@michaelxpettis Avatar @michaelxpettis Michael Pettis

China's economic growth model is facing significant challenges, including a shift from investment-driven growth to one that is more consumption-based. The country's industrial policies, while successful in certain areas such as its EV industry, have also led to overcapacity and imbalances in the economy. Beijing is attempting to address these issues through strategic investments and stimulus policies, but experts warn that a more substantial overhaul of the growth model is needed.

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Social Influence

Social category influence finance countries travel destinations currencies #2457 social networks stocks technology brands us election automotive brands agencies

Social topic influence china #1366, investment #797, debt #1340, beijing #86, gdp #204, countries, gdp growth #202, tariffs #362, bloomberg, japan

Top accounts mentioned or mentioned by @ft @scmpnews @markets @wsj @economics @bradsetser @noahpinion @foreignaffairs @adamtooze @bpolitics @opinion @qingeneral86 @business @gregip @vshih2 @berthofmanecon @zichenwanghere @christo39775311 @prosyn @cfrorg

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Top posts by engagements in the last [--] hours

"Very interesting article on a growing part of the fund management industry starting to attract some of my graduating students. Here is a striking comment: The value of junk bonds doesnt depend on credit analysis said Larry Hu an. via @financialtimes https://www.ft.com/content/d9988dfe-2162-11ea-92da-f0c92e957a96segmentId=dddf6252-6e37-bb4b-bda7-2193a3453893 https://www.ft.com/content/d9988dfe-2162-11ea-92da-f0c92e957a96segmentId=dddf6252-6e37-bb4b-bda7-2193a3453893"
X Link 2019-12-18T22:05Z 161.1K followers, [--] engagements

"Good article. I ran EM fixed income trading at First Boston at the time of the merger with CSFB and the takeover by Credit Suisse and worked extensively with both "partners" (if you can refer to entities that loathed each other as. via @financialtimes https://www.ft.com/content/68f8d7a6-56fb-11ea-a528-dd0f971febbc https://www.ft.com/content/68f8d7a6-56fb-11ea-a528-dd0f971febbc"
X Link 2020-03-08T08:54Z 162K followers, [--] engagements

".dollar open capital accounts and an investment safe haven but these put substantial downward pressure on American producers and workers including farmers smaller manufacturers and small businesses generally (the same is true by the way for other similarly open and"
X Link 2020-03-24T10:33Z 161.5K followers, [--] engagements

".well-governed capital markets like the UK). The point is that while the global reserve status of the dollar is a positive for global trade it also raises American debt and transfers income from American workers and producers to American and global banks and financiers"
X Link 2020-03-24T10:36Z 162K followers, [--] engagements

"It is hard to know what "a regular review of Italys creditworthiness" even means. Italian payment prospects depend almost wholly on political decisions made in Rome Brussels Paris and Berlin not on estimates of projected cashflow. via @financialtimes https://www.ft.com/content/ec672629-aa29-470f-a306-5066dddf523c https://www.ft.com/content/ec672629-aa29-470f-a306-5066dddf523c"
X Link 2020-04-26T07:33Z 162K followers, [--] engagements

"I fully agree with @ben_rog among other things a drop in real estate prices is a wealth transfer from the old to the young. When I moved to New York in the late 1970s and early 1980s everyone knew that New York was dying and that. via @financialtimes https://www.ft.com/content/d4fff7a2-9b63-11ea-871b-edeb99a20c6e https://www.ft.com/content/d4fff7a2-9b63-11ea-871b-edeb99a20c6e"
X Link 2020-05-24T11:54Z 162.1K followers, [---] engagements

".PBoCs ability to lower interest rates is severely constrained by its need to see reserves rise if it is to expand the domestic money supply. Its a mistake to assume that the PBoC has the same freedom to manage domestic monetary policy as the Fed or the ECB. Those other"
X Link 2020-06-22T06:48Z 162.1K followers, [--] engagements

".the busload but it allows them to take risks in their work without worrying too much about making the rent. I'd love to see much lower real estate prices everywhere especially in New York"
X Link 2020-07-22T06:07Z 162.2K followers, [--] engagements

"6/- supposed to be gritty and diverse. It isn't the wealthy and large corporations driving up real estate prices that made NYC the world's most exciting city and it is not because of but rather in spite of high rents that NYC became one of the major centers in the US for"
X Link 2020-08-17T04:40Z 162.2K followers, [--] engagements

"1/- Good piece on the continuing disconnect between China's red-hot commercial real estate market and its weaker economy: "Whether it is office vacancy rates in Shanghai and Beijing of between [--] and [--] per cent negative net take-up levels in the. https://www.scmp.com/comment/opinion/article/3098547/why-chinas-commercial-property-markets-resilience-amid-coronavirusutm_source=Twitter&utm_medium=share_widget&utm_campaign=3098547"
X Link 2020-08-25T07:56Z 162K followers, [--] engagements

"Very interesting article about the shared-bicycle plague that briefly affected China's major cities. According to this article about 25-30 million bicycles have already been junked by the over [--] companies that have gone bankrupt within four years of. https://www.scmp.com/business/china-business/article/3103908/what-happens-discarded-bikes-chinas-sharing-boom-taxpayersutm_source=Twitter&utm_medium=share_widget&utm_campaign=3103908"
X Link 2020-10-04T09:43Z 162.1K followers, [---] engagements

".the first one setting up. They raised enormous amounts of money basically to offer free shared-bicycle services to consumers. The whole spectacle tells us something about how much private equity money there is in China desperately looking for investment opportunities"
X Link 2020-10-04T09:43Z 162.2K followers, [--] engagements

"2/7 This might have seemed a good thing in the gold-standard days when there were significant balance of payments constraints on domestic US investment but by the 1970s those constraint were gone. At any rate Saudis would have had no other option: other countries with"
X Link 2020-10-11T08:45Z 162.1K followers, [--] engagements

"3/7 large surpluses whether oil exporters or Asian manufacturers did the same thing as the Saudis did which was to invest most of their surpluses in the US without the need for William Simons brilliant diplomacy. The reason is that the US was the only"
X Link 2020-10-11T08:45Z 162K followers, [--] engagements

"4/9 government wont allow the situation to deteriorate as that could lead to systemic risks. He adds: If they let Yongcheng or Brilliance go under no state firms in Henan or Liaoning will ever be able to tap the bond market again. The government wont let that happen"
X Link 2020-11-15T09:22Z 162.2K followers, [--] engagements

"4/11 very hard to eliminate without politically-difficult domestic adjustments that none of them want to accept. This means that the RCEP can only function as a trade bloc either if some of its members are forced into running deficits (in practice only Australia and"
X Link 2020-11-16T08:24Z 177K followers, [--] engagements

"1/4 For nearly two years I've argued that we were going to see substantial increases in portfolio and FDI inflows into China and so we are to the point where I suspect that the PBoC is now wrestling with currency-appreciation concerns and with. https://www.ft.com/content/93ad4482-aa8a-407a-8039-0538457356b3 https://www.ft.com/content/93ad4482-aa8a-407a-8039-0538457356b3"
X Link 2020-11-18T08:25Z 162.1K followers, [--] engagements

"6/6 Pulling this off will require a very difficult redistribution of income and with it of political power but it does suggest that Beijing is endorsing the "trade wars are class wars" thesis and indirectly perhaps Bernanke's saving glut hypothesis. @M_C_Klein @adam_tooze"
X Link 2020-12-14T14:34Z 163.5K followers, [---] engagements

"The housing minister repeats again the mantra "housing is for living in not for speculation" and that Beijing will not use the property market as a form of short-term stimulus to prop up the economy. This is becoming pretty pro-forma. http://www.xinhuanet.com/english/2021-01/06/c_139646693.htmbsh_bid=5578304205 http://www.xinhuanet.com/english/2021-01/06/c_139646693.htmbsh_bid=5578304205"
X Link 2021-01-07T05:32Z 162.2K followers, [--] engagements

"Interesting piece by Houze Song at MacroPolo. He thinks [----] GDP growth will be around 5% as Beijing focuses on getting risks under control and does little to boost economic activity. That is 1-2 percentage points lower than my expectation and way below everyone else's. 1/ My take on how Chinese economy will going to perform in [----] @MacroPoloChina . The main theme is that [----] growth will be shaped by policy tightening vs consumption recovery. https://t.co/1b1X7nynO6 1/ My take on how Chinese economy will going to perform in [----] @MacroPoloChina . The main theme is that [----] growth will be"
X Link 2021-01-19T21:04Z 162.2K followers, [--] engagements

