Chinese Economics Thread

Hendrik_2000

Lieutenant General
What do you know "rule of law" only apply if it goes my way else bad decision and to be ignored
Trump administration blasts WTO ruling on China
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FILE - This June 18, 2019, file photo shows a container ship on the Delaware River in Philadelphia. The Trump administration blasted a World Trade Organization decision Tuesday, July 16, that could let China levy sanctions on the United States. (AP Photo/Matt Rourke, File)
WASHINGTON (AP) — The Trump administration blasted a World Trade Organization decision Tuesday that could let China levy sanctions on the United States.

The 2-1 decision by the WTO's appellate body was actually a mixed verdict in a case that dates back to 2007 and is unrelated to the tariffs the administration has slapped on $250 billion in Chinese goods. In its final decision, the WTO agreed with the U.S. that China lets state-owned enterprises (SOEs) subsidize Chinese firms by providing components at unfairly low costs.

But it said the U.S. wrongly calculated the tariffs imposed to punish China for the subsidies. If the U.S. doesn't recalculate them, China can retaliate with its own sanctions.

The Office of the U.S. Trade Representative said the ruling "undermines WTO rules, making them less effective to counteract Chinese SOE subsidies that are harming U.S. workers and businesses and distorting markets worldwide."

Separately, the U.S.-China are locked in a yearlong standoff over U.S. allegations that China uses predatory tactics — including outright theft of trade secrets — in an aggressive push to challenge American technological dominance
 

styx

Junior Member
Registered Member
please china please, you should auto impose these 25% tariffs on all your export to the us,

Moderator note: removed part of sentence containing swear word
 
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Orthan

Senior Member
I can only acess the first part but this Bloomberg article mentions that china´s total debt per GDP has now surpassed 300%.

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China´s total debt went from 297 to 303 % in a single year. Taking into account that growth is slowing and china really has still not hit the acelerator pedal in easing, makes me think that this pace will only increase. Thats just not sustainable. In a few years, china´s debt will hit 350%. At this pace, sooner rather than later, china will have a brutal financial crisis. China urgently needs to reform its economy so that its more efficient (more market-oriented and less state-owned) and also less export-dependent, even if it means acepting slow (or very slow) growth rates.

What do you think about this ?
 
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Equation

Lieutenant General
I can only acess the first part but this Bloomberg article mentions that china´s total debt per GDP has now surpassed 300%.

Please, Log in or Register to view URLs content!


China´s total debt went from 297 to 303 % in a single year. Taking into account that growth is slowing and china really has still not hit the acelerator pedal in easing, makes me think that this pace will only increase. Thats just not sustainable. In a few years, china´s debt will hit 350%. At this pace, sooner rather than later, china will have a brutal financial crisis. China urgently needs to reform its economy so that its more efficient (more market-oriented and less state-owned) and also less export-dependent, even if it means acepting slow (or very slow) growth rates.

What do you think about this ?


I think a a whole lot of countries are going to have to fall off the cliff before China needs to worry about its direction. This is especially true because China has greater control over its economy and is thus able to change course or move a lot faster.

Here is a 2019 list of the world's most indebted countries by debt to GDP ratio. Japan is number 1. USA is number 8. China's so far down the list it's hard to find.

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Debt to GDP Ratio by Country 2019
What countries have the largest debt in the world? Here is a list of the top ten countries with the most national debt:

  1. Please, Log in or Register to view URLs content!
    (National Debt: ¥1,028 trillion ($9.087 trillion USD))
  2. Please, Log in or Register to view URLs content!
    (National Debt: €332.6 billion ($379 billion US))
  3. Please, Log in or Register to view URLs content!
    (National Debt: €232 billion ($264 billion US))
  4. Please, Log in or Register to view URLs content!
    (National Debt: €2.17 trillion ($2.48 trillion US))
  5. Please, Log in or Register to view URLs content!
    (National Debt: $2.33 billion (USD))
  6. Please, Log in or Register to view URLs content!
    (National Debt: €18.95 billion ($21.64 billion USD))
  7. Please, Log in or Register to view URLs content!
    (National Debt: €399.5 billion ($456.18 billion USD))
  8. Please, Log in or Register to view URLs content!
    of America (National Debt: $19.23 trillion (USD))
  9. Please, Log in or Register to view URLs content!
    (National Debt: €1.09 trillion ($1.24 USD))
  10. Please, Log in or Register to view URLs content!
    (National Debt: $350 billion ($254 billion US))

If we go by external debt, which is debt owed to foreign entities, we see that China is literally less than one order of magnitude than the US, that is, less than 10%. As a ratio of GDP, it is 15%, compared to 115% in the US. I would worry far more about the other countries on the list.

