Chinese Economics Thread

[TK3600]

You know, now that you've started attacking me personally, let's dig up the evidence and discuss what's been said in the past and whether what I've said has been accurate or not. But first, lets start with your statements.


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Act of God pandemic, or negligence of duty? Make up your fucking mind.

People don't give a fuck if it was the local government or the central government that f'd up as they are all part of the same Party. Xi has consolidated so much power that, he's got to own the wins and the losses.



The government totally did not let COVID restrictions loose when people started protesting all over the country.

If anyone here is interested, I've pretty much stuck to this thread as it is my areas of expertise - I spend half my time in China and have visited over 200 companies/factories and about a dozen cities in the past year and half. I challenge anyone else who's done as much on the ground research as I have in this thread to come forward and debate me. Otherwise if your knowledge base consists of a diet of Globaltimes or Guancha then you're really drinking the propaganda coolaid - as much as I think some of the Guancha stuff is decent, there are idiots like Sima Nan, to whom 'patriotism' is simply a business to be monetized and his

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Now, if you believe he is more credible, you do you, all the power to you.

Now, with some assessment of your statements out of the way, let me remind you what I've said in this thread and whether I've been correct in my assessments - as it seems you haven't really participated in this thread all that much in the past year or so.



This was one of my first 'predictions' on this thread - you can check the data yourself to see whether I was accurate. 2022 GDP was *exactly* 3% - in the middle of what I said.







The second major prediction I made on this thread was the infamous 8% retail sales growth where I had @vincent say the following to me. The good news is that someone here indeed did bet against me with @AndrewS suggesting retail sales as high as 15% IIRC. Kindergarten math would indicate that 8% is a lot closer to 7.6% than 15%.

And yes, I'm dunking on these two - because they were so wrong and that deserves a dunking if we are having an intellectual pissing contest.



Here's another prediction that was 1.3% too optimistic for 2023.



Considering that retail sales growth in 2023 was 7.6% - meaning that I was overoptimistic; and that @vincent has not come out to offer a mea culpa - I believe that he was, in fact, not ready to face the reality of the situation.



Contingent on an 8% retail sales growth and a slightly negative export growth expectation, I stated that 5.5% GDP growth was my best guess for 2023 - with 2023 growth coming in at 5.2% - yet again I was 'overoptimistic' - but @TK3600 should also remember the way he attacked me for being 'pessimistic' about a 5.5% growth expectation in 2023.

I don't know @Bellum_Romanum seems like I've just been been attacked for...being correct?

But sure, I'm the echo chamber and

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.

At the same time I do want to commend @Jiang ZeminFanboy for evolving his views as he's appreciated the gravity of the difficulties today.



@Blitzo I do recall you 'questioning the validity' of my sampling - go check what YUMC has been saying about 'traffic' vs. 'ticket' in the past 12 months.

Credibility comes from being accurate about expectations - you of all people should know this.



Finally, this offer stands - thus far nobody has had the stones to actually do this trade with me. Bueller! BUELLER?! If @Bellum_Romanum you are quite confident about this - put your money where your mouth is.




This is good to know - but lack of updated data is certainly...not ideal for tracking purposes.

You guessed 5%, later revised. My 'attack' happened prior to the revision. If you get to cherry pick, then so can I. My guess was 6% in first try, and real number fell berween 5 and 6. I will use your earlier number since that is when my "attack" happened. Truth is somewhere in between, as usual.

My "attack" was actually misidentify you as sleepy, but later apologized. It has nothing to do whether you are optimistic, as long as you are not a spammer. Since you are not, I have no more reason to be hostile.

 

[GiantPanda]

This really has the same vibes to me when Biden told coal miners to “learn to code.”

Biden gave people a $1.9T short-term stimulus package called the American Rescue Plan Act in 2021.

Before that was another $3T in pandemic funds in 2020.

Who are you kidding?



All that money and China was and is growing far faster.

Don't give me bullshit that the US with all that free money is doing better. American electricity usage went down in 2023.

 

[TK3600]

What's the PPP rate?

Also, I've specifically stated that I am buying USD with CNY at the PPP rate.



Nobody does, that's why we're on a f'ing forum - this is an intellectual dick measuring contest. If you can't stand being wrong, you are welcome to not make your opinions known.

