The article explained in one picture:
China will lose for sure. Do you know the arm strength required to chuck a bar of gold that size)
Chinese Economics Thread
- Thread starter Norfolk
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China will lose for sure. Do you know the arm strength required to chuck a bar of gold that size)
In4ser
Junior Member
Seems that the cartoonist needs to label the Chinese flag and gold bars because Americans are too stupid recognize them without it.The article explained in one picture:
27.4 pounds. That is nearly 2 men's open competition shot puts (16 pounds each), or a little over 3 women's open competition shot puts (8.82 pounds each).
Gotta label the flag China in case Americans too dumb to tell the flag.The article explained in one picture:
Edit: lol someone said it first.
American: surely I will win because hospital cost they pay is more than the gold bar landing on their face!
April data:
Value-added industrial output up 6.7% yoy
Retail sales up 2.3% yoy
Real estate investment down 9.8% yoy
Public sector investment up 7.4% yoy
Private sector investment up 0.3% yoy
The weak retail sales data is related to declining property prices. The weak private sector investment data is related to the weak retail sales data. Perhaps the government's plan to purchase unsold homes and convert them into affordable housing will boost consumer spending.
I mean, it will almost certainly help in the long run but I wouldn't expect to see any major swings in consumer spending or savings rates. Cleaning up the property sector is a slow and messy process which will take years. It's already taken years.
This program could cost up to 280 billion dollars over a 5 year period. If this number is true then this will not be enough to revive the housing market but might be able to put a floor on falling prices. Which is the goal. Still I'm against this as its nothing more than a bailout for the housing industry that needs to shrink. China can use this money much better elsewhere.
I agree, but what do you think that money should be used for instead? Perhaps that money could be used to bolster the pension system so that Chinese people don't have to worry about retirement as much. Perhaps that money could be used to bolster the stock market. At the end of the day, the CPC's job is to ensure that Chinese people feel financially secure.
The CPC is in the process of reforming the Chinese stock market (filtering out fraudulent companies), so perhaps stocks will become the dominant asset class in China. On the other hand, this may push Chinese companies to excessively focus on short-term profits like American companies.
Spending 280 billion dollars may be worthwhile if the government can stop property prices from falling. Chinese consumers becoming confident in their wealth would boost retail sales, which would boost industrial output. GDP growth rates well above 5% should be possible if this happens.