Chinese Economics Thread

[mossen]

Of course not, but there already is a steady increase in youth unemployment over the years as more youngsters graduate from college but find out that there is a mismatch of supply and demand of many occupations.

That's because China suffers from what the West and East Asia does: overeducation. Most jobs don't need a degree. Another issue is that Chinese youth have been told that if they get a degree then they "deserve" a better job, so I suspect part of this unemployment is just them turning their noses up to "unworthy" jobs.

But this is the same problem as in Europe where you have people with university degrees working as baristas. There's simply too many graduates, which means that the quality of the average university-educated person is much lower in 2023 than it was during 1960 when only the top 10% of the population went to uni.

China is unfortunately repeating the exact same mistakes as everyone else. South Korea has had very low fertility for many years, but part of it is due to overcredentialism, which postpones childbirth. China seems to be going in the same direction.

I think the German model is better. Focus more on vocational schools for most people and universities should just be for the top 20% or so. But this is politically very difficult to achieve, as parents want to think their kid can and should go to university when in most cases the answer is, not really. So even in Germany, this model is weakening. Very hard to solve.

 

[TK3600]

I called for 6% and @abenomics12345 called for 5%. So far both western and Chinese predict around that. Everything within expectation. 6-6.5%

 

[abenomics12345]

I gave two numbers, 4-5% CAGR is the medium term growth I would expect over the next 5 years. In terms of 2023 specifically, I would expect anywhere in the 4-6% range - probably edging closer to 5.5 than anything else. But honestly even if you had a time machine and knew what it was, what good is it? Literally not going to add any value.

FWIW I have a bet with someone for 500 dollars about retail sales growth for 2023 - my bet was 8% and their bet was 15% - we will be splitting the difference at 11.5% - anything higher I would pay a pro-rata and anything lower I would receive a pro-rata.

I would *love* to be wrong.

The hilarity here is I'm actually personally invested in the success of China - I've yet to see anyone else here put money behind their bold claims.

I called for 6% and @abenomics12345 called for 5%. So far both western and Chinese predict around that. Everything within expectation. 6-6.5%

This is the second time I'm reminding you that I did not say 5%

 

[TK3600]

This is the second time I'm reminding you that I did not say 5%

You are still below expectation at 5.5%. That changes nothing.

 

[Overbom]

Growth will be >6%. I knowingly went with the most ambitious 6.5% target and I am still sticking with it

I expect the government to start stimulus measures on H2 2023, ideally targeted at new infrastructure and probably the service sector.

Btw, IMO no way growth will be only 5.5%

 

[siegecrossbow]

That's because China suffers from what the West and East Asia does: overeducation. Most jobs don't need a degree. Another issue is that Chinese youth have been told that if they get a degree then they "deserve" a better job, so I suspect part of this unemployment is just them turning their noses up to "unworthy" jobs.

But this is the same problem as in Europe where you have people with university degrees working as baristas. There's simply too many graduates, which means that the quality of the average university-educated person is much lower in 2023 than it was during 1960 when only the top 10% of the population went to uni.

China is unfortunately repeating the exact same mistakes as everyone else. South Korea has had very low fertility for many years, but part of it is due to overcredentialism, which postpones childbirth. China seems to be going in the same direction.

I think the German model is better. Focus more on vocational schools for most people and universities should just be for the top 20% or so. But this is politically very difficult to achieve, as parents want to think their kid can and should go to university when in most cases the answer is, not really. So even in Germany, this model is weakening. Very hard to solve.

There is a cultural stigma against blue collared jobs in Chinese culture unfortunately. People would rather apply for low paying office jobs than high paying jobs in manufacturing or construction.

 

[Michael90]

Not only these 2 companies, there is also ZTE, Oppo and Vivo Mobile.

And they are trying to pull up a fast one on the Chinese mobile industry

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China should move 0 industries to India until it starts playing by the rules of the game that the rest of the world abides with

"Should and will" are two different things. Lol
As i said before, Chinese people are often singlemindedly more business oriented than political. So they tend to mostly look at how much money can be made logically, without considering the political sides of things first and foremost.
So despite your wish, Chinese companies xill keep trying to invest in India irrespective of Indian government going after Chinese companies. So Huawei, Xiaomi, ZTE etc examples won't stop others from moving to India. They will keep looking at the size of India and potential market potential .

 

[FairAndUnbiased]

"Should and will" are two different things. Lol
As i said before, Chinese people are often singlemindedly more business oriented than political. So they tend to mostly look at how much money can be made logically, without considering the political sides of things first and foremost.
So despite your wish, Chinese companies xill keep trying to invest in India irrespective of Indian government going after Chinese companies. So Huawei, Xiaomi, ZTE etc examples won't stop others from moving to India. They will keep looking at the size of India and potential market potential .

India is actually a small market for most products because the population that can afford anything beyond basic sustenance is small.

 

[weig2000]

China is unfortunately repeating the exact same mistakes as everyone else. South Korea has had very low fertility for many years, but part of it is due to overcredentialism, which postpones childbirth. China seems to be going in the same direction.

Well, China significantly increased the college enrollments in the late '90s precisely to counter the youth unemployment issue amid economic downtown after the Asian financial crisis. The idea was to postpone the youth from joining the job market. See the following college enrollment statistics:



From 1977, the first year Chinese colleges reopened to enroll students regularly after Culture Revolution, to 1996, the total college enrollments increased less than 3.6x. From 1997 to 2016, the increase in enrollments were 7x. The increase in enrollment rate was even more staggering: from 5% to 75%.

China is not going back to double digit growth rate, not even to the "bottom line" 8% growth rate that the then Chinese premier Zhu Rongji avowed to guarantee in late '90s. China's manufacturing industry is as strong as ever, but it is moving up the ladder and will not employ a lot of people marginally relative to the working age population. The other main growth drivers, real estate and infrastructure building, have diminishing returns, to put it mildly. You should not expect them to employ as many people. Therefore, the youth unemployment issue will persist.

Until China changes its growth model significantly, that is. That's not going to be easy, but it's another subject.

 

[PopularScience]

Well, China significantly increased the college enrollments in the late '90s precisely to counter the youth unemployment issue amid economic downtown after the Asian financial crisis. The idea was to postpone the youth from joining the job market. See the following college enrollment statistics:

View attachment 112813

From 1977, the first year Chinese colleges reopened to enroll students regularly after Culture Revolution, to 1996, the total college enrollments increased less than 3.6x. From 1997 to 2016, the increase in enrollments were 7x. The increase in enrollment rate was even more staggering: from 5% to 75%.

China is not going back to double digit growth rate, not even to the "bottom line" 8% growth rate that the then Chinese premier Zhu Rongji avowed to guarantee in late '90s. China's manufacturing industry is as strong as ever, but it is moving up the ladder and will not employ a lot of people marginally relative to the working age population. The other main growth drivers, real estate and infrastructure building, have diminishing returns, to put it mildly. You should not expect them to employ as many people. Therefore, the youth unemployment issue will persist.

Until China changes its growth model significantly, that is. That's not going to be easy, but it's another subject.

Automation will create a lot of engineer/technician jobs