Chinese Economics Thread

[taxiya]

The one thing good about Brexit is now the China-UK FTA negotiation is on the table.

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英国财政大臣哈蒙德说，英国正在着手与中国讨论达成双边自由贸易协定事宜，规模可能达到数十亿英镑。.....

哈蒙德在G20外长峰会上表示，英国和中国将达成自由贸易协定。.....

当被问到中英是否会达成双边的自由贸易协定时，哈蒙德表示完全可能：“我们已经和中国发展了战略伙伴关系，与中国增加了贸易额度，双边公司的对外投资均有所增长。在欧盟的框架下，中英只能到此为止。但是当英国脱离欧盟后，毫无疑问两国都希望巩固双边关系，并建立更坚实的构架。”

British Finance Minister Hammond said during the G20 summit, Britain and China is in discussion of FTA. He also said, due to the EU membership, UK has done what it can do to improve trade with China. When UK finally left EU, there is no doubt the bilateral relationship of UK and China will improve further.

The Chinese side has been relatively quitter than UK in terms of FTA before, probably because of not wanting to unnerve the EU. While the British was louder in the subject (Boris Johnson and Gordon Brown), probably trying to poke the EU for concessions in the divorce bill. Now with the Brexit becomes inevitable (no return, no regret), it is time for some serious work.

 

[Hendrik_2000]

Via Martian
In the year 2000, US retail sales were $3.3 trillion and China's retail sales were $472 billion. It's obvious that the US economy was much larger than China's in the year 2000.

For 2018, both the US and Chinese annual retail sales are $5.8 trillion. This is an important economic indicator that the US and Chinese economies are roughly the same size.
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"The mighty force of consumerism has taken hold in China. In 2018, retail sales in China are expected to equal or surpass sales in the United States for the first time, another definitive marker in China's rise to economic superpower status. (first paragraph)
...
Trump has pointed to the tariffs President Ronald Reagan put on Japanese semiconductors in the 1980s as a model he wants to emulate, but the difference is the U.S. economy was far larger than Japan's at the time. Now the United States faces an economic equal [in China]."

 

[manqiangrexue]

For 2018, both the US and Chinese annual retail sales are $5.8 trillion. This is an important economic indicator that the US and Chinese economies are roughly the same size.

Is it? Because Chinese like the spend WELL within their means while Americans like to accumulate so much debt that their bank is the biggest mourner at their funeral. If a Chinese and an American both go into a car dealership and order the same Lamborghini model, I expect the Chinese person to be rich enough to buy it cash, while the American splits it into the lowest down-payment possible and spends the next 15 years paying it off month-by-month with the bank threatening to repo it for late payment at least once every year or other year.

 

[Anlsvrthng]

Is it? Because Chinese like the spend WELL within their means while Americans like to accumulate so much debt that their bank is the biggest mourner at their funeral. If a Chinese and an American both go into a car dealership and order the same Lamborghini model, I expect the Chinese person to be rich enough to buy it cash, while the American splits it into the lowest down-payment possible and spends the next 15 years paying it off month-by-month with the bank threatening to repo it for late payment at least once every year or other year.

: D
Before the second world war they said that the US citiens are living within they means, and the UK/German guys are prolific spenders : )

The Chinese doesn't like to spend/save less or more than the americans, the Chinese saving is high because the businesses saving a lot due to the insuficient Chinese( world) demand.

 

[manqiangrexue]

: D
Before the second world war they said that the US citiens are living within they means, and the UK/German guys are prolific spenders : )

The Chinese doesn't like to spend/save less or more than the americans, the Chinese saving is high because the businesses saving a lot due to the insuficient Chinese( world) demand.

I guess Americans are still on spending spree to celebrate WWII win

What you say is fundamentally untrue (again). Completely disregarding (your imaginary) business models and talking about family spending (as we were just talking about retail sales), Chinese families like to buy their houses, cars in one payment with the money that they have, keeping savings in the bank to be passed onto their children. Americans like to do down-payment, 10 year monthly payment plan, debt management negotiations with the bank, repo, file bankruptcy if needed, die in debt. On the same budget, Americans tend to live fancier lives, since they're constantly buying things that they can't afford. So if you told me that a Chinese family and an American family have the same retail purchase numbers in the past year, odds are that the Chinese family earns a lot more/is in a much better financial position.

