Chinese Economics Thread

[LesAdieux]

IMF estimated that Chinese GDP nominal 2021 would be $16.64T ... more than $1T off , well $1T is the size of ~ Mexico or Indonesia or 50% more than Taiwan

Please, Log in or Register to view URLs content!

Interesting how many % the Chinese defense spending would increase this year, lower or higher than 8.1% ? ... I'd bet 10-11% , thats in Yuan, in US$ would be easily 15%

the staffs in the IMF and the world Bank are under pressure to under report and under estimate China.

a few months ago, the head of IMF almost lost her job for "over estimate" China. she was officially probed for it.

the shit storm saga started from the world Bank. they have a table about the most favourable countries to do business. China was ranked at no. 83. Kim, then president of the world Bank, thought that's too low for China, so Georgieva moved it to 76th, that's her crime.

 

[SanWenYu]

Your intuition about US numbers are spot on. The US economic data are mumbo-jumbo and getting more confusing over time. You can't exactly accuse them of faking data because they don't need to fake - they're just more innovative in defining the data, because the US economy is largely a service economy. Just like you can't accuse there are much corruption in the US simply because much of the corruptions are legalized.

Reminds me how Bloomberg made the US the number one in that infamous "Covid resilience ranking" in June 2021 - by showing only the favorable numbers. Bloomberg conveniently omitted the death numbers in that ranking.

Now Forbes starts touting that death numbers in a deadly pandemic are no longer important. Coincidence? Or is Forbes trying to save face after publishing that shitty "research" accusing China underreported 1.7m deaths?

 

[manqiangrexue]

So during the two years of the pandemic,

US average growth is projected to be 1.9% (-3.5% followed by 5.6%)

China average growth is 5.2% (2.3% followed by 8.1%)

Overall China's growth beats the US by about 3.3 percentage points, which is very similar to 2019 when China grew at 6% and the US at 2.3%. I dare say China would have come out a much bigger winner if it had wanted to. The US gov't has been doing everything it can in the past couple years to rev up growth, to the point where it has now created an inflation problem for itself, whereas China has been cracking down on economic activity like mad (especially 2021). If each economy had been left to its natural devices, China's Covid-free economy would have outperformed by a much greater margin.

I think the calculation better goes like this:
USA: 0.965x1.056=1.019
China: 1.023x1.081=1.106

So China grew but 10.6% in 2 years and the US 1.9%, which is more like 8.7% difference over 2 years (closer to 4.26% difference per year with compounding effect). Yeah, but not only is the US exhausted at expending its cards for growth, it suffered pretty much a million deaths (likely to be more) while China still carries a lot of coiled recovery energy to boost its economy further as it also limited human loss to only the initial 4.6K deaths in Wuhan. If China did what the US was doing, instead of seeing greater economic activity, we could be looking at well over 4 million deaths (since China is more densely populated than the US), multiple new deadly variants, and the entire country in chaos across all sectors including the economy. So I would say that by both playing it safe and still soundly beating the US, China really found the Goldilocks zone and it is paying off.

 

[Tyler]

IMF estimated that Chinese GDP nominal 2021 would be $16.64T ... more than $1T off , well $1T is the size of ~ Mexico or Indonesia or 50% more than Taiwan

Please, Log in or Register to view URLs content!

Interesting how many % the Chinese defense spending would increase this year, lower or higher than 8.1% ? ... I'd bet 10-11% , thats in Yuan, in US$ would be easily 15%

Someone was supposed to edit the chart on Jan16, 2022

 

[mossen]

China's per capita GDP is now around ~$12.5K per head. That is low compared to the US (1/5th of their income level) but higher than Russia or Malaysia. China will be able to cross the World Bank's official threshold for high-income within a few years, as they use a 3-year average. Given adverse demographics, I think attention should shift from total size to per capita GDP as China is now so big that nobody can seriously threaten it. It's more than 18% of world GDP and I don't think it will dip below that, if anything increase its share of the pie further.

What are China's prospects from continuing to increase its GDP per capita? I think pretty good, given it has a huge share of the world's best talent.



