Chinese Economics Thread

[tamsen_ikard]

Seriously, i am still wondering why Xi kept that zero covid bullshit policy for so long. It made zero sense after a year, yet he persisted when the whole world had long moved on to normal life. That waw the worse decision anyone could make. It left long lasting scars on people(which is normal) and dented consumers/entrepreneurs confidence alot. That was a very stupid move. Even more crazy to think he would have continued with it for even longer if not for the rare public protests by people against the policy. Anyway, hope it has been a lesson learned.

As I explained in my previous post. China did not open up earlier to prevent Chinese educated elites Pro-Western class and the western world from accusing the CCP of killing a lot of people by being incompetent or being stubborn for not using western vaccines and so on.

Anyone who follows current world politics knows how any kind of mistake or failure China does gets blown up by the west and China's own large anti-CCP pro-Western liberals.

In the beginning of Covid China locked down much earlier, faster and more comprehensively than any country would have done. But they were still accused by the west for being incompetent and essentially spreading Covid to the world. Back then media was full of Articles about how this Covid will be then end of CCP rule and so on. But China ofcourse bounced back because it turned out western governments were very incompetent at managing this kind of epidemics. So, that reduced the accusations and instead CCP got a political boost for locking down comprehensively.

China's government is under much more stronger scrutiny than western governments and any kind of infraction is blown up by Chinese pro-western elites.

If China opened up earlier, then I am sure the Western media would have accused CCP of opening up too early and causing too many deaths. They would essentially accuse the government of being killers. This is how Mao is also accused of being a killer for famines in 1950s eventhough he never killed anyone deliberately.

So In 2022, Government kept locking down until there was visible protest to open up coming from the same elites. When they essentially protested for CCP to step down unless they opened up. That's when CCP got the pretext to open up. Now no one could accuse them for being the killers. The fast opening up certainly caused deaths in the thousands. But no one was able to question CCP anymore. They were just too fed of being locked down and accepted the death toll.

Another plus point of opening late was that Covid became milder and milder. This is how viruses evolve. They become more mild as the time goes on. So, that also reduced death count by a lot.

This was China accepting economic cost of lockdown for the political cost of being accused of incompetence and causing a lot of deaths.

 

[TK3600]

Fighting Omicron is like King Canute fighting the waves, an act of absurdity. China wasted huge resources in the zero covid strategy, fighting Omicron , a mild form of Covid but the most easily spreading version of the disease. Then, China gave up on that strategy and let go of all covid rules so that disease spread like wildfire, mildly infected most and then went away. It could have done that a year back and saved it's economy.

Consumer confidence was it's peak in early 2021. All that was thrown away to fight a mild disease which could not be contained in any case.

For rivals of China like USA, India, EU etc it was a dream come true. China deliberately sabotaged it's economy after coming out of the main covid wave as the strongest economy. Analysts were predicting that China wold overtake USA by 2028. All that was thrown away.

How did American economy do dying by millions? China could have opened couple month sooner but they still are the winner of this pandemic.

There is no winning against a virus, but you can win by lose the least.

 

[Minm]

The economy had a very good start of the year and then a couple of bad months. Yes, consumer confidence is very bad. But consumer confidence isn't everything. Most people don't read economic news all day and all they know is that their employer was late to pay their salary two months ago. It takes time for this sentiment to change. And it will be the positive growth that causes consumer confidence to rise, not the other way round.


There's a similar phenomenon of unexplained low consumer confidence in America. People are feeling more negative about the economy than what the economic data suggests they should feel, so China isn't even that unusual. The reasons are probably different in the US though

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[abenomics12345]

I misremembered. 6-6.5% it is.

Good on you for sticking with it.

How did American economy do dying by millions? China could have opened couple month sooner but they still are the winner of this pandemic.

There is no winning against a virus, but you can win by lose the least.

China opening a few months sooner would not have caused excessive deaths that would've been prevented by delaying a few months. The healthcare industry at large was not prepared for this - all you need to look at is the shortage of cough/cold medicines - a shortage - in China! Large pharmacy chains (let alone small ones) were not told to prepare for the reopening in late 2022 - they ran out of cough/cold medicine quite quickly. Yes you can argue they should've prepared anyways, but that's a business issue and less so policy.

