How China Cooks Its Books & The Growing Risk of a Chinese Economic Implosion

[ByLoSellHi]

Quote from trefoil:

China was growing rapidly, and its high savings rate is proof of that: savings correlates not so much to income as to growth in income, because if someone's income is growing rapidly, they will save more proportionately than someone who's income is high but stagnant, since the latter person is used to having that amount of money and therefore has expenses that will eat up most of that income. Which explains the disparity in savings between the US and China.
Whether it still is growing rapidly is the question as far as how much China's stats are manipulated. Best way to figure it out is indirectly, through China's demand for raw materials from the rest of the world, be it energy, copper, iron ore. By that measure China does seem to still have a strong economy. Only time will tell us for sure whether what we observe indirectly is for real.
Japan already answered the question of whether a centrally planned but privately operated economy can keep up the pace. It can't. But my impression, maybe mistaken, maybe not, is that China is actually less of a centrally planned economy than is Japan's. Remember, until just now, the Liberal Democratic Party ruled pretty much uncontested in Japan, so even though they had elections, it was for all practical purposes a one-party state, kinda like NYC before Giuliani. So Japan having a more planned economy than China since Deng reformed the place is not nearly as crazy as it at first sounds.
Which leaves the question of whether the political system in China can truly withstand the cycles of a private economy. It'll be interesting to see how that works.
And then there's the demographic time bomb, a result of their one child policy. It's almost a commonplace by now to observe that China is in danger of getting old before it gets rich. Another interesting thing to watch...

Great post x2.

Don't forget that China is adding to commodity stockpiles not necessarily out of current demand, but as a hedge due to weak global currencies and based on potential future necessity.

 

[the1]

I chose the median wages because that puts my point at a disadvantage. If few people make big bucks and many people pan-handle the median wage will be skewed up, not down. If I chose the mean wage then it is skewed down, not up.

I didn't post a link because I was hoping my data would entice you to do a little research of your own, which apparently isn't the case and if it is then you haven't been able to refute it.

Your points in A are remarkable but you need to dig a little deeper. What you are citing is superficial data generated by the Chinese Government. That's like the inmates reporting to the worden concerning the conditions of the prison.

Quote from asiaprop:

a) well as you started to play with numbers why dont you look at those numbers that matter such as current account surplus/trade balance, GDP growth, income growth, consumption growth. Then you may get a better idea where China is headed over the next 10-20 years.
b) Could you please provide a link to your secondary school statistic. I would be curious. Re your salary figures you conveniently chose the median over the mean for apparent reasons...

 

[MohdSalleh]

Quote from mgabriel01:

You might add that the leadership in China is keenly interested in remaining the leadership in China and that will remain their top priority regardless

So over the next 50 years it will be real interesting to see if a large economy can essentially be 'directed' by a very small number of decision makers.

To date, that has never worked - even if they are very very smart guys --

My money is on a major fuck-up over there in the next 50 years - and they won't recover because the leadership will put its desire to remain in power above all else

over here we fuck up regularly, but when we do - we throw the bums out and new guys get to take a turn

Try that in China Komrade!

this is a dumb eurocentric perspective. The Chinese have been overthrowing regimes and their rulers for 5000 years. Long before we were a superpower, the Chinese have been a super power for 1000 years, the Ming dynasty fleet was 3 times the size of the Spanish Armada, and back when their ancestors built cities and a standard of living, yours were sucking on sheeps tits in the caves of Europe

 

[asiaprop]

I think you are totally wrong about your points on median and mean, maybe you wanna go back to basic statistics. With a lot of people below the poverty line or at least way below the average wage level and a few hugely outperforming average wage then the median will be a lot lower than the mean. Not sure which part is not clear about this. So I dont change, you were in fact using a figure that helped to support your argument and now you mix up mean and median.

I used economic figures and their trends that are also supported by US houses such as JPMorgan, HSBC, GS, and CIC. They independently conduct their research and estimates. Nobody claimed there is no mismatch between those numbers and what the government sometimes reports and thats precisely why I look at trends over time rather than absolute numbers.

About your secondary education point, I asked you because I indeed checked a bit and could not find anything that supported your number of percentage of citizens who attended secondary school. Maybe its hiding somewhere but it is for sure not a widely cited figure. So I challenge you to support your claims.

Quote from the1:

I chose the median wages because that puts my point at a disadvantage. If few people make big bucks and many people pan-handle the median wage will be skewed up, not down. If I chose the mean wage then it is skewed down, not up.

I didn't post a link because I was hoping my data would entice you to do a little research of your own, which apparently isn't the case and if it is then you haven't been able to refute it.

Your points in A are remarkable but you need to dig a little deeper. What you are citing is superficial data generated by the Chinese Government. That's like the inmates reporting to the worden concerning the conditions of the prison. A little more research Asia....you'll get there.

 

[Debaser82]

Peking will be a desert in 20 years, everyone knows this.

Too bad for them but hey that's life.

 

[asiaprop]

please entertain us more...it gets funnier by the hour.

Quote from Debaser82:

Peking will be a desert in 20 years, everyone knows this.

Too bad for them but hey that's life.

 

[Debaser82]

Quote from asiaprop:

please entertain us more...it gets funnier by the hour.

Did you know no country in the world has more disabled birth ratio's and down syndrome babies because of all the polution?

 

[Random.Capital]

Quote from the1:

If few people make big bucks and many people pan-handle the median wage will be skewed up, not down. If I chose the mean wage then it is skewed down, not up.

That's backwards.

 

[Kassz007]

Quote from asiaprop:

I think you are totally wrong about your points on median and mean, maybe you wanna go back to basic statistics. With a lot of people below the poverty line or at least way below the average wage level and a few hugely outperforming average wage then the median will be a lot lower than the mean. Not sure which part is not clear about this. So I dont change, you were in fact using a figure that helped to support your argument and now you mix up mean and median.

Median wage would be the better measure for this purpose. Mean age would be skewed due to the relatively few people in the country who make much more than the average citizen.

 

[asiaprop]

I agree and thats why median age is more often used and I only said that using median age supports his point more than mean age. It still does not hide the fact that that guy lacks even most basic math/stats skills.

Quote from Kassz007:

Median wage would be the better measure for this purpose. Mean age would be skewed due to the relatively few people in the country who make much more than the average citizen.