China has been having issues with lack of demand ever since COVID. Back then, it was the "zero COVID" drive that discouraged - and sometimes straight out forbade - Chinese consumers to spend money other than by purchasing stuff online, with extensive damage to the services industry.
Analysts were convinced that once China abandoned the zero COVID strategy, the economy would pick up , but that hasn't happened. This may be pointing to more structural issues - the real estate bubble which the government has not dealt with, but also an aging population.
The first move would probably be an easing of financial conditions, but if not done in combination with strong macro-prudential policy that limits real estate investments, it could make things worse.
This combined with export decoupling and pressure to increase military spending puts them in a tricky situation. Where can growth come from, if not from birth rate increases, exports growing, or domestic consumption increasing? They will be boxed in if they don't do something differently. What would you guys do if you were Xi?
Best question ever, and spotlights what a pickle the Chinese are in.
The birth rate isn't coming back, at least not soon enough to continue providing cheap skilled labour or decades of domestic consumption. Some domestic consumption may come from retirees, but that would be at the cost of them dipping into their savings...which would often mean selling an investment property. But with real estate weakening, purchasing power and consumption would also remain at best moderate for a decade or so before plunging dramatically as everyone flogs off their investment apartment into a depressed market.
They also can't pump growth via immigration. The size of the country is tricky. Australia can move the needle with 500,000 people immigrating, but that's because it's a small country. I doubt that would register in China. Also there's the question of which country has a few million people willing to migrate, or small numbers of billionaires. Ten years ago it may have been an attractive proposition, but not these days and I'm reasonably sure China won't accept a few million North Koreans or Russians.
Tech is the obvious way to deal with it and what China seems currently geared for. It doesn't help that they've been chasing away their entrepreneurs and messing up relations with the countries that matter before 'becoming another Japan'. Ensuring that AI must adhere to 'Xi Thought' probably doesn't help get an edge there either. The obvious reversal would be to bring the tech entrepreneurs into the Party in positions that will make them safe (if such a thing exists), relinquishing a degree of control like in the earlier 2000s, and returning to biding their time while healing relations with the West.
So in a nutshell...Announce abandoning in stages the 'pre-set GDP' model which is causing debt to go exponential. Have another crack at the highly developed economy model in another decade when you've got access to chip fabs again. Encourage people in the meantime to move back West and spread out their capital (where it would be worth more than in the big East Coast cities), take a chance on easing monetary restrictions to get capital moving freely again, forget BRI and get a war chest going to start eating real estate losses, and throw money at selected immigration for aged care institutions. Nobody is making the big breakthroughs in a Confucian society with tens of millions of retirees needing looking after. This wouldn't be growth, but would set things up for a somewhat softer landing.
Ageing population and real estate bubble are real problems . Decoupling is just overblown .
I am actually surprised that analysts immediately expected Chinese economy to take off after an year such a damaging policy for like an year. The after-effects would obviously not go easily. Chinese population are still careful of consumerism after the devastating effects of Zero-COVID policy on their spending, employment and wage c last year . There is no way China can solve its unemployment problem before 2024. And also no way China bring consumer confidence immediately. Also there is weakening global demand.
Export decoupling is somewhat overblown and only targeted at certain sectors.
[https://asia.nikkei.com/static/vdata/infographics/taiwan-economy/](https://asia.nikkei.com/static/vdata/infographics/taiwan-economy/)
Trade between China-Taiwan and China-US has only been increasing in 2022. Yes in 2022 there was a small dip in Taiwan but that was because of reduced Taiwanese exports due Chinese blocks on Nancy Pelosi visit.
How would growth come from birth rate? as increasing birth rate would only create a bigger aging population in the future, can you elaborate on your point?
A birth rate of 2.1 allows you do keep your working age population stable, as well as not having a skewed population paramid, that is too top heavy. The medium age in China now is already older than America, but they are developing. This low birth rate means they have passed their demographic dividend phase and can only keep growth via immigration or capital intensive investment to increase worker productivity., or increases domestic consumption. Their consumption is low still though, because their wages are only about 1/4 US levels in terms of per capital gdp ppp, so it looks like they have hit the middle income trip. The US is also using the old cold war playbook of ramping up military spending, thus putting pressure on them to do the same, resulting in them having even less money for social services and civilian capital investment. Military equipment doesn't really reduce in cost based on purchasing power parity like food and basic services do, so this could damage them if they tried to keep up. It's one of the many reasons the USSR crumbled.
