Chinese Economics Thread

[iewgnem]

The most important thing is that China stays on top of technological development, even if GDP growth is stagnating. Don't want to turn into Japan or Europe after all. In the 18th century, China and India had the vastly larger GDP then all European nations, but of course a large economy based mainly on agriculture couldn't compete with industrial nations.

I think the concept of GDP is gonna get a little weird in the coming decades, just like it did in the 18th century. In a world where human labor drives every part of the economy, GDP makes sense. In an increasingly automated world where production exceeds consumption because most of the human workers are replaced by robots, what does the economy, global trade and GDP look like? You could have weird scenarios where a nation's GDP is super low because the majority of the population lives on welfare because the robots took most of the jobs and the economy is super efficient, so money doesn't get exchanged much, but is so automated and efficient that they can do shit like pump out dozens of aircraft carriers in a year and for a fraction of the prize. Compared to a country with low automation that has a very healthy consumer class and thus GDP, but everything they make is super expensive, labor and time consuming, meaning their actual production of material goods is tiny compared to the automated nation.

China's robot density went from 322 in 2021 to 470 in 2023, with a base that's already the largest industrial workforce in history, this represent the largest and fastest increase in productivity ever observed in human history.
China's automotive export went from 1 million to 6 million in the last 36 month, that's on average +80% every year, growing in month what it took western countries decades to achieve.
China is the only large economy not suffering from inflation, and America cries every week about how China's producing too much.

Even GDP growth of 5% is a gross under-estimate of what's happening, what we're seeing is a divergence toward singularity with the phenomenon being measured saturating the primitive economic model created by the west.

 

[supercat]

Retail sales still sucks, central government give the cash for kids!

https://twitter.com/i/web/status/1868477008378028056

For the first 11 months of 2024, retail sales grew 3.5%, while industrial output expanded 5.8%.

https://twitter.com/i/web/status/1868491491447845009

https://twitter.com/i/web/status/1868487524752003087

China's electricity demand in 2023 increased by 7% and it is on track to grow by that much again this year.

People caught up in the Western narrative for China refuse to see how incredible any growth is and how immensely potent this constant surge in electricity demand is and how well this bodes for the future:
View attachment 140983

All economic activity in a modern economy run on electricity.

Talking about electricity, China will become the largest producer of nuclear energy in the world this year.

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[GiantPanda]

I don't know much about China's economy but I do know that since Malaysia opened out visa free entries for Chinese tourists, there is a huge influx of people coming in from China and they are among the highest spending tourists group, and many of them are young people with a lot of money.

We are expecting 5 million Chinese tourists in 2025, to spend USD6.75 billion in Malaysia. If the young people are so hard hit by bad economy in China, where did they get the money to travel?

I also see Xiaomi Su7 EV and Huawei Mate 70 phones etc sold like hot cake, reaching billion yuans of sales within 24 hours. is China's economy bad? I find it hard to believe the nay sayers.

You actually touched on several very important points that loom large in any discussion as to the direction of the Chinese economy:

1) Before the Pandemic, Chinese tourists were the largest spenders in the world by far. The heft of the Chinese consumer economy is often understated. Combined with being the largest market for overseas tertiary education (college bachelors and doctorates), the spending power of Chinese citizens overseas is far greater than even that of the US in the beginning of 2018.

2) For an economy that is in the midst of RE de-leveraging, the current high levels of internal travel and now returning overseas travel plus the practical rise of an new market in EVs points to consumer spending that is EXTRAORDINARILY good when we consider what usually happens to a RE
de-leveraging of this magnitude. They complain about a 3.5% increase? Well, in 2009 retail sales CONTRACTED 3.6% during the American sub-prime RE de-leveraging.

China is going through a massive restructuring of its economy along with the de-leveraging. There are always losers and winners when an economy changes. Millions are punished by their RE investments. But millions more are set to benefit from the new paradigm of R&D and leading edge manufacturing.