Pretty sure you were goading me about sharing something like "what property I owned", and got your post deleted. So lets be fair here. Did I unfairly call you sleepy? Yes. And I apologized. Did you also act unhinged causing mods to step in? Yes. I would call it even except you didnt apologize for that one.

Your dick measurement is against the rules. Forum have rules. If you can't follow it, then why are you here?

 

[HighGround]

Biden gave people a $1.9T short-term stimulus package called the American Rescue Plan Act in 2021.

Before that was another $3T in pandemic funds in 2020.

Who are you kidding?

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All that money and China was and is growing far faster.
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Don't give me bullshit that the US with all that free money is doing better. American electricity usage went down in 2023.

I told you before, electricity consumption is not a proxy for economic growth.

Put it another way, my opinion on China's economy (largely a very positive one) wouldn't change even if electricity consumption remained static. Conversely, United States did in fact grow faster than most of its peers.

But the problem with US stimulus is that United States is a heavily indebted country that's continually pushing the limits of its purse. By contrast, China doesn't have such constraints. Limiting your policy toolkit because of some "virtuous behavior" is silly and doesn't actually help anyone.

Nor am I critical of China's industrial policy, but like I've said a few weeks before in this thread. Consider the victims of Evergrande's collapse. I remarked that the people who got defrauded are really hard done by and it wouldn't be a bad thing for the Government to take more direct measures to make people whole. Especially people who really didn't do anything wrong but simply trusted a very large corporation.

And I still don't see anything wrong with that sentiment. To take this idea further, the lack of social services in lower-tier areas has been noted before. It would take a lot of government money and effort to make social services better and to reform the hukou system to make it more equitable for Chinese people who have worked very hard to make the country as properous as it is today.

Again, what is wrong with that? Your prescription seems to be for the Government to just support industries only, and people who are out of luck are simply out of luck and should just learn to read the economic tide and be employed in industries that are on the rise. How is that compassionate or fair or beneficial for the wider economy? It's not.

So yes, of all the things United States has done wrong, trying to make childcare more affordable and fixing infrastructure through America's Rescue Plan is definitely not one of them.

 

[Maikeru]

Regarding the stimulus "big bazooka" that everyone in the West at least is so desperate for PRC to deploy, it seems obvious to me that China is keeping its powder dry in case Trump wins in November and really does implement his 60/100/10000000% tariffs. That would amount to an immediate and pretty much total "decoupling" and require every resource China (and the USA) has to deal with it.

Seems equally obvious that the US establishment has been goosing the economy with massive borrowing in an effort to postpone a recession as long as possible in an effort to stop Trump. Might just about have worked, as well.

Re: the VC startup article in the FT, it's explained here:

https://twitter.com/i/web/status/1834261949942751699

 

[HighGround]

Regarding the stimulus "big bazooka" that everyone in the West at least is so desperate for PRC to deploy, it seems obvious to me that China is keeping its powder dry in case Trump wins in November and really does implement his 60/100/10000000% tariffs. That would amount to an immediate and pretty much total "decoupling" and require every resource China (and the USA) has to deal with it.

Seems equally obvious that the US establishment has been goosing the economy with massive borrowing in an effort to postpone a recession as long as possible in an effort to stop Trump. Might just about have worked, as well.

I mean you wouldn't need the "powder". If Trump is going to massively escalate the trade war, fair enough it'll be a bit harder for China. For United States though?

Grab popcorn and enjoy the show. I know tons of you hate America.

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[abenomics12345]

Regarding the stimulus "big bazooka" that everyone in the West at least is so desperate for PRC to deploy, it seems obvious to me that China is keeping its powder dry in case Trump wins in November and really does implement his 60/100/10000000% tariffs. That would amount to an immediate and pretty much total "decoupling" and require every resource China (and the USA) has to deal with it.

Seems equally obvious that the US establishment has been goosing the economy with massive borrowing in an effort to postpone a recession as long as possible in an effort to stop Trump. Might just about have worked, as well.

A very reasonable explanation of why there's no big stimulus today.

But if anyone bothered to read what I said, reforms announced as part of the 3rd plenum needs to be accelerated with clear timelines (none of this '逐步‘ or '优化' or '完善' bullshit that doesn't commit to a specific plan) - I don't know why or how anyone interprets that as me wanting a big bazooka?

I mean you wouldn't need the "powder". If Trump is going to massively escalate the trade war, fair enough it'll be a bit harder for China. For United States though?

Grab popcorn and enjoy the show. I know tons of you hate America.

