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Anne Stevenson-Yang, a journalist and software executive who's worked and lived in China since 1985, and now a research director at an investment capital firm,

Anne Stevenson-Yang, a journalist and software executive who's worked and lived in China since 1985, and now a research director at an investment capital firm, has this to say about China's GDP: "actual Chinese GDP is probably a third lower than is officially reported" http://www.barrons.com/articles/anne-stevenson-yang-why-xi-jinpings-troubles-and-chinas-could-get-worse-1417846773 http://www.barrons.com/articles/anne-stevenson-yang-why-xi-j... "China is sinking into a deflationary recession that’s increasing in speed and may take some time to run its course. Investors have lost faith in the property market, which alone comprises about 20% of GDP, when taking into account the entire supply chain, from iron-ore production to construction to related financial services and appliance sales. Employment and wage compensation will suffer. Consumption will continue to suffer. There’s even an outside possibility that China’s economic miracle could end up in a fiery crash landing, if a surge in banking-system loan defaults outruns government regulators’ attempt to contain such a credit crisis and restore financial confidence." She has a good video about China's economy here: https://www.youtube.com/watch?v=C2SStFt-k_A https://www.youtube.com/watch?v=C2SStFt-k_A

6t6t6 11y ago
Maybe the article represents a bit of wishful thinking; but the fact that this is the most up-voted comment is also quite revealing.
- sharetea 11y ago
  Another number to watch out for is capital outflow out of China. "Over the last seven weeks alone, $190 billion has left the country." http://www.businessinsider.com/chinas-record-capital-outflows http://www.businessinsider.com/chinas-record-capital-outflow... "by 2018 all of China's excess reserves — cash that it has on hand to use immediately — could be gone."
- chvid 11y ago
  Why the strong anti-China sentiment on HN? I don't get it.
  - AndrewKemendo 11y ago
    Probably a combination of inherent cynicism and lack of credibility in Chinese financial statistics.
    - chvid 11y ago
      The particular source here is not the Chinese government but the magazine the Economist and the consulting firm McKinsey. Both are very reputable. You can go to China or some of the surrounding countries (SE Asia, Japan, Australia) and see for yourself. Or look at the sales reports from Apple. The massively growing Chinese middle class is quite a real thing. Yet the reaction here is of scepticism, disbelief, denial. I don't understand that. No other topic (Europe, US, Africa, Middle-east ...) is met with same.
      - europestup 11y ago
        Actually, it looks to me like Europe's economic prospects are always reported about in a negative way here on hn...
        icebraining 11y ago
        As an European, I'd suspect of bias if they weren't!
      - eggy 11y ago
        Yes, but just before the last two big financial crises, Americans were buying houses they couldn't afford, second and third cars, taking loans etc... I live in Macau, and the Chinese government's recent policy of cracking down on corruption, money laundering and their history of 'massaging' the news, leaves even the Macanese, Hong Kongers and coastal mainlanders suspicious of any economic statistics coming out of the government. Foreign worker quotas here, and the drop in gamblers, VIP especially have resulted in 36% drops from last year. Gambling/Casinos generate 80% of Macau's GDP. I hold out hope for a progressive, free China, but after observing the yellow umbrella movement in Hong Kong, and the mainland's actions and words, I am in despair. The people have been under this type of rule for so long, and the rumors are that the current administration is only going after corruption when done by political rivals, while saving face with their own party. I truly believe consumerism is going to be humbled by a crash here, and hopefully a restructuring to head up with honest accounting by government if they want to be taken serious in the world currency market.
obrero 11y ago
> There's even an outside possibility that China's economic miracle could end up in a fiery crash landing People have been saying this since Deng Xiaoping took over, over 35 years ago. Actually, they've been saying it for over 65 years.
- hga 11y ago
  I think these two events in the last 65 years count as "fiery crash landings": https://en.wikipedia.org/wiki/Great_Leap_Forward https://en.wikipedia.org/wiki/Great_Leap_Forward https://en.wikipedia.org/wiki/Cultural_Revolution https://en.wikipedia.org/wiki/Cultural_Revolution Note the latter created an uneducated generation, and as of late we've been learning a lot more people were slaughtered than was generally thought. Moving forward past the Gang of Four, it's hard to see how this experiment won't end in tears: https://en.wikipedia.org/wiki/One-child_policy https://en.wikipedia.org/wiki/One-child_policy Where it's strictly enforced, it results in what's called 4-2-1, where 4 grandparents are supported by 2 parents (as long as they can) are supported by 1 child. That, the lack of a general social safety net, and the general government policy of financial repression (https://en.wikipedia.org/wiki/Financial_repression https://en.wikipedia.org/wiki/Financial_repression) appears to be short circuiting a lot of what I presume The Economist article is talking about, for many people are desperately trying to save for their and their elders' old age instead of spending like "normal" consumers. E.g. one reason for the property and other bubbles, which held out the promise of better investment returns.
  - dreamfactory2 11y ago
    I suspect very few commenters here have visited China lately. There is a ton of consumer spending in China. Apple stores everywhere in big cities, way more than London or New York for example. The biggest name luxury brands are all over the place. Cost of living in Shanghai is on par w San Francisco, Beijing is probably higher.
    - hga 11y ago
      Never visited, didn't even read the The Economist article (didn't want to use up my quota of them) but: There is a ton of consumer spending in China. Apple stores everywhere in big cities, way more than London or New York for example. The biggest name luxury brands are all over the place. Cost of living in Shanghai is on par w San Francisco, Beijing is probably higher. Are any of these signs of middle-class prosperity? The general theory here is that you want a huge middle class spending a lot of money. In aggregate, in the US at least in times past, the broadly construed middle class had more wealth than the upper class, spend more, and also provide useful functions WRT to upper class earnings and spending. E.g. how cool are the Apple products that I see for sale in my local Wal-Mart? I.e. to what extent does middle class adaptation of upper class fashions drive changes in the latter?

