Chinese Economics Thread

[fishrubber99]

Douyin and weibo is filled with "lying flat", "no kids", "unemployment", etc. No wonder consumption rose so modestly.

I mean, in terms of the "no kids" comments, fertility is broadly declining around the world. Fertility rates in most countries (even in developing ones like India) have already reached below replacement levels. You can find social media posts in any nation's predominant social media platforms acknowledging this, these videos are what I found on YT and none of them are specifically about China:



These are comments on the "Europe's Fertility Crisis explained" video, do these Europeans seem particularly optimistic about the future? This is just their version of "lying flat" except they haven't come up with a catchy phrase for it yet:



This is not an issue exclusive to China, and regardless, China's overall consumption growth is just under 2% of the pre-COVID trend line (I posted an informative Twitter post earlier showing this). General malaise and insecurity about the future for China's youth is an issue that the Chinese government will have to fix, but I don't see how posting about the fact that some Chinese social media posts are negative and then making an assertion (without any evidence being posted) that this is linked to weak consumption (when consumption is not particularly weak if we look beyond retail sales) is not really providing any useful insights or points of discussion in this thread imo.

 

[Proton]

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Average per capita disposable income grew by 5.4% YoY (4.6% for urban residents, 6.8% for rural residents). Median disposable income grew by 5.9%, more than the average.

Average per capita consumption spending grew by 6.8% YoY (6.1% for urban residents, 7.6% for rural residents), more than the growth in disposable income. Is this what they call "lack of consumer confidence" and "weak consumption"?

If we look at retail sales, then we see they rose about 5% in January-April of 2023, following the removal of most Covid measures. Growth for the rest of 2023 was around 2%. This is reflected in the YoY statistics for consumer spending; strong growth - but it doesn't specify when it happened.

For the 6 first months of 2024 retail sales has gone up 0.4%, with June seeing a 0.12% decline MoM.

 

[Index]

Considering the hordes of people calling for my head when I said "8% in 2023 is probably the best you can do", and that 6.8% is lower than 8% - yes, this is weak.

Expectations were for 2023 to grow in the teens.

And who were those "hordes of people"? lmao a name or two would be prudent no?

It's an easy prediction to make that the no1 economy isn't gonna grow by teens when the no2 economy and their economic vassals have been hit by a massive slump since the Ukraine war and are barely growing above 1%. There's only so much market/products to go around, China isn't in a vacuum.

Preaching to the choir much? No one was expecting growth in the teens.

Continued economic boom but no ridiculous growth in >10% in 2024 is matching expectations.

 

[ZeEa5KPul]

Separately, other economic issues that may lead to people here responding differently, but questions you should think deep/hard about when you push for certain things to happen:

1) We can all agree that robotaxi (or some form of self-driving technology) is consistent with 'technology improvement' and is demonstrative of China's technological prowess, and presumably should increase productivity. However, there are anywhere from 10-15 million Didi drivers who would be jobless if robotaxis are rolled out enmass quickly ("China speed") in China. Simply put, Didi drivers are not the high wage earning, or STEM grads from Harbin Institute of Technology.

On the other hand, the companies ('big bad capitalists‘) that benefit from this would be your Baidu and Didis of the world - US listed public companies with American/Global shareholders.

Question: Is it consistent with consistent with common prosperity to roll out robotaxi quickly?

2) We can also agree that drone improvement is also consistent with China's technological improvements, or robotic usage in factories. There are also millions of Meituan delivery drivers who also would be rendered jobless if drone food delivery is rolled out enmass in China. Similarly, Meituan delivery drivers are also not high wage earning nor STEM grads from Xidian University.

Question: Is it consistent with consistent with common prosperity to roll out drone delivery quickly?

Keep in mind, drones and Chinese cars are manufactured increasingly with robots - the Zeekr/Volvo factory can make a car every 60 seconds - and the entire factory only has 4000 people. (Xiaomi is a little slower at 70 seconds) - so the job loss/gain tradeoff is simply not easy to make - not to mention the skills mismatch in the short to medium term.

Advancing technology as fast as possible is absolutely the right thing to do and completely consistent with common prosperity. People in a rational, socialist economy should not be doing useless work. I find it ironic that capitalists caricature socialism as making people dig ditches then fill them up; now we have a capitalist advocating taxi and delivery driver sinecures. What has the world come to?

Labour-saving technology is a severe threat to workers in a capitalist economy because they're just going to be thrown out into the street. If you don't do anything to enrich the oligarchy, you don't eat. Good thing China isn't a capitalist economy run by an oligarchy.

China isn't about to run out of useful things for people to do any time soon. Even if robotaxis and delivery drones were ready today - which they aren't, the tech is still very problematic and failure-prone - every single displaced worker can and should be tasked with paving the deserts with solar panels and windmills. The most pressing bottleneck to China's energy transition is the shortage of workers to install this infrastructure.

 

[siegecrossbow]

For now each of Baidu’s Apollo taxi still has a remote control worker that could gracefully takeover in event of system failure. I think the impact to jobs will be gradual.

