Chinese Economics Thread

Anlsvrthng said:

: )
It is more af predicting the future.

The analysis of the now and past gives indication about the possible futures that we will facing.

Knowing what hapens now and what will happen is not making judgement about person, group of people or country , but rather than understand what options the future holding for us.

Sadly to talk about problems, and analyse why something can't work is a national characteristic of my thinking , and I apreciate that the people from other nations found this annoying many times

So, to keep the conomic activity stable, and the population happy China has three ways to go( and keep the income of the average citizen on growing path) :

1. investment - the share of investment from GDP growth falling , so it is safe to say the return on investment for new projects falling
2.consumption - it is financed from debt, not from wage increase, and based on the available data it is peaked in 2017 ( but if not then it will peak before 2020)
3. Export ( growing of trade surplus) - it contributed to the GDP growth negativly, and the biggest net trade deficit country want to start a trade war.

So, it is safe to say we geting close to a singularity point, the determinant of the decision matrix zero at the moment , and the transformation is not invertible.
: D

I don't know what will happens, but something will happens.

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You can try to "analyze" and "predict the future" but you should realize that your results are of absolutely no value and for your personal amusement only, because you have absolutely no qualifications that indicate your ability to judge Chinese economics. You come from a nation with a declining economy, you can't read charts, and many of the things you offer are factually incorrect. So your "analysis" based on these credentials is basically worth same as diet and fitness advice coming from a 500 pound man who needs to be lifted out of his house by a crane through the roof.

The conclusion, like I said, is that you don't have the platform to be considered seriously.

Anlsvrthng said:

There is no evidence of any data that can be usd to to calculate the ROI on economical size apart from the stable level of investment on China level with decreaing GDP growth from the named investment.
So finaly yes, the return on the past 15 years investment falling, considering that this mix contain everything created since 90 , AND the initial investment had massive positive impact we can expect that the current investments has negative return.

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In China, the return of investment is falling as per capita GDP increases. But that's no different from any other countries. Every country's investment is subject to the same law of diminishing returns. You cannot use this to argue that on the national level, the overall efficacy of Chinese investment is worse than other countries with similar per capita GDP.

Anlsvrthng said:

This is the part where we know that the Chinese investment representing roughly 50% of all fixed asset investment of the world.
So, NO ,there is no comparable economy around the world, this is an unique experience.

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As I mentioned in the previous post, only the ratio of bad investment vs overall investment is relevant here. The difference in the size of investment does not really matter.

As China's billionaires get closer to matching Western billionaires wealth they'll be criticized for not giving their wealth away outside China when most of their wealth doesn't come from outside China.

A pretty fair assesment of Chinese economy and politic I always thought the German is more neutral when it come to China But of course there is a bit of envy mixed with trepidation and respect all at the same time.But at least they give credit where it is due and not necessarily see everything from the prism of ideology. And of course their DW is more intelligent and thought provoking than mindless fare in Anglo Saxon countries
REmind me of my younger year debating with Russian, German and Swiss over slipovitch about China
Here one of the comment on this video


I think historically China and Germany has pretty good relationship. Even in China people have high regards for Germans. This documentary was made by the Germans which is why it's not biased. If America or UK made this documentary they would only talk about negative aspects of China.

supercat said:

In China, the return of investment is falling as per capita GDP increases. But that's no different from any other countries. Every country's investment is subject to the same law of diminishing returns. You cannot use this to argue that on the national level, the overall efficacy of Chinese investment is worse than other countries with similar per capita GDP.
As I mentioned in the previous post, only the ratio of bad investment vs overall investment is relevant here. The difference in the size of investment does not really matter.

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Let think a bit.

Say I make a new road, that has 1 billion yuan investment cost + profit.
I sell this road to a local goverment ,who buy it and pay for it by issueing new bonds with 30 years maturity.
Say that the road needs to be replaced at the end of this 30 years.
We calculate with 0% interest.

This project increase the GDP by this billion yuan.
1. The project over 30 years will save to the local population 2 billion yuan in transport time. In this case they will have more money to spend, more good to make/buy, and they will increase the GDP more due to efficiency improvement.
2.The project will save 1 billion of transport time for the local population. It means that the net long term effect on the GDP will be 0, the project bumped up the GDP for the building of the project, but the return won't make it possible for the local population to book any efficiency improvement.The number of roads built by the local goverment will be stagnant,they can't increase the number of projects
3. The return on investment is less than 1 billion. If this type of projects are frequent, then the local goverment will go bankrupt.


I think we can say that this kind of calculation is true for a business or whatever you want to name.

In the CCCP the ROI was negative, after a while they had to stop to make new invetment, because the previous ones wasted money not made.

