11 ms·

> Several analysts said in recent weeks that China’s economic growth was already testing the lower end of Beijing’s full-year target of around 6-6.5%, which is

by aazaa 7y ago

> Several analysts said in recent weeks that China’s economic growth was already testing the lower end of Beijing’s full-year target of around 6-6.5%, which is likely to spur more policy easing. Second-quarter growth cooled to 6.2%, the weakest in nearly 30 years. 6% growth would be the envy of many countries. For comparison, the last time the US did that was 1984, after back-to-back recessions and a flood of deficit-financed defense spending: https://www.thebalance.com/us-gdp-by-year-3305543 https://www.thebalance.com/us-gdp-by-year-3305543

izend 7y ago
The other question is if the reported 6% is actually true, lots of incentive for regional leadership to make sure they "hit" their number.
- chlee 7y ago
  In addition, some analysts believe that China's official GDP growth numbers are overinflated, and the actual GDP growth is 1-2% lower than the official government data. for example, Li Keqiang, the current premier of China (the #2 guy behind Xi) measures a different set of numbers [1] to approximate China's GDP growth because he doesn't trust the official GDP figures due to inaccurate local government growth data. [1] https://en.wikipedia.org/wiki/Li_Keqiang_index https://en.wikipedia.org/wiki/Li_Keqiang_index
  - dirtyid 7y ago
    >he doesn't trust the official GDP figures Chinese GDP is "made up" according to Li himself in an leaked memo in the mid 2000s. The context behind this statement is that Chinese GDP figures are irrelevant to the actual operations of the Chinese economy and calculated off low-effort and unreliable provincial measures to appease foreign audiences - the government understands the limitations of statistic reporting in China. They know any number derived would be largely meaningless, so here's some back of the napkin estimates for international audiences who clamor for it so much. Then people take it out of context and accuse manipulation or falsification when no one should take it seriously since garbage in garbage out. In addition to LKI, the government uses other internal measures like TSF (total social financing) [1] while ignoring the GDP to gauge economic health. As for foreign commentaries and studies on Chinese GDP, they're as unreliable as the Chinese figures themselves because the data simply isn't there. The most rigorous western analysis of Chinese GDP I'm aware of was conducted by CSIS who comprehensively reverse engineered Chinese GDP reporting from ground up, sector by sector using a variety of official sources, and concluded China is (1 trillion USD) larger than official numbers purported to be: Broken Abacus? A More Accurate Gauge of China's Economy [2]. That's not to say it's anymore an accurate reflection of ground truths, but at least it tries to reconstruct from the bottom up. Unless people believe the Chinese government expends vast resources manipulating every bit of data to comport to their GDP estimates which by all accounts they don't even care about. [1] http://www.chinabankingnews.com/total-social-financing/ http://www.chinabankingnews.com/total-social-financing/ [2] https://www.youtube.com/watch?v=vOxIJMjZOUo& https://www.youtube.com/watch?v=vOxIJMjZOUo&
    - NicoJuicy 7y ago
      I thought China's economy was overestimated with 12%-25% according to the source. Yeah, so nothing can go wrong there... ¯\_(ツ)_/¯
- seanmcdirmid 7y ago
  There is definitely a bit of that. A decade ago, the provinces would even under report their numbers for various reasons. But no one can deny that China has had growth, and GDP added activities include things like tearing down a building and building another one in its place, or simply having the building appreciate in value, so GDP itself is not a great measure.
  - fspeech 7y ago
    Land value appreciation is not part of GDP. Buildings on land typically depreciate instead of appreciate, but upgrading or remodeling are definitely GDP.
    - jmalicki 7y ago
      While land value appreciation (which gp cited) isn't part of GDP, rent (and imputed rent) are part of GDP, so that still flows through to GDP (at least to the extent that rent and property values are related).
      - marsokod 7y ago
        Exactly, rent and loans/mortgages interests linked to the appreciation of assets are all included in the GDP.
- m0zg 7y ago
  Yep. That's how "growth" was reported in the Soviet Union.
Retric 7y ago
Under the CCP China’s per person growth has been lackluster over the full period 1950 - today relative to many countries. The numbers have improved, but context is always important. Edited: Used poor numbers for GDP ranking. Trying numbers from here: https://pophealthmetrics.biomedcentral.com/articles/10.1186/1478-7954-10-12#Sec12 https://pophealthmetrics.biomedcentral.com/articles/10.1186/... but it's not that fast. PS: Of note the 1950’s GDP was after a long civil war.
- Leary 7y ago
  ROFL. Never have I seen a more skillful distortion of facts. China's GDP per capita was around $500 per person in 1950, just at subsistence level, whereas it is currently around $9500. Other than a few countries such as South Korea, there are no countries that have advanced so much in that period. If they have fallen in ranking, that is only because a number of countries became independent after WW2, especially in Europe.
  - Retric 7y ago
    In 1950 China Per capita GDP was 612$ where Ethiopia was $277.00 thus it was well past subsistence levels. Critically as I said this was post civil war which should have allowed for rapid growth in the next few years.
  - mytailorisrich 7y ago
    Between 1949 and 1978 they did massively screw up economically while experiencing a population boom, which obviously led to GDP per capita numbers to collapse. On the other hand, since 1978 they've experienced probably the biggest economic boom in human history. After Mao's death the government was pragmatic enough to realise that if they did not kick start the economy the regime would collapse (as it did in the USSR), and they rightly concluded that socialist economic management does not work. Beyond that, it's difficult to compare with South Korea (since someone else mentioned that country) just due to the population difference.
    - Synaesthesia 7y ago
Mirioron 7y ago
>6% growth would be the envy of many countries. Yes, but China on the whole is still fairly poor. It's much easier to catch up - many poor(er) countries that get their economy going again show immense growth until they get catch up with the rich countries. Much of the eastern bloc (that recovered well) are in a similar situation.
