Chinese Economics Thread

now matter how big is a disagreement on ideology here,
China's economy predicted to expand 6.7 pct in H1
Xinhua| 2018-07-08 14:01:57
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China's economy is predicted to expand 6.7 percent in the first half of 2018, slightly retreating from the growth seen in the first quarter but showing continued resilience, according to forecast by financial institutions and economists.

Despite some external uncertainties, China's economy has extended an improving trend on the back of the global economic recovery, rising new growth momentum and a warming property market, said a report released by the international financial research institution with the Bank of China.

Lian Ping, chief economist of the Bank of Communications, also forecast growth of 6.7 percent.

In the second quarter, the contribution of consumption and investment to economic growth may come in at 70 percent and 35 percent, respectively. Although net exports made negative contribution to growth, the fast growth of exports helped pull up manufacturing production and investment, according to Lian.

For the outlook in the second half of the year, chief economist of CITIC Securities Chu Jianfang believes there will be no big risk of recession and the economy will remain resilient, citing rising industrial investment, steady infrastructure investment and warming external demand.

The Chinese economy registered 6.8-percent growth in the first quarter.

China is scheduled to release a string of economic data including GDP growth for the second quarter on July 16.
 

Orthan

Senior Member
According to this article, chinese savers may not have as much money as some think.

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What do you think of this ? Does this mean that china stands little chance of developing a consumption-based economy ?
 

Hendrik_2000

Lieutenant General
According to this article, chinese savers may not have as much money as some think.

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What do you think of this ? Does this mean that china stands little chance of developing a consumption-based economy ?

Like so many of the Bloomberg article they come from and agenda "China cannot compete with US" and derive reasoning to buttress their argument. This is another "feel good"article from bloomberg

To begin with Chinese wages has been growing at double digit for the last decades That is why it can support all those home purchases . This is supported that service industry is now comprises more than half of the economy and growing. There should have no problem of servicing debt if your cash flow is improving. And most of the debt is due to expensive home.But in China most of the parents also contribute to the purchases of home

Chinese economy is shifting to high value added economy with it attended higher wages

The article just saying Chinese welfare system is inadequate without any proof When in reality is getting better all the time with every year
 

plawolf

Lieutenant General
Like so many of the Bloomberg article they come from and agenda "China cannot compete with US" and derive reasoning to buttress their argument. This is another "feel good"article from bloomberg

To begin with Chinese wages has been growing at double digit for the last decades That is why it can support all those home purchases . This is supported that service industry is now comprises more than half of the economy and growing. There should have no problem of servicing debt if your cash flow is improving. And most of the debt is due to expensive home.But in China most of the parents also contribute to the purchases of home

Chinese economy is shifting to high value added economy with it attended higher wages

The article just saying Chinese welfare system is inadequate without any proof When in reality is getting better all the time with every year

That article is just (seemingly willfully inaccurate) statistical cherry picking; comparing apples to oranges; and false logic.

I have no idea what kind of statistical origami the author was performing when he multiples household saving rate by the percentage of the ‘household income as a part of GDP’, especially since GDP doesn’t measure household income( GDP=consumption, investment, government spending and the net of imports and exports).

Other than to get a lower savings rate, I how no idea what he was trying to achieve with that piece of nonsense calculation.

Its comparing apples and oranges to strip out govenrment mandated saving minimums for China and compare that to other savings rates that includes such mandated minimums.

Comparing wealth per capita in USD to savings rates is also nonsensical and comparing apples to oranges since Chinese consumers don’t typically consume in USD.

Basically almost every single point he makes makes no sense, which is quite impressive a feat to achieve!

However, to step away from that trash piece, people need to also appreciate that Chinese consumption is never going to be as big a driver of economic growth as western consumption for the simple fact that western levels of consumper consumption is simply unsustainable.

In the West, consumer consumption was largely debt driven, whereby people were effectively bringing their consumption forwards.

So instead of saving for months or years to buy that new car, house, holiday or whatever, western consumers instead took out debt to purchases those goods and services now while they pay for them later.

