China Economy Megathread

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I would blow Dane Cook: Dec 26, 2008

Arglebargle III posted:

https://www.gartner.com/newsroom/id/3115517

Time to divest you'reself of Apple stocks.

Time for the government to start faking smartphone purchase stats.

# ? Aug 22, 2015 19:14

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# ? May 25, 2024 19:20

Cugel the Clever: Apr 5, 2009; I LOVE AMERICA AND CAPITALISM DESPITE BEING POOR AS FUCK. I WILL NEVER RETIRE BUT HERE'S ANOTHER 200$ FOR UKRAINE, SLAVA

Arglebargle III posted:

https://www.gartner.com/newsroom/id/3115517

Time to divest you'reself of Apple stocks.

It was time to do that when the gilded goose committed suicide via homeopathic 'medicines'.

# ? Aug 22, 2015 21:15

namaste friends: Sep 18, 2004; by Smythe

http://ftalphaville.ft.com/2015/08/21/2138087/more-on-questioning-chinas-weirdly-stable-unemployment-rate/

quote:

More on questioning China�s weirdly stable unemployment rate

Some thought-provoking paragraphs on China this Friday from Stephen Lewis, chief economist, at ADM Investor Services International, regarding the reliability of the country�s jobs data. He starts with this useful reminder:

Of the ten conflicts in human history with the highest death tolls, five were civil wars in China. Chief among these was the Three Kingdoms War (184-280 CE) when up to 40 million are reckoned to have perished in military operations and from the destructive consequences of warfare. This is an enormous number, considering that the global population at that time is unlikely to have exceeded 400 million. More recently, the Taiping Rebellion (1850-1864) claimed more than 20 million lives while the civil war that brought the Communist Party to power in 1949 resulted in 7.5 million deaths, over and above the 20 million estimated to have been killed in the roughly contemporary Japanese invasion. This is not the history we were taught at school but Chinese leaders are well aware of these facts. When disorder breaks out in China, things turn very nasty indeed. It is best, therefore, to avoid disorder at almost any cost.

Admittedly, it is very difficult to imagine the Chinese families happily thronging Oxford Street in this holiday season resorting to insensate violence. But these are the ones who, for the moment, are the beneficiaries of China�s erstwhile economic success. It is those who cannot afford to travel abroad, and we do not see, who might potentially be the foot-soldiers of disaffection.

Small surprise, says Lewis, that urban unemployment is politically a big deal for the authorities.

The state simply can�t afford joblessness for the hundreds of millions of rootless workers, who regularly float between countryside and city and who are content enough, providing they receive regular wages (the regularity of the wages being the key thing that made substituting crop-dependent impoverished existence in rural regions for employment-dependent impoverished existence in urban areas attractive). If they are idled through a collapse of demand for their products, internal security can no longer be guaranteed.

Should we be surprised then, says Lewis, that according to figures provided to the IMF, China�s unemployment rate has averaged 4.1 per cent every year without exception from 2010-2014? � an almost Madoff style consistency record. As we�ve noted, one question is what�s actually being counted. Lewis wonders if perhaps, given the unique political sensitivity of the employment data, we should treat it even more cautiously than GDP figures.

Regarding the latter, there�s much to suggest this should be treated with kid gloves as well:

For some time past, economic analysts elsewhere in the world have greeted China�s quarterly GDP data with scepticism. Oddly enough, they have been willing to accept without demur the GDP levels consistent with those growth rates, taking them as an accurate reflection of reality. Thus, statements that China now has, in purchasing power parity terms, the largest economy of any nation in the world go unchallenged. Yet, if the GDP growth rates are lower than claimed, the GDP levels must also be lower. It is not only sticklers for statistical accuracy that need worry about this. If China�s economy is not as large as it is commonly assumed to be, the ratios of debt to output, already worryingly high on the basis of the published figures, could, in fact, be even more stretched than they appear to be.

In any case � as the links below show � it�s not just Lewis wondering about the numbers now.

