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China’s Economy Slows Sharply

nytimes.com

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Re: China’s Economy Slows Sharply

#81

Post by 1996 »

neolefty wrote: post #55
clomond wrote: post #39

Earlier quoted context omitted.

I've seen it in various economics articles/readings on the topic regarding the governments long term economic strategy. (see article below I found) You are also right - yes one of the biggest complains IS that many Chinese businesses are "owned" by the government with lots of influence there. However, the big resistive force here preventing this further breakup is that they are such huge employers, and it is not poli…

I love all these "You are also right" comments. One of the skills I hear about being prized in Chinese culture is the ability hold two conflicting ideas in your head at once, without feeling stressed about it. And that skill seems to help when trying to understand China itself!

Being able to manage what seems to be multiple "conflicting" ideas at once and without stress should be prized in every culture.

The world is not black or white. Enlarging your perspectives always help.

Re: China’s Economy Slows Sharply

#82

Post by gscott »

clomond wrote: post #39
friedman23 wrote: post #35

Earlier quoted context omitted.

> and shifts from inefficient state owned enterprises to companies that can operate more efficiently and are "market oriented") Do you have evidence of this? Isn't one of the biggest US complaints that many Chinese businesses are indistinguishable from the government?

I've seen it in various economics articles/readings on the topic regarding the governments long term economic strategy. (see article below I found) You are also right - yes one of the biggest complains IS that many Chinese businesses are "owned" by the government with lots of influence there. However, the big resistive force here preventing this further breakup is that they are such huge employers, and it is not poli…

I was reading an article some time back some Chinese businesses in order to get loans had to give a stake in their company to the government. It is not something heard about often but gives the government even more sway over private businesses.

Re: China’s Economy Slows Sharply

#83

Post by gscott »

seanmcdirmid wrote: post #33
onlyrealcuzzo wrote: post #7

Earlier quoted context omitted.

This is actually pretty genius. Perhaps the Chinese economy is recession-proof. But I doubt it. It's at the height of a 30-year bull market. It doesn't seem insane that a downturn could happen. And the party seems to be pretty weak when the Chinese economy isn't doing swimmingly. If things finally do turn sour, what a convenient time. You can just blame it on someone else.

The Chinese economy has had plenty of recessions in the last 30 years: 1990, 1998, even 2008 was probably a dip in real terms. It’s not like the economy hasn’t gone sour before.

This time I wonder if some businesses are moving out of China due to the instability of the relationship with the US and China, not to mention the future instabilities to come.

Re: China’s Economy Slows Sharply

#84

Post by apo »

I think of China as epicenter of a gargantuine deflationary hurricane. The cycle goes something like this:

1. Chinese economy slows down.

2. Chinese leadership realizes it's only one real recession away from existential threat.

3. Chinese government floods the market with fake money.

4. Chinese factories expand and export still more goods, despite weak demand.

5. World inventories pile up, depressing prices across the board.

6. Factory orders dry up around the world, sending host economies downward.

7. GOTO 1.

Re: China’s Economy Slows Sharply

#85

Post by snaky »

apo wrote: post #84

I think of China as epicenter of a gargantuine deflationary hurricane. The cycle goes something like this: 1. Chinese economy slows down. 2. Chinese leadership realizes it's only one real recession away from existential threat. 3. Chinese government floods the market with fake money. 4. Chinese factories expand and export still more goods, despite weak demand. 5. World inventories pile up, depressing prices across th…

> Chinese leadership realizes it's only one real recession away from existential threat.

That's true for at least 30 years now.

Re: China’s Economy Slows Sharply

#86

Post by seanmcdirmid »

gscott wrote: post #83
seanmcdirmid wrote: post #33

Earlier quoted context omitted.

The Chinese economy has had plenty of recessions in the last 30 years: 1990, 1998, even 2008 was probably a dip in real terms. It’s not like the economy hasn’t gone sour before.

This time I wonder if some businesses are moving out of China due to the instability of the relationship with the US and China, not to mention the future instabilities to come.

I don’t think so, not yet anyways. Trump is probably a one term president, and most companies are thinking longer term. 1989-90 was much much worse.

Re: China’s Economy Slows Sharply

#87

Post by exabrial »

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...

To your first point, seems like they'd say anything to try to save face.

Re: China’s Economy Slows Sharply

#88

Post by askaboutit »

Every economy has a plateau then a fall, then a pull back up again. I think the aggressive trade stance and hard line politics by China might have played a major role. As it’s frightened both the local businesses and foreign businesses and lead to all global powers starting to put tariffs and trade barriers up, all due to China wanting to get away with pretty blatant violations of fair trade, huge import taxes on foreign goods, great firewall blocking any foreign purchase easily, hugely subsidised mail, forced ownership sharing, lowered safety regulations, lack of pollutant regulation etc. chuck in a house market with terrible quality at a high price and you’ve got a balloon waiting to pop. I don’t blame the Chinese for wanting to buy any house outside of China. But they’ve taken their “build junk make bank” mentality to the world and it can’t last much longer.

Re: China’s Economy Slows Sharply

#89

Post by reaperducer »

seanmcdirmid wrote: post #86
gscott wrote: post #83

Earlier quoted context omitted.

This time I wonder if some businesses are moving out of China due to the instability of the relationship with the US and China, not to mention the future instabilities to come.

I don’t think so, not yet anyways. Trump is probably a one term president, and most companies are thinking longer term. 1989-90 was much much worse.

I don’t think so

Think again.

GoPro moving some production out of China to avoid US tariffs: https://www.cnn.com/2018/12/10/tech/gopro-china-tariffs/inde...

Re: China’s Economy Slows Sharply

#90

Post by apo »

snaky wrote: post #85
apo wrote: post #84

I think of China as epicenter of a gargantuine deflationary hurricane. The cycle goes something like this: 1. Chinese economy slows down. 2. Chinese leadership realizes it's only one real recession away from existential threat. 3. Chinese government floods the market with fake money. 4. Chinese factories expand and export still more goods, despite weak demand. 5. World inventories pile up, depressing prices across th…

> Chinese leadership realizes it's only one real recession away from existential threat. That's true for at least 30 years now.

According to Bloomberg, the last Chinese recession was 25 years ago:

https://www.bloomberg.com/opinion/articles/2018-07-19/china-...

When the inevitable happens, it's going to be catastrophic.

The entire population of young adults in a country of over 1 billion has never experienced a recession.

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