Chinese Economics Thread

[tamsen_ikard]

With all the China slowdown and China peak articles coming in recently. What do you guys think will be the long term growth potential of China to catchup with western income levels by 2050?

My assessment is that China has a lot catchup growth left. Chinese brands are slowly taking over market share in every field. Chinese cars are growing overseas, Electronic brands like TCL, Haier are gaining market share, Heavy equipment makers like SANY are also gaining share. There there is Chinese tech industry slowly gaining in overseas markets like Temu in ecommerce or Mihoyo in gaming. So, overall this trend will continue.

Moreover there is catchup growth left in terms of urbanization. China should be able to reach 80%+ urbanization by 2050. Each percent Urbanization should add several percentage point of GDP growth per year.

I believe China should be able to double its economy twice in 30 years. That means 4 times overall compared to today.

So, if China's GDP per capita today is 13K USD, it should be able to get to 52K USD by 2053.

Total GDP should read 72 trillion USD, that should be bigger US and EU combined by 2050.

One reason for that is Chinese competition should lead to massive loss of business and market share for western brands. So, that should lead to a slowdown in their GDP growth.

What do you guys think? When do you think China will peak in terms of growing faster than western countries and gaining share of global GDP?

 

[Maikeru]

With all the China slowdown and China peak articles coming in recently. What do you guys think will be the long term growth potential of China to catchup with western income levels by 2050?

My assessment is that China has a lot catchup growth left. Chinese brands are slowly taking over market share in every field. Chinese cars are growing overseas, Electronic brands like TCL, Haier are gaining market share, Heavy equipment makers like SANY are also gaining share. There there is Chinese tech industry slowly gaining in overseas markets like Temu in ecommerce or Mihoyo in gaming. So, overall this trend will continue.

Moreover there is catchup growth left in terms of urbanization. China should be able to reach 80%+ urbanization by 2050. Each percent Urbanization should add several percentage point of GDP growth per year.

I believe China should be able to double its economy twice in 30 years. That means 4 times overall compared to today.

So, if China's GDP per capita today is 13K USD, it should be able to get to 52K USD by 2053.

Total GDP should read 72 trillion USD, that should be bigger US and EU combined by 2050.

One reason for that is Chinese competition should lead to massive loss of business and market share for western brands. So, that should lead to a slowdown in their GDP growth.

What do you guys think? When do you think China will peak in terms of growing faster than western countries and gaining share of global GDP?

Always worth looking at what serious companies with actual skin in the game think, rather than loons and grifters on youtube. Boeing's commercial aircraft forecast predicts PRC growth averaging 4.1% pa over the next 20 years which is double US and triple Europe. Boeing base many of their business decisions on this forecast AIUI, presumably they are able to pay serious economists and bankers for their input.

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The easy wins are largely done for China so I don't expect we'll see 8-10% growth often going forward (of course, AI might change that, but this would also be the case for US/EU), but there's still plenty of scope for expansion so 4-5% seems reasonable. Demographics are an issue but so they are for the rest of the world, especially Asia.

 

[Deleted member 23272]

With all the China slowdown and China peak articles coming in recently. What do you guys think will be the long term growth potential of China to catchup with western income levels by 2050?

My assessment is that China has a lot catchup growth left. Chinese brands are slowly taking over market share in every field. Chinese cars are growing overseas, Electronic brands like TCL, Haier are gaining market share, Heavy equipment makers like SANY are also gaining share. There there is Chinese tech industry slowly gaining in overseas markets like Temu in ecommerce or Mihoyo in gaming. So, overall this trend will continue.

Moreover there is catchup growth left in terms of urbanization. China should be able to reach 80%+ urbanization by 2050. Each percent Urbanization should add several percentage point of GDP growth per year.

I believe China should be able to double its economy twice in 30 years. That means 4 times overall compared to today.

So, if China's GDP per capita today is 13K USD, it should be able to get to 52K USD by 2053.

Total GDP should read 72 trillion USD, that should be bigger US and EU combined by 2050.

One reason for that is Chinese competition should lead to massive loss of business and market share for western brands. So, that should lead to a slowdown in their GDP growth.

What do you guys think? When do you think China will peak in terms of growing faster than western countries and gaining share of global GDP?

The world's basically going through a quasi-recession and no country is unscathed including China. There are things that were kind of out of the government's control like the export decline and even the real estate sector, which I don't blame them for. Other things like the decline in private sector confidence and youth unemployment was kind of brought about by some bad policies, and I've been vocal about it.

