Chinese Economics Thread

canonicalsadhu

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You have to add on Steel, Cement etc; as well as the multipliers.

The issue is a lot of construction in China happens *because* of real estate development. As well, remember the 65 trln of LGFVs? A lot of that debt requires land sales by local governments to pay interest. Zunyi Road and Bridge is the first of many to come.

Seriously, people need to read 置身事内 to get a sense of the data.
Even if you consider all the related industries to real estate development you get a much smaller number than the often touted 30% of Western media.
Recently the director of China's National Bureau of Statistics
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that real estate and all related industries account for 13-14% of GDP. This figure seems reasonably accurate to me and in line with what I posted earlier. If you refer to the link I posted regarding China's GDP composition, you have around 8% for real estate, rental, leasing + around 4% for real estate construction + around 1-2% for related materials industries such as steel and cement which gives around 13-14% of GDP.
 

Minm

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Even if you consider all the related industries to real estate development you get a much smaller number than the often touted 30% of Western media.
Recently the director of China's National Bureau of Statistics
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that real estate and all related industries account for 13-14% of GDP. This figure seems reasonably accurate to me and in line with what I posted earlier. If you refer to the link I posted regarding China's GDP composition, you have around 8% for real estate, rental, leasing + around 4% for real estate construction + around 1-2% for related materials industries such as steel and cement which gives around 13-14% of GDP.
You also have to consider that if real estate investment declines, construction workers aren't automatically going to be unemployed with their contribution to GDP going to zero. Economic activity can shift into other sectors as workers take jobs in other industries.

A team at the ADB actually estimated real estate to be 13.8% of GDP in 2017
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Eventine

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One third of China's trade is with Belt & Road countries now.
In the West, they tell you about how the West is diversifying from China.

In reality, China is diversifying from the West.

This is why the US is resorting to tactics like "nobody is allowed to do business with China if they use any US technology," instead of tariffs or export bans - it's because those no longer work.

But as long as China keeps up in the technology race, that won't work in the long term, either.

Countries will just stop using US technology when trading with China, and then gradually, realize that they don't need to use US technology when trading with anyone else, either.
 

TK3600

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In the West, they tell you about how the West is diversifying from China.

In reality, China is diversifying from the West.

This is why the US is resorting to tactics like "nobody is allowed to do business with China if they use any US technology," instead of tariffs or export bans - it's because those no longer work.

But as long as China keeps up in the technology race, that won't work in the long term, either.

Countries will just stop using US technology when trading with China, and then gradually, realize that they don't need to use US technology when trading with anyone else, either.
Then US will stary harassing anyone relying on US who also trade with China without US tech. Then they will harass trading partner of China who have nothing to do with US. Then they will overextend in their diplomacy and collapse diplatically.
 

abenomics12345

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You also have to consider that if real estate investment declines, construction workers aren't automatically going to be unemployed with their contribution to GDP going to zero. Economic activity can shift into other sectors as workers take jobs in other industries.

A team at the ADB actually estimated real estate to be 13.8% of GDP in 2017
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Yea I don’t doubt it was 14% in 2017 the problem is what happened since - Evergrande and Country Garden really ballooned out since the shantytown reform starting in 2016-2019 - it *really* grew in those 4 years
 

Minm

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Yea I don’t doubt it was 14% in 2017 the problem is what happened since - Evergrande and Country Garden really ballooned out since the shantytown reform starting in 2016-2019 - it *really* grew in those 4 years

And from 2020 to 2022 they've really shrunk. China has already paid the economic price for reducing the housing share of GDP. That's one of the big reasons why 2022 growth is so low. The base effect of an inflated property sector makes growth look smaller than it really is. Now that property is smaller, growth can go up. What I find the most remarkable is that China was able to have positive growth at all while deflating the bubble, but obviously growth has to be higher in the post bubble era than in the bubble deflation years

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tphuang

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Compared to US & EU, Russia is still a small export market for Chinese companies, but I think getting to $100 billion export to Russia a year shouldn't be too difficult. With Russia now essentially aligning its brand and product line to all Chinese products, it's great opportunity for Chinese brands. And unlike in the 90s, China provides a more than worthwhile alternative to all Western products. This is like a great reset for the Russian society to adopt and appreciate Chinese product and to invest in the Chinese economy and export energy products to China. Once Russia completely switches over, then Belarus, Central Asian countries, EAU and Armenia will also all migrate over I think. That's a pretty large sized market for Chinese companies to supply.
 

AndrewS

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This is why @Patchwork_Chimera laughs at you. You talk like a subject matter expert and tried to explain something that you don't understand, without qualifying that it's just your understanding of the subject. Instead you tried to sound authoritative. And when corrected, you barely even know where you are wrong, and instead of admitting your knowledge is limited, you double down.

Couple of points

Well, I think it's poor form to drag Patch into this discussion as it is completely irrelevant to him.

I will just say that he hasn't responded to the followup where I outline where those SSNs should have a far larger tactical and strategic impact if employed at soft targets beyond the 2nd Island Chain and all the way to the Continental USA. This isn't a new line of thought either. We already had this sort of discussion in the SSN thread (IIRC some years ago) on how SSNs could operate.

