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In China: Policy Failure
Nothing to see here, just a double-digit plunge in fixed investment across the world's second-larges
H-Man, trying to manage 1.4B people in the same space as the U.S. is quite the task, while Xi’s economy is not resting maybe it is just tired.
It’s all tuckered out after a long squawk.
Look, I took the liberty of examining that parrot, and I discovered that the only reason it had been sitting on its perch in the first place was that it had been nailed there.
Those numbers need to be adjusted for population growth – slightly down since 2023 – and the aging of the population – older people don’t buy much. Maybe the growth level is sensible and even properly managed.
John, nominal growth’s outstripped real growth for 10 quarters in a row. They’re in deflation. And how does one go about “adjusting” retail sales for age? Smartphone sales of CNYwhatever billion were actually > CNYwhatever billion after you control for more old people? I mean, I get what you’re driving at, but I’ve been listening to people tell me that China’s not stuck in a rut for two years and the implied deflator’s been negative every single quarter for that entire period.
“China had a pretty good thing going: Inherently contradictory or not, communism with a dash of capitalism and political oppression with a tinge of economic liberty, was working out. And the rest of the world was willing to look the other way on one-sided trade as long as the Party pretended to liberalize. Then they pivoted (back) to totalitarian dictatorship under Xi and here we are.”
That’s exactly right. I remember thinking they had created a new “hybrid” that held an unfair advantage over traditional capitalism.