Chinese Economics Thread

tphuang

tphuang

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Exactly why non-Western countries are more eager than ever to get out of the shadow of USD and EUR.

I listened to this podcast about China's push for RMB internationalization. They completely missed mentioning the role that Russia has played in pushing forward Yuan internationalization this year. Aside from that, they brought up some good point about China using its role as a major customer to push paying for resources and other goods in RMB. They also talked about expanding the role of their commodity/future exchanges to be more international and such.
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So the usage of these exchanges and places to park your money is important. They also talked about the importance of getting more Yuan out in the world so that people can use it. A lot of this involves getting the off shore RMB through HK and then using the stock/bond connect program to invest in Chinese market. The issue of trust is still present. People need to trust that China will not institute capital controls on RMB to be willing to exchange for RMB and then invest in the Chinese market.

Currency swaps is a great way to encourage other countries to directly transact in Yuan and not have to burn through USD currency reserves.
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This is another good article about how Russia is pushing to move away from dollar and into Yuan. In many ways, I think this happened a year or two too soon. But it seems like a really bad idea for China to not ride this wave of interest in its currencies. Over the next year, it would be good if most if not all the trading between the two countries are done in Yuan and RUB. Which would push other commodity countries to also sell to China in RMB.
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It's with this context, that we need to think about great internationalization of Yuan. The start of Petroyuan is a good thing but will take a few years. America controls the world's economy with its control over the USD, SWIFT and financial institutions. This type of control does not go away over night. As such, continued pushing incremental greater usage of Yuan is the way to go. Also, increasingly greater usage of Chinese bond market, access to Chinese capital and greater usage of Chinese financial exchanges. These things all need to develop quickly if they want to bring RMB to the same level as EUR
 
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tonyget

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There is one thing I agree with him，that is China needs to get out of this real estate bubble，and focus on develop consumption and technology，even if it means short term pain，real estate has been sucking too much wealth from Chinese economy. Unfortunately few days ago LiuHe just reiterated that real estate is the core sector of the economy，which means a significant portion of the capital will still flow to real estate

 
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gelgoog

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This is hardly surprising. China still has less urban population by percentage than most developed countries. To support urbanization those people moving from the countryside need to have houses there. And the state does well to support urbanization since this typically leads to increased productivity.

Of course, everything China does must be wrong, so the US claims this is actually a bad thing. That the Chinese property market has a overhang and concentrates too many resources in the Chinese economy, when the US housing sector implosion in 2007-2008 caused the US economy and the world economy to have a meltdown. Americans used their houses like they were a credit card with constant remortgaging extracting money out of inflated house prices. At the same time, China's stock market is growing a lot faster than any other stock markets out there, so I think US claims of Chinese economic malaise are just bunk. If the Chinese economy is sick, then the US economy is a rotting corpse.

You see a lot of money in the US chasing malinvestments. While China popped the bubbles in Ant Group, Bitcoin trading, and the housing sector, the US just lets these inflate wildly out of proportion. And then you get massive collapses like FTX, and the 2007-2008 Global Financial crisis.
 
Strangelove

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Modern industrial system, core tech to hog focus​


By MA SI | China Daily | Updated: 2022-12-20 09:01

Building a modern industrial system with a focus on making breakthroughs in core technologies will be a key priority next year as it can help advance industrial upgrade and boost the resilience of supply chains, experts and company executives said on Monday after digesting the highlights of the tone-setting Central Economic Work Conference, which concluded on Friday.

They said China will improve the global competitiveness of its traditional industries. The conference, they said, stressed the need to speed up research, development and application of cutting-edge technologies in the fields of new energy, artificial intelligence, biotech, green and low-carbon development and quantum computing, and work harder to develop the digital economy.

Fu Baozong, director of the industry department of the Beijing-based Academy of Macroeconomic Research, which is part of the National Development and Reform Commission, the country's top economic regulator, said China has formed a sound and efficient industrial chain and supply chain system, which plays a decisive role in the international industrial division.

However, under the impact of multiple factors, the upstream and downstream circulation obstacles in the industrial chains and supply chains have increased recently, and the weaknesses of some links have become prominent, Fu said.

To further improve the resilience and security level of the supply chains, it is necessary to strengthen interregional linkages, and upstream and downstream cooperation, while ensuring stable production at key enterprises, Fu said.

To help achieve breakthroughs in core technologies, the Ministry of Industry and Information Technology has approved the establishment of a string of national manufacturing innovation centers, including three new ones in November, which focus on graphene, virtual reality and ultra-high-definition video industries.

The ministry said it would guide the new manufacturing innovation centers to improve their ability to seek technological innovation so as to provide strong support for the high-quality development of primary fields in manufacturing.

Wang Yiming, vice-chairman of the China Center for International Economic Exchanges, said as global competition in strategically important industries intensifies, some countries are acting like a "small courtyard with high walls" against China, aiming to contain its high-tech sectors.

So, it is of greater importance to pursue breakthroughs in key technologies now, Wang said, adding that self-reliance in certain crucial technologies is a prerequisite to guarantee national security.

Zhu Minghao, executive director of the high-end manufacturing research center of Beijing Jiaotong University, said the intelligent, green and high-end transformation of traditional industries is an important basis for the manufacturing industry to pursue high-quality development. It not only promotes traditional industries to glow with new vitality, but also helps release more domestic demand.

Yang Yuanqing, chairman and CEO of Lenovo Group Ltd, said consistent long-term input into R&D is key to boosting innovation, and the company will double its R&D investment within three years.

Yu Kai, CEO of Horizon Robotics, the first Chinese company to commercialize self-designed processors for autonomous driving, said smart electric vehicles are a once-in-a-lifetime opportunity for China to develop homegrown artificial intelligence chips and operating systems. Horizon Robotics will step up efforts to push for indigenous innovation, Yu said.
 
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