- yogthos 7y ago
  US on the whole is also fairly poor. For example, 40% of Americans are living paycheck to paycheck can't afford an unexpected 400 dollar expense. And China has far better support for the poor than US with things like healthcare, education, and public transit. https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...
  - ElonMuskrat 7y ago
    You have no idea. I've been to poor parts of China. People heat themselves with the coals of wood-fired stove which they used to cook meals. I once saw a family that owned a government subsidized washing machine. They couldn't afford the electricity to operate the machine, so they use the tumbler to store household items.
    - yogthos 7y ago
      Have you been to Flint where there's no drinking water?
      - EpicEng 7y ago
        You're making an incorrect generalization about a large country by misleadingly citing isolated examples which seem to support your point once you realize that you can't back your initial argument up in a meaningful way. You may as well be arguing that England is a poor country because London has a low income neighborhood or two. Stop grasping at straws.
mc32 7y ago
They had a century of built-in slack they had to work their way out of. It can’t be maintained indefinitely especially with an aging pop., but this deceleration came quicker than expected.
AFascistWorld 7y ago
GDP Per capita $10,153 (67th) And the population is aging fast.
- reaperducer 7y ago
  And the population is aging fast How is it that Chinese people age faster than Western people? Is it the health care system? Nutrition? Lack of access to preventative medicine?
  - jankeymeulen 7y ago
    1 child policy. The population pyramid is inverted, so the average age is increasing.
    - chlee 7y ago
      Exactly like you said. The 1 child policy is leaving China with a low birthrate and hence an increasing smaller population of young people. The problem is further compounded when Mao encouraged Chinese people to have as many children as possible, which lead to ~6 childbirths per women in the 1960's. This means that, at some point, there will be too many old people to be supported by too little young people. Japan is facing similar population issue for example. Now, with the population index slowly inverting, China is running out of time to grow rich before it grows old. Otherwise, its social infrastructure will at some point become overburdened by old people who require care/safety net and not enough young people to to provide that care/safety net (either directly as children taking their aging parents or indirectly by paying taxes). Also, China needs to figure out how it can overcome the middle income trap. Otherwise, its growth potential is severely limited, and could be more fuel being added to the rapidly aging population problem.
    - BurningFrog 7y ago
      The 1 child policy was abolished in 2016. https://en.wikipedia.org/wiki/One-child_policy#Abolition https://en.wikipedia.org/wiki/One-child_policy#Abolition
mrbonner 7y ago
I remember seeing an article from the WSJ stating the need to analyze energy input: coal, electric, oil, etc... to really correlate the Chinese economic growth published by the communist government. So, 6% official growth number should be taken with a grain of salt.
IkmoIkmo 7y ago
> 6% growth would be the envy of many countries. For comparison, the last time the US did that was 1984 No, not exactly. It has to be contextualised. Growing 2% if you're already rich is fine. It's essentially a promise they'll stay rich, and get ever so slightly richer. But 2% growth for someone who earns next to nothing, is basically a promise that they'll be poor forever. So let's compare the US in 1984 when it last had China's growth, and China today when it last had... China's growth. https://ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us?tab=chart&time=1980..2016&country=CHN+USA https://ourworldindata.org/grapher/maddison-data-gdp-per-cap... In 1984, US (inflation-adjusted, 2011 dollars) had a GDP per capita of $32k. China today is at $12k. 6% might be okay for the US. But for the almost 1.4 billion Chinese (who live on an income distribution, i.e. almost 700 million people living on less than that $12k, and hundreds of millions on quite very little), 6% may not be the promise they'll accept from their government for long. Not saying it's low-growth, but you can't just compare it to rich countries. The standard is very different, and China will be anxious to crank it back up.
- onlyrealcuzzo 7y ago
  If your GDP is "growing" 2%, and your population is growing 1.2%, and inflation is 1%, you're getting less productive -- not more. Your quality of life is probably declining. I'm not saying this is the case. I'm just saying -- it is possible to "grow" without improvement. See the Malthusian Trap that plagued humanity from the beginning of time until the Industrial Revolution. It's probably better to just measure productivity & quality of life directly. It isn't easy. But it's not easy to measure GDP either. Measure what matters, you know?
  - mactrey 7y ago
    GDP growth rates are generally reported "real" i.e. inflation is taken out. But yes you want GDP to grow at least as fast as population to maintain a given standard of living. The US population growth rate has been below 2% since at least the mid-70s.
  - the_economist 7y ago
    GDP growth rate is reported after subtracting inflation, but the GDP number itself does not subtract inflation. If you have a GDP of $1 trillion, 2% inflation and 3% GDP growth, you'll have a GDP of $1.05 trillion after 1 year.
hevi_jos 7y ago
You mean you believe the number that a communist dictatorship gives you? All Chinese numbers are generated by State institutions that work for the interest of the party and for the interest of the State. BTW, Have you ever dealt with Chinese nationals? In Business, in live? In China? Chinese by the way will tell you anything you want to hear. Their mindset is completely different from Europeans or Americans. They will tell you that they can do something, but they then will not do. But they don't consider that they lied to you because it is expected by culture that you can understand the context and interpret the nuances of what they tell you.
burtonator 7y ago
6% growth for an industrializing nation isn't that high. China is still growing...
wuliwong 7y ago
Are these numbers calculated the same way in the US and in China?

