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China’s Economy Slows Sharply

nytimes.com

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Re: China’s Economy Slows Sharply

#71

Post by Laforet »

contingencies wrote: post #32

These articles are coming thick and fast from three sources: The Washington Post, New York Times and Bloomberg. Nobody else (BBC, Australia, etc.) seems to be reporting the same, which leads me to believe there's a political element to this reporting, particularly amidst the current "trade war". (We don't see a rash of "US Economy Shows Sharply" every time something goes wrong for the US, although the trend is arguab…

Just because there is a coordinated media campaign does not necessarily invalidate the issue being presented. For example, MSM reporting on Venezuela's economy ramped up significantly from early 2016 to coincide with a diplomatic push for regime change. Fast forward to present day, Maduro is stil president but the economy is definitely in a even worse shape. Not to mention a lot of the structural problems were already present before Chavismo so their current position wa made inevitable decades ago.

P.S. Chinese households have already leveraged themselves to the brim in the last couple of years, thanks to real estate speculation. Opinions differ on exact figures but most estimates place average household debt in the range of 80% to 100% of disposable income which is close to that of the USA. The government's finances are in okay shape but the people's are definitely not.

Re: China’s Economy Slows Sharply

#72

Post by whyonearth »

contingencies wrote: post #54
whyonearth wrote: post #40

Earlier quoted context omitted.

Surely the markets took a hit today because the world's financial centers have all been duped by such propaganda. Look, even China-friendly South China Morning Post is in on the con, despicable. https://www.scmp.com/economy/china-economy/article/2178089/c...

On the contrary, SCMP is HK based and can often be seen to publish articles openly critical of Beijing, despite mainland ownership. (Edit: response to below: Yes, I think "formerly independent" as Wikipedia states is perhaps a good summary of SCMP's status, but I don't follow China media much. Used to read FEER a lot years ago, that was great but switched to a closed model and the best journos (some of whom I know) a…

I get that you're in China and that everything's relative, but we are comparing SCMP to other globally respected mainstream news sources, and with that reference point it tends towards Chinese interests. https://en.wikipedia.org/wiki/South_China_Morning_Post#Contr...

Re: China’s Economy Slows Sharply

#73

Post by Matticus_Rex »

defertoreptar wrote: post #58
rrggrr wrote: post #5

I continue to believe - as I've said in prior HN comments - that the Chinese leadership welcomes this slowdown and the related trade dispute as a means to rebalance the domestic economy, while placing the blame for the rebalancing on the United States. I note that at least one distinguished China watcher agrees: https://carnegieendowment.org/2018/07/27/china-s-best-option...

Why would they want a economic slowdown?

If during a boom the economy picks up significant malinvestment (inefficient or oversubsidized firms, firms that were in a particularly good position to benefit from low-interest loans but weren't necessarily the most competitive firms that should have gotten it, etc. etc.) most of those firms are going to survive until there's a significant bust. China has artificially propped up a lot of industries and firms, and over time the deadweight loss of decisions like that builds on itself like barnacles on a ship, getting worse and worse. While I personally don't think the leadership is smart enough to want a slowdown, it might be a really good thing for their economy in the long term.

Re: China’s Economy Slows Sharply

#74

Post by tanilama »

malloryerik wrote: post #66
rrggrr wrote: post #5

I continue to believe - as I've said in prior HN comments - that the Chinese leadership welcomes this slowdown and the related trade dispute as a means to rebalance the domestic economy, while placing the blame for the rebalancing on the United States. I note that at least one distinguished China watcher agrees: https://carnegieendowment.org/2018/07/27/china-s-best-option...

Rebalancing the domestic economy toward greater household income is necessary to provide sustained growth in China, and that's what Michael Pettis argues in your link to his blog. Make no mistake though, the national and Party leadership is deathly afraid of low growth and it is exactly what they seek to avoid. The leadership knows they must create domestic consumer demand and that this must happen through an increas…

Then they shouldn't hype up the real estate price so much, it is draining the domestic consumers dry.

Re: China’s Economy Slows Sharply

#75

Post by contingencies »

Laforet wrote: post #71
contingencies wrote: post #32

These articles are coming thick and fast from three sources: The Washington Post, New York Times and Bloomberg. Nobody else (BBC, Australia, etc.) seems to be reporting the same, which leads me to believe there's a political element to this reporting, particularly amidst the current "trade war". (We don't see a rash of "US Economy Shows Sharply" every time something goes wrong for the US, although the trend is arguab…

Just because there is a coordinated media campaign does not necessarily invalidate the issue being presented. For example, MSM reporting on Venezuela's economy ramped up significantly from early 2016 to coincide with a diplomatic push for regime change. Fast forward to present day, Maduro is stil president but the economy is definitely in a even worse shape. Not to mention a lot of the structural problems were alread…

Sure, there are issues and there is definitely a speculatory angle to Chinese real estate. That's not debatable. However, I don't think there's an average Chinese household, and it's hard to interpret these genericized and simplified third or fourth hand statistics and draw any valid conclusions. In short, I don't believe (though do not fully dimiss) random other-language reported numbers reported in tabloid format, rather I am inclined believe the people and my own eyes.

