Chinese Economics Thread
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@tonyget Borrell after getting an earful from Lavrov is now giving a conciliatory line...LOL, these EU bureaucrats , unelected as they are need some proper lesson in diplomacy and Lavrov had given them that for free....hahaha, отлично сработано!!!
Good news.
I would not say that OCP was a mistake as a policy, I think the mistake was in being too slow in abolishing it later. It should have ceased to exist in the mid-00s when China was already on the path to prosperity and it was clear that it would have the ability to support a larger population. Without OCP the problems with pollution, soil degradation (due to excessive farming), food & energy self-sufficiency, etc. would have been way worse now as China's population would lie somewhere in the 1.7-1.8 billion region. Having a large population is good if you have enough capacity to support it (basic needs, education, jobs, etc.), otherwise, it would be something like India - a huge population that largely lives under the poverty line with low educational levels and labor participation.
That being said, I also don't like some of the new regulations, they seem counter-productive. What's the point of starting the actually needed educational reform with banning private tutoring while leaving the very reason why this tutoring became a thing? Start with the basics, then shut down private tutoring with prior notice later, when you get your new system running. The gaming regulations just don't make any sense - if you want to target gacha games, then focus on them, not with broad restrictions on online gaming as a whole. The entertainment industry reforms are also questionable - targeting the symptoms instead of roots again. The energy rationing just to hit climate targets are also dumb. However, there were good decisions as well - better IP regulations, tighter regulations of the internet sector (the US needs to learn from China there) and a crackdown on monopolies, finally addressing the 996 issue, movements in the deflation of the property bubble (proposition of property tax, not going to straight bailout Evergrande, the proposition to create incentives to disaggregate "elite" schools which skyrocket the land prices, etc.), slowdown of debt accumulation.
Digital currencies are coming to Asia, just not the cryptocurrencies touted by moon boys.
Needless to say, this project will completely bypass the USD, with HK's massive capital markets and UAE's oil, a massive chunk of capital will be displaced from the USD, definitely hitting the black bag projects of the CIA, although surely the loss of Afghanistan and its poppy fields should take a hit out of the CIA's black bag budget.
Wasn’t there a report showing that over 80% of coal power plants were funded by western and japan private enterprises?
While China is constructing new power plants, that takes years to a decade. they need to bring in policies that will solve the energy crisis in the short and medium term. They need to get away from emission limits and allow more coal for now, prepare more LNG for the winter. Make sure that this power curbs do not continue and will not address industrial output. Especially coming out of pandemic lock downs! I am disappointed they didn’t handle this better. But then again I’m not in government so I don’t know the details well.
Local government debt is also big.
Im starting to think that a lot of economic activity in china is just driven by excess liquidity. Too much liquidity, debt, house prices, low-return infrastructure investment, etc.
Literally no way for anyone to know "Hidden Debt" unless they inspected accounts themselves. This figure is vastly exaggerated and is an attempt to damage investor confidence in China.
Also this report is from Goldman Sachs the architect of the 2008 recession . Funny how they're giving advice to the Chinese govt on how to manage debt.
These orgs are throwing whatever figure comes to their mind and thats why their reports are irrelevant.
Debt is certainly a problem but not at the level which is being portrayed here.
The power shortage in China has many reasons and the emissions targets is the lease of them. Its a combination of a booming economy and drier weather that is hampering hydro-electricity generation and not allowing electricity to be sold at market prices. Its the last one that is the most damaging. Coal prices went up more than 100% from a year earlier and China hasn't allowed the power companies to rais prices. Therefor power companies are rationing production to reduce losses. Whenever you sell something below market prices there will be shortages. Then there is the trade war with Australia which also has help to worsen the situation. Australian coal wouldn't prevent the power shortages but it would have helped.
As long as China doesn't allow electricity prices to reflect market conditions there will be shortages.