Chinese Economics Thread
- Thread starter Norfolk
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Crazy how many westerners still believe Reuters is an unbiased source
The end is definitely near... the faster you grow, the harder you fall! Take that China!
But Chinese growth is authoritarian so the more they grow, the worse the world becomes.
We've heard a lot about how Xi has supposedly retreated from market reform that Deng pioneered. This has become a mantra in the Western media. But what's reality?
If private firms were squeezed out, then you would see it in the data. But you don't. In fact, as a share of exports, the SOE sector has been steadily been trending down. Xi did not change this trendline.
To be fair, most Chinese SOEs are active in domestic sectors with little export exposure. A good example would be telecom. But there's no reason why allowing private players there is any good. Low productivity sectors like telecom are natural targets for rent seekers in the West. Just look at absurd telecom prices in countries like the US, Canada or Australia. It's understandable why these Western firms would want to recreate that in China and why they are whining to their governments about lack of access.
What the data also shows is that domestic Chinese private firms have begun to take a greater and greater chunk of the export. 10-15 years ago, foreign firms dominated the non-state share of exports. Domestic firms have moved up the value chain. I suspect this is another reason for resentment.
If private firms were squeezed out, then you would see it in the data. But you don't. In fact, as a share of exports, the SOE sector has been steadily been trending down. Xi did not change this trendline.
To be fair, most Chinese SOEs are active in domestic sectors with little export exposure. A good example would be telecom. But there's no reason why allowing private players there is any good. Low productivity sectors like telecom are natural targets for rent seekers in the West. Just look at absurd telecom prices in countries like the US, Canada or Australia. It's understandable why these Western firms would want to recreate that in China and why they are whining to their governments about lack of access.
What the data also shows is that domestic Chinese private firms have begun to take a greater and greater chunk of the export. 10-15 years ago, foreign firms dominated the non-state share of exports. Domestic firms have moved up the value chain. I suspect this is another reason for resentment.
Is this accurate, Japan only grew 6%?
Japan's GDP in USD in 1995 was 5.5 trillions. Today, it is just less than 5 trillions. Japan doesn't have a lost decade but it has lost 3 decades.
As for low end manufacturing, moving out to global south is not good solution in medium and long term. Automated low end as much as possible is the best solution and bring back those who move out as automation is in full swing.
This is a very illuminating graph.
Note that the stagnating foreign exports is not a result of decoupling - foreign firms are in fact pouring more and more money into China than ever before, particularly in high tech industries and services: . They're just not getting the returns they used to, because domestic firms are increasingly outcompeting (and in some cases such as solar panels outright dominating) their foreign counterparts in export markets.
Numbers indicate the future Chinese economy will be one driven by private-led enterprise, innovation and technology.
Just brutal. Statistics and numbers like this are simply too brutal for most westerners to handle.