Chinese Economics Thread

[Jura The idiot]

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In July 2017, the total retail sales of consumer goods reached 2,961.0 billion yuan, ...

mind-boggling numbers I mean I looked at how much it was in the US and

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is 469265
and

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is 91227
I won't check if I looked at the right month, anyway back to yuan:
(469265+91227)*6.303 I'm in millions now, just not to forget LOL!
so it's 3.5328 (about three and a half) trillion (1E12) yuan

 

[manqiangrexue]

One more time, here is my position.

1.

• C (consumption) is normally the largest GDP component in the economy, consisting of private expenditures in the economy (household final consumption expenditure). These personal expenditures fall under one of the following categories: durable goods, nondurable goods, and services. Examples include food, rent, jewelry, gasoline, and medical expenses, but not the purchase of new housing.

Retail sales (as generally understood) form a subset of this category and thus cannot be larger than it.

2. The source of the issue is probably the category called "total retail sales of consumer goods", which sounds very much like "retail sales", but is only used in China. It remains unclear to which internationally used category it's supposed to correspond. The value of this category

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was 36.6 trillion yuan, of which 32.7 trillion yuan was for "the retail sales of goods" (the rest was catering). That is 5.2 trillion dollars at the current exchange rate. Assuming another year of 10% growth, that brings the 2018 number to 5.7 trillion dollars, very close to the Mizuho number. This is why I think those reports are using this statistic.

3. The apparent contradiction is there in the Chinese data; there is no issue of World Bank data being different. For 2015, total retail sales of consumer goods were 30 trillion yuan (click on

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), while final consumption expenditures were 36 trillion yuan, of which household consumption expenditures were 26 trillion yuan and the rest was government consumption (

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3-13 and 3-14). Again, I don't know how there could have been more retail sales than there was private consumption, particularly when this also includes services.

4. About the idea that these reports can't be (or are very unlikely to be) wrong, here's a

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by A.T. Kierney that says that in 2016 China's total retail sales were 3 trillion USD. This does contradict the other reports, yet there have been no call outs or retractions. Furthermore, here's a PwC

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that measures market size by household consumption (11.5 trillion USD for the USA and 3.4 trillion USD for China in 2013, page 8) and gives the food and grocery sales numbers (page 11) as 854 billion USD for the USA and 318 billion USD for China, with predictions for 2018 of 960 billion USD and 581 billion USD, respectively. This

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by Deloitte says that American retail sales in 2016 were 3.7 trillion. Basically, the numbers are all over the place and I don't think the ones we're discussing have been shown to be right.

Actually, I found an

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in Forbes that questions the Mizuho numbers on basically the same grounds as I do, so it's not even true that there's been no skepticism.

5. I already posted what could be the "correct" numbers for retail sales.


I'd appreciate it if any reply would address these points.

The AT Kierney article that you posted cites its data from the World Bank, so I would assume that it is using that statistic, which I said should be correct, but should be something else. The Forbes article challenges the Mizuho data by saying it doesn't think that data is sound; it resonates with many Western articles that don't think China's GDP could be as high as it is, BUT, critically, it does NOT accuse the article of the mix-up that you are accusing it of. For all the analysis that Douglas Bulloch is putting out there, they would all be unnecessary if he could simply say that Mizuho has confused two statistics with each other, which would be an embarrassing and immediate deathblow to Mizuho's analysis. That that's not there leads me to think that this not a source of error. On top of that, if you look at the articles that this person is writing, (

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) every one is anti-China; he's basically a less famous Gordon Chang, so you know that the desperation to discredit this data is there, but what's not there is the hard evidence. The fact that PwC has 2 articles, one using similar data to Mizuho and one using data from the World Bank published months apart is further evidence that PwC knows exactly what these two statistics mean, could not have confused them, and they're both correct.

