Chinese Economics Thread

[Quan8410]

To all the idiots who argued that there was no urgency for more stimulus policy I suggest read the politburo readout today. This is the first time economy was discussed at the September Politburo meeting:

会议强调，要加大财政货币政策逆周期调节力度，保证必要的财政支出，切实做好基层“三保”工作。


要促进房地产市场止跌回稳，对商品房建设要严控增量、优化存量、提高质量，加大“白名单”项目贷款投放力度，支持盘活存量闲置土地。要回应群众关切，调整住房限购政策，降低存量房贷利率，抓紧完善土地、财税、金融等政策，推动构建房地产发展新模式。要努力提振资本市场，大力引导中长期资金入市，打通社保、保险、理财等资金入市堵点。要支持上市公司并购重组，稳步推进公募基金改革，研究出台保护中小投资者的政策措施。

Just adopt the Singapore cpf housing model. It worked well and truly socialist. Everyone can get a house if they work.

 

[PopularScience]

Just adopt the Singapore cpf housing model. It worked well and truly socialist. Everyone can get a house if they work.

China already have affordable house program. Half market price.

 

[Quan8410]

China already have affordable house program. Half market price.

Hong Kong has something similar too, the public housing program and it simply doesn't work. And half market price is still high, get it to 1/5 because the market is distorted. House price to income ratio in China is nearly 30, which is among top 10. That's absurdly high compare to US at 3.3 or Australia 8.4.

 

[PopularScience]

Hong Kong has something similar too, the public housing program and it simply doesn't work. And half market price is still high, get it to 1/5 because the market is distorted. House price to income ratio in China is nearly 30, which is among top 10. That's absurdly high compare to US at 3.3 or Australia 8.4.

Not everyone living in mega cities. 300k RMB can buy an affordable house in second tier city

 

[Quan8410]

Not everyone living in mega cities. 300k RMB can buy an affordable house in second tier city

Define second-tier. Is Chengdu second-tier? in Chengdu, the price is 18k RMB per sq meter. 300k RMB do not get you even a 20 m2 studio in Chengdu.

 

[PopularScience]

Define second-tier. Is Chengdu second-tier? in Chengdu, the price is 18k RMB per sq meter. 300k RMB do not get you even a 20 m2 studio in Chengdu.

Chengdu is very big. City center is expensive. Outskirt is cheap.

 

[Quan8410]

Chengdu is very big. City center is expensive. Outskirt is cheap.

Yes but that price I quoted is on average and that is still a very high price.

 

[tphuang]

To all the idiots who argued that there was no urgency for more stimulus policy I suggest read the politburo readout today. This is the first time economy was discussed at the September Politburo meeting:

会议强调，要加大财政货币政策逆周期调节力度，保证必要的财政支出，切实做好基层“三保”工作。


要促进房地产市场止跌回稳，对商品房建设要严控增量、优化存量、提高质量，加大“白名单”项目贷款投放力度，支持盘活存量闲置土地。要回应群众关切，调整住房限购政策，降低存量房贷利率，抓紧完善土地、财税、金融等政策，推动构建房地产发展新模式。要努力提振资本市场，大力引导中长期资金入市，打通社保、保险、理财等资金入市堵点。要支持上市公司并购重组，稳步推进公募基金改革，研究出台保护中小投资者的政策措施。

btw, calling people idiots on this forum really is not appropriate.

Read what I wrote. No where did I say they are not urgent or anything like that.

I said, no major injections in the stock market has happened yet. I've read articles like this several times and haven't seen any mention of that

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Feel free to find 1 source that says they have already done it.

 

[Franklin]

I don't think there is any real value in analyzing this change in terms of the overall Chinese economy, the stimulus is more meant to be targetted to certain groups of people (households with mortgages) and help buttress but not completely alleviate some of the housing market weakness we've been seeing for the past few years.

As always, there's a Glenn thread about this:

https://twitter.com/i/web/status/1838952136765211132

Ultimately, I think the government just wants to hit around 5% growth this year, not necessarily a huge amount more than that. Freeing up about 0.12% of GDP through the RRR cut will help with that when most projections pre-recent stimulus was around 4.7% growth this year.

I have made that exact point in my post that this is not about real changes in the direction of the economy or policies but rather ease the burden and anger of certain groups in the economy.

And it may also have something to do with the upcoming 75th anniversary of the PRC. They want to create a uplifting mood in the country for this event. They are now also giving out a one time cash handout for the extreme poor of the country. all of this comes at the eve of this big event of the 75th anniversary of the PRC.

 

[Iracundus]

Actually some proposals have been floated in the past where each Chinese, gets a dividend cut from each SOE.

This would ensure continuous bottom-up public support for SOEs, accelerate income growth, and enhanced monitoring of SOE's financial and competitiveness performance ("we are talking about my money here!")

Of course as a counterpoint, it can be argued that this already happens in an indirect way by the SOEs funneling money to the Gov as taxes, or by supporting unprofitable projects for offering public goods.

It's a complex issue for sure, however I quite like the argument that it would ensure bottom-up support from the public. Everyone is aware of the private businesses hiring so many people and contributing so many taxes, they are more efficient etc, but sometimes it's difficult for the average Joe to understand the value of SOEs.
In the beginning it may not affect much, but who knows if in the future, public sentiment turns against SOEs? Such a measure would be a concrete real world benefit that every single person could enjoy and experience personally.

The effect is psychological. SOEs paying tax to the government is invisible and not felt intuitively by the average person, but they would feel receiving a dividend.

If this dividend then goes to paying off cost of living expenses or mortgage, the person gets even more of a psychological boost to sense of wellbeing as it relieves the sense of financial stress. This may help overall consumer spending as well.

What needs to be done is educate people to not expect sky rocketing capital gains from rising stock prices (so they don't go in thinking to flip shares like flipping real estate property), but instead a regular stream of dividends for effectively life.