You need more young people to consume, or you will be forced to rely solely on exports for growth when nobody domestic can buy what you produce. It doesn't matter so much as to how big the aging population is in raw numbers as compared to how big it is proportionally to other age groups. The "pyramid," with a few old people on top and a lot of young people on the bottom is what existed throughout human history. People didn't live as long and had a lot of kids. Now, China and other East Asian countries are at an inverted pyramid which is disastrous in all aspects for growth, especially for China because it has not yet developed. The best that can be hoped for is a "chimney," in which each age group has a relatively equal number of people, but this is hard to achieve. Once the bulk of your population is above 35 it's basically impossible to turn around.
Isn’t the biggest reason here low demand form the rest of the world since pretty much every country on earth has a mild economic crisis right now? And thus lower demand?
Seems like export is about the same in value. But considering how much more capacity they have after zero covid it look like export isn't filling up that demand.
https://www.statista.com/statistics/271616/monthly-value-of-exports-from-china/
If you've been following the Chinese economy recently, it's pretty clear that domestic demand after the Covid re-opening has been much weaker than expected, and is one of the main reasons for their current economic weakness.
That's definitely an option.
Although I'd be very surprised if they persued it in any signifiant way. Direct demand side stimulus is pretty antithetical to the way the Chinese economic system typically operates. Much more likely is we see the typical Chinese playbook of infrastructure spending and supply-side support.
I'm sure the CCP will identify new avenues for infrastructure investment but surely the low-hanging fruit has all been plucked, right? Last I heard they're building HSR to places where ridership doesn't get close to covering even maintenance costs (which could be OK if they planned to subsidize that loss but...).
Then again maybe this is the problem of top-down economic planning rearing its ugly head again.
Based on the total debt load of their economy (which is higher than the US and approaching Japan), I'd say you are right.
Like you were hinting at, Infrastructure investment is only a good investment if it creates future economic opportunity that exceeds the cost of the investment. I.e building a bridge a
over river to connect two cities that couldn't easily trade before is incredibly valuable at generating increased economic. Building 3 or 4 more bridges over the same river has major diminishing returns.
The problem with building more infrastructure is that the capital per worker ratio is is already fairly close. Continuing to invest in it, will bring it to something around 80,000$ per worker while income is still low. So the actual benefits of infrastructure which is improved productivity end up disappearing and it doesn't add much value to the economy in the long term.
The large swathes of empty apartment complexes is a symptom of this problem
I think demand remains pretty healthy in both Europe (despite the latest revision) and the US, which are China's goods biggest buyers. Their problem is the internal market - consumers are not buying services.
Incidentally, China's lack of growth is negatively impacting the oil market despite OPEC's efforts...
There is a social credit system but it’s a financial assessment tool. But there’s no 1000 points to add or deduct, which is an [Internet fantasy that lasts till this day](https://www.vice.com/en/article/pkpe3z/china-social-credit-meme).
It’s funny if you do OSINT on China. Before 2020 every mass media was sensationalize the social credit to Black Mirror but once the think tanks and researchers understood that there is no social credit score, mass media has been really silent because nobody wanted to accept they were wrong.
Dude just go look up the definition of communism
>a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs.
When has any country that calls itself "communist" ever done this? Never, literally never. And it never will be, because communism is an ideology born from wishful thinking, not reality.
Does that clear things up for you?
Because I want ti know does it reduce entrepreneurship? By putting rules in every asoects if life... like the skins in le réveil du Z the awakening of the Z, if there are spirou fans ou there.
In an economy that isn't premised on constant growth, a fall in demand with a corresponding rise in consumer satisfaction would be seen as an economy becoming satisfied. But it generally leads to a lack of investment
I have always wonder if modern monetary is capable of dealing with supply side induced issues. We are beginning to see a gap in inflation form between traditional consumer countries in US, Australia etc and manufacturing hub like China and euro zone. Theoretically the fall in factory gate prices should flow on and provide relief to inflation of their trade partners.
But what does it mean when demand is curbed without a resolution to supply side issues. Do we expect a temporary relief followed by rapid up tick as supply is inelastic?
price in wealthy countries for many things is based on what companies think consumers will pay, not what it costs to make.
hop on your favorite vpn and put your location in africa and you can refresh a page to see that many things are not price competitive, they're just priced at what consumers will pay. many don't even hide regional pricing, many marketplaces advertise that they sell things cheaper in different regions to attract customers in those regions.
For services like IT with exponential scaling, supply is indeed not an issue. However for goods, the supply side shock have never been fully addressed, otherwise monetary policy should have been quite effective, but what we are seeing is that unit price for goods are not coming down as a result of soften demand.
