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China’s Economy Slows Sharply

nytimes.com

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Re: China’s Economy Slows Sharply

#21

Post by clomond »

NicoJuicy wrote: post #9
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...

I have my sincere doubts about this. China always had a requirement to grow 6% for every city. So I believe some numbers are inflated ( mostly about real estate eg. Ghost cities, ..). This doesn't give many issues, because there is actual growth. The reasoning goes that when the growth slows, the entire pyramid goes crumbling down ( debts). As weird as it is, I think it's an objective overview of everything China rel…

My understanding is that both of you can be right.

The "Chinese government" is not a singular, monolithic entity in the same way the "US Government" is actually a bunch of departments, branches and jurisdiction levels each with competing and sometimes differing interests and goals. (but yes, it is more unified in China in the sticking to party line).

The Chinese federal government has been wanting to make this re-balancing for a long time (a shift away from exports towards domestic consumption, and shifts from inefficient state owned enterprises to companies that can operate more efficiently and are "market oriented").

Where you are also correct is that many of the inflated GDP numbers and "inefficient" investments / capital towards things like ghost cities are mostly driven by state governments, in their attempt to meet the "goals" as stated by the federal government.

Re: China’s Economy Slows Sharply

#22

Post by echevil »

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…

No sane people would believe indefinite high growth is maintainable, and slowdown is of course welcome if that helps avoid bigger problems down the road.

Re: China’s Economy Slows Sharply

#23

Post by brobinson »

onlyrealcuzzo wrote: post #11
volkl48 wrote: post #6

Earlier quoted context omitted.

The article points to less easily faked data to indicate the slowdown, not the official statistics that are widely known to have a tenuous relationship with reality.

Look -- I'm as skeptical of the Chinese miracle as anyone. But serious question: if the data was really as fake as everyone says, wouldn't the official and unofficial exchange rate of the Yuan be a lot larger? If the Chinese are basically pretending the economy has grown 500% and it's only grown 100%, wouldn't the value of the Yuan prove it?

The value of the yuan to what, the US dollar? It's pegged and maintained there using foreign currency reserves. It's occasionally adjusted so I guess it could be considered a "dirty float" if you want to stretch that definition a bit.

Also: https://www.investors.com/politics/editorials/new-study-shin...

Re: China’s Economy Slows Sharply

#24

Post by landryraccoon »

onlyrealcuzzo wrote: post #11
volkl48 wrote: post #6

Earlier quoted context omitted.

The article points to less easily faked data to indicate the slowdown, not the official statistics that are widely known to have a tenuous relationship with reality.

Look -- I'm as skeptical of the Chinese miracle as anyone. But serious question: if the data was really as fake as everyone says, wouldn't the official and unofficial exchange rate of the Yuan be a lot larger? If the Chinese are basically pretending the economy has grown 500% and it's only grown 100%, wouldn't the value of the Yuan prove it?

You can fake stats sure, but can you fake the fact that everything sold in an Apple store and half the stuff on Amazon or Walmart is made in China now?

Re: China’s Economy Slows Sharply

#25

Post by mrkstu »

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 would be unnecessary if the Chinese economy was in a healthy state.

The question isn't whether a contraction is in the offing, but how deep and large it is and what kind of knock on effects it has globally.

Re: China’s Economy Slows Sharply

#26

Post by friedman23 »

echevil wrote: post #22
friedman23 wrote: post #14

Earlier quoted context omitted.

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…

No sane people would believe indefinite high growth is maintainable, and slowdown is of course welcome if that helps avoid bigger problems down the road.

>No sane people would believe indefinite high growth is maintainable

It might not be but that doesn't mean you don't want it to occur for as long as feasibly possible. Maybe until you even reach parity with the US on a per capita income basis?

> and slowdown is of course welcome if that helps avoid bigger problems down the road

A slowdown is the problem itself, this is like saying you want to die of heart disease now because you might die of cancer later in age.

Re: China’s Economy Slows Sharply

#27

Post by zachguo »

China's economy will slow, no doubt about it. CCP worries about it way more than Trump. But car sales and anecdotes are not really good ways to measure the economy. If you have doubt about those GDP numbers published by China. Take look at metrics such as freight traffic and trade stats.

Re: China’s Economy Slows Sharply

#28

Post by nosleeptill »

Having done business in China, and having friends still in China, as one of them put it, "China has more problems than you can count."

China is really a complex house of cards, it looks more foreboding than it actually is in reality.

The second the economy slows the consumers hide, and go back to stuffing cash into their mattresses.

I think Trump is a fool, but in the case of China I think we need a fool. Trump believes he's invincible, so he doesn't get caught up with the "apparent facts" about China and it's economy.

Re: China’s Economy Slows Sharply

#29

Post by WrtCdEvrydy »

anoncoward111 wrote: post #10
jacquesm wrote: post #4

And that is assuming that the previous and present day reporting are correct.

That's definitely an issue, but I would like to add that many of us feel the US govt too engages in lying through data. The biggest one in my mind is the unemployment rate. Even though Labor publishes nuanced statistics and revises them for accuracy, Trump and the media focus solely on the lowest tier of unemployment rate, which is the one below 4%. To be included in this rate, you must currently be receiving unemplo…

Because people looking for work or in states with bad employment numbers can use it as a crutch.

It's easy to blame the president for the reason your coal job is no longer around, yet as soon as people find employment, those on unemployment are moochers.

Re: China’s Economy Slows Sharply

#30

Post by seanmcdirmid »

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...

I think you are partially right: the trade disputes make for a convenient scapegoat for a slowdown that was way overdue. As for how the people take it, will they blame America or the CCP, the latter of which has basically encouraged a lot of moral hazard (you can’t lose on real estate, it’s backed by the government!)? It’s not like they can just throw the turkeys out of it’s the latter.
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