 

[Michaelsinodef]

For now each of Baidu’s Apollo taxi still has a remote control worker that could gracefully takeover in event of system failure. I think the impact to jobs will be gradual.

Are they responsible for more than 1 taxi, or just 1 to 1?

 

[Staedler]

And who were those "hordes of people"? lmao a name or two would be prudent no?

It's an easy prediction to make that the no1 economy isn't gonna grow by teens when the no2 economy and their economic vassals have been hit by a massive slump since the Ukraine war and are barely growing above 1%. There's only so much market/products to go around, China isn't in a vacuum.

Preaching to the choir much? No one was expecting growth in the teens.

Continued economic boom but no ridiculous growth in >10% in 2024 is matching expectations.

I seem to recall even the most optimistic people stopped at or well before 8%. I don't recall frequent posters actually calling for above 8%.
In fact, my impression was abe arguing for rates even below the government's target unless massive stimulus was unleashed and that was why he got a lot of push-back.

Most posters don't have a position that rates will be significantly higher than the target nor do people have problems with others stating they think growth will be at the target rate. I understand the government target rate is the pretty much guaranteed end result with variance of at most 1% above that, but in a long-tail structure (much closer to target than above). It's not like every year will be the onset of COVID and thus unpredictable.

 

[abenomics12345]

retail growth of 8% is very conservative

I think 15% growth is not unreasonable.

If only one-fifth of those excess Chinese savings are turned into retail sales, that an extra 6 Trillion RMB (15% of retail sales growth)

And who were those "hordes of people"? lmao a name or two would be prudent no?

It's an easy prediction to make that the no1 economy isn't gonna grow by teens when the no2 economy and their economic vassals have been hit by a massive slump since the Ukraine war and are barely growing above 1%. There's only so much market/products to go around, China isn't in a vacuum.

Preaching to the choir much? No one was expecting growth in the teens.

Continued economic boom but no ridiculous growth in >10% in 2024 is matching expectations.

See above. It helps to not be revisionist about expectations.

Are they responsible for more than 1 taxi, or just 1 to 1?

Based on what Pony.Ai told me, it's 3:1 to 4:1 - I would assume similar numbers for Apollo

now we have a capitalist advocating taxi and delivery driver sinecures.

Are you denying that Baidu and Didi shareholders will make a boatload of money at the expense of drivers if robotaxis are rolled out quickly?

Your refusal to engage the specific pragmatic issue ("what happens to the 10s of millions of workers if they are displaced in short order at China speed") and handwavy retort about "-isms" and ideology is sufficient evidence that you have no clue how to think about problems.

Here's a situation that will make your brain explode: Is Costco capitalist or socialist?

It's the best performing grocery retailer by a mile and has generated significant value for shareholders ("big bad capitalists"), yet it is known for targeting no more than 14% gross margins for any item it sells and is known to pay workers significantly more than competitors while also having

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as it did not participate in greedflation during Covid.

 

[Index]

See above.

2 ppl which imho are vastly overestimating how realistic such growth would be.

It helps to not be revisionist about expectations.

As far as my expectations have been, going far back, I've always advocated that breakneck growth is impossible due to China's economic size, and that the no1 most important thing is keeping China's rivals at even lower growth rates so they can't catch up, not chase fanfic tier 10-15% growths.

I don't speak for anyone else here through obviously.

 

[ZeEa5KPul]

Are you denying that Baidu and Didi shareholders will make a boatload of money at the expense of drivers if robotaxis are rolled out quickly?

No. So what if they do?

Your refusal to engage the specific pragmatic issue ("what happens to the 10s of millions of workers if they are displaced in short order at China speed") and handwavy retort about "-isms" and ideology is sufficient evidence that you have no clue how to think about problems.

I already told you what happens to the 10s of millions of workers who would be displaced in this specific pragmatic issue: they build and deploy the enormous amount of renewable energy infrastructure that China needs. That's an at least decade-long frenetic buildup that requires as many people as China can get its hands on. That I have to repeat myself is sufficient evidence that you have a problem with reading comprehension.

It's the best performing grocery retailer by a mile and has generated significant value for shareholders ("big bad capitalists")

I make a distinction. There are good capitalists and bad capitalists. For example, WCF is a good capitalist while Jack Ma is not. And it's not a rigid category - the good capitalist of today might become the bad capitalist of tomorrow (and yes, it's generally one-way; redemption is very difficult in this story).

I know little about Costco, but it seems run by decent people from what you've said. They might be good people, but they're in a bad system and that's the point. In China's system, the excesses of big bad capitalists are curtailed and if necessary, the individuals themselves are curtailed.

It's not just a matter of handwaving "-ism" retorts, it's a crucial difference between how two systems react to technological change and what happens to the vast majority of people in each when such wrenching change occurs. In a socialist system, massive public works projects like the RE buildup (renewable energy, not real estate) that themselves generate wealth but more importantly allow the creation of vast new wealth through their positive externalities, are commonplace - it's what the system is designed to do. Such public works projects are next to impossible in capitalist societies, and are generally only feasible during war (which is why capitalist countries are so bellicose, war is the only time when their governments can function at a high level and act like governments).