I believe that WSJ articles are the most biased when it comes to China. There’s a continuous, almost decade-long fixation on predicting a collapse of China similar to that of the USSR, but this is truly false and unnecessarily catastrophist. China is not the USSR because the USSR simply lacked the tools to monitor the health of its economy (inflation rates, unemployment, etc.), which is why it couldn’t act wisely. China, as I see it, will never collapse, and even with less pronounced growth than in the past, it will remain—or at least for a few decades—an economic superpower. It’s the United States, rather, that seems to have many imbalances and risks collapse, primarily a political one.
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Chinese Economics Thread
- Thread starter Norfolk
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Doesn't that precisely show the deep history of this undercounting compared to international practices? Good find.
It explains 'historic undercounting' based on adoption of an old practice - it does not absolutely explain for the *intentional* undercounting of GDP - it may simply be that the NBS was never compelled to update the methodology out of a prioritization of more urgent tasks, or simply laziness - or any other reason.
What it does explain however, is that there is absolutely zero intent on undercounting as of Jan 8 2025 - precisely because they are 'raising' the way GDP is calculated. This explicitly refutes your claim below that there is somehow a 'purposeful undercounting' of GDP.
Yeah, China likes it when it appears weaker, it buys it more time to develop peacefully and surprise its enemies if needed. That's why their GDP is undercounted by half. I also know that consumption, and retail sales, also appear to purposefully be undercounted just to confuse outsiders. Youth unemployment rates were also always overstated up until recently. I read about this from Glenn, but he will say that this is just because the methodologies are different, but I think it's all purposeful, too much coincidence. If anything, China wants everyone to understimate everything about them. I somewhat have to agree that there really is censorship/manipulation regarding their reporting- but is aimed at understating, not overstating. That's totally opposite approach from the US. China wants to appear weak because it is strong (to win even easier). The US has to appear strong because it is weak (the only way to survive a while longer). They are totally different stages of strategy.
It explains 'historic undercounting' based on adoption of an old practice - it does not absolutely explain for the *intentional* undercounting of GDP - it may simply be that the NBS was never compelled to update the methodology out of a prioritization of more urgent tasks, or simply laziness - or any other reason.
What it does explain however, is that there is absolutely zero intent on undercounting as of Jan 8 2025 - precisely because they are 'raising' the way GDP is calculated. This explicitly refutes your claim below that there is somehow an 'purposeful undercounting' of GDP.
Good first step, but then when they also double their GDP now and fix the differences in methodologies compared to international practices regarding consumption, retail sales, etc, I might believe you. This example you provided is about how they changed something very weak compared to the biggest "offenders". Yeah, I'm not saying it is purposeful, what we know is that there is certainly more undercounting than overcounting going on. But what is the reason, it could be many things. For me, the most logical explanation is what I said before already.
That is my point, there is possibly lots of undercounting as much as there was overcounting (due to incentives by local officials to lie about data in order to get promoted), but there is very limited evidence purposeful intent to underreport about GDP stats especially in 2025.Good first step, but then when they also double their GDP now and fix the differences in methodologies compared to international practices regarding consumption, retail sales, etc, I might believe you. This example you provided is about how they changed something very weak compared to the biggest "offenders". Yeah, I'm not saying it is purposeful, what we know is that there is certainly more undercounting than overcounting going on. But what is the reason, it could be many things. For me, the most logical explanation is what I said already and I'm firm on it.
Exhibit B - why would they be interested in underreporting consumption when Chongqing district party secretary is asking all party cadres to go out and buy shit?
I remember when the youth employment rate got so bad, the government just stop released it several months so they can revised it lower. If the government want to appear weak, just keep the old methodology. Undercounting GDP or exxagerating unemployment rate or any sort of such tactics are clearly nonsense.
From what we can see, "Made in China 2025" is largely on track, and the timelines have been respected. The only thing missing is a company capable of producing EUV machines for chip manufacturing. However, this is likely a goal being pursued secretly with immense funding and colossal human resources, so I expect some surprises. If we look at the progress of Chinese industry from 2015 to today, it is striking: an almost complete supply chain for consumer electronics (smartphones, PCs, etc.), a hyper-competitive and globally integrated automotive industry with impressive vertical integration, a solid military industry capable of producing cutting-edge products, a space industry competitive with the U.S. and certainly ahead of Russia and Europe, a highly developed heavy and technological industry with state-owned energy giants and high-speed rail integrated into an increasingly carbon-free and ecological strategy. Even the civil aviation industry is becoming more competitive, although it is currently the only major area that still lags behind the West. However, the Boeing crisis offers great opportunities in international markets. Then there is the biological and pharmaceutical industry, about which I am less informed, so I cannot comment. I do know, however, that in the field of heavy biomedical equipment, such as radiology and diagnostic machines, growth is evident, and many companies are already entering Europe. Finally, the light industry has been dominant for many years. In short, I do not see the "Made in China 2025" plan as struggling.
Then there is the biological and pharmaceutical industry, about which I am less informed, so I cannot comment.
Its as globally competitive as as biomedical equipment (some are globally leading some still have gaps vs. best in class globally)
So trump that is claiming greenland and gulf of mexico and panama for the usa is strong?No one want to appear weak if they are so strong. If China is so strong then it already taken Taiwan and shoot Nancy Pelosi plan when she touch foot on Taiwan. If China is so strong then it already should settle the border dispute with those damn Indian or should already claim back Vladivostok from the Russian. China appear as exactly it is. Strong but not strong enough
That is my point, there is possibly lots of undercounting as much as there was overcounting (due to incentives by local officials to lie about data in order to get promoted), but there is very limited evidence purposeful intent to underreport about GDP stats especially in 2025.
Exhibit B - why would they be interested in underreporting consumption when Chongqing district party secretary is asking all party cadres to go out and buy shit?
You see, it's understandable if a mistake is 1-5% of something, but I'm afraid that there is a 50-100% lowered disbalance between true and reported GDP.
My hunch tells me it's closer to 100%, but let's be conservative. The GDP is the biggest actual economic measure that could be concealed for strategic intent.
As for consumption and retail sales, they are not that important, to be used for deception, so they are not undercounted so considerably.
Also, just to add, since the Chinese government has incentives to use this strategy, then how can we as outsiders actually get true evidence that they did so?
Instead, we probably have to go in roundabout ways to find how much higher their true GDP is. It is explained well in this from Han Feizi. And for consumption and retail sales, there are endless threads on Glenn's Twitter. Sometimes you need to use deductive common sense in life.
Well, the most basic one for starters.I mean by what economic measure would America be ahead in 2025?
The only thing I can think of is space payload capacity and large commercial aviation.
Which admittedly China must fix at some point but it's mostly due to institutional inertia (especially for commercial aircraft). And China can continue to use its commanding economic and industrial lead to overwhelm US companies with sheer resources.
The gap between China and US isn't as big as it was between the US and USSR, but it's still pretty noticeable. An isolated lead in commercial aviation doesn't make US an overall more powerful economy, just as USSR's lead in rocketry did not make them overall more powerful.
Nominal GDP.