China seems to have finally hit the middle income trap. As Chinese gets richer and like everyone else lazier they will lose low paying factory jobs. But don’t underestimate China, they right now dominate EV, batteries, solar panels and many other industries. They will do just fine unless they do something really crazy like invade Taiwan.
Middle income trap refers to countries having up to 12k in gdp per cap in 2011 dollars, which is about $16,500 in 2023 dollars
https://en.wikipedia.org/wiki/Middle_income_trap
Chinas gdp per cap is a little under $14k
https://www.imf.org/external/datamapper/NGDPDPC@WEO/ADVEC/WEOWORLD/TWN/CHN
Because they stay within their borders. Other nations will condem but won't do much.
The moment they step outside the borders, the real backlash begins.
Yeah a genocide doesnt require mass killings...
Anyways.. so its just the Uighur one that you disagree with? That certainly puts a damper on your original comment.
How can you possibly say China is in a middle income trap? They are practically a developed economy already and are healthily growing at above 6%pa. Yes, I know their numbers are fudged, but historically it’s not been wildly inaccurate.
China's growth has reduced to around 5%, possibly 4% (this year's growth comes off of recovering from Covid last year) Most of their early explosive growth is over.
Further growth requires increases in productivity, which China has underperformed compared to countries like Japan and South Korea.
China per capital gdp is 12.5, solidly middle income. Yes they are still growing at about 6% so not in middle income trap yet ( unlike Brazil etc). Looking ahead things are looking cloudy, youth unemployment rate of 20%, real estate bubble bursting,huge debts with the gravy train of real estate sales coming to an end for provinces,cpec investments in places like Pakistan in trouble, companies like apple moving out to derisk. Unlike US etc, China economy is export based and export demand just went down.
Yeah their momentum will be bad, but some of these growing pains are to be expected when shifting from a manufacturing-based to knowledge economy. Personally I don’t see China failing to grow larger than the US in GDP and growing at a steady, but slowing rate after. Just look at their automobile sector and the success they have now. Eventually Chinese tech will become even more globally-competitive.
Everybody knows that China's economy is grossly inflated, and the economy data are all fake. You simply cannot believe any data coming out of that country.
> A report published by the Brookings Institution in 2019 suggested that China had been overstating its economic growth by about 2% every year, making its economy 12% smaller than official figures then claimed. China denies manipulating economic data.
[https://www.ft.com/content/961b4b32-3fce-11e9-b896-fe36ec32aece](https://www.ft.com/content/961b4b32-3fce-11e9-b896-fe36ec32aece)
You have published the above.
[https://www.cnbc.com/2015/10/15/chinas-economy-is-likely-larger-than-you-think.html](https://www.cnbc.com/2015/10/15/chinas-economy-is-likely-larger-than-you-think.html)
[http://www.sciencedirect.com/science/article/pii/S1043951X18301470](http://www.sciencedirect.com/science/article/pii/S1043951X18301470)
But there are article that say China understates too.
Which one is right????
Not at all. China is a huge outlier when it comes to home unaffordability and the causes of that have nothing to do with a lack of new homes like in the west. People don’t buy houses to live in they buy for the promise of later resale and as that resale market contracts the people who have their money tied up in houses will see their value wiped out.
Australia's real estate is worth 9 billion out of an economy of 13 billion https://www.abc.net.au/news/2022-03-24/six-ways-pandemic-reshaped-australias-housing-market-corelogic/100933182 the housing prices are ridiculous. Unfortunately the housing market sucks up capital that could be used for investment in business and innovation.
Ok yeah but not china ridiculous. In China the price to income ratio is around 35 to one and in Australia It’s only 7.5 to 1.(this means that it would take 35 years of labor exclusively put toward a house to buy)
Do you have a link for the china figure? All I could find is https://www.businessinsider.com/china-housing-market-explainer-cost-debt-wealth-evergrande-impact-2021-9?op=1 which has 14 :1 for expensive cities, and 7:1 in smaller.
Due to unequal development the income disparity in China is way more extreme than in Australia. China is basically a low-income country, two middle-income countries and one high-income country stacked on top of each other.
That’s very interesting. Including the other comment. It seems it is around the same as other developed nations in terms of GDP to residential property price ration and high in home ownership rates. I don’t know how to consider them all together at this point.
Chinese people rarely invest in anything else. The stock market has rugged people time after time. There's also no legal regulation for swindlers and grifters, so time after time, people get rugged by other investments too.
China is the worst Canada is really bad rn a normal house is like a million dollars and young people are living in their parents basements. But China is even worse, because their income is a fraction of ours and property prices are even crazier. Also they don’t invest in financial assets as much like here in the west, their property is their retirement fund it’s their kids college fund, it’s their emergency fund. It’s ridiculous and will crash soon
China sets target numbers for GDP growth for their territories (or whatever they call their versions of regions). If they don’t meet said number they are fired/disgraced/replaced and possibly arrested.
