Chinese Economics Thread

[kroko]

Re: World's largest economies 2001-2018

India may grow faster, but Indian economy is not in good shape and the Rupee is declining

what about comparing to china? china grows 50% betwen 2013-2018. How can russia do the same with half the growth rate? I think russia´s growth path is exagerated in this chart.

 

[Quickie]

Re: World's largest economies 2001-2018

Is this GDP nominal or GDP PPP?

How can russia keep ahead of india in 2018? india is at the same level as russia today and is growing faster.

In PPP, India's GDP is probably bigger than Russia's GDP already. Even so, the way the GDP in PPP terms is calculated is also questionable. China's electrical power consumption is about 20% more than the U.S. but its PPP GDP is said to be only 75% that of the U.S. (for 2012).

 

[jobjed]

Re: World's largest economies 2001-2018

In PPP, India's GDP is probably bigger than Russia's GDP already. Even so, the way the GDP in PPP terms is calculated is also questionable. China's electrical power consumption is about 20% more than the U.S. but it's PPP GDP is said to be only 75% that of the U.S. (for 2012).

That just means Chinese consumers spend more of their disposable income on electricity bills than they do on other goods and services.

 

[Quickie]

The electrical power consumption is measured in energy units of kilowatthours. It's quite pointless to measure this in monetary terms when we're really talking about the amount of an utility that's used to generate economic activity.

 

[jobjed]

The electrical power consumption is measured in energy units of kilowatthours. It's quite pointless to measure this in monetary terms when we're really talking about the amount of an utility that's used to generate economic activity.

My bad. But electrical usage doesn't translate into more wealth.

 

[AssassinsMace]

Ironic since I've seen Western analysts see a downturn in energy consumption in China as a sign of a downturn in the economy.

 

[TerraN_EmpirE]

Lets face it the numbers are questionable on both sides. Those who try of gauge based no electricity are usually aiming pessimist those the state issues are very optimist
trying to gauge based on power consumption is an attempting at gaining data on commercial use not civil use. Civil use is you at home sitting at your computer watching Klingon jello wrestling videos online. Commercial is manufacturing it uses a lot more power than any home could even dream of and indicates the current level of production. Production is supply side economics. Trouble is when a manufacturer is state run they can make based not on orders cut but on quota that means they have stock pile. Extra merchandise sitting around is not positive in the books its negative.
If you have to much supply and no demand you have no income and no income means you are in trouble.

 

[plawolf]

Trying to gauge economic performance from electrical use is like trying to read tea leaves. It is a very crude and judgement based approach and different people can make the same data produce polar opposite conclusions based on the assumptions they make.

Basically, you can make the numbers say what you want since there are so many factors to consider and eliminate.

For example, the power consumption measure does not really take into account efficiency savings and consumer habits. Using less power could mean businesses are retiring old, inefficient machines and production methods and switching to new, more efficient and productive machines and techniques that yields more output for less power consumed. Hell, if you upgrade the transmission lines and/or built new power plants closer to where power is used so you don't have to transmit it as far as before, there is less transmission loss as a result, so you can have the same amount of power usage yet be able to cut back on power production significantly.

With electricity consumption, it is also all but impossible to separate commercial and civil usage, so we have little way of telling if an increase in power consumption is because factories are making more products, or because millions of more homes now have air conditioning compared to the comparative year. With the hybrid and electric car industry about to take off, that will further skew any attempt to analyse the raw data.

If you want to look at supply side indicators for economic activity, single purpose raw materials like iron ore, cement and coper would be far better bets, but even there it is hard to factor in efficiency savings and what those raw materials are ultimately used for.

As the old analysis saying goes, trash in trash out. If the raw data you are using has too much 'noise' to 'signal', your results are unlikely to be sound.

Supply side observations are only useful if you can get precise data on exactly what inputs are going in to where as well as factor in as much of the related variables like technology improvements and changing production methods etc. Supply side observations are thus only really good for focused analysis on one or a small group of select factories or locations, which is why intelligence agencies often use it. You can get a good idea of how many tanks a tank factory is making without having to have eyes inside the factory by keeping taps on how much iron ore the factory is using for example, but there is no way to work on that level of detail system-wide to monitor an entire economy.

 

[Quickie]

Actually it wouldn't go as far as reading tea leaves. There may be variation in the correlation due to many factors but if you look at the top few GDPs of a number of countries, they're quite closely related to electrical power consumption although I haven't really checked whether the ranks crossed in any of the countries. There are probably variations between different countries but for a particular country, the correlation shouldn't go that far off between this year to the next few years or even the next ten years.

 

[AssassinsMace]

Wall Street is very fickled. One day they will be very optimistic about future prospects of the economy. The next day it will be a flip around and filled with dire predictions. Rumor can spark the direction that markets will take. Look at how there can maintenance in one oil refinery somewhere in the world and that causes oil prices to go up. Last year there was a story on TV that there was going to be a bacon shortage and everyone stocked up on bacon. Yet I still see bacon on sale in stores since then. The reason why the market is so sensitive to anything even manipulation is because that's how people on Wall Street make money day by day. They're not in it for long term profits.

There's a lot of propaganda about how China owns most of the US's debt because it buys up US Treasuries. The fact is the American people buy and owns most of US Treasuries. But the misinformation that China owns most of it can spark a sell-off if China gets rid of the debt it does hold because people don't want to lose money as prices goes down. The same goes with the idea that if energy consumption in China goes down is really meaningless but for the markets it's all about the pluses and minuses of mere pennies.

The sensitivity inherent in markets could spark a sell-off which is also why it can be used as a geo-political weapon like against China, i.e. spinning energy consumption as condition of the overall economy. You hear the same fickled assessments of China all the time. People like Jim Chanos try to spark the sell-off of anything to do with China because that's where he placed his bets so he's doing everything he can to make a collapse of China happen. A lot of his bets are because of these ghost cities where no one is living in there. He's just looking at the black and white of it. He thinks because no one is living there it's because no one is buying thus the developer who made these ghost cities, who borrowed from the government, is losing big time thus the government wasted a lot of money. No a lot of the said ghost cities being reported by the West are owned property that was bought. It's just the people bought them were for investment purposes not to live in. Now that's a whole different animal of problems down the line but nothing like Chanos is peddling where there's no return thus the government lost all that money building these empty cities. It's been over two years since he predicted China would definitely collapse. What does it say about anything he said was not based on fact? Meaning Wall Street is not all about the truth.

Why was there a bacon shortage? Not because they were running out of bacon. It was a fiction in order to make money from people stocking up on bacon because of said future shortage. No different from Eron who manipulated energy markets so they can make huge profits. Chanos is trying to replicate with China what George Soros did with the 1997 Asian Financial Crisis who can be credited with sparking it. It's not just about money. There's a large part that has to do with ego and Chanos looks at himself as a general out to conquer and destroying China's economy is equivalent to destroying a country and he wants to put that feather on his cap and make money while he's at it. Chanos doesn't like a future where the West doesn't have control over the world economy thus he can't manipulate it to make money. The irony is people like Chanos are trying to use the market system against China when they hate China because it doesn't work within their system. That's why he hasn't been able to get any of his predictions right about China.