"4/5 burden and they can only do that by restraining the growth in public-sector and real-estate investment. Industrial metals are perhaps an inverse proxy for rebalancing: the more balanced Chinese growth the less upward pressure on prices. If GDP growth this year"
X Link 2021-02-21T03:15Z 162K followers, [--] engagements

"Beijing takes further steps to encourage capital outflows this time as part of multinationals' liquidity management. This is going to make it harder to control outflows if they ever become a problem (and at some point they probably will). https://www.caixinglobal.com/2021-03-13/china-trials-greater-flexibility-for-multinationals-currency-conversion-101675017.html https://www.caixinglobal.com/2021-03-13/china-trials-greater-flexibility-for-multinationals-currency-conversion-101675017.html"
X Link 2021-03-16T09:56Z 162.1K followers, [--] engagements

"2/5 But it does indeed matter beyond some level a higher debt burden can raise real costs for the economy increase volatility and reduce balance-sheet flexibility. But because I think the global economy is demand constrained and not supply constrained I am less worried"
X Link 2021-04-05T05:52Z 162.2K followers, [--] engagements

"1/11 This is definitely the right way to think about it: someone will have to absorb Huarong's huge balance-sheet losses and what mostly matters is who that someone is. This is ultimately a political question not a financial or legal one. RT @BW: Someone has to take big losses on Chinas Huarong. Will it be foreign or domestic investors https://t.co/2yQRDjdNTR RT @BW: Someone has to take big losses on Chinas Huarong. Will it be foreign or domestic investors https://t.co/2yQRDjdNTR"
X Link 2021-04-21T04:30Z 162K followers, [---] engagements

"1/3 "If the gamble doesnt work these countries will be saddled with some of the worlds highest debt ratios potentially destabilizing the eurozone." Given their very high unemployment and terrible infrastructure Italy Spain and Greece have almost. https://www.wsj.com/articles/bidenomics-takes-root-in-europes-economically-fragile-south-11620039617st=ey7b6uqkjfjrvp1&reflink=mobilewebshare_twitter https://www.wsj.com/articles/bidenomics-takes-root-in-europes-economically-fragile-south-11620039617st=ey7b6uqkjfjrvp1&reflink=mobilewebshare_twitter"
X Link 2021-05-04T06:39Z 162.1K followers, [---] engagements

"1/3 Beijing sends another signal that property tax reform Is on the agenda.and apparently has been given the name "Godot". It is hard to imagine that a property tax that meaningfully raises the carrying cost of apartments especially those owned. https://www.caixinglobal.com/2021-05-12/beijing-sends-another-signal-that-property-tax-reform-is-on-the-agenda-101710555.html https://www.caixinglobal.com/2021-05-12/beijing-sends-another-signal-that-property-tax-reform-is-on-the-agenda-101710555.html"
X Link 2021-05-13T16:00Z 162K followers, [--] engagements

"2/3 for speculative or "investment" reasons many of which are empty won't also put huge downward pressure both on rent and on real estate prices. If regulators think that there is some level of property tax that is just high enough to discourage speculation but not so high"
X Link 2021-05-13T16:00Z 162.1K followers, [--] engagements

"1/4 This story doesn't change much does it Real estate prices in China's [--] largest cities rose month on month by 0.48% in April after rising 0.41% in March. This is an annualized 5.9% for April and 5.5% for the past two months. https://www.bloomberg.com/news/articles/2021-05-17/china-s-home-market-out-of-control-as-prices-climb-further https://www.bloomberg.com/news/articles/2021-05-17/china-s-home-market-out-of-control-as-prices-climb-further"
X Link 2021-05-17T04:29Z 162K followers, [--] engagements

"2/3 Chinas real estate industry has been a pillar of the national economy." That's the point. As long as Beijing wants to maintain unsustainable GDP growth rates (probably anything above 2-3%) it cannot help but rely on property development and infrastructure investment"
X Link 2021-06-11T09:29Z 162.2K followers, [--] engagements

"3/3 to drive growth. The former requires rising real estate prices and both require total debt to rise faster than GDP. That is why after a decade and more of inveighing against speculative real estate buying and rising debt neither has been resolved or will be any time soon"
X Link 2021-06-11T09:29Z 162K followers, [--] engagements

"Beijing wants to internationalize the RMB and its domestic financial markets but it doesnt want the risk of financial instability that comes with it. For now Beijing is removing capital restrictions while continuing to intervene heavily to. https://www.bloomberg.com/news/articles/2021-06-16/china-is-quietly-stepping-up-its-interventions-in-markets https://www.bloomberg.com/news/articles/2021-06-16/china-is-quietly-stepping-up-its-interventions-in-markets"
X Link 2021-06-17T04:41Z 162.1K followers, [--] engagements

".limit domestic volatility including credit risk most importantly but this can only work during good periods of rising markets and financial inflows. When conditions change as they always do Beijing will have to choose between openness and stability"
X Link 2021-06-17T04:41Z 162.1K followers, [--] engagements

"1/3 "China will clamp down on illegal activities in the securities market and promote the high-quality development of the capital market. The targets include effectively curbing the frequent occurrence of major illegal and criminal cases and making. http://en.people.cn/n3/2021/0707/c90000-9869125.html#.YOVGl_vcHlY.twitter http://en.people.cn/n3/2021/0707/c90000-9869125.html#.YOVGl_vcHlY.twitter"
X Link 2021-07-07T06:21Z 162K followers, [--] engagements

"5/6 Unfortunately declining real estate prices are politically very problematic and always bad for the banking system so officials tend quickly to back away from whatever polices they had originally put into place to "stabilize" prices"
X Link 2021-07-28T08:37Z 162.2K followers, [--] engagements

"1/3 Even as there are rising rumors of more monetary easing down the road Chinese regulators insist once again that they will spare no effort to clamp down on the high-risk activity of local financial institutions. There is as I've pointed out. https://www.scmp.com/economy/china-economy/article/3143657/china-vows-crack-down-high-risk-banks-economys-postutm_source=Twitter&utm_medium=share_widget&utm_campaign=3143657 https://www.scmp.com/economy/china-economy/article/3143657/china-vows-crack-down-high-risk-banks-economys-postutm_source=Twitter&utm_medium=share_widget&utm_campaign=3143657"
X Link 2021-08-03T10:46Z 162.2K followers, [--] engagements

"5/8 the major source of wealth accumulation among Chinese households. How do social financial and economic institutions adapt after [--] years of inexorably rising prices during which the belief developed (still strong today) that Beijing will never let real estate prices fall"
X Link 2021-08-06T11:54Z 162.2K followers, [--] engagements

"2/3 But of course with real estate 3-4 times as expensive in China (relative to income) as it is in other major economies it would be pretty hard for it to be otherwise. Only a sharp and sustained fall in property prices relative to income or"
X Link 2021-09-18T05:16Z 162.1K followers, [--] engagements

"3/3 a stock market bubble can resolve that imbalance. Japan in the late 1980s had even higher real estate prices and a truly epic stock market bubble and I think real estate accounted for roughly 65-70% of Japanese savings"
X Link 2021-09-18T05:16Z 162K followers, [--] engagements

"2/6 on viewing US debt incrementally rather than systemically. An important series of papers by @profsufi @AtifRMian and @ludwigstraub have already shown that in the US when rising income inequality causes an increase in the savings of the. https://scholar.harvard.edu/files/straub/files/mss_richsavingglut.pdf https://scholar.harvard.edu/files/straub/files/mss_richsavingglut.pdf"
X Link 2021-09-22T05:05Z 162.1K followers, [--] engagements

"3/6 rich this paradoxically does not lead to more US savings but rather to more US debt among lower income Americans. I argued in my [----] book that this is because US investment is not constrained at all by scarce savings and so more savings cannot result in more investment"
X Link 2021-09-22T05:05Z 162.1K followers, [--] engagements

