You're the one whose vocabulary doesn't know the difference between value add and profitability.
Chinese Economics Thread
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John Smith flips burgers at McDonalds in California. He earns minimum wage, $16.50/hour. Putting aside taxes, etc., and assuming standard work month of 173 hours, at current exchange rates of 1:7.33, this comes out to $2859.45 or 20,923 yuan/month.
In China, a person making 20,923 yuan per month is firmly considered upper middle class. But John Smith is strictly lower class in the US; in fact he can barely make ends meet and likely depends on welfare. This is because, as many people have observed, prices for living are much higher in the US, and especially so in California.
But let's say John Smith decides to take a trip to China. Now every dollar he brings is actually worth 7.33 yuan, and he actually can spend as though he is an upper middle class Chinese salary man. Hence the "loser back home" effect we see in so many Chinese cities.
What the above really means is that, from China's perspective (since China is allowing this to happen), the value John Smith generates flipping burgers in California is equivalent to a 80th+ percentile Chinese engineer/scientist working for BYD, Huawei, etc. Because after all, John Smith can buy just as much Chinese stuff with his McDonalds salary, as that 80th+ percentile Chinese engineer/scientist.
Sure, there's the tax of having to go to China with his savings (flight tickets, etc.), or alternatively, the tax of paying for shipping from China and whatever tariffs Trump put on Chinese products; but even if we account for that difference, John is still getting a great deal from exchanging his labor flipping burgers at McDonalds for upper middle class buying power in China.
This is also why nominal GDP is meaningful (and not irrelevant). If we agree that China is allowing Americans to purchase an inflated life style with the power of the exchange rate, then we should also agree that China is also, implicitly, under valuing (or deflating) Chinese labor. From the perspective of global markets, then, the value the average Chinese is generating is lower than that of the average American, despite the seeming absurdity of a burger flipper from California generating equivalent value as a Huawei engineer.
In China, a person making 20,923 yuan per month is firmly considered upper middle class. But John Smith is strictly lower class in the US; in fact he can barely make ends meet and likely depends on welfare. This is because, as many people have observed, prices for living are much higher in the US, and especially so in California.
But let's say John Smith decides to take a trip to China. Now every dollar he brings is actually worth 7.33 yuan, and he actually can spend as though he is an upper middle class Chinese salary man. Hence the "loser back home" effect we see in so many Chinese cities.
What the above really means is that, from China's perspective (since China is allowing this to happen), the value John Smith generates flipping burgers in California is equivalent to a 80th+ percentile Chinese engineer/scientist working for BYD, Huawei, etc. Because after all, John Smith can buy just as much Chinese stuff with his McDonalds salary, as that 80th+ percentile Chinese engineer/scientist.
Sure, there's the tax of having to go to China with his savings (flight tickets, etc.), or alternatively, the tax of paying for shipping from China and whatever tariffs Trump put on Chinese products; but even if we account for that difference, John is still getting a great deal from exchanging his labor flipping burgers at McDonalds for upper middle class buying power in China.
This is also why nominal GDP is meaningful (and not irrelevant). If we agree that China is allowing Americans to purchase an inflated life style with the power of the exchange rate, then we should also agree that China is also, implicitly, under valuing (or deflating) Chinese labor. From the perspective of global markets, then, the value the average Chinese is generating is lower than that of the average American, despite the seeming absurdity of a burger flipper from California generating equivalent value as a Huawei engineer.
You cherry picked a small subset of the overall corporations as if that was somehow representative of Chinese corporations in aggregate. I pulled the NBS monthly data release that incorporates *all* of Chinese companies in aggregate. If you want to feel great and jerk off to how Huawei or BYD is great, you do you; but my mode of analysis is the entirety of China, for which the aggregate datasets are useful.
Additionally, your data table of "9% Fixed Asset Investment in Manufacturing" growth is actually proving my point - that there is more capacity being added than needed and that is driving prices (PPI) and profitability down. Basic Economics 101.
This is also why the Central Economics Works Conference that concluded less than a month ago explicitly called out for dealing with this problem:
Precisely.
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This has nothing to do with population, but with the nature of industrial capitalism. The US had such periods because they were thriving in industrial capitalism, not rotting finance capitalism hellhole like today. Every thriving innovative industrial capitalist nation has similar price decreases due to high innovation and competition. This is the backbone of innovation. By bringing the price of novel products down so more people can buy and enjoy them (mass monetization and technology democratization also increase business profits, and employment, wages), we raise the overall quality and standard of living in the country. See this below, it was also the same in the US once upon a time with ICE cars.
Yeah, but John Smith can't simultaneously physically work and receive his wage in the MCDonals in California and and spend his money and live on a high heel in China. Unless he masters some kind of space transportation technology. So your 'argument' is still completely useless/dumb.
No, dude, stop coping. That is also from NBS and includes ALL manufacturing.
The other link from Global Times IS only high-tech sectors, but keep in mind this,
That could just mean that high-tech companies' profits were enough to OFFSET all other industrial sectors if they had a downturn.
Enough so we would see such a massive rise in FAI and wages from the second link.
I explained it already. Overall profits across all industries combined were down, but not from high-tech, they were up 6.3% yoy.
Profits from high-tech were enough to increase wages and FAI (9.3% yoy) to such amazing levels. What is so hard to understand here?
It was the same thing in 2023. Western sweatshops probably going out of business, replaced by domestic high-tech rising giants.
You've actually proved my point that extrapolating economy sizes from airport exchange rates is fully irrelevant because there is no way a statistically relevant number of "John Smiths" can go to China enough to even make a noticeable dent in the local city economy, let alone on a national level.
"John Smith" cannot bring more than what? What's the median monthly disposable income for Americans anyways? He's exchanging that 400 USD or so with the 7.33 RMB rate. Sure that's a great deal for him. It's also just a novelty for the few people who have the wealth to travel.
Which btw is not John Smith who is more likely than not in debt just affording rent. He'll what, save up for a once in decade family trip, get some cheap food and a nice hotel with the trip budget 3000 RMB he converted for, which does not even amount to a rounding error in the local economy.
Sure if a 100 million John Smiths with their Janes and kiddos turned up and each converted their whole net worth into RMB and went to China, yeah they would cause economic trouble. But that is legally impossible. Hence why in a macroeconomic scale, airport exchange rates do not apply.
You went from:
(which is CLEARLY untrue)
To:
("oh shit I was wrong")
And quickly to:
("if you ignore all the bad things I did, I didn't do anything bad")
Including the automotive manufacturing industry which saw profits drop 7.3%. That includes all of the NEV players.
Take the L dude.
(which is CLEARLY untrue)
To:
("oh shit I was wrong")
And quickly to:
("if you ignore all the bad things I did, I didn't do anything bad")
Including the automotive manufacturing industry which saw profits drop 7.3%. That includes all of the NEV players.
Take the L dude.
It doesn't matter whether a cat is black or white, as long as it catches mice. I don't care about the process, as long as I see rising real wages and a near 10% increase in FAI in a year, I respect it, and move on. So to go back to my original points. YES, rising value added from high-tech manufacturing DID lead to higher profitability of 6.3% yoy (in high tech sectors that we are talking about since they are the ones that captured that value added in the first place logically). Which led to higher wages in manufacturing and the overall economy and amazing FAI growth too.