6t6t6 11y ago

Maybe the article represents a bit of wishful thinking; but the fact that this is the most up-voted comment is also quite revealing.

sharetea 11y ago
Another number to watch out for is capital outflow out of China. "Over the last seven weeks alone, $190 billion has left the country." http://www.businessinsider.com/chinas-record-capital-outflows http://www.businessinsider.com/chinas-record-capital-outflow... "by 2018 all of China's excess reserves — cash that it has on hand to use immediately — could be gone."
chvid 11y ago
Why the strong anti-China sentiment on HN? I don't get it.
- AndrewKemendo 11y ago
  Probably a combination of inherent cynicism and lack of credibility in Chinese financial statistics.
  - chvid 11y ago
    The particular source here is not the Chinese government but the magazine the Economist and the consulting firm McKinsey. Both are very reputable. You can go to China or some of the surrounding countries (SE Asia, Japan, Australia) and see for yourself. Or look at the sales reports from Apple. The massively growing Chinese middle class is quite a real thing. Yet the reaction here is of scepticism, disbelief, denial. I don't understand that. No other topic (Europe, US, Africa, Middle-east ...) is met with same.
    - europestup 11y ago
      Actually, it looks to me like Europe's economic prospects are always reported about in a negative way here on hn...
      - icebraining 11y ago
        As an European, I'd suspect of bias if they weren't!
    - eggy 11y ago
      Yes, but just before the last two big financial crises, Americans were buying houses they couldn't afford, second and third cars, taking loans etc... I live in Macau, and the Chinese government's recent policy of cracking down on corruption, money laundering and their history of 'massaging' the news, leaves even the Macanese, Hong Kongers and coastal mainlanders suspicious of any economic statistics coming out of the government. Foreign worker quotas here, and the drop in gamblers, VIP especially have resulted in 36% drops from last year. Gambling/Casinos generate 80% of Macau's GDP. I hold out hope for a progressive, free China, but after observing the yellow umbrella movement in Hong Kong, and the mainland's actions and words, I am in despair. The people have been under this type of rule for so long, and the rumors are that the current administration is only going after corruption when done by political rivals, while saving face with their own party. I truly believe consumerism is going to be humbled by a crash here, and hopefully a restructuring to head up with honest accounting by government if they want to be taken serious in the world currency market.

obrero 11y ago

> There's even an outside possibility that China's economic miracle could end up in a fiery crash landing People have been saying this since Deng Xiaoping took over, over 35 years ago. Actually, they've been saying it for over 65 years.

hga 11y ago
I think these two events in the last 65 years count as "fiery crash landings": https://en.wikipedia.org/wiki/Great_Leap_Forward https://en.wikipedia.org/wiki/Great_Leap_Forward https://en.wikipedia.org/wiki/Cultural_Revolution https://en.wikipedia.org/wiki/Cultural_Revolution Note the latter created an uneducated generation, and as of late we've been learning a lot more people were slaughtered than was generally thought. Moving forward past the Gang of Four, it's hard to see how this experiment won't end in tears: https://en.wikipedia.org/wiki/One-child_policy https://en.wikipedia.org/wiki/One-child_policy Where it's strictly enforced, it results in what's called 4-2-1, where 4 grandparents are supported by 2 parents (as long as they can) are supported by 1 child. That, the lack of a general social safety net, and the general government policy of financial repression (https://en.wikipedia.org/wiki/Financial_repression https://en.wikipedia.org/wiki/Financial_repression) appears to be short circuiting a lot of what I presume The Economist article is talking about, for many people are desperately trying to save for their and their elders' old age instead of spending like "normal" consumers. E.g. one reason for the property and other bubbles, which held out the promise of better investment returns.
- dreamfactory2 11y ago
  I suspect very few commenters here have visited China lately. There is a ton of consumer spending in China. Apple stores everywhere in big cities, way more than London or New York for example. The biggest name luxury brands are all over the place. Cost of living in Shanghai is on par w San Francisco, Beijing is probably higher.
  - hga 11y ago
    Never visited, didn't even read the The Economist article (didn't want to use up my quota of them) but: There is a ton of consumer spending in China. Apple stores everywhere in big cities, way more than London or New York for example. The biggest name luxury brands are all over the place. Cost of living in Shanghai is on par w San Francisco, Beijing is probably higher. Are any of these signs of middle-class prosperity? The general theory here is that you want a huge middle class spending a lot of money. In aggregate, in the US at least in times past, the broadly construed middle class had more wealth than the upper class, spend more, and also provide useful functions WRT to upper class earnings and spending. E.g. how cool are the Apple products that I see for sale in my local Wal-Mart? I.e. to what extent does middle class adaptation of upper class fashions drive changes in the latter?