Chinese Economics Thread

[PikeCowboy]

as far as I understand, it doesn't make sense for an economy to depend on trade surplus.

suppose I'm an exporter and bring in 100usd and I exchange that for 700cny at the exim bank. I then give the exim bank 490cny to buy 70usd worth of foreign goods. You now have 30usd just sitting in the exim bank and 210cny circulating in the domestic economy not matched to any physical good. Trade surplus is inflationary to the domestic economy and deficit has to be deflationary. Did I get this wrong somewhere? I mean you could have just as well printed 210cny and handed it to someone in the domestic economy.

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Edit: I guess unless the exim bank is printing money it had to have purchased those 210cny from somewhere, presumably in the currency market... but if you consistently hold a surplus year after year... you might as well just print it... in an isolated system you can't really tell the difference.

Edit: that has to be what the Chinese government is effectively doing, maintaining stable exchange rates in the face of consistent surplus.

 

[curiouscat]

Which Philips patents are these? I am kind of curious since that failure of a company does not even make lightbulbs anymore ever since they spun out their lighting division. At best they might make like medical gear? But phones? Please.

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[henrik]

Which Philips patents are these? I am kind of curious since that failure of a company does not even make lightbulbs anymore ever since they spun out their lighting division. At best they might make like medical gear? But phones? Please.

These are just patent trolls tying to extort money from other companies. Chinese companies holding patents can also sue these western laggards.

 

[bebops]

as far as I understand, it doesn't make sense for an economy to depend on trade surplus.

suppose I'm an exporter and bring in 100usd and I exchange that for 700cny at the exim bank. I then give the exim bank 490cny to buy 70usd worth of foreign goods. You now have 30usd just sitting in the exim bank and 210cny circulating in the domestic economy not matched to any physical good. Trade surplus is inflationary to the domestic economy and deficit has to be deflationary. Did I get this wrong somewhere? I mean you could have just as well printed 210cny and handed it to someone in the domestic economy.

----------
Edit: I guess unless the exim bank is printing money it had to have purchased those 210cny from somewhere, presumably in the currency market... but if you consistently hold a surplus year after year... you might as well just print it... in an isolated system you can't really tell the difference.

Edit: that has to be what the Chinese government is effectively doing, maintaining stable exchange rates in the face of consistent surplus.

not producing enough or constantly depend on imports from other countries is inflationary.

U.S=inflationary

 

[Dolcevita]

Which Philips patents are these? I am kind of curious since that failure of a company does not even make lightbulbs anymore ever since they spun out their lighting division. At best they might make like medical gear? But phones? Please.

Con job to keep those liberal arts graduate lawyers employed.

 

[doggydogdo]

as far as I understand, it doesn't make sense for an economy to depend on trade surplus.

Yes, but it doesn't depend on trade surplus.

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[mossen]

Public opinion in China shifting away from nakedly pro-capitalist mindset. Folks have to remember that China has higher inequality than the US. When the economy was growing extremely rapid, it was easier to forgive that. But now that 5% is the new normal, people will become more critical of a supposedly "communist" party tolerating very high inequality.

I think this is something Western analysts miss when they claim Xi is some kind of ideological Maoist. He is merely responding to public opinion and public opinion in China is shifting left on economics.

 

[Index]

View attachment 132432

Public opinion in China shifting away from nakedly pro-capitalist mindset. Folks have to remember that China has higher inequality than the US.

This is a lie, or heavy statistical twisting at best.

When nearly all people think of inequality, they think of the 1% or 0.1%, billionaires and trust fund babies holding hostage large parts of economy, while the "little guy" working a salaried job isn't getting their shares of the pie.

What GINI measures is not that, but rather salary difference between middle/upper class workers and middle/lower class workers. Calling this "inequality" is highly misleading, most people would not think that it's unequal that an engineer makes much more than a fast food worker, because nearly anyone can recieve an education/work proactively and join the middle class. It is the barrier to entry towards generational wealth that people see as "unequal", because you can work a high salaried job for several livetimes without becoming a billionaire.

Pay disparity between salaried workers in China is higher than in USA, but the 1% owns a much smaller share of the economy in China than in America.

So no, America is economically far more unequal than China.

When the economy was growing extremely rapid, it was easier to forgive that. But now that 5% is the new normal, people will become more critical of a supposedly "communist" party tolerating very high inequality.

I think this is something Western analysts miss when they claim Xi is some kind of ideological Maoist. He is merely responding to public opinion and public opinion in China is shifting left on economics.

 

[Serb]

Folks have to remember that China has higher inequality than the US.

No, the US is ranked number 24, and China 145 in total wealth inequality globally.

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The ordinary Gini Index counts just for income inequality, not by assets (net worth).

But, even in income, China has a better score if it even means something to you.

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It is all that wealth inequality that leads to much worse education and healthcare (opportunity and life in general) inequality in the US too.

 

[FairAndUnbiased]

View attachment 132432

Folks have to remember that China has higher inequality than the US.

Proof?