Chinese Economics Thread

[BoraTas]

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.

Last year China stimulated the market. It led to lower inflation. Because it increased production, but not the consumer demand. Banks giving loans is what generates money so you can't stimulate the economy if there is no household demand for credits. There is nothing to do other than keeping the economy stable and waiting for the urge to save more to pass.

 

[Biscuits]

Zero covid policy saved millions of lives. In my opinion, the policy could have been dropped perhaps 6 months sooner, but it's reasonable to err on the side of caution when there are millions of lives at stake. And the policy isn't the sole factor, the current situation and is caused by confluence of changes in policy towards real estate (another temporarily painful measure that will result in long term benefits), US economic imperialist policies towards trade and technology, slowdown in external demand, and being at the tail end of an investment cycle, and all the while dealing with transitioning into a high income, high value add economy where higher wages is leading to loss of advantage in labor intensive low value add industries (a good thing). Yet despite all the headwind, there is still much growth potential, and the economy is still growing at a very respectable rate.

The pain caused on China's western partners by the ongoing economic war between NATO and Russia should not be underestimated, if anything, it might be the biggest reason for a relative slowdown.

 

[zbb]

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A good article on China's private consumption issue

The consumption component of China's GDP is severely underestimated while the investment component is overestimated.

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Many people see the extremely low share of consumption to GDP as indicative of repressed spending and the high share of investment as waste. Yet few pause to wonder why until the recent slowdown, the news was all about double-digit sales growth rates in the luxury goods, fast-food outlet and home furnishing sectors. How can one reconcile retail sales that were growing at 15-20 per cent a year for decades with GDP numbers that suggest lacklustre growth in personal consumption? This raises suspicions that something is amiss, quite possibly that consumption is seriously understated. A 2008 Morgan Stanley study estimated that Chinese GDP was about 30 per cent higher than official figures, and per capita consumption was as much as 80 per cent higher.

The statistics are based on an obsolete, 30-year-old sample survey; do not take full account of cash transactions; do not include fully non-cash provision of social services; and have not been adjusted to reflect the market values for owner-occupied housing. Moreover, as a result of high sales taxes, businesses often do not issue receipts leading to household purchases being underreported.

Overall, the personal consumption-to-GDP ratio might be closer to 45 per cent rather the reported 35 per cent and the investment ratio about 38 per cent instead of 48 per cent. If so, then China’s consumption and investment ratios are in line with its Asian peers such as Japan, South Korea and Taiwan during their comparable stage of development.

 

[KYli]

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[KYli]

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[TK3600]

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.

The reality is western tech is destined to be overshadowed by Chinese tech as China develops, while the core market will still be China.

As for Russia they have plenty of well educated people as well, the difference will be they will brain drain into China instead of western tech companies, so it improves Chinese tech directly.

 

[Bellum_Romanum]

China's leaders think they can just flip off and on society and the economy like a light switch and everything will just come springing back. They are finding out that's not the case with zero-covid

Lol here comes Mr. STRAWMAN making idiotic argument when such claim was never made or assumed by the Chinese leadership.

If idiots like you keep assuming that Chinese leaders are as stupid and dumb as you make them out to be then how the flak is that country making your panties in the west soaking wet from all the anxiety caused by the nincompoop CCP?

Those leaders have run cities bigger than whatever stupid country you're from buddy boy. I am sorry for being rude, but your statement compels me to ridicule your ill advised commentary with an equally crude response.

 

[KYli]

More likely due to the mansion don't have the permit to build to begin with. Many of these lavish mansions are built without permit and by bribing the local government.

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It is actually a good opportunity to accumulate more yuan as Dollar bull run is coming to end soon.

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[henrik]

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[ansy1968]

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@horse bro Game set match China!!!! ...lol Huawei decision to drop the smartphone business and focus on 5G infrastructure is the correct strategy. For the Neocons and US political elites, may you lived in interesting times.