Overall trend in China is best exemplified by the increase electricity demand and production. An economy that can use up 7% MORE electricity every year can't help but grow at a pretty prodigous clip.

 

[GulfLander]

He's a clown.

The "real growth has actually been 3% below official numbers for years/decades" of his is essentially something he made up, without strong backing of any real data.

Curious who made him "Top economist" in China? Whats influencing his views, like where he studied, who he qorked with etc...

 

[Biscuits]

I won't call a GDP growth rate of 4.9% to 5.0% stagnant. "Stagnant" is just a mis-information narrative by western media bashing China. What about the Indonesia's 2023 5.01% growth rate, certaintly Indonesia's GDP is not stagnant, right?

I mean he said even if, that's not the case right now, with the economic boom still ongoing.

Ultimately what I'm reading from the current numbers is just more of the same we have known for the last 5 years. China is widening it's lead, but at the same time what will be more exciting is what the growth actually means for the tech/industry sector, since they're nowadays the ones driving it.

And I'd say it's absolutely fine for China to stagnate in growth at some future point, as long as western countries are doing even worse.

 

[Michaelsinodef]

Curious who made him "Top economist" in China? Whats influencing his views, like where he studied, who he qorked with etc...

Why do you trust a western news source that he is a "top economist in China"?

 

[azn_cyniq]

For the first 11 months of 2024, retail sales grew 3.5%

3.5% isn't great. In 2019, before the pandemic, retail sales in China grew by 8%. Since then, it's grown at an average rate of 3.9% (-3.9% in 2020, 12.5% in 2021, -0.2% in 2022, and 7.2% in 2023). Source:

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That's a sharp deceleration, so China can clearly do better. The wealth effect is a real thing, and consumption growth in China will not reach pre-pandemic levels without stable house prices and a healthy stock market.

 

[GiantPanda]

3.5% isn't great. In 2019, before the pandemic, retail sales in China grew by 8%. Since then, it's grown at an average rate of 3.9% (-3.9% in 2020, 12.5% in 2021, -0.2% in 2022, and 7.2% in 2023). Source:

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That's a sharp deceleration, so China can clearly do better. The wealth effect is a real thing, and consumption growth in China will not reach pre-pandemic levels without stable house prices and a healthy stock market.

That was 8% on top of a dangerous RE bubble. This is 3.5% during RE unwinding and an epic economic restructuring that will define China's future.

Again both RE de-leveraging and re-structuring usually spell periods of stagnation and decline in other nations as resources shift from established economic drivers to new untested ones. But China is powering through these major transitions with growth.

People don't understand how much has changed in the economy:



These kinds of massive shifts are bound to create uncertainty in encumbent businesses which are RE and property construction and all the ancillary sectors connected to them in China's case.

Wait a few years, we are still in the nascent stage of this transition, way before the full returns come in from R&D and the investments in robotics, AI, the EV and green energy come in. Before the C919 and the Chinese civilian aerospace from low altitude to wide-bodies to LEO mega-constellations fully take hold.

 

[bd popeye]

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An employee works on a production line of a pharmaceutical packaging manufacturer in Lianyungang City, east China's Jiangsu Province, Dec. 16, 2024. China's economic recovery gained momentum in November, fueled by a series of recent pro-growth policies that have contributed to an accumulation of positive factors. In November, the impact of combined policy measures continued to unfold, yielding excellent results in key economic indicators such as industrial output, investment, consumption and services for the past month, said the National Bureau of Statistics (NBS). (Photo by Wang Chun/Xinhua)

In November, the impact of combined policy measures continued to unfold, yielding excellent results in key economic indicators such as industrial output, investment, consumption and services for the past month, said the National Bureau of Statistics (NBS).

"Boosted by a raft of policy measures, the Chinese economy has achieved generally stable growth while making progress, with positive factors further accumulating," NBS spokesperson Fu Linghui told a press conference Monday.

The NBS spokesperson said that value-added industrial output, an important economic indicator, expanded 5.4 percent year on year in November, showing steady growth, driven by the large-scale equipment upgrades and consumer goods trade-in programs.


