Chinese Economics Thread

[Anlsvrthng]

now, giving the benefit of the doubt and reading

#9691 Anlsvrthng, Yesterday at 8:19 AM

huh,
Anlsvrthng

apparently you've added China's inflation to GDP to get "9%",
out of which you subtracted
an increase of China's households debt "(debt growth 4.4%)"
and then added "(saving growth negative saving growth -)"
to arrive at "close to 0 income growth";

I don't get what's "(saving growth negative saving growth -)"
so please elaborate, plus
Anlsvrthng
show units of all terms in your equation: you woudn't be mixing apples with oranges, would you?

: )

It is due to the way the GDP is calculated.

Say if the US economy generated 10 $ goods in year 0, and 11 in year 1 , then the economy didn't growth by 10 %, but by a value corrected by inflation.
Means if the inflation was 5% , then the GDP growth was 0.05/1.05=0,0476 >>> 4.76% , NOT 10%.

But the consumer spending is not corrected by inflation, so if the consumer spent 5$ in year 0, and 5.4 in year 1 then it is easy to claim 8% growth of consumption, but it can not be compared to the GDP growth directly.
Actually, this number should show that the consumer spending falling, from 50% to 49% of the GDP.


Many number about the Chinese economy mixing up the inflation adjusted data ( like GDP) with gross data ( like consumer spending) .

To make it worst the core (food) inflation is higher than the full inflation.

The inflation data is very shady anyway everywhere, and because it is the base for the GDP growth calculation it is susceptible for manipulation.
Example in the US in the 00s they understated the inflation because the house price increase was not counted into the inflation.
Means the interest rate was lower than should be , and the crisis in 09 was best part due to that.

So, understating the inflation increase the gdp, and creating asset bubbles because of cheaper long term financing.


The consumer spending data is easy, every household has income , has money saved, money borrowed and money spent.
The sum of this four cashflow has to be 0.
So, knowing three of these the fourth can be calculated, or the discrepancy between the numbers discovered.

The inflation corrected consumer spending is close to the money borrowed ( something% inflation adjusted borrowing vs 8.something NON inflation adjusted spending increase),and the consumer saving falling as well(no 16 /17 data for this ,but previous years showing falling trajectory)


Means the net household income has to fall,not grow, maybe interest payment or new taxes?

Sum the inflation with GDP OR subtract the inflation from consumer spending is not precise (these should be multiplications) but with small numbers the error is small .


Anyway, thanks, you are the first who try to understand that I talk about.

 

[Jura The idiot]

: )

It is due to the way the GDP is calculated.

Say if the US economy generated 10 $ goods in year 0, and 11 in year 1 , then the economy didn't growth by 10 %, but by a value corrected by inflation.
Means if the inflation was 5% , then the GDP growth was 0.05/1.05=0,0476 >>> 4.76% , NOT 10%.

But the consumer spending is not corrected by inflation, so if the consumer spent 5$ in year 0, and 5.4 in year 1 then it is easy to claim 8% growth of consumption, but it can not be compared to the GDP growth directly.
Actually, this number should show that the consumer spending falling, from 50% to 49% of the GDP.


Many number about the Chinese economy mixing up the inflation adjusted data ( like GDP) with gross data ( like consumer spending) .

To make it worst the core (food) inflation is higher than the full inflation.

The inflation data is very shady anyway everywhere, and because it is the base for the GDP growth calculation it is susceptible for manipulation.
Example in the US in the 00s they understated the inflation because the house price increase was not counted into the inflation.
Means the interest rate was lower than should be , and the crisis in 09 was best part due to that.

So, understating the inflation increase the gdp, and creating asset bubbles because of cheaper long term financing.


The consumer spending data is easy, every household has income , has money saved, money borrowed and money spent.
The sum of this four cashflow has to be 0.
So, knowing three of these the fourth can be calculated, or the discrepancy between the numbers discovered.

The inflation corrected consumer spending is close to the money borrowed ( something% inflation adjusted borrowing vs 8.something NON inflation adjusted spending increase),and the consumer saving falling as well(no 16 /17 data for this ,but previous years showing falling trajectory)


Means the net household income has to fall,not grow, maybe interest payment or new taxes?

Sum the inflation with GDP OR subtract the inflation from consumer spending is not precise (these should be multiplications) but with small numbers the error is small .


Anyway, thanks, you are the first who try to understand that I talk about.

it's a wall of text Anlsvrthng
I ask again
show units of all terms in your equation: you woudn't be mixing apples with oranges, would you?