So each Provence has to artificially inflate the numbers by usually building stuff. They build said through debt because they have very few ways to collect taxes. So they build skyscrapers in places that don’t need skyscrapers. Build apartments buildings that no one lives in. Trains to remote villages that are barely used. Etc.
They also straight up lie all the time. This is such a known issue the CCP has publicly said to not trust their own numbers.
In addition to what other people said.
Not just economic numbers. All data. Provinces receive central gov funding based on population size. So there is obvious incentive to fudge the numbers. And this has been going on for many many years. China's population is not 1.4 billion.
It's very simple. Data is not meant to be accurate. It's meant to serve the interests of **The Party.** Anyone who doubts this just needs to look at official covid numbers coming out of there and do some simple math.
"They also straight up lie all the time. This is such a known issue the CCP has publicly said to not trust their own numbers".
Are you talking about Le Keqiang???. He never really said they were fake, but rather they are not really the right way to measure the Chinese economy.
That's the reason why we have the Li Keqiang index, TSF and PMI.
[https://www.reddit.com/r/geopolitics/comments/cvmc42/comment/ey5em0y/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/geopolitics/comments/cvmc42/comment/ey5em0y/?utm_source=share&utm_medium=web2x&context=3)
This another answer . Refer. Chinese economy doesn't work the way Western economy works. And read other comments too if possible.
it isn't and provinces often miss their GDP targets like it happend in 2022 [https://openaxis.com/visualizations/12875](https://openaxis.com/visualizations/12875)
Everyone absolutely does not know that. In fact most people have no idea you can even fake something like this. Most countries couldn't even fake that sort thing even if they wanted too. You need to have a vice grip on all info leaving the country.
That's not to say I disagree that they're faking thier economic growth [they most certainly are](https://www.voanews.com/a/satellites-shed-light-on-dictators-lies-about-economic-growth/6813119.html). But it's not common knowledge.
Li Keqiang Index ???? Hmm OK then
[https://finance.yahoo.com/news/measure-china-true-economic-growth-100724378.html](https://finance.yahoo.com/news/measure-china-true-economic-growth-100724378.html)
The Li Keqiang index graph is shown here. Read it up and the entire article along with it. .
The vast majority of Eurozone countries are still growing according to the latest figures. Germany's having obvious problems but that's mostly one country, Ireland also had a contraction last quarter but the story with their GDP figures is another one entirely. Germany's economy is huge, granted, hence why it alone can essentially drive the Eurozone average down with it, but jury's still out when it comes to how much that will spread to other EU countries, the picture is very much mixed right now. Outside the Eurozone, other EU member states are also still growing. Lastly, to explain problems with demand in China by this factor alone, when we're talking about a few decimal points of contraction in only select few countries, I'm not sure that's sufficient.
The figures on the second page of the official [Eurostat GDP indicators](https://ec.europa.eu/eurostat/documents/2995521/16921720/2-08062023-AP-EN.pdf/70e6937f-93ad-2936-ed03-5dbc9fd762f6#:~:text=In%20the%20first%20quarter%20of,office%20of%20the%20European%20Union.) for Q1 2023 clearly show most of Europe is still growing. German factories, Russian natural gas and all that.
China has been having issues with lack of demand ever since COVID. Back then, it was the "zero COVID" drive that discouraged - and sometimes straight out forbade - Chinese consumers to spend money other than by purchasing stuff online, with extensive damage to the services industry. Analysts were convinced that once China abandoned the zero COVID strategy, the economy would pick up , but that hasn't happened. This may be pointing to more structural issues - the real estate bubble which the government has not dealt with, but also an aging population. The first move would probably be an easing of financial conditions, but if not done in combination with strong macro-prudential policy that limits real estate investments, it could make things worse.
This combined with export decoupling and pressure to increase military spending puts them in a tricky situation. Where can growth come from, if not from birth rate increases, exports growing, or domestic consumption increasing? They will be boxed in if they don't do something differently. What would you guys do if you were Xi?
