Chinese Economics Thread

[ZeEa5KPul]

I've made this point many times, but the good parts of the economy aren't big enough yet to offset the bad parts.

When does that crossover point happen, in your opinion? When does RE and other pathological parts get cut down enough and semis, EVs, renewables, aerospace, advanced manufacturing, robotics, biotech, software, etc. grow enough to take over as the main economic driver?

 

[abenomics12345]

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.

I don't even know what your point here is other than to complain. But you do you.

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?

I said that they added the stimulus - point being that they were concerned enough about the economy to have done so - if you looked at history this was only done in extraordinary circumstances (Covid/GFC etc).

I never said that *all* of the 1 trln was used in 2023. I never quantified the explicit impact of the additional deficit spending on GDP growth in 2023, but you would be retarded to believe that none was spent in 2023 and there was zero benefit. (Like, do I have to explain to you that money can be spent in increments and that it's not either "1trln" or "zero"?)

All of this is to say that GDP growth would've been lower than 5.5 when I made my projection given the circumstances.

 

[abenomics12345]

When does that crossover point happen, in your opinion? When does RE and other pathological parts get cut down enough and semis, EVs, renewables, aerospace, advanced manufacturing, robotics, biotech, software, etc. grow enough to take over as the main economic driver?

Hard to say - because the problem here isn't that these sectors aren't growing fast enough. I've made this point earlier, the biggest problem is what I said a while ago - consumers in China are being extra cautious with their spending.

This is why excess savings are showing up in the banking system - its an indicator of cautiousness. Consumer confidence corresponds this assessment.



As an example - there are some 550k units of industrial robots deployed in the world per year. The avg selling price is maybe 100k USD - that's like 55bln USD/year of revenues generated (not value add). China is about 50% so call it 28bln USD. If China grew this by 20%/yr - this is still a drop in the bucket when you compare that to the trillions of LGFV debt that have issues.

So in short, do some math, because vibes and feels aren't going to help. (This is no different than doing the math that Patch did on fires generation and coefficients for interception/arrival/failures etc)

Doing this work doesn't mean you are going to be correct, but it gives you a much better understanding of what might happen.

The earlier post about Chinese investors running for India/Japan - the default answer here isn't that they are stupid. There are a lot of very book smart people who have a very strong belief of what the world looks like - you may very well disagree with it, but it would be stupid to treat everything that you disagree by as 'stupid' by default, especially if these people have superior access to information than you do about why they are pessimistic.

If anything, this is an extremely strong indication of the zeitgeist and sentiment domestically.

Again, this isn't to say they are correct - but it helps that you understand why as opposed to label them as stupid and dismissing their views as dumb.

 

[zgx09t]

I don't even know what your point here is other than to complain. But you do you.



I said that they added the stimulus - point being that they were concerned enough about the economy to have done so - if you looked at history this was only done in extraordinary circumstances (Covid/GFC etc).

I never said that *all* of the 1 trln was used in 2023. I never quantified the explicit impact of the additional deficit spending on GDP growth in 2023, but you would be retarded to believe that none was spent in 2023 and there was zero benefit. (Like, do I have to explain to you that money can be spent in increments and that it's not either "1trln" or "zero"?)

All of this is to say that GDP growth would've been lower than 5.5 when I made my projection given the circumstances.

I don't even know what your point here is other than to complain. But you do you.

Maybe you stick to Yum China and that would work out fine.
Venturing out into a tale of 2 different systems from your regular run of the mill corporate henchman empty suit perspective doesn't earn you any pay raise.



I said that they added the stimulus - point being that they were concerned enough about the economy to have done so - if you looked at history this was only done in extraordinary circumstances (Covid/GFC etc).

Oh now you added another " I said" wall of words that was never there in the post I quoted. Okay, let me try to understand how it relates to your 2023 projection of 5.5%.
Stimulus tends to add to GDP agreed? Regardless of if they are rare or not, or as rare as sovereign bonds.




I never said that *all* of the 1 trln was used in 2023. I never quantified the explicit impact of the additional deficit spending on GDP growth in 2023, but you would be retarded to believe that none was spent in 2023 and there was zero benefit. (Like, do I have to explain to you that money can be spent in increments and that it's not either "1trln" or "zero"?)