In general, from my limited knowledge, the points that you make look fine. As a matter of fact, I started this debate by asking you if you could reconcile the different data given what seems to be contradicting information. So if you can't, and you're asking me to, I certainly can't either since I was asking you. LOL

I still can't accept the explanation that PwC, Mizuho, and eMarketer made the same mistake on separate occasions of comparing incomparable statistics on top of at least 1 (PwC) already demonstrating that it knows the difference, with no one pointing this out even when trying desperately to challenge the article. I'm more inclined to believe that the mistake lies with you and not with them.

That said, from reading your Deloitte article citing the US retail at $3.7T, I searched and found that that is also a widely used figure. So I can accept that there may be different ways to calculate retail market/sales, but it does not mean that the one used by Mizuho, eMarketer, PwC is wrong.

So I think the our solution will lie here:
1. If one of us isn't too lazy and if one of the firms isn't too busy, one of us can write an email to them (preferably PwC, the firm that uses both sets of data) and ask for an explanation.
2. Assuming we're both too lazy to do #1, it's reasonable to think that we should see this year or next, China actually surpassing the US as the largest retail market. (Of course it's possible that it takes a little longer even if they are running near even now.) By that point, there should be many more articles on it, especially on the economic headlines. We may have more to go on by then. It's the waiting game.

 

[manqiangrexue]

If there is no spending power, but there is high profit then the companies profit shown as saving in the general ledger of the national economy .


My point is simple: the spending /saving diferences due to different political /economical/development characteristic on the national economy level, NOT due to nationality/skin colour/ language.

Irrelevant. I said that as things are now, the average Chinese family would be far less frivolous consumers than the average American family as a percent of their income. I didn't charge whether it was due to skin color or language or national politics, etc...

You're basically saying that this is not an inherent trait for being Chinese but something shaped from the situation of the country, therefore in the future, it can change. That's fine; we're shifting towards higher consumerism in the Chinese economy anyway.

 

[Klon]

The AT Kierney article that you posted cites its data from the World Bank, so I would assume that it is using that statistic, which I said should be correct, but should be something else. The Forbes article challenges the Mizuho data by saying it doesn't think that data is sound; it resonates with many Western articles that don't think China's GDP could be as high as it is, BUT, critically, it does NOT accuse the article of the mix-up that you are accusing it of. For all the analysis that Douglas Bulloch is putting out there, they would all be unnecessary if he could simply say that Mizuho has confused two statistics with each other, which would be an embarrassing and immediate deathblow to Mizuho's analysis. That that's not there leads me to think that this not a source of error. On top of that, if you look at the articles that this person is writing, (

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) every one is anti-China; he's basically a less famous Gordon Chang, so you know that the desperation to discredit this data is there, but what's not there is the hard evidence. The fact that PwC has 2 articles, one using similar data to Mizuho and one using data from the World Bank published months apart is further evidence that PwC knows exactly what these two statistics mean, could not have confused them, and they're both correct.

In general, from my limited knowledge, the points that you make look fine. As a matter of fact, I started this debate by asking you if you could reconcile the different data given what seems to be contradicting information. So if you can't, and you're asking me to, I certainly can't either since I was asking you. LOL

I still can't accept the explanation that PwC, Mizuho, and eMarketer made the same mistake on separate occasions of comparing incomparable statistics on top of at least 1 (PwC) already demonstrating that it knows the difference, with no one pointing this out even when trying desperately to challenge the article. I'm more inclined to believe that the mistake lies with you and not with them.

That said, from reading your Deloitte article citing the US retail at $3.7T, I searched and found that that is also a widely used figure. So I can accept that there may be different ways to calculate retail market/sales, but it does not mean that the one used by Mizuho, eMarketer, PwC is wrong.