Let me put this clearly, there was no 'grand overarching plan' to reopen in late 2022 - there was preparation done to improve readiness but that had zero relation to when the country opened up.

In other words, the economic/political cost of delaying from summer 2022 to winter 2022, had very limited payoff (vaccination uptake did not dramatically increase). This problem doesn't change that China did very well in the pandemic in the grand scheme of things, but glossing over the policy mistake is not intellectually honest.

 

[EverfrosT]

Good on you for sticking with it.



China opening a few months sooner would not have caused excessive deaths that would've been prevented by delaying a few months. The healthcare industry at large was not prepared for this - all you need to look at is the shortage of cough/cold medicines - a shortage - in China! Large pharmacy chains (let alone small ones) were not told to prepare for the reopening in late 2022 - they ran out of cough/cold medicine quite quickly. Yes you can argue they should've prepared anyways, but that's a business issue and less so policy.

Let me put this clearly, there was no 'grand overarching plan' to reopen in late 2022 - there was preparation done to improve readiness but that had zero relation to when the country opened up.

In other words, the economic/political cost of delaying from summer 2022 to winter 2022, had very limited payoff (vaccination uptake did not dramatically increase). This problem doesn't change that China did very well in the pandemic in the grand scheme of things, but glossing over the policy mistake is not intellectually honest.

If you want to look at excessive deaths, now is probably not the best time to pass judgement. In fact, I heard that the flu season is hitting hard now here in China largely due to people with f*cked-up immune systems.

Anyway, in my opinion the open-up is largely due to the whole situation blowing up and we could not effectively contain the virus anymore. There's no point talking about economic cost or political cost because as you said, there is no grand scheme and there is no what-ifs. The only thing I can do is to keep the mask on (like many others) and hope that I don't catch covid 5 times in a row and lose my work ability before retirement.

 

[KYli]

India may not have as big an economy as China right now but past history is a good predictor of future performance. For most of the last 500 years China’s and India’s economies have been roughly equal and both have led the world. Not only that, like Chinese people the world over, Indian people too have excelled the world over in business. In fact, in America and Canada, ethnic Indians as a community earns more than any other ethnic group.

In past history, India is just a geographical term that is conceived by British. In addition after industrialization, economy is no longer defined by how many people you can feed but how much productivity that you can produce. Arguing that just because your daddy is rich before so that you would become rich again is the most useless and irrelevant argument that one can make. As for Indians in the West, most of them are elites that fled India so of course they do better. But Indians have a

The point is Omicron was a mild form of the disease. Very few died from it. China could have done what everyone else in the world was doing, allowing herd immunity to build up in society by exposure to this mild form of Covid.

After 5 millions killed in India and millions more killed around the world for coronavirus variant Delta, it is wise and smart for China to wait until its population is fully vaccinated and mutation has slowdown before reopening. Before Omicron, China's economy performance has been consistently better than India and the rest of the world.

In fact, this policy is exactly what China did very soon after Chinese assembly re-appointed Mr Xi for another term of office. It loosened covid controls and allowed herd immunity to build. It could have done this months back and saved it's economy.

China had decided to reopen On March 2023 but was forced to reopen early due to the contagious of Omicron. This decision was made after the death tolls and damage that Delta variant had caused in many countries. Before Delta variant, China was planning to reopen in summer of 2021.

Chinese assembly might at best delay the reopening a few months which wouldn't have much of effect on Chinese economy.

WHO was recommending it for a long time. China could have seen the response of India, a similarly sized country. India suffered greatly in the initial wave of covid but it largely shrugged off Omicron for the simple reason that people already had some immunity through vaccination and Omicron is a very mild form of Covid. Even at that stage China's vaccination rate was much higher than India.

After 5 millions deaths, India is not a shining example that any country should look to. I am glad the Chinese government at least values its people more than Indian government.