But one thing could be said is that the current growing gap in nominal GDP between the countries is not exactly a great metric for determining the economic competition, since the US dollar GDP is surging ahead of everyone else's just simply due to high interest rates and inflation rather than any real growth. As others have, said China this year is falling behind due to the decline of the Yuan, but the next year the government can decide to appreciate it to 5 to a dollar and suddenly the two country's economies will be neck in neck.

All in all, it'll be hard to predict the future, neither country's victory is a foregone conclusion like their respective nationalists claim and more likely both countries will be duking it out for a long time in ways that the US and Soviet Union never did, since the latter had nothing to show for on the economic and consumer technology front. But the key metrics to look for instead of Nominal GDP, although that'll still be important, will be HDI, technology and innovation rankings, financial rankings, corporate market share, both country's respective consumption and purchasing powers, diplomatic presence in global institutions.

 

[pbd456]

China is moving up the value chain, and it will eat into the export market of western countries over time. In the short term, the western countries can compensate by increasing the service components of the economy to compensate. However it will not be sustainable in the long term. So the western countries will not be able to grow forever -even at a low rate.

 

[zbb]

China's export fell less than expected. All economic indicators have been improved in recent data.

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CNY is about ~7% lower against the USD this past August than August of last year. So August exports and imports in CNY terms are essentially flat YoY.

 

[ansy1968]

China is moving up the value chain, and it will eat into the export market of western countries over time. In the short term, the western countries can compensate by increasing the service components of the economy to compensate. However it will not be sustainable in the long term. So the western countries will not be able to grow forever -even at a low rate.

And is restructuring its economy as they implement the DUAL CIRCULATION strategy as envision in the 14th 5 year plan.

 

[luminary]

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With total brand value at US$1.01 trillion, down 18.8 percent from last year's US$1.24 trillion, the total value is still 13 percent higher than in 2019. This was also a slower decline pace compared with the top global listings, which dropped 20% of their value in the year.

"As economic recovery is progressing along a winding zig-zag road instead of a V-shaped rebound, and brands have dedicated more efforts to upgrade quality, amid increasingly discerning shopping behavior," said Doreen Wang, Kantar China chief executive and global chair of Kantar BrandZ.

Tencent retains the top spot for the third year running with US$144 billion brand value, and fashion and apparel e-tailer Shein stood in 12th place, the highest ranking newcomer with brand value of US$21.6 billion. The other giants in the top five include established brands and leading digital players Alibaba, Moutai, Douyin, and China Mobile.

The largest category by total brand value is Media and Entertainment, with 11 brands and a total value of US$241.4 billion, followed by Retail at US$136 billion.

Eleven brands are newcomers or re-entries and six are making their debut, according to the calculation based on stock price performance and corporate market valuation in the 12 months that ended March 2023. With new entrants in nine different categories, it is a clear signal that despite the dominant position of large established players, newcomers are still proving there are many different routes to building a well-known brand in today's China.

Booking site Trip.com grew 31 percent in value and advanced 25 places, while China Southern Airlines grew its brand value by 22 percent, as travel services showed the most evident rebound amid normalization of travel. Anta and Li-Ning in the apparel category also benefited from Chinese shoppers' strong preference and support for national brands.

 

[luminary]

After Apple pulled some of its products, some suppliers have experienced stress or gone out of business.

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Channel NewsAsia
In Taipei, Apple supplier Largan Precision, which makes camera lenses, dropped more than 4%, while contract chipmaker TSMC fell 0.6% on Friday. China's Luxshare Precision Industry, maker of connector cables for the iPhone and MacBook, as well as AirPods, and owner of factories capable of making iPhones, fell 2%.

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The Shanghai and Shenzhen-based company focuses predominantly on manufacturing Apple Home-compliant devices. According to

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(in Chinese), Apple removed its products from its online store in China as early as July 14.

 

[Maikeru]

Always worth looking at what serious companies with actual skin in the game think, rather than loons and grifters on youtube. Boeing's commercial aircraft forecast predicts PRC growth averaging 4.1% pa over the next 20 years which is double US and triple Europe. Boeing base many of their business decisions on this forecast AIUI, presumably they are able to pay serious economists and bankers for their input.

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The easy wins are largely done for China so I don't expect we'll see 8-10% growth often going forward (of course, AI might change that, but this would also be the case for US/EU), but there's still plenty of scope for expansion so 4-5% seems reasonable. Demographics are an issue but so they are for the rest of the world, especially Asia.

Airbus CMO for comparison purposes:

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Doesn't give GDP figures by country/region though.

 

[KYli]

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