Chinese Economics Thread

[broadsword]

Wrong logic.

I looked after the consumer items with available statistics, and I found the cars/pork/phones, and the consumer debt to GDP number.

If you have statistics for any high ticket , mass consumed item,then fine ,please share it.

And the car / phone sales are weak compared to the US numbers, in China the demand for phones droped by 5%, in the US increased by 2-3%, on world level the demand increased by 8%.

Means it is NOT lack of new phones or whatever.

If you have same nice statistics about TV sets, furniture purchasing, school expenses or anything household related that can give even better pircture please share it.

Explain why.

 

[supercat]

I think you miss the point.

The current car production will create aprox. half as high car ownership numbers like in the UK IF the average car age will be 14 years ,like in the US.

Growing sales number ( let say 10% per year) sustainable only for 4-6 years, IF the Chines car ownership will be the same like in the UK.

According to

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The per capita car ownership of UK is at least 510 per 1000 people, while China's is about 160 per 1000 people. So it will take more than 10 years of 10% growth for China's per capita car ownership to reach UK's, assuming UK's car ownership will not grow at all. And why would China's car ownership stop at UK's level? How about New Zealand and Australia?

But these numbers means that in say ten years time the per capita GDP has to be the same level like UK, and the consumption share as well.

This may be the case but only in PPP terms. In nominal terms, Chinese cars will probably still be less expensive than those in UK even after 10 years.

It boiling down to 10% GDP growth, and 12-13% consumption growth for ten years.

The problem is the copy - past growth model ( like above with " China will subtitute US semi manufacturing" ) works up to this ( or up to 2008) point.

China's consumption growth may well reach a sustained 10% a year despite a GDP growth of 6-7%. Currently, China's retail sales is growing more than 10% a year.



Volvo is doing well, thanks to the Chinese market. Geely also wants to buy shares from AB Volvo and reportedly bought shares from Daimler (Mercedes-Benz):

STOCKHOLM — Sweden's

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Car Group expects stronger earnings and sales this year after the Chinese-owned automaker reached new records on both counts in 2017 thanks to strong demand for a string of new models, particularly in China.

Volvo Cars, bought by Zhejiang Geely Holding Group in 2010, reported on Thursday its fourth straight year of record sales as a revamped, pricier model lineup helped it take on larger rivals such as Daimler's

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.

The Gothenburg-based company, one of Sweden's biggest by sales, said operating earnings rose to 14.1 billion Swedish crowns ($1.76 billion) in 2017 from 11.0 billion a year earlier, as revenues climbed 17 percent to 210.9 billion crowns.

After the launch of new SUV models, the mainstay of Volvo's business, and with its first U.S. plant set to begin production later this year, Chief Executive Hakan Samuelsson said the automaker was poised for further growth in 2018.

"We believe we will see another strong year of growth with higher profitability," he told Reuters. "We now have all we need to keep growing and improve our profitability in order to reach the level where we want to be."

"Now, it is all about execution."

After languishing for years under the Ford Motor Co umbrella, Volvo Cars has found a new lease of life under Geely's ownership, investing in a broad overhaul of its models and making rapid inroads the world's biggest auto market, China.

In recent months, Geely has been spreading its net wider, striking a deal to buy an 8 percent stake in truck maker AB Volvo, once the owner of Volvo Cars.

It has also bought shares in Daimler in the hopes of forging an alliance over electric cars technology, sources told Reuters this week.

The implications for Volvo Cars are unclear, but the automaker has taken steps toward an eventual stock listing, raising 5 billion crowns from Swedish institutional investors through the sale of newly issued preference shares just over a year ago.

Samuelsson declined to comment on Geely's reported purchase of Daimler shares, but said opportunities for further co-operation with Gothenburg neighbor AB Volvo might be evaluated by the two firms, while an IPO for Volvo Cars remained an option.

"We run the company as if it was a listed company, and we believe it is good for us to have that transparency," he said.

"As far as a possible IPO is concerned, I know that is an option and a question for the owners Geely Holding to decide."

Volvo Cars has set a goal of reaching sales of 800,000 cars within the next few years.

It sold 571,577 Volvos last year, up 7 percent from 2016, boosted by demand in China, its biggest market, and brisk sales of its new 90-series station wagons and sedans and XC60 SUV.

($1 = 7.9923 Swedish crowns)

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[Anlsvrthng]

Explain why.

You start from the preconception I cherry picking data to support my theory.

The issue is I picking randomly onsumer related sales data to see the "health" of consumer economy.

Up to this point the available data:
-car
-phone
-pork
-tv sets
-white goods

The white goods the only category that showing imprvement over 2016, however this category directly related ( and maybe financed by ) the housing market.

I don't have any more data, if you have then free to share.

