Chinese Economics Thread

[Equation]

IT will turn into , there is huge amount of poor who wants nice dwelling , question is how China will transfer the assets from the rich to the poor?

Japanese style, USA great depression style, Roman empire collapse style?

Everyone talking about the end point, but not about that how to get there .
I mean, it is easy to get the gold from the sunken ship 3000 meters deep, question is how you get there without die during the diving.

It's also "easier" to play down China's ability when one's own country are suffering as well in both economically and government leadership wise. Remember China is the ONLY country TODAY to be able to uplift 800 million people out of poverty and another hundreds of millions more in middle class status. Like I said, that's better than any "god" or government out there.

 

[Anlsvrthng]

LOL Why Japanese style, USA style, or Roman style? Are we talking about Japan, USA or Italy? They follow their styles and China follows ours.

I already told you, it will be done Chinese style, and the middle class will be expanded and the poor will be uplifted, as it always has been in the PRC. I know you fear Chinese style but shoving your head into a hole in the ground and pretending it doesn't exist will not change the world around you...

There are countless example showing the difficulty to redistribute the wealth/ turn around the wrong wealth distribution patterns.

Roman empire around 400 after date , big depression in 1930s, Japanese struggle since the 80s, Argentine in 1998 .

And there is a mathematical issue with it, IF the house prices are not affordable with the current wage level, and there is already excess inventory ( 42% higher than the second most bubble economy) and no one want to drop the price seriously, then how can the construction industry stay alive in the lack of demand for decade(s) ?

At the moment the real wage growth is 5% (nominal 7.5% ), the house price growth is 8.6%.

And the wages started from very low level compared to house prices, and this is not improving.

See this:

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Price to income ratio ,China 29.5 , UK 8.9 .

 

[manqiangrexue]

There are countless example showing the difficulty to redistribute the wealth/ turn around the wrong wealth distribution patterns.

Roman empire around 400 after date , big depression in 1930s, Japanese struggle since the 80s, Argentine in 1998 .

And there is a mathematical issue with it, IF the house prices are not affordable with the current wage level, and there is already excess inventory ( 42% higher than the second most bubble economy) and no one want to drop the price seriously, then how can the construction industry stay alive in the lack of demand for decade(s) ?

At the moment the real wage growth is 5% (nominal 7.5% ), the house price growth is 8.6%.

And the wages started from very low level compared to house prices, and this is not improving.

See this:

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Price to income ratio ,China 29.5 , UK 8.9 .

Well, there are countless examples of it being difficult for other countries, and also countless examples of how some countries have succeeded. But those are only asides from the fact that China has been creating wealth to boost the lower classes all along. Redistribution of wealth from the wealthy to the poor is one thing; China much prefers that the rich keep getting richer, but the poor get richer too, lifting the economic power of the whole country. So China's not interested in making the rich poorer to make the poor richer; maybe that's why some other economies have failed. China aims to make every Chinese richer.

Your examples of how other nations have difficulty uplifting the poor is absolutely pointless when applied to a China that already does this every day and has been for decades. It is like saying, "Donald Trump can't dunk; Jay Leno can't dunk; Danny Devito can't dunk; all these guys can't dunk! So how can Lebron James dunk?" The answer is because you're looking at Lebron James dunk LOL

 

[Anlsvrthng]

Well, there are countless examples of it being difficult for other countries, and also countless examples of how some countries have succeeded. But those are only asides from the fact that China has been creating wealth to boost the lower classes all along. Redistribution of wealth from the wealthy to the poor is one thing; China much prefers that the rich keep getting richer, but the poor get richer too, lifting the economic power of the whole country. So China's not interested in making the rich poorer to make the poor richer; maybe that's why some other economies have failed. China aims to make every Chinese richer.

Your examples of how other nations have difficulty uplifting the poor is absolutely pointless when applied to a China that already does this every day and has been for decades. It is like saying, "Donald Trump can't dunk; Jay Leno can't dunk; Danny Devito can't dunk; all these guys can't dunk! So how can Lebron James dunk?" The answer is because you're looking at Lebron James dunk LOL

The extreme level of income to price ratio, the low level of consumption compared to GDP, the exploding household debt showing that these policies doesn't works.
The transfer of wealth to poor from wealthy doesn't happens.

If the poor income faster growing than the asset owners income then in practice it means the company sales growing, the money flowing, but previously the profit was 10, and the salary pool was 8, now the salary pool growing from year to year, but the profit pool stay the same.

Do you think the companies / rich guy will not do anything in they disposal to turn around the trend?
And this is about the net profitable company, but if the (like all SOE) business makes money by arbitraging the cheap loans and inflation, then the required market conditions for this trend change require to shut off the money taps.