So I think the our solution will lie here:
1. If one of us isn't too lazy and if one of the firms isn't too busy, one of us can write an email to them (preferably PwC, the firm that uses both sets of data) and ask for an explanation.
2. Assuming we're both too lazy to do #1, it's reasonable to think that we should see this year or next, China actually surpassing the US as the largest retail market. (Of course it's possible that it takes a little longer even if they are running near even now.) By that point, there should be many more articles on it, especially on the economic headlines. We may have more to go on by then. It's the waiting game.

I can't reconcile contradicting data, because they're contradicting. I did, however, explain why it's a contradiction and where it's probably coming from.
In point 1, a basic economic concept was defined. In 2 and 3, there are additional statistics and the probable source for the different data. In 4, I posted examples that show that different companies come up with different data. In 5, I posted what could be the right figure, straight from the National Bureau of Statistics of China.

Since your main point still seems to be that these firms couldn't be wrong, here's some more on that. We should note that of the reports/forecasts that provide numbers (excluding the PwC one, as no numbers are available), all report different numbers for retail sales. There is literally no pairwise match.
1. Mizuho (from the graph in WaPo): USA passes 5 trillion (all in USD) around 2013, China around 5 trillion in 2016.
2. eMarketer: USA 4.7 trillion in 2015 (published in 2016, so this is not even from bad forecasting), China 4.9 trillion in 2016.
3. A.T. Kierney: China 3 trillion in 2016. That they use World Bank data doesn't mean they're talking about something else. They clearly write "national retail sales" or "total retail sales". In fact, they use a lot more sources: Euromoney, Population Data Bureau, International Monetary Fund, World Bank, World Economic Forum, Economist Intelligence Unit, Planet Retail and A.T. Kierney analysis are all listed as sources.
4. Deloitte: USA 3.7 trillion in 2016.

Each and every one of these reports contradicts one or more of the others. They are not all saying the same thing and they are not all right at the same time in some mysterious way I can't understand.

 

[Anlsvrthng]

Irrelevant. I said that as things are now, the average Chinese family would be far less frivolous consumers than the average American family as a percent of their income. I didn't charge whether it was due to skin color or language or national politics, etc...

NOT the Chinese family save a lot, but the Chinese corporations / businesses/ billionaires.

This is the trap, everyone identify the average chines with the general econmy, but actualy the families command less than half of the GDP, the remaining is controled by billionaires/corporations/goverment.

To be a consumer economy this has to change

This is the challange of Xi.


The most problematic it is not connected to say elections , elected parlament and so on.
That is an irrelevant part of the equatation.
The most important is the low level governance, the transparency and efficiency of it.

That is extremly hard to change.

 

[Hendrik_2000]

Chinese consumer are doing ok living standard has been inceasing yoy so cut it off More important news of the impending trade war I say when it come hit hard on Agi import from US Via Emperor

Brazil has replaced the US as the dominant exporter of soy beans to China with a 57% market share compared to just 31% market share for the US. Apparently, the US really doesn't like this but can do little about it except to call China a "new imperial power" in Latin America. It is an encouraging sign that China has made progress in shifting her import of critical resources away from hostile powers to at least more neutral countries. China needs to re-double up her efforts to diversify her imports away from Australia to Central Asia, Russia, Middle East, Africa and Latin America since Australia appears to have said that it had also made its choice to become China's new enemy.

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China's Food Giant Emerges as Leading Exporter of Brazil Soy
By Tatiana Freitas and Gerson Freitas Jr
February 2, 2018, 8:00 AM GMT+8 Updated on February 2, 2018, 10:56 PM GMT+8

Cofco seeking acquisitions that would further its position
Company is Brazil’s No. 3 soy exporter, shipping data show

Soybeans in a cargo ship headed to China at the Tiplam terminal in Santos, Brazil. Photographer: Patricia Monteiro/Bloomberg
Cofco International Ltd. has already overtaken some of the world’s oldest agricultural traders to become one of the biggest shippers of soybeans in Brazil, the top exporter. Now, the Chinese food giant is considering acquisitions that would extend its position even further.