And I'll add that when I notice Patch writing glaring errors or something which doesn't make sense to me, I don't use the laugh emoji as I don't think it's very mature or respectful in general.

Electrons don't "rotate" in "orbits" at "2200 km a second". This was the funniest part to me. Like a little ball spinning around the nucleus.

Well, as stated earlier, this is a secondary school level explanation. Do I really want to get into the next level of details about subatomic particles also being a wave function and superposition? Electrons orbiting a hydrogen atom at 2200km per second is good enough, as that is what the scientists estimate is the speed and people can understand this.

OK, let's say that this is just a conceptual misunderstanding. What do you think happens with these electrons when a chemical reaction happens? And you think no chemistry happens inside a battery?

What do you mean "chemical reactions happen at a scale where it's essentially mechanical"? You mean there's no chemical reactions in confined spaces? Orly? Heterogeneous catalysis anyone? How about all of biochemistry?

When I say mechanical, I do mean atoms having to move.
And whilst current batteries predominantly use a liquid lithium electrolyte, it does look like semi-solid state and fully solid-state batteries are viable as they are being used in high-end cars.
And because the technology is still in its infancy, we can expect rapid improvements in cost and performance.


Maybe by "mechanical" you mean "macroscopic energy scales". Yes combustion happens at a macroscopic energy scale. That's why we use it for grid energy and to move heavy vehicles like ships and cars lmao.

But why else? Because combustion fuels have high energy density. Why is that? Because the relevant energy scale (this is what you meant to say btw, not "mechanical") for an electrochemical reaction in battery is on the order of 100-200 kJ/mol.

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Combustion reactions for hydrocarbons are on the order of ~1000 kJ/mol for methane and it only goes up from there.

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This is why combustion is used. It has incredibly high molar energy.

I don't specifically say hydrogen is good either, where did I say hydrogen is good? I said your reasoning doesn't make sense, and it is absolutely true that it doesn't.


Not quite. I said this previously. It's the difference between:

1. In an electricity/battery energy pathway, you can have an entirely solid-state system where only the electrons move and I suspect this will be the norm in the future.

For example, a solar panel produces electrons, they flow through copper conductors almost instantly into the battery. That battery will likely be solid-state in the future, then the battery discharges to an electric motor at which point it is converted into motion to drive the wheels.

2. But in an Ammonia/Hydrogen energy pathway, you always have to move atoms around. You use electricity to split water molecules and then capture the hydrogen atoms. Then you have to mechanically compress the hydrogen, transport the hydrogen in tanker trucks and pump it into a hydrogen station storage tank. Then you have to pump it into yet another storage tank in the car. When the hydrogen is ready to be used, it then has significant losses in a combustion engine or fuel cell. A combustion engine wastes most of its energy, because the heat (moving atoms) can't be captured. All this creates significant losses at each stage and its difficult to create an alternative pathway because you are constrained by the requirement to work with hydrogen in chemical reactions.

I deliberately used the term ""mechanical"" in inverted commas as a gross simplification, because nobody really cares about technical jargon in the real world.

Yes, chemical reactions can and do have a far higher energy density than batteries.
But that by itself isn't directly relevant to the question, which is about energy pathways - hydrogen/ammonia versus electricity/battery energy.

So the underlying question is how much does it cost to propel a vehicle, because the lower-cost solution will be the winner. And I haven't even gone into how electricity is already available everywhere and the average socket is sufficient for the average car-owner. In comparison, a hydrogen energy pathway will require an entirely new and expensive infrastructure buildup.

I recall at least 3? discussions already on hydrogen versus electric vehicles in the NEV and other threads already. I see TPHuang has been helpful enough to post the energy pathway losses for hydrogen

And if you've read the works on future energy pathways (Third Industrial Revolution etc), you'll understand why electricity is going to be the predominant energy pathway in the future. Most cars and grids in the future will not be powered by hydrocarbons.
 

AndrewS

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By the way, I pointed out a few key points where I think @AndrewS has gotten wrong ('lack of land in tier 1 cities', 'excess deposits misunderstood for savings') - have you re-assessed?

I'll have to do some more research when I have time.
I know there is a lack of land in the Tier-1s, but I'm trying to figure out what theoretical framework could be used to determine a savings versus deposit split.


If the notion is that "Hydrogen is not going to work because its not efficient at 40%" - the comparison has to be made vs. ICE engines, and as @FairAndUnbiased illustrated, energy density is one of the key issues for hauling around a truckload of batteries. I'm just going to leave this well circulated (at least should be) chart from the EIA on energy density. You can see why gas/diesel is so difficult to replace and why you can't power cars on uncompressed natural gas turbines despite it burning more 'efficiently' as compared to diesel or gasoline.

View attachment 105476

Yes, trucks are an issue because the weight of the battery directly impacts payload, which is particularly apparent for long-distance trucking.

But the truck market is significantly smaller in terms of value and numbers, when compared to the passenger vehicle market. In addition, most trucks or delivery vehicles actually travel pretty short distances so they can have a comparatively small battery and can be charged frequently.

My view is that hydrogen could have a place in long-distance trucking and probably in ships, but the majority of transport will be electric.
 
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