"1/2 "There are two ideas of government. There are those who believe that if you will only legislate to make the well-to-do prosperous their prosperity will leak through on those below. The democratic idea however has been that if you. via @WSJ https://www.wsj.com/articles/biden-expresses-support-forannual-tax-on-billionaires-unrealized-gains-11632498487st=j8aykmkghrpfa7j&reflink=desktopwebshare_twitter https://www.wsj.com/articles/biden-expresses-support-forannual-tax-on-billionaires-unrealized-gains-11632498487st=j8aykmkghrpfa7j&reflink=desktopwebshare_twitter"
X Link 2021-09-26T11:41Z 162K followers, [--] engagements

"5/5 All of this suggests that we are pretty far from the middle of the boom. I assume for people like Charlie Munger foreign real estate prices only became a problem around the time that mainstream American newspapers first write about it"
X Link 2021-11-05T03:31Z 162.2K followers, [---] engagements

"Still one of my favorite interviews relevant because of the recent publication of the paperback edition of "Trade Wars are Class Wars". https://www.phenomenalworld.org/interviews/trade-wars-are-class-wars/ https://www.phenomenalworld.org/interviews/trade-wars-are-class-wars/"
X Link 2021-11-13T04:22Z 162.1K followers, [---] engagements

"Given how bad US infrastructure is compared to that of most other rich countries and even some poor countries (e.g. China) it's incredible that we're fighting so ferociously over whether or not we should fix our transportation system. via @WSJ https://www.wsj.com/articles/biden-infrastructure-bill-signing-11636997814reflink=mobilewebshare_twitter https://www.wsj.com/articles/biden-infrastructure-bill-signing-11636997814reflink=mobilewebshare_twitter"
X Link 2021-11-16T12:19Z 165.2K followers, [---] engagements

"1/7 Good Al Jazeera piece on the Chinese property market with lots of CBB data: "Bank credit is being rolled out to property firms at a higher level than in any period during the second or third quarters according to. via @AJEnglish https://aje.io/gk8934 https://aje.io/gk8934"
X Link 2021-12-01T05:49Z 161.9K followers, [---] engagements

"4/7 I am surprised this is allowed but I guess local governments have little choice if they can't otherwise sell enough land to meet revenues needs. But this represent a doubling down on the property sector"
X Link 2021-12-04T04:10Z 162.1K followers, [---] engagements

"5/7 Why Because if the property market revives and prices continue to rise the LGFVs can then sell the land on and make a profit. But if the property sector doesn't revive the LGFVs will be sitting on losses on which local governments will have to make good"
X Link 2021-12-04T04:10Z 162.1K followers, [---] engagements

"6/7 It is structures like these that make it so hard to deflate the property bubble. By making it ever more costly they increase opposition to policies that might lead to a much-needed adjustment in the property market"
X Link 2021-12-04T04:10Z 162.1K followers, [---] engagements

"9/10 It is inevitable in other words that the sector becomes financially overexposed to any volatility in asset prices let alone to a sustained reversal"
X Link 2021-12-15T14:09Z 162.2K followers, [--] engagements

""Chinas central bank is encouraging financial institutions to fund mergers and acquisitions in the property industry in the hope of defusing risks said an official citing a recently issued regulatory notice." https://www.caixinglobal.com/2021-12-31/pboc-urges-financial-institutions-to-fund-property-sector-asset-buyouts-101824765.html https://www.caixinglobal.com/2021-12-31/pboc-urges-financial-institutions-to-fund-property-sector-asset-buyouts-101824765.html"
X Link 2022-01-02T10:19Z 162.1K followers, [--] engagements

"1/3 RMB rose 2.4% against USD this year and more importantly 8.1% against a trade-weighted basket of currencies. In spite of that in [----] China had record exports and record trade surpluses. via @scmpnews https://www.scmp.com/economy/china-economy/article/3161735/chinas-yuan-posts-second-straight-year-gains-against-usutm_source=Twitter&utm_medium=share_widget&utm_campaign=3161735 https://www.scmp.com/economy/china-economy/article/3161735/chinas-yuan-posts-second-straight-year-gains-against-usutm_source=Twitter&utm_medium=share_widget&utm_campaign=3161735"
X Link 2022-01-02T15:03Z 162.1K followers, [---] engagements

"2/3 That just shows as we should have already known that the level of the currency is only one of the many things that matter for trade competitiveness. Wages and interest rates matter just as much"
X Link 2022-01-02T15:03Z 162.1K followers, [--] engagements

"1/2 Yesterday Xiamen a port city in Fujian with a population of 4-5 million announced the upcoming launch of a pilot property-tax program but then suddenly withdrew the announcement without explain why. https://www.caixinglobal.com/2022-01-29/xiamen-announces-pilot-property-tax-then-takes-it-back-101836320.htmlcxg=web&Sfrom=twitter https://www.caixinglobal.com/2022-01-29/xiamen-announces-pilot-property-tax-then-takes-it-back-101836320.htmlcxg=web&Sfrom=twitter"
X Link 2022-01-29T07:11Z 162.1K followers, [--] engagements

"2/2 I suspect that in such an uncertain environment for real-estate prices a meaningful property tax would almost certainly cause prices to drop faster than the authorities would like to see"
X Link 2022-01-29T07:11Z 162K followers, [--] engagements

"In Shanghai mortgages and consumer loans were down 10.4% year on year in January even as real estate prices in the city continue to rise. As a result it seems that Shanghai banks will loosen loan restrictions to get credit to grow again. via @scmpnews https://www.scmp.com/business/banking-finance/article/3169497/shanghai-homebuyers-looking-capitalise-eased-creditutm_source=Twitter&utm_medium=share_widget&utm_campaign=3169497"
X Link 2022-03-07T05:23Z 162.1K followers, [--] engagements

"1/2 In practice there is no difference between the MoF borrowing RMB [--] trillion from the PBoC or the PBoC "handing over" RMB [--] trillion of its profits to the MoF. In either case the money supply expands by RMB [--] trillion and FX reserves remain unchanged. https://www.caixinglobal.com/2022-03-09/caixin-explains-why-chinas-central-bank-is-handing-over-1-trillion-yuan-to-treasury-101853373.htmlcxg=web&Sfrom=twitter https://www.caixinglobal.com/2022-03-09/caixin-explains-why-chinas-central-bank-is-handing-over-1-trillion-yuan-to-treasury-101853373.htmlcxg=web&Sfrom=twitter"
X Link 2022-03-10T05:41Z 162K followers, [--] engagements

"1/2 Robin Harding makes an important point here. The real alternative to the global dollar is not a global euro a global RMB or even (unfortunately) a global bancor. It is a fragmented global currency and trading system. https://www.ft.com/content/601786bd-6d11-47ca-8c8b-02072c15d955 https://www.ft.com/content/601786bd-6d11-47ca-8c8b-02072c15d955"
X Link 2022-03-11T05:33Z 172.5K followers, [---] engagements

"2/2 We've seen this before and it isn't really about encouraging sales with gift-giving so much as about lowering real-estate prices without reducing the list price which may trigger government restrictions or anger older buyers. We'll see a lot more of this in the next year"
X Link 2022-03-20T13:23Z 162.1K followers, [--] engagements

"1/4 This is interesting. Evergrande has just "discovered" that RMB [--] billion in pledged deposits have been seized by banks. Depending on how this is treated by the authorities it could have an adverse impact on the way insolvency occurs within China. https://www.caixinglobal.com/2022-03-23/evergrande-unit-discovers-21-billion-in-cash-was-seized-by-banks-101859658.html https://www.caixinglobal.com/2022-03-23/evergrande-unit-discovers-21-billion-in-cash-was-seized-by-banks-101859658.html"
X Link 2022-03-23T08:12Z 162.1K followers, [---] engagements

"3/5 If that's the case it suggests that Beijing is slowly and laboriously moving away from the development model of the past decade in which significant amounts of non-productive investment allowed China to meet excessively high GDP growth targets"
X Link 2022-04-01T07:36Z 162K followers, [--] engagements

"1/4 It's worth noting that this is a form of capital control that might reduce unwanted capital inflows into Canada. I don't know how effective it will be in controlling soaring real estate prices but it might help at the margin at little cost to Canada. https://www.scmp.com/business/article/3173326/canada-prepares-ban-most-foreigners-buying-homes-two-years-control-soaringutm_source=Twitter&utm_medium=share_widget&utm_campaign=3173326"
X Link 2022-04-09T05:24Z 162K followers, [---] engagements

