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Fojar38 posted:So where's Chinese growth coming from? It's definitely not consumption. Monetary policy bruh. Lending.
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Jun 8, 2015 06:44
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Cultural Imperial posted:Monetary policy bruh. Lending. That sounds sustainable.
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Jun 8, 2015 06:59
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Oh and printing, lots and lots of printing.
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Jun 8, 2015 07:00
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Ink prices alone are 24% of GDP this month.
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Jun 8, 2015 08:52
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I meant money printing lol
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Jun 8, 2015 09:19
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Fojar38 posted:So where's Chinese growth coming from? It's definitely not consumption.
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Jun 8, 2015 12:40
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Yes, yes, with enough tons of poo poo the Chinese could raise rates of consumption, expanding the medical share of GDP enormously!
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Jun 8, 2015 13:49
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What happens to that chinese IMF competitor if China craters?
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Jun 8, 2015 14:31
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Arglebargle III posted:Yes, yes, with enough tons of poo poo the Chinese could raise rates of consumption, expanding the medical share of GDP enormously! Well loving played, man.
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Jun 8, 2015 15:14
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Warcabbit posted:What happens to that chinese IMF competitor if China craters? It becomes a mechanism for China to fund other rogue states to generally be a thorn in the United States' and allies' side, like it was from the start and was always going to be?
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Jun 8, 2015 15:47
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Lemme rephrase: It occurred to me that getting huge loans measured in renminbi, then China's economy craters, and then paying back in renminbi, might be a really neat trick for certain people who joined the bank.
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Jun 8, 2015 17:36
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Chinese people need to spend more of other people's money (i.e. loan money)
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Jun 8, 2015 17:49
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Can someone please elaborate why Chinese growth is not due to growing internal middle class consumption? I am clueless on the subject.
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Jun 9, 2015 16:50
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Average savings rate is pretty high, and most people who do have money invest rather than buy goods.
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Jun 9, 2015 19:32
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Somaen posted:Can someone please elaborate why Chinese growth is not due to growing internal middle class consumption? I am clueless on the subject. * You need cash for anything medical. The basic provincial healthcare tied to you hukou is there but ranges from 'basic western rural standard' in Beijing to 'we don't need to clean needles, this has only had 30 guys blood on it, its still good' bumfuckdong province. * You need cash for big occasions like weddings, deaths and anti-ghost firework festivals. * You need cash to Which means you need a cash stockpile to hand that you can't go out and spend. The chinese need a real social safety net to get more consumers and consumer consumption. But consumerism is bad so gg china i guess.
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Jun 9, 2015 22:26
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Somaen posted:Can someone please elaborate why Chinese growth is not due to growing internal middle class consumption? I am clueless on the subject. I don't really know what you mean by 'why', it's just a fact that the vast majority of the Chinese economy is built around selling stuff to the US and other developed countries A lot of the Chinese economy is also not liberalized, lots of large conglomerates and corporations are government owned still, and the government is taking its sweet time selling them off
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Jun 9, 2015 23:48
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Chinese coal imports for the month of May are down over 40% year on year... So I don't know how the gently caress they're growing. Source: somewhere on Bloomberg earlier this week, I'm on my tablet.
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Jun 10, 2015 00:16
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FrozenVent posted:Chinese coal imports for the month of May are down over 40% year on year... So I don't know how the gently caress they're growing. Mining more of their own coal? Using other power sources?
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Jun 10, 2015 00:27
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Somaen posted:Can someone please elaborate why Chinese growth is not due to growing internal middle class consumption? I am clueless on the subject. Investment. A company or the government borrows from a bank and invests that in something (99% of the time infrastructure or housing), and the investment gets written down as money added to the economy, hence economic growth. In China banks will give out loans to basically anyone, especially if it's a local government, because the loan is considered guaranteed by Beijing. These loans are usually bad at this point and lead to dead end projects with no return. This is in large part due to the 2008 financial crisis and China's ridiculously huge stimulus package (made up of borrowed money) intended to offset the crisis by spending heavily on infrastructure. China keeps borrowing so that it can keep on spending, but it needs to spend more and more to sustain the same level of growth (as investment-based growth is heavily subject to diminishing returns,) which Beijing has so far responded to by borrowing more money and adding more debt so that they can continue to lend to banks so that the banks in turn can keep lending for infrastructure that will never see any return. If this sounds like a massive financial human centipede that's because it is.
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Jun 10, 2015 02:07
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And all that debt is used to buildings that no one wants.
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Jun 10, 2015 02:57
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So you're saying Chinese consumers really want to save, and Chinese firms really want to invest? It's almost like there's some relationship between total savings and total investment.
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Jun 10, 2015 03:27
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Arglebargle III posted:So you're saying Chinese consumers really want to save, and Chinese firms really want to invest? It's almost like there's some relationship between total savings and total investment. Chinese consumers also want to invest if the stock market is anything to go by. Not like you can feasibly have a consumption based economy with a GDP per capita of $7,589, putting the Chinese right between Bulgaria and Botswana.
