Chinese Economics Thread

[MixedReality]

Population size matters of course but are you saying that a China with 2.5 or 3x the population of the US is insufficient to overtake the US and that 4x+ is required??

If you think that I think shrinking population is good, then you have a reading comprehension problem. What is the thesis of the paragraph? Read below; this is a reading comprehension exercise for you now:

Quoted from #29884 above:
"Sure, it would be nice if China could maintain a higher population and still have all the increases in life standards. I'm certainly not opposed to efforts to stimulate marriage and childbirth, so I'm in support of CCP policy. But what I am against is the characterization that things simply won't work or that a collapse will happen if births don't increase to keep China's population stable. The evidence is showing that even with a lower population, China's rise is on track; it could be better if the population was kept up, but it's not a linear relationship because increased population leads to increase crowding, increased costs, diminished standard of living, fueling the desire to emmigrate. It's an unclear relationship; I tend to favor a managed higher population in line with what we have the resources to provide well for, but by no means do I think it is critical to China's future or that China couldn't become the world's most powerful country with a leaner population."

The author's main point is:
A) Population growth is bad
B) Population growth is preferable but not required for China's rise
C) The CCP is bad
D) I dunno, check with the CCP

And come to think of it, you've lacked thought and oversimplified everything from the get go. It's first that less people = less consumption, which is wrong because per capita increases more than offset a slight population drop. Then, you went to, "Population is so important because it just is for China." Then, "Go argue with the CCP," and finally now, you're just like, "If you disagree with me, you must think population growth is bad," when I clearly stated that it was preferable but not required. What do you have against advanced thinking?

I said birth rates need to be increased. Which is the policy goal of the CPC. Not sure where I stated that China can’t overtake the US. Can you give the post # where I said this?

 

[zgx09t]

Of course absolute population size matters, but where huge ass malls advance, birth rates retreat, that's the way it is.

 

[manqiangrexue]

I stand by my point that population size matters and I used the example of the power difference between US and Australia to explain why. Both fully developed countries and one has a vastly bigger population than the other. US enjoys vastly bigger market size, labour pool, taxable base and other advantages over Australia because of its far larger population. No matter what Australia does it won’t be a more powerful country than the US. US just has more people. That’s why population size matters. I can use India and Pakistan as an example too. Pretty similar living standards but India has far more power than Pakistan.

That is a seismic shift in the goalpost. Nobody would ever argue against that population size matters. Of course it does, but the point is, a declining population does not go hand-in-hand with declining national power and China doesn't NEED a population that is 4x that of the US to overtake the US. In other words, population and average citizen quality both matter and if the former receives a slight drop, massive continuous increases to the latter can more than make up for it.

I said birth rates need to be increased. Which is the policy goal of the CPC. Not sure where I stated that China can’t overtake the US. Can you give the post # where I said this?

Overtaking the US is the national priority. If that can be done, it is testament to China being in prime health. If this path is preserved, then it is testament that nothing is seriously wrong. If this is not in your mind, then what does the birth rate need to be increased for? What would happen if it didn't happen and China experiences a slight drop in population?

 

[MixedReality]

That is a seismic shift in the goalpost. Nobody would ever argue against that population size matters. Of course it does, but the point is, a declining population does not go hand-in-hand with declining national power and China doesn't NEED a population that is 4x that of the US to overtake the US. In other words, population and average citizen quality both matter and if the former receives a slight drop, massive continuous increases to the latter can more than make up for it.

Overtaking the US is the national priority. If that can be done, it is testament to China being in prime health. If this path is preserved, then it is testament that nothing is seriously wrong. If this is not in your mind, then what does the birth rate need to be increased for? What would happen if it didn't happen and China experiences a slight drop in population?

It’s good that you think population size matters. Which has been my point.

 

[abenomics12345]

Are you sure that mid year fiscal revision was all spent? Hate to fact check your sloppy job and you are the one that get paid.

That's the problem with western finance, all returns and extraction for the dollar and society be damned.

Read what I wrote - where did I suggest that all the fiscal revision was spent? Hate to fact check your sloppy job because you need to read things as I wrote, not as you think I wrote.

 

[Aniah]

It’s good that you think population size matters. Which has been my point.

Wasn't your point saying that population size is the only thing that matters?

"Population size is everything."

I think that's what they are debating against.

 

[zgx09t]

Because the S&P 500 Index is up ~11% CAGR in the past 10 years and 9.6% CAGR in the past 20 years. The economic/social/political rot in the US has not impacted financial performance of Fortune 500 companies. Therefore investors are happy to buy more stocks. Investing in the S&P 500 is almost religious (go read the finance bloggers like Morgan Housel etc) among the investor class in the US. Not "announcing comprehensive reforms" is the feature, not bug, of the American capital markets.

Now of course that could change when the chicken comes home to roost and the US implodes and we unravel. But the two most important things in investing/finance:

1) The market can stay irrational longer than you can stay solvent;
2) Being early is no different than being wrong.

So while I understand why everyone here wants to experience the mental orgasms from imagining China becoming #1, it is important to live in the present and not in the potential future.