"2/4 Some people might argue that Canada will be worse off because Canadian real estate owners will lose out on potential further price appreciation but it must be remembered that rising real estate prices do not make Canadians richer"
X Link 2022-04-09T05:24Z 162.1K followers, [--] engagements

"3/4 Canadians are collectively richer only when there's an increase in the total amount of goods and services they produce. Because higher real estate prices do not increase productivity (and may actually reduce it) higher real estate prices are just an internal wealth transfer"
X Link 2022-04-09T05:24Z 162K followers, [---] engagements

"1/2 Several readers have responded that other things affect volatility in the financial system and while clearly some of them do Minsky's point (and mine) has to do with the ways in which financial systems must automatically adjust to changes in underlying volatility"
X Link 2022-04-11T16:10Z 162K followers, [--] engagements

"2/2 For example in a market in which say real estate prices have risen steadily for 10-20 years businesses that implicitly make speculative bets on real estate will be more profitable than and will eventually displace those that don't. This is how the whole system adjusts"
X Link 2022-04-11T16:10Z 162K followers, [--] engagements

"2/7 The article tells of a family in an enviable financial position just a few years ago when real estate prices were soaring. They had a good income and their mountain of debt was easily managed as long as the value of the real estate backing it continued to soar"
X Link 2022-04-19T06:19Z 162.2K followers, [--] engagements

"2/2 But soaring real estate prices mean that some people are clearly wealthier which just means that there has been a wealth transfer within the economy from those who are effectively "short" real estate to those who are long"
X Link 2022-05-01T14:22Z 162K followers, [---] engagements

"10/10 But Germany has no choice as Mnchau also points out. These mercantilist policies are unsustainable. Large persistent surpluses require rising income inequality to keep wages low and maintain high savings rates and these in turn undermine the financial system"
X Link 2022-05-15T03:53Z 162.1K followers, [---] engagements

"1/2 This is pretty worrying: "With so many buyers competing for so few available properties home prices in the U.S. rose 18.8% last year." via @WSJ https://www.wsj.com/articles/the-fed-searches-for-the-magic-number-to-cool-a-red-hot-u-s-housing-market-11653402996st=wxhz9mti4zo9bs8 https://www.wsj.com/articles/the-fed-searches-for-the-magic-number-to-cool-a-red-hot-u-s-housing-market-11653402996st=wxhz9mti4zo9bs8"
X Link 2022-05-26T04:18Z 162.2K followers, [---] engagements

"8/10 Something similar happened in Chinese real estate. In the 1980s/1990s real estate prices rose year after year for good fundamental reasons. These rising prices reflected real increases in productivity and helped the economy allocate real estate to its most productive use"
X Link 2022-06-03T10:24Z 162.2K followers, [---] engagements

"2/7 While inflation can certainly be a constraint on the demand-side policy stimulus typical of the US it is not a constraint on the supply-side policy stimulus typical of China. On the contrary in China low inflation is mainly a consequence of its supply-side stimulus"
X Link 2022-06-17T09:34Z 162K followers, [--] engagements

"2/3 By lowering the cost of imports cutting tariffs would increase demand for and hence the price of other goods and services. Inflation is caused by an imbalance between demand and supply. Tariffs will shift demand around a bit but they don't affect the overall imbalance"
X Link 2022-07-03T07:02Z 162.1K followers, [--] engagements

"3/3 For all the bluster with which they were proposed tariffs had no impact at all on the American trade balance and that's also why their removal will have no affect on overall prices"
X Link 2022-07-03T07:02Z 162.2K followers, [---] engagements

"1/4 A weaker yen boosts growth in the short term by subsidizing exports but because households who are net importers ultimately pay for that subsidy it reduces growth in the long term by undermining the much-needed rebalancing towards domestic demand. https://www.ft.com/content/136af78b-dee2-446f-8ba8-21d25ce74ff8 https://www.ft.com/content/136af78b-dee2-446f-8ba8-21d25ce74ff8"
X Link 2022-07-04T12:25Z 162.1K followers, [---] engagements

"Japanese yen real effective exchange rate. [----] = 100"
X Link 2022-07-04T15:07Z 162.1K followers, [--] engagements

"2/2 In fact in every province in which the property bubble is starting to deflate we will "discover" that expectations of ever-rising real-estate prices had underpinned an enormous amount of very risky borrowing. This has happened in every real-estate bubble in history"
X Link 2022-07-14T09:06Z 162.2K followers, [--] engagements

"2/5 For me the more important story continues to be the deterioration in the quality of growth. For the first half of [----] GDP growth was up 2.5% year on year while retail sales a proxy for consumption was down 0.7%. Clearly the consumption share of GDP is still dropping"
X Link 2022-07-15T04:43Z 162.1K followers, [--] engagements

"3/5 Fixed asset investment on the other hand was up 6.1% in the first half of the year driven by a 7.1% rise in infrastructure (real estate investment not surprisingly was down 5.4%)"
X Link 2022-07-15T04:43Z 162.2K followers, [--] engagements

"5/8 That would be a good thing overall for the economy all other things being equal but will all other things be equal Given the incredibly low rental yields If property owners now expect a return on their property either rents must surge or real estate prices must drop"
X Link 2022-07-25T07:30Z 162.2K followers, [--] engagements

"6/8 The rental yield would have to rise in other words but if in fact rents decline with all the new apartments coming onto the rental market it seems to me that this will just put even more downward pressure on real estate prices"
X Link 2022-07-25T07:30Z 162.2K followers, [--] engagements

"1/3 Good Yicai summary of NBS report on property: "Some [----] million square meters of residential property were sold last month down from [-----] million in June. The value of sales slumped [--] percent to CNY969.1 billion." https://www.yicaiglobal.com/news/china-property-market-rebound-falters-as-home-sales-halve-in-july https://www.yicaiglobal.com/news/china-property-market-rebound-falters-as-home-sales-halve-in-july"
X Link 2022-08-16T03:46Z 162K followers, [--] engagements

"@Brad_Setser That seems to be the case. It is also consistent with what seems like Xi's centralizing tendencies. The thing is that while local government budgets have been squeezed in the past two years they still own a lot of assets that can eventually be used to fund transfers"
X Link 2022-10-11T04:14Z 180.1K followers, [--] engagements

"7/7 In that case defending globalization and strengthening its existing institutions will only make things worse not better and will lead ultimately to an even more disruptive deglobalization process. We should instead accelerate its reform"
X Link 2022-11-02T05:39Z 179.2K followers, [---] engagements

"1/2 The world of "crypto" seems to use the word "liquidity" very differently from the world of finance. In finance "liquidity" refers to the ease with which assets can be converted to cash at something near the present value of future earnings. https://www.ft.com/content/3dadaed2-f959-482e-8897-1a40803de5ae https://www.ft.com/content/3dadaed2-f959-482e-8897-1a40803de5ae"
X Link 2022-11-10T06:16Z 164.4K followers, [---] engagements

"9/9 This has never happened before in other countries that followed this growth model probably because the needed transfers were politically too difficult to pull off but without them I expect China's sustainable GDP growth rate China to be less than 2-3%"
X Link 2022-11-24T05:46Z 162.1K followers, [---] engagements

""Its important that Americans know the truth. Seven Fed rate hikes in just nine months have barely dented corporate power to raise prices and profit margins." @RBReich https://open.substack.com/pub/robertreich/p/the-fed-is-deadutm_campaign=post&utm_medium=web https://open.substack.com/pub/robertreich/p/the-fed-is-deadutm_campaign=post&utm_medium=web"
X Link 2022-12-14T10:49Z 162.1K followers, [---] engagements

"1/7 What should we expect in [----] According to Caixin: "In the first [--] months of [----] domestic consumptions contribution to GDP growth was 52.4% sliding from 57.2% in [----] before the pandemic." https://www.caixinglobal.com/2023-01-02/cover-story-chinas-road-to-economic-recovery-faces-post-covid-speed-bumps-101984470.htmlcxg=web&Sfrom=twitter https://www.caixinglobal.com/2023-01-02/cover-story-chinas-road-to-economic-recovery-faces-post-covid-speed-bumps-101984470.htmlcxg=web&Sfrom=twitter"
X Link 2023-01-02T04:06Z 162.2K followers, 37.5K engagements

"2/2 Yes but the former represents nominal GDP growth whereas the latter real GDP growth so these numbers are not at all inconsistent"
X Link 2023-01-02T05:18Z 162K followers, 14.5K engagements

