Chinese Economics Thread
- Thread starter Norfolk
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Well done Xi. Especially tackling the destructive price wars many Chinese companies are engaged in. Plus it’s time to start shutting off those unproductive companies especially in the solar industry which as led to overcapacity and huge losses to the biggest/mist competitive players like JinkoSolar, LONGi, and Trina Solar. It’s about time there should be consolidation and closing down the other smaller scarred inefficient producers .
The chart in the post (copied below) really debunks the myth that Chinese industrial production is export oriented/dependent. As I previously pointed out, China is in fact far less export oriented/dependent than the other major manufacturing powers.
Can't find it now, but I remember seeing a list of companies that were the largest exporters of goods from China to the US, where #1 was Apple, #2 was HP, #3 was Dell, and mostly American and other foreign (non-Chinese) companies filling out the rest of the list. While exports by companies like Apple, HP, and Dell generate high gross export revenue, relatively little of the value added comes from China, with most of the value added coming from components imported from Taiwan, South Korea, etc. So it's no surprise that while Chinese trade surplus with the US dropped dramatically due to the trade war, China's overall trade surplus as well as US's overall trade deficit are both looking to set new record highs this year.
Xi must be a moron because according to this forum, deflation is always good.
Like inflation there different types of deflations, there is deflation because consumers cannot afford the goods, like a money crunch and there is deflation because you are producing too much, too much food, too much consumer goods. The first one is bad, the second one is not that bad and solves on its own.
Now between inflation and deflation I think the 80s Latin-Americanization of a country's economy is the worst thing that can happen to a country, either your currency sucks or you country have supply problems. One thing is wages not increasing as fast as you want but still have the ability to afford a nice living standard and another different thing is a economy trapped with wages not increasing but prices increasing really fast. In the first one is annoying for companies and the second one is a recipe for social upheaval.