The equipment manufacturing sector's output climbed 7.6 percent from a year ago in November, 1 percentage point higher than the previous month, contributing nearly half of the overall industrial output growth, the NBS data showed.

The purchasing managers' index for the manufacturing sector came in at 50.3 last month, up 0.2 percentage points from the previous month and surpassing the boom-or-bust line of 50 for the second time since it returned to expansion in October after five consecutive months of contraction.

Fu highlighted the increased demands in terms of investment and consumption. The country's fixed-asset investment rose 3.3 percent year on year in the first 11 months of 2024, to 46.5839 trillion yuan (about 6.48 trillion U.S. dollars).

In November, China's retail sales of consumer goods went up 3 percent year on year to hit 4.38 trillion yuan in November, Fu said, adding that with the nation's consumer goods trade-in program continuing to take effect, the retail sales of household appliances and audiovisual equipment, furniture, automobiles, and construction and decoration materials increased 22.2 percent, 10.5 percent, 6.6 percent and 2.9 percent, respectively.

China's service production index increased by 6.1 percent year on year in November, the NBS data showed. In a breakdown of the figures, the sub-index on information transmission, software and IT services reported robust growth of 9.3 percent year on year. This was matched by a 9.3 percent increase in leasing and business services, followed by an 8.8 percent growth in the financial sector.

The spokesperson also noted that the quality of China's economic growth continues to improve. In the first 11 months, the output of the high-tech manufacturing industry went up 9 percent year on year. The pace of growth outstripped overall industrial output by 3.2 percentage points during the same period.

In November alone, the country's production of new energy vehicles, industrial robots, and integrated circuit products surged 51.1 percent, 29.3 percent, and 8.7 percent year on year, respectively, serving as major bright spots of the country's all-round green transition.

However, Fu also mentioned that the international environment remains complicated and challenging.

For the next stage, various policies must be implemented sufficiently and effectively to further boost recovery, optimize structure, and promote high-quality economic development.

On Monday, the Chinese government issued a document that outlines measures to modernize the nation's retail industry over the next five years, seeking to initially form a modern retail system that features enriched supplies and high-quality services, and that is smart, convenient and green by 2029.

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Employees work at a workshop of an automobile enterprise in Guiyang, southwest China's Guizhou Province, Dec. 11, 2024. (Photo by Yuan Hongfu/Xinhua)

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An employee works at a workshop of a textile enterprise in Lianyungang City, east China's Jiangsu Province, Dec. 16, 2024. (Photo by Geng Yuhe/Xinhua)

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An employee works at a workshop of a textile enterprise at Manzu Township of Zunhua City, north China's Hebei Province, Dec. 16, 2024. (Photo by Liu Mancang/Xinhua)

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An employee works at a supermarket in Gaomi City, east China's Shandong Province, Dec. 16, 2024. (Photo by Li Haitao/Xinhua)

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An aerial drone photo taken on Dec. 16, 2024 shows a view of Jingtang Port District of Tangshan Port in Tangshan City, north China's Hebei Province. (Photo by Li Lei/Xinhua)

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An employee produces guitars at a company in Zaozhuang City, east China's Shandong Province, Dec. 15, 2024. (Photo by Sun Zhongzhe/Xinhua)

 

[zbb]

3.5% isn't great. In 2019, before the pandemic, retail sales in China grew by 8%. Since then, it's grown at an average rate of 3.9% (-3.9% in 2020, 12.5% in 2021, -0.2% in 2022, and 7.2% in 2023). Source:

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That's a sharp deceleration, so China can clearly do better. The wealth effect is a real thing, and consumption growth in China will not reach pre-pandemic levels without stable house prices and a healthy stock market.

Retail sales numbers are not inflation adjusted by default. Inflation in China was 2.9% in 2019 but close to 0 in the last couple of years, so the difference in growth between 2019 and now is partly due to inflation being higher in 2019.