by aazaa 7y ago

izend 7y ago

The other question is if the reported 6% is actually true, lots of incentive for regional leadership to make sure they "hit" their number.

chlee 7y ago
In addition, some analysts believe that China's official GDP growth numbers are overinflated, and the actual GDP growth is 1-2% lower than the official government data. for example, Li Keqiang, the current premier of China (the #2 guy behind Xi) measures a different set of numbers [1] to approximate China's GDP growth because he doesn't trust the official GDP figures due to inaccurate local government growth data. [1] https://en.wikipedia.org/wiki/Li_Keqiang_index https://en.wikipedia.org/wiki/Li_Keqiang_index
- dirtyid 7y ago
  >he doesn't trust the official GDP figures Chinese GDP is "made up" according to Li himself in an leaked memo in the mid 2000s. The context behind this statement is that Chinese GDP figures are irrelevant to the actual operations of the Chinese economy and calculated off low-effort and unreliable provincial measures to appease foreign audiences - the government understands the limitations of statistic reporting in China. They know any number derived would be largely meaningless, so here's some back of the napkin estimates for international audiences who clamor for it so much. Then people take it out of context and accuse manipulation or falsification when no one should take it seriously since garbage in garbage out. In addition to LKI, the government uses other internal measures like TSF (total social financing) [1] while ignoring the GDP to gauge economic health. As for foreign commentaries and studies on Chinese GDP, they're as unreliable as the Chinese figures themselves because the data simply isn't there. The most rigorous western analysis of Chinese GDP I'm aware of was conducted by CSIS who comprehensively reverse engineered Chinese GDP reporting from ground up, sector by sector using a variety of official sources, and concluded China is (1 trillion USD) larger than official numbers purported to be: Broken Abacus? A More Accurate Gauge of China's Economy [2]. That's not to say it's anymore an accurate reflection of ground truths, but at least it tries to reconstruct from the bottom up. Unless people believe the Chinese government expends vast resources manipulating every bit of data to comport to their GDP estimates which by all accounts they don't even care about. [1] http://www.chinabankingnews.com/total-social-financing/ http://www.chinabankingnews.com/total-social-financing/ [2] https://www.youtube.com/watch?v=vOxIJMjZOUo& https://www.youtube.com/watch?v=vOxIJMjZOUo&
  - NicoJuicy 7y ago
    I thought China's economy was overestimated with 12%-25% according to the source. Yeah, so nothing can go wrong there... ¯\_(ツ)_/¯
seanmcdirmid 7y ago
There is definitely a bit of that. A decade ago, the provinces would even under report their numbers for various reasons. But no one can deny that China has had growth, and GDP added activities include things like tearing down a building and building another one in its place, or simply having the building appreciate in value, so GDP itself is not a great measure.
- fspeech 7y ago
  Land value appreciation is not part of GDP. Buildings on land typically depreciate instead of appreciate, but upgrading or remodeling are definitely GDP.
  - jmalicki 7y ago
    While land value appreciation (which gp cited) isn't part of GDP, rent (and imputed rent) are part of GDP, so that still flows through to GDP (at least to the extent that rent and property values are related).
    - marsokod 7y ago
      Exactly, rent and loans/mortgages interests linked to the appreciation of assets are all included in the GDP.
m0zg 7y ago
Yep. That's how "growth" was reported in the Soviet Union.

