Chinese Economics Thread

[jli88]

So you basically measure economic power by the capability to run a money printing press. Interesting.

If you can simply run the printing press, than other countries currency should ideally increase in value. But not the case.

He's Indian and I said some mean things about Indians. Let's just let him vent for a bit

Don't spread rumors.

It's unimaginable to you? You have a very poor imagination; it's rare when someone's imagination is less creative than reality as the RMB constantly flunctuates against the USD and it's currently unremarkable. Nominal GDP is determind by currency conversion, which is determined by the central bank. In other words, the size of your nominal GDP is determined by you. And yet, people don't try to one-up each other; why? Because it's pointless; nominal GDP just a trade tool to regulate import and export rate. You can raise your currency sky high and boost your nominal GDP through the roof and you wouldn't increase the size of your economy, only bust your own exports while heralding in imports. Why has the US complained to China before that it's undervaluing the RMB? Cus the US wants China to have a larger economy? LOL Why did you post this terribly ignorant thing on this forum?

The nominal increase in US GDP to such an extent was. Yes RMB will fluctuate, but the nominal growth rate in China has come down in RMB terms as well. The growth rate of 5.3% is real, since there is deflation, the nominal growth is lower than that.

Nominal GDP is not pointless, it is not just a countries wish that they can value the currency as whatever they like. It is also a metric by which value of products and services and labor is compared across economies. They are pros and cons of devaluation. If you are driving major devaluation, usually this would imply rise in inflation, rise in exports (though not necessarily), and an undervaluation of the labor in the country.

That China's economy faced immense challenges is something acknowledged by pretty much everyone including the government, which is the reason that major corrective actions have been put in place this year. This is not even disputable.

There are positives though. Positives:

1. Property Bubble has been deflated, major positive.
2. Auto Industry is doing well both in growth and tech advancement, and as per recent reports overtook property, another major positive.
3. Overall, economy is starting to look up.

I refuse to be cowered on this forum to only post positive things, and never discuss some temporary setbacks and some challenges.


In other news, this year trade has returned to positive trajectory.

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[Serb]

If you can simply run the printing press, than other countries currency should ideally increase in value. But not the case.




Don't spread rumors.



The nominal increase in US GDP to such an extent was. Yes RMB will fluctuate, but the nominal growth rate in China has come down in RMB terms as well. The growth rate of 5.3% is real, since there is deflation, the nominal growth is lower than that.

Nominal GDP is not pointless, it is not just a countries wish that they can value the currency as whatever they like. It is also a metric by which value of products and services and labor is compared across economies. They are pros and cons of devaluation. If you are driving major devaluation, usually this would imply rise in inflation, rise in exports (though not necessarily), and an undervaluation of the labor in the country.

That China's economy faced immense challenges is something acknowledged by pretty much everyone including the government, which is the reason that major corrective actions have been put in place this year. This is not even disputable.

There are positives though. Positives:

1. Property Bubble has been deflated, major positive.
2. Auto Industry is doing well both in growth and tech advancement, and as per recent reports overtook property, another major positive.
3. Overall, economy is starting to look up.

I refuse to be cowered on this forum to only post positive things, and never discuss some temporary setbacks and some challenges.


In other news, this year trade has returned to positive trajectory.

Please, Log in or Register to view URLs content!

I don't get what you are yapping about man, sry, you make no sense whatsoever.

 

[jli88]

No, paper money is not a better measure of economic output. I've lost count of the number of times this has been debated on this forum, but I do remember each time it was conclusively proven PPP is a closer approximation of real economic output/power. At the very least, you can compare primary and secondary sector output in nominal terms but service sector absolutely must be compared using PPP.

So if that's the case, does it mean that Indian economy is the third largest in the world? And almost 42% of China's economy? Because I strongly dispute that Indian GDP is that big in relation to China's.

Wikipedia GDP PPP below:




All economic metrics have pros and cons. I am not saying nominal GDP is the only thing or even the most important thing to look at. However, it is definitely one of the most measures of economic prosperity and success.

 

[FriedRiceNSpice]

I refuse to be cowered on this forum to only post positive things, and never discuss some temporary setbacks and some challenges.

I strongly agree in principle. Unfortunately, given the long history of trolls on this forum, sometimes it is difficult for some forum members to separate out troll posts from genuine concerns. Personally I would prefer to give each post the benefit of the doubt, and would hope other members can as well.

So if that's the case, does it mean that Indian economy is the third largest in the world? And almost 42% of China's economy? Because I strongly dispute that Indian GDP is that big in relation to China's.

India has x12 the population of Japan yet only twice the GDP. India has the 5th highest industrial output in nominal terms. So why would you not believe India's economic output is 3rd highest in the world? India's weakness lies in the fact that it's GDP per capita is so long, so a significant proportion of India's economic activity just goes towards keeping its population supplied with basic food, housing, and basic necessities.

GDP is not the only metric to assess the strength of an economy. But GDP PPP as a metric should receive much higher weight than nominal GDP. Manufacturing output, trade, productivity, technology, etc should all be considered when evaluating the strength of an economy.

 

[AndrewS]

All economic metrics have pros and cons. I am not saying nominal GDP is the only thing or even the most important thing to look at. However, it is definitely one of the most measures of economic prosperity and success.

