Chinese Economics Thread
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I think the real estate sector is a serious issue but China can definitely export its way out of this mess. The push into the high end of the value chain is going very well and is the main thing offsetting the pain from real estate right now.
Ok, so that likely means there is quite a significant share of the market not captured in those numbers.
And that really doesn't dispute much what I wrote though.
And?
One likely would also need workforce age and movements, total Beijing population movement, and also workforce hukuo distribution though.
To get an actual deeper and meaningful analysis.
Your premise is shit.
Just like you write farther in your post, things are mixed.
And its the same for deflation!
Such as, companies reducing prices of their wares due to lower production prices (better production efficiencies or cheaper input materials) is likely in most circumstances a positive thing (a longer term possible negative, was if it say killed competition so that the company became like a monopoly).
And yes, there are also situations where deflation can have more negative over positive influence.
?
I don't think people have a problem with that.
But at the same time, people have confidence in the Chinese government still being a le to manage and control growth (we likely get that ~5% yearly for quite a while)
Yea, which is also something the Chinese central government has been saying.
It's a work in progress.
?
How are they not getting materially wealthier when they can buy more with what they earn?
If the lower costs was more temporary and resulted in the death of companies providing those cheaper stuff, then yes, there would be course of concern.
But we really aren't at the point (or enough data, not to mention we would need to drill deep in each sector) to draw conclusions.
And while profitability is one data point to look at, it's not enough (what is the actual profitability of the companies in the sector? Could it be like the NEV car sector, where BYD and CATL are massively profitable in selling batteries, while smaller and medium NEV car companies are taking losses? Etc.)
Nah, at China's size, it's not exporting itself out of the issues of the RE sector.
With that said, I'm not all that worried, while there will be a bigger negative drag from the RE sector, more resources and manpower is directed to other sectors.
And also, while the asset value of houses has fallen, it does mean it becomes more akin to a commodity (which is a plus), and like has been said, houses are for living (and not speculation).
There are still many 100 millions of poorer people(migrant workers, rural people etc.) looking to get a new house in urban places or upgrading the older or smaller property they might have.
And for them, it's a major positive that houses are cheaper now (also gonna be nice for future younger people).
Oh, and also, the people speculating in houses (including taking out loans to buy multiple units), well they can get fucked lol.
0 sympathy for them, especially if they still did after "houses was for living" was said (even those before, should have seen it coming).
Russian oligarchs thought the same. End result is Russian GDP is growing, EU GDP is shrinking, and those who bet against Putin lost everything.
How does #2 work? Random employees that get fucked over don't have the power to do that and not get caught. Anyone that is making low enough money - that is, working for a salary in a job - does not have the power to arbitrarily change product specifications or processes.
If they commit sabotage or are a businessman, then they're not some random 'innocent citizen'. They either hold power (and lost the power struggle) or engaged in an illegal activity. Then it's for the legal system to figure out.
BTW, Shandong land rover lady was arrested. The PLA vet has refused negotiations and is pressing charges.
There is no amount of industry that will work. Since export is industry, export cannot solve this problem either.
Simple thought experiment: what if all of China's technical goals instantly came true? Even if China controlled ASML and all of its revenue was added to China's GDP per capita, it would only increase by ~$50. Airbus? Another ~$50.
In fact, even if the entire US agricultural and industrial GDP was added to China, China's nominal GDP would still be smaller.
This shows the absurdity of nominal GDP.
The only way to break this is by breaking the system that allows some countries to use paper generated by internal services to import physical products made elsewhere.
Chinese retirement age is 50-60.
You expect me to believe people returning their products accounted for 28.7% growth in delivery volume? lol
Chinese banking is not the same as banking in other countries. Chinese banks have massive amounts of assets it can use to digest "crappy loans".
"if you talked to the people in China who have generally have extremely negative sentiment". Most Chinese don't have a negative sentiment though. Most Chinese i know including my family are very optimistic about China's growth, probably even more so now. After the documentaries about Chinese illegal immigrant showed how shitty rest of the world is, many anti-China liberals became less anti-China.
It's a self-selection effect. Chinese emigrants are mostly pessimistic / negative about China. That's what made them emigrate, in the first place. Most people here have actually done the 360. They were brought up by Chinese emigrants who hated China and worshipped the West; but through their own experiences, realized the West was no better or even worse.
Any way, it is a fact that life was and probably still is easier in the West. But it's a house of cards, built on generational wealth and power derived from four centuries of colonialism and conquest. That wealth is, at long last, running out - the days of Western hegemony are numbered. But like the Byzantine Empire out lived the Roman Empire, and spent a thousand years more or less stagnant until its conquest at the hands of the Turks, it's not likely that we'll see a sudden collapse of Western power. Rather, it will be a slow and gradual process, with most of its population still convinced they're the superior civilization, even long after the reality of that has faded.
Any way, it is a fact that life was and probably still is easier in the West. But it's a house of cards, built on generational wealth and power derived from four centuries of colonialism and conquest. That wealth is, at long last, running out - the days of Western hegemony are numbered. But like the Byzantine Empire out lived the Roman Empire, and spent a thousand years more or less stagnant until its conquest at the hands of the Turks, it's not likely that we'll see a sudden collapse of Western power. Rather, it will be a slow and gradual process, with most of its population still convinced they're the superior civilization, even long after the reality of that has faded.
one measure of economic development in China is life span and average height.
Both have really risen in past 30 years
Both have really risen in past 30 years
Chinese banking is not the same as banking in other countries. Chinese banks have massive amounts of assets it can use to digest "crappy loans".
You need to go back and retake Remedial Accounting 101. Loans issued by banks *are* assets. The fact that there is a massive pile of assets, is in fact confirming my point that there are a lot of loans issued, a big chunk of which are to mortgagees (38 trln) and developers (10s of trillions) and local government financing vehicles. Bad assets are digested via recognizing provisions for credit losses. You should stop embarrassing yourself.
The textbook definition of
So why is e-commerce retail sales growth 8.7% YTD?
Total employment in Beijing was -2.7%. If you believe that this reduction was due to somehow a massive uptick of retirements, show me the work.
Prices are lower yes, but as more companies are going out of business and are hiring less people at lower wages. Lower wages = less consumption = even less revenues = more losses. This is by definition a deflation spiral.
Yes, jianbing stands are not covered, but are you going to tell me you have a way to statistically consolidate the financial results of the jianbing stands all around Beijing? "Nobody Knows" is the correct answer, which does not mean "They are definitely better than the industry which had earnings fall by 90%".
10 days in the drunk tank and 1000 RMB fine...come on dude that's more lenient than a mosquito bite. The more important question is how this lady had the balls to do this - who was her dad?
Revenues =/= GDP. You cannot do that math without accounting for the multiplier effect.
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