Anyway, the crises above wasn't the result of the imbalances, but the SOLUTION for that.
The government policies during the depression made the difference between the united states of america and argentina.
Who was protected, the poor or the rich?

The Chinese situation now ripple for a big correction.

 

[manqiangrexue]

The extreme level of income to price ratio, the low level of consumption compared to GDP, the exploding household debt showing that these policies doesn't works.
The transfer of wealth to poor from wealthy doesn't happens.

If the poor income faster growing than the asset owners income then in practice it means the company sales growing, the money flowing, but previously the profit was 10, and the salary pool was 8, now the salary pool growing from year to year, but the profit pool stay the same.

Do you think the companies / rich guy will not do anything in they disposal to turn around the trend?
And this is about the net profitable company, but if the (like all SOE) business makes money by arbitraging the cheap loans and inflation, then the required market conditions for this trend change require to shut off the money taps.


Anyway, the crises above wasn't the result of the imbalances, but the SOLUTION for that.
The government policies during the depression made the difference between the united states of america and argentina.
Who was protected, the poor or the rich?

The Chinese situation now ripple for a big correction.

You didn't read properly.

First. I said, wealth creation for the poor, not wealth transfer. You said wealth transfer and you've been hung up on it.

Secondly, you are trying to use analysis to debunk something that has already happened. There is nothing, no reason in the universe for anyone to say that China cannot raise its poor into the middle class because it has already happened and is still happening. Everything you are saying is like you are living in an imaginary world where the poverty level in China has remained steady for the last few decades. You're wrong, because your conclusion is against reality. Just as no amount of mathematical "reasoning" can prove that 1+1=3, no amount of economic argument can prove that China cannot do what it has already done and is continuing to do.

 

[Anlsvrthng]

First. I said, wealth creation for the poor, not wealth transfer. You said wealth transfer and you've been hung up on it.

Doesn't really matter how you name it. At the moment the economical control is in the hands of wealthy, and it has to transferred to the hands of poor.
Data doesn't show any transfer.

Secondly, you are trying to use analysis to debunk something that has already happened. There is nothing, no reason in the universe for anyone to say that China cannot raise its poor into the middle class because it has already happened and is still happening. Everything you are saying is like you are living in an imaginary world where the poverty level in China has remained steady for the last few decades. You're wrong, because your conclusion is against reality. Just as no amount of mathematical "reasoning" can prove that 1+1=3, no amount of economic argument can prove that China cannot do what it has already done and is continuing to do.

You question the basic of science. The usability of past experiences and theories based on logic.

 

[Anlsvrthng]

I think many doesn't grasp the issue that faced by China now.

I saw the same problem in the eastern European countries.

The transfer of wealth from the few to the many is way more complex and deeper political change than say from go to a one party system to a plural "democracy".

Without deep legal, political,institutional changes the whole "wealth redistribution" will not work.
To make them work China has to go through a deeper and more complex transformation than the one happened in the 90s in Eastern Europe.

And it is not about voting and so one, that is an irrelevant part of the equitation , it is about deep legal and economy control changes.

 

[manqiangrexue]

Doesn't really matter how you name it. At the moment the economical control is in the hands of wealthy, and it has to transferred to the hands of poor. Data doesn't show any transfer.

No, it matters plenty. It's not just a name at all. Transfer of wealth from the rich to the poor means the rich have to be poorer and give up their wealth. Creation of wealth has something to do with the poor sending thier kids to school, then their kids gain knowledge and have novel ideas on opening new industries and reforming old ones and they become a richer group of people. Your "transfer of wealth" sounds terrible; it scares the rich. They want to take all their money and leave as soon as they hear you want to do some Robin Hood crap to them. That's not what China does. The creation of wealth by the poor is how China reduces poverty, grows the middle class, and develops its economy. You don't even understand the difference and you're here trying to analyze how something that has already happened couldn't be happening?

Economic control is always in the hands of the wealthy; in which country is it not? If it weren't, the economy would be run into the ground instantaneously because regular people with hourly pay jobs are not smart or experienced enough to be in control of the national economy.

You question the basic of science. The usability of past experiences and theories based on logic.

No, I question your reading comprehension. This response of yours is nonsense. The "basic of science" is that if you're seeing something happen, then don't waste your time trying to convince others it can't happen. That's common sense.

I think many doesn't grasp the issue that faced by China now.

The lack of understanding is all yours. You don't understand what kind of country China is. You think that every small mistake or hurdle that a midget country with an insignificant economy couldn't overcome could stop a country like China in its tracks. If that were true, China would never be where it is today. That's what you don't grasp.

I saw the same problem in the eastern European countries.