Judging by your comments, it's like you don't know what Chinese or American people do at all. Why do you feel the need to speak when you're always wrong?

Personal questions, of course you can choose not to answer: How old are you? Where are you from? What is your level of education (if any)?

 

[Klon]

This is the exact same thing that was already discussed on this thread.
1. The Washington Post story is wrong. The confusion again probably comes from the category name Total retail sales of consumer goods, which is only used in China and doesn't actually measure retail sales.
2. Here's the

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for Household final consumption expenditure, which includes retail sales.

 

[manqiangrexue]

This is the exact same thing that was already discussed on this thread.
1. The Washington Post story is wrong. The confusion again probably comes from the category name Total retail sales of consumer goods, which is only used in China and doesn't actually measure retail sales.
2. Here's the

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for Household final consumption expenditure, which includes retail sales.

Speaking to you with no lingering hostilities from our last exchange, let me say that I think you are confusing articles with each other. "Total retail sales of consumer goods" is a term used in another article not mentioned here, but on the China-Korea thread only. The article mentioned here does not mention any such term. I believe that this article is talking about retail sales in the more internationally accepted definition. This Washington Post article draws its data from Mizuho Securities, which is an international investment banking firm and I find it hard to believe that they would make such a grievous mistake and even draw a chart from it. Here are just two more articles that say the same thing as the Mizuho data and their wording is very clear:

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Neither use the term, "total retail sales of consumer goods" either. I'm not cherry-picking these articles; I searched for "China USA retail market" and I don't see a single article claiming that the US retail market is still the largest (much less is 3 times the size of China's as suggested by the data that you posted).

So... I think we are certainly talking about something other than the confusion of the term, "total retail sales of consumer goods" here. I realize that these seem to contradict your World Bank data and I don't know how to explain that. I believe the answer will lie again, in the awkward definition of some economic term that we did not catch.

 

[Klon]

Speaking to you with no lingering hostilities from our last exchange, let me say that I think you are confusing articles with each other. "Total retail sales of consumer goods" is a term used in another article not mentioned here, but on the China-Korea thread only.

That is what I was thinking of.

The article mentioned here does not mention any such term. I believe that this article is talking about retail sales in the more internationally accepted definition. This Washington Post article draws its data from Mizuho Securities, which is an international investment banking firm and I find it hard to believe that they would make such a grievous mistake and even draw a chart from it. Here are just two more articles that say the same thing as the Mizuho data and their wording is very clear:

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Neither use the term, "total retail sales of consumer goods" either. I'm not cherry-picking these articles; I searched for "China USA retail market" and I don't see a single article claiming that the US retail market is still the largest (much less is 3 times the size of China's as suggested by the data that you posted).

So... I think we are certainly talking about something other than the confusion of the term, "total retail sales of consumer goods" here. I realize that these seem to contradict your World Bank data and I don't know how to explain that. I believe the answer will lie again, in the awkward definition of some economic term that we did not catch.

Confusion is the simplest and most probable explanation. After all, total retail sales of consumer goods sounds like a more official name for retail sales and without checking, it would be easy to miss that it's a category only used in China.

The two articles are both based on the same thing, so they're one data point, for a total of two.

The reported value for total retail sales of consumer goods for 2017 is 36.6 trillion yuan. If you divide this with 5.8 trillion dollars, you get 6.3 yuan/dollar, which is basically the current exchange rate, suggesting that they are in fact talking about this category.

Another example: 5.8 trillion dollars is 44% of China's 2017 GDP and 30% of the USA's 2017 GDP. This doesn't fit with the perception or the data that the American economy is based on consumption more than the Chinese economy. On the other hand, household final consumption expenditure is 39% of China's 2016 GDP and 69% of the USA's 2016 GDP.