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US Inflation to 7% and deficit to 10% - and wealth inequality gets to the levels where pitchforks come out.

 

[FairAndUnbiased]

I told you before, electricity consumption is not a proxy for economic growth.

Put it another way, my opinion on China's economy (largely a very positive one) wouldn't change even if electricity consumption remained static. Conversely, United States did in fact grow faster than most of its peers.

But the problem with US stimulus is that United States is a heavily indebted country that's continually pushing the limits of its purse. By contrast, China doesn't have such constraints. Limiting your policy toolkit because of some "virtuous behavior" is silly and doesn't actually help anyone.

Nor am I critical of China's industrial policy, but like I've said a few weeks before in this thread. Consider the victims of Evergrande's collapse. I remarked that the people who got defrauded are really hard done by and it wouldn't be a bad thing for the Government to take more direct measures to make people whole. Especially people who really didn't do anything wrong but simply trusted a very large corporation.

And I still don't see anything wrong with that sentiment. To take this idea further, the lack of social services in lower-tier areas has been noted before. It would take a lot of government money and effort to make social services better and to reform the hukou system to make it more equitable for Chinese people who have worked very hard to make the country as properous as it is today.

Again, what is wrong with that? Your prescription seems to be for the Government to just support industries only, and people who are out of luck are simply out of luck and should just learn to read the economic tide and be employed in industries that are on the rise. How is that compassionate or fair or beneficial for the wider economy? It's not.

So yes, of all the things United States has done wrong, trying to make childcare more affordable and fixing infrastructure through America's Rescue Plan is definitely not one of them.

Government spending on targeted social welfare is different than simply handing money out to people. Handing money directly to people may in fact result in even higher inequality and lower welfare than doing nothing i.e. it is stolen by scams and frauds.

Infrastructure and education spending is also a form of social welfare. Giving everyone in a 1M city 10k RMB once vs. spending 10M on a rail extension or apartment block when millions still drive polluting motorbikes and live in shanties, which alleviates poverty more?

Life expectancy in Henan in 2021, a relatively poor province, matches US average of 2022.

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[GiantPanda]

I told you before, electricity consumption is not a proxy for economic growth.

Yes, it is. It is absolutely a proxy for growth in the real economy which is the production of physical consumerables. In fact, China did not consider services as part of the Gross Domestic Produce until very late. And then only reported it as an cursory effort.

But let's do a logical exercise:

China's demand grew at 7% in 2022 and 2023. (The US grew by 2.6% in 2022 and loses 1% in the 2023.)

There is no production into the Gross Domestic Produce that doesn't take some form of electricity even when doing services. Writing a report or blow drying hair takes electricity.

So if China's electricity demand is growing 7% every year then what accounts for it besides an increase in economic activity?

You're going to tell me that people are just being more and more wasteful every year but the economy is bad? If the economy is bad why wouldn't people and corporation do their best to save money by turning electricity off?

We know that when economy activity is bad electricity demand goes down too. Again look at 2008 (sank 3.8%) in the US. And look at 2019 (down 1.2%) and 2020 (collapsed 3.3%) during the pandemic.

So why isn't it a proxy when the economy goes up? Especially when a country like China is expanding year after year -- not a fluky one off?

 

[proelite]

Yes, it is. It is absolutely a proxy for growth in the real economy which is the production of physical consumerables. In fact, China did not consider services as part of the Gross Domestic Produce until very late. And then only reported it as an cursory effort.

But let's do a logical exercise:

China's demand grew at 7% in 2022 and 2023. (The US grew by 2.6% in 2022 and loses 1% in the 2023.)

There is no production into the Gross Domestic Produce that doesn't take some form of electricity even when doing services. Writing a report or blow drying hair takes electricity.

So if China's electricity demand is growing 7% every year then what accounts for it besides an increase in economic activity?

You're going to tell me that people are just being more and more wasteful every year but the economy is bad? If the economy is bad why wouldn't people and corporation do their best to save money by turning electricity off?

We know that when economy activity is bad electricity demand goes down too. Again look at 2008 (sank 3.8%) in the US. And look at 2019 (down 1.2%) and 2020 (collapsed 3.3%) during the pandemic.

So why isn't it a proxy when the economy goes up? Especially when a country like China is expanding year after year -- not a fluky one off?

Perhaps shifting the economy to export-led growth uses more electricity but generate less economic growth.