supercat
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China probably will overtake the US in a decade or so even in nominal terms, depending partly on how fast the yuan will appreciate.
Chinese Economics Thread
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China will overtake the US in nominal GDP if Yuan appreciates to 0.2 USD or USD deprecates to the above ratio. Earlier predictions had such appreciation happen in 2020 but that didn’t pan out. But with dedollarization on the horizon the USD may be subject to deprecation in the long term.
There are two things that will always destroy an economy and possibly society. One is hyper-inflation. Two is deflation. There is a third thing, and that is debasement of the currency, but that usually leads to hyper-inflation.
It is the debt. With inflation, you pay back the debts with cheaper dollars. With deflation, you pay back the debts with expensive dollars.
They call it the debt-deflation spiral. The money is sucked out of the economy straight to the bond holders, or in today's parlance, the 1%.
To make a long story short, there are three well know periods in modern times where deflation was permanent. The Great Depression. Japan's lost decades. And the EU when Merkel was around.
None of these periods are thought to be success stories.
Hyper-inflation is more common in economic history, with its own predictable results.
Now, to get a little funny, why not, economics is still kind of dull, even though some of us like it ...
Let's talk about Germany a little bit more.
Under Merkel, they had deflation which lead to stagnation, economic growth was usually 1%.
Under Scholtz, they have inflation which lead to stagflation, economic growth probably around 1%.
Note the words, stagnation, which is a proper English word, and stagflation, a new word from the 1970's due to what happened in the US.
It is kind of funny how they went from deflation to stagflation, in a blink of an eye.
Then to see some German politicians on the world stage acting tough, what a show.
They do not seem to realize they never solved their deflation. Using stagflation to solve deflation, is not a solution. How you they going to solve the stagflation? A trade war?
Bro after the EU in 2030 and even faster IF the Russian utterly defeat Ukraine in 2026.
I'd say that a weak currency is currently in China's interest to retain existing low-value and medium-value industries as:
1. wages in much of China are still low and these jobs as useful for lower-skilled workers
2. it limits the ability of the US (or anyone else) to decouple from China
3. due to capital controls, it's difficult for a weakening currency to result in large currency outflows. But in any case, China still has a huge annual trade surplus
At the same time, we also see:
1. a comprehensive effort to develop in new emerging industries (eg. electric vehicles, energy, AI, Telecoms) and those jobs
2. develop companies in existing industries where China currently imports (eg. semiconductors, specialty components) and those jobs
3. continued wage increases and GDP growth, so that minimum wages will reach moderate levels.
4. China is still accumulating large trade surpluses every year, and has nowhere to put them except in US assets which can be seized
So in 5-10 years time, a weak currency won't be required.
At that point, I can see a significant (steady) currency appreciation happening
That is not realistic
That is not likely to happen either
Realistically, Russia isn't able to conquer and occupy much more territory than it has today
My best guess is a stalemate roughly on current lines.
For developing countries, the "ideal" inflation rate is somewhat higher as it will increasingly reflect wage growth in the service sector.
And the latest studies indicate that people don't really notice inflation until it exceeds 5%-ish. So you could go for a 3% or even 4% inflation rate target
than they are in the US because of Beijing's immense bargaining power with pharma firms
Under a implemented by Beijing to expand access to various medicines, drugmakers have to negotiate their prices directly with the government if they want their products to be covered by China's state-funded medical insurance.So in China, Ozempic jabs cost 478 Chinese yuan, or $67, per China's (NRDL). That price stands in stark contrast to the US, where an Ozempic injection costs $995, per the pharmaceutical website
as China withholds tour groups
and ongoing political, trade and security disputes led to Australia being stripped of its Approved Destination Status (ADS). The loss of Chinese tour groups is a significant hit to Australia’s tourism industry.