But the second high teicket item after the housing is the cars ,so weakness in the car sales showing deteriorating financial conditions of households.

And to make it wors the phone/pork sales droping like stone.

Usually if a household wants to show uplife life style then they have to have nice house and car, even if they have to eat grass.

I have a feeling in China everyone wants to show nice picture to his/her surronuning, like the south Spaniards : D

 

[broadsword]

You start from the preconception I cherry picking data to support my theory.

The issue is I picking randomly onsumer related sales data to see the "health" of consumer economy.

Up to this point the available data:
-car
-phone
-pork
-tv sets
-white goods

The white goods the only category that showing imprvement over 2016, however this category directly related ( and maybe financed by ) the housing market.

I don't have any more data, if you have then free to share.

But the second high teicket item after the housing is the cars ,so weakness in the car sales showing deteriorating financial conditions of households.

And to make it wors the phone/pork sales droping like stone.

Usually if a household wants to show uplife life style then they have to have nice house and car, even if they have to eat grass.

I have a feeling in China everyone wants to show nice picture to his/her surronuning, like the south Spaniards : D

Moving the goal posts, young man?

Just after you got the data on cars, cellphones, you proclaimed that's it: 2017, China in crisis. As if China's livelihood depend on those few items.

Relive your post here:

The story is even worst than it looks on surface.

China passanger car sales actualy grow by 1.4% from 2016 to 2017

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The samart phone sales droped by 4.9% , at the same time the US the sales growth by 1.5%.

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so, there was same "myth " about the Chinese that doesn't want to take loan.
So, it is a myth, the Chinese like to load up themself with loans like the average US citizen.

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46.8% in the second quarter of 17, growing by 1.3% from the previous quarter.
Means it is 5% worth of GDP household consumption comming from the new debt of the households.

Just for reference, in Hungary similar level of household debt triggered a melt down during 2008, and the debt level droped to 19%. So ,if you look for frugal, and saver country then Hungary or Russia is you choice, NOT china.But

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So, it looks like the real crisis in China started in 2017

I rebutted with growth of GDP nearly seven percent. With your kind of economic knowledge, you should know what that means. GDP is the summation of all economic activity, taking into account the drop in some sectors and the rise in others. I also wrote there are other goods and services that the Chinese consume, not just cars, etc.

So now, you wise up and try to cover up your tracks? But not before trying to be evangelical and blame communism for committing the people to poverty and that the middle class was thrown under the bus. Before you make those accusations, remember, Google is your friend, before you start acting like a charlatan; wikipedia is your guardian.

As for personal loans, the Chinese are more likely than Westerners to use them to buy houses than Westerners, who are more likely to rent the fixed asset. I have no link to give you, but you can quote me.

So what do you think will be the growth rate for China, India and America this year?

 

[Jura The idiot]

now I read
Commentary: Healthy China-U.S. ties significant for interests of both, world
Xinhua| 2018-02-10 19:45:56

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Some Western politicians and academics tend to believe in a tragic destiny for great power, predicting that China and the United States are going to collide just as the Athens were vanquished by Sparta in the Peloponnesian War more than 2,000 years ago.

They call such thinking the Thucydides Trap. However, history should be taken as past lessons, rather than a foretoken of the future. It can not be stressed more in the case of the China-U.S. relations.

Late Friday, Chinese State Councilor Yang Jiechi met with U.S. President Donald Trump, and expressed Beijing's willingness to have a stronger cooperation with Washington in trade and on other fronts, and to strengthen coordination on the Korean peninsula nuclear issue.

Yang's trip came as the Trump administration seems over the recent weeks to have been recalibrating Washington's strategic understanding of its ties with China and Beijing's role in the world.

In his first State of Union Address delivered late last month, Trump said China is among the "rival" countries that challenge America's interests and values. Not long before that, Washington, in its newly-published National Security Strategy and National Defense Strategy, tagged China a strategic competitor and a revisionist power.

The recent days have also seen some bumps in trade ties between the world's top two economies. Earlier last month, Washington has imposed 30 percent tariffs against its solar panels imports, 70 percent of which are from China and Malaysia. Also, the results of a probe into what it alleged intellectual property theft by China will be released soon.

These unfriendly labels and unilateral trade moves have reflected a growing misunderstanding of China's policy intentions, as well as a failure to recognize the huge global significance of a stable and sound China-U.S. ties among some beltway politicians.

China, though the world's second largest economy, remains a developing country. Many of its pressing priorities still focus on boosting domestic economic and social reforms and development.

Beyond its borders, Beijing is trying to work with the rest of the world to improve the existing global governance system so that it can reflect the rise of the emerging economies, and better serve the interests of all. Those in the United States and the West who suspect China is trying to pull down what they call the current "liberal world order" with its own are just seeking to tilt at windmills.

