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China's Zombie Economy

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Re: China's Zombie Economy

#81

Post by stale2002 »

Vt71fcAqt7 wrote: post #57
duxup wrote: post #41

Earlier quoted context omitted.

I believe you're misunderstanding and taking that term too literally. The term has an established economic meaning that applied to Japan long before China, and Japan didn't "die": https://en.wikipedia.org/wiki/Zombie_company The article also describes that process.

Maybe you are taking "China is dying" too literally, although I see that I should have used a different phrase, as it clearly took away from my actual point which was a data-based claim. I think it is fair though to say the people who think that China will see "Japanification" while still at ~13k GDP per capita are essentially saying that China is dying — and people actually were saying that China was collapsing afte…

The point though, is that China isn't going to have a revolution, or dramatic collapse.

Instead, it is going to have a long and slow stagnation.

Therefore, the people saying "well, people have been talking about a China collapse for a decade but I haven't seen anything dramatic happen!!" Are wrong and missing the point.

Because a decade of stagnate growth for China is still a big deal, while not being dramatic in a way that obviously "proves" the China doomsayers correct.

Re: China's Zombie Economy

#82

Post by jacquesm »

adventured wrote: post #16
FrustratedMonky wrote: post #9

Question. For 20 years I've been hearing China will takeover, and also that it is about to collapse. It seems like daily there is some story about how China will collapse, and then also stories of how it will still takeover. I did read it, but not seeing what this article brings new. What is the point being made here? Except, things are bad, and nobody realizes it. The term Zombie Economy has been used for a lot of y…

Both ends (takeover / collapse) are exaggerations for the benefit (attention) of the person making the claim. The US and EU/Eurozone/Western Europe are not going away. Their significant allies are not going away (eg Japan, South Korea, Australia, New Zealand, India, etc.). China isn't taking over, they're becoming (have become) a peer global power. China has accumulated vast wealth, infrastructure, manufacturing, kno…

China could still turn into a North Korea writ larger with as extra lever the fact that they hold the keys to the manufacturing kingdom.

Re: China's Zombie Economy

#83

Post by nonethewiser »

anovikov wrote: post #26
gruez wrote: post #24

Earlier 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.

PPP was never the standard definition for GDP.

Re: China's Zombie Economy

#84

Post by seanmcdirmid »

stale2002 wrote: post #81
Vt71fcAqt7 wrote: post #57

Earlier quoted context omitted.

Maybe you are taking "China is dying" too literally, although I see that I should have used a different phrase, as it clearly took away from my actual point which was a data-based claim. I think it is fair though to say the people who think that China will see "Japanification" while still at ~13k GDP per capita are essentially saying that China is dying — and people actually were saying that China was collapsing afte…

The point though, is that China isn't going to have a revolution, or dramatic collapse. Instead, it is going to have a long and slow stagnation. Therefore, the people saying "well, people have been talking about a China collapse for a decade but I haven't seen anything dramatic happen!!" Are wrong and missing the point. Because a decade of stagnate growth for China is still a big deal, while not being dramatic in a w…

I don’t know. That property bubble, they are still trying to inflate it even more. When it pops, I’m not sure what will happen: will it just be Japan bad and they stagnate for a couple of decades, or will it be much worse?

Anyways, I wouldn’t predict a collapse (that probably won’t happen), but I wouldn’t rule one out either. I’m just glad I’m not exposed to either anymore.

Re: China's Zombie Economy

#85

Post by nonethewiser »

jandrese wrote: post #53
eatonphil wrote: post #8

Earlier quoted context omitted.

Sure, but it's The Economist saying this in the article as well: > The Economist now claims that China might never catch up with the US

Fundamentally China’s huge population means they will overtake the US. Government mismanagement, corruption, and capital imbalances can slow it down but the march of progress is inevitable.

Presumably you think India will overtake China then. Is that accurate? Their population is already larger and is expected to grow further while China’s is declining rapidly.

Re: China's Zombie Economy

#86

Post by anovikov »

peterfirefly wrote: post #76
anovikov wrote: post #25

Earlier quoted context omitted.

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 i…

If you trust the official Chinese GDP figures. Big if. Very big if. (All countries seem to do some overcounting but not by 100-400%.)

I'd say their figures are weird. In some industries, output is truly astounding, making up 60-95% of worldwide total, and that is entirely verifiable and believable. In others, we see obvious lies. No one can really find out the truth, and some attempts to get to the truth only harm reputation of the one trying (like The Economist's own attempt to do it by measuring changes in night illumination, that was incredibly flawed and drew a lot of criticism - https://www.economist.com/graphic-detail/2022/09/29/a-study-...)

Re: China's Zombie Economy

#87

Post by JumpCrisscross »

ang_cire wrote: post #60
satvikpendem wrote: post #49

Earlier quoted context omitted.

The PPP loans were literally this. They were even more favorable since most were forgiven.

And PPP loans were not available (legally) to individual workers, only to the Business Owner class. Sure, it was expanding the criteria of bailout from "superwealthy business owners" to "average business owners" and "politicians playing at business owners who set up a shell company", but that's not really refuting their point that the government only cares about protecting capital. "Here's $600 to live on for 6 month…

> PPP loans were not available (legally) to individual workers

They were available to contractors. Workers got extended unemployment and forebearance benefits. If you have an actual solution to propose, go for it. But complaining with misaligned facts isn’t particularly productive.

Re: China's Zombie Economy

#88

Post by golergka »

gsatic wrote: post #37
fuoqi wrote: post #32

>But many enterprises simply took advantage of easy bank loans to refinance their existing debt without adding new spending or investment to the economy. These companies eventually became loan addicts; and as with any addiction, increasing doses were needed to generate diminishing effects. Sounds like a description of the Western economic situation to me.

Dont remind them why banks collapsed and why interest rates arent dropping any time soon. Focus on China, Russia, Elons cage match etc.

You mean the bank collapses where banks had all the assets to cover their customers deposits and just lacked immediate liquidity for the bank runs, so that they were bought out by other banks who assumed all of their obligations, and none of the customers or taxpayers actually lost any money?

Re: China's Zombie Economy

#89

Post by seanmcdirmid »

anovikov wrote: post #86
peterfirefly wrote: post #76

Earlier quoted context omitted.

If you trust the official Chinese GDP figures. Big if. Very big if. (All countries seem to do some overcounting but not by 100-400%.)

I'd say their figures are weird. In some industries, output is truly astounding, making up 60-95% of worldwide total, and that is entirely verifiable and believable. In others, we see obvious lies. No one can really find out the truth, and some attempts to get to the truth only harm reputation of the one trying (like The Economist's own attempt to do it by measuring changes in night illumination, that was incredibly…

There was always that guy who was barred from trading in Hong Kong in 2016 because they claimed Evergrande was cooking its books [1]. Safe to say that snooping around China’s economy for real information isn’t going to be appreciated at all.

[1] https://en.wikipedia.org/wiki/Andrew_Left

Re: China's Zombie Economy

#90

Post by nonethewiser »

Vt71fcAqt7 wrote: post #38
duxup wrote: post #35

Earlier quoted context omitted.

I don’t think this article is saying “China is dying”.

How do you interpret "Zombie Economy?" > a corpse said to be revived by witchcraft, especially in certain African and Caribbean religions. Edit: I admit that I used the wrong word. I would correct it to: I'm still not sold on the "China is Japanifying" theory.

Dying implies China will not exist. Zombie economy could mean stagnation or decline. We’ve already seen that with Japans Zombie companies. It doesnt mean the end of China.
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