The Chinese government deliberately discourages domestic demand, sacrificing the living standards of the Chinese people and causing overcapacity. As a result, it became export-oriented and the policy of export dumping was used to disrupt the world trade order. This is a consistent approach of dictators.
They're not taking any u-turn here. Michael has been saying the same thing for two decades. But the CCP hasn't been able to reform. It eventually will have to.
No one with a rational mind would want to lose the huge market of 1.4 billion potential consumers like China and India. People who ignores that reality are making fool of themselves.
@@catinbootsnow4267 Yup that's why China has gotten rid of the USA as its biggest export destination. The result, the GDP gap between China and the USA is narrowing down.
i think they are looking into the future far ahead, imagine they make everything for the world but everything is automated with robots and AI.@@toi_techno
There is no way out of that. To bring people out of poverty, you simply have to raise workers salaries and not only for factory workers, that moves you toward a service economy. China hasn't done that yet except in the developed areas / cities.
@@alexeykulikov2739 are you unfamiliar with English grammar? Them is a pronoun, just like he/him/they or even you/your/it/us/our. Don’t worry, I know it’s hard, but you’ll get there!
He's just parroting standard Western neoliberal capitalist talking points, the latest of which being "China has too much manufacturing capacity" in addition to the older "China invests too much, and doesn't consume enough." The "excessive" manufacturing capacity one is pretty amusing, because they're complaining that Chinese goods are becoming too plentiful and too affordable for Western consumers. This anti-consumer complaint wants to protect high prices for Western manufacturers who cannot compete with Chinese manufacturing because they lack scale, input cost control, and logistics.
It is going to be a monumental task to get people to save materially less and consume a lot more like in other economies . That's going against Chinese culture and habits spanning millennia. Some people say they save a lot because there are no safety nets but if you know Chinese history, even during the golden era of some past Dynasties, this was equally a 'problem'. People saved a lot despite robust safety nets in place.
It's not a cultural thing. I understand it's tempting to attribute the problems/succusses of foreign countries that you don't know much about to cultrual reasons. I am afraid the reasons we don't spend much are very simple and boring. Most of us are either too poor to begin with or too broke after buying a home, and, yes, most of us don't have social safety nets. 'Dynasty rises, people suffer; dynasty falls, people suffer'. If you really know our history, you would understand that some dynasties are considered golden is because the state prospered not the people. The emporers were absolute monachs, not leaders of your modern welfare states.
I think he's referring to economic sustainability, not environmental sustainability. In that regard, he's right. You can't sustain an economy if people are hesitant to spend.
@@andrewharris3900 It's either the west doesn't get it because of pr0p@ganda, or they know that they can't stay rich if China continues to build up it's production capacity so that we(the global south) can afford the things privileged West are enjoying as well...
@ Simeon... This is conventional wisdom (consumption to pick up the slack in demand for industry). In US we have opposite problem - excessive consumption, and inadequate savings & investment.
Long term, probably it matters a lot due to trickle down effect. But as it stands, the high end tech sector only make up a relatively small part of the economy, thus in short to medium is less relevant from a pure economic point of view.
It really isn't in that it employs so few Chinese people. 3/4 of Chinese has not attended high school and will never participate in advanced parts of the labor market. For those already past 3-4 years of age, some of the intellectual potential is permanently lost due to rural childrearing methods. For young adults the situation is worse as childhood anemia, untreated visual problems and worm infection reduce their schooling outcomes (e.g. ref: "invisible china"). If/when automatization takes over more jobs, the high tech sector may even have an inverse correlation with the income of the majority of the Chinese population Finally the high tech sector is so wasteful with direct and indirect subsidies that its net-positive contribution to the real economy is doubtful. The latter not being an isolated problem for China, but is also reflected elsewhere. E.g. the productivity growth lag in the US correlates really nicely with zero-rate investment into silicon valley.
@@Baz.007 the importance of the high tech sector is not in pure volume of sales, it is in the dependence of all other sectors on it. You remove the high tech and most sectors can't function properly anymore
Tech side is a good catalyst. It has never been an engine of economy. They are like turbos. But if the engine sucks those turbos are not gonna be enough.