That’s one of the main drivers of western boom and bust economic cycles, whereby consumers splurge on debt fuelled consumption when interest rates are low, and then cut back as they struggle to serve all the payment plans.

Governments try to bring up consumption to shore up economic performance by lowering interest rates, which works until interests rates get close to zero, at which point govenments loose that option. But that’s NOT creating more wealth, all you are doing is spending more money now to leave your future self poorer. It only makes sense to the super-short term and obsessed western governments who can only see as far as the next election.

What no western economists seems to be realising (or at least able to get such views published in western MSM) is that irrespective of whether you are saving first to consume later, or consuming first and saving to make the payments later, you still need to save (cut back consumption) at some point to afford to buy those consumer goods!

While Chinese consumers who have been saving for a while can indeed afford to dip into their nest eggs; I think that it would be unlikely for them to want to spend that nest egg unless it’s for important things like a house, marriage, education, medical treatment etc, for which the have been saving for in the first place.

Indeed, it seems especially unlikely that Chinese households will choose to make big purchases at times of great economic uncertainty, as is the case now.

That’s bad for China as it’s GDP might fall sharper than people might expect as a result of the trade war with the US, as households hold back consumption in expedition of economic hard times ahead; but it is also good news since that means American exports to China will likely suffer a much bigger fall as Chinese consumers naturally cut back on non-essentially consumption, and also from the public backlash against US brands as the economy suffers from the US initiated trade war.

However, it’s not all going to be doom and gloom.

Chinese consumers will cut back on discretionary, especially big ticket luxury spending. But, because of the big savings most Chinese households are sitting on, it means Chinese households can and will dip into those for essential consumption if and when needed.

So to sum up, I would expect a bigger fall in Chinese imports than would be proportional to the size of the tarrifs. Chinese GDP may also fall more sharply than some might think initially, however, there will also be a pretty high ‘floor’ level of economic activity that Chinese households would be able to maintain by dipping into their collective savings, which will be a lot higher than for America.

In the short run, the headline numbers might make it look like America is winning the trade war as Chinese GDP might fall more sharply in the short run. However, Chinese GDP is likely to stabilise at a much higher level after the effects of the intial shocks have fed through, whereas I would expect the US economy to suffer more and more as the effects of the trade war hits and drags on.

America is better predisposed to fight a short skirmish, whereas China’s strength lies in the long war.

I would expect Trump to try and hammer out a deal fairly quickly, while America’s advantages makes it look like it is doing a lot better than it actually is.

The main question is whether Trump realises that his advantage is largely illusionary and fleeting (in which case he may make relatively reasonable demands in the hopes that China will have him some small concessions so he can announce victory and end the trade war quickly); or if he believes his own propaganda and asks for too much, in which case China will probably knuckle down for the long game.
 
now matter how big is a disagreement on ideology here,
China's economy predicted to expand 6.7 pct in H1
Xinhua| 2018-07-08 14:01:57
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now
Economic Watch: China's economic fundamentals point towards high-quality development
Xinhua| 2018-07-09 16:31:58
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Although China's growth data for the first half of the year is yet to be released, a glimpse into the positive changes in economic fundamentals showed China is moving steadily towards its goal of high-quality development.

With overall economic activity maintaining stable expansion and industrial and service production picking up pace, China's sound economic fundamentals once again dismissed some persistent doubts over the health of the world's second largest economy.

Official data showed the country's manufacturing purchasing managers' index (PMI) came in at 51.5 in June, above the boom-bust line of 50.

While the reading was lower than 51.9 in May, it surpassed an average of 51.3 for the first half of this year, indicating upward momentum, according to the National Bureau of Statistics (NBS).

In the first five months, profits at China's major industrial firms grew 16.5 percent, quickening from the 15-percent expansion for the January-April period.

Other economic indicators, including energy consumption, freight traffic, and producer prices all ticked up in May, pointing to a stable real economy and progress in structural transformation.