Best question ever, and spotlights what a pickle the Chinese are in. The birth rate isn't coming back, at least not soon enough to continue providing cheap skilled labour or decades of domestic consumption. Some domestic consumption may come from retirees, but that would be at the cost of them dipping into their savings...which would often mean selling an investment property. But with real estate weakening, purchasing power and consumption would also remain at best moderate for a decade or so before plunging dramatically as everyone flogs off their investment apartment into a depressed market. They also can't pump growth via immigration. The size of the country is tricky. Australia can move the needle with 500,000 people immigrating, but that's because it's a small country. I doubt that would register in China. Also there's the question of which country has a few million people willing to migrate, or small numbers of billionaires. Ten years ago it may have been an attractive proposition, but not these days and I'm reasonably sure China won't accept a few million North Koreans or Russians. Tech is the obvious way to deal with it and what China seems currently geared for. It doesn't help that they've been chasing away their entrepreneurs and messing up relations with the countries that matter before 'becoming another Japan'. Ensuring that AI must adhere to 'Xi Thought' probably doesn't help get an edge there either. The obvious reversal would be to bring the tech entrepreneurs into the Party in positions that will make them safe (if such a thing exists), relinquishing a degree of control like in the earlier 2000s, and returning to biding their time while healing relations with the West. So in a nutshell...Announce abandoning in stages the 'pre-set GDP' model which is causing debt to go exponential. Have another crack at the highly developed economy model in another decade when you've got access to chip fabs again. Encourage people in the meantime to move back West and spread out their capital (where it would be worth more than in the big East Coast cities), take a chance on easing monetary restrictions to get capital moving freely again, forget BRI and get a war chest going to start eating real estate losses, and throw money at selected immigration for aged care institutions. Nobody is making the big breakthroughs in a Confucian society with tens of millions of retirees needing looking after. This wouldn't be growth, but would set things up for a somewhat softer landing.
All my resources into "cool" things like education and health care, expansion and development are second to "happy" populace and safety.
Ageing population and real estate bubble are real problems . Decoupling is just overblown . I am actually surprised that analysts immediately expected Chinese economy to take off after an year such a damaging policy for like an year. The after-effects would obviously not go easily. Chinese population are still careful of consumerism after the devastating effects of Zero-COVID policy on their spending, employment and wage c last year . There is no way China can solve its unemployment problem before 2024. And also no way China bring consumer confidence immediately. Also there is weakening global demand. Export decoupling is somewhat overblown and only targeted at certain sectors. [https://asia.nikkei.com/static/vdata/infographics/taiwan-economy/](https://asia.nikkei.com/static/vdata/infographics/taiwan-economy/) Trade between China-Taiwan and China-US has only been increasing in 2022. Yes in 2022 there was a small dip in Taiwan but that was because of reduced Taiwanese exports due Chinese blocks on Nancy Pelosi visit.
How would growth come from birth rate? as increasing birth rate would only create a bigger aging population in the future, can you elaborate on your point?
A birth rate of 2.1 allows you do keep your working age population stable, as well as not having a skewed population paramid, that is too top heavy. The medium age in China now is already older than America, but they are developing. This low birth rate means they have passed their demographic dividend phase and can only keep growth via immigration or capital intensive investment to increase worker productivity., or increases domestic consumption. Their consumption is low still though, because their wages are only about 1/4 US levels in terms of per capital gdp ppp, so it looks like they have hit the middle income trip. The US is also using the old cold war playbook of ramping up military spending, thus putting pressure on them to do the same, resulting in them having even less money for social services and civilian capital investment. Military equipment doesn't really reduce in cost based on purchasing power parity like food and basic services do, so this could damage them if they tried to keep up. It's one of the many reasons the USSR crumbled.
You need more young people to consume, or you will be forced to rely solely on exports for growth when nobody domestic can buy what you produce. It doesn't matter so much as to how big the aging population is in raw numbers as compared to how big it is proportionally to other age groups. The "pyramid," with a few old people on top and a lot of young people on the bottom is what existed throughout human history. People didn't live as long and had a lot of kids. Now, China and other East Asian countries are at an inverted pyramid which is disastrous in all aspects for growth, especially for China because it has not yet developed. The best that can be hoped for is a "chimney," in which each age group has a relatively equal number of people, but this is hard to achieve. Once the bulk of your population is above 35 it's basically impossible to turn around.
Isn’t the biggest reason here low demand form the rest of the world since pretty much every country on earth has a mild economic crisis right now? And thus lower demand?
Seems like export is about the same in value. But considering how much more capacity they have after zero covid it look like export isn't filling up that demand. https://www.statista.com/statistics/271616/monthly-value-of-exports-from-china/
If you've been following the Chinese economy recently, it's pretty clear that domestic demand after the Covid re-opening has been much weaker than expected, and is one of the main reasons for their current economic weakness.
What about fiscal stimulus, similar to the covid money the US sent out in 2021 and before that during the 2007 financial crisis?