# ? Aug 23, 2015 03:27

icantfindaname: Jul 1, 2008

The whole "China can't have disorder ever because it's special" thing has always bothered me, premodern China had basically the most stable political regime in the world for literally thousands of years. The Middle East has been at war basically constantly for its entire history, whereas China has a bad civil war every few hundred years and suddenly China can't have democracy or human rights or non-fudged unemployment numbers because of its horrible civil wars? Like literally China was probably the most internally stable premodern society by a long shot. Obviously the chaos of the late 19th/early 20th centuries looms large in the Chinese consciousness, but this is another entry on the list of orientalist garbage vomited out by Chinaboos to excuse the CCP

I especially like the casualty figures for the pseudo-mythological war mostly attested in epic literature taken at face value. Did you know that 10 billion people died in Roman-Persian wars just like contemporary historians claimed?

icantfindaname fucked around with this message at 04:23 on Aug 23, 2015

# ? Aug 23, 2015 04:10

Kassad: Nov 12, 2005; It's about time.

Even if you take those figures at face value (and you shouldn't, as you said), both that uprising and the Taiping rebellion started as secret society plots that were planned out for years. It wasn't a bunch of Chinese people going apeshit and burning poo poo for no reason because their inscrutable mind went into "burn everything" mode. That guy's fear of the unwashed mob is showing, it's like reading a 19th century conservative pamphlet.

Bringing up the Three Kingdoms is just comical because of how long ago it was. What if [insert large-scale political reform] leads to another Caesar crossing the Rubicon ;_;

# ? Aug 23, 2015 07:25

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

Kassad posted:

Even if you take those figures at face value (and you shouldn't, as you said), both that uprising and the Taiping rebellion started as secret society plots that were planned out for years.

That's definitely not true of the Taiping at least.

I'm also not sure why you two are jumping on the author. His point is that civil wars in China have been highly destructive (true), that the Chinese government is aware of this (also true), and this influences their decision making (probably true).

# ? Aug 23, 2015 08:31

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

I'm less convinced that the CCP cares about the potential loss of Chinese life from civil unrest and more convinced that they know they'd probably end up strung up really quickly.

# ? Aug 23, 2015 08:57

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

Fojar38 posted:

I'm less convinced that the CCP cares about the potential loss of Chinese life from civil unrest and more convinced that they know they'd probably end up strung up really quickly.

Well, obviously, yeah

Daduzi fucked around with this message at 10:35 on Aug 23, 2015

# ? Aug 23, 2015 09:33

namaste friends: Sep 18, 2004; by Smythe

http://www.ft.com/intl/cms/s/0/388bf2ca-475a-11e5-af2f-4d6e0e5eda22.html?siteedition=intl

quote:

The Chinese model is nearing its end
George Magnus

August in China has been anything but the quiet month of myth. Developments in the equity and foreign exchange markets and even the appalling industrial accident in Tianjin might seem mere bad luck when considered individually. Together, however, they symbolise a slow-motion denouement of China�s economic and political model. The country is now going through a crisis of transition, unparalleled since Deng Xiaoping set out to put clear water between China�s future and the Mao era.

The signs are that it is not going so well. Rebooting the authority and primacy of the Communist party, the pursuit of often contentious reforms, financial liberalisation and rebalancing the economy while trying to sustain an unrealistic rate of growth are complex and mutually incompatible goals.

Deng�s task in a pre-industrial society without a middle class and social media was, in many ways, easier. Determined to avoid the concentration of power in one individual, he empowered government bodies and ministers, especially the State Council and the prime minister, and encouraged openness and a consensus-driven political model. This worked well enough until the 21st century, but gradually tended towards atrophy. The party succumbed to corruption and paid scant attention to citizens� concerns about social, environmental and product safety. The economy built up high levels of debt, overcapacity and an addiction to misallocated and credit-fuelled investment.

To address these serious problems, President Xi Jinping has turned the clock back. He has accumulated more power than any leader since Mao and consistently emphasised the Leninist need for �party purity� to avoid the fate of the Soviet Communist party. Among his first policies was an extralegal anti-corruption campaign that continues to this day. He has usurped the authority of government institutions by establishing party bodies, known as �small leading groups�, that are more numerous than ministries and hold sway over the most important functions of the state.

There was doubtless a strong case for some re-centralisation of power in China, especially to implement the party�s ambitious reforms. Yet while some reforms have made progress, many important ones affecting the role of the state in the economy and the introduction of market mechanisms have suffered from dilution and the opposition of vested interests. The clampdown on civil society, media, legal and non-governmental institutions has not helped. A strong central authority, perversely, has stifled important reforms, removed authority and accountability from those institutions responsible for carrying them out and produced conflicted decision-making.

