Chinese Economics Thread

[broadsword]

Dont't know who is that guy, but I have an

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moment : )
Up to few days ago I tought that the consumers and the transition to consmption driven from investment happens in China, maybe slowly, but now it is quite obivous it doesn't happens. It actually hitting the wall.

You have not been reading the news. Google for them.

This is the news of the decade : D

That's to someone like you. Not even to the most pessimistic Western economists.

 

[broadsword]

It is important, because it can lead to social instability.

And frankly now it is an unknownl land, what will happens.

There is someone who agrees with you. From Quora.

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, lives in Chengdu, Sichuan, China

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As a Chinese I would say most probably yes, China will collapse in 2019, to be specific starting from 4th of February, 2019.

Factories will shut down, shops will be closed, the government will stop operating, stock market will stop trading. Biggest cities like Beijing and Shanghai will be deserted, becoming ghost cities.

Rich families will go overseas, while the local people are eager to put money into food. Many families are in front of the slogan to express their demands, the streets will be filled with explosive residue of gunpowder.

Most people will stop working, but drink all day.

Young children gather in crowds and groups to beg for money.

The whole country will seem to be in a state of collapse......

By the way, this “collapse” happens every year.

 

[supercat]

The population density fo China is more similar to the UK than the Australia / US.

Yes. But China's population density is only about 54% of UK's. See

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For UK, the vehicle ownership is 510 per 1000 persons. So China can have a higher vehicle ownership than 510 per 1000 persons.

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.

320 vehicles/1000 persons is only about 63% of UK's per capita ownership.

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.

To reach UK's level, China has to produce about 500 million more vehicles. At a current production rate of 24 million a year and a 10% growth rate, it will take 10 years at least.

See?

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

Exactly what's unbalanced?

 

[broadsword]

Chinese Ebikes account for 81.6% of total imports into EU for 2013.
NSG Insight

EU-27 Imports of E-bikes (in units) 2013

Country of origin E-bike Units
P.R. of China 304,301
Japan 31,399
Taiwan 18,273
Vietnam 15,751
USA 680
Canada 488
Ceuta 422
Malaysia 292
Switzerland 273
Hong Kong 259
All others 613
Total units 372,751
Source Eurostat

 

[antiterror13]

Big part of China is mountain , and have 0 population density.
If you consider Enland population density then it is way higher than the UK data, because Scotland ( and Walles) is empty.

The remaining part has extreme level o population density.


If the public transport is good in china, and if needs lover level of car ownership than UK then the current level of car sales is the ballance point, and the car sales won't add to the GDP any more, and the road construction as well wasted money from this point.

what actually your point? .. you keep moving the goal posts ... quite annoying

 

[manqiangrexue]

what actually your point? .. you keep moving the goal posts ... quite annoying

His point is that China's economy is completely unsustainable, at an inflection point, and in utter crisis, the kind where the GDP keeps growing splendidly year on year.

 

[supercat]

And the household incomet from the gross domestic product is lower as well. : )

However the german is higher only by 6.3% , it takes one year of the current speed of consumer debt growth to go higher than germany.

See the different directions? The two graph can cross each other now, or in the next six month.
And ths is COMPARED to the GDP , means in nomainal term it growing faster.

five-six years to reach the same level.

six-seven years to reach the same level.

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Meantime the private consumption share from the GDP decreased from 39.4 % to 39.1% in one year time.

In germany the household consumptio to GDP is 53% (very low too) , so the households 120 % ish in debt compared to the yearly income inChina,, 100% ish in Germany, 130% ish in the UK, 112% ish in the USA.

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Means the chinese consumers are in worst finanacial condition compared to the US consumers.

Interesting, isn;t it?

And the US consumer is actualy decreasing its debt level since 2009, and the chinese is in(or was) in the exponential growth phase.

Why do you always talk about debt level but not savings rate? China has as much national gross savings as the U.S. and EU combined.

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A tale of Chinese spending power in the Year of the Dog
Tourists head to major destinations such as Thailand, Japan, Malaysia, Indonesia and the Philippines for Chinese New Year

As you would expect from China, it is all about the numbers. With the clock ticking down to the Chinese New Year, or the Spring Festival holiday, retailers, restaurants and tourist destinations are gearing up for a financial feast.

Business confidence appears to be as high as the fireworks which will illuminate the night sky to bring in the Year of the Dog.

Last week, a report released by the Ministry of Commerce showed that total earnings for retail and catering companies are predicted to hit 900 billion yuan (US$143 billion) during the week-long holiday, a 10% increase compared to 2017.

“The key term will be consumption upgrade,” Wang Bingnan, the vice-minister of Commerce, told the Chinese media at a press conference. “Higher-quality products and services will gain popularity.

