Chinese Economics Thread

Yesterday at 8:26 AM
now I read
China slowdown persists as industrial economy posts worst growth since February 2002
  • Industrial production – a measure of China’s industrial sectors including manufacturing and mining – grew by just 4.8 per cent in July
  • Retail sales, a key metric of consumption in the world’s most populous nation, grew 7.6 per cent in July, down from 9.8 per cent growth in June
Updated: 1:01pm, 14 Aug, 2019
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Important economic indicators from China’s National Bureau of Statistics: -- Value-added industrial output up 4.8% YOY in Jul

... etc.:
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and as I can see, the industry result for this July didn't get into
Economic Watch: China weathers trade headwinds with greater economic resilience
Xinhua| 2019-08-15 09:52:56
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"Facing mounting challenges home and abroad, the Chinese economy continued to operate within a reasonable range with steady upward momentum in July," Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), told a press conference Wednesday.

BEIJING, Aug. 14 (Xinhua) -- China's economic resilience again defied doom-mongers' projections as the country's steady upward momentum is well-positioned to withstand external pressure.

"Facing mounting challenges home and abroad, the Chinese economy continued to operate within a reasonable range with steady upward momentum in July," Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), told a press conference Wednesday.

In the first seven months of this year, high-tech industries outpaced the overall industrial sector in both investment and output, NBS data showed.

The investment in high-tech manufacturing surged 11.1 percent year on year, 5.4 percentage points faster than total fixed-asset investment growth, while high-tech manufacturing output rose 8.7 percent, 2.9 percentage points faster than total industrial output.

Foreign trade also maintained steady expansion as exports expanded 10.3 percent from a year ago to 1.53 trillion yuan (218 billion U.S. dollars) in July alone and imports went up 0.4 percent to 1.21 trillion yuan.

Excluding auto sales, which were affected by the country's new emissions standards that came into effect in July, retail sales rose 8.8 percent last month, holding steady with that in June.

Job data offers a wealth of information regarding economic strength. China's job market remained generally stable in July, with 8.67 million new urban jobs created in the first seven months, accomplishing 79 percent of the annual target.

Foreign direct investment (FDI) into the Chinese mainland expanded 7.3 percent year on year in the January-July period, while FDI in July alone was up 8.7 percent year on year, higher than the 8.5 percent growth in June, according to the Ministry of Commerce.

Domestic consumption, already a dominant driving force of the economy, remains at a high level. A report from global measurement and data analytics company Nielsen showed that the consumer trend index stood at a relatively high of 115 points in the second quarter, similar to that of the last quarter.

Index levels above and below the baseline of 100 indicate consumer optimism and pessimism, respectively. The index measures perceptions of local job prospects, personal finance and willingness to spend.

"The economic structure has been continuously optimized, and the endogenous power of the economy has been enhanced. It highlights the resilience and vitality of the Chinese economy and effectively facilitates the long-term stable development," Justin Sargent, president of Nielsen China noted.

Meanwhile, China's burgeoning new economy features new industries and new forms and models of business, which have become new growth drivers.

These new growth drivers contributed 16.1 percent to the country's GDP last year, up 0.3 percentage points from one year earlier, according to the NBS.

However, it would be self-deceiving to say that there are no clouds on the horizon.

"The current external environment is more severe and complicated and the country's economic development faces growing downward pressure," Liu admits.

Liu said China is confident and determined to implement stabilizing policies, strengthen innovation, inject market vitality and promote sound and stable economic development.

"As the Chinese economy faces new risks and increasing downward pressure, the country should focus on long-term trends and key issues so as to turn crises into opportunities," read a statement released after a meeting held by the Political Bureau of the Communist Party of China Central Committee at the end of the July.

China will continue to implement proactive fiscal policy and prudent monetary policy. Policies of cutting taxes and fees should be further implemented, according to the meeting.
 
now I read
Trade conflict will prompt China to develop a more independent monetary system
Source:Global Times Published: 2019/8/14 20:48:40
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The China-US trade war began over a year ago, the US' economic bullying has since spread to the financial and currency sectors as the US has designated China as a currency manipulator.

This is not the first time the US has waged a trade war, and China is not its first victim. Looking through history, the US has always gained upper hand and left its opponents with a "lost decade" or decades. In this history, there are lessons to be learned.

China has the confidence and capability to transfer the trade and financial war, which has been imposed by the US, into an opportunity to build a solid financial system and an independent monetary system, thereby safeguarding its monetary sovereignty and financial security. By doing so, China can prepare for long-lasting China-US competition.

China has always placed economic and financial security at the forefront of its concerns. The trade war will lead to a lose-lose scenario. Any trade war "victory" is nothing but a demonstration of one party's ability to bear more pressure. Building a financial system that can endure such stress is key; it will rely on the integrity of a country's monetary sovereignty. Monetary sovereignty is the basis of financial and national security.