That is why August�s events matter. Encouragement of the stock market was supposed to be a weathervane for market mechanisms and a more efficient allocation of capital. But equities suffered a relapse, following extraordinary support measures estimated at more than $150bn. The indices are still flirting with the nadir reached in early July. Caught between its roles as cheerleader and regulator, the government has shown a lack of trust in the very market forces it sought to introduce.

This month�s mini-devaluation of the renminbi was explained officially as an incremental change to China�s financial liberalisation, designed to help the currency�s admission later this year to the International Monetary Funds�s accounting unit, the Special Drawing Right. Yet the action was communicated poorly at best. Again, the authorities have been conflicted, torn between a strong renminbi policy to help rebalance the economy, and a softer one to respond to weakening growth. Economic statistics this summer, especially for exports, manufacturing and investment, were disappointing, underscoring that weaker performance for the past four years has become impervious to stimulus measures, which this year already add up to more than 1 per cent of gross domestic product.

A central part of the challenge for China will be its ability to manage employment, a more politically sensitive indicator than GDP. The official unemployment rate, supposedly about 4 per cent over many years, is fiction. Current developments in investment and labour-intensive construction, the low registration for unemployment benefits among those without urban registration status, the weakness of the benefit system and the difficulties of finding suitable work for 7m graduates a year are among many reasons to believe that the jobless rate may not only be higher than the 6.3 per cent estimated by the International Labour Organisation but rising.

China�s economic transition was always going to be difficult, but developments this year suggest that things are not going according to plan. The centralisation of power is proving to be a double-edged sword for reform, the anti-corruption campaign is choking off initiative and growth and the economy cannot be kept on an unrealistic expansionary path by unending stimulus.

The time for accepting a permanently lower growth rate is drawing closer. It will test the legitimacy and reform appetite of China�s leaders in ways that will determine the country�s prospects for years to come.

The writer is an associate at Oxford university�s China Centre and a senior adviser
to UBS

# ? Aug 23, 2015 16:25

Bro Dad: Mar 26, 2010

http://www.theglobeandmail.com/repo...rticle26066035/

quote:

China on Sunday allowed pension funds managed by local governments to invest in the stock market for the first time, potentially channeling hundreds of billions of yuan into the country�s struggling equity market.

China published a draft rule on the move for public consultation on June 30, at the height of a recent stock market rout.

Despite a series of official measures aimed at supporting the market, investor sentiment has remained fragile amid continued signs of a slowing economy.

The State Council, or cabinet, published the finalized rules on Sunday after shares slumped nearly 12 per cent last week, the worst weekly performance since June.

Pension funds will be able to invest up to 30 per cent of their net assets in the country�s stocks, equity funds and balanced funds, according to rules published on the State Council�s website.

Previously, the pension funds could only invest in bank deposits and treasuries.

Together the funds have assets of more than 2-trillion yuan ($322-billion (U.S.) that can be invested, meaning about 600-billion yuan ($97-billion U.S.) could theoretically go into the stock market, state media has estimated.

According to the new rules, pension funds can also invest in convertible bonds, money-market instruments, asset-backed securities, index futures and bond futures in China, as well as the country�s major infrastructure projects.

Local governments can mandate institutions authorized by the central government to manage the pension funds.

# ? Aug 23, 2015 17:11

Vladimir Putin: Mar 17, 2007; by R. Guyovich

Bro Dad posted:

http://www.theglobeandmail.com/repo...rticle26066035/

Such a bad idea.

# ? Aug 23, 2015 17:25

The Lord of Hats: Aug 22, 2010; Hello, yes! Is being very good day for posting, no?

Bro Dad posted:

http://www.theglobeandmail.com/repo...rticle26066035/

This is going to be a goddamn disaster. If there's a saving grace it's that that first drop already happened, so there shouldn't be any illusions about market volatility (unlike, say, the housing bubble, which was billed as a safe investment until it suddenly wasn't). Unfortunately, I can still imagine a lot of fund managers either ignoring the warning signs, or being pressured into investment.

# ? Aug 23, 2015 17:48

trucutru: Jul 9, 2003; by Fluffdaddy

Bro Dad posted:

http://www.theglobeandmail.com/repo...rticle26066035/

Holy poo poo! :lol:

Goddamn, goodbye pensions.

# ? Aug 23, 2015 18:02

Adventure Pigeon: Nov 8, 2005; I am a master storyteller.