Retric 7y ago

Under the CCP China’s per person growth has been lackluster over the full period 1950 - today relative to many countries. The numbers have improved, but context is always important. Edited: Used poor numbers for GDP ranking. Trying numbers from here: https://pophealthmetrics.biomedcentral.com/articles/10.1186/1478-7954-10-12#Sec12 https://pophealthmetrics.biomedcentral.com/articles/10.1186/... but it's not that fast. PS: Of note the 1950’s GDP was after a long civil war.

Leary 7y ago
ROFL. Never have I seen a more skillful distortion of facts. China's GDP per capita was around $500 per person in 1950, just at subsistence level, whereas it is currently around $9500. Other than a few countries such as South Korea, there are no countries that have advanced so much in that period. If they have fallen in ranking, that is only because a number of countries became independent after WW2, especially in Europe.
- Retric 7y ago
  In 1950 China Per capita GDP was 612$ where Ethiopia was $277.00 thus it was well past subsistence levels. Critically as I said this was post civil war which should have allowed for rapid growth in the next few years.
- mytailorisrich 7y ago
  Between 1949 and 1978 they did massively screw up economically while experiencing a population boom, which obviously led to GDP per capita numbers to collapse. On the other hand, since 1978 they've experienced probably the biggest economic boom in human history. After Mao's death the government was pragmatic enough to realise that if they did not kick start the economy the regime would collapse (as it did in the USSR), and they rightly concluded that socialist economic management does not work. Beyond that, it's difficult to compare with South Korea (since someone else mentioned that country) just due to the population difference.
  - Synaesthesia 7y ago

Mirioron 7y ago

>6% growth would be the envy of many countries. Yes, but China on the whole is still fairly poor. It's much easier to catch up - many poor(er) countries that get their economy going again show immense growth until they get catch up with the rich countries. Much of the eastern bloc (that recovered well) are in a similar situation.

yogthos 7y ago
US on the whole is also fairly poor. For example, 40% of Americans are living paycheck to paycheck can't afford an unexpected 400 dollar expense. And China has far better support for the poor than US with things like healthcare, education, and public transit. https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...
- ElonMuskrat 7y ago
  You have no idea. I've been to poor parts of China. People heat themselves with the coals of wood-fired stove which they used to cook meals. I once saw a family that owned a government subsidized washing machine. They couldn't afford the electricity to operate the machine, so they use the tumbler to store household items.
  - yogthos 7y ago
    Have you been to Flint where there's no drinking water?
    - EpicEng 7y ago
      You're making an incorrect generalization about a large country by misleadingly citing isolated examples which seem to support your point once you realize that you can't back your initial argument up in a meaningful way. You may as well be arguing that England is a poor country because London has a low income neighborhood or two. Stop grasping at straws.

mc32 7y ago

They had a century of built-in slack they had to work their way out of. It can’t be maintained indefinitely especially with an aging pop., but this deceleration came quicker than expected.