It also means a country is able to form an independent currency-issuing system - both sides of the central bank's balance sheet need to be yuan-denominated.

If foreign exchange reserves take up the majority of its assets while any liabilities are in home currency, it means the country's money-issuance is not independent. Its money supply depends on foreign reserves brought by the trade surplus and foreign direct investment. Money injections, distribution channels and methods are all confined by the scale of foreign exchange reserves.

If a country has an independent monetary system, its central bank will have more tools to counter systemic risks. Unfortunately, most developing countries do not have wholly-integrated monetary sovereignty.

Their currency-issuing mechanisms are pegged to the US dollar to match their export-oriented economies. If they inject money into their circulation systems without US-dollar backing, international capital will recognize it as invalid.

Any country, including China, needs to build a currency-issuing system separate from foreign reserves, and should have more policy flexibility when economic growth shifts from export-oriented growth to growth driven by market demand.

Many developing countries, during their attempts to build independent currency-issuing mechanisms, have fallen into traps and thus failed. Whether or not China can sidestep the proverbial Caudine Forks is putting the country to test.

There are five policy suggestions proposed here.

First, improving the budgeting for the operations of state-owned assets. The reality is that state-owned enterprises (SOEs) will act as leading players in the Chinese economy in the medium- and long-term. SOEs have played an important role in China's economic growth. However, some have experienced operating difficulties, turned into zombie companies, or even become local governments' financing platforms. They have occupied a great deal of social resources and capital. Those companies have accumulated seemly huge fixed assets on their accounts without generating profit on the market. This situation, which is eating up the real economy and piling up systemic risks, has to change.

Second, implementing stricter control on local fiscal budgets. Local governments' fiscal situations are optimistic. Some local governments' debts have snowballed to 10 times their annual fiscal revenues. This is not including debt financing through affiliated SOEs. Debt issues could be hidden risks jeopardizing the stability of the yuan. They require determination to reconstruct local financial revenues and expenditures in line with sustainable development.

Third, breaking up the implicit guarantee in financial institutions. The implicit guarantee encourages and pampers institutions to blindly grant loans and expand, creating inefficient assets and eventually harming the currency-issuing mechanism.

Fourth, establishing a multi-level capital market. The market has faith in the US dollar not only due to US military hegemony, but also due to its convenience and safety. China should learn from the US and better circulate its currency.

Fifth, setting up a clear goal for monetary policy. Central banks that have independent monetary systems will have a full set of policy instruments. The People's Bank of China needs to have a clear goal, committing to maintain inflation at a certain level. The market will thus have more certain expectations and will build confidence in the central bank's policy effectiveness.

This year marks the 70th anniversary of the founding of the People's Republic of China. Generations of Chinese people have made efforts to regain the pride and prosperity of the Chinese nation. Today, the financial war will prompt China to gain more independent monetary sovereignty, and to safeguard the country's financial security.
"policy suggestion" #3 was perhaps the most interesting, if you ask me
 

Quickie

Colonel
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Trump just blinked, giving China a possible edge in trade war, Jim Chanos and others say

The news guys are just as clueless as Trump. China would not have blinked first in any which way.

I'm not an expert on this trade war stuff but from what I've read from the one or more Chinese news sources, their stand has been pretty clear and unchanging in all trade talks that have been going on.

It's either no tariffs on both sides; or tariffs from you and counter-tariffs from the Chinese side.
 

localizer

Colonel
Registered Member
LMFAO

"My parents are the greatest people I know. They've always given me their best and supported me through thick and thin. I love them dearly and thank them every day for everything I have. Pls send money?"

What is he saying? We’ll end the HK protests if you give concessions on trade war?
 
In addition to any punishment handed to full extent of law in HK, Any of the violent protestor as punishment should just be banned from entering mainland until 2047. This will effectively kill their career and will be a much deserved punishment.
 

manqiangrexue

Brigadier
What is he saying? We’ll end the HK protests if you give concessions on trade war?
Dude, no. You were laughing at it without knowing what it he was saying? It's a comically poorly-disguised attempt to flatter Xi by showering him with praise in hopes of earning Donnie the personal meeting on trade talks that he desperately needs.
 
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localizer

Colonel
Registered Member
Dude, no. You were laughing at it without knowing what it he was saying? It's a comically poorly-disguised attempt to flatter Xi by showering him with praise and in the end, he puts in 2 little words to hint that it's because he desperately wants a personal trade talks meeting.
Dude look at his new tweets. Tell me what you think he wants.

Why is Trump conflating HK with trade war. He now says he wants Xi to meet protestors.
 
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