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Not enough, especially with the increasing trade sanctions and tariffs coming from every other country against China. There's a reason why there are Chinese st

Not enough, especially with the increasing trade sanctions and tariffs coming from every other country against China. There's a reason why there are Chinese state employees not having been paid for 8 months, or Chinese citizens unable to withdraw a few hundred dollars from state banks. There was some talk of Shanghai proposing a new rejuvenation tax for residential buildings this summer. The backlash was so great, that the government quietly backtracked.

Jensson 2y ago
How do you know they can't print enough when they haven't tried printing money? They could print and thus increase internal consumption until they have a zero trade balance, which would help a lot of their issues, it is unclear how much but it would help.
- pragmomm 2y ago
  China has been printing money since 2009. thus the 11 trillion off the book debts for local governments.
  - kredd 2y ago
    That’s 15 years. Why not for another 15 years? I mean eventually things might crash, but as the saying goes, “economists have predicted 9 out of last 5 recessions”.
    - pragmomm 2y ago
      based on the lack of big policy move from Chinese government this year, many thinks China has now run out of powder.
culi 2y ago
> Chinese state employees not having been paid for 8 months I haven't heard of this before. Do you have a source (pref. one that doesn't start with "radio free" haha)? China's a massive country and "Chinese state employees" can mean all sorts of things
- seanmcdirmid 2y ago
  Localities are having cashflow issues, since all the VAT basically goes to the central government and without property taxes they rely on land transfer taxes. That could be playing out harshly in lower tiered cities, but I honestly have no idea what is going on ATM. Any claim about china has to be prefixed with some at least, since there are lots and lots of people.
- fancl20 2y ago
  There's a liquidity issue for some heavily in debt local governments. It's also much complex because central government is taking this as a chance to pushing unwelcome structural changes. There's a quick fix have been done before - central government can simply swap local with central government debt and they still have a lot of fiscal room to do so. But many economists are against the approach this time because there's a issue long aware that central government doesn't actually able to control local government's budget but their debt considered backed by central government's unlimited credit. What make things worse is the political incentive is local government has to grow economy and they can achieve that by borrowing money for investment. Even if the investment return is almost 0 there's a short term GDP boost (just think it as giving money to local workers, similar to Civilian Conservation Corps). So now what they are pushing is force local government sell unused state assets they owned, cutting civil servant (hurting local consumption and local GDP), limiting their borrowing capacity and all other government reforms. Most importantly they want to break the expectations that local government debts are back by central government which distorted the market a lot in past decades.

Jensson 2y ago

How do you know they can't print enough when they haven't tried printing money? They could print and thus increase internal consumption until they have a zero trade balance, which would help a lot of their issues, it is unclear how much but it would help.

pragmomm 2y ago
China has been printing money since 2009. thus the 11 trillion off the book debts for local governments.
- kredd 2y ago
  That’s 15 years. Why not for another 15 years? I mean eventually things might crash, but as the saying goes, “economists have predicted 9 out of last 5 recessions”.
  - pragmomm 2y ago
    based on the lack of big policy move from Chinese government this year, many thinks China has now run out of powder.

culi 2y ago

> Chinese state employees not having been paid for 8 months I haven't heard of this before. Do you have a source (pref. one that doesn't start with "radio free" haha)? China's a massive country and "Chinese state employees" can mean all sorts of things

seanmcdirmid 2y ago
Localities are having cashflow issues, since all the VAT basically goes to the central government and without property taxes they rely on land transfer taxes. That could be playing out harshly in lower tiered cities, but I honestly have no idea what is going on ATM. Any claim about china has to be prefixed with some at least, since there are lots and lots of people.
fancl20 2y ago
There's a liquidity issue for some heavily in debt local governments. It's also much complex because central government is taking this as a chance to pushing unwelcome structural changes. There's a quick fix have been done before - central government can simply swap local with central government debt and they still have a lot of fiscal room to do so. But many economists are against the approach this time because there's a issue long aware that central government doesn't actually able to control local government's budget but their debt considered backed by central government's unlimited credit. What make things worse is the political incentive is local government has to grow economy and they can achieve that by borrowing money for investment. Even if the investment return is almost 0 there's a short term GDP boost (just think it as giving money to local workers, similar to Civilian Conservation Corps). So now what they are pushing is force local government sell unused state assets they owned, cutting civil servant (hurting local consumption and local GDP), limiting their borrowing capacity and all other government reforms. Most importantly they want to break the expectations that local government debts are back by central government which distorted the market a lot in past decades.