"2/2 .net capital inflows it's very hard to see how a group of countries with large structural trade surpluses and excess domestic savings can form their own trading bloc around the use of their own currencies. Who will absorb their excess savings https://x.com/michaelxpettis/status/1610491460067168262 https://x.com/michaelxpettis/status/1610491460067168262"
X Link 2023-01-04T09:13Z 166.4K followers, 21.4K engagements

"8/9 This debate isn't going away. I expect to hear a lot this year about the need to stabilize debt. But those most worried about surging debt will seem to have the upper hand only because much of this year's GDP growth will consist of "high quality" growth"
X Link 2023-01-05T05:06Z 162.2K followers, 11.5K engagements

"9/9 Once we've absorbed the impact of a partial reversal of last year's contraction in consumption however China will be stuck with the same old dilemma: should Beijing allow debt to continue rising unsustainably or should it accept GDP growth rates below 2-3%"
X Link 2023-01-05T05:06Z 162.1K followers, 10.9K engagements

""Sales of residential property in China tumbled more than [--] percent last year to a six-year low" while "home sales by value fell nearly [--] percent". This implies that real estate prices dropped by 8% which is higher than the official figures suggest. https://www.yicaiglobal.com/news/china-home-sales-fall-to-six-year-low-in-2022 https://www.yicaiglobal.com/news/china-home-sales-fall-to-six-year-low-in-2022"
X Link 2023-01-18T04:59Z 162K followers, 15.2K engagements

"1/9 There's no question that the property sector must play a "diminished role" in Chinas growth. A 3-decade property bubble has left China with a vastly oversized property sector and perhaps the highest real estate prices in the wold. via @scmpnews https://sc.mp/sx9mutm_source=Twitter&utm_medium=share_widget&utm_campaign=3207594 https://sc.mp/sx9mutm_source=Twitter&utm_medium=share_widget&utm_campaign=3207594"
X Link 2023-01-22T05:02Z 162.2K followers, 55.9K engagements

"8/9 That is why if it wants to maintain high high enough growth in economic activity to satisfy political and employment needs Beijing cannot allow enough of a property-sector contraction to clean up the mess too quickly. It must try to stretch out the process"
X Link 2023-01-22T05:02Z 162.1K followers, 11.8K engagements

"2/2 Most Latin American policymakers must know this and if they nonetheless support a common currency while they might pretend that its because they need an alternative to the US dollar it's really because they don't trust themselves to manage their own currencies"
X Link 2023-01-22T05:25Z 179.4K followers, 14K engagements

"3/5 The expansion of China's public sector and the corresponding contraction of the private sector has been the inexorable outcome of development policies in which soft-budget constraints must drive a rising share of overall growth"
X Link 2023-01-27T10:09Z 162K followers, [----] engagements

"4/5 If Beijings renewed embrace of the private sector and foreign investors is indeed "consistent with recent high-level policy statements made in Beijing" among other things Beijing will have to give up GDP growth targets that exceed the real underlying growth rate"
X Link 2023-01-27T10:09Z 162.2K followers, [----] engagements

"1/2 I just got back three hours ago from a ten-day trip through London Paris Milan and Malaga. This was my first trip out of China in just over three years and so of course I brought back books:"
X Link 2023-02-10T13:36Z 179.4K followers, 130.4K engagements

"4/4 to accumulate property except in a few areas that aren't already suffering from a collapse in demand With the property sector as overextended as it is and real estate prices still so extraordinarily high I wonder who will participate"
X Link 2023-02-22T05:12Z 162.2K followers, 10.5K engagements

"3/3 The developing-country debt ratio rose by [--] percentage points to 250% led by China Russia Vietnam and Ghana in that order"
X Link 2023-02-23T08:45Z 162.1K followers, 12K engagements

"5/6 In the US monetary easing tends to expand demand whereas in China it expands supply and so in China easing money to fund more supply-side policies will only make the demand imbalance greater and prove more disinflationary"
X Link 2023-04-11T05:03Z 162.1K followers, 12.8K engagements

"1/15 Very interesting article but I think Wolfgang Munchau makes a common mistake in assessing the global dominance of USD. He seems to argue this is about whether or not some other currency can replace USD. https://www.eurointelligence.com/ https://www.eurointelligence.com/"
X Link 2023-04-26T11:12Z 167.3K followers, 300.8K engagements

"Russia won't settle trade with India in rupees because it runs a surplus with India and doesn't want to accumulate rupee claims. What matters is less the currency in which trade is denominated and more the one in which balances are accumulated. https://www.reuters.com/markets/currencies/india-russia-suspend-negotiations-settle-trade-rupees-sources-2023-05-04/ https://www.reuters.com/markets/currencies/india-russia-suspend-negotiations-settle-trade-rupees-sources-2023-05-04/"
X Link 2023-05-05T06:05Z 161.9K followers, 86.8K engagements

"If the government doesnt invest this economy will keep going down so the willingness of sovereign funds to invest is something we have never taken more seriously. https://www.ft.com/content/f3d841cf-cc94-4d0c-bd88-69f0a8dde199 https://www.ft.com/content/f3d841cf-cc94-4d0c-bd88-69f0a8dde199"
X Link 2023-05-09T13:07Z 163.5K followers, 37.1K engagements

"2/3 Instead of a "China story" we will have a whole lot of different Chinese stories as is the case by the way in other large economies like the US or the EU. Some sectors of the Chinese economy and some regions will continue to grow while others will slow sharply"
X Link 2023-05-30T10:30Z 152.2K followers, 18.2K engagements

"3/3 The "China story" in fact ended years ago but the eventual adjustment was postponed by surging debt. Once Beijing decides or is forced to control debt I expect GDP growth to slow to below 2-3%. The important point is that this slowdown will be very unevenly distributed"
X Link 2023-05-30T10:30Z 152.2K followers, 24.6K engagements

"7/7 That is why if we really want to address surging debt in the US we must reverse the policies that led to rising income inequality and we must limit the ability of foreigners to dump excess savings into the US. Debt limits are just a measure of legislative incompetence"
X Link 2023-06-03T05:14Z 140.7K followers, 18.6K engagements

""It is sensible to avoid 'following the old path' of mainly stimulating infrastructure investment and the property market which can stabilize the economy over the short term but could have long-term side effects of impeding economic restructuring.""
X Link 2023-06-22T01:43Z 143.3K followers, [--] engagements

"7/7 The PBoC is in effect lending RMB to a very risky borrower as a way to get it to trade in RMB. This is certainly one way to increase RMB usage internationally but it may turn out to be a very expensive way and perhaps not sustainable"
X Link 2023-06-28T15:52Z 138.8K followers, 25.2K engagements

""At least [--] countries owe China debts that exceed 10% of their total external debt. China is the largest bilateral creditor in many countries under the Debt Service Suspension Initiative framework with a median share of 54%.""
X Link 2023-06-27T19:19Z 139.3K followers, 27.7K engagements

"1/8 This article notes that "Germanys reliance on production and exports is unusual among large developed economies making it look more like China the worlds workshop than an average European nation." via @WSJ"
X Link 2023-06-28T13:24Z 143.3K followers, 191.1K engagements

""Less than 1% of customers appear to be driving almost two-fifthsof sales in Chinas biggest luxury malls." While luxury brands trade at all-time highs this is a terrible vulnerability. In a slowing economy displaying wealth will become unacceptable"
X Link 2023-06-26T08:22Z 143.3K followers, [---] engagements

"So far this year the RMB has declined 2.2% against the CFETS basket of currencies. With the inflation differential real depreciation has been around 3-4%. China is weakening domestic demand in exchange for a larger trade surplus"
X Link 2023-06-27T03:18Z 143.3K followers, 14.5K engagements

"This is a little bizarre. The idea that higher spending on pop concerts is inflationary makes sense only if concertgoers have no budget constraints. Otherwise higher spending on pop concerts means less spending on other goods and services"
X Link 2023-06-27T04:27Z 143.3K followers, [---] engagements

"1/3 According to Zhou Xiaochuan "Some creditors including China argue that the debt crisis can be alleviated by interest rate cuts or maturity extension rather than direct reduction of the principal.""
X Link 2023-06-28T04:57Z 143.3K followers, 49.4K engagements