Re: China’s Economy Slows Sharply

#76

Post by jandrese »

CoolGuySteve wrote: post #47
mrkstu wrote: post #25

The pullback of outflows capital to foreign locations is the most telling to me. Chinese companies are starting to be net sellers instead of net acquirers of foreign assets. That would be fine if it was just because they were getting better return on their capital inside China, but in reality it is to pay back runaway debt and inability to complete asset purchases due to government capital controls. Those controls wo…

What happened in the early 90s recession when Japan pulled back on foreign investment? Did they cause the recession or were they wiped out by it? The only thing I remember as a teenager then was the Japanese briefly gaining and losing control of the NBC/GE conglomerate.

IIRC overall the Japanese lost their shirt on those deals and it lead to an entire lost decade economically. I would not be surprised at all to learn that the Chinese government was inflating figures for political purposes and are in trouble now that the chickens are coming home to roost. It's super tempting for authoritarian regimes to cook the books to look better internationally. There was also seemingly a belief in the government that if they could maximize the trade surplus with the world they could somehow "win" at the economy.

Re: China’s Economy Slows Sharply

#77

Post by tehduder9 »

crazynick4 wrote: post #53
_dark_matter_ wrote: post #44

Earlier quoted context omitted.

Given your premise that American media is reporting Chinese Economic Slowdowns more widely than other country's media, there are two options: 1. Conspiracy - They are working together, and perhaps with the government and other private entities, to sow a particular narrative 2. Profit - Their audiences are particularly interested in these stories, given the e.g. aforementioned trade war I'll leave it to the reader to…

Do these necessarily have to be exclusive? The CIA is known to have made organized attempts to influence the media in the past. Virtually every government does this, it seems implausible to me that we (the US) would be the only ones with 'objective' reporting. Of course you simply have to namedrop the term 'conspiracy' to get a knee-jerk reaction and have everyone lean in the opposite direction of what is otherwise a…

ok..

Re: China’s Economy Slows Sharply

#78

Post by Gigablah »

contingencies wrote: post #56
lambdasquirrel wrote: post #49

Earlier quoted context omitted.

I’ve sometimes wondered if there is a journalistic bubble chamber.

I think this (and an 'English language media on China bubble chamber') is probably far closer to the truth than the "conspiracy" being put forward by others. Quite amused at multiple "Googled so it must be true" responses.

You’d think people would have learned something after Bloomberg’s Super Micro shenanigans.

Re: China’s Economy Slows Sharply

#79

Post by antt »

jandrese wrote: post #76
CoolGuySteve wrote: post #47

Earlier quoted context omitted.

What happened in the early 90s recession when Japan pulled back on foreign investment? Did they cause the recession or were they wiped out by it? The only thing I remember as a teenager then was the Japanese briefly gaining and losing control of the NBC/GE conglomerate.

IIRC overall the Japanese lost their shirt on those deals and it lead to an entire lost decade economically. I would not be surprised at all to learn that the Chinese government was inflating figures for political purposes and are in trouble now that the chickens are coming home to roost. It's super tempting for authoritarian regimes to cook the books to look better internationally. There was also seemingly a belief…

Funnily enough the 90s saw better growth for median incomes in Japan than the 10s have so far for the US. If anything Japan looks like they managed their crisis much better by pushing the losses up rather than down.

Re: China’s Economy Slows Sharply

#80

Post by tanilama »

friedman23 wrote: post #14
rrggrr wrote: post #5

I continue to believe - as I've said in prior HN comments - that the Chinese leadership welcomes this slowdown and the related trade dispute as a means to rebalance the domestic economy, while placing the blame for the rebalancing on the United States. I note that at least one distinguished China watcher agrees: https://carnegieendowment.org/2018/07/27/china-s-best-option...

Absolutely no leader welcomes an economic slowdown. Especially not the leader of an authoritarian government. Your hypothesis does not explain why the Chinese government is acquiescing to American trade demands. If they welcomed this economic slowdown they would be holding firm in trade negotiations. What we are actually seeing happen is a rebalancing of foreign investment. American businesses have purchased stock in…

FDI is one thing, but remember China, before the trade war even starts, has began to remove benefits from the foreign companies and replace them with domestic companies.

A larger picture here is China is going through its own deleveraging campaign. They can't take more debt to stimulate the economy. Traditionally the government would ramp up massive investments in infrastructure or just remove the control over the overheated housing market. Both of those approaches are now out of the table. The infrastructure result in big debt, while the housing bubble is already the biggest probably in human history. It is unfortunate for the Chinese government to run into the trade war with US now, but it only accelerates the coming of the inevitable, the delayed reckoning.

But China is big enough to make its problem, the world's problem, just like US. It won't be the first to fall in this game, even though it might start it.

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