The company is looking into buying warehouses and other facilities related to logistics deep in Brazil’s agricultural heartland, according to Valmor Schaffer, Cofco’s head for South America.

"There will be surgical investments in strategic areas," Schaffer said in an interview at Cofco’s regional headquarters in Sao Paulo. Most of the spending will be in Mato Grosso, Brazil’s top soybean state that accounts for a quarter of the country’s total output.

China Driven
Brazil soy exports to China rose fivefold in past decade

Source: Brazil Agriculture Ministry, Conab, Bloomberg
While century-old traders took decades to build a leading position in Brazil’s oilseed market, Cofco has been able to amass a similar stronghold within just the last couple of years. Shipping line-up data signal that the Chinese company in 2017 exported more than Archer-Daniels-Midland Co., Cargill Inc. and Louis Dreyfus Co., -- the A, the C and the D in the so-called ABCD quartet that dominates global agricultural trade. It’s become the No. 3 exporter, trailing only Bunge Ltd., the B, and Tokyo-based Marubeni Corp.

7 Million Tons

Cofco exported about 7 million metric tons of soybeans from Brazil in 2017, including shipments also made by companies recently acquired by the Chinese group, according to line-up data from Williams, a Brazilian shipping agency. That’s jumped from 2.4 million tons in the previous year. The figures only account for shipments where the exporting agency was disclosed, putting the nation’s total at 67.7 million tons last year. Brazil’s grain exporter group Anec pegs the total at 68.3 million.

Leading Stake
Brazil's biggest soybean exporters in 2017, in % of total shipments

Source: Williams shipping agency
*Includes undisclosed exporters
The Chinese company is still reliant on other trading houses when it comes to supplying its Asian crushing plants and is now seeking more ways to acquire crops directly from Brazil’s farms.

"We want to connect the farmer in Mato Grosso to the Chinese consumer," Schaffer said. The company plans to double crop purchases from Mato Grosso farmers in the next few years, he said. "This should put us in a superior position."

Cofco’s strategy has upended the traditional supply chain, where trading houses acted as middle men between farmers and consumers. The disruption comes at a tough time for the ABCD’s of the world, which are also contending with historically low grain prices and a prolonged period of subdued market volatility.

"China is just cutting out the competition at source," said Alvin Tai, an analyst at Bloomberg Intelligence in Singapore.

China is the world’s biggest buyer of soybeans, used in everything from cooking oil to animal feed. Brazil’s dominance as a supplier has grown in recent years as bumper harvests made prices more competitive against the U.S. On Friday, soybean prices in Chicago fell to their lowest in two weeks amid prospects of another big crop in Brazil.

Cofco didn’t comment on Williams’ line-up figures, but Schaffer said the company exported about 7 million tons in the last year, while declining to specify how much came directly from farmers. Bunge and ADM declined to comment on Cofco’s expansion and on their export volumes. Dreyfus’s press office said the company’s purchases in Brazil are "much larger" than estimated by Williams’ line-up data, while declining to disclose the actual figures.

Cofco entered the Brazilian market through a $4 billion buying spree that saw the company take control of Hong Kong-based Noble Group Ltd.’s agritrading business as well as Dutch trader Nidera BV in 2014. Since then, it has focused on fully integrating the teams while also facing hurdles including a $150-million accounting hole in 2016 and allegations of slave-like conditions by Brazilian prosecutors last year. It also went on to buy the remaining minority stake in Nidera, with the deal closing in February 2017.

Cost Cutting

The company has since enacted a big cost-management program that made it more competitive, allowing it to grab a greater share of the exports, Schaffer said.

"We’ve left 2017 extremely prepared for the challenge of supplying China’s increasing demand and turning Cofco into not only a large-scale company, but also a profitable one," he said.

Cofco’s soybean demand exceeds 20 million tons annually and that will likely top 30 million in the coming years, Schaffer said. The Brazilian unit is the main supplier for the parent company, accounting for more than half of volumes -- including those originally purchased by other traders. Still, the company wants that share to keep rising.