"1/6 I don't think it is correct to argue that Biden's industrial policies are "bulking up deficits". This might have been true [---] years ago when US investment was constrained by domestic savings and net foreign inflows. via @WSJ"
X Link 2023-06-28T14:08Z 143.4K followers, 66.5K engagements

"2/2 A weak currency may drive up import prices but it also reduces domestic demand and so what matters is which impact is greater. In Japan it is probably the latter"
X Link 2023-06-28T10:42Z 177.1K followers, [----] engagements

"5/9 There is no way in other words that investment can retain anywhere near that share of GDP if it dropped by [--] percentage points China would still be among the highest investing countries in the world"
X Link 2023-06-30T03:16Z 140.6K followers, [----] engagements

"6/9 But as the share of investment declines by definition the share of consumption must rise as China is far too big for net exports to take up the slack. That means that one way or another consumption in China will grow faster than GDP"
X Link 2023-06-30T03:16Z 143.3K followers, [----] engagements

"7/9 But there are two ways that can happen. A surge in consumption growth perhaps to 7% can drive GDP growth of 4%. Or a sharp drop in GDP growth say to 1-2% can be consistent with consumption growth of 3-4%"
X Link 2023-06-30T03:16Z 143.3K followers, [----] engagements

"8/9 In either case consumption must (and will) lead GDP growth but there are better ways in which that can happen and worse ways. As I see it Liu and Steil rule out the better ways but that just means that China must follow the worse ways"
X Link 2023-06-30T03:16Z 143.4K followers, [----] engagements

"9/9 It is important to understand that rebalancing is not a choice. It is the inevitable adjustment for highly unbalanced economies and the longer it is postponed the more difficult it tends to be. But there are many ways rebalancing can happen"
X Link 2023-06-30T03:25Z 143.3K followers, [----] engagements

""Chinas biggest state banks are offering local government financing vehicles loans with ultra-long maturities and temporary interest relief to prevent a credit crunch amid growing tension in the US$9 trillion debt market." via @scmpnews"
X Link 2023-07-04T05:06Z 141.3K followers, 33.1K engagements

"1/2 "Local governments issued around RMB [---] trillion of bonds in the first six months of this year mostly to repay the principal on maturing debt and to fund major infrastructure projects. Though that represents. https://www.yicaiglobal.com/news/20230704-04-chinas-local-govts-issue-usd6075-billion-of-bonds-in-first-half https://www.yicaiglobal.com/news/20230704-04-chinas-local-govts-issue-usd6075-billion-of-bonds-in-first-half"
X Link 2023-07-05T03:14Z 166.6K followers, 46.2K engagements

"@YanLian31677392 1/2 I am not referring to bilateral imbalances and never do. What drives the US deficit is net capital inflows and so what matter is the extent to which China's excess savings (i.e. the excess of savings over investment) directly or indirectly flow into the US"
X Link 2023-07-09T04:07Z 143.3K followers, [---] engagements

"1/2 "New housing sales fell 28.1% in June against a low comparison base a year earlier. In the first six months new home sales rose 0.2% from the same period last year mainly boosted by the release of pent-up demand in the first quarter." https://www.caixinglobal.com/2023-07-07/chinas-june-new-housing-sales-plunge-281-for-top-builders-102073137.htmlcxg=web&Sfrom=twitter https://www.caixinglobal.com/2023-07-07/chinas-june-new-housing-sales-plunge-281-for-top-builders-102073137.htmlcxg=web&Sfrom=twitter"
X Link 2023-07-07T07:37Z 151.9K followers, 37.9K engagements

"@georgemagnus1 I thought we killed this argument ten years ago when we pointed out that a stronger RMB which the US wants of course means selling Treasuries"
X Link 2023-07-09T05:51Z 143.3K followers, 10.5K engagements

"1/4 "When the tariffs were put in place the focus was on economics and trade policy. Now it's not about that anymore. It's all about national security." The tariffs on China were never going to have a beneficial impact on the US economy. https://www.npr.org/2023/06/27/1184027892/china-tariffs-biden-trump https://www.npr.org/2023/06/27/1184027892/china-tariffs-biden-trump"
X Link 2023-07-09T05:05Z 162.2K followers, 90.7K engagements

"Much discussed although mainly among people who don't seem to understand how currencies work. In ten years I suspect very few people will remember any of this"
X Link 2023-07-09T08:37Z 143.3K followers, 113.3K engagements

""Prioritizing high-quality development Li Qiang said more measures should be taken to transform development patterns adjust economic structure and increase growth drivers." Yes but so far this isn't in any of the proposed policies"
X Link 2023-07-09T16:36Z 143.3K followers, 15.8K engagements

"1/3 Taiwans exports fell 23.4% year on year in June after a 14.1% fall in May. Imports fell even more by 29.9% in June after a decline of 21.7% in May. While external demand is declining sharply domestic demand is declining even faster"
X Link 2023-07-10T01:10Z 143.3K followers, 121.6K engagements

"3/6 And yet he concludes: "Overall though there have been worries and anxieties over China's foreign trade the overall trade situation during the past three years suggests things are still in a good shape.""
X Link 2023-07-10T03:58Z 162.1K followers, [----] engagements

"1/3 "Lou Jiwei ruled out any near-term issuance of special treasury bonds as it would necessitate a slew of investment projects with sufficient return potential for bond repayment." https://www.chinadaily.com.cn/a/202307/10/WS64aad8a7a310bf8a75d6e16c.html https://www.chinadaily.com.cn/a/202307/10/WS64aad8a7a310bf8a75d6e16c.html"
X Link 2023-07-10T04:01Z 165K followers, 28.4K engagements

"3/3 "The Ministry of Finance in a report published on Tuesday urged local governments to make full use of their own resources and policies to resolve implicit debt risks.""
X Link 2023-07-10T04:02Z 162.2K followers, [----] engagements

"2/3 In spite of higher food prices and the weak RMB (and reinforcing its real depreciation) China's inflation data continue to suggest just how weak domestic demand has been. I suppose we'll see this reflected in this week's trade data and next week's retail sales data"
X Link 2023-07-10T04:27Z 152.1K followers, 11.3K engagements

"3/3 I hope analysts don't argue as they usually have that low inflation increases the scope for PBoC monetary easing. It should be obvious by now that China's deflation is the consequence of monetary easing in a system in which easing affects supply more than demand"
X Link 2023-07-10T04:27Z 152.1K followers, 17.5K engagements

"I know its fun to highlight online stupidity and god knows it's easy enough to find but I would point out that among the very wide group of people I know in China in finance business music art and academia this is not even a minority opinion"
X Link 2023-07-10T10:33Z 143.4K followers, 201.4K engagements

""The absence of inflation in China exposes structural problems in the economy after three years of pandemic curbs including deteriorating household balance sheets that have damped consumer spending." via @WSJ"
X Link 2023-07-10T10:09Z 143.3K followers, 25K engagements

"1/12 Richard Koo is right to think in terms of balance sheets. Hyman Minskys great contribution to modern economics was to argue that economics is not just about the asset side of the national balance sheet but was rather about the interaction between"
X Link 2023-07-11T09:07Z 143.4K followers, 187.7K engagements

"6/12 The second mistake Koo makes which arises out of the first is that if the problem is that the private sector is paying down debt as he claims his solution is for the government to expand fiscal spending heavily on more infrastructure and other projects to make up for"
X Link 2023-07-11T09:00Z 143.3K followers, [----] engagements

"12/12 This is easier said than done of course because it requires a massive transformation of political business and financial institutions but its the only way China can avoid Japanification"
X Link 2023-07-11T04:25Z 143.3K followers, 15.3K engagements

"Even People's Daily is now saying it: "China's consumer inflation remained flat indicating the still-weak demand and highlighting the necessity for more steps to expand effective demand and boost market confidence.""
X Link 2023-07-11T04:30Z 143.3K followers, 12.4K engagements

""Chinese governments hold an array of assets that could be sold to pay down debt. Is Beijings recent advocacy for re-rating listed state-owned enterprises intended to pave the way for their eventual sales" This is slowly becoming the new consensus"
X Link 2023-07-11T18:36Z 143.3K followers, 71.1K engagements

"5/9 If China won't do this through wealth transfers which is politically very difficult it will have to do it by recognizing and allocating the losses. If it does the latter quickly this too will be politically difficult"
X Link 2023-07-12T23:38Z 140.5K followers, [----] engagements