Before anyone tells me that only the top quintile or so in the US owns equity assets - like yes, do you think this is any different than in China? Probably only 10% of people in China care about the stock market - but you, being an English speaker with access to SDF - with free time to opine on issues discussed here, are in the top quartile if not top decile of society. (Accessing SDF in China requires a VPN, which costs over 100 USD/yr).

As well, consumption is largely a rich people business - The top quintile of Americans contributed to about 45% of Personal Consumption Expenditures; whereas the top 1/3 of Chinese contribute to about 50% of Chinese consumption (retail sales as a proxy). Guess what, pissing off the rich people by enacting necessary reforms isn't conducive to them investing/consuming.



I've made this point many times, but the good parts of the economy aren't big enough yet to offset the bad parts. Personally know someone senior at Huawei who just upgraded to an 800k rmb car this year - clearly feeling great (rightfully so) about their future prospects. But someone of a similar age at Vanke or Country Garden would not feel the same.

Yeah, cheap easy money in those years frothed up indexes and you are all starry eyed about it? Valuation is half in magic kingdom and half in your head.

If we slice and dice Chinese firms in a different perspective than that of regular analyst calls, we'd see a different picture, then again that's your job and we don't get paid for that.

 

[zgx09t]

Read what I wrote - where did I suggest that all the fiscal revision was spent? Hate to fact check your sloppy job because you need to read things as I wrote, not as you think I wrote.

Then why did you even bring in those 2 caveats in your 2023 projection?

I initially projected 5.5% GDP growth - in reality this came in at 5.2% with 2 caveats:

1) The country reduced actual 2022 GDP by about 548bln rmb, providing an easier comparable for 2023 growth data;

Meaning 2023 got a lift from 2022 revised low base

2) The Central Government increased budget deficit by 1 trln of special purpose bonds used for disaster relief.

Got another lift of 1T here, which is only true if entirely spent

So what it is sloppy?

 

[Biscuits]

Population size matters of course but are you saying that a China with 2.5 or 3x the population of the US is insufficient to overtake the US and that 4x+ is required??

If you think that I think shrinking population is good, then you have a reading comprehension problem. What is the thesis of the paragraph? Read below; this is a reading comprehension exercise for you now:

Quoted from #29884 above:
"Sure, it would be nice if China could maintain a higher population and still have all the increases in life standards. I'm certainly not opposed to efforts to stimulate marriage and childbirth, so I'm in support of CCP policy. But what I am against is the characterization that things simply won't work or that a collapse will happen if births don't increase to keep China's population stable. The evidence is showing that even with a lower population, China's rise is on track; it could be better if the population was kept up, but it's not a linear relationship because increased population leads to increase crowding, increased costs, diminished standard of living, fueling the desire to emmigrate. It's an unclear relationship; I tend to favor a managed higher population in line with what we have the resources to provide well for, but by no means do I think it is critical to China's future or that China couldn't become the world's most powerful country with a leaner population."

The author's main point is:
A) Population growth is bad
B) Population growth is preferable but not required for China's rise
C) The CCP is bad
D) I dunno, check with the CCP

And come to think of it, you've lacked thought and oversimplified everything from the get go. It's first that less people = less consumption, which is wrong because per capita increases more than offset a slight population drop. Then, you went to, "Population is so important because it just is for China." Then, "Go argue with the CCP," and finally now, you're just like, "If you disagree with me, you must think population growth is bad," when I clearly stated that it was preferable but not required. What do you have against advanced thinking?

Through militarily and in cultural influence speaking it is debatable, economically and industrially speaking, it is already in the past tense how China surpassed US. The problem ahead lies in that while China has its own upper/middle class at the size of the American one, there are many areas that have much poorer people.

In that predicament, China has the exact same issue as the Eurozone. To keep growing, China must simply where Europeans failed, at uplifting the underdeveloped areas into the same living standard as the top. This struggle is by far the biggest determinant of Chinese growth.

As a country of 1.4 billion, in order to return to its former status and complete national reconstruction, China needs to go far above US and reach parity with the whole combined Imperial west.

 

[supercat]

It's ironic how rosy are this and the semiconductor threads as in the real world even Chinese are trying to escape their country, e.g.

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and mainland stocks are lower each year and hang seng now is at levels from year 1997 (and this is inflation unadjusted!), any explanation?

I guess it's an indication that the Chinese economy is less financialized than developed countries. This will change as China's financial market grows and matures.

15 to 20 million births has been the range over the past 20 years. Births were 9.02 million and deaths were 11.1 million in 2023. 2 million decline in population.

A 2 million decline out of 1.4 billion is a decrease of about 0.143%. At this rate, China's population will decline about 1.4% over 10 years at most, assuming birth rate and death rate don't improve. I don't think it's a serious decrease in China's population. On the other hand, China aims to double its middle class population from 400 million to 800 million in a decade. So it's almost a certainty that China will become the largest economy on a nominal basis in about a decade.

https://twitter.com/i/web/status/1747447310035149264

China will release youth unemployment rate again, after adjusting for students.

https://twitter.com/i/web/status/1747490138954027268