"We need to gain scale in origination to continue supplying Chinese demand and growing as suppliers inside our company," Schaffer said.

 

[manqiangrexue]

I can't reconcile contradicting data, because they're contradicting. I did, however, explain why it's a contradiction and where it's probably coming from.
In point 1, a basic economic concept was defined. In 2 and 3, there are additional statistics and the probable source for the different data. In 4, I posted examples that show that different companies come up with different data. In 5, I posted what could be the right figure, straight from the National Bureau of Statistics of China.

Since your main point still seems to be that these firms couldn't be wrong, here's some more on that. We should note that of the reports/forecasts that provide numbers (excluding the PwC one, as no numbers are available), all report different numbers for retail sales. There is literally no pairwise match.
1. Mizuho (from the graph in WaPo): USA passes 5 trillion (all in USD) around 2013, China around 5 trillion in 2016.
2. eMarketer: USA 4.7 trillion in 2015 (published in 2016, so this is not even from bad forecasting), China 4.9 trillion in 2016.
3. A.T. Kierney: China 3 trillion in 2016. That they use World Bank data doesn't mean they're talking about something else. They clearly write "national retail sales" or "total retail sales". In fact, they use a lot more sources: Euromoney, Population Data Bureau, International Monetary Fund, World Bank, World Economic Forum, Economist Intelligence Unit, Planet Retail and A.T. Kierney analysis are all listed as sources.
4. Deloitte: USA 3.7 trillion in 2016.

Each and every one of these reports contradicts one or more of the others. They are not all saying the same thing and they are not all right at the same time in some mysterious way I can't understand.

I understand what you posted, but I really require absolute proof, not just perceived evidence if I'm going to believe that several elite investment firms are wrong and a casual economics reader is right.

I think I've already written all the points to these before. For the Mizuho-eMarketer conflict, they show the same trend, and were published 2 years apart. Sometimes, there are adjustments and new data are amended to previous years' numbers. For AT Kierney, it's important, then, to find the source they are actually getting their numbers from, to understand it fully. By the looks, it may be what Deloitte is using (but in different year), which, I've said before, is also a widely-accepted number. That indicates to me that there are multiple ways to calculate the retail market or retail sales, but it doesn't mean that one way is wrong and the other is right because PwC's 2015 analysis and eMarketer's 2016 piece are also widely cited and accepted even if we can't find the original report for PwC.

Once again, PwC has issued two very different reports both in 2015 and by your logic, they directly conflict with each other very badly. (Even if the report is not here to dissect, the conclusion is very clearly written and "contradicts" the other report in data and in conclusion.) I believe that the chances of that mistake is much lower than the chances of there being something "mysterious" that you don't understand.

So if you don't have anything new to add, think we'll still defer to two points of the last post:
1. If one of us isn't too lazy and if one of the firms isn't too busy, one of us can write an email to them (preferably PwC, the firm that uses both sets of data) and ask for an explanation.
2. Assuming we're both too lazy to do #1, it's reasonable to think that we should see this year or next, China actually surpassing the US as the largest retail market. (Of course it's possible that it takes a little longer even if they are running near even now.) By that point, there should be many more articles on it, especially on the economic headlines. We may have more to go on by then. It's the waiting game.

 

[manqiangrexue]

NOT the Chinese family save a lot, but the Chinese corporations / businesses/ billionaires.

This is the trap, everyone identify the average chines with the general econmy, but actualy the families command less than half of the GDP, the remaining is controled by billionaires/corporations/goverment.

To be a consumer economy this has to change

This is the challange of Xi.


The most problematic it is not connected to say elections , elected parlament and so on.
That is an irrelevant part of the equatation.
The most important is the low level governance, the transparency and efficiency of it.

That is extremly hard to change.