"To respond to some of the questions I've had China literally has a limited number of paths it can follow and any "solution" must fit within one or more of these paths"
X Link 2023-07-11T16:01Z 143.3K followers, [----] engagements

""Economic operations show that the effective demand is still insufficient said the secretary-general of NIFD. The increasingly loose monetary policy works to some extent but it is urgent to strengthen the efficiency of active fiscal policies.""
X Link 2023-07-12T04:59Z 143.3K followers, 11K engagements

"5/6 That is where Bidenomics can be very useful. To the extent that it requires direct government support to boost investment in infrastructure and manufacturing the US trade deficit will be balanced by higher investment rather than lower savings"
X Link 2023-07-12T10:48Z 143.3K followers, 12.6K engagements

"6/6 This doesn't solve the problem of the US deficit which still reduces domestic demand as trade partners externalize the cost of manufacturing subsidies that suppress domestic demand but at least it allows the deficits to have a less toxic impact on the US economy"
X Link 2023-07-12T10:48Z 140.3K followers, 10.7K engagements

"2/2 the most selective in Chinese universities with a career as architect the top choice for Chinese students. Within a few years architecture had fallen out of the rankings altogether and its graduates indicated the highest dissatisfaction with their incomes and lifestyles"
X Link 2023-07-12T16:12Z 140.8K followers, [----] engagements

"1/3 The "long-awaited real estate market stabilization policy" unveiled this week known as "the fourth arrow" seems mainly to be an extension of maturing real-estate loans to the end of 2024"
X Link 2023-07-13T14:00Z 143.3K followers, 36.9K engagements

"2/3 According to this article to resolve the real estate problem the markets need to bring prices down slowly improve sales significantly increase the strength of cash flow returns and reduce inventory gradually"
X Link 2023-07-13T14:00Z 143.3K followers, [----] engagements

"@berthofmanecon @Noahpinion @vshih2 1/2 I disagree Bert. Forcing depositors to pay means exacerbating the demand imbalances by transferring income from households to real estate developers and local governments. That's what they did to clean up the banks in the 2000s and during that time household consumption"
X Link 2023-07-13T14:00Z 143.4K followers, [----] engagements

"The share of Chinas exports to the advanced economies and to southeast Asia is falling while the share of exports to Russia and to developing economies in Latin America the Middle East and Africa is rising. via @WSJ"
X Link 2023-07-18T00:28Z 143.3K followers, 14.4K engagements

"1/5 We shouldn't be surprised that measure after measure to stabilize and revive the property market has failed. In a highly speculative market what drives buying is mainly expectations of continued price appreciation"
X Link 2023-07-14T07:27Z 143.3K followers, 139.1K engagements

"1/8 Rising US debt is indeed a problem but the way to resolve it isn't by cutting back on government spending and it certainly isn't by cutting back on government investment. The real way to resolve it is by reversing income inequality"
X Link 2023-07-29T10:37Z 141.1K followers, 191.6K engagements

"Good news. Zhejiang (one of China's richest provinces) is lifting all hukou restrictions except for capital city Hangzhou. I hope it lifts restrictions on Hangzhou soon although we may get some sense of the consequences by watching Ningbo and Wenzhou"
X Link 2023-07-18T08:57Z 143.3K followers, 95.2K engagements

"1/2 "The PBOCs rate cuts suggest Chinese policymakers are becoming increasingly concerned about a recovery thats losing steam and see a need for more monetary easing to lift market expectations." https://www.caixinglobal.com/2023-07-19/china-needs-more-than-monetary-stimulus-to-bolster-flagging-economy-analysts-say-102077406.htmlcxg=web&Sfrom=twitter https://www.caixinglobal.com/2023-07-19/china-needs-more-than-monetary-stimulus-to-bolster-flagging-economy-analysts-say-102077406.htmlcxg=web&Sfrom=twitter"
X Link 2023-07-19T14:03Z 152.1K followers, 32.5K engagements

""The Biden administrations attempt to surgically cut economic ties with China is proving difficult to execute." No surprise. The current account is the obverse of the capital account. You can't restructure the former without restructuring the latter"
X Link 2023-07-21T19:32Z 143.3K followers, 39.1K engagements

"4/9 as the cleaning up of the banking system accomplished mainly by forcing losses onto the household sector through highly repressed interest rates pushed its savings rate to surreally high levels and with it its consumption rate to surreally low levels"
X Link 2023-07-22T08:35Z 152.2K followers, [----] engagements

"5/9 China had to bring down its investment rates as a rising share was directed into non-productive property and infrastructure investment but because of its extremely low consumption rate it couldn't bring down investment while still maintaining high GDP growth targets"
X Link 2023-07-22T08:35Z 152.2K followers, [----] engagements

"6/9 This by the way is what also happened to nearly every other country that followed a similar growth model although none ever did so to quite the same extremes as China did. That's why it should have been clear a decade ago that as long as China maintained excessively"
X Link 2023-07-22T08:35Z 152.2K followers, [----] engagements

"7/9 high GDP growth targets not only would debt grow unsustainably but a rising share of economic activity would shift from the hard budget constrained sectors of the economy (i.e the private sector) to the soft budget constrained sectors (mainly local governments and SOEs)"
X Link 2023-07-22T08:35Z 152.2K followers, [----] engagements

"8/9 The relative decline of the private sector in other words is not the cause of China's slowdown as many analysts claim but is rather the consequence of the combination of deep demand imbalances and excessively high GDP growth targets"
X Link 2023-07-22T08:35Z 152.2K followers, 14.5K engagements

"Guangdong Jiangsu Shandong Zhejiang Henan and Sichuan with the six largest provincial GDPs in China (representing 45% of China's total GDP) saw year-on-year growth in the first half of [----] of 5.6% https://www.yicaiglobal.com/news/chinas-zhejiang-jiangsu-and-shandong-log-over-6-gdp-growth-in-first-half https://www.yicaiglobal.com/news/chinas-zhejiang-jiangsu-and-shandong-log-over-6-gdp-growth-in-first-half"
X Link 2023-07-25T03:17Z 151.9K followers, 50.1K engagements

"1/2 I think the FT is right. Beijing has listed all the things it wants to fix including consumption but in most cases without proposing how it will actually fix them. I suspect there is still a lot of disagreement among policymakers over what to do. https://www.ft.com/content/0467e111-a6c0-4eac-a28d-61652e6bd119 https://www.ft.com/content/0467e111-a6c0-4eac-a28d-61652e6bd119"
X Link 2023-07-25T04:35Z 162K followers, 131.4K engagements

"9/10 If Beijing were to assume local-government debt the total financing cost for each project would of course be lower but that wouldn't benefit the Chinese economy. The same losses would still be absorbed by the economy just by a different entity"
X Link 2023-07-31T06:42Z 143.4K followers, [----] engagements

"10/10 Over the next few years we'll hear many proposals to "resolve" the problem of years of non-productive investment by lowering the debt-servicing costs. Eventually we'll realize that these don't reduce the losses. They merely shift the losses to other parts of the economy"
X Link 2023-07-31T06:42Z 143.3K followers, 10.9K engagements

"8/8 consumption will play a greater role in the economy is if there is an increase in the relative share ordinary households retain of China's GDP. Of course that requires a reduction in the government share and that's what makes it so difficult to implement"
X Link 2023-07-31T10:49Z 143.3K followers, [----] engagements

"3/4 That's more than a little unfair. In a non-transparent market with limited and questionable macroeconomic information low quality financial statements weak corporate governance an unpredictable regulatory framework regular currency interest-rate and credit"
X Link 2023-07-31T14:55Z 143.3K followers, [----] engagements

"1/3 Good piece by @nate_taplin. He argues that China is facing real structural difficulties not a temporary downturn in which case "rhetorical support for entrepreneurs and consumers may not be enough to turn things around.""
X Link 2023-08-01T07:59Z 143.3K followers, 217K engagements

""The PBoC pledged to step up mortgage easing to support homebuyers signaling further efforts to bolster the ailing property market vowing to implement precise and differentiated housing credit policies based on the specific conditions of each city.""
X Link 2023-08-02T06:04Z 143.3K followers, 13K engagements