AFascistWorld 7y ago

GDP Per capita $10,153 (67th) And the population is aging fast.

reaperducer 7y ago
And the population is aging fast How is it that Chinese people age faster than Western people? Is it the health care system? Nutrition? Lack of access to preventative medicine?
- jankeymeulen 7y ago
  1 child policy. The population pyramid is inverted, so the average age is increasing.
  - chlee 7y ago
    Exactly like you said. The 1 child policy is leaving China with a low birthrate and hence an increasing smaller population of young people. The problem is further compounded when Mao encouraged Chinese people to have as many children as possible, which lead to ~6 childbirths per women in the 1960's. This means that, at some point, there will be too many old people to be supported by too little young people. Japan is facing similar population issue for example. Now, with the population index slowly inverting, China is running out of time to grow rich before it grows old. Otherwise, its social infrastructure will at some point become overburdened by old people who require care/safety net and not enough young people to to provide that care/safety net (either directly as children taking their aging parents or indirectly by paying taxes). Also, China needs to figure out how it can overcome the middle income trap. Otherwise, its growth potential is severely limited, and could be more fuel being added to the rapidly aging population problem.
  - BurningFrog 7y ago
    The 1 child policy was abolished in 2016. https://en.wikipedia.org/wiki/One-child_policy#Abolition https://en.wikipedia.org/wiki/One-child_policy#Abolition

mrbonner 7y ago

I remember seeing an article from the WSJ stating the need to analyze energy input: coal, electric, oil, etc... to really correlate the Chinese economic growth published by the communist government. So, 6% official growth number should be taken with a grain of salt.

IkmoIkmo 7y ago

> 6% growth would be the envy of many countries. For comparison, the last time the US did that was 1984 No, not exactly. It has to be contextualised. Growing 2% if you're already rich is fine. It's essentially a promise they'll stay rich, and get ever so slightly richer. But 2% growth for someone who earns next to nothing, is basically a promise that they'll be poor forever. So let's compare the US in 1984 when it last had China's growth, and China today when it last had... China's growth. https://ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us?tab=chart&time=1980..2016&country=CHN+USA https://ourworldindata.org/grapher/maddison-data-gdp-per-cap... In 1984, US (inflation-adjusted, 2011 dollars) had a GDP per capita of $32k. China today is at $12k. 6% might be okay for the US. But for the almost 1.4 billion Chinese (who live on an income distribution, i.e. almost 700 million people living on less than that $12k, and hundreds of millions on quite very little), 6% may not be the promise they'll accept from their government for long. Not saying it's low-growth, but you can't just compare it to rich countries. The standard is very different, and China will be anxious to crank it back up.

onlyrealcuzzo 7y ago
If your GDP is "growing" 2%, and your population is growing 1.2%, and inflation is 1%, you're getting less productive -- not more. Your quality of life is probably declining. I'm not saying this is the case. I'm just saying -- it is possible to "grow" without improvement. See the Malthusian Trap that plagued humanity from the beginning of time until the Industrial Revolution. It's probably better to just measure productivity & quality of life directly. It isn't easy. But it's not easy to measure GDP either. Measure what matters, you know?
- mactrey 7y ago
  GDP growth rates are generally reported "real" i.e. inflation is taken out. But yes you want GDP to grow at least as fast as population to maintain a given standard of living. The US population growth rate has been below 2% since at least the mid-70s.
- the_economist 7y ago
  GDP growth rate is reported after subtracting inflation, but the GDP number itself does not subtract inflation. If you have a GDP of $1 trillion, 2% inflation and 3% GDP growth, you'll have a GDP of $1.05 trillion after 1 year.

hevi_jos 7y ago

You mean you believe the number that a communist dictatorship gives you? All Chinese numbers are generated by State institutions that work for the interest of the party and for the interest of the State. BTW, Have you ever dealt with Chinese nationals? In Business, in live? In China? Chinese by the way will tell you anything you want to hear. Their mindset is completely different from Europeans or Americans. They will tell you that they can do something, but they then will not do. But they don't consider that they lied to you because it is expected by culture that you can understand the context and interpret the nuances of what they tell you.

burtonator 7y ago

6% growth for an industrializing nation isn't that high. China is still growing...

wuliwong 7y ago

Are these numbers calculated the same way in the US and in China?