China's economy doesn't need to transform into a consumer economy by proportion to the rest of China's economy; it if it did, then handing more economy power to the masses while diverting them from the government/corporations would help. BUT the goal is to grow EVERYTHING and have China become a large consumer by sheer size without losing the control of the government on the economy. This control is crucial to keeping China's economy on track and highly resilient to dangers that would be imminent but likely unmanageable to free economies.

I don't understand how anything you said after "Xi" is relevant.

I don't appreciate how discussions with you always go wildly off topic like an oil spill.

 

[manqiangrexue]

If the US wants to compete with China, it needs to put its money where its mouth is. Latin America's old enough to make its own decisions and choose its own economic partners. Telling other people who to be friends with is middle school shit.

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China accuses U.S. of disrespect after Latin America comments

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•February 2, 2018

FILE PHOTO: U.S. Secretary of State Rex Tillerson steps off his plane as he arrives to the presidential hangar in Mexico City, Mexico February 1, 2018. REUTERS/Henry Romero
BEIJING (Reuters) - China accused the United States of disrespecting Latin America after U.S. Secretary of State Rex Tillerson warned countries in the region against excessive reliance on economic ties with China.

Tillerson, in a speech ahead of a visit to Mexico, Argentina, Peru, Colombia and Jamaica, said China was getting a foothold in Latin America, using economic statecraft to pull the region into its orbit.

In a statement released late on Friday responding to Tillerson, China's Foreign Ministry said cooperation between China and Latin America is based on common interests and mutual needs.

"What the United States said is entirely against the truth and displayed disrespect to the vast number of Latin American countries," the ministry said.

Cooperation between China and Latin American countries is based on equality, reciprocity, openness and inclusiveness, it added.

"China is a major international buyer of Latin American bulk commodities, and imports more and more agricultural and high value-added products from the region," the ministry said.

China's investment in and financial cooperation with Latin American countries are in full accordance with commercial rules and local laws and regulations, it added.

"The development of China-Latin America ties does not target or reject any third party, nor does it affect the interests of third parties in Latin America," the ministry said.

"We hope that relevant countries abandon outdated concepts of zero-sum games and look at the development of China-Latin America relations in an open and inclusive manner."

Chinese Foreign Minister Wang Yi visited Chile last month for a summit with Latin American and Caribbean countries, where he invited them to join China's massive Belt and Road infrastructure program.

Separately, the U.S. Treasury's top economic diplomat, David Malpass, on Friday accused China of enabling poor governance in Venezuela by propping up the socialist government of President Nicolas Maduro through murky oil-for-loan investments.

 

[taxiya]

My point is simple: (1) the spending /saving diferences due to different political /economical/development characteristic on the national economy level, (2) NOT due to nationality/skin colour/ language.

The first part of your words is true, but it does not necessarily lead to the second part to be true.

The first part being true, IMO is because that is saying "Material world decides human/social behavior". It is perfectly described by Karl Max's "materialism" that is my foundation of thinking. One can draw the same conclusion without being a follower of Karl Max though.

However, IMO (also in the thought of Marxism) human mind is shaped by culture. So culture DOES in turn act in the same way on the material world.

Now, let's apply these to the spending behavior. In Chinese mind shaped for thousand years, Chinese (1) disdain banking activity (taking profit without material work) and commerce in general from the start more than 4000 years ago, merchant has the LOWEST social standing (scholar, farmer, craftsman, merchant). (2) Chinese see owning money to be a disadvantage and shame in some cases. Yes everything changes, so does Chinese, but simply dismiss the material impact of culture is a huge mistake because that culture does not change over time, it takes decades or centries.

Give you a current reference, Japanese and South Korean. Haven't they already entered the same development/economical stage as American and Europeans many decades ago? Yes, they have. Why then do they still have a higher saving rate similar to the Chinese? The only common thing among these east Asian people are their shared culture heritage. Doesn't that shared culture make a physical impact on the economy? It does.