Yeah you didn't say all of 1T, that's exactly why you are you and sloppy. If you can't quantify the effects, WTF did you bring it in here anyway, as opposed to your caveat 1? That you don't actually have any real analytical skills and thought process?




(Like, do I have to explain to you that money can be spent in increments and that it's not either "1trln" or "zero"?)

Okay, then how much increment spent in 2023? See you are sloppy and left out context and details and people tends to fact check your rather brash and careless horseshit.



All of this is to say that GDP growth would've been lower than 5.5 when I made my projection given the circumstances.

Lol wut? Your caveat 1 and 2 both tend to increase GDP, not lower, you sloppy. Do you actually get paid for this shit irl? LoL.
I think under your brash and crass, nothing respectable is there, regardless of if you have an actual job or not.

Have a great rest of the week.

 

[Minm]

Hard to say - because the problem here isn't that these sectors aren't growing fast enough. I've made this point earlier, the biggest problem is what I said a while ago - consumers in China are being extra cautious with their spending.

This is why excess savings are showing up in the banking system - its an indicator of cautiousness. Consumer confidence corresponds this assessment.

View attachment 124059

As an example - there are some 550k units of industrial robots deployed in the world per year. The avg selling price is maybe 100k USD - that's like 55bln USD/year of revenues generated (not value add). China is about 50% so call it 28bln USD. If China grew this by 20%/yr - this is still a drop in the bucket when you compare that to the trillions of LGFV debt that have issues.

So in short, do some math, because vibes and feels aren't going to help. (This is no different than doing the math that Patch did on fires generation and coefficients for interception/arrival/failures etc)

Doing this work doesn't mean you are going to be correct, but it gives you a much better understanding of what might happen.

The earlier post about Chinese investors running for India/Japan - the default answer here isn't that they are stupid. There are a lot of very book smart people who have a very strong belief of what the world looks like - you may very well disagree with it, but it would be stupid to treat everything that you disagree by as 'stupid' by default, especially if these people have superior access to information than you do about why they are pessimistic.

If anything, this is an extremely strong indication of the zeitgeist and sentiment domestically.

Again, this isn't to say they are correct - but it helps that you understand why as opposed to label them as stupid and dismissing their views as dumb.

The thing about the economy and especially the stock market is that a lot of it is about sentiment. Currently, sentiment in China is bad and sentiment about China in the West is very bad. These people aren't stupid, but they may be incorrect. Of course if you leave the bad sentiment for too it becomes self fulfilling.

Overall growth of 5.2% is neither good or bad, it's just ok. Overall the economy is ok. Is it really necessary to describe it as awful when it's neither good nor bad?

The big task for the Chinese government is too give people confidence again. Foreign investors are probably a lost cause because they worry about being expropriated by their own countries if they own investments in China as happened with Russia, whose stocks were delisted in the west.

Domestic consumer confidence should start to recover soon. All the indicators are slowly trending upwards again after a very bad middle of the year in 2023. Why would people not respond to that? Their wages are going up and prices are not while their real estate wealth is stabilising

 

[horse]

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.

The most important story the last 40 years has been China.

The most important story for me these coming 10-20 years will be China, if the country can make it into middle income then high income status. That would be remarkable.

At 5% growth rate, they will make it.

A doubling of the middle class would surely achieve that goal.

 

[horse]

There is no doubt in my mind that China will reach high income status soon, maybe they already there in some of the cities.

What trade war?

What tech war?

See how much bs we have to deal with on a day to day basis? It is unbelievable.

I think all this economic propaganda from the Western media is just a form of mind control.

(Granted, I could use another term other than mind control, such as talking points, controlling the narrative, but I like mind control, has that MK-ULTRA vibe to it.)

For example, the point was brought up that Japanese stocks did well lately.

Then I remembered something. Did not the BoJ buy up all the Japanese stock market?

And of course, the US Fed is printing press central.

So the PRC decided not to do that, prop up the domestic stock market, which is still the second largest in the world in terms of capitalization. China does not prop up the stock market and China is in trouble.