Along with economic resilience, the job market also remained stable, giving policymakers more room to push reforms. In May, China's surveyed unemployment in urban areas declined to 4.8 percent, down 0.1 percentage point from April and 0.1 percentage point lower than last May.

"Generally speaking, China's economic operation has maintained its trend of steady and improving development," said NBS spokesperson Mao Shengyong.

According to a forecast by financial institutions and economists, China's economy is predicted to expand 6.7 percent in the first half of 2018, slightly retreating from the 6.8-percent growth seen in Q1 but still well above the government target of 6.5 percent for the whole year.

In regards to the second half of the year, chief economist of CITIC Securities Chu Jianfang believes there will be no big risk of recession and the economy will remain resilient, citing rising industrial investment, steady infrastructure investment and warming external demand.

The better-than-expected performance is largely attributable to China's supply-side structural reforms, which helped increase utilization efficiency of industrial capacity and enhance supply quality of products and services.

"The advancing of supply-side structural reforms are showing spill-over effects, and better quality of the supply system will push stable growth of the economy," said Ning Jizhe, deputy head of the National Development and Reform Commission.

Meanwhile, the country's deleveraging efforts are happening in a stable and orderly manner. The credit profile of China reflects a number of strengths, including the vast size and growth rate of its economy, denoting very high shock absorption capacity, according to a report from global rating firm Moody's.

Last month, the World Bank upgraded its forecast for China's economic growth in 2018 to 6.5 percent, 0.1 percentage point higher than its January forecast.

The World Bank's latest China Economic Update said that economic activity had remained resilient, and the new economy was now a more prominent source of growth.

Morgan Stanley also raised its forecast on the pace of China's economic expansion for this year and 2019 in a research note, saying growth had become more sustainable and less reliant on credit.

The New York-based investment bank expects China's GDP to rise 6.6 percent year on year in 2018, up from its previous projection of 6.5 percent. Its forecast for 2019 improved from 6.3 percent to 6.4 percent.
 
now noticed the tweet
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Chinese Gigafactory 3,
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's next Gigafactory, will be built in
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and can produce 500K automobiles per year, CEO of Tesla Elon Musk announced in Shanghai on Tue; The deal is the biggest foreign manufacturing project of all time in the city.

DhwKl6zUcAAKn5q.jpg
 

vincent

Grumpy Old Man
Staff member
Moderator - World Affairs
now noticed the tweet
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Chinese Gigafactory 3,
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's next Gigafactory, will be built in
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and can produce 500K automobiles per year, CEO of Tesla Elon Musk announced in Shanghai on Tue; The deal is the biggest foreign manufacturing project of all time in the city.

DhwKl6zUcAAKn5q.jpg

Just a ploy to raise cash for its operations
 
now I read
Temasek bullish on Chinese economy's long-term development
Xinhua 2018-07-11 20:26:55
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Singapore's sovereign wealth fund Temasek is upbeat about the long-term outlook of the Chinese economy, a company official said Wednesday.

China's efforts to deleverage and rebalance the economy and to open up the financial sector will help its economy achieve sustainable development in the long run, according to Wu Yibing, Temasek's head of China, in an interview.

A more open financial sector, with concrete measures and swift implementation, shows China's economic confidence and provides considerable opportunities for overseas investors, especially those focused on the long term.

"As an investor in the fundamentals, we value the trend of the macroeconomy," Wu said. "We have full confidence in China's mid- and long-term development."

Temasek reported a record net portfolio value of 235 billion U.S. dollars as of the end of March, with China forming 26 percent of its underlying portfolio exposure, only second to Singapore's 27 percent.

Wu Hai, Temasek's managing director of China, said the company has increased investment in innovative firms in such areas as technology, life science, and non-banking financial services.

Chinese innovation-based enterprises have a promising future thanks to the broad market and abundant funding, he noted.