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Jun 10, 2015 04:20
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quote:Why Savings equals Investment:
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Jun 10, 2015 04:52
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Somaen posted:Can someone please elaborate why Chinese growth is not due to growing internal middle class consumption? I am clueless on the subject. Basically these http://www.highestbridges.com/wiki/index.php?title=List_of_100_Highest_Railway_Bridges
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Jun 10, 2015 05:31
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I'm not sure what you're trying to argue. Yes, the Chinese are fond of saving their money, but that alone doesn't create substantial nor consistent GDP growth and it certainly isn't what caused China's crazy high growth over the past decade and a half. Since 2008 it's almost entirely been infrastructure investment fueled by ever-increasing debt.
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Jun 10, 2015 05:44
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Infrastructure malinvestment
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Jun 10, 2015 05:46
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That is a lot of bridges. Do any of them actually go someplace? IF so, does that someplace have any people living in it?
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Jun 10, 2015 05:58
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If you click on the highest ranked Chinese bridge this appears: Something like half the Chinese bridges on that list aren't completed yet and I'll bet that if someone cared enough to look a decent chunk of those are stalled indefinitely.
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Jun 10, 2015 06:03
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Fojar38 posted:I'm not sure what you're trying to argue. Yes, the Chinese are fond of saving their money, but that alone doesn't create substantial nor consistent GDP growth and it certainly isn't what caused China's crazy high growth over the past decade and a half. Since 2008 it's almost entirely been infrastructure investment fueled by ever-increasing debt. Maybe there's some kind of relationship between savings, debt, and investment.
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Jun 10, 2015 09:35
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Arglebargle III posted:Maybe there's some kind of relationship between savings, debt, and investment. I dunno, if you define investment as GDP minus government purchases and consumption and then define savings as GDP minus government purchases and consumption, then chances are pretty high that they are gonna be equal.
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Jun 10, 2015 10:17
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Textbook economics or bogus voodoo? You decide.
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Jun 10, 2015 11:09
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Arglebargle III posted:Textbook economics or bogus voodoo? You decide. Lol, I had no idea that this was real. I just read the wikipedia article on it and even the author can't keep that stuff straight for more than one paragraph. It's a total mess. https://en.wikipedia.org/wiki/Savings_identity quote:Note that this is an "identity", meaning it is true by definition. This identity only holds true because investment here is defined as including inventory accumulation. Thus, should consumers decide to save more, and spend less, the fall in demand would lead to an increase in business inventories. The change in inventories brings savings and investment into balance without any intention by business to increase investment.[2] And also the identity holds true because savings are defined to include private savings and "public savings" (actually public saving is positive when there is budget surplus, that is, public debt reduction). This says absolutely nothing about how savings and investment(investment-investment + "inventory"-investment) are actually related to each other.(I would assume in a hilariously complicated and opaque way, making actual predictions extremely difficult)
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Jun 10, 2015 13:01
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Good thing we have waitwhatno here to explain this concept; he read the wikipedia page!
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Jun 10, 2015 16:19
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Arglebargle III posted:Good thing we have waitwhatno here to explain this concept; he read the wikipedia page! Actually, I haven't read the article past the quoted part. Sorry, you are on your own here man.
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Jun 10, 2015 16:51
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Arglebargle III posted:Maybe there's some kind of relationship between savings, debt, and investment. Okay. I'm just not sure what that changes about what I said.
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Jun 10, 2015 18:00
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Thank you to everyone that replied! What about the Chinese government's promises to raise internal consumption? Is anything being done in that regard? I imagine some official starting uncontrollably convulsing when told to create a Chinese pension program instead of more badass trains and bridges
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Jun 10, 2015 18:06
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Somaen posted:Thank you to everyone that replied! What about the Chinese government's promises to raise internal consumption? Is anything being done in that regard? I imagine some official starting uncontrollably convulsing when told to create a Chinese pension program instead of more badass trains and bridges The Chinese government has been saying that for a couple years now and from what I can tell progress is slow if it even exists at all. It doesn't help that the CCP is saying one thing ("Consumption based economy is good!") and doing another ("Banks please keep loaning to everyone, people should invest their money in stocks.")
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Jun 10, 2015 18:13
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Fojar38 posted:I'm not sure what you're trying to argue. Yes, the Chinese are fond of saving their money, but that alone doesn't create substantial nor consistent GDP growth and it certainly isn't what caused China's crazy high growth over the past decade and a half. Since 2008 it's almost entirely been infrastructure investment fueled by ever-increasing debt. Savings contributed to the US post-War growth though.
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Jun 10, 2015 19:38
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Savings=Investment is part of what determines GDP, but treating GDP as a one-size-fits-all measure is up there with assuming the perfect competition model is meant to describe actual markets in terms of misapplying economics.
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Jun 10, 2015 19:44
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Part of the problem is the new money types spend extravagantly, but that's a tiny minority on top of the vast masses who are all your Depression-era grandparents. I've seen the lengths people even my age will go to in order to save literally 30 cents, I don't think mass consumption culture is very likely for a while.
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Jun 11, 2015 01:03
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