Chinese Economics Thread

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zbb

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interestedseal said:
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China’s Income as percentage of GDP is in fact higher than US. But it’s Consumption as % of GDP is much lower because Chinese households save more and don’t owe as much debt. In fact even within consumption China’s % of gdp on goods consumption is higher. So it’s only services consumption that’s much lower. This is not to say China shouldn’t further increase goods consumption or household income’s share in its GDP, but the key to promote consumption might be to decrease saving through more transfer payments and social welfare
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Consumption of services is growing faster in China than the consumption of goods and
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. Services PMI is also consistently better than manufacturing PMI since the end of COVID restrictions. So things are already moving in the direction that you want.

One thing to note that much of the high services GDP in the US comes from sectors like healthcare, insurance, finance, education, legal, etc. where the monetary value of the services are grossly exaggerated and often actually detracts from the wellbeing of the people. China should keep these types of "service" low in its economy. E.g. UnitedHealth Group is the 4th largest company by revenue in the US that provides healthcare insurance and services and you can just take a look at the online reactions to the recent murder of its CEO to get a sense of how its "services" contribute to the wellbeing of Americans.
 
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virsuvei

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interestedseal said:
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China’s Income as percentage of GDP is in fact higher than US. But it’s Consumption as % of GDP is much lower because Chinese households save more and don’t owe as much debt. In fact even within consumption China’s % of gdp on goods consumption is higher. So it’s only services consumption that’s much lower. This is not to say China shouldn’t further increase goods consumption or household income’s share in its GDP, but the key to promote consumption might be to decrease saving through more transfer payments and social welfare
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In standard International Accounting IAS model national savings is calculated as Profits + PrivateSavings. The latter is PrivateIncome - Consumption. For Profits most of the money actually comes from investments. So when the pundits write that Chinese savings are too high and this permits huge investments then in reality it's the other way. Huge investments, financed with extensive lending, create huge profits which show up as huge savings.
 
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Iracundus

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zbb said:
Consumption of services is growing faster in China than the consumption of goods and
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. Services PMI is also consistently better than manufacturing PMI since the end of COVID restrictions. So things are already moving in the direction that you want.

One thing to note that much of the high services GDP in the US comes from sectors like healthcare, insurance, finance, education, legal, etc. where the monetary value of the services are grossly exaggerated and often actually detracts from the wellbeing of the people. China should keep these types of "service" low in its economy. E.g. UnitedHealth Group is the 4th largest company by revenue in the US that provides healthcare insurance and services and you can just take a look at the online reactions to the recent murder of its CEO to get a sense of how its "services" contribute to the wellbeing of Americans.
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All of those services serve an original function but the problem is over time the companies that engage in them take the profit motive to its logical extreme, rent seek, and then become detrimental to the original purpose and function of that service. Healthcare is maintenance for the people of society and who doesn't want to live longer in better health? Increased health also means longer time to produce and to consume as an economic unit. Insurance was to ameliorate the devastating impact of less common or rare events that might be beyond the control of the victim. Any companies that engage in these kinds of services need to have regulation to ensure the greed for more private profit doesn't start to interfere with the societal good meant to be provided by the service.
 
Wrought

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Politburo readout mentions a shift in monetary policy to "moderately loose" alongside more proactive fiscal policy. As noted elsewhere, this level of change hasn't happened since 2011. Looks like leadership is determined to keep the momentum going into next year; at this point, I would be surprised if CEWC sets the target lower than around 5%.

会议指出，明年要坚持稳中求进、以进促稳，守正创新、先立后破，系统集成、协同配合，实施更加积极的财政政策和适度宽松的货币政策，充实完善政策工具箱，加强超常规逆周期调节，打好政策“组合拳”，提高宏观调控的前瞻性、针对性、有效性。要大力提振消费、提高投资效益，全方位扩大国内需求。要以科技创新引领新质生产力发展，建设现代化产业体系。要发挥经济体制改革牵引作用，推动标志性改革举措落地见效。要扩大高水平对外开放，稳外贸、稳外资。要有效防范化解重点领域风险，牢牢守住不发生系统性风险底线。要持续巩固拓展脱贫攻坚成果，统筹推进新型城镇化和乡村全面振兴，促进城乡融合发展。要加大区域战略实施力度，增强区域发展活力。要协同推进降碳减污扩绿增长，加快经济社会发展全面绿色转型。要加大保障和改善民生力度，增强人民群众获得感幸福感安全感。
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bd popeye

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A customer selects vegetables at a supermarket in Congjiang County of Qiandongnan Miao and Dong Autonomous Prefecture, southwest China's Guizhou Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Luo Jinglai/Xinhua)

BEIJING, Dec. 9 (Xinhua) -- China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics (NBS) said on Monday.

The figure was down from the 0.3-percent increase registered in October, largely due to slower food price rises, said NBS chief statistician Dong Lijuan.

The core CPI, which excludes food and energy prices, rose 0.3 percent from a year ago in November, up from 0.2 percent in October.

On a monthly basis, the CPI slipped 0.6 percent in November, following a 0.3-percent decrease in October.

The NBS data also showed the country's producer price index (PPI), which measures costs for goods at the factory gate, went down 2.5 percent year on year in November, narrowing from the 2.9-percent decline in October.

On a month-on-month basis, the PPI turned to an increase of 0.1 percent last month from a decrease of 0.1 percent in October.

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Customers select fruits at a supermarket in Shijiazhuang, north China's Hebei Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Jia Minjie/Xinhua)

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Customers select vegetables at a supermarket in Binzhou, east China's Shandong Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Chu Baorui/Xinhua)

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A customer selects goods at a supermarket in Guiyang City, southwest China's Guizhou Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Long Jianrui/Xinhua)

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Customers select food at a supermarket in Boxing County, east China's Shandong Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Chen Bin/Xinhua)

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A vendor arranges seefood for sell at a market in Lianyungang, east China's Jiangsu Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Wang Chun/Xinhua)

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A customer selects condiments at a supermarket in Wuxi, east China's Jiangsu Province, Dec. 9, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Huan Yueliang/Xinhua)

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Customers learn about vehicles on sales in Yantai, east China's Shandong Province, Dec. 7, 2024. China's consumer price index (CPI), a main gauge of inflation, was up 0.2 percent year on year in November, the National Bureau of Statistics said Monday. (Photo by Tang Ke/Xinhua)
 
Jiang ZeminFanboy

Jiang ZeminFanboy

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abenomics12345 said:
Something that folks here might not appreciate - is that the looser the fiscal policy/monetary in China today (i.e increased reflationary expectations) the more RMB is likely to appreciate vs. the USD.
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Appreciate or depraciate? I think here everyone would want the rmb to appreciate cause it's really low now if it could be back to 6.7 for 1 USD that would be nice
 
Bellum_Romanum

Bellum_Romanum

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proelite said:
That's going to hurt exports when the tariffs come in.
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If by now the Chinese companies that only look forward to making money through exports thereby wanting to lower the RMB perpetually low then I say good luck to them. They have been informed for several years now that the Chinese government focus is the dual circulation in order to strengthen Chinese domestic consumption= market size to soften the cushion or blow to this impending eventuality.

These merchants who worship western markets come what may need a rude awakening and deserve to get their heads dunked on.
 
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