Chinese Economics Thread

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AndrewS

Brigadier
Registered Member
Han Patriot said:
It is also fiat currency which destroyed Ming finances. If managed properly fiat currency is good in an expanding economy.
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If managed properly. But the temptation to print more money is always there ,especially if there is a war.

Ray Dalio's book below goes into a lot more detail about hard money and fiat currency cycles, along with why it happens.

AndrewS said:
I would recommend Ray Dalio's "Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail"
It's basically an update and extension to Kennedy's "Rise and Fall of the Great Powers" with a lot more analysis on finance.

And it comes to the conclusion that every empire/society/country follows a similar "arc" in terms of lifecycle (250 years +/- 150 years)

So it mainly focuses on the situation in the Western World from 1500AD onwards, with the Dutch Empire Arc, then the British Empire Arc and then the American Empire Arc.

But it also looks at the Chinese dynasties from 600AD onwards from the Tang->Song->Yuan->Ming->Qing->People's Republic.
And found a similar story in terms of Arcs.

The most interesting part was the conclusion that based on the indicators, the USA is in the decline phase, whilst China is still in the ascent phase.

So it's not just that China is growing and can grow much larger than the USA.
It's that the USA is suffering from imperial overstretch, has become a kleptocracy run by the rich, is spending beyond its means, etc etc

So it makes sense for China to wait. We can already see the US running persistently large trade deficits and also government budget deficits, which are unsustainable in the long run.

The US Net International Investment Position is is already at negative 69% of GDP, and based on current run rates, I reckon we're looking at negative 100% of GDP around 2026.

But outwardly, everything in the US will likely look ok (potentially for decades) until one day, there is a "crisis" which destroys confidence in the USD as a reserve currency
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BlackWindMnt

Captain
Registered Member
AndrewS said:
If managed properly. But the temptation to print more money is always there ,especially if there is a war.

Ray Dalio's book below goes into a lot more detail about hard money and fiat currency cycles, along with why it happens.
Click to expand...
I should really pick up the book again but my free time is so limited the past two months.
 
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Overbom

Brigadier
Registered Member
Property tax trials are delayed. Given that home prices are already decreasing by themselves, i think it is a good decision

"Breaking: China is delaying its planned five-year property tax trials. Finance Ministry said conditions to expand the trials “aren’t ripe” this year, reports @TByGraceZhu The “course correction” in Xi’s econ policy continues"

https://twitter.com/i/web/status/1504056169421324288
 
K

KYli

Brigadier
W

weig2000

Captain
KYli said:
China Yuan is overvalued according to Bloomberg.
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Why is Yuan overvalued?

Let's see, the export has been extraordinarily strong, the growth, though under potential due to COVID etc., has been a lot faster than most other major economies, and the inflation has been much milder than the US and other western economies while interest rate has been higher than those in the US/West. All these don't even consider the political risk of western currencies introduced by their behaviors with respect to Russia, Venezuela, Afghanistan etc. So why do they consider Yuan overvalued?

In fact, I think PBOC intentionally suppresses Yuan lately, for fear of too fast appreciation of Yuan.
 
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