@@bulthaosen1169 without high tech some sectors stop working completely aviation is one of those banking and financial institutions would have troubles operating Hi tech is not a turbo is part of the fiber of a modern economy
So, they interview a china based state employee about numbers given by the Chinese bureau of statistics which is known for their rather "optimistic" calculations?
Together with the US, China has the most number of glo--bal economists and analysts going through its economy's data with a fine c--omb using a myriad of methodologies and data points. GDP is never 100% accu--rate for any economy but I can't dev-iate much for a large economy like this with so many people analyzing it. Many full time.
@k.k.c8670 unlike US's government's data which is open to public examination, the chinese government data is "trust me bro". This is why the Chinese netizens were openly mocking government claim to 5.2% growth for 2023 despite government censorship working overtime.
Increasing domestic consumption in China is going to be extremely difficult with the majority of savings tied up in real estate. Real estate in China is hard to sell considering over 90% of home sold are new.
U r correct. 2024, mark the first year of Apple’s decline? iPhone shipments in China fell 33% year-on-year last month. iPhone shipments in the Chinese market have declined for the second consecutive month. Total iPhone shipments in January were approximately 5.5 million units, a decrease of approximately 39% from the same period last year.
@@kendalson7100 It's actually excellent if "homes are for living in", as Xi stated. Over 90% of Chinese own their homes, and deflating the bubble lowers cost and increases affordability, increases homeownership. What's "terrible" is the refusal of the Chinese government to bail out Western specuators who knowingly bought depressed real estate stocks that the Chinese had fled. From the Chinese perspective, those bagholders have only themselves to blame.
They're a nation of clever, thrifty , workaholics with a high degree of cooperation and low crime. As long as they were just making yo- yos, windshield wipers and stuff, the U.S. didn't bother them, but when they moved up to high tech stuff, that's when the Amerikans started messing with them.
@@GoGoPooerRangersSadly he is right, it wasn't that long ago when the US didn't have any problems with china whatsoever, now the story is different...
@@TerrySalahat "Moving up to military stuff is a no no" ? Why is it not a no no for the Americans? With all the talkin' sh** and provocations by the Amerikans, how would you expect them to respond?
Ah.....the good old days. Cheap Russian oil and gas, sell Mercedes, BMW, Audis to those rich Russian thugs and Chinese elites. And all done without restrictions! No wonder that these industrialists are so sad.The good old days are gone forever.
@ryuuguu01 Exactly. He thought China is a fundamental capitalist oriented society like merrrica where costs of education and medical service are insanely high while in reality china is fundamentally a socialist society where public service such as transportation is surprisingly cheap and the costs of education and medical service is extremely low(cause most schools and hospitals in China are not private but public) esp compared to the US.
Bro what are you talking about? The UK among other countries is flooded with Chinese masters students.. their whole system/culture is hyper focused on educational attainment.
He is wrong. The Chinese are natural savers. They are rated among the top ten savers countries in the world. Couple with a huge population, their savings will empower their banks
U r correct 2024, mark the first year of Apple’s decline? iPhone shipments in China fell 33% year-on-year last month. iPhone shipments in the Chinese market have declined for the second consecutive month. Total iPhone shipments in January were approximately 5.5 million units, a decrease of approximately 39% from the same period last year.
Michael Pettis analysis of China's economy is definitely worth reading up on. Basically, China's issues are structural, where the economy is designed to move money away from its citizens (consumption) and funnel it to investment (savings). "Savings" is not some chinese cultural quirk - they like to spend money as much as anybody. "Savings" is the economic concept for fiscal investment vs fiscal consumption. It's apparently very difficult to change an investment driven economic model to a consumption model.
'They like to spend money as much as anyone else' does not sound like the Chinese.😊 In 2023 savings by the chinese hit record highs. If you are not talking about reality what r u talking about
@ovariantrolley2327 It is a cultural thing. U can observe the same kind of behavior on oversea Chinese. Here in ASEAN, Chinese immigrants and their descendants are known for being generally richer than other ethnic groups due to A. They are better at making money and doing business B. They save a lot(occasionlly spend a lot) and like to prepare for rainy days. It has become a universal phenomenon in many ASEAN countries such as Singapore, Malaysia, Thailand, and Indonesia where Chinese are either dominant groups (Singapore) or significant minorities(Malaysia, Thailand and Indonesia). Chinese in other parts of the world like merrrica(a consumption driven economy Btw)is pretty much the same. So yea It is a cultural thing that the Chinese love to save money
@@wyatthart2434ah yes the factories and nation which is asked to build the quality products by brands, can't build quality products. Makes sense. Maybe it's time to check if your brain can produce quality thinking. When British Empire feared the German Empires production capabilities, they created the term "Made in Germany" to fearmonger consumers to avoid it. Nowadays it is a praise. Same goes to China. The nation that produced quality products, exporting them for 3 millenia and continues to do so now and in the future. They produce what is asked for.