I'm curious how sound is your model since you said
"Have you ever had to solve process/machine/material/quality/business problems using statistical tools ever?" Yesterday at 8:19 AM

 

[Anlsvrthng]

it's a wall of text Anlsvrthng
I ask again
show units of all terms in your equation: you woudn't be mixing apples with oranges, would you?

I'm curious how sound is your model since you said
"Have you ever had to solve process/machine/material/quality/business problems using statistical tools ever?" Yesterday at 8:19 AM

Important bit:
It is due to the way the GDP is calculated.

Say if the US economy generated 10 $ goods in year 0, and 11 in year 1 , then the economy didn't growth by 10 %, but by a value corrected by inflation.
Means if the inflation was 5% , then the GDP growth was 0.05/1.05=0,0476 >>> 4.76% , NOT 10%.

But the consumer spending is not corrected by inflation, so if the consumer spent 5$ in year 0, and 5.4 in year 1 then it is easy to claim 8% growth of consumption, but it can not be compared to the GDP growth directly.
Actually, this number should show that the consumer spending falling, from 50% to 49% of the GDP.

 

[Equation]

Important bit:
It is due to the way the GDP is calculated.

Say if the US economy generated 10 $ goods in year 0, and 11 in year 1 , then the economy didn't growth by 10 %, but by a value corrected by inflation.
Means if the inflation was 5% , then the GDP growth was 0.05/1.05=0,0476 >>> 4.76% , NOT 10%.

But the consumer spending is not corrected by inflation, so if the consumer spent 5$ in year 0, and 5.4 in year 1 then it is easy to claim 8% growth of consumption, but it can not be compared to the GDP growth directly.
Actually, this number should show that the consumer spending falling, from 50% to 49% of the GDP.

Those numbers have nothing to do with China. In the last year, China's average monthly inflation was 2.1% while its spending, income, and disposable income all rose close to 9%. There is not sense-making mathematical way to claim that 2.1% can negate these numbers, especially income, down to 0%.

 

[Anlsvrthng]

Those numbers have nothing to do with China. In the last year, China's average monthly inflation was 2.1% while its spending, income, and disposable income all rose close to 9%. There is not sense-making mathematical way to claim that 2.1% can negate these numbers, especially income, down to 0%.

The consumer spending data is easy, every household has net income(after tax,interest,including government refund/benefits/capital and investment gains) , has money saved, money borrowed and money spent.
The sum of this four cashflow has to be 0.
So, knowing three of these the fourth can be calculated, or the discrepancy between the numbers discovered.

 

[Franklin]

This is the reason why China's economy keeps growing. And incomes are rising faster than all other major economies in the world. All sectors in China are "forced" to innovate and introduce new methods and technology of working. China is able to do this because of its investments in infrastructure, education and industry. And that in turn is made possible by the high savings rate of its people.

China has become a dominant US$1.89 bn logistics market

As costs are gradually rising in all aspects, logistics companies face full market competition and are having little room for reducing costs

China has become a global logistics power and the world’s largest logistics market, racking up 12.1 trillion yuan (US$1.76 trillion) in logistics costs in 2017, The Paper reported.

With the increase of GDP and logistics demand, it is estimated that total costs in China will be close to or exceed 13 trillion yuan (US$1.89 trillion) in 2018, according to Ni Wei, an executive director of China International Transportation and Logistics Expo.

“The total logistics cost of 13 trillion yuan has created a 13-trillion-yuan logistics market,” said Ni.

As costs are gradually rising in all aspects, logistics companies face full market competition and are having little room for reducing costs.

To survive and develop in the competition, these companies must adopt new technologies and equipment, and transform from labour-intensive to technology-intensive enterprises, Ni said.

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Real wages/income are growing faster in china than the global average for the last decade.

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[Jura The idiot]

Important bit:
It is due to the way the GDP is calculated.

Say if the US economy generated 10 $ goods in year 0, and 11 in year 1 , then the economy didn't growth by 10 %, but by a value corrected by inflation.
Means if the inflation was 5% , then the GDP growth was 0.05/1.05=0,0476 >>> 4.76% , NOT 10%.

But the consumer spending is not corrected by inflation, so if the consumer spent 5$ in year 0, and 5.4 in year 1 then it is easy to claim 8% growth of consumption, but it can not be compared to the GDP growth directly.
Actually, this number should show that the consumer spending falling, from 50% to 49% of the GDP.

hold it, what I decided to look at is

#9691 Anlsvrthng, Yesterday at 8:19 AM

Consumer spending = income-saving+loans ______Agree?