The Lord of Hats posted:

This is going to be a goddamn disaster. If there's a saving grace it's that that first drop already happened, so there shouldn't be any illusions about market volatility (unlike, say, the housing bubble, which was billed as a safe investment until it suddenly wasn't). Unfortunately, I can still imagine a lot of fund managers either ignoring the warning signs, or being pressured into investment.

The later is probably what's going to happen. Being "allowed" to invest 30% of your pension fund in the stock market means 30% of your pension fund is going in the stock market, like it or not (revive the A shares).

# ? Aug 23, 2015 18:18

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

If wide swaths of the market are still frozen, how are the pension funds going to be able to invest? Just in the shallow remaining market, bailing out the holders of frozen equities privately, or something else?

RIP Chinese pensioners either way.

# ? Aug 23, 2015 18:24

Vladimir Putin: Mar 17, 2007; by R. Guyovich

Is this a signal that things are more dire than we think?

# ? Aug 23, 2015 18:42

Redgrendel2001: Sep 1, 2006; you literally think a person saying their NBA team of choice being better than the fucking 76ers is a 'schtick'

a literal thing you think.

ocrumsprug posted:

If wide swaths of the market are still frozen, how are the pension funds going to be able to invest? Just in the shallow remaining market, bailing out the holders of frozen equities privately, or something else?

RIP Chinese pensioners either way.

They'll probably be funneled into the big Chinese companies involved in energy and finance.

# ? Aug 23, 2015 18:48

jet sanchEz: Oct 24, 2001; Lousy Manipulative Dog

Vladimir Putin posted:

Is this a signal that things are more dire than we think?

That is exactly what I thought when reading the article.

# ? Aug 23, 2015 18:50

trucutru: Jul 9, 2003; by Fluffdaddy

Vladimir Putin posted:

Is this a signal that things are more dire than we think?

well, if you need to throw your pensioners to the lions to prop the market then things cannot be going that well

# ? Aug 23, 2015 18:58

Fox Cunning: Jun 21, 2006; salt-induced orgasm in the mouth

This gives me the impression that there's something worse than mass ruined pensions they're trying to stave off...

# ? Aug 23, 2015 21:07

How are u: May 19, 2005; by Azathoth

Bro Dad posted:

http://www.theglobeandmail.com/repo...rticle26066035/

Holy poo poo, china!

# ? Aug 23, 2015 21:08

icantfindaname: Jul 1, 2008

ocrumsprug posted:

If wide swaths of the market are still frozen, how are the pension funds going to be able to invest? Just in the shallow remaining market, bailing out the holders of frozen equities privately, or something else?

RIP Chinese pensioners either way.

I think "frozen" actually is code for "can only go up". If someone comes to the Chinese SEC with a suitcase full of pension money and says they want to dump it all into the stocks they're trying to prop up those stocks will mysteriously unfreeze for long enough to do that

# ? Aug 23, 2015 21:24

Vladimir Putin: Mar 17, 2007; by R. Guyovich

Fox Cunning posted:

This gives me the impression that there's something worse than mass ruined pensions they're trying to stave off...

I don't know why they are risking it at all. Doesn't the government have tons of cash reserves?

Edit: maybe they don't want to use all their foreign reserve currency because that would flood the market and depreciate that currency vs renminbi.

# ? Aug 24, 2015 00:23

I would blow Dane Cook: Dec 26, 2008

Vladimir Putin posted:

I don't know why they are risking it at all. Doesn't the government have tons of cash reserves?

Burning through them to keep the yuan propped up.

# ? Aug 24, 2015 00:23

Ardennes: May 12, 2002

Vladimir Putin posted:

I don't know why they are risking it at all. Doesn't the government have tons of cash reserves?

Edit: maybe they don't want to use all their foreign reserve currency because that would flood the market and depreciate that currency vs renminbi.

Also, the stability of the regime is heavily dependent on maintaining those reserves both to support the renminbi and stabilize the banking system. One issue that China has is the renminbi isn't a major reserve currency which is going to complicate massive foreign purchases of debt, and their population is can't support a giant domestic state debt burden like Japan and its postal banking system.

They are just throwing the pension systems into the fire because believe they are comparatively expendable compared to the needs of the state itself (we will see about that).

# ? Aug 24, 2015 00:35

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

Vladimir Putin posted:

I don't know why they are risking it at all. Doesn't the government have tons of cash reserves?