“Instead of the traditional gatherings, more families are choosing to dine outside or order dishes online,” he added.

At the heart of this trend are the major e-commerce players such as Alibaba, Tencent and JD.com.

Home deliveries are forecasted to soar as part of the online shopping boom. Internet travel bookings have also seen a sharp rise in the run-up to the Spring Festival, which starts on Feb. 15.

“Changes in lifestyle [are having an] impact on consumer behavior and habits,” Vishal Bali, the managing director of Nielsen in China, told the state-owned Xinhua News Agency.

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. About 385 million trips are expected to be made during the New Year festivities, an increase of 12% compared to 2017, according to data released by the Ministry of Commerce.

Tourism revenue is projected to reach 476 billion yuan with around 6.5 million Chinese traveling overseas, which is one million more than the entire population of Scotland.

“Consumers have come up with new requirements for tourism and food, thus contributing to the upgrading of these two sectors,” said Bali at Nielsen, the global market research firm.

“When traveling, they pay more attention to the experience and comfort. In terms of food consumption, they are more willing to pay for healthy [options],” he added.

Nielsen’s latest China Consumer Confidence Index confirmed those views. Last year, its CCI came in at 112 points, up from 106 in 2016, with job prospects, personal finance and spending power reaching a two-year peak.

In the fourth quarter survey, the CCI hit a record high of 114 points as confidence in the economy continued to grow.

This is in line with Beijing’s official figures with retail sales in the world’s second-largest economy expected to expand by 10% in 2018 to more than 40 trillion yuan, a report from the research institute of the China Council for the Promotion of International Trade highlighted.

“Since [2017], the excess capacity of traditional industries has gradually been solved, and the new growth points have emerged,” said Wei Shao, a manager at Nielsen China. “The quality of economic development has been improved, with growing indexes of employment, income and prices.”

Indeed, increased consumer confidence is seeing a mini foreign travel boom with Thailand the number one vacation spot during Chinese New Year. Japan, Singapore, Malaysia, Indonesia, Vietnam and the Philippines make up the top seven.

Another hot destination will be Europe. Ctrip, a leading online travel agency in Shanghai, reported last week that affluent customers were going upmarket, with luxury accommodation bookings jumping by 72%, without revealing detailed figures.

“More people are also opting to celebrate the Lunar New Year on luxury cruise liners,” Ctrip stated without disclosing the exact numbers to Caixin, a media group based in Beijing.

Overseas or on the high seas, Chinese tourists will unleash their spending power in the Year of the Dog.

 

[Jura The idiot]

now noticed the tweet

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Houston-based Cheniere Energy announced Friday that it has struck two long-term deals to sell 1.2 million tons of liquefied natural gas (

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) every year to China National Petroleum Corporation (CNPC). Shipments will begin this year

 

[Anlsvrthng]

Why do you always talk about debt level but not savings rate? China has as much national gross savings as the U.S. and EU combined.

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Ok, it sounds a bit strange.

You mean by saying" savings" liquid assets in the disposal of the population, or money saved in the bank, or what?

I mean, it is quite safe to say the average US citizen has higher level of assets in his/her disposal than the average Chinese household.

Or you mean the national level yearly saving rate, that needs to be invested somewhere ?

In the later case the yearly investment has to generate positive return, or at least has to keep its value.

That is the problem in China at the moment.

The businesses making investments with negative return rate.

Means 100 yaun of saving worth only 90 youan in one year time, and it rolled over by using cheap financing, and that helps to avoid the recognition of losses.

 

[Anlsvrthng]

His point is that China's economy is completely unsustainable, at an inflection point, and in utter crisis, the kind where the GDP keeps growing splendidly year on year.

I still thinking about the potential outcomes.

But I think the graph about China oil/ore/coal consumption, and the general labour requireet of investment and so on means that without using very creative accounting the further investment fueled headling GDP growth become very hard.

I mean, there is no more technology improvement in making new roads, so now on the exponentialy increasing ammount of road construction will useing exponentialy mroe resources.

I mean, the problem with investment based GDP growth is that if you make 100000 km of road every year then the GDP contribution will stay the same, so if you want to increase the GDP by ten percent then you have to make ten percent more road per year.

After a while you have to restrict the consumption to make this trick, if there is no more free resources in the economy.
In that case the best way is to start to send into bankrupcy the road making companies and banks, and free up the resources to make cosnumption items.
Additionaly, they can start to import mroe consumer item.

The best outcome should be changing trade ballance from surpluss to deficit, big company bankrupcies, but tight labour market and improving sallaries, faster growing than the inflation.

That should be the real reballancing.
Example there was a moment like this in 1937 in Germany, when they reached the maximum level of armament making.

Interesting.