In crafting and carrying out its China policy, President Trump and his administration need to fully grasp a fact that, as the world turns increasingly globalized, China's interests and that of the United States are highly intertwined. That means it would be a lose-lose situation when China and the United States pit against each other instead of working together.

Take the recent solar panel tariffs for example: it's true that some Chinese companies in the industries are going to take a hit over the punitive measures, yet many American consumers would also be hurt for rising solar power prices. Related industries in the United States are also going to lose jobs.

Also, China should not be blamed for America's high-flying trade deficits. Leaving aside the fact China's trade surplus with Washington is mainly a result of the Asian country being a last assembly point for many products, economists and statistics have already pointed out that is because the Americans are consuming increasingly more than the country can produce, and the U.S. trade gap with its trading partners, not just China, is continuing to skyrocket.

Again, these differences do not mean that the two sides should work against each other. They should resolve these disagreements through certain dialogue mechanisms just as what Trump and his Chinese counterpart, Xi Jinping, agreed to set up at the U.S. leader's Mar-a-lago resort last April.

More than that, the world's two major countries also need to work more closely to address the world's most imminent challenges, like climate change and the fight against terrorism.

It is interesting to note that, one day ahead of his meeting with Yang, Trump arranged a meeting with Henry Kissinger, former U.S. secretary of state and an expert on China. According to later media reports, the two talked about situation on the Korean peninsula, the Middle East, and China.

Almost 46 years ago, it was Kissinger and then U.S. President Richard Nixon who came to Beijing and joined the Chinese leaders to break the estrangement of the two countries.

In his book "On China," Kissinger wrote "what a culmination if, forty years later, the United States and China could merge their efforts not to shake the world, but to build it."

It is hoped that Trump can follow that good advice, and join Beijing to ensure that the countries can build a shared future instead of falling into the Thucydides Trap.

 

[manqiangrexue]

You start from the preconception I cherry picking data to support my theory.

The issue is I picking randomly onsumer related sales data to see the "health" of consumer economy.

Up to this point the available data:
-car
-phone
-pork
-tv sets
-white goods

The white goods the only category that showing imprvement over 2016, however this category directly related ( and maybe financed by ) the housing market.

I don't have any more data, if you have then free to share.

But the second high teicket item after the housing is the cars ,so weakness in the car sales showing deteriorating financial conditions of households.

And to make it wors the phone/pork sales droping like stone.

Usually if a household wants to show uplife life style then they have to have nice house and car, even if they have to eat grass.

I have a feeling in China everyone wants to show nice picture to his/her surronuning, like the south Spaniards : D

If the total consumption is increasing, and you're only showing single data points that have a slight decrease (or trying to discount the increases), then you are cherry-picking your data as they do not represent the overall trend of increase. This is beside the point that most of your decreases are either already untrue (cars) or explained by foreign companies' under-performance (phones).

I also don't know what you are talking about with the pork issue because according to your favorite site, (

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), it's growing just fine, but eventually, it cannot grow anymore. A nation of stable population cannot eat more and more every year indefinitely. And also, beef is seen as superior to pork in China but pork is cheaper and easier to raise, so as China gets richer, we can expect to see a drop in pork and rise in beef (

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). Although I wouldn't personally partake in this, we may also see a drop in overall meat sales in China for this peculiar reason here: (

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).

Furthermore, all of the "drops" (fluctuations is actually the more proper term) that you see have happened many times and turned over just as many times in the last few decades of China's growth without causing any "inflection." In China, the trend for all of them is rising, but none of them are free from small downward fluctuations every once in a while.

I basically wrote this for other people reading because I know you can't learn or hold a discussion. These points have all been told to you before but you're still citing these non-existent issues desperate to create an image of China's fall. And I'll bet that despite all this, next post, you'll still say, "China's pork, cellphone, car sales are PLUMMETING (if you know the word LOL) severely and consumer is DEAD FISH so you get ready for crisis 2018... or maybe 4 years later!" LOLOL

You just think about what stupid shit you're gonna say in 2019 when all these statistics you cited with downward fluctuations go back up because by your logic, if these 4 stats show China's crisis, then when they rise, then it's a new era of growth!

 

[Anlsvrthng]

Moving the goal posts, young man?

Just after you got the data on cars, cellphones, you proclaimed that's it: 2017, China in crisis. As if China's livelihood depend on those few items.

Relive your post here:


I rebutted with growth of GDP nearly seven percent. With your kind of economic knowledge, you should know what that means. GDP is the summation of all economic activity, taking into account the drop in some sectors and the rise in others. I also wrote there are other goods and services that the Chinese consume, not just cars, etc.

