Yukon Huang: Debunking Myths About China's Economy

Morgan Stanley required a $100 billion bailout-loan from the Federal Reserve less than 10 years ago.

Who are we to deny their prowess? Or anyone else - especially this guy:

---

The Changing Debate Over China’s Economy

...

The Chinese growth model, as I have pointed out many times before, is not radically new. It is based primarily on the growth model developed by Japan in the 20th Century. It involves policies that can be traced at least as far back as the “American System” of the early 19th Century, and it has been implemented in various forms by many different countries around the world during the past 100 or even 200 years. There is, in other words, actually quite a lot that we know and understand about the model, even if many of us seem to have forgotten much of it – including its typical weaknesses, one of the most obvious of which is the tendency for over-investment in the late stages of the miracle-growth period leading to an unsustainable increase in debt.

...

 

valid point, the Morgan Stanley research / forecast was done based largely on China cultural uniqueness, and then incorporate economic data around it.

one of the cultural factors used was the personal (15-19%) and gross savings (~59%) rate in China,
as compared to ~3% and 20%, respectively, in the US​

 

thank you for pointing that out!

that's more incentive for it to get it right, as opposed to WSJ's mere educated guess!


btw, which US Financial behemoth did not get a bailout from the Govt ?

 

you do know that this criticism started in the late 1990s, leading to Gordon Chang's 2000 NYT's best seller
"the coming collapse of the Chinese economy, 10 years tops", no? .

since that time, China has more than doubled its debt to GDP ratio; yet, its economy has continued to grow uninterrupted. in fact,
its GDP has grown 8-fold

according to MS, Chang was looking at China's Debt situation thru American lenses,

US's personal and gross savings rates are ~3% and ~ 20%, respectively.
For China, it's 15-19% an 59%, respectively.
​

Chang assumed that China has the same saving rates as the US.

that said, China's debt situation is problematic, but, based on empirical evidence over the past 18 years,
it's not enough to stop its GDP growth,

 

Could you please highlight where Pettit cites this individual to whom you are referring?

 

What is it that you do and where did you get your degrees from? I seriously doubt you have had the exposure I have had in China. China does many things more advanced than western countries and is attacking poverty at an astounding rate. Unlike the US which has the resources and seems to be moving backwards: http://bbs.clutchfans.net/index.php...reme-poverty-in-the-u-s.287013/#post-11478487

 

ur referring to Gordon Chang, no ?

Gordon Chang has been your run-of-the-mill history / poli sci major-turned- professional commentator/analyst/pundits. there many pundits critical of China out there , but because he has a Chinese-sounding last name, he stands out.

there is a tendency among US media to make him out to be the authority on China, as well as Asia, even tho his
punditry is mere run-of-the mill

 

Could you please highlight where Pettis cites this individual of whom you are referring?

 

Stopping GDP growth and greatly slowing it down are two different things. China isn't so special that it gets around supply and demand.

 

Growing as fast as China did, does come at costs. They have so far been able to spend and legislate their way out it, but that's not a sustainable system. I'm in the middle on China...

 

empirical evidence indicates otherwise; China is is still growing its GDP faster than all the major economies in the world

proof of the pudding is the IMF's recently approval of granting the Chinese currency w
Special Drawing Rights (SDR) on international trade settlements​

what is your point ?

 

400 million Chinese became middle class which is good , but what's great is that they've over half a billion of poor people which means their economic growth is sustainable for decades to come

 

So because it's growing its GDP faster than any other country means it will only get better? Is that was the empirical says? Come on.....

And India has outpaced China at various point these last several years too for empirical evidence....

What goes up, most come down. It's inevitable.

Your basic economic thesis is.... well China has done well the last 18 years when it underwent the largest modernization in history and therefore will continue to do well...... you silly.

 

such intellectually dishonesty.

i know that you know my basic point is that

China has done well the last 40+ years,

Empirical evidence contradicts the convenient / dismissive claim---levied against China over the past 18 year---that it will not be able to sustain its economic growth, due to high level of debt.

