Chinese Economics Thread

A

AndrewS

Brigadier
Registered Member
ILikeChina said:
Total electricity output in the last two months April -4.3% and May -3.3%, two months in a row = recession. Retails sales down a lot two months in a row even with increased petroleum prices, industry production excluding coal is 0.1% up May, contraction in April. The only thing which is up like it used to be long term is debt fueled investment at 6%. All in real economy is in recession and overall stagnation. Q2 is lost. We may see some recovery in June because of government action with reducing taxes on many goods and for businesses.
Click to expand...

Remember that China deliberately held back on stimulus spending in the past 2 years, so there is lots of scope to spend.

Ideally, this should go to energy production and storage like wind turbines, solar, hydro, nuclear, EVs and batteries. These are industries which are capital intensive, but once they've been built, they produce/store energy at low cost. And they are broadly competitive against existing competitors.
 
Jiang ZeminFanboy

Jiang ZeminFanboy

Senior Member
Registered Member
AndrewS said:
Remember that China deliberately held back on stimulus spending in the past 2 years, so there is lots of scope to spend.

Ideally, this should go to energy production and storage like wind turbines, solar, hydro, nuclear, EVs and batteries. These are industries which are capital intensive, but once they've been built, they produce/store energy at low cost. And they are broadly competitive against existing competitors.
Click to expand...
There was no stimulus for consumption for 2 years, but there was a big stimulus for production in 2020 when covid hit. In 2021 there wasn't and it was a very good year for China, but we are now in 2022.

China's total debt surged similar to the others in 2020, just the stimulus went to a different place, to production so China could supply the world in 2020, and 2021 with real goods for printed money by the west for consumption.


Euctzc4XEA4YT7L
 
Jiang ZeminFanboy

Jiang ZeminFanboy

Senior Member
Registered Member
ZeEa5KPul said:
"Debt fueled", huh? What do you "fuel" investments with in Poland then, ILikePoland? I ask because the first thing that springs to mind when I think of economic success is Poland, so I'm hoping China can learn something from its masterful performance.
Click to expand...
You're offtopic, it's not a topic of Poland's economics, I can give you the last economic data if you want, production in Poland in April YoY 13% up, in China the same month -2,9% YoY. I expect a free fall in the economic activity in Poland in the coming months because interest rates are now at 6% and keep growing.

Debt-fueled is easy to understand. When the whole economy grows, investment doesn't increase much the total debt to GDP ratio of the country, an example is China's 2021 growth, and that's not debt-fueled investment growth, the other way around is when the "real" economy stagnates or is in recession and investment is growing very fast, then the total debt to GDP ratio is increasing fast, an example is China growth for 2020 year.
 
Last edited:
ZeEa5KPul

ZeEa5KPul

Colonel
Registered Member
ILikeChina said:
You're offtopic, it's not a topic of Poland's economics, I can give you the last economic data if you want, production in Poland in April YoY 13% up, in China the same month -2,9% YoY. I expect a free fall in the economic activity in Poland in the coming months because interest rates are now at 6% and keep growing.
Click to expand...
I didn't ask for Poland's economic data, I asked what magical substance you use to "fuel" investments there with since you obviously don't use icky debt like China. Everyone knows that debt should only be used for consumption. Using debt to invest in production? Madness!
 
ZeEa5KPul

ZeEa5KPul

Colonel
Registered Member
ILikeChina said:
Debt-fueled is easy to understand. When the whole economy grows, investment doesn't increase much the total debt to GDP ratio of the country, an example is China's 2021 growth, and that's not debt-fueled investment growth, the other way around is when the "real" economy stagnates or is in recession and investment is growing very fast, then the total debt to GDP ratio is increasing fast, an example is China growth for 2020 year.
Click to expand...
This is nonsensical on so many levels. How do you think an economy grows? Hint: is isn't consumption. Investment is growth. Investment is the real economy. It's shocking how much the West has every single economic concept ass-backwards.

But the most ridiculous thing has to be the "debt-to-GDP" idea. That compares apples to oranges - debt is a stock, GDP is a flow. If you want to compare something, compare debt to assets or debt servicing payments to GDP.
 
M

MortyandRick

Senior Member
Registered Member
ILikeChina said:
Total electricity output in the last two months April -4.3% and May -3.3%, two months in a row = recession. Retails sales down a lot two months in a row even with increased petroleum prices, industry production excluding coal is 0.1% up May, contraction in April. The only thing which is up like it used to be long term is debt fueled investment at 6%. All in real economy is in recession and overall stagnation. Q2 is lost. We may see some recovery in June because of government action with reducing taxes on many goods and for businesses.
Click to expand...
So a recession is defined as 2 quarters of lower electricity output? That's a pretty low bar to define recession. In that case a lot of countries would meet the definition in the last couple years.
 
You must log in or register to reply here.
Top