Chinese Economics Thread

[vincent]

The 600M earning less than 1000RMB a month is a useless statistic. Li Keqiang didn’t specified who are included in that figure. Children and students obviously have zero or very little income. Plenty of pensioners in the rural areas have very little pension but supported themselves with their plot of land and with helps from their kids.

 

[dirtyid]

I didn't say earning less than 1000rmb a month. I said 600m with DISPOSABLE INCOME of 2000 USD, i.e. really 1700 USD / 1000rmb per month. 600m as in individuals, so combine into household it's 2000-4000 rmb per month. IIRC people lost their shit and misintrepreted LKQ as actual income but eventually media dug up NBS data to show it was per capita disposable income which is not as aggregious. Actual wages are higher.

But point remains, this is pretty low for disposable income/consumption. Pensions ARE indeed paltry. Elderly can't be expected to till their plot forever. And extra bad if system doubles down on dragging kids to to incur disproportionate elder care cost if also want to lift TFR for grandkids. But maybe also deliberately kept low. Hence IMO not wise to stimulate with cash + minimum wage across the board... just going to inflate cost 450m rural and increasing amount of urban pensioners. So supply side stimulus to keep COI low in way that's fair. Too politically unstable to only raise minimum wage in urban areas, rural already got screwed enough. Meanwhile urban/developed economy will naturally grow disproportionately more and can use less % of wealth transfer to take care of rural/ low cost pensioners, or same % of wealth to take care of increasing # of pensioners.

E: just trying to explain why I think central gov reluctant to throw cash / boost welfare uniformly, they have to balance / stablize essentially two economies so poor doesn't resent the rich , while the rich eventually pays for the poor.

 

[Sinnavuuty]

Anecdotal evidences seem to indicate that China's economy is at least 50% bigger than America's. China has to provide food, shelter, healthcare, education, and other services for 4 times more population. China's manufacturing sector is as big as the US, EU, and Japan combined. China's auto market is 2x bigger than America's. China also generate 2x more electricity than the US.

Luckin Coffee just entered the US market.

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You cited several data and parameters to show that China’s economy is larger than it is actually priced in, but you did not mention the biggest parameter:

China’s underestimated consumption.

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China's Consumption Is Not Nearly as Low as It Appears: CF40 Policy Brief​

Leading independent econ thinktank finds the gap between China and developed countries across various consumption sectors is significantly narrower when measured by actual consumption volumes.​

After a systematic comparison, we have arrived at four summary observations: First, China’s consumption level is systematically underestimated. Second, this underestimation primarily stems from price advantages and exchange rate deviation. Third, although China’s consumption level is no longer low, there remains considerable potential for further expansion and quality enhancement of consumption. Fourth, actively promoting consumption to achieve a more balanced trade structure will support high-quality domestic economic development and help create a more favorable external environment.

I recommend the article above which explains in detail the aspects of the underestimation of Chinese consumption compared to other countries, including developed countries such as Japan.

 

[Sinnavuuty]

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China's New Economic Priority: Ending the Race to the Bottom​

Latest economic meeting chaired by Xi suggests Beijing is serious about ending the price wars destroying Chinese industries​

Today's meeting agenda centered on two strategic priorities: constructing a unified national market and advancing high-quality development of China's marine economy. In

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, topics addressed included the modernization of

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(1st meeting),

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(2nd meeting), and

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(4th meeting).

 

[Wrought]

Goldman Sachs estimates that Chinese gold purchases are much higher than officially reported.

 

[Franklin]

Why Chinese manufacturing wins.

 

[Maikeru]

Goldman Sachs estimates that Chinese gold purchases are much higher than officially reported.

View attachment 155927

I have seen credible seeming reports thst China's real gold reserves are in the 20-30kt range.

 

[BoraTas]

I have seen credible seeming reports thst China's real gold reserves are in the 20-30kt range.

It is probably at that range with the deposits of banks and individuals. PBOC wasn't really interested in stockpiling gold until recently. China has a small proportion of its central bank reserves in gold compared to most other countries. It owns a small proportion of gold in China.

 

[supercat]

Since second half is usually better than the first half of the year, China's car sales will almost certainly exceed 31.3 million units in 2025, after an 11.4% growth in the first 6 months. In comparison, the best year ever for the US was 17.55 million units. NEV sales increased 40% year-on-year (yoy) and reached 6.94 million units (a penetration rate of 44.3%). Export of NEV expanded 75% yoy and hit 1.06 million units in the first 6 months.

https://twitter.com/i/web/status/1943199311698776202

https://twitter.com/i/web/status/1943192725014053183

 

[antiterror13]

I have seen credible seeming reports thst China's real gold reserves are in the 20-30kt range.

Likely more than that, but possibly not under PBOC, but hold by the people in China. China never exporting gold that produce internally, even China is the largest producer of gold for years now. China is also one of the biggest importers of gold in the world.

I wouldn't be surprised if gold in China (PBOC, corporate and people) exceed 30kt. Remember that Chinese people love Gold

Interesting report here in 2021

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It says around 30,000 tonnes since 2000 and you know before that Chinese also had a lot of gold