True. Look at what happened to Russia and Ukraine in the 1990s when they did as Western economists suggested. China is right to do its own thing and ignore the "noise". Western economists haven't even been good to the Western working class or middle class in the last 40 years. Neoliberalism is a proven sham. The Western worker would be better off with China's economic policies than the voodoo economic that they have been fed since the end of the Cold War.
Another example among many about how this expert's opinion is off the mark is that the world is running out of usable construction quality sand. After air and water, sand is the most used resource in the world. Even DW Documentary has posted a production about this acute impending shortage of sand. How can we expect to see GDP based mainly on construction of large scale infrastructure projects to continue without sand?
Don’t forget China has 1.4 billion people. Only a few elites who got excellent job can live as 1st world. Others are still living in developing society.
Together with the US, China has the most number of glo--bal economists and analysts going through its economy's data with a fine c--omb using a myriad of methodologies and data points. GDP is never 100% accu--rate for any economy but I can't dev-iate much for a large economy like this with so many people analyzing it. Many full time.
@@k.k.c8670 That's bs for two 2 reasons. 1) Chinas baseline data is collected by local governments and send to Bejing. Since noone wants to lose the cushy job or make central government angry bad numbers are lowered and good numbers overreported. 2) All companies in China must have by law CCP representatives. They are the ones collecting the data and sending them to Bejing. And Bejing does everything to not embarrass itself on the world stage. For example data on youth unemployment were stopped last year for obvious reasons and it doesn't stop there.
Why? Because of 1 plot on a graph? First off, the US and China are still big trading partners. Many businesses and infrastructure projects in the US relies on Chinese goods, why would anyone involved in these projects want China to fail? Additionally, there’s still a hefty amount of investments in China securities, why would anyone want their investments to fail?
doubt it, since data from the CCP is worthy of toilet paper only. And DW is a known German Govt apparatus which does what the current Govt tells them to do. Scholtz has been a big friend to China and the CCP in particular. Scholtz sold the port of Hamburg to the Chinese state. What a Guy!!!
No one wants to spend money because income isn't keeping up with cost of living. This is the problem everywhere. Everyone is too afraid to stand up to the rich.
Together with the US, China has the most number of glo--bal economists and analysts going through its economy's data with a fine c--omb using a myriad of methodologies and data points. GDP is never 100% accu--rate for any economy but I can't dev-iate much for a large economy like this with so many people analyzing it. Many full time.
@@k.k.c8670China is the country that didn't let international disease experts into the country to explore the origins of covid until a year after the virus was discovered and you imagine that it is possible for international economists living outside of China to figure out how accurate are China's economic figures? No. Take any information from the CCP regime with a kg of salt.
Why not report economic crash on the US, EU, UK and Australia? Their unemployment, their homeless, their drug zombies,the recent genocides, their all year long war, so much to talk about, why China? Envy?
Like the guy said, China's investment in infrastructure isn't very profitable, like their massive overinvestment in housing. If the investment is never going to return your money or some other form of profit, it's money wasted.
The Chinese economy was majorly aided by accelerating the domestic growth of the electric car industry. It likely filled in some of the void of the real estate industry, buuutttt, worldwide sales of EV is not growing exponentially. That said, it's good to hear that China's recession seems to be occuring at a milder pace so as to not cause a worldwide recession.
only less than 30 percent of all car expoerted from China were pure EVs, still huge volume of ICE cars, so really the EV slow down will not hurt the car export that much , you may not see alot chinese ICE car in US or EUROPE yet, but theuy are already seeling pretty well in Russia , SEA, south america and middle east
Well, there is no "recession" in China to begin with. It is still growing at around 5% a year, a very fast pace for an economy at its GDP per capita level. Plotting growth rate against GDP per capita, China is performing similarly as South Korea, Malaysia and Turkey at the same stage of development. A recession is two quarters of negative growth. China hasn't had one for decades. It is more like European countries hit by an energy crisis of their own making that has led to the UK and Germany having recessions.
