Chinese Economics Thread

Overbom

Brigadier
Registered Member
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China wants a unified domestic market, but local finance poses a significant challenge. Yes, eliminating regulatory and administrative barriers between cities and provinces will reduce transaction costs and increase market efficiency.
This is centralisation. That's one of the reasons why it is so important that Xi secures a 3rd term. Only when that happens will he have the power to start touching local interests.

In fact, I predict bitter infighting with local governments resisting central gov directives. A 3rd term Xi would be able to bulldoze through the opposition
 

antiterror13

Brigadier
When celebrity and Douyin, Alibaba, Tencent influencers that making hundreds of millions without paying much tax, then you know you have serious tax problems. Huang Wei was just fine 210 million in tax evasion. There are serious loopholes.

There is always a hole in any tax system, just fix it as it goes

How about Trump only paid less than $1K for federal tax for years ?
 

KYli

Brigadier
There is always a hole in any tax system, just fix it as it goes

How about Trump only paid less than $1K for federal tax for years ?
It is one thing to be creative in tax cheating. It is entirely different thing when a whole industry can evade taxes for years and no one is doing anything about it even though it is illegal. As a person with a master degree in tax accounting, I think I do know more than average people in how these things work. Basically, people in China didn't even bother to hide their tax cheating and cover their trails. And most of the tax loophole is man made.
 

antiterror13

Brigadier
It is one thing to be creative in tax cheating. It is entirely different thing when a whole industry can evade taxes for years and no one is doing anything about it even though it is illegal. As a person with a master degree in tax accounting, I think I do know more than average people in how these things work. Basically, people in China didn't even bother to hide their tax cheating and cover their trails. And most of the tax loophole is man made.


well, your first comment was about loophole, and your example were basically "cheatings" thats a crime .. thats nothing to do with a loophole. Tax evasion has nothing to do with a loophole, it is simply a crime

Congratulation for your master degree in Tax, but doesn't mean you are always right in Tax
 

ZeEa5KPul

Colonel
Registered Member
Hell no, that is why you don't want to have too many Western educated economists. MMT works to a degree but we can see that from the US from housing price and rent inflation and labor inflation to inflated stock prices are getting out of control due to excess money supplies.
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You have to distinguish between when a concept is problematic and when the country implementing it is. Things like MMT are sound, the problems occur when it's implemented by America. MMT isn't a problem, America is.

China's economy is insanely productive (actually productive, not stock buyback productive) so there's enormous scope to increase the money supply to boost growth without triggering inflation.
 

KYli

Brigadier
well, your first comment was about loophole, and your example were basically "cheatings" thats a crime .. thats nothing to do with a loophole. Tax evasion has nothing to do with a loophole, it is simply a crime

Congratulation for your master degree in Tax, but doesn't mean you are always right in Tax
Tax evasion/cheating and loophole go hand in hand. For example, when Chinese celebrities have their companies domicile in a low tax city to lessen the tax burden it is called a loophole. When they attempt to shift some of their incomes and expenses to such company that is called gray area. When these celebrities in order to minimize their taxes sign fake contracts and forge documents in order to pay little and no tax by using such loophole that is called tax evasion. Sometime gray area can also be called tax evasion such as Trump debt cancelled scheme and reuse the losses to avoid any tax payment. That is why Trump is still fighting the IRS.
 

KYli

Brigadier
You have to distinguish between when a concept is problematic and when the country implementing it is. Things like MMT are sound, the problems occur when it's implemented by America. MMT isn't a problem, America is.

China's economy is insanely productive (actually productive, not stock buyback productive) so there's enormous scope to increase the money supply to boost growth without triggering inflation.
No matter how productive you are. Excess money supplies have the habit of ending up in the stock and housing market. In addition, you should remember how iron ore prices, commodities and food prices went out of control. MMT only works in some degree even for China. Any attempt to abuse the money supplies system would eventually come back to haunt you.
 

ZeEa5KPul

Colonel
Registered Member
No matter how productive you are. Excess money supplies have the habit of ending up in the stock and housing market. In addition, you should remember how iron ore prices, commodities and food prices went out of control. MMT only works in some degree even for China. Any attempt to abuse the money supplies system would eventually come back to haunt you.
Inflation depends on how large the money supply is relative to how productive the economy is. China is almost always in a disinflationary/deflationary mode because its productivity rises so rapidly that it puts a lid on prices. That might sound like a good thing, but deflation suppresses investment since who wants to produce in an environment where prices keep dropping - the sound move is just to hold on to money as it gains in value. The US is so far away from any genuine productivity (being a "service" economy dominated by financial chicanery and stock market bubbles) and its money supply has already long surpassed what its meagre productivity can support.

I agree that in principle China can brrrr its money printers enough that it triggers inflation, but that won't happen because China is run by experts and not demagogues and white-collar criminals.
 

KYli

Brigadier
Inflation depends on how large the money supply is relative to how productive the economy is. China is almost always in a disinflationary/deflationary mode because its productivity rises so rapidly that it puts a lid on prices. That might sound like a good thing, but deflation suppresses investment since who wants to produce in an environment where prices keep dropping - the sound move is just to hold on to money as it gains in value. The US is so far away from any genuine productivity (being a "service" economy dominated by financial chicanery and stock market bubbles) and its money supply has already long surpassed what its meagre productivity can support.

I agree that in principle China can brrrr its money printers enough that it triggers inflation, but that won't happen because China is run by experts and not demagogues and white-collar criminals.
To some extent, what you said is true. However, there is a reason why the Chinese government is trying to put a cap in infrastructure spending and excessive customer spending. It is Western giants that control the prices of commodities and food not China. For example, Western companies would choose not to increase iron ore production and the prices of iron ore would go up and up and up until China reduces demands. Same thing with many commodities and food. You don't want to end up sending your hard earned money to these Western giants.

It doesn't matter how smart the Chinese government is. Just look at iron ore prices, even a slight hint of infrastructure boom can send the prices to the roof. We are talking about $100 billion more just for iron ore alone. In addition, China is already having a great difficulty to discourage excess money from entering the housing market which would create more social problem.
 
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