If you believe that, then the mind control is working.

 

[abenomics12345]

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

Oh now you added another " I said" wall of words that was never there in the post I quoted.

It's pretty simple you imbecile:

I predict GDP growth of 5.5%, actual GDP comes in lower than 5.5% even when the government lowered base on which 5.5% is calculated. Meaning that the actual growth in dollars was less than the initial 5.5% implied. Learn some grade 5 math, it would help.

Yeah you didn't say all of 1T, that's exactly why you are you and sloppy. If you can't quantify the effects, WTF did you bring it in here anyway, as opposed to your caveat 1? That you don't actually have any real analytical skills and thought process?

This is simple linear equation you dimwit.

Knowing that the actual dollars spent in 2023 as a variable of 0<x<1 trillion, I know that the actual impact of said stimulus in 2023 is a number above zero without knowing exactly how much was spent. Which further adds to point that, without said stimulus, actual growth would've been lower than projected GDP growth of 5.5%.

You might have failed grade 8 math but - do keep up.

Lol wut? Your caveat 1 and 2 both tend to increase GDP, not lower, you sloppy. Do you actually get paid for this shit irl? LoL.
I think under your brash and crass, nothing respectable is there, regardless of if you have an actual job or not.

Now you're just failing basic English.

The two caveats, without which, would have reduced the actual GDP growth of 5.2% to a number lower than 5.2%. Last time I checked, 5.2% is lower than 5.5%.

Go back and do your remedial english/math homework.

 

[ZeEa5KPul]

Hard to say - because the problem here isn't that these sectors aren't growing fast enough. I've made this point earlier, the biggest problem is what I said a while ago - consumers in China are being extra cautious with their spending.

This is why excess savings are showing up in the banking system - its an indicator of cautiousness. Consumer confidence corresponds this assessment.

You see depressed spending and excess savings, I see a vast pool of capital to fund China's industrial upgrade and economic maturation at low interest rates. Very conveniently located in the state-owned banking sector where the state can direct it to strategic sectors.

As an example - there are some 550k units of industrial robots deployed in the world per year. The avg selling price is maybe 100k USD - that's like 55bln USD/year of revenues generated (not value add). China is about 50% so call it 28bln USD. If China grew this by 20%/yr - this is still a drop in the bucket when you compare that to the trillions of LGFV debt that have issues.

You're comparing a stock (LGFV and RE debt) to a flow (robotics companies' annual revenues). I can't claim any particular expertise in finance but that strikes me as fallacious. As for LGFV debt issues, what percentage of these loans are non-performing? How much of it needs to be written down and over what period?

The earlier post about Chinese investors running for India/Japan - the default answer here isn't that they are stupid. There are a lot of very book smart people who have a very strong belief of what the world looks like - you may very well disagree with it, but it would be stupid to treat everything that you disagree by as 'stupid' by default, especially if these people have superior access to information than you do about why they are pessimistic.

I had nothing to do with any post about Chinese investors running anywhere, but since we're on the subject: I don't think they're stupid, I think they're conniving. They're playing politics by trying to pressure Xi with an investment strike until he showers them with stimulus. They picked the wrong one.

It might come as a shock to the Chinese investor class, but Xi doesn't like them very much. He's very happy to see them cut off their noses to spite their faces and just as happy to replace the likes of Yang Guoqiang and Jack Ma with people like Wang Chuanfu.

 

[FairAndUnbiased]

The earlier post about Chinese investors running for India/Japan - the default answer here isn't that they are stupid. There are a lot of very book smart people who have a very strong belief of what the world looks like - you may very well disagree with it, but it would be stupid to treat everything that you disagree by as 'stupid' by default, especially if these people have superior access to information than you do about why they are pessimistic.

If anything, this is an extremely strong indication of the zeitgeist and sentiment domestically.

Again, this isn't to say they are correct - but it helps that you understand why as opposed to label them as stupid and dismissing their views as dumb.

Chinese FDI in Japan and India is <1 billion USD

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I don't see a running towards India/Japan. And at least for India, FDI from China has declined due to Indian policies.

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