Topic: China’s Debt-to-GDP Ratio Rises a Record of 286.1% (Read 412 times)

also important to know evergrande headquarter operated in hongkong.. thus different rules applied compared to mainland china's rules set by beijing

Obviously with Evergrande the Chinese gov sidestepped its own foundational principles as a supposedly socialist government.
There's an important asterisk here however. Ever since Deng Xiaoping, the liberalization of policies has allowed for many free market elements to start affecting the daily life of Chinese people.

There are many voices in China, but mostly also abroad, that highlight how China is straying too far from the benefits of planning parts of an economy for the greater good.
So while Evergrande at least to some extent might have been working in cooperation with the Chinese government, it was still acting as a private for profit corporation and there was not even the possibility of enough oversight from the state to prevent them.

It's important to understand that profit and growth driven investment are the only factors that create incentives to build homes where no one wants to live in.
In countries where state subsidies exist for housing quite the opposite actually happens, there's more demand than supply and the state gets overwhelmed with reviewing requests unless they dedicate more resources to this effort.

show the whole quote, its a stat of market share of SHIPMENTS

just so you know CHINA make over a billion phones a year...
just so you know CHINA only import 271.3 million in 2023
just so you know of the 271.3 million imports only 45m were of the apple variety

learn why a shipment, shipping, shipped is related to transporting products not sales of products.. and yes i said sales not sails

but it was fun to watch you yet again mention a quote but snipped off the word shipment even when you quote me calling you out on it

Lol, no central planning?
https://www.fujian.gov.cn/english/news/202108/t20210809_5665713.htm



A lot of people mistake the fact that private companies build something it automatically means there is no government control.
So let's clear a bit of those:
- no company can build how much it wants, every local authority and every regional government has pre-approved quotas
- local governments can force final prices on specific projects and can enforce a minimum price
- the central government can make quotas on new buildings, denying building in big cities and enforcing building in smaller ones (mainly to prevent migration), even without demand there, even if in the past 10 years only 10% of the buildings have been sold, the quota must be met!
- the main government and province governs issue permits and quotas outside the real market on new real estate building, you don't buy land and seek approval for you project like in the west, you first register, your company gets approved and you can build a x where y meets z on predesign land
- the whole hukou thing, basically treating migrant workers as second class citizens, denying the right to buy or sell a house without permit

Does this look like a free market?

It's interesting that while China is an economy that still follows central planing to a large extent, they do allow many free-market aspects into their economy.
Evergrande for instance, was a firm very much based on free market competition and received a lot of funding originating from western big money firms.

Evegrande and the entire Chinese real estate boom was a very large deviation from what a centrally planned economy would look like. For sure it created many jobs and kind of a gold rush for home manufacturing firms and investors, but it also created a bubble. For one, the government was either unable or unwilling to monitor what the portfolio of real estate assets by a company as large as Evergrande consisted of. It's true that many of these housing estates will remain unfinished and uninhabited.

But we have to think about some fundamentals before judging what to criticize here. What drove Evergrande to project infinite growth even past the point where people weren't moving in to their newly constructed apartments (and TOWNS!)? Wasn't it profit and chasing growth-oriented investors? If China had proper central planing for housing there would be no need for a market-based approach to this issue, which is essentially the root cause to tis issue.

Yeah:
https://www.bbc.com/news/business-67562522

Perfect central planning

Oh Franky, I always forget English is your sixth language you never learned
https://www.idc.com/getdoc.jsp?containerId=prAP51817224




Yeah Franky, top smartphone brand by SALES in CHINA is APPLE! Deal with reality!

Are we arguing about which nation is actually producing more?
Because china sure does surpass the US and probably most other nations when it comes to total amount of things produced. Just check the US trade deficit and you will see that the US has been slowly but surely decreasing it's manufacturing and just keeps relying more and more on imports.

Ofc this happens for a reason, the relative cost to produce most stuff is usually lower abroad, often due to lower labor costs. But the net benefit of having jobs in your country is always going to be greated due to the multiplier on GSP contribution.
The free market doesn't care about a nation's prosperity though. China is doing better in some economic aspects due to the very fact that they have central planning and can plan big parts of the economy bssed on national interests instead of short term profits of individuals.

Maersk can't be the loser as long as the money printer in the US keeps printing papers and pays for the containers.