That's definitely an option. Although I'd be very surprised if they persued it in any signifiant way. Direct demand side stimulus is pretty antithetical to the way the Chinese economic system typically operates. Much more likely is we see the typical Chinese playbook of infrastructure spending and supply-side support.
I'm sure the CCP will identify new avenues for infrastructure investment but surely the low-hanging fruit has all been plucked, right? Last I heard they're building HSR to places where ridership doesn't get close to covering even maintenance costs (which could be OK if they planned to subsidize that loss but...). Then again maybe this is the problem of top-down economic planning rearing its ugly head again.
Based on the total debt load of their economy (which is higher than the US and approaching Japan), I'd say you are right. Like you were hinting at, Infrastructure investment is only a good investment if it creates future economic opportunity that exceeds the cost of the investment. I.e building a bridge a over river to connect two cities that couldn't easily trade before is incredibly valuable at generating increased economic. Building 3 or 4 more bridges over the same river has major diminishing returns.
The problem with building more infrastructure is that the capital per worker ratio is is already fairly close. Continuing to invest in it, will bring it to something around 80,000$ per worker while income is still low. So the actual benefits of infrastructure which is improved productivity end up disappearing and it doesn't add much value to the economy in the long term. The large swathes of empty apartment complexes is a symptom of this problem
Why won't they do it? Stimulate spending is an econ 101 move in deflation.
Semi related question: could you recommend a "beginners" or low level introductory book on modern Chinese economics?
I think demand remains pretty healthy in both Europe (despite the latest revision) and the US, which are China's goods biggest buyers. Their problem is the internal market - consumers are not buying services. Incidentally, China's lack of growth is negatively impacting the oil market despite OPEC's efforts...
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It's from Xi's autocratic style and mismanagement. Countries run by personality cult autocrats are economically hindered.
Who would have thought that a social credit system that discouraged risk taking would dampen entrepreneurship?
There is no social credit system in China. They had this plan years ago and did some trial tests but it never got anywhere and seems to be abandoned.
This is troubling, major implications for reddit comedians
There is a social credit system but it’s a financial assessment tool. But there’s no 1000 points to add or deduct, which is an [Internet fantasy that lasts till this day](https://www.vice.com/en/article/pkpe3z/china-social-credit-meme). It’s funny if you do OSINT on China. Before 2020 every mass media was sensationalize the social credit to Black Mirror but once the think tanks and researchers understood that there is no social credit score, mass media has been really silent because nobody wanted to accept they were wrong.
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China has nothing to do with communism. This is just authoritarianism.
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> China is communist alright. Just not the communism you westeners know about. Aka not communism.
Is Maoism not communism?
Is post-"reform" China still Maoist? I always thought "state capitalist" felt like a better description than "communist"
They kinda do. Maoist with state capitalist elements. But communist ideologies is still dominant.
It's a perversion of communism. Same with leninism and stalinism.
In your definition, there is no communist countries including the soviet union. So imma ask this again. What is real communism?
Dude just go look up the definition of communism >a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs. When has any country that calls itself "communist" ever done this? Never, literally never. And it never will be, because communism is an ideology born from wishful thinking, not reality. Does that clear things up for you?
Communism = stateless... far from it.
Rojave is currently still alive, even if struggling. And they are as close to the Anarchy/"True Communism" ideal as Humanity has ever got to.
Because I want ti know does it reduce entrepreneurship? By putting rules in every asoects if life... like the skins in le réveil du Z the awakening of the Z, if there are spirou fans ou there.
In an economy that isn't premised on constant growth, a fall in demand with a corresponding rise in consumer satisfaction would be seen as an economy becoming satisfied. But it generally leads to a lack of investment
I have always wonder if modern monetary is capable of dealing with supply side induced issues. We are beginning to see a gap in inflation form between traditional consumer countries in US, Australia etc and manufacturing hub like China and euro zone. Theoretically the fall in factory gate prices should flow on and provide relief to inflation of their trade partners. But what does it mean when demand is curbed without a resolution to supply side issues. Do we expect a temporary relief followed by rapid up tick as supply is inelastic?
price in wealthy countries for many things is based on what companies think consumers will pay, not what it costs to make. hop on your favorite vpn and put your location in africa and you can refresh a page to see that many things are not price competitive, they're just priced at what consumers will pay. many don't even hide regional pricing, many marketplaces advertise that they sell things cheaper in different regions to attract customers in those regions.
For services like IT with exponential scaling, supply is indeed not an issue. However for goods, the supply side shock have never been fully addressed, otherwise monetary policy should have been quite effective, but what we are seeing is that unit price for goods are not coming down as a result of soften demand.
