Chinese Economics Thread
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okay so I don’t know when did people think it’s okay to get racist and off topic on this thread. Just because the moderators aren’t always following a particular thread, doesn’t mean this kind of behavior is okay. Anything more on this will be deleted. And frankly, I don’t care how it is on Indian forum. This kind of behavior is not okay about any racial group on SDF. Consider all of you warned
China has the world’s largest industrial base (about 30% of the global total) and is one of the most advanced and most productive one in the world. That is why the Americans and the Europeans are constantly crying foul about Chinese industry because they can’t compete. Wages in Chinese manufacturing are nearing OECD levels. But the problem is that the population is so large that when you average everything out that the indicators in China are still far below those of the developed nations.
The problem is that there are only a limited number of people that can work in the high tech industries rather it is manufacturing or services. Then the question is what about the rest. What are they going to do? That is a question that no one has a answer to not even China.
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Something to keep in mind that even though the GDP adjusted for Purchasing Power Parity (which is what I assume that GDP adjusted for cost means) may not be that accurate.
"What we are dealing with is a legacy of China having never properly transitioned from its Soviet-era Material Product System (MPS) system of national accounts to the United Nations’ System of National Accounts (SNA) standard. MPS accounting is only concerned with material production. Services are considered costs of production and excluded by design.
In China’s first attempt at converting MPS to SNA in 1985, it tacked on a ludicrously low 13% to the MPS number and called it China’s services GDP. Over the years, the World Bank has twisted the arm of China’s National Bureau of Statistics for modest increases to China’s services GDP with limited success. The NBS fought tooth and nail to minimize these adjustments in order to maintain developing economy status for as long as possible.
What we conclude from all this is that on an apples-to-apples UN SNA basis, Chinese households are consuming much more than 38% of GDP. And investments are much less than 42% of GDP."
"What we are dealing with is a legacy of China having never properly transitioned from its Soviet-era Material Product System (MPS) system of national accounts to the United Nations’ System of National Accounts (SNA) standard. MPS accounting is only concerned with material production. Services are considered costs of production and excluded by design.
In China’s first attempt at converting MPS to SNA in 1985, it tacked on a ludicrously low 13% to the MPS number and called it China’s services GDP. Over the years, the World Bank has twisted the arm of China’s National Bureau of Statistics for modest increases to China’s services GDP with limited success. The NBS fought tooth and nail to minimize these adjustments in order to maintain developing economy status for as long as possible.
What we conclude from all this is that on an apples-to-apples UN SNA basis, Chinese households are consuming much more than 38% of GDP. And investments are much less than 42% of GDP."
Ultimately the goal of the economy is make more with less. People often forget this and think that the real goal of the economy is to squeeze as much money out as possible. A $5000 ambulance ride offers the same services as a $50 ambulance ride. If a $500 phone does everything that a $1000 phone can, you should pick the $500 phone. What matters is the product that you have at the end of the day or the work that gets done, not the amount of money that gets made.
To put it into simple terms, if $1 billions gets you an aircraft carrier and in another country $10 billion gets you exact same aircraft carrier, it's obvious who will have an advantage in a war. But in our modern economy, the $10 billion dollar aircraft carrier is better because it contributes more to the economy, all the middleman and companies building the thing gets a nice bonus and GDP goes up more compared to the cheaper product.
The current economy with all it's complications, tax loopholes, tax havens and complicated financial wizardry tries it's best to hide this. It's hilarious that people say that China's economy is "fake" while China holds so much industrial power. Yes China does have it's own fair share of financial bullshit to pump up GDP, but nowhere near western countries. There's entire countries like Britain that survive solely on their financial sector and their ability to launder dirty money or tax havens like Ireland.
The only real thing holding China back in the last decade is that in many areas of technology and branded companies they were lacking behind in. That's not the case today and in the next decade, China will begin to lead the pack.
