Chinese Economics Thread

AssassinsMace

Lieutenant General
On the same day financial headlines say China's imports and exports are down giving credit to Trump's tariffs yet China's trade surplus with the US has only increased. That's a contradiction. This is an example of how you can spin anything. I can say China's imports are down because Chinese are buying less from the US in protest. I can say exports are down because it shows Trump is destabilizing the world economy because of bad policies and people are buying less. But the American spin is it's Americans not buying Chinese yet China's trade surplus with US has only increased. I'm assuming these numbers are coming from China. Think China manipulates numbers to make them look good but when they're bad it must be the truth. Or it's because China sees their success scaring the US so make it look things are going bad to ease their fears... During the Obama era the West was upset that China wasn't showing signs of being affected by the 2008 financial crisis and action was being demanded against China. Then all of the sudden China's numbers started to falter and literally since then all you hear is bad news from China in the media. If it was strategy by China, it certainly worked because all you hear now is about how the Western system works and China's doesn't when it was feared it looked the other way around back then. You can't really claim that your system is better when you're waiting for China to collapse just because the Western world suffered and was recovering from the 2008 financial crisis.
 
Last edited:

Hendrik_2000

Lieutenant General
I have a suspicion that many of the so-called exports to SEA were rerouted to the U.S.

I don't think so ASEAN market is growing fueled by growing middle class and familiarity with Chinese product It will be too cumbersome to rerouted trade with US to all ASEAN country. Think of logistic, customs etc. Maybe Vietnam is exceptional case since they are close by China
 

localizer

Colonel
Registered Member
Chinese manufacturers returning home from ‘inefficient’ Vietnam despite US trade war tariffs
Please, Log in or Register to view URLs content!

  • Rising costs of labour and land in Southeast Asian nation, as well as inability to find ‘efficient’ workers, forcing some firms to reconsider fleeing Donald Trump’s tariffs
  • President Xi Jinping agreed a tariff truce with his US counterpart at the G20 summit in Osaka, but firms now exploring options in Thailand, Bangladesh and Myanmar

I also want to note how Western countries are becoming decreasingly important as decades go by:
world_gdp_map_05.png

These growths rates are not even adjusted for population growth and growth due to gov't debt.
 
Last edited:

Equation

Lieutenant General
Us is cutting their own nose by restricting trade with tariff
Please, Log in or Register to view URLs content!
'
US overtaken by Southeast Asia as China's No. 2 trade partner
American exports plunge 30% as Beijing finds other suppliers

  1. ISSAKU HARADA, Nikkei staff writer JULY 13, 2019 04:36 JST

    BEIJING -- The U.S. is losing importance as a trading partner of China as their tariff war drags on, dropping a notch to third place in the first half of 2019 to trail the European Union and Southeast Asia.

    Sino-American trade in goods declined 14% on the year to $258.3 billion, according to statistics out Friday from Chinese customs authorities. In exports, the U.S. sustained a much harder blow.

    Agricultural and energy products easily sourced from elsewhere account for much of the Chinese imports from the U.S. But big Chinese exports like computers, mobile phones and other electronics have supply chains that take more time to rearrange. While Chinese exports to the U.S. fell 8% to $199.4 billion, American exports to China plunged 30% to $58.9 billion.


    For June alone, Chinese exports to the U.S. fell 8% on the year to $39.2 billion as American exports to China dropped 31% to $9.3 billion.

    "External conditions are complex and difficult, and many challenges stand in the way of stable trade," Chinese customs spokesman Li Kuiwen told reporters Friday.

    China is looking to other major markets to fill the gap. Trade with the EU, which overtook the U.S. as its top trade partner in 2004, increased 5% on the year to $337.9 billion in the first half. Trade with the Association of Southeast Asian Nations grew 4% to $291.8 billion, topping the American tally. Should current tensions continue, the bloc could rank above the U.S. for the full year for the first time on record.

    ASEAN member Vietnam enjoyed a 14% jump in exports from China. Chinese businesses are moving more parts and materials to newly set up production bases there. At least some of this is aimed at skirting American tariffs on products made in China.

    An item-by-item breakdown highlights how the trade war is reshaping the flow of goods. For example, the U.S. imposed a 10% tariff on Chinese furniture last September, raising it to 25% this May. Chinese furniture exports to the U.S. fell 11% on the year to $3.7 billion for the January-May period, while those to ASEAN nations increased 30% to $1 billion.

    "American clients are demanding lower prices to ease the pain of the tariffs," an export manager at a manufacturer in Hebei Province said. "A lot of companies are starting to refuse orders from the U.S."

    U.S.-bound exports of semiconductors, on which Washington slapped a 25% tariff last year, also dropped 29% for January to May. Those to ASEAN jumped 37%.

    Though not subject to U.S. tariffs, $1 billion of Chinese toys were exported to ASEAN in the five-month period, a 52% surge on the year.

    Beijing and Washington resumed working-level trade negotiations for the first time in two months Tuesday, but only by phone. No face-to-face talks have been held, despite speculation that they could this week.

    U.S. President Donald Trump has expressed frustration over the lack of progress. "China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would," he tweeted Thursday. Bilateral trade is expected to shrink even further as negotiations drag on.

"U.S. President Donald Trump has expressed frustration over the lack of progress. "China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would," he tweeted Thursday."

Yeah, so this is probably the last chapter of Art of the Deal: when you're dealing with someone with a full deck of cards who doesn't bite on any of the BS in this book, just pretend you made a deal! China never said they'll buy agricultural goods; just say they did and hope they go along with it!

Please, Log in or Register to view URLs content!


China and US differ on Agricultural Purchases that Trump Boasted About

July 10, 2019
WASHINGTON — President Trump emerged from a June meeting in Japan with Xi Jinping, the Chinese president, saying that China would immediately begin purchasing American farm products in return for a trade truce that would forestall more United States tariffs on Chinese goods.

China did not see it that way. People familiar with the negotiations say China has denied making any explicit commitment to buy American farm products during those discussions and instead saw large-scale purchases as contingent on progress toward a final trade deal that is still nowhere in sight.
Chinese officials have maintained that any further purchases would be made only as part of a trade deal rather than as a unilateral concession, said Eswar Prasad, a professor of international trade at Cornell University and the former head of the International Monetary Fund’s China division.
 

AssassinsMace

Lieutenant General
When $30 billion for what US farmers make from selling to China trumps the entire US $20 trillion economy, it's not leverage that's given up so easily especially since Trump said US technology companies can for now trade with Huawei yet the US Commerce Department has told everyone that Huawei is still on the US's blacklist. So who's the one breaking their promise.
 
now I read
Commentary: Navigating headwinds, China remains anchor for world economy
Xinhua| 2019-07-15 20:59:50
Please, Log in or Register to view URLs content!

In an otherwise turbulent world fraught with uncertainties, China's steadily expanding economy came as a relief and once again proved its key role in powering global growth.

Data from the National Bureau of Statistics showed the economy grew 6.2 percent in the second quarter of the year, retreating from the 6.4-percent expansion in Q1.

In the first half, growth came in at 6.3 percent, within the government's stated goal of between 6 percent and 6.5 percent for 2019.

While the headline data offered a broad measure on growth, simply dwelling on the figure would be understating the challenges and hardships the country had undergone to keep the economy on the right track.

Domestically, downward pressures still loomed large and policymakers were tasked with fostering new growth drivers, containing debt levels, stabilizing trade and avoiding drastic fluctuations in the financial market.

Worse still, China and the United States have been locked in drawn-out trade tensions since last year, which brought increasing uncertainties to global growth given the world's two largest economies' outsized role in international trade and finance.

It was against such headwinds that the country managed to deliver 6.3-percent growth, and the result was hard won.

Step by step, China has taken targeted reforms to remove structural and institutional barriers hampering growth.

Newly-introduced tax cuts and fees reductions have saved businesses by around 893 billion yuan (about 130 billion U.S. dollars) in the first five months. The improving business sentiment, in turn, encouraged investment and boosted consumption and trade.

The private sector got special attention. In April, China's central authorities pledged more measures on SMEs financing difficulties, including the creation of more financing channels and encouraging small firms to seek funding on the "new third board."

The country adopted a targeted cut in reserve requirement ratio (RRR) for some small and medium-sized banks in three phases to support private as well as micro and small enterprises. The third phase of the RRR cut is scheduled to take effect on Monday.

Spurred by the government campaign for mass innovation and entrepreneurship, the Internet-led "new economy" is becoming a more prominent source of growth and picking up the slack when traditional drivers are losing steam.

Dealing with trade frictions provoked by the U.S., China, a staunch supporter of globalization, has been committed to seeking win-win solutions and choosing to open its door wider for the benefit of both itself and the world at large.

In June, the Shanghai-London Stock Connect program was officially launched, and China's A-shares were included in the FTSE Global Equity Index Series as planned.

The government also decided to remove caps on foreign ownership of brokerages, futures dealers and life insurers by 2020, a year ahead of the previous plan.

With its fast economic rise over the past decades built upon ceaseless reforms and opening-up, China knows all too well that it should stick firmly on the right path.

With the maturing Chinese economy and its increasing interactions with the world, uncertainties and troubles are inevitable. But with clear direction, the world can count on China to be a responsible mainstay for sustained growth for many years to come.
 

siegecrossbow

General
Staff member
Super Moderator
here's the link to what I read earlier today:
China's economic growth slumps to lowest in 27 years as the trade war hits
Please, Log in or Register to view URLs content!


kind of touching to say an economy "slumps" while growing 6.2% LOL

It is in reference to past growth rates.

I think it is inevitable that the growth rate will decrease as the overall Chinese GDP gets larger. Ten percent of 1 trillion dollars is not the same as 10 percent of 2 trillion dollars.
 
It is in reference to past growth rates.

I think it is inevitable that the growth rate will decrease as the overall Chinese GDP gets larger. Ten percent of 1 trillion dollars is not the same as 10 percent of 2 trillion dollars.
to my surprise, even GlobalTimes sounds kind of weary though:
Much potential remains for China’s economy
Source:Global Times Published: 2019/7/15 20:43:06
Please, Log in or Register to view URLs content!

The Chinese economy grew by 6.3 percent year-on-year in the first half of the year. In the second quarter, it expanded by 6.2 percent from a year ago, the lowest growth rate in the past 27 years. While future of China-US trade war remains uncertain, the data left a pessimistic impression on the Chinese people.

Chinese were used to high growth rates of around 8 percent, or even double-digit figures. But realizing a high figure is not aimed at showing off. Be it 6.3 percent or lower, it can be seen as a good performance compared to the rest of the world. China still leads the major economies when it comes to growth.

The Chinese government has recently reiterated that it will not adopt strong stimulus policies for the economy. That's because the Chinese economy needs healthy development. Strong stimulus policies come with economic data that looks good, but what ordinary people want is better living standards.

China is seeing the largest-ever economic transformation driven by the government's proactive regulation. The fundamental direction of this transformation is to put people first. During the process, we see less pollution and increasing ecological principles of economic development. At the same time, consumption is gradually taking center stage among the driving forces of the country's economy.

Fairness has received greater attention from society. Solving income inequality and unbalanced economic development in different regions has become a major policy orientation.

The protection of the private economy has once again become the focus of China's economic policy over the past year. Small and micro businesses are being supported. Although the China-US trade war is escalating, new breakthroughs have constantly been made in Chinese policies in terms of opening-up. Despite a slowdown in China's GDP growth rate in recent years, the quality of the growth continues to rise. With the improving environment and city governance and rapid transition from a traditional economic model to a new economic model, the Chinese people's lives have changed fast.

China once experienced an overheating economy plagued by a high-level of resource consumption and pollution, severe corruption and repeated construction. Although GDP data was high, it was not sustainable and there was a large amount of waste, which failed to improve people's lives. The economic adjustments over the years are undoubtedly correct. The quality of our life is improving.

Of course, the downward pressure on the economy is a great challenge that must be taken seriously by all local governments.

Is it possible to achieve a higher economic growth rate? We should not give up seeking this possibility. For instance, many places are striving to drive economic growth with what they call a "nighttime economy" (business activities between 6 pm and 6 am in the service sector). This is something which must be explored for economic growth.

Houses are meant to be lived in, not for speculation. This principle must be adhered to. But the current purchase restriction curtails normal demand. Can real estate governance be improved to satisfy the demand for living?

High-quality development should correspond to people's desire for a better life. City management should put people's convenience, safety and comfort up front. Cities should value order, pluralism and freedom.

China has enormous economic potential. There is still much room to reshape ordinary people's life, which is the core of the potential. That makes China one of the most promising major economies. Much remains to be done in unleashing its full potential.
 
now
Donald Trump goads China over record low GDP growth rate as US trade war tariffs hit slowing Chinese economy
Please, Log in or Register to view URLs content!

  • Gross domestic product growth slowed to 6.2 per cent in the second quarter of 2019 with tariffs of 25 per cent on US$250 billion of Chinese imports remaining in place
  • The US president agreed to pause imposing 25 per cent levies on an additional US$300 billion of Chinese imports after meeting Xi Jinping at the G20 summit
US President Donald Trump used his first tweets of the day on Monday to goad China about its slowest gross domestic product growth rate on record, while better-than-expected economic data for June was met with “scepticism” and “caution” by analysts, rather than as a sign of a turnaround in the economy.

China’s
Please, Log in or Register to view URLs content!
slid to 6.2 per cent in the second quarter of 2019, the lowest reading since records began in March 1992, and below the levels reported during the global financial crisis, the National Bureau of Statistics (NBS) confirmed on Monday. The figure, though, fell within the range of Beijing’s target growth rate for the year of between 6.0 to 6.5 per cent, and was generally expected.
Monthly economic data for June was better than anticipated with industrial production improving by 6.3 per cent from a year earlier, despite the trade war with the United States. Retail sales growth also surged by 9.8 per cent in June, the highest since March 2018.

But that did not stop the US president taking to his social media account before 7am in Washington, with US tariffs of 25 per cent on US$250 billion of Chinese imports remaining despite the truce agreed between
Please, Log in or Register to view URLs content!
at the G20 summit in Osaka at the end of June.

“China’s second quarter growth is the slowest it has been in more than 27 years. The United States tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving,” he said.

“This is why China wants to make a deal with the US, and wishes it had not broken the original deal in the first place. In the meantime, we are receiving billions of dollars in tariffs from China, with possibly much more to come. These tariffs are paid for by China devaluing and pumping, not by the US taxpayer!”

China has insisted that all tariffs on Chinese imports added by the US during the trade war must be scrapped as part of any deal to end the year-long conflict, with the truce only seeing the 25 per cent levies on an additional US$300 billion of Chinese imports halted. China’s demand would require the Trump administration to give up its position that some levies remain in place even after an agreement is reached.

While Trump focused on China’s GDP, which slid from 6.4 per cent in the first quarter, analysts had already reacted to June’s seemingly positive data.

“[Positive people] might claim that this is a result of the resilience of the Chinese economy and the effectiveness of Beijing’s countercyclical easing measures. We recommend caution, as we see no strong signals that China’s economy bottomed out in June. And, like the blip of a recovery in March, the rebound of official activity data in June may not be sustainable,” economists from Japanese bank Nomura, led by Lu Ting, said.

June’s industrial data contrasted sharply with the weak sentiment among manufacturers surveyed in the
Please, Log in or Register to view URLs content!
and declining prices of raw materials captured by the
Please, Log in or Register to view URLs content!
which was indicative of weak demand from factories. The data also jarred with declining
Please, Log in or Register to view URLs content!


“We are sceptical of this apparent recovery given broader evidence of weakness in factory activity,” said Julian Evans-Pritchard, senior China economist from Capital Economics.

Based on Capital Economics’ calculations from the output levels for individual products, Evans-Pritchard said the year-on-year growth of industrial production slowed in June, from 3.2 per cent to 2.9 per cent.

The official figures said that June’s industrial growth was largely due to better performances in the mining and manufacturing sectors. Growth in mining increased from 3.9 per cent in May to 7.3 per cent, while manufacturing output went from 5 per cent to 6.2 per cent.

“Looking ahead, we doubt that the better-than-expected data for June will mark the start of a turnaround,” added Evans-Pritchard.

Michelle Lam, a China economist from French bank Societe Generale, said that it is hard to attribute the surprising rebound of industrial output to the “front-loading” effect of the ongoing trade war with the US because there is no inventory data available for analysis.

But she did not rule out the possibility that Chinese manufacturers had sped up production of some of the additional US$300 billion worth of goods on which Washington had threatened tariffs to levy new tariffs before they were postponed at the G20 summit.

“In our view, the introduction of value-added tax cuts, summer production caps and the upcoming environment inspections probably caused out-sized distortion to the monthly data. Therefore, we prefer to read the year-to-date figure [of 6 per cent, which also takes into account data revisions], which showed stabilisation [of industrial production], rather than acceleration,” said Julia Wang, senior economist at HSBC.

Strong retail sales in June were attributed to a 17.1 per cent upturn in car sales, according to the NBS. Improved car sales for a second consecutive month were in part driven by large discounts offered by dealers to clear inventories before
Please, Log in or Register to view URLs content!
were introduced at the start of July.
However, in the second half 2019, infrastructure investment is still the key to driving growth, analysts said. In June, infrastructure spend grew by 3.9 per cent, which brought first half of the year growth to 4.1 per cent, but it was still a far cry from the double-digit rate often seen in the past.

Manufacturing investment, meanwhile, has been vulnerable to the uncertainties stemming from the on-off US-China trade talks. Property investment is also likely to slow down, as Beijing recently started tightening offshore financing for mainland developers, analysts said.

“Property is at a very late stage of a cycle. Ideally, policymakers should loosen meaningfully right now, including cutting the benchmark [interest] rate. But it’s not going to happen, while policymakers are further tightening the money flows to property developers recently. Therefore any small improvement in recent data should be more like a blip than a trend,” Larry Hu, chief China economist from Macquarie Group, said.

“The improvement of data in June strengthens our views that the upcoming Politburo meeting [later this month] will not make any major policy changes and the People’s Bank of China will not follow the [US Federal Reserve] cut, despite muted inflation,” Hu added.

Other analysts agreed that further easing is less likely now, but could happen should the economy become more stressed later this year.

“Even with fiscal policy turning more supportive again, we think that construction activity will come under pressure in the coming quarters as the recent boom in property development unwinds,” added Nomura analysts.

“Combined with increasing headwinds from US tariffs and weaker global growth, we expect this to culminate in a further slowdown in economic growth over the coming year.”
 
Top