Lower domestic consumption of american goods lol.
Chinese Economics Thread
- Thread starter Norfolk
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As I understand it, on a trade weighted basis, the RMB is stable.
I'm not an econ guy so i just want to ask opinions about this ? Is it legit ? Or it just too pessimism ?
There's no country comparable, because of China's side she's now taking up a sizable amount of the entire world's GDP. For China to grow at high speed requires the entire rest of the globe to also be growing at high speed else there's just not enough consumption in the world to support the growth. Never mind the fact that the whole world economy is not doing well at the moment.
He forgot that China is not any average country
I wil
I will take this bet of his certitude with respect to his analysis on China's supposed peak economic growth. Bear in mind that many of the reasons why China's economy is not as strong as they could be was initiated by the government policies enacted these past 2 years. The tech industry, the tutoring industry, gaming industry, and now the real estate industry plus the ongoing Zero-COVID dynamic policy which does limit the economic growth China enjoys. The leadership is trying to re-orient it's economy towards the future but because most analysis and these so-called analysts are only interested on providing the short term fixed for the ADHD people in the west, it's why they keep producing garbage or incompetent and incomplete analysis of China’s economy.
It's legit. The data is the data. Even if China outperforms 90% of all historical examples, then according to the data we should expect no more than 3 to 3.5% growth per annum on average. Zero Covid of course only adds to the problems, but that's China's own failure. The days of fast Chinese growth are behind us except for outlier years like 2021 (bounceback on big economic shock).
This isn't terribly surprising. China is at the cusp of becoming a high-income country according to the World Bank definition and the West is still by far the biggest and most important economic bloc to trade with, which is doing all it can to suppress China's rise.
I still expect China to continue converging with the West, but it won't be as rapid as it used to be.
Of course it's true that China's GDP growth is going to slow as the supply of new workers goes down. But for future growth the best comparison is probably Korea, not Mexico. Korea continued experiencing high GDP per capita growth long after they passed China's current level of wealth. China's investment in technology and education makes similar increases in productivity per worker likely. At least the developed eastern provinces will probably follow the path of Korea and Japan. The poorer western provinces might be different.
I'd say it's the volatility that's the issue. A strong dollar isn't a problem. A strengthening dollar is an issue because it changes the value of your goods while they're in transit and increases debt loads. If the dollar was strong but didn't move, it would be much more popular. The RMB's stability is a big asset
EU companies, facing energy crisis, invest more in China
By GT staff reporters Published: Sep 28, 2022 11:12 PM
EU rising energy prices Illustration: Liu Rui/GT
Energy shortage in Europe intensified by the Nord Stream pipelines blast, which pushed gas prices to record levels, have sent many European companies scrambling to deal with the growing risks to production costs.
Companies in the region are heading to China to set up new plants and pursue investment opportunities, especially companies in auto-making and chemicals, which need stable power supplies, the Global Times learned.
From January to August, the actual use of foreign capital in China reached 892.74 billion yuan, up 16.4 percent year-on-year, statistics from the Ministry of Commerce showed.
The EU's overall investment in China rose by a significant 123.7 percent, reflecting European companies' confidence in the Chinese market.
For example, that its first plant in South China's Zhanjiang started operation in early September, marking the company's largest overseas investment project to date.
Recent moves by some European companies might not be a direct reflection of the energy crisis in Europe, as supply chain shift often takes years. But the trend shows that these companies are embracing the Chinese market in an effort to stabilize their supply chain, Bai Ming, deputy director of the International Market Research Institute at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Wednesday.
The Nord Stream 1 and 2 explosions will have a great impact on energy supply in Europe, experts said. On the other hand, China is relatively less affected by international energy crunch and has advantages in ensuring stable energy supply.
A recent survey of more than 100 automakers and suppliers by the German Association of the Automotive Industry found that 22 percent wanted to relocate their investments abroad, according to local media reports. Only 3 percent of them intended to increase investment in Germany.
German auto-makers account for about one-third of EU's direct investment in China. That level was even higher in the first half of 2022, as German automaker BMW increased its stake in a Chinese joint venture from 50 percent to 75 percent, and other European automakers poured more money into new facilities to make electric vehicles in China.
Analysts predict that if the European energy crisis deepens, more companies will increase their investment in China.
Although China is the world's largest energy importer, China's energy supply is basically guaranteed, and cooperation between Chinese and European enterprises can ease the energy crisis and strengthen supply chain security, Wu Yikang, honorable chairman of the Shanghai Institute of European Studies, told the Global Times on Wednesday.
"Recent moves by European companies show that their confidence in investing in China is growing instead of waning, and there is no decoupling from China as reported by some Western media," Wu said.