And it will stay with them. The limitations of donkeys do not apply to race horses.

The transfer of wealth from the few to the many is way more complex and deeper political change than say from go to a one party system to a plural "democracy".

That's why China doesn't do Western style "transfer" of wealth. China just makes more wealth.

Without deep legal, political,institutional changes the whole "wealth redistribution" will not work.
To make them work China has to go through a deeper and more complex transformation than the one happened in the 90s in Eastern Europe.

The deep change in China is that an uneducated mass of blue collar basic laborers is being transformed into teams of highly educated scientists, engineers, businessmen, etc... That's the transformation that China strives for to create a larger urban middle class who can afford housing and can contribute meaningfully to the country.

Your thinking is so inflexible that you are still stuck questioning how China can make CEOs accept lower salaries while paying janitors and assembly line workers enough to buy a 4 bedroom apartment in Beijing with 3 cars. This inflexibility is why you will never understand China and the Chinese way.

 

[Anlsvrthng]

No, it matters plenty. It's not just a name at all. Transfer of wealth from the rich to the poor means the rich have to be poorer and give up their wealth. Creation of wealth has something to do with the poor sending thier kids to school, then their kids gain knowledge and have novel ideas on opening new industries and reforming old ones and they become a richer group of people. Your "transfer of wealth" sounds terrible; it scares the rich. They want to take all their money and leave as so

...

you will never understand China and the Chinese way.

Again.
Wealth is the capability to make money , NOT the actual possession of a physical item.
The most wealthy persons on earth has they rank based on the expected future cash flow.
If the future cash flow will be changed for the favour of workers then the asset owners current worth will decrease.

Wealth transfer means the devaluation of assets , and the increased cost of workforce.

And all other part of your post showing the emotional attachment to the topics, and the lack of capability to objectively evaluate the situation.

Funny thing is your reasoning sounds like saying maybe a pig can't fly , but the elephant can, because it has big ears : D

You repeatedly try to small scale experiments /results dismiss based on the lack of size of given countries.

 

[manqiangrexue]

Again.
Wealth is the capability to make money , NOT the actual possession of a physical item.
The most wealthy persons on earth has they rank based on the expected future cash flow.
If the future cash flow will be changed for the favour of workers then the asset owners current worth will decrease.

Wealth transfer means the devaluation of assets , and the increased cost of workforce.

Well again, you're wrong. Wealth is not defined as the expected future cash flow. Where the hell did you get that definition? An unskilled man who won the lottery is not wealthy? Someone who inherited millions of dollars from his grandfather is not wealthy? A guy with no money, no house, no car but a briefcase full of unrealized designs with the potential to make him a billionaire is already considered wealthy? You get more ridiculous by the post.

Wealth is defined by what you have right now; When Donald Trump cheated his way to the wealth rankings, he lied about the current worth of his properties. He didn't tell them false plans on how much he expects to earn in the future because that's a joke.

But the funny thing is, it doesn't matter; your new made-up definition actually suits China better. Because the Chinese situation embodies that perfectly. The poor masses in China that have their children getting educated, the young people living in 6 people dorms studying 12 hours a day to learn technology, science, economics, all embodies future wealth, not current wealth. Which is why they will turn their knowledge into wealth and buy those empty apartments being readied for them; if it were current wealth, they'd be living in them now.

And all other part of your post showing the emotional attachment to the topics, and the lack of capability to objectively evaluate the situation.

Maybe because I have repeated myself so you think it is emotional. No, it is because you still don't understand the simple principle of NOT trying to disprove things that are already true. China has been and is still growing its middle class, increasing the number of people who can afford to buy urban housing. That's a fact. You can't argue against facts. This has nothing to do with my emotion and everything to do with your stupidity.

Funny thing is your reasoning sounds like saying maybe a pig can't fly , but the elephant can, because it has big ears : D

Hmmmm you are not good at this game. First of all, whether elephants fly does not depend on whether or not pigs fly. Pigs don't fly because they can't and elephants don't fly because they can't; they are independent. If you think that the reason elephants cannot fly is because pigs cannot fly, that explains some of your confusion.

But a more appropriate analogy would be that you think because pigs can't fly, so birds also cannot fly. Then, you look up and see birds flying, and you say, "No, that's not possible. They must be like the pig, the cow, or the elephant. Let me explain all the reasons that this cannot be happening:" And you ramble on with made-up reasons masquerading as "analysis" or "evaluation".

You repeatedly try to small scale experiments /results dismiss based on the lack of size of given countries.

This "sentence" does not make sense in English. I have made no experiments here at all. It is you who tried to use cherry-picked examples of some historical events to try to argue why something that is already happening, cannot be happening.