A Marxist economist will tell you when overproduction appears, there must be too much residual value were exploited and then invested to some high profitable productions but the customer are already eploited too much to buy them. So, from a Marxist view, the most direct way to solve this problem are raising the income of labors to let them restore ability to buy.
Chinese Economics Thread
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broadsword
Brigadier
Sounds like another form of QE to me.
regarding the wording, I am not a professional English translator of CCP terminologies, so my wording may not be accurate or standard translation used by Central Party School "中央党校". So I don't mind if you use a different word, so long as we know what each other is talking about.
As of when the primary stage will end. That is not a question I am able to answer. My thought is that, it can not be set to a fixed date, but rather whenever the public ownership (represented by state property agency 国有资产管理局) is able to hold an overwhelming percentage of "capital 资产" of the country, say 80%? Today, my guess is around 40 to 50%. More importantly, the public ownership must be capable to run the investment as efficient as private ownership or even better. CCP is not going to sacrifice efficiency for pure ideological cause like the orthodoxy era before 1980s or Soviet Union, so it will take some time. I am not sure if I will live long enough to see that day. The challenge to CCP is to keep the communist members committed to that long term goal during this primary stage, surrounded and working with capitalism while maintaining a strong conviction to socialism. That is what president Xi is doing right now, clean the party (of corrupted members), clear the mind of the members (revisit the oath), reinforcing the vision (combating the anti media and voice), just like Deng Xiaoping did in the late 1980s.
The question is how to raise the income without sacrificing the efficiency. By only taking money from the rich and give to the poor like the European welfare state practice? That is actually what the old Communists in USSR and pre-reforming China did. For that USSR is dead, China was at the edge of collapse, now EU is stuck in a dead-lock. All history keeps on telling us is that, it is a dead-end. No system can sustain a non-efficient ideological driven practice be it in the name of communism, socialism or human-right. Economy is a science and runs just like a machine, it does not have emotion nor compassion. Karl Marx is clear about that conclusion. To be a true follower of Marxism, one must avoid falling into that trap.
I am aware of the events in the 2008 to 2010 period in China that some characters advocate "sharing the cake", calling to give free money to populace from the huge foreign reserve. That call is not Marxism at all, it is only covered with a seemingly leftist cloak. It is mobilism, populism just like what is going on in Italy, Spain, UK, US, Greece.
The only viable and true Marxism way is to invest money in uplifting workers competence, to restructure the economy to move working force away from over crowed area. These approach will take longer time in an indirect way, but are the only ways.
I want to emphasize that the demand and wish of the mass (people) is not necessarily communism or Marxism. In the primary stage of socialism, people are as selfish as in the capitalist society, therefor blindly meeting those demands are damaging. One of the task of Communist in the early stage is to educate the mass, to transform the mass to higher social and moral ground and awareness. That task would be translated, as of today, to encourage the poor to learn, improve themselves for a better job while in the mean time the state would assist that goal be providing education and training programs.
Blackstone
Brigadier
In a 'water is wet' story, Chen Qiufa, Governor of Laioning, aid the province falsified its economic data for years. While not surprising, it's good for more PRC national, province, and local officials to highlight bad data and correct the problem.
It's important to note what the article doesn't mention is China's National Statistics Bureau has been 'correcting' bad provincial economic data for a long time, in its role to provide best data possible to policy makers. Different studies from human economists to computer algorithms found China's official national data relatively accurate and believable. In fact, a study by Nicholas Lardy, a long time China economy watcher, said official economic numbers were actually lower than their study showed.
So, yes the provinces and municipalities have been faking economic numbers for many years, but NSB bean counters were wise to that early, and made adjustments in their sausage-making for Beijing, resulting in relatively accurate economic data.
It's important to note what the article doesn't mention is China's National Statistics Bureau has been 'correcting' bad provincial economic data for a long time, in its role to provide best data possible to policy makers. Different studies from human economists to computer algorithms found China's official national data relatively accurate and believable. In fact, a study by Nicholas Lardy, a long time China economy watcher, said official economic numbers were actually lower than their study showed.
So, yes the provinces and municipalities have been faking economic numbers for many years, but NSB bean counters were wise to that early, and made adjustments in their sausage-making for Beijing, resulting in relatively accurate economic data.
Longstanding doubts about the accuracy of China's economic data just got a big piece of supporting evidence: The governor of an entire province has admitted that local officials cooked the books for years.
The embarrassing revelation comes just days before the closely watched release of China's national economic data for last year.