Edit: maybe they don't want to use all their foreign reserve currency because that would flood the market and depreciate that currency vs renminbi.

Also I've noticed that it's the go-to argument for idiots when it's pointed out to them that China's economy is hosed/China isn't going to overtake the US. "But they have 3.7 trillion in reserves!"

Which basically means that they can't actually be used without causing even more panic because everyone considers the reserves to be a lifeline that would only be used if things are actually hosed.

# ? Aug 24, 2015 01:47

namaste friends: Sep 18, 2004; by Smythe

First shcomp readings in 30 minutes. :gizz:

# ? Aug 24, 2015 01:49

I would blow Dane Cook: Dec 26, 2008

Cultural Imperial posted:

First shcomp readings in 30 minutes.

# ? Aug 24, 2015 02:02

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

Guys, guys, no need to worry, they've got it covered:

http://www.bbc.com/news/business-34013514

quote:

But, when in doubt, reach for the hard facts and take a deep breath - and here's what Julian Evans-Pritchard, China Economist at Capital Economics, says:

"Sentiment [on China] is currently overly downbeat," he wrote on Friday. "The downside risks to short-run growth are now overstated.

"Credit growth has begun to accelerate on the back of recent policy easing, which should feed through into stronger activity, albeit with a lag. The fiscal stance is also set to loosen in coming months as local governments accelerate spending to hit annual budget targets. "

Increasing credit and local government spending to get out of the problem: that seems like a novel and sustainable solution to me.

# ? Aug 24, 2015 02:02

Invisible Handjob: Apr 7, 2002; by FactsAreUseless

Daduzi posted:

Guys, guys, no need to worry, they've got it covered:

http://www.bbc.com/news/business-34013514

Increasing credit and local government spending to get out of the problem: that seems like a novel and sustainable solution to me.

Is it just me or does it seem like the BBC always has overly upbeat news on China?

# ? Aug 24, 2015 02:07

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

Invisible Handjob posted:

Is it just me or does it seem like the BBC always has overly upbeat news on China?

The British establishment in general has been sucking China's dick for like the past 5 years and it's very fascinating.

# ? Aug 24, 2015 02:22

drilldo squirt: Aug 18, 2006; a beautiful, soft meat sack; Clapping Larry

Why though?

# ? Aug 24, 2015 02:30

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

drilldo squirt posted:

Why though?

I have no idea, just theories. People say that it's because of guilt over the Opium wars or whatever but I think that it's because a bunch of policymakers came to sincerely believe the "China's gonna rise and be a superpower and rule the world" narrative and the British are just hedging their bets which is very much in their historical character.

It's not like they have anything to lose. If China does rule the world then they're first in line to do the 21st century kow-tow and if (when) they don't well back to the Yanks then.

# ? Aug 24, 2015 02:33

I would blow Dane Cook: Dec 26, 2008

SHCOMP shat itself again, down 4%

# ? Aug 24, 2015 02:34

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

Jumpingmanjim posted:

SHCOMP shat itself again, down 4%

Dehumanize yourself and face the bloodshed.

# ? Aug 24, 2015 02:35

I would blow Dane Cook: Dec 26, 2008

I am trying to find the right Wile E Coyote gif to express what is going on with the SHCOMP today.

# ? Aug 24, 2015 02:44

Daduzi: Nov 22, 2005; You can't hide from the Grim Reaper. Especially when he's got a gun.

Fojar38 posted:

The British establishment in general has been sucking China's dick for like the past 5 years and it's very fascinating.

In the case of the BBC, it's more that they've become very conservative (with a small c) over the past decade due to a number of scandals, and so their reporting tends to err on the side of caution and predicting the status quo will continue.

# ? Aug 24, 2015 02:55

Arglebargle III: Feb 21, 2006

Fojar38 posted:

Dehumanize yourself and face the bloodshed.

You hosed up.

# ? Aug 24, 2015 03:03

Vladimir Putin: Mar 17, 2007; by R. Guyovich

Jumpingmanjim posted:

SHCOMP shat itself again, down 4%

Goodbye pensions I guess.

# ? Aug 24, 2015 03:04

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# ? May 25, 2024 19:20

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Vladimir Putin posted:

Goodbye pensions I guess.

This is 11th dimensional chess from the CPC. They are just waiting for a good bottom to buy in on, then it is easy street for all the elderly in China.

# ? Aug 24, 2015 03:06

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