Saving rate falling , consumer debt increasing YOY 4.somtehing% ._______Agree?
Inflation : 2.5% , GDP growth 6.5% __ __Agree?
Spending growth-loans growth+saving growth = income growth(decrease)____Agree?
9%-(debt growth 4.4%)+(saving growth negative saving growth -)= close to 0 income growth _____Agree? ->this is the critical part.

Have you ever had to solve process/machine/material/quality/business problems using statistical tools ever?

and I'm struggling to understand what message you tried to convey;

now please confirm if I understood, or elaborate if I didn't:

1. the first term "9%" would be year over year
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   change?
2. the second term "(debt growth 4.4%)" would be year over year
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   change?
3. the third term "(saving growth negative saving growth -)" would be year over year
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   change?

(at this point I could imagine one might divide 1. and 2. and 3. by the number of households, to get an average change of 1. and 2. and 3.)

and please describe in words your claim of "close to 0 income growth" composed of 1. and 2. and 3.

 

[Jura The idiot]

now I read
China's central bank continues to pump funds into market
Xinhua| 2018-12-21 19:53:44

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China's central bank continued to inject liquidity into the money market through reverse repos Friday.

The People's Bank of China (PBOC) conducted 30 billion yuan (about 4.4 billion U.S. dollars) of seven-day reverse repos at an interest rate of 2.55 percent and 20 billion yuan of 14-day reverse repos at 2.7 percent, unchanged from previous operations.

The scale of the operations was smaller compared with the 150 billion yuan of reverse repos conducted Thursday.

The PBOC said in a statement that its interest payments to financial institutions on their required reserves could partially offset the impact of factors such as maturing treasury deposits at banks.

This week has seen a combined net injection of 600 billion yuan via the PBOC's open market operations, the largest weekly amount in 11 months.

Wang Youxin, a researcher with the Institute of International Finance at the Bank of China, said the PBOC's operations were aimed at meeting short-term liquidity demands near year-end and offsetting the impact of the U.S. interest rate hike.

The U.S. Federal Reserve on Wednesday raised short-term interest rates by a quarter of a percentage point, but signaled a slower pace of rate hikes next year as the U.S. economy is expected to cool.

Through reverse repos, the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

 

[Anlsvrthng]

hold it, what I decided to look at is

#9691 Anlsvrthng, Yesterday at 8:19 AM


and I'm struggling to understand what message you tried to convey;

now please confirm if I understood, or elaborate if I didn't:

1. the first term "9%" would be year over year
   Please, Log in or Register to view URLs content!
   change?
2. the second term "(debt growth 4.4%)" would be year over year
   Please, Log in or Register to view URLs content!
   change?
3. the third term "(saving growth negative saving growth -)" would be year over year
   Please, Log in or Register to view URLs content!
   change?

(at this point I could imagine one might divide 1. and 2. and 3. by the number of households, to get an average change of 1. and 2. and 3.)

and please describe in words your claim of "close to 0 income growth" composed of 1. and 2. and 3.

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net income.

Problem is retail sales growth showing it compared to itself, consumer debt compared to GDP, household saving compared to disposable income.
---------------------------------------------
Other calculation is ____retail sales growth __-__GDP growth(non inflation adjusted)_____-______consumer debt growth______+______saving growth _______=______change of consumption versus GDP in %. >>>> is the Chinese economy rebalancing from investment to consumption? Is it sustainable?

 

[Jura The idiot]

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net income.

Problem is retail sales growth showing it compared to itself, consumer debt compared to GDP, household saving compared to disposable income.
---------------------------------------------
Other calculation is ____retail sales growth __-__GDP growth(non inflation adjusted)_____-______consumer debt growth______+______saving growth _______=______change of consumption versus GDP in %. >>>> is the Chinese economy rebalancing from investment to consumption? Is it sustainable?

looks like I need to try again after 52 minutes ago

please go point by point:

point #1 the first term, "9%" inside #9691, would be year over year

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Real gross domestic product
(for China here, of course) change?
either confirm, or explain what that term is

point #2 the second term, "(debt growth 4.4%)" inside #9691, would be year over year

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China Household Debt
change?
either confirm, or explain what that term is

point #3 the third term, "(saving growth negative saving growth -)" inside #9691, would be year over year

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Household savings
(for China here, of course) change?
either confirm, or explain what that term is

point #4 state what your claim of "close to 0 income growth" inside #9691 means in relation to #1 and #2 and #3
(you expressed "close to 0 income growth" to be (#1 - #2 + #3) inside #9691, correct?)

thank you for handling all points