In US+EU the investmetn rate was positiove, so they managed to scale up the economy, and make more with less.

Now, what was the reason of the diference?
Maybe the bankrupcy system, that affected even the local goverments/councils as well? (it is a real question - just to make it clear : ) )

Hendrik_2000 said:

How can you put social development, poverty alleviation, improving regional imbalance into quantitative number?

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They call it as sceience . : )
I mean, to quantify the conditions of the enviroment, make theories about the internal connections between parameters, and test them.
: )

Anlsvrthng said:

They call it as sceience . : )
I mean, to quantify the conditions of the enviroment, make theories about the internal connections between parameters, and test them.
: )

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Physical science has long had consistent empirical measures by which to make comparisons for hypothesis testing, sociological conditions by comparison lack these (the Laffer curve for example lacks a standardized output format because conditions and even assumptions vary so greatly) to the extent that it more resemble intellectual gambling than consistent analytical rigor for a proper science.

Anlsvrthng said:

Let think a bit.

Say I make a new road, that has 1 billion yuan investment cost + profit.
I sell this road to a local goverment ,who buy it and pay for it by issueing new bonds with 30 years maturity.
Say that the road needs to be replaced at the end of this 30 years.
We calculate with 0% interest.

This project increase the GDP by this billion yuan.
1. The project over 30 years will save to the local population 2 billion yuan in transport time. In this case they will have more money to spend, more good to make/buy, and they will increase the GDP more due to efficiency improvement.
2.The project will save 1 billion of transport time for the local population. It means that the net long term effect on the GDP will be 0, the project bumped up the GDP for the building of the project, but the return won't make it possible for the local population to book any efficiency improvement.The number of roads built by the local goverment will be stagnant,they can't increase the number of projects
3. The return on investment is less than 1 billion. If this type of projects are frequent, then the local goverment will go bankrupt.


I think we can say that this kind of calculation is true for a business or whatever you want to name.

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You are wasting your time. You cannot make a claim and then providing "supporting evidence" that has nothing to do with reality and is entirely made up by yourself.

Anlsvrthng said:

In the CCCP the ROI was negative, after a while they had to stop to make new invetment, because the previous ones wasted money not made.

In US+EU the investmetn rate was positiove, so they managed to scale up the economy, and make more with less.

...

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There is not a shred of evidence that on a national level the overall ROI of China is less than those in EU and the U.S. By making such outlandish claims you sound like that you are really living in your own world.

Come on guys give it up trying to argue with wall! Here is real news Toruism up by 11%. so all who said sky is falling eat your heart out
I would hate to travel in China this time of the year It is wall to wall people!

More tourists travel around China during holiday
Source: Xinhua| 2018-02-18 20:33:58|



Tourists visit the Bund in east China's Shanghai, Feb. 17, 2018. The Chinese people enjoy their week-long holiday for the Spring Festival, or the Chinese Lunar New Year, which fell on Feb. 16 this year. (Xinhua/Zhuang Yi)

BEIJING, Feb. 18 (Xinhua) -- Some 287 million tourists travelled in China during the first four days of the week-long Chinese Lunar New Year holiday, up 11.1 percent from the same period last year, new data showed Sunday.

Tourism revenue rose 11.6 percent to 352.7 billion yuan (55.61 billion U.S. dollars) in the four days, the China National Tourism Administration (CNTA) said.

On Sunday alone, some 73 million tourist trips were made across the country, up 15.3 percent, while tourism revenue rose 16.6 percent to 94.4 billion yuan.

Some 385 million tourists are expected to travel around China during the holiday spanning from Feb. 15 to 21, an increase of 12 percent, the CNTA forecast earlier this month.

China earned 5.4 trillion yuan from tourism in 2017, an increase of 15.1 percent.

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now I read
China's private funds hit 1.85 trillion USD
Xinhua| 2018-02-18 18:33:36

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China's private investment funds amounted to 11.76 trillion yuan (about 1.85 trillion U.S. dollars) at the end of last month, up by 660 billion yuan in January, data from the Asset Management Association of China (AMAC) showed.

The sector picked up speed from a 100-billion-yuan increase in the previous month.

Funds for securities expanded to 2.61 trillion yuan as of January, up by 320 billion yuan from the previous month, while those for private equities and venture capital stood at nearly 7.09 trillion yuan, AMAC data showed.

By the end of January, the number of private fund managers climbed to 22,883, up by 437 from the end of 2017, despite total employees in the sector shrinking 33,700 year on year to 238,300 as of December 2017.

In November last year, draft guidelines unified rules covering asset management products issued by all types of financial institutions, requiring them to set leverage ceilings.

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