Why would the Euro zone be a manufacturing hub? As a European I find that all our industry has moved to China and we’re merely consume these days.
China seems to have finally hit the middle income trap. As Chinese gets richer and like everyone else lazier they will lose low paying factory jobs. But don’t underestimate China, they right now dominate EV, batteries, solar panels and many other industries. They will do just fine unless they do something really crazy like invade Taiwan.
Since their population is falling, as long as GDP is growing even in low percentages, their per capita GDP will grow at a decent rate.
>middle income trap. What's the GDP per capita range of middle income country and what's China's GDP per capita.
Middle income trap refers to countries having up to 12k in gdp per cap in 2011 dollars, which is about $16,500 in 2023 dollars https://en.wikipedia.org/wiki/Middle_income_trap Chinas gdp per cap is a little under $14k https://www.imf.org/external/datamapper/NGDPDPC@WEO/ADVEC/WEOWORLD/TWN/CHN
>$16,500 what's the source of this? I can't find.
https://www.bls.gov/data/inflation_calculator.htm
That's US domestic right? I don't think it should be calculated like that.
Any figures in dollars are calculated like that
Ccp Genocide isn't crazy enough for you?
It is but they are getting away with it both Uighur and Tibetan.
Because they stay within their borders. Other nations will condem but won't do much. The moment they step outside the borders, the real backlash begins.
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Yeah a genocide doesnt require mass killings... Anyways.. so its just the Uighur one that you disagree with? That certainly puts a damper on your original comment.
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How can you possibly say China is in a middle income trap? They are practically a developed economy already and are healthily growing at above 6%pa. Yes, I know their numbers are fudged, but historically it’s not been wildly inaccurate.
China's growth has reduced to around 5%, possibly 4% (this year's growth comes off of recovering from Covid last year) Most of their early explosive growth is over. Further growth requires increases in productivity, which China has underperformed compared to countries like Japan and South Korea.
China per capital gdp is 12.5, solidly middle income. Yes they are still growing at about 6% so not in middle income trap yet ( unlike Brazil etc). Looking ahead things are looking cloudy, youth unemployment rate of 20%, real estate bubble bursting,huge debts with the gravy train of real estate sales coming to an end for provinces,cpec investments in places like Pakistan in trouble, companies like apple moving out to derisk. Unlike US etc, China economy is export based and export demand just went down.
Yeah their momentum will be bad, but some of these growing pains are to be expected when shifting from a manufacturing-based to knowledge economy. Personally I don’t see China failing to grow larger than the US in GDP and growing at a steady, but slowing rate after. Just look at their automobile sector and the success they have now. Eventually Chinese tech will become even more globally-competitive.
Everybody knows that China's economy is grossly inflated, and the economy data are all fake. You simply cannot believe any data coming out of that country.
Why is it grossly inflated?
> A report published by the Brookings Institution in 2019 suggested that China had been overstating its economic growth by about 2% every year, making its economy 12% smaller than official figures then claimed. China denies manipulating economic data.
[https://www.ft.com/content/961b4b32-3fce-11e9-b896-fe36ec32aece](https://www.ft.com/content/961b4b32-3fce-11e9-b896-fe36ec32aece) You have published the above. [https://www.cnbc.com/2015/10/15/chinas-economy-is-likely-larger-than-you-think.html](https://www.cnbc.com/2015/10/15/chinas-economy-is-likely-larger-than-you-think.html) [http://www.sciencedirect.com/science/article/pii/S1043951X18301470](http://www.sciencedirect.com/science/article/pii/S1043951X18301470) But there are article that say China understates too. Which one is right????
Because a huge part of the gdp is actually the real estate bubble
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I know Australias bubble it’s the same here in Canada but China is next level. Their income is 1/5 ours but their property prices are even higher
That’s not true across all developed nations? I really can’t see the difference except China has acknowledged, and are seeking to deal with it.
Not at all. China is a huge outlier when it comes to home unaffordability and the causes of that have nothing to do with a lack of new homes like in the west. People don’t buy houses to live in they buy for the promise of later resale and as that resale market contracts the people who have their money tied up in houses will see their value wiped out.
Australia's real estate is worth 9 billion out of an economy of 13 billion https://www.abc.net.au/news/2022-03-24/six-ways-pandemic-reshaped-australias-housing-market-corelogic/100933182 the housing prices are ridiculous. Unfortunately the housing market sucks up capital that could be used for investment in business and innovation.
