Chinese Economics Thread

[Serb]

china inflation rate has been steady ay 0% these recent years.. i feel bad for super confident country like argentina which stuck at 280% inflation. the west will never say argentina going to collaspe

Yeah, also deflation (or low inflation as in China) means more savings in an economy, which means more productive investment and innovation in general.

Btw, in a neutral economic environment, is a perfectly normal state to have deflation due to technological breakthroughs introduced every year,

Only countries that are over-printing money like the US and some third-world countries would have such persistent high inflation levels.

That means that their people and other actors in the economy are looking to spend everything now (often only on riskier investments that could outpace inflation), instead of expanding the productivity frontier, because their money is expected to lose value in the future.

How can some companies begin to save money for a long-term investment in some new productivity when they would lose 10% a year on inflation?

That just inclines them to dump a shit ton of cash into the unproductive share-buybacks and dividends, even more than they already are doing.

 

[lcloo]

US added to their GDP by retail selling imported Chinese goods at 300% to 400% on (import) FOB prices, and also help the US government gaining revenue by heavy taxes and tariff. In a way US GDP benefitted from imports from China.

So a same Chinese product that gained (FOB) $100 GDP for China will add $200 to $300 (Retail) to US GDP.

 

[siegecrossbow]

Conversely, others are losing export because China is exporting more. Nobody is carrying anything. Because for every export, there is someone importing. There is a set amount based on total trade volume. The more China exports, the less others will export under the same trade volume. Likely because their export is no longer competitive. The more one export, the greater the economy of scale advantage. The less others will have economy of scale. This gap will likely grow much bigger, despite already really big.

Not really. In 2022, or more precisely before the Ukraine War fiasco everyone was increasing in export volumes.

 

[zgx09t]

Often the GDP growth rates that are cited (real GDP increase in domestic currency) is not enough to show how economic power calculus between Nations is shifting.

The Nominal $ denominated figures are more comparable for that.

View attachment 129311

Chinese economy went from being 76% of US size to (projected in 2024) to 64.3% of US size. Even 5 years back that was unimaginable.

TIL excessive money supply through debasing a fiat currency makes you richer.
Seriously, you should be on Biden's economic team.

 

[gadgetcool5]

https://twitter.com/i/web/status/1787804963197858057

It's remarkable that Japanese export volumes continue to fall despite the collapse of the yen. Standard economic theory would not predict that.

 

[gelgoog]

It's remarkable that Japanese export volumes continue to fall despite the collapse of the yen. Standard economic theory would not predict that.

The effect probably would not be immediate.
If I was the government of Japan I would just let the Yen totally collapse. It would probably solve all their financial problems.
It would make their enormous debt, mostly in Yen, trivial to pay for example.

 

[AndrewS]

It's remarkable that Japanese export volumes continue to fall despite the collapse of the yen. Standard economic theory would not predict that.

But remember that of the stuff Japan exports, Chinese companies are going after every category.

 

[Maikeru]

The effect probably would not be immediate.
If I was the government of Japan I would just let the Yen totally collapse. It would probably solve all their financial problems.
It would make their enormous debt, mostly in Yen, trivial to pay for example.

Maybe that's the plan. Let USDJPY fall to about 300 then sell the UST to pay off the domestic debt. Cunning.

 

[LuzinskiJ]

Maybe that's the plan. Let USDJPY fall to about 300 then sell the UST to pay off the domestic debt. Cunning.

Letting Yen free fall would wreck havoc with inflation given Japan import almost all of her raw materials.

 

[gelgoog]

Letting Yen free fall would wreck havoc with inflation given Japan import almost all of her raw materials.

It does not matter if Japan has a positive balance of trade. The question is can they get positive balance of trade or not.