So now, you wise up and try to cover up your tracks? But not before trying to be evangelical and blame communism for committing the people to poverty and that the middle class was thrown under the bus. Before you make those accusations, remember, Google is your friend, before you start acting like a charlatan; wikipedia is your guardian.

As for personal loans, the Chinese are more likely than Westerners to use them to buy houses than Westerners, who are more likely to rent the fixed asset. I have no link to give you, but you can quote me.

So what do you think will be the growth rate for China, India and America this year?

Up to 2012 the Chinese crisis affected only the Goverment / business sector, the most important household was free of debt.

The most important data is the household debt to GDP, the phone/car/tv/pork showing only the ultimate debt carry capacity of the midle class , and the peak point of debt fueled consumption growth.

Now the midle class debt loaded and hit the pea spending point in 2016.

The business / goveremtn doesn't realy matter , the (yuan) debt carry capacity of the goverment infinite, the business sector can go int bankrupct, but what can you do with the household sector?

And the GDP growth is absolutly irrelevant, the banks are goverment controlled in China, and the increase in lending automaticaly increasing the investment level and GDP.

But they can not increase the consumption, and the household:business:goverment ratio .without working against the interest of the political class.

 

[Anlsvrthng]

According to

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The per capita car ownership of UK is at least 510 per 1000 people, while China's is about 160 per 1000 people. So it will take more than 10 years of 10% growth for China's per capita car ownership to reach UK's, assuming UK's car ownership will not grow at all. And why would China's car ownership stop at UK's level? How about New Zealand and Australia?

This may be the case but only in PPP terms. In nominal terms, Chinese cars will probably still be less expensive than those in UK even after 10 years.


China's consumption growth may well reach a sustained 10% a year despite a GDP growth of 6-7%. Currently, China's retail sales is growing more than 10% a year.

Volvo is doing well, thanks to the Chinese market. Geely also wants to buy shares from AB Volvo and reportedly bought shares from Daimler (Mercedes-Benz):

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The population density fo China is more similar to the UK than the Australia / US.
At the moment the car stock of China is around 200 million, and the production is around 25-30, so in 8 years time they will have 400 million car, 320/1000 person.
Not far away from the UK.

To reach the UK level the production has to increase by 50% ,means 2-5 years to reach that level with 10% growth.

ten years to reach the saturation point, after that the GDP/ consumption ratio has to be like in the UK.

See?

The growth is nt balanced, if you follow simple scenarios neither of them add up.

 

[manqiangrexue]

Up to 2012 the Chinese crisis affected only the Goverment / business sector, the most important household was free of debt.

The most important data is the household debt to GDP, the phone/car/tv/pork showing only the ultimate debt carry capacity of the midle class , and the peak point of debt fueled consumption growth.

Now the midle class debt loaded and hit the pea spending point in 2016.

The business / goveremtn doesn't realy matter , the (yuan) debt carry capacity of the goverment infinite, the business sector can go int bankrupct, but what can you do with the household sector?

And the GDP growth is absolutly irrelevant, the banks are goverment controlled in China, and the increase in lending automaticaly increasing the investment level and GDP.

But they can not increase the consumption, and the household:business:goverment ratio .without working against the interest of the political class.

I guess of all the wrong things you said, I have to pick the ones that are most wrong...

Many countries have higher household debt to GDP than China and many have lower. The US, for example, has higher. So why is this the MOST important and what can you extract from China being in the middle of the pack?

A peak in 2016 means that Chinese consumption declined in 2017. The data everyone see is that it's increasing. So are you just so badly out of things to say you're making up statistics that don't exist now? LOL

The population density fo China is more similar to the UK than the Australia / US.
At the moment the car stock of China is around 200 million, and the production is around 25-30, so in 8 years time they will have 400 million car, 320/1000 person.
Not far away from the UK.

To reach the UK level the production has to increase by 50% ,means 2-5 years to reach that level with 10% growth.

ten years to reach the saturation point, after that the GDP/ consumption ratio has to be like in the UK.

See?

The growth is nt balanced, if you follow simple scenarios neither of them add up.

The only thing that doesn't add up is your logic. What the hell are you talking about? China is China and UK is UK. Their auto situations have nothing to do with each other. Do you know how many things China has achieved that the UK will never? LOL Your entire comparison is absolutely pointless.

 

[Anlsvrthng]

If the total consumption is increasing, and you're only showing single data points that have a slight decrease (or trying to discount the increases), then you are cherry-picking your data as they do not represent the overall trend of increase. This is beside the point that most of your decreases are either already untrue (cars) or explained by foreign companies' under-performance (phones).

Household debt to GDP is NOT a single data pont.

It showing brutal indebtness of the chinese households, .

Now the question is the saturation point, and by the available data it is 2017.

The interesting data point should be the housing starts / sales/ prices, but there I haven't found any data, appart from this: