Chinese Economics Thread


cbl21

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Unpopular opinion:
China's poverty level should be at $7.20/day at 2019 UMIC-standards (PPP-inflation adjusted from $5.50/day in 2011) rather than the current level of ~$1.90/day of extreme poverty. China's poverty line is way too low for a country of its development state (i.e. an upper-middle-income country that will likely ascend to developed country status sometime mid-decade).

What is China's UMIC ($5.50/day PPP, 2011) poverty rate? Next year, World Bank projects it to be below 15%, and probably below 10% by 2024-2025. For context, Greece, a developed country, has a UMIC poverty rate of 5+%
 

j17wang

Junior Member
Registered Member
Unpopular opinion:
China's poverty level should be at $7.20/day at 2019 UMIC-standards (PPP-inflation adjusted from $5.50/day in 2011) rather than the current level of ~$1.90/day of extreme poverty. China's poverty line is way too low for a country of its development state (i.e. an upper-middle-income country that will likely ascend to developed country status sometime mid-decade).

What is China's UMIC ($5.50/day PPP, 2011) poverty rate? Next year, World Bank projects it to be below 15%, and probably below 10% by 2024-2025. For context, Greece, a developed country, has a UMIC poverty rate of 5+%
Agree, poverty level should be adjusted from $1.90/day, although whether to $7.20 a day is still debateable. China isn't a developed country yet though. Is there a mid-tier?
 

cbl21

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Analysis:
Our call:
  • By 2025, Beijing will have had little choice but to reform its way out of challenges that result in a Chinese economy that will likely become more open, balanced, and efficient.
  • China faces one of the most daunting external environments in decades, which ironically will likely push Beijing to further embrace foreign direct investment (FDI) and improve the business environment.
  • On the domestic front, China’s “internal circulation” agenda will be less about self-reliance but focus on improving productivity and inducing more local competition, while keeping a lid on financial risk.
  • The pursuit of reform priorities means that at the end of the 14th Five-Year Plan (FYP, 2020-2025), China will likely have eluded the “middle-income trap” and become a near-majority middle-class country.
Key assumptions:

  1. Beijing will relearn some of the lessons from Deng Xiaoping by moderating its approach that balances improving its economic relationships abroad while improving its business and investment climate at home.
  2. Beijing will continue to be hawkish on local finances as its main tool to induce reforms and local competition by forcing them to operate in a resource-constrained environment.
Leading indicators:

  1. Sustained increases in FDI flows and portfolio investment for consecutive years, while annual surveys of foreign businesses in China show continued improvement and confidence in the business climate.
  2. Local debt/GDP ratio stabilizes over the next few years.
  3. Surpassing the high-income country threshold as defined by
    the World Bank (~$13,000 GNI per capita).
Overall, I do agree with the assessment China will be able to escape the middle-income trap sometime mid-decade. China only needs 4.5% growth per annum to break past the $13000 GDP per capita requirement set by the World Bank, which it can easily accomplish.

For context, between 2021-25, the average annual growth rate based on the IMF forecast to 2025 for China will be ~6%, ranging from 8.2% for 2021 down to 5.5% by 2025 (which I believe is what the 14th 5-year plan will be aiming for); basing on this, I estimate China's nominal GDP per-capita will be in the ballpark of $15000/year, and PPP GDP per capita well above $23000/year (in 2019 terms, not inflation-adjusted).

If we look at HDI, China likely can break past the 0.800-HDI mark sometime around ~2025 based on recent trends. Countries with an HDI of 0.800 or above is what is considered by the UN as another indicator or metric for a developed country.
 

OppositeDay

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Agree, poverty level should be adjusted from $1.90/day, although whether to $7.20 a day is still debateable. China isn't a developed country yet though. Is there a mid-tier?
$7.20 is the standard for upper middle income countries, so it's already the mid-tier.
 

AssassinsMace

Brigadier
Foxconn is not happy with Apple.

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Foxconn is not happy with Apple going to Luxshare.

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A case of too many chefs in the kitchen and in this case some of the chefs forget Apple owns the kitchen. I'm sure Apple doesn't want Sino-Taiwanese politics in making iPhones. Foxconn certainly isn't helping playing stunts like with what happened in Wisconsin where you have typical Asian sycophant behavior sucking up to the one in power and blowing with the wind in display. Meaning also they would play along with the anti-China line of the Taiwanese government which isn't good for Apple. And Foxconn sees the writing on the wall that Apple maybe trying to move away from them where all they are are middle men that can be replaced.
 

AssassinsMace

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The solution is simple. Don't try to screw China. All their complaints and their whining are all because they want control over China. If you notice they say China is being hostile to this country or that country. And in most cases it's because they chose to poke China in the eye. All those islands China is constructing in the South China Sea is happening because Vietnam first started to try to build artificial islands and use them to stake claims. Don't blame China because they can do it bigger and better. They complain how their businesses don't have access to China, it's because they don't give China access to their countries. Trump's trade war only exposed how the US gets hurt not China meaning the US is getting more overall from trade with China than the other way around. Sweden complained that their right to free speech is being violated by China because Chinese officials started to retort back to Swedish officials mocking China. Because Sweden might be intimidated and hold back their insults because Chinese are fighting back, that's violating their free speech. Maybe if they didn't insult China, they wouldn't get insulted back. Ever think of that? Their side wants to molest human nature. They want to be able to screw with China but they don't want China to return it. It's called self-defense. If they don't want that to happen then the simple solution for it not to happen is don't start it.
 

emblem21

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I guess the USA isn’t going to be too happy there racism and hate has once again screwed them over. I wonder how the European nations are doing now that there biggest economies are going into lockdown again. Will they further piss of the Chinese with there whole Xinjiang crap and are they willing to endanger what little of there economy is left because listening to the HK rioters/Pompeo is a thing. Really these idiots love to shoot themselves in the foot since South America and Africa are really enjoying the opportunity to grow since they have the decent to mind there own business. In fact almost all the usa’s problem with China is because they still want China to bend over the the whim of the USA with nothing in return. They will only get destruction and ruin in return for there pride and arrogance
 

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