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localizer

Colonel
Registered Member
In the US, consumer spending is a sign of how well the economy is doing... until it's not.

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I can only acess the first part but this Bloomberg article mentions that china´s total debt per GDP has now surpassed 300%.

Please, Log in or Register to view URLs content!


China´s total debt went from 297 to 303 % in a single year. Taking into account that growth is slowing and china really has still not hit the acelerator pedal in easing, makes me think that this pace will only increase. Thats just not sustainable. In a few years, china´s debt will hit 350%. At this pace, sooner rather than later, china will have a brutal financial crisis. China urgently needs to reform its economy so that its more efficient (more market-oriented and less state-owned) and also less export-dependent, even if it means acepting slow (or very slow) growth rates.

What do you think about this ?


Best case is to let everyone think China is gonna collapse (Thx Comrade Chang) and just push forward.

Debt is really only a problem if your economy is slow and advanced. I remember Yukon Huang said there is no middle income trap, but a high income trap. China's growth is still above 6% meaning that productivity increases by that much since Chinese population really isn't growing. However, there are still lots of population that needs to be urbanized which can be equated to population growth without actual increases in population (Leads to GDP/capita growth). There is still a lot of catching up to do which guarantees growth as long as people are getting educated correctly.

Think about the Chinese high speed rail issue. There's supposedly $300 billion in debt. However, the Chinese ridership/purchasing power will increase very fast and that debt might eventually be a non-issue like in Japan. Infrastructure also boosts the ability of people to get around studies have shown to be one of the most important factors of employment rates of the average joe.


Bad debt is like Japan's Fukushima disaster costs which is northward of $180 billion just for cleanup and compensation. Other examples of bad debt are things like welfare, social security, maintaining expensive bases all over the world, ... These are massive debts that don't significantly increase productivity/GDP growth, that's why it's bad. Something like welfare probably does more harm than good in the end.

In China, the most important thing right now is to bring everyone up to date in understanding the importance of mechanization of labor. There is so much opportunity for growth out of teaching the most basic knowledge/examples to people. Any debt that goes into providing jobs is good because these people need to learn. Ex. There's a lot of fraud in the Chinese scientific community which I know very well, but I don't see it as much of a problem because all those resources is going into training basic science skills which will be important in the long run.

As long as Chinese people are provided a job, food, water, education, housing, transportation, internet, and other basic necessities, I think the country can only go up. The West wouldn't be trying to break up China and create unrest if they didn't think this was the case. If China was actually going to collapse they would treat China like India or Africa.
 

Quickie

Colonel
If we go by external debt, which is debt owed to foreign entities, we see that China is literally less than one order of magnitude than the US, that is, less than 10%. As a ratio of GDP, it is 15%, compared to 115% in the US. I would worry far more about the other countries on the list.

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The external debt at 115% GDP at 2% interest is like 2.3% of U.S. GDP.

That's like all of U.S. GDP growth in a year is about the same as the debt interest paid to foreign countries.

At 25% tax rate, the U.S. will have to print more money or put on more debt to settle the 75% rest of the debt.

There will be no end to it unless the U.S. is able to increase its GDP growth per year by much more than 2.3%. It's kind of scary the mainstream economists are keeping quiet on this.
 
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AssassinsMace

Lieutenant General
This is part of the financial reforms that they want from China. They want to be able to lend in China and make all this money. Keep in mind that all this bad news about China is for American audiences. That's why they always have to paint China as failing. If China is doing better, then American citizens will demand change. Change means blaming politicians and voting them out and changing the system that enriches only the elites. If they can't blame China for all their problems, it's the politicians that protect the elites that are going to be blamed hence why no matter Democrat or Republican, they want to blame China for the US's problems to deflect that they are the ones responsible.
 

AssassinsMace

Lieutenant General
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Does it really matter when the US has veto power? Countries wanting help will still be facing the same conditions and scrutiny that's makes them turn to China. Same when Abe tried to push ADB as a better alternative to AIIB. The one reason why they go to China and not them is what they will never change to make them truly a better alternative. The changes in the end will be superficial.
 
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