Oh they exactly know what's going on. I don't doubt it. The thing is, they can't do anything to reverse it. It is all going downhill since Nixon removed the gold standard. More printing and more debt, less manufacturing in the US.


Nike ain't paying shit. The consumers in the US, the tax payers do. The money printer creates inflation by inflating the money supply and it becomes everybody's problem. Every middle class and working class citizen pays for the empty container.

The equation for being wealthy is very simple. If you have lots of stuff (not cash), you are a wealthy person. Not only China has more stuff, they make more stuff.

Simplification is good.

A bit simple as the empty container gets someplace else before returning to china. The handler Maersk https://www.maersk.com/tracking/ would be the loser if not. Simplification is not good when forming an opinion about the course of a country.

I doubt the finance ministers or secretaries of this planet know how the balance sheet of their respective state look like. 

Take nike, their shoes cost between 4 and 15 US$ to make and are sold between 80 and 600 US$ in the US. Nike pays for the container, are you aware how many empty containers Nike could afford? 
 

heres the thing about stompix. he ADORES trying to find the most slimmest and most muffelled stat he can find to make america look great
. when he sees "apple takes top spot in chinas smart market" what he misses out is the statistic is not about china's population consumer market.. but a statistic about which phone is imported most BY SHIPMENT

for instance
there are 1.4billion cell phones manufactured in china. china domestically manufacture billions but lets say only imports 285m
of the IMPORTS iphones is within the 285m but not all 285m, just the most compared to others imported
(only 45m iphones were sold in china last year)
do not confuse SHIPMENTS with sales

meaning although chinas population market are buying WAY MORE THEN 285m only a fraction actually are iphones(45m)

yep stompix purposefully ignored "in shipments" to pretend to then say his stat proves iphones are #1 ranking of all chinese bought phones

iphones are not the #1 rank phone amongst chinese consumers.. though stompix will now want to post 10 racially bias posts to try to make china look bad and make america look great again

..
stompix always has a "confirmation bias" where instead of finding all available statistics. running the math to get better/more accurate results. he instead just quick searches one statistic that sounds like a narrative he already set for himself.

They certainly produce more papers than the real stuff. The numbers don't lie. China on the other hand, they make more real stuff than papers.


And?

For every iphone the US send out, they buy 1.65 Huawei from China and the other countries...


For every 2 ship containers come from China to US, one of them returns empty. China is winning this game no matter how you spin it.  

Oh, it is! It's like the teacher asking you why you didn't do your homework and you point at the other guy saying he didn't eat all his carrots! Why?
Is it that impossible to have a conversation on a country alone and not go full crazy on but what about the US, but the US, what about the US, look at the US,
Although now that I think, yeah, it might not be low effort propaganda, it might be a sign of a meltdown because of a rejected green card!

Imagine how discussions on Bitcoin would be if at every pace someone would say but what about ethereum but what about solana!


Yeah, and we have heard of Japan collapsing because of this for 3 decades yet, remember how the UE was supposed to crash because of PIGS? It all depends who owns that debt and what it was used to prop, in China it's spiraling out of control and its used to prop a sector of the economy that makes 30% of their GDP and it's unable to prop up even by enforcing minimal prices on houses and apartments so their value can't go down.


I remember how Iranians were chatting death to America at Soleimani burial while his coffin was in a Chevy truck and his daughter was taking pictures with an Iphone, speaking of
Apple takes top spot in China’s smartphone market for the first time
Who's buying who?  

when you realise the formula for GDP is essentially.. yesterdays(figuratively) debt is tomorrows(figurative) GDP. you then learn that GDP is not a real number people actually care or should get emotional over..
its just a silly stat that world leaders abuse to rank each country, but that stat doesnt represent real money economics of cash flow/asset flow of a country domestically nor internationally

just remember all modern money is basically debt generated

If China's debt is unsustainable, the whole world will suffer. It won't be an isolated crisis if the Chinese economy experiences a financial crisis.
First of all China is the single largest bonds buyer in many foreign nations. If they start focusing on their domestic economy it'll be hard to find a replacement bonds buyer so many countries will have to wind down their spending so they also can avoid getting into a debt spiral.

Chinese state owned companies are also some of the top bidders on global infrastructure projects. They provide affordable and reliable large scale infrastructure development services to many developing nations, often at favorable terms. A domestic financial crisis would likely mean that they would have to increase their prices due to their domestic disruptions. So development in much of the developing world would also slow.