In fact, very few countries did as well as China in handling the main wave of covid. It controlled the infection and it's economy held up well. But then for some strange reason China decided on the same zero covid strategy against Omicron even though everyone was saying that it won't work against Omicron because of how highly infectious it was and how mild it was.

The West will be hoping China will make such similar self-sabotage moves in the future too.

At best, China made a mistake for being too careful and not reopening a few months early. But it is acceptable price to pay for saving millions of lives as other countries have failed to do so during Delta wave that reopened too early.

US spent 10 trillions to fix its economy during the pandemic and would eventually need to pay up for such cost. Similarly, many countries are under the similar circumstance. There is nothing rosy about their economies with you take a look at the high inflation and the debts they accumulated during that period.

Just like I said before, the downturn in Chinese economy right now is more due to the burst of bubble of property sector and the weak demand from the West. Chinese tourism and hospitality industry have rebounded back strongly and sustainably.

 

[KYli]

It is right decision to lower the down payment to 40% but further relaxing should be careful. Shenzhen home price is still overvalued and speculation is not totally dead yet.

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[CMP]

As far as this retarded Covid discussion goes, later viruses tend to be much more mild as an outcome of evolutionary fitness. It's very much an open question of whether the economic benefits of opening in Summer 2022 would've been worth the public health consequences, vs doing so in Winter 2022.

Having been fully vaccinated and up-to-date even now, but also going as far back as each iteration of Covid vaccines, it really was just a bad one night flu followed by a few days of bad cold when I got it in Fall 2022. And that infection was picked up in a crowded maskless environment. Anyone still wearing a mask at that time would have been very well protected, opening or no opening.

 

[TK3600]

Good on you for sticking with it.



China opening a few months sooner would not have caused excessive deaths that would've been prevented by delaying a few months. The healthcare industry at large was not prepared for this - all you need to look at is the shortage of cough/cold medicines - a shortage - in China! Large pharmacy chains (let alone small ones) were not told to prepare for the reopening in late 2022 - they ran out of cough/cold medicine quite quickly. Yes you can argue they should've prepared anyways, but that's a business issue and less so policy.

Let me put this clearly, there was no 'grand overarching plan' to reopen in late 2022 - there was preparation done to improve readiness but that had zero relation to when the country opened up.

In other words, the economic/political cost of delaying from summer 2022 to winter 2022, had very limited payoff (vaccination uptake did not dramatically increase). This problem doesn't change that China did very well in the pandemic in the grand scheme of things, but glossing over the policy mistake is not intellectually honest.

I do not have enough information to determine how many month earlier opening is optimal, but strictly from economic point of view I see your point. That said, I believe CPC is approaching this from a stability and moral point of view. If there are any chance of mass death, small even, it was deemed worthy to sacrifice economy for stability. From a moral point of view killing a million old man is unacceptable, even if inconsequential for economy.

 

[abenomics12345]

I do not have enough information to determine how many month earlier opening is optimal, but strictly from economic point of view I see your point. That said, I believe CPC is approaching this from a stability and moral point of view. If there are any chance of mass death, small even, it was deemed worthy to sacrifice economy for stability. From a moral point of view killing a million old man is unacceptable, even if inconsequential for economy.

The moral argument is not functionally relevant here because what happened in the end - a forced, unplanned and uncoordinated opening, did not prevent the excess deaths that they were looking to prevent.

On one hand, there was economic/political costs imposed on society for sticking to ZCP - a noble cause that I can appreciate - but on the other hand there was virtually zero preparation done (as evidenced by aspirin shortages - note I don't even count hospital crowding because there is less capacity to ramp up capacity there than there is for drugs) to prevent the chance of mass death - especially as it was clear that ZCP was unsustainable and unviable.

The only credible argument you can make would be that they intended for ZCP to last 5 years - in which case the economy is done for.

Nobody is saying that one "prefers to kill old people" - but Presidents do not make easy decisions. The options to Xi were: an ebbing social unrest and the risk of economic implosion from continued ZCP vs. 1 mln dead old people who should've been vaccinated. Yes, its like choosing ice cream flavoured crap vs. crap flavoured ice cream - but its clear that the cost/benefit skewed one over the other.