""The BIS estimated that by the end of last year Chinese household debt reached [----] per cent of its economic output compared to [----] per cent for the average of emerging economies and [----] per cent in the United States and [----] per cent in Japan." https://sc.mp/g9ucutm_source=Twitter&utm_medium=share_widget&utm_campaign=3229755 https://sc.mp/g9ucutm_source=Twitter&utm_medium=share_widget&utm_campaign=3229755"
X Link 2023-08-03T05:52Z 162.1K followers, 18.6K engagements

"1/5 "Many companies realize how difficult it is to wean themselves off of the incredibly competitive Chinese production and logistics ecosystems." This is why for all the talk of offshoring China's global share of manufacturing is unlikely to decline"
X Link 2023-08-03T06:30Z 143.3K followers, 55.2K engagements

"1/5 Good article. Hancock notes that "The optimistic vision pushed by some government-linked economists is that the strength of so-called new economy sectors can make up for propertys decline." via @BW"
X Link 2023-08-03T08:40Z 143.3K followers, 50.7K engagements

"1/6 "Companies have joined the scramble into long-term CDs adding to the drag on China's economy as it effectively means both businesses and households are hoarding cash rather than investing it despite lower interest rates.""
X Link 2023-08-04T05:48Z 143.3K followers, 19.4K engagements

"15/15 I wrote an essay in [----] which explains why the problems now facing the Chinese economy were inevitable long before the COVID-related "intrusions" happened. It was published by Carnegie two years later"
X Link 2023-08-04T10:00Z 143.3K followers, 25.2K engagements

"1/2 "Nearly [-----] scientists of Chinese descent have left for other countries including China (two-thirds)." We're sending thousands of our best scientists to China. It would be hard to come up with a dumber set of policies"
X Link 2023-08-05T04:57Z 143.3K followers, 95.1K engagements

"1/5 For those who think that China's rapid development in the 1990s and 2000s was driven mainly by the unleashing of the private sector and not by active government intervention here is what Wu Jinglian has to say in this piece on Ryutaro Komiya:"
X Link 2023-08-05T06:19Z 143.3K followers, 176.4K engagements

"As a music fanatic this article made me shudder. I guess the good news is that whenever popular music gets this sentimental bloated and overproduced there's usually a Little Richard waiting somewhere in the wings ready to smash things up"
X Link 2023-08-05T09:08Z 143.3K followers, [----] engagements

"Good piece by @hofunghung arguing correctly in my opinion that "It would be wrong to think that external factors have radically altered Chinas prospects. Rather the countrys gradual decline started more than a decade ago." https://newleftreview.org/sidecar/posts/zombie-economy https://newleftreview.org/sidecar/posts/zombie-economy"
X Link 2023-08-06T03:28Z 162.2K followers, 268.7K engagements

"3/7 Among other things debt-servicing costs will be maximized precisely when the economy is doing worst and minimized when it is doing best. The consequence is automatically to make an economy that probably already suffers from excess volatility even more volatile"
X Link 2023-08-06T09:12Z 138.9K followers, [----] engagements

"4/7 Because volatility itself creates financial distress costs which include disincentives for investment erratic politics labor conflicts weak spending foreign currency hoarding and so on inverted balance sheets worsen the economic outlook for developing economies"
X Link 2023-08-06T09:12Z 143.4K followers, [----] engagements

"8/10 It seems to me that unlike in China investment in India is savings constrained in which case policies that force up domestic savings can boost growth as long as additional savings are directed into domestic investment and not into foreign purchases by wealthy Indians"
X Link 2023-08-06T14:19Z 138.8K followers, [----] engagements

"9/10 This by the way is basically what China did in the 1990s and early 2000s: an undervalued RMB repressed interest rates and other implicit or explicit transfers forced up savings that were collected into a highly controlled and investment-friendly financial system"
X Link 2023-08-06T14:19Z 162.2K followers, 12K engagements

""That has revived stark divisions between northern and southern European countries with a hawkish group led by Germany demanding automatic limits and others including France advocating flexibility." via @economics"
X Link 2023-08-07T05:27Z 143.3K followers, 13.6K engagements

"2/3 manageable debt and growing working populations versus the rest. As this article notes for example "Jiangsu and Zhejiang where Guandan first evolved arent immune to sluggish consumer spending a shaky property market and towering local government debt but they are"
X Link 2023-08-07T05:43Z 143.3K followers, [---] engagements

"The problem is overcapacity more than regulations: "An auto analyst at Bernstein estimates China now has the overall capacity to make close to 40mn vehicles a year and rising but there is domestic demand for just 20mn to 25mn.""
X Link 2023-08-07T05:49Z 143.3K followers, 47.5K engagements

"@Noahpinion @KiarostamiBeing Thanks Noah although I'm not sure what Ws are"
X Link 2023-08-07T09:58Z 143.3K followers, [----] engagements

""A decade of 'money printing' fiscal stimulus and low interest rates 'is in retreat'. Private equity firms will be forced 'to go back to investing in the old-fashioned way. Theyll actually have to be very good investors.'""
X Link 2023-08-07T10:23Z 143.3K followers, [---] engagements

"1/2 According to this article American businesses may be redirecting a rising portion of their earnings from savings (e.g. stock buybacks) to investment (productive capacity). If this continues it should result in higher and more sustainable growth"
X Link 2023-08-07T16:37Z 139.1K followers, 80K engagements

"1/3 "Low inflation is driving up real or inflation-adjusted interest rates in the economy pushing up businesses debt-servicing costs and undermining the central banks pledge to spur lending." That's true but it's not the whole story. via @economics"
X Link 2023-08-08T05:45Z 143.3K followers, 39.1K engagements

"1/3 Is China finally in deflation "China's consumer prices fell in July for the first time since February 2021" says China Daily "while factory-gate prices declined at a slower pace." But that's not really the way I see it"
X Link 2023-08-09T05:04Z 143.4K followers, 15.2K engagements

"2/3 I'd say that China was in CPI deflation (that forbidden word) for most of this year but that in July for the first time since February the CPI index actually rose. This doesn't prove that deflation is over we will need to see a few more months of increases but it"
X Link 2023-08-09T05:04Z 162.2K followers, [----] engagements

"1/9 While I continue to be very skeptical about China's ability to resolve its debt problems and its domestic demand imbalances and about China's medium- and long-term growth prospects I suspect that near-term pessimism is getting a little out of hand"
X Link 2023-08-09T05:43Z 143.3K followers, 14K engagements

"1/2 In my latest piece for the Carnegie Endowment I argue that rising Chinese debt is the mirror image of rising US debt. In either case distortions in the distribution of income force policymakers to choose between rising debt and rising unemployment"
X Link 2023-08-09T15:20Z 143.3K followers, 43.2K engagements

""Citigroup Inc.s chief China economist Yu Xiangrong estimated that last year some [---] trillion yuan ($700 billion) worth of mortgages in the country 12% of the year-end outstanding total were paid off early." https://www.caixinglobal.com/2023-08-09/in-depth-chinese-banks-balk-at-regulatory-support-for-rate-cuts-to-existing-mortgages-102091565.htmlcxg=web&Sfrom=twitter https://www.caixinglobal.com/2023-08-09/in-depth-chinese-banks-balk-at-regulatory-support-for-rate-cuts-to-existing-mortgages-102091565.htmlcxg=web&Sfrom=twitter"
X Link 2023-08-10T04:43Z 153.3K followers, 23.4K engagements

"1/4 Household savings have definitely risen Adam although the surge in household deposits overstates this increase because there was also a substantial shift among households from riskier forms of savings (e.g. WMPs and home purchases) to plain vanilla bank deposits"
X Link 2023-08-10T13:19Z 140.4K followers, 79.2K engagements

"@topologic_apple This is an ideological myth. Hard currencies and "market-determined" interest rates have broken many economies perhaps most notoriously Argentina in the late 1990s"
X Link 2023-08-10T13:26Z 143.4K followers, [--] engagements

"1/5 "Many economists worry that a reversal of this centurys boom in trade would carry a heavy economic cost bringing higher prices and lower efficiency." This is such conventional thinking among economists and journalists that very few. via @WSJ"
X Link 2023-08-10T15:29Z 143.3K followers, 48.2K engagements

"1/5 About RMB [--] trillion of implicit obligations of local governments will become explicit obligations of local governments. While this improves the quality of information it doesn't change the systemic cost or risk of the debt at all. via @markets"
X Link 2023-08-11T05:17Z 143.3K followers, 39.2K engagements

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