"China's economy has gradually shifted to growth more reliant on domestic demand and innovation rather than foreign trade," he said. "No matter what kind of an economic cycle we are in, innovation always drives the economy."
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Hendrik_2000

Lieutenant General
And China did innovate contrary to those propaganda of "China stealing" Endorsement from Temasek is something because these people are no nonsense business oriented outfit with 350 billion asset
Here is the link to the latest GII report:
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Temasek is the holding company of Singapore government that invest in myriad company
Temasek is commonly referred to as a
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, particularly by the press and research outlets based outside Singapore.
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However, it has frequently disputed this terminology, and prefers to be referred to as an
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, because it invests mostly in equities, is the outright owner of many assets, and pays taxes like other commercial investment firms.
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Temasek has credit ratings of “AAA/Aaa” by
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Global Ratings and Moody's Investors Service
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respectively since their inaugural ratings in 2004. Temasek has also attained perfect quarterly scores
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on the Linaburg-Maduell Transparency Index,
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a measure of the openness of government-owned investment funds.


China joined the world's top 20 most innovative economies for the first time while the United States fell out of the five top-ranked countries,
NEW YORK (AP) — China joined the world's top 20 most innovative economies for the first time while the United States fell out of the five top-ranked countries, according to a report released Tuesday by one of its co-sponsors, the U.N. intellectual property agency.

The Global Innovation Index 2018 keeps Switzerland in the No. 1 spot, followed by the Netherlands, Sweden, United Kingdom and Singapore. The United States fell from fourth place in 2017 to sixth this year, while China jumped from 22nd to 17th in the rankings.

Francis Gurry, director general of the U.N. World Intellectual Property Organization, said China's ranking represents a breakthrough for its economy, which is rapidly transforming and prioritizing research and ingenuity.

"China's rapid rise reflects a strategic direction set from the top leadership to developing world-class capacity in innovation and to moving the structural basis of the economy to more knowledge-intensive industries that rely on innovation to maintain competitive advantage," Gurry said. "It heralds the arrival of multipolar innovation."kilometres and will not be able to support trucks which are too heavy.

The index is sponsored by the WIPO, Cornell University's SC Johnson College of Business and INSEAD, the graduate school of business with campuses in France, Singapore and Abu Dhabi. They say it gives global decision makers a better understanding of how to stimulate innovation, which "drives economic and human development."


The report said "China's innovation prowess becomes evident in various areas," with some of its greatest improvements in global research and development companies, high technology imports, the quality of its publications, and enrollment in graduate education.

"In absolute values, and in areas such as R&D expenditures and the number of researchers, patents and publications, China is now first or second in the world, with volumes that overshadow most high income economies," it said.

The report said that China's rapid rise in the rankings over the last few years has been spectacular and that it shows the way for other middle-income economies, though only Malaysia, currently 35th in the rankings, continues to edge closer to the top 25.

According to the index, 20 middle and lower-income economies that perform "significantly better" than their level of development would predict made this year's list of "innovation achievers," including three for the first time — South Africa, Tunisia and Colombia.

Six of the achievers come from sub-Sahara Africa, the most for any region. In addition to South Africa, they are Kenya, Rwanda, Mozambique, Malawi and Madagascar.

There were five achievers from eastern Europe — Moldova, Armenia, Ukraine, Montenegro and Serbia.

The report singles out three countries that made a comeback to the achievers list this year — Mongolia, Thailand and Montenegro. In addition to Kenya, three other countries have been on the achievers list for eight years — Moldova, Vietnam and India.

At the bottom of the innovation rankings are Bolivia, Nigeria, Guinea, Zambia, Benin, Niger, Ivory Coast, Burkina Faso, Togo and Yemen.

The list of 126 nations includes three countries that climbed 10 places in the rankings: Iran from 75th to 65th, Albania from 93rd to 83rd, and Egypt from 105th to 95th. Macedonia, meanwhile, fell more than 10 spots, from 61st to 84th.
 
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taxiya

Brigadier
Registered Member
During the recent China-Arab ministerial summit,
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We know where China get the dollars to invest in Arabic countries. This is one of the many investments along the road and belt countries. Through this network, China also get the oil, gas and market. The ongoing "trade war" is eye-catching, but the real big things are happening every day away from the limelight.
 
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