As the bottom text points out, even in a more conservative estimate, China has ~20X more top math talent than the US. Of course, this doesn't include emigration of bright minds to the US but the difference should still be about 10X. Top math talent is what drives technological and scientific innovation since math is the foundation of both. China has an enormous advantage over any other country which is impossible to bridge.

Given China's still-low per capita GDP despite having a huge size of the world's top talent, it is hard for me to be bearish on China in the long run. However, China's population likely peaked last year, which is why I think focusing on per capita GDP makes more sense going forward given that GDP growth will outstrip population decline by a wide margin, so overall economic size will still increase for many, many years to come.

 

[pmc]

This maybe faster and more efficient distribution to Western EU.
with some background regarding baltic.

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

 

[sinophilia]

So during the two years of the pandemic,

US average growth is projected to be 1.9% (-3.5% followed by 5.6%)

China average growth is 5.2% (2.3% followed by 8.1%)

Overall China's growth beats the US by about 3.3 percentage points, which is very similar to 2019 when China grew at 6% and the US at 2.3%. I dare say China would have come out a much bigger winner if it had wanted to. The US gov't has been doing everything it can in the past couple years to rev up growth, to the point where it has now created an inflation problem for itself, whereas China has been cracking down on economic activity like mad (especially 2021). If each economy had been left to its natural devices, China's Covid-free economy would have outperformed by a much greater margin.

Why would you use two different calculations for the US and China?

if Chinese average growth rate is 5.2% (by simply adding both years 2.3+8.1 then dividing by two) then US average growth rate is 1.05% (-3.5+5.6 then divide by two).

Chinese = 5.2% average annual growth rate
US = 1.05% average annual growth rate

China's average growth rate was 4.95x as much (+395% more) over that two year period.

Of course this doesn't actually tell you how much each country grew, just the average rate of growth (and not even taking into account compounding).

As @manqiangrexue states, the more appropriate way to calculate is the difference between starting point and ending point (you actually used this for the US in your comment, but then you calculated only the average annual growth rate for China and used that to compare to the total growth of the US over the two year period):

US is 1.9% larger over the two year period
China is 10.6% larger over the two year period

China grew 5.58x as fast (458% more) over the two year period of 2020 and 2021 as compared to the US.

What's amazing is China is so big now (almost 80% of the US in annual nominal GDP, including HK/MO) that growth differentials like that create an immense difference in economic output added. If China grew 5.58x as much in the next two year period again for example, it would add 4.46x as much in gross value.

So if the US added $400 billion to its GDP over a two year period, China would add $1.784 trillion.

 

[mossen]

I should also add that the traditional strength of the US (rapid population growth) is coming to an end, both due to much lower fertility, elevated deaths and a higher resistance to immigration.

https://imgur.com/p6mxarR

Given these facts, China's population dynamics aren't as bad given America's population dynamics are rapidly declining too. So quality becomes more important than just quantity.

 

[drowingfish]

GDP is no longer as relevant once you are at US and China's size. there are a slew of other data points that represent a better picture, though those are much more nuanced and less accessible, so the media just throw around one number to try telling the public a much more complicated story. simply take any country with around China's GDP/capita and compare how they are and how their peoples live and you realize how useless it is as a metric.

 

[drowingfish]

I should also add that the traditional strength of the US (rapid population growth) is coming to an end, both due to much lower fertility, elevated deaths and a higher resistance to immigration.

https://imgur.com/p6mxarR

Given these facts, China's population dynamics aren't as bad given America's population dynamics are rapidly declining too. So quality becomes more important than just quantity.

with regards to population i always like to invoke a simple economic axiom which is diminishing return to scale population is like any other factors of production, if it continues to increase without commensurate increase of other factors, then the benefit of this change will diminish. for a country like China the hard limiting factor is land and resources, sure increasing population will also increase GDP, but at the same time that economic benefit may not worth the additional stress on resources and living space.

so yes China's economy will definitely have to slow due to decreasing/aging population. however, a perpetually increasing population is not the answer.