(I know the 5.8 trillion dollars number is supposed to be for 2018. It really doesn't make much of a difference to the numbers as presented above.)

 

[manqiangrexue]

That is what I was thinking of.



Confusion is the simplest and most probable explanation. After all, total retail sales of consumer goods sounds like a more official name for retail sales and without checking, it would be easy to miss that it's a category only used in China.

The two articles are both based on the same thing, so they're one data point, for a total of two.

The reported value for total retail sales of consumer goods for 2017 is 36.6 trillion yuan. If you divide this with 5.8 trillion dollars, you get 6.3 yuan/dollar, which is basically the current exchange rate, suggesting that they are in fact talking about this category.

Another example: 5.8 trillion dollars is 44% of China's 2017 GDP and 30% of the USA's 2017 GDP. This doesn't fit with the perception or the data that the American economy is based on consuption more than the Chinese economy. On the other hand, household final consumption expenditure is 39% of China's 2016 GDP and 69% of the USA's 2016 GDP.

(I know the 5.8 trillion dollars is supposed to be for 2018. It really doesn't make much of a difference to the numbers as presented above.)

So here's the thing: if what you are saying is true, that this is a mix up and that the US retail market is some 3 times bigger than China's, then PricewaterhouseCoopers (2016) and Mizuho Securities (2018) have both made a huuuggee mistake and declared that China's retail market had surpassed that of the US when it was only a third the size, and after this huge mistake, no one stood out to challenge them, and to this date, they have not issued a correction. We're talking about huge companies evaluating mountains of global economic data; to make a mistake this big and have no one intuitively smell something off would be like the NBA accidentally publishing an article stating that Isaiah Thomas is taller than Yao Ming and then, 2 years later, Sport Illustrated confirmed it with another article of their own stating the same thing! The unlikelihood of this happening is what makes me think that the chart posted on the Washington Post is correct, BUT it refers to something other than what your World Bank data is showing.

Regarding the bold part, I think first of all, even though the Chinese are more careful with money and less frivolous that Americans when it comes to luxuries or unneeded purchases, we are still talking about over 4 times the mouths to feed and basic necessities to fulfill in China compared to the US, which would drive basic spending up even if luxury spending is lower. Henrik_2000 posted this, "For 2018, both the US and Chinese annual retail sales are $5.8 trillion. This is an important economic indicator that the US and Chinese economies are roughly the same size." and I posted, "Is it? Because Chinese like the spend WELL within their means while Americans like to accumulate so much debt that their bank is the biggest mourner at their funeral." Both are overtures at the possibility that the Chinese GDP is massively understated and actually equal to or larger than America's. I just hint at the possibility; I don't stand by it, I'm not saying it has to be the case, and I don't want to debate it. It's just for food fun food for thought.

 

[Anlsvrthng]

I guess Americans are still on spending spree to celebrate WWII win

What you say is fundamentally untrue (again). Completely disregarding (your imaginary) business models and talking about family spending (as we were just talking about retail sales), Chinese families like to buy their houses, cars in one payment with the money that they have, keeping savings in the bank to be passed onto their children. Americans like to do down-payment, 10 year monthly payment plan, debt management negotiations with the bank, repo, file bankruptcy if needed, die in debt. On the same budget, Americans tend to live fancier lives, since they're constantly buying things that they can't afford. So if you told me that a Chinese family and an American family have the same retail purchase numbers in the past year, odds are that the Chinese family earns a lot more/is in a much better financial position.

Judging by your comments, it's like you don't know what Chinese or American people do at all. Why do you feel the need to speak when you're always wrong?

Personal questions, of course you can choose not to answer: How old are you? Where are you from? What is your level of education (if any)?

Anyway, the reason of mounting debt in US is simply the falling incomes ,due to the chinese cheap workforce, used up by the US companies to make extra profit, that is -- suprise, suprise-- saved.

And generaly, the Chinese central bank wants to load up with debt the Chinese households as well.

Again, house prices in China?

What do you think ,what is the most expensive asset of every household?