Let alone the fact that China still lifts big part of the world's responsibilities when it comes to manufacturing.
Cheap labor in china is still utilized so we can get cheap phones, plastic products, raw materials, parts for production and many things.

The real question isn't if this debt to GDP ratio is meaningful, but what will be the consequences in the event of a Chinese financial crisis.
My speculation is that the whole world is so dependent on China that our leaders (regardless of how undemocratic that would be) would not let china enter into a spiraling crisis and would rather help it to contain any potential consequences of a financial crisis.
Personally, I would rather see our economies become more isolated from China and start producing more of our own stuff, but that doesn't seem to be happening soon sadly.

The nuance is that the USA can print DOLLARS that the whole world needs. China can't print dollars. Dollars in which he has more than half of his external debt. Dollars for which technologies are bought in China, and DOLLARS in which investments used to come to China.
Yes, not everything is so positive in the US, but the US economy has been and remains stable (relative to most others), as well as other characteristics that ensure the stability of the dollar. But the same cannot be said about China. China has overestimated its strength, its importance, its potential. Plus, and this is perhaps one of the main problems, he chose the path to a totalitarian or close to this vector of power. This happens, we are watching the situation develop. And the biggest problem is that such regimes, often, in order to “smooth out” their inept rule, start wars that can turn from local to global. This is an old concept, when the local population can soon no longer be restrained from an internal “explosion”, they create a “global external problem”, where supposedly there are “external enemies”, the security of the country, “let’s save the homeland”...

There is more to come as China has messed up big time and it has so many policies which goes against humanity it won't require any other nation to topple China but it's own domestic issues, China has created so much of discontent amongst it's citizens and it's surrounded by issues like inhumane treatment of Uyghur (Occupied East Turkestan), Declining population (ageing population) due to it's strict one child policy which seems to be relaxed now, it's frequent stand off with India and controversies surrounding Taiwan. These issues are just waiting to burst and it would be bad for China.

Each government tries to devalue its currency to match the others as Ive read it, if USA had been the only country to devalue in 2008 or more recently 2020 then we'd have a very different outcome.   The trade balance would be altered, I presume the bias would have swung to domestic production for USA as imports become more expensive.  Its not quite clear as many countries are using USD as a proxy for world trade despite it mostly being tied to that country and especially the Americas or large trading partners.  Its seen as a disadvantage to have a strong currency now which is not the way it should be yet thats how it's turned out.
   Part of that currency weakness is this ongoing debt situation, I see the real losers as the common populations of each country.    The very largest entities in a country often use up large amounts of debt they have issued themselves, able to utilize the cash and gain a great return then inflation.   Most of us plain workers are just trying to save enough to buy a house or deposit so we lose value.


I wont ignore, I think China has the greater problem somehow.  They lack population growth now, in fact their working population has been falling for some time.  USA continues to have base line growth from decade to decade and quite often justified in its housing demand which is of higher quality.  I presume these factors matter but its not always clear, both countries sometimes end up with a ghost town effect from housing built but of no real usage at that time.

Talking about the US debt isn't "low effort propaganda". The USA and China have the same problems, when it comes to big government debt. Other countries like Japan and the UK also have ridiculous levels of government debt. At this point, the global economy might be heading to a "who will stop paying it's debts first" race. The anti-west propaganda is praising China for it's high economic growth and big technological progress. The anti-west people are ignoring the fact that the Chinese economy is built upon the same real estate bubble as the US economy. Every capitalist economy is building a financial/real estate bubble more or less. The capitalist economy of communist China is no exception of this rule.

While every country tries to massage and sooth their numbers, more developed countries understand that creating independent statistics which accurately diagnose problems in the economy is more important than trying to appease the dictator in charge. The problem with communist and authoritarian countries is that creating a problem, even something as innocuous looking like compiling figures, may often annoy the wrong political person which can make your life a lot harder. Then you start to end up in an echo chamber, where figures are tailored to what looks good and makes the country look better, rather than helping to identify a problem. The more Xi Jinping sticks around, the worse this is going to get.

The US produces much more than paper.
Did China research and develop most of the products they are selling?
Still 90% of all financial transactions are done through SWIFT.
They have all those buyers China needs to have a positive balance.

An I'm not a fan of the US System. neither of socialism and other isms