Living standards are best measured with PPP, as it better reflects actual output.

---

The nominal exchange rate is subject to long periods of under and over-valuation.

For example, when the Japanese yen was way overvalued back in the 90s, the Japanese economy was almost the same size as the US economy. But that "success" was an illusion. In real terms using PPP, the Japanese economy was about half the size.

---

Today in 2024, Japan's GDP is $4 Trillion due to the undervalued yen.
Back in 2012, it was almost twice the size using the overvalued exchange rate.

But in between 2012 to 2024, the size of Japan's economy barely changed in local currency terms, with <1% annual growth.

 

[jli88]

India has x12 the population of Japan yet only twice the GDP. India has the 5th highest industrial output in nominal terms. So why would you not believe India's economic output is 3rd highest in the world? India's weakness lies in the fact that it's GDP per capita is so long, so a significant proportion of India's economic activity just goes towards keeping its population supplied with basic food, housing, and basic necessities.

GDP is not the only metric to assess the strength of an economy. But GDP PPP as a metric should receive much higher weight than nominal GDP. Manufacturing output, trade, productivity, technology, etc should all be considered when evaluating the "power of an economy.

Indian economy is nowhere that big, it doesn't show up in the nominal numbers, in industrial production numbers, in trade numbers, in HDI numbers, in life expectancy, in quality of education, in infant mortality rate, even in agricultural production!

There's always been a debate about what economic metric to use, like GDP. And on top of that how to measure it.

For me I track these things:

1. Nominal GDP (current in $)
2. Nominal GDP (current local currency)
3. Nominal GDP (real local currency)
4. GPD PPP (current in $)
5. Exchange Rate
6. Agricultural Production (like real production, wheat, rice, vegetables, fruits, meat production etc.)
7. Industrial GVA
8. Stock Market
9. Export and Imports (both in USD and local currency)

 

[manqiangrexue]

The nominal increase in US GDP to such an extent was.

That's not even a sentence. It has no meaning.

Yes RMB will fluctuate, but the nominal growth rate in China has come down in RMB terms as well.

What the hell are you even saying? There is no such thing as a nominal growth rate in RMB; that's called PPP growth. Nominal growth is in USD. And yes, as China leaves the fast and dirty phase for the high tech high income phase, the growth cannot be 8-10% like before.

The growth rate of 5.3% is real, since there is deflation, the nominal growth is lower than that.

Nominal "growth" may even be negative if the currency conversion is reduced by more than the PPP growth; it doesn't matter. It just means that China wishes to export more and import less.

Nominal GDP is not pointless, it is not just a countries wish that they can value the currency as whatever they like. It is also a metric by which value of products and services and labor is compared across economies. They are pros and cons of devaluation. If you are driving major devaluation, usually this would imply rise in inflation, rise in exports (though not necessarily), and an undervaluation of the labor in the country.

It's how a country wishes to balance its international trade. The rest of what you wrote sounds like US politician babble.

That China's economy faced immense challenges is something acknowledged by pretty much everyone including the government, which is the reason that major corrective actions have been put in place this year. This is not even disputable.

China always grows through them; that's not disputable. China is a country fast catching up and overtaking the US; it's in fight mode. It's not going to tell people everything is smooth sailing. It's going to tell people that it's a hard fight but the government will do its part navigating as always so the people just have to do their part working hard and putting down the fuel behind the engine. Doesn't mean it's time to make mountains out of mole hills.

There are positives though. Positives:

1. Property Bubble has been deflated, major positive.
2. Auto Industry is doing well both in growth and tech advancement, and as per recent reports overtook property, another major positive.
3. Overall, economy is starting to look up.

CCP delivers; we all knew that.

I refuse to be cowered on this forum to only post positive things, and never discuss some temporary setbacks and some challenges.

You'll be cowered and crushed by the truth if all you can do is concern troll and your arguments won't be left alone or unchallenged just because you finished up with a cute little antithesis like below.

In other news, this year trade has returned to positive trajectory.

Please, Log in or Register to view URLs content!

Duh, there was never any doubt.

 

[OppositeDay]

What the hell are you even saying? There is no such thing as a nominal growth rate in RMB; that's called PPP growth. Nominal growth is in USD.

Nominal GDP growth rate in RMB vs real GDP growth rate in RMB
Nominal GDP in USD vs PPP GDP in USD

Both 'nominal' but not the same thing

 

[FriedRiceNSpice]

There is no such thing as a nominal growth rate in RMB; that's called PPP growth.

Nominal growth in RMB = (current year GDP in RMB - previous year GDP in RMB) / previous year GDP in RMB.

Then you subtract inflation to compute the real GDP growth (which is currency agnostic).

 

[azn_cyniq]

Don't spread rumors.

That was a dumb comment. I'm sorry. Your posts are usually high-quality and I enjoy reading them.

I think China is a one-of-a-kind economy becuase an increasing portion of its commodity imports are paid for in RMB and it is capable of manufacturing most industrial products domestically. As such, measuring the GDP of China in USD may not be the best option, although it is still important. Obviously, this varies by country. For instance, Russia's nominal GDP in USD significantly understates its economic output due to Western sanctions. On the other hand, India's nominal GDP in USD is a fair representation of its economic output because it is largely free to trade with the rest of the world and depends heavily on foreign industrial products.