To put it into simple terms, if $1 billions gets you an aircraft carrier and in another country $10 billion gets you exact same aircraft carrier, it's obvious who will have an advantage in a war. But in our modern economy, the $10 billion dollar aircraft carrier is better because it contributes more to the economy, all the middleman and companies building the thing gets a nice bonus and GDP goes up more compared to the cheaper product.
The current economy with all it's complications, tax loopholes, tax havens and complicated financial wizardry tries it's best to hide this. It's hilarious that people say that China's economy is "fake" while China holds so much industrial power. Yes China does have it's own fair share of financial bullshit to pump up GDP, but nowhere near western countries. There's entire countries like Britain that survive solely on their financial sector and their ability to launder dirty money or tax havens like Ireland.
The only real thing holding China back in the last decade is that in many areas of technology and branded companies they were lacking behind in. That's not the case today and in the next decade, China will begin to lead the pack.
Chinese authorities have said they may revise newly drafted online gaming rules shortly after the planned restrictions caused major tech companies to lose billions of dollars.
State broadcaster CCTV reported on Saturday that the authorities have heard the “concerns and opinions raised by all parties”, adding that “the State Press and Publication Administration will study them carefully and further revise and improve them”, referring to the media regulator.
massive blow to the world’s biggest games market. Investors went into a tailspin, leading to as much as $80bn in market value being wiped off from China’s two biggest companies, industry leader Tencent Holdings and Netease.
According to the new rules, online games would be banned from giving players rewards if they log in every day, if they spend on a game for the first time, or if they spend several times on a game consecutively. All are common incentive mechanisms in online games.
CCTV reported that regulators may now change the wording of sections of the draft rules that limit the ability to encourage daily logins and wallet top-ups
State broadcaster CCTV reported on Saturday that the authorities have heard the “concerns and opinions raised by all parties”, adding that “the State Press and Publication Administration will study them carefully and further revise and improve them”, referring to the media regulator.
massive blow to the world’s biggest games market. Investors went into a tailspin, leading to as much as $80bn in market value being wiped off from China’s two biggest companies, industry leader Tencent Holdings and Netease.
According to the new rules, online games would be banned from giving players rewards if they log in every day, if they spend on a game for the first time, or if they spend several times on a game consecutively. All are common incentive mechanisms in online games.
CCTV reported that regulators may now change the wording of sections of the draft rules that limit the ability to encourage daily logins and wallet top-ups
The government's media branch has always been strongly in favor for AAA development and going against microtransactions et al. While I can agree these are noble long term goals, moving too fast can cause disturbances.
Imo they should make the initial suggestions less harsh, and at the same time, delay their implementation until after the hype storms from major AAA titles like Black Myth and When Winds Meet.
If they time it correctly, companies with predatory earning models will be completely unable to defend their practices, as gamers will have examples of excellent alternatives that they'd want companies to develop instead.
You're not wrong, but I suspect there's also a mentality issue at play here. I read a lot of Indian media and everyone agrees that Indian railways are substantially underfunded, but that is because tickets have to be very cheap for the vast poor masses to afford them. Raising the ticket prices would allow for greater investments but many can't afford any other transportation option (except buses, which are also underutilised). The Indian middle classes are increasingly opting for a US-style bargain: cars in the city and airplanes for longer distance travel.
So it's a chicken-and-egg problem. China solved this by raising its savings rate to nose-bleed levels and then that allowed the investment rate to go up to 40% of GDP if not higher. You could self-finance all that investment without borrowing from abroad (current account deficits).
All this requires a significant amount of state capacity and financial repression: basically subsidising deposit growth to Chinese households by having high interest rates and then channelning that excess savings cheaply to various infrastructure firms, often controlled by the state. It's not easy to pull off.
That model works uniquely well in China but I suspect it is not so easy to replicate in India, let alone the West.
Just goes to show that there are idiot decision makers out of touch with how things really work in every government.
As I understand it, in this case they have a pretty good understanding of the mechanisms in these kind of games and it is the targeting of those mechanisms is why some of those companies and investors are shivering.