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China's Zombie Economy
21–30 of 156 posts
Re: China's Zombie Economy
#22Earlier quoted context omitted.
Your deposits are lent out by the bank.
Banks don't generally lend out deposits.
> Banks don't generally lend out deposits.
Do you mean in China or generally?
I’m not a finance person but my understanding is that fractional reserve banking is fairly common.
Re: China's Zombie Economy
#23>The Economist projected that China would become the world’s biggest economy by 2018, surpassing the United States. What annoys me about economists is how often they redefine how they calculate things like "GDP" and "unemployment" and then try to compare their new oranges to their old data apples. In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant r…
> In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant revision America still is "number 1". Maybe, but the Economist is a UK publication. What incentive would they have to prop up the identity of America as number 1?
I don't think you can be hired by the Economist if you don't believe in American Exceptionalism + The International Rules-Based Order[0] + America World Police.
Plus here in the UK we're obsessed/in love with the US.
Endlessly pining for their approval (trade deals, FOM deals, etc), willing to support anything they ask for, invasions, war-mongering, censorship, propaganda, "decoupling", privatization, austerity, etc.
Actually we often do much more than what they presumably are asking for.
It's a sad and deeply abusive relationship.
[0] Whatever the state department decides it wants today.
Re: China's Zombie Economy
#24>The Economist projected that China would become the world’s biggest economy by 2018, surpassing the United States. What annoys me about economists is how often they redefine how they calculate things like "GDP" and "unemployment" and then try to compare their new oranges to their old data apples. In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant r…
>In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant revision America still is "number 1".
Can you elaborate on this? What are the "older metrics" in question?
>Same goes for unemployment. You can compare these metrics when you change how they're calculated.
Is the 20% figure cited in the article somehow not comparable to other figures in the G-7?
Re: China's Zombie Economy
#25>The Economist projected that China would become the world’s biggest economy by 2018, surpassing the United States. What annoys me about economists is how often they redefine how they calculate things like "GDP" and "unemployment" and then try to compare their new oranges to their old data apples. In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant r…
Well there is GDP PPP and nominal and metrics never changed. China has surpassed U.S. in PPP GDP around 2017 and might at some far away future point around it's historical peak (10-20 years away), get up to 2x the U.S. level, but it might never reach U.S. nominal level (currently 67% of it), or if it does, only briefly and marginally so.
None of those metrics has "changed". It's just two different ways of measuring it: PPP defines intrinsic economic power/amount of goods consumed, nominal defines power on world markets/purchasing ability. We produce and consume in national prices that are different (and PPP factor corrects for that difference), but we trade in nominal dollars.
Re: China's Zombie Economy
#26>The Economist projected that China would become the world’s biggest economy by 2018, surpassing the United States. What annoys me about economists is how often they redefine how they calculate things like "GDP" and "unemployment" and then try to compare their new oranges to their old data apples. In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant r…
>In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant revision America still is "number 1". Can you elaborate on this? What are the "older metrics" in question? >Same goes for unemployment. You can compare these metrics when you change how they're calculated. Is the 20% figure cited in the article somehow not comparable to other figures in the G-7?
Simply PPP vs nominal.
Re: China's Zombie Economy
#27“ In its closed financial system, exporters must surrender their foreign earnings to the central bank, which creates equivalent RMB to mop up the foreign currencies. This led to the rapid expansion of RMB liquidity in the economy, mostly in the form of bank loans. ” Can anyone explain this to me? My interpretation is the central bank exchanges exporter’s foreign currency for RMB. How does it become bank loans?
If it's like Russia, maybe you get paid in bucks but you pretty much must convert them all to RMB immediately. So the bank needs to create all that RMB for all the exporters. Part of it circles back in taxes and stuff. Assuming exporters can't or don't want to spend all that RMB immediately there's now a bunch of RMB in country in some shape or form. A lot probably in banks.
In Russia you have to convert 25-30% of your earnings nominated in foreign currencies (it was 50-80% in 2022, but got relaxed since then) and you do it on a somewhat open market. IIUC in China the requirement is much stricter and the exchange rate is effectively pegged against USD.
Re: China's Zombie Economy
#28Earlier quoted context omitted.
> In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant revision America still is "number 1". Maybe, but the Economist is a UK publication. What incentive would they have to prop up the identity of America as number 1?
I don't think you can be hired by the Economist if you don't believe in American Exceptionalism + The International Rules-Based Order[0] + America World Police. Plus here in the UK we're obsessed/in love with the US. Endlessly pining for their approval (trade deals, FOM deals, etc), willing to support anything they ask for, invasions, war-mongering, censorship, propaganda, "decoupling", privatization, austerity, etc.…
> Plus here in the UK we're obsessed/in love with the US.
Well the state department didn't support brexit [0], as one sort-of counterpoint. However, The Economist didn't either [1]. So this doesn't disprove your overall point.
[0] https://carnegieendowment.org/2018/11/28/limitations-of-u.s....
[1] https://www.economist.com/sites/default/files/EconomistBrexi...
Re: China's Zombie Economy
#29Earlier quoted context omitted.
>In many respects, if you use the older metrics China has long surpassed America on its GDP output but with the constant revision America still is "number 1". Can you elaborate on this? What are the "older metrics" in question? >Same goes for unemployment. You can compare these metrics when you change how they're calculated. Is the 20% figure cited in the article somehow not comparable to other figures in the G-7?
Simply PPP vs nominal.
But in this case nominal vs PPP GDP are both in use. I don't see how "economists" are "redefining" things. It sounds more like OP is seeing "GDP" in separate articles, thinking they're the same thing, and then thinking there's some sort of conspiracy to mislead when he figures out they're in fact different.
edit:
I did some searching and found a economist article that claimed china's economy would exceed the US's in 2018: https://www.economist.com/finance-and-economics/2011/12/31/h...
The article very clearly says that 2018 is the date where its GDP at market rates will exceed the US. So at least for this article, there's no mixups here, only a failed prediction.
Re: China's Zombie Economy
#30It's so tiresome how much of popular geopolitical/macro "analysis" is literally just a linear extrapolation of surface metrics. Almost zero understanding of underlying trends and agendas and how new technology (renewable energy, automation) will disrupt.
Growth went from 10% to 5%, therefore it is basically 0% if not negative.
Birthrates are down, therefore total demographic collapse is imminent.
Some real estate projects failed, therefore all real estate is about to crash.
So much noise. But hey, the Strategic Competition Act of 2021 earmarked hundreds of millions of dollars for producing such nonsense.