is the US which has started its printing press, exporting inflation to the rest of the world (mainly China), and then paying for physical good with toilet paper money.

The FED can just insert another 0 to the printing press and China is still forced to accept the currency
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Chinese can offload the currency by buying commodities (oil, food, etc) if they want to.
 
C

caudaceus

Senior Member
Registered Member
AndrewS said:
Is it really free riding?

I would say the global mass stimulus outside of China has been poorly targeted to benefit the ultra wealthy rather than the poor.

Also, if China was to stimulate its domestic economy even further now, there would be even more shortages and inflation.
For example, there is a global shortage of microchips which are used in so many products. There is no spare capacity to produce more.

So best for China to hold back and keep its stimulus in reserve.
It will be needed in 2 years time when other governments tighten economic policy.
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That's the liquidity trap and that challenge is probably solvable by the e-RMB. Govt can do stimulus in laser focus manner e.g. targeting specific products or adding expiry time for the stimulus.
 
V

voyager1

Captain
Registered Member
AndrewS said:
There's not enough commodities to buy.
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Agreed. Thats the problem, isnt it? From what I know almost all the storage facilities for commodities in China are full lol

Even if it wanted to buy all the commodities, it wouldnt have space to store them. It is inevitable that China will import inflation and then due to being the "World's Factory" it would start exporting inflation.

The World is in big big trouble right now due to all this printing
 
V

voyager1

Captain
Registered Member
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China’s antitrust regulator said on Monday it has officially started an investigation into Meituan, the country’s largest on-demand delivery service provider, over alleged monopolistic business practices of forcing merchants to “pick one from two,”
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Next one to get get the antitrust hammer is Meituan. Good news for small businesses
 
T

Tyler

Captain
Registered Member
AndrewS said:
COVID has been eliminated in China. You can see cases at zero many days.

And everyone knows that if there is an another outbreak, there will be a short, sharp, localised lockdown whilst they test every single person in the city over the course of 3 days.

Also remember that the Chinese government hasn't done much stimulus so far, so there's a lot of scope for this.
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They should vaccinate a city, with Sinovac or Sinopharm vaccine in 3 days, the same way they tested the whole city in 3 days. There is no way they are behind the UK in vaccination rates.
 
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