Just the facts, during the past 18 years, China's GDP increased 8-fold.​

u r going off tangent, diverting attention away from your less-than-coherent verbiage.

stay on course, the discussion is on the sustainability of the Chinese economic growth train

 

A convenient falsehood; wish that calurker would name / identify "people"

Being bullish on China is no longer an outlier view

https://www.ft.com/content/b0284e7c-092e-11e7-97d1-5e720a26771b​

Admitting you are a bull on China takes bravery. You’ll face a barrage of questions about the country’s draconian capital controls and supposedly "unsustainable leverage" Then there’s the misdirected investment by Beijing and the resulting overcapacity the economy must absorb. However, an increasing number of financial conglomerates, Morgan Stanley, Goldman Sachs, etc., are publicly confessing their bullishness, forecasting a higher-income Chinese economy

in that vein, many global multi-national corp are beefing up their investment in China to increase their economic presence there


As reported by FT, Reuters and other news services:

* GM - More than one-third of the 9.96 million vehicles GM sold globally were delivered to Chinese customers. Profits from Chinese operations, including joint ventures, accounted for about 20 % of GM’s global net income of $9.7 billion.

* Caterpillar Inc - Asia, including China, accounts for 20 % of the heavy equipment maker’s revenue.

* Wal-Mart Stores Inc – The retail giant has 432 stores in China, and has invested in online properties there. CEO Doug McMillon calls China “clearly a strategic market for us.”

* Starbucks – The coffee chain has 2,500 stores in China, will expand to 5,000 by 2020. outgoing CEO Howard Schultz told investors China will one day be a bigger market for Starbucks than the USA..

* Boeing – The Chicago aircraft maker plans to build a “completion” factory in China, anticipating that the country will need 6,800 new jetliners worth $1 trillion over the next 20 years.

*Airbus expects to have 2,000 aircraft operating in China before the end of 2020 as demand continues to rise. In addition, it projects Chinese airlines will need 60-100 A380s over the next five to seven years.​

* Macy’s - It holds a 65 % stake in an online retailing venture with Hong Kong’s Fung Retailing Limited that targets Chinese consumers

​

btw,

the Trump co has applied for licensing/patent protection in China for the mgmt/development of hotels /
golf courses, as well as escort services

https://www.reuters.com/article/us-...s-bet-on-stable-china-relations-idUSKBN1412QB​

 

Oh please. Economists are the Kardashians of academia. One need look no further than Soothsayer Krugman, who so famously proclaimed the internet would be no more useful than the fax machine. They don't have a squat's worth of predictive power. They blather on while thumb-twiddling until the inevitable black swan shows up, then they spend years analyzing why they couldn't see it coming (see GFC-2008).

All the "economic analysis" (i.e. mental masturbation) in the world won't change the fundamental truth governing reality:

How many of the the West's citizens are looking to escape to China? How many of China's citizens are looking to do the opposite?

The foundation is rotted. A toxic house of cards held together via the heavy hand of a brutal, authoritarian government and an ever-flowing spigot of funny money. End of story.

 

​

And? Your argument is merely past economic growth will mean future economic growth. It’s silly.

Nope, you were dishonest as China hasn’t been the fastest growing country every quarter.

China is slowing down, sorry to interject facts.

 

past performance is the best predictor of future performance

it is much more reliable than your parroting of Gordon Chang's argument that
because of its high debt level, China's economy will collapse, which has been proven wrong.

back-pedaling, a far-cry from ur parroting of Gordon Chang's false claim that the China economy will collapse

 

So you think China will never have a serious correction?

Is China's growth slowing? Yes or no?

When has China's debt level been as high as it's been than the last several years?

Who is Gordon Chang again? You keep bringing him up like I am familiar with him? Is that something you do when you don't have an argument?

 

earlier you're back-pedaling, now ur just playing dumb

when has China's gross (personal, private sector, Gov't) savings rate has been as high as it has been the past several years.

FYI, ~60% for China, ~20% for the US​