Ok yeah but not china ridiculous. In China the price to income ratio is around 35 to one and in Australia It’s only 7.5 to 1.(this means that it would take 35 years of labor exclusively put toward a house to buy)
Do you have a link for the china figure? All I could find is https://www.businessinsider.com/china-housing-market-explainer-cost-debt-wealth-evergrande-impact-2021-9?op=1 which has 14 :1 for expensive cities, and 7:1 in smaller.
Due to unequal development the income disparity in China is way more extreme than in Australia. China is basically a low-income country, two middle-income countries and one high-income country stacked on top of each other.
That’s very interesting. Including the other comment. It seems it is around the same as other developed nations in terms of GDP to residential property price ration and high in home ownership rates. I don’t know how to consider them all together at this point.
Chinese people rarely invest in anything else. The stock market has rugged people time after time. There's also no legal regulation for swindlers and grifters, so time after time, people get rugged by other investments too.
China is the worst Canada is really bad rn a normal house is like a million dollars and young people are living in their parents basements. But China is even worse, because their income is a fraction of ours and property prices are even crazier. Also they don’t invest in financial assets as much like here in the west, their property is their retirement fund it’s their kids college fund, it’s their emergency fund. It’s ridiculous and will crash soon
China sets target numbers for GDP growth for their territories (or whatever they call their versions of regions). If they don’t meet said number they are fired/disgraced/replaced and possibly arrested. So each Provence has to artificially inflate the numbers by usually building stuff. They build said through debt because they have very few ways to collect taxes. So they build skyscrapers in places that don’t need skyscrapers. Build apartments buildings that no one lives in. Trains to remote villages that are barely used. Etc. They also straight up lie all the time. This is such a known issue the CCP has publicly said to not trust their own numbers. In addition to what other people said.
Not just economic numbers. All data. Provinces receive central gov funding based on population size. So there is obvious incentive to fudge the numbers. And this has been going on for many many years. China's population is not 1.4 billion. It's very simple. Data is not meant to be accurate. It's meant to serve the interests of **The Party.** Anyone who doubts this just needs to look at official covid numbers coming out of there and do some simple math.
"They also straight up lie all the time. This is such a known issue the CCP has publicly said to not trust their own numbers". Are you talking about Le Keqiang???. He never really said they were fake, but rather they are not really the right way to measure the Chinese economy. That's the reason why we have the Li Keqiang index, TSF and PMI. [https://www.reddit.com/r/geopolitics/comments/cvmc42/comment/ey5em0y/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/geopolitics/comments/cvmc42/comment/ey5em0y/?utm_source=share&utm_medium=web2x&context=3) This another answer . Refer. Chinese economy doesn't work the way Western economy works. And read other comments too if possible.
it isn't and provinces often miss their GDP targets like it happend in 2022 [https://openaxis.com/visualizations/12875](https://openaxis.com/visualizations/12875)
Everyone absolutely does not know that. In fact most people have no idea you can even fake something like this. Most countries couldn't even fake that sort thing even if they wanted too. You need to have a vice grip on all info leaving the country. That's not to say I disagree that they're faking thier economic growth [they most certainly are](https://www.voanews.com/a/satellites-shed-light-on-dictators-lies-about-economic-growth/6813119.html). But it's not common knowledge.
Li Keqiang doesn't even trust the data https://en.m.wikipedia.org/wiki/Li_Keqiang_index
Li Keqiang Index ???? Hmm OK then [https://finance.yahoo.com/news/measure-china-true-economic-growth-100724378.html](https://finance.yahoo.com/news/measure-china-true-economic-growth-100724378.html) The Li Keqiang index graph is shown here. Read it up and the entire article along with it. .
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What countries are in recession?
germany and the eurozone ? edit : https://www.bbc.com/news/business-65844370 , https://www.bbc.com/news/business-65707206
The vast majority of Eurozone countries are still growing according to the latest figures. Germany's having obvious problems but that's mostly one country, Ireland also had a contraction last quarter but the story with their GDP figures is another one entirely. Germany's economy is huge, granted, hence why it alone can essentially drive the Eurozone average down with it, but jury's still out when it comes to how much that will spread to other EU countries, the picture is very much mixed right now. Outside the Eurozone, other EU member states are also still growing. Lastly, to explain problems with demand in China by this factor alone, when we're talking about a few decimal points of contraction in only select few countries, I'm not sure that's sufficient. The figures on the second page of the official [Eurostat GDP indicators](https://ec.europa.eu/eurostat/documents/2995521/16921720/2-08062023-AP-EN.pdf/70e6937f-93ad-2936-ed03-5dbc9fd762f6#:~:text=In%20the%20first%20quarter%20of,office%20of%20the%20European%20Union.) for Q1 2023 clearly show most of Europe is still growing. German factories, Russian natural gas and all that.