Chinese Economics Thread

[siegecrossbow]

China car sales up a disastrous 5.3% in 2024. Collapse imminent:

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Also, HIGH bond yields in US & UK are bad, but LOW bond yields in China are EVEN WORSE!

Didn’t you know that silly purchases like automobiles don’t represent the true health of consumer spending? Only real metrics like lawyer fees, out of pocket medical expenses, only fans subscriptions, student loans, and tax cuts for mega corporations.

 

[doggydogdo]

Before you call anyone an idiot, you realize your problem is that your thick skull cannot comprehend the fact that GDP in China is not higher than the US. Simply because the market price for all the things you talk about are lower. Seriously read what I wrote before. GDP is just a measurement - it is not 'fake' or 'wrong' - its a method of measurement.

The point is that China's economy is bigger. GDP is pretty meaningless by your logic since it literally doesn't correlate to anything of value.

And until RMB starts to appreciate, none of what you say matters so long China requires external inputs (as last I checked majority of commodities are still priced in USD).

China doesn't want RMB to appreciate for export purposes. China has the largest USD reserve and can buy whatever commodities it wants without worrying about its position, China has used USD to hedge against RMB. A strong dollar is only bad to Chinese imports if China only has RMB to trade with.

 

[antiterror13]

The point is that China's economy is bigger. GDP is pretty meaningless by your logic since it literally doesn't correlate to anything of value.

China doesn't want RMB to appreciate for export purposes. China has the largest USD reserve and can buy whatever commodities it wants without worrying about its position, China has used USD to hedge against RMB. A strong dollar is only bad to Chinese imports if China only has RMB to trade with.

Agreed, if we change the GDP (which is meaningless) to Economy, there is no doubt China's economy is significantly bigger

Really beyond me that the US include "Imputed Rent" into GDP calculation. If China did that, at least China's GDP is I estimate 7-10% higher as home ownership in China is quite high, 90% of urban households own their home

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While in the US is 67%

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[fatzergling]

Do you guys really think China is an NPC buying worthless paper money for real physical goods? This paper money can be exchanged for Western firms, Western technology, Western assets. Under the lords of capitalism, who has the capital controls the workplace. Look at the many loyal workers treated like garbage because private equity can buy up the firms they work for. China takes advantage of this institution to buy out Western assets and transfer their know how to China.

 

[GiantPanda]

Before you call anyone an idiot, you realize your problem is that your thick skull cannot comprehend the fact that GDP in China is not higher than the US. Simply because the market price for all the things you talk about are lower. Seriously read what I wrote before. GDP is just a measurement - it is not 'fake' or 'wrong' - its a method of measurement.

And until RMB starts to appreciate, none of what you say matters so long China requires external inputs (as last I checked majority of commodities are still priced in USD).



What you said @fatzergling is literally what I've wrote below:

I did not call you an idiot. What I did call idiotic is your soap box reply about "war" when I pointed out consumption ratios of China on goods and electricity! Those are civilian figures not "war." That was an idiotic reply. Sorry.

PPP GDP had been higher for China for about a decade now with or without the RMB appreciating, sir.

But even that is besides the point. I said GDP is only a gauge for the economy. I said it is a poor gauge when it is calculated in Nominal where a country like China that is using twice the electricity as the US and consumes in multiples of the US in cars and other goods is somehow smaller than the US.

It is even more ridiculous when Nominal GDP claims that China had lost ground in its economy to the US in the past few years when China's electricity demand is growing exponentially compared to the US.

 

[abenomics12345]

The fact is that China makes a lot of shit. Therefore China is the PRODUCER. (Obviously China has a lot of consumption, but in aggregate China is a net exporter so the country is more of a producer than it is a consumer)

The fact is also that the US consumes a lot of shit (as much as people here circle jerk to how ASEAN is China's biggest trading partner, a lot of that is just rerouted Chinese trade with the US). Therefore the US is the CONSUMER.

If a PRODUCER gives away all of its producer surplus to the CONSUMER - i.e China gives away all of its producer surplus to the US. GDP is a measurement of VALUE ADD at MARKET prices - meaning yes even if China somehow made all the value, it gave it away for free to its customers and therefore China did not capture said value.

How in any way/shape/form is this beneficial to China?

 

[GiantPanda]

The fact is that China makes a lot of shit. Therefore China is the PRODUCER. (Obviously China has a lot of consumption, but in aggregate China is a net exporter so the country is more of a producer than it is a consumer)
...
Therefore the US is the CONSUMER.

Sorry, again by all reasonable metrics, China is a MUCH bigger consumer than the US. Whether it is cars, air conditioners, pork, beer or electricity, China consumes in multiples of the US.

Think about this, China consumes the majority of global primary products like steel or cement. That is more than the rest of the world combined! It also consumes a majority of high-tech manufactured products like ships, HSR (80% of global total!) and green energy power.

Sorry, China is the global consumer. More so than the US.

China simply has a bigger economy. China exports are a side product of China's internal markets and their economy of scale both for costs and product advancement and iteration. Exports do not drive China's economy. China's consumer base drives exports because of the economy of scale they provide to China's companies.

Again, GDP PPP has China as a much bigger economy than the US.

Consumption figures has China eating up good in multiples of the US. It hints at an economy at least twice as large as the US.

 

[abenomics12345]

Think about this, China consumes the majority of global primary products like steel or cement.

You need to break things down into domestic consumption vs. for exports - otherwise its simply because China is the world's factory (which seems to be giving away value to foreign economies).

See my point re: Net exports being positive - in aggregate China is a producer because NX >0.

 

[fishrubber99]

Being able to produce things gives you leverage and a significant degree of power over people consuming your production. This is because it's far more difficult to produce things than to consume things.

You also shouldn't fall into the trap of equating value with price. You can take dropshipping as an example of this where American social media influencers sell cheap Chinese goods to their followers. These influencers simply mark up the product and don't add any additional value to the product itself, i.e. this will increase the GDP but it's not equivalent to increasing value.

 

[GiantPanda]

You need to break things down into domestic consumption vs. for exports - otherwise its simply because China is the world's factory (which seems to be giving away value to foreign economies)

China is China's factory first and foremost

Exports as a percentage of its GDP is comparable to most of the world. And I think even this is overstated because Chinese domestic produce is hugely undercounted in Nominal:




China is not an exported oriented economy. It is a massive domestic economy (much bigger than the US) that also happens to have a huge export component as a side benefit (from the economy of scale produced by that huge domestic market.)