Governor Chen Qiufa of Liaoning, a major industrial region in northeastern China, said this week that false statistics boosted the province's economic data from 2011 to 2014, according to China's official state news agency Xinhua.
Experts and even some government officials have long viewed growth figures from the world's second-largest economy with a healthy . But Chen's admission is particularly candid.
In some cases, officials inflated government income by more than 100%, according to Xinhua. Revenue for one Liaoning county was reported to be 2.4 billion yuan ($350 million) in 2013, but an audit office later corrected it to 1.1 billion yuan ($160 million).
Central government inspectors warned Liaoning officials of "the prevalence of economic data fraud" back in 2014.
Liaoning's heavy industries have weighed down the province's economy recently.
The province's numbers aren't looking so good anymore. It reported last year that its economy was shrinking as traditional industries suffered.
It had the worst performing economy out of 31 regions across China in the first quarter of 2016, according to Xinhua.
"Our province failed to meet the expected targets," Chen said of Liaoning's disappointing recent figures. The province has a population of 43 million, bigger than that of California.
China's overall economy expanded 6.7% in the third quarter of 2016, right in line with the previous two quarters. Economists expect it to have grown at a similar pace in the fourth quarter, too.
Some analysts who are dubious about China's remarkably smooth numbers turn to proxy measures to gauge the health of the economy. They look at electricity output, freight shipments and seaport cargo volumes.
China the head of its National Statistics Bureau last year.
The new chief, Ning Jizhe, said last month that the falsification of local statistics still happens in some areas from time to time, warning of heavy punishment for those who fake official figures.
Equation
Lieutenant General
Well said Mr. Ma! Too bad Washington and political pundits will continue to beat the drums of blaming others for the job lost instead of themselves. That's what I meant when I said before that the US could be heading down the same path as the former Soviet Union.
Chinese billionaire Jack Ma says the US wasted trillions on warfare instead of investing in infrastructure
David A. Grogan | CNBC
) founder fired a shot at the United States in an interview at the World Economic Forum in Davos, Switzerland.' data-reactid="14" data-type="text">Alibaba
Donald Trump[/a]has been talking about imposing new tariffs on Chinese imports.
Ma says blaming China for any economic issues in the U.S. is misguided. If America is looking to blame anyone, Ma said, it should blame itself.
"It's not that other countries steal jobs from you guys," Ma said. "It's your strategy. Distribute the money and things in a proper way."
" data-reactid="17" data-type="text">"It's not that other countries steal jobs from you guys," Ma said. "It's your strategy. Distribute the money and things in a proper way."
He said the U.S. has wasted over $14 trillion in fighting wars over the past 30 years rather than investing in infrastructure at home.
To be sure, Ma is not the only critic of the costly U.S. policies of waging war against terrorism and other enemies outside the homeland. Still, Ma said this was the reason America's economic growth had weakened, not China's supposed theft of jobs.
In fact, Ma called outsourcing a "wonderful" and "perfect" strategy.
(NYSE: IBM), Cisco (NASDAQ: CSCO), Microsoft (NASDAQ: MSFT), they've made tens of millions — the profits they've made are much more than the four Chinese banks put together. ... But where did the money go?"" data-reactid="21" data-type="text">"The American multinational companies made millions and millions of dollars from globalization," Ma said. "The past 30 years, IBM(NYSE: IBM), Cisco(NASDAQ: CSCO), Microsoft(NASDAQ: MSFT), they've made tens of millions — the profits they've made are much more than the four Chinese banks put together. ... But where did the money go?"
He said the U.S. is not distributing, or investing, its money properly, and that's why many people in the country feel wracked with economic anxiety. He said too much money flows to Wall Street and Silicon Valley. Instead, the country should be helping the Midwest, and Americans "not good in schooling," too.
" data-reactid="23" data-type="text">"You're supposed to spend money on your own people," Ma said. "Not everybody can pass Harvard, like me." In a previous interview, Ma said he had been rejected by Harvard 10 times.
Along those lines, Ma stressed that globalization is a good thing, but it, too, "should be inclusive," with the spoils not just going to the wealthy few.
"The world needs new leadership, but the new leadership is about working together," Ma said. "As a business person, I want the world to share the prosperity together."
solarz
Brigadier
He must have touched a nerve because most of the comments on that article is positive, something that's astounding for an article related to China.
Equation
Lieutenant General
Good, that makes it all harder for the Gordon Chang and the likes of him to bash China for the US economic woes.
