Chinese Economics Thread

[SanWenYu]

Micron CEO in China to pay a visit to Ministry of Commerce.

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"美光官网显示，桑杰·梅赫罗特拉表示，该投资项目彰显了美光对中国业务及中国团队成员坚定不移的承诺。"

The MOC official should ask him about

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.

 

[FairAndUnbiased]

It's strange that people still "worry" about demand in China when Chinese domestic sales of most goods far exceeds any other market despite China's nominal GDP being lower than the US and only a little larger than the EU. In fact, the Chinese domestic market is larger than the US and EU combined for many categories of goods. This is the reason why western companies are rushing to invest in China despite the constant call to decouple/de-risk from their governments and propaganda outlets/media.

Of course, there are some items where Chinese domestic demand lack far behind the US and western countries, e.g. opioids, cocaine, methamphetamines, fire arms, bullet proof accessories for kindergarteners, etc. Is that what these people are referring to when they "worry" about low Chinese domestic demand?

high US consumption is from the most important of markets:

1. medical costs
2. rent
3. insurance
4. bureaucracy (registration, permits, licensing)
5. household services (telecom, electricity, water)
6. propaganda

What a consumer centric society.

 

[fatzergling]

The so-called low "demand" in China angle is pretty easy to point out as a complete falsehood.

China consumes almost twice as many cars and three times as as many air conditioners as the US -- just as an example:


There is no bigger market for practically every appliance, white good or house hold consumerable than China.

China has a much higher appliance ownership than it's GDP/capita would suggest. Majority of houses in China have air conditioning, while ~25% of houses in Mexico have air conditions. By having a self-sufficient industry, China is able to roll out appliances in a way that most other countries cannot.

Additionally, Chinese resource consumption is much higher than what it's GDP/capita would suggest. Take a look at this following chart and notice the massive disparity.

And this is ~4-5 years ago outdated.
The idea that Chinese do not "consume" anything is such obvious BS to anybody that notices how much stuff Chinese are gradually accumulating in their houses.

 

[Dolcevita]

high US consumption is from the most important of markets:

1. medical costs
2. rent
3. insurance
4. bureaucracy (registration, permits, licensing)
5. household services (telecom, electricity, water)
6. propaganda

What a consumer centric society.

+
7. Tax (Including sales tax for other tax, real estate tax)
8. HIdden service fee (Tips, location fee, tolls)
9. Penalty

 

[BoraTas]

high US consumption is from the most important of markets:

1. medical costs
2. rent
3. insurance
4. bureaucracy (registration, permits, licensing)
5. household services (telecom, electricity, water)
6. propaganda

What a consumer centric society.

You forgot pick-up trucks. Because they gotta carry the wood once a year

 

[PopularScience]

China has a much higher appliance ownership than it's GDP/capita would suggest. Majority of houses in China have air conditioning, while ~25% of houses in Mexico have air conditions. By having a self-sufficient industry, China is able to roll out appliances in a way that most other countries cannot.

Additionally, Chinese resource consumption is much higher than what it's GDP/capita would suggest. Take a look at this following chart and notice the massive disparity.
View attachment 116087
And this is ~4-5 years ago outdated.
The idea that Chinese do not "consume" anything is such obvious BS to anybody that notices how much stuff Chinese are gradually accumulating in their houses.

China produces 60% of world home appliances.

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[Michael90]

instantaneous since zero COVID and the economic crackdown left bigger scars that a simple reopening was never going to fix

Are you saying the current economic situation was caused by government policies?

 

[henrik]

Are you saying the current economic situation was caused by government policies?

The prolonged zero covid policy was bizarre. Now the much needed stimulus is still not there. What is the big guy thinking? What the general public needs is more money printing, so that more economic activity can be created.

 

[Michael90]

Unfortunately Chinese companies are not 100% reliable either. A lot are scared of Western sanctions. Like Huawei, DJI, or Alibaba even.
Huawei left the Russian mobile phone provider space in Russia. Basically 30% of base stations in Russia use Huawei equipment. And now they have zero support or upgrades.

Why are you blaming Chinese private companies.they are running a business dude, not charity or feelings/emotions. So they have shareholders to answer to and if it doesn't make business sense then they won't do it. Thats gow things work in the business world. They have to weight the pro and cons . If its more advantageous for them to relain in Russia they would have done so, the fact that they didnt shows they had far more to lose by risking full western sanctions and banned from market on their business.
Afterall, despite all the talk, Russia can't replace the Western market and even tech cooperation/JV markets for China . That’s just the sad reality.

 

[Michael90]

The prolonged zero covid policy was bizarre. Now the much needed stimulus is still not there. What is the big guy thinking? What the general public needs is more money printing, so that more economic activity can be created.

Well, i think it was more political than anything. Xi Jinping, made it one of his core policy slogans. So it was hard for him to just say all that was for nothing and a mistake. He got too invested politically with his Zero covid policy to the point that there was almost no turning back from that. In fact it was actually a good thing for the government that Chinese people came out to protest after 3 long years of lockdowns and constant disruptions of their daily lives, this help the president to have a way out with revoking the zero Covid policy, since could just use the protests as a good way to stop that erroneous policy.