Before, I usually aggree to some of the points by Petis but now majority of them are not making sense and in fact counter intuitive if you want to build a modern economy in this coming century. Since Michael Petis is classically economist with neo classical perspective and have not technical background, I think that's why he's raising some highly mistaken points here that I will be highlighting. 1. For an economy that's transitioning to a high income and developed economy which is China is right now, science, innovation and technology sector is the most important to invest. This is what Micahel Pettis is wrong where he mentioned that high tech is not very important to the economy in general. If there is no lack in innovation and highly dependent on non-valuable service economy (like ubers drivers, financialization of economy), your economy will remain stagnant and that's what's happening in western economy. Bear in mind, Petis that although China accounts about 17% of world's manufacturing, China is still lagging behind in some high value added manufacturing sectors like Semiconductors & Aerospace. If your economy is highly innovative and have more chunk of high tech sectors, a high value service oriented economy will follow through. Because this science, tech & innovation will disrupt the economy as what this EVs are doing and will create a new opportunity & jobs for the economy. That's how modern economy was created, we won't have programmers if there's no computers and will just stick for typewriters, if you get what I mean. In fact these so called low value service jobs you're talking like online peddlers, uber drivers, etc are in fact the impact and result of investments and innovation because smartphones was commodified and the advancement of communication via internet. So in my opinion, CHINA is in fact in right direction in which majority of their investments is now concentrated to high tech, science & innovation sectors of manufacturing. From the latest statistics, real estate is now down around 19% of GDP while high tech manufacturing accounts 14.3% of the GDP. With this they're are on target for the high tech manufacturing to have bigger share over real estate by next year. Considering the real estate flatline growth and majority of credit flow to manufacturing now than real estate. Hence, China is in the midst of re orientation of their economy to a more sustainable and high value added path. 2. I agree that China has high savings rate but saying FDI is not that important is a mistake. Although, China can self sustain to invest itself without relying to FDI, it would be much better to have FDI as supplementary as you transition towards a more consumption based economy.
Re 1. Pettis is talking about high tech sector being small part relative to the size of the Chinese economy, to achieve desired 5% growth China needs around 1000 new unicorns each year. Second problem is that world doesn't want to accommodate Chinese surpluses due to its size + political reasons , USA, Europe, Japan, Korea, India, Brazil, are already putting trade barriers what's left is not that much and usually with poor credit rating. Without domestic consumers to buy Chinese goods the factories will close.
Everytime onwards, after Chinese New Year, consumption rises because the overall spirit of the Chinese is rejuvenated to look forward better prospects after the new year period restarts.
Laughed out loud because yesterday I watched a news outlet saying China was at rock bottom because of its poor policies 😂 the media can’t make up its mind
China isn't doing its job of transforming its economy into a consumption-based one through increasing minimum wages and social safety nets, but dumping excess manufactured goods abroad while destroying the manufacturing bases in Europe and the US, no different from what Japan did in the 1980s.
you dont lie your data when china is the world #1 trading nation in the world. export and import from and to china does not lie. that is why china is the world second largest economy.
Sorry, a quick question about saving rate... Assuming people don't put their savings in a tin can under their beds... With countless wonderful infrastructure and buildings (um... Some are still building in progress), where does the money come from (apart from the investment banks outside China)? If those things are built using money from Chinese banks, do you think the people can still withdraw their money and start spending? Sorry that I don't have any data on this but this is really a question I wanna ask
@@k.k.c8670sorry... I don't understand... If you count on the general public to spend more, you want them to start spending their savings or borrow money, right? So, my point is... where does the money come from? Banks? How much more could Chinese banks lend out? Don't you think the Chinese banks had lent out a lot to build bridges and empty houses?
It's internal debt, so it can be cleared at any time. External debt to foreigners is problematic, because printing money returns as inflation. Chinese bridges and houses get used and lived in. It's not a problem. ALL of the so-called "ghost cities" are thriving. China just likes to plan and build ahead on a much bigger scale than most. It's the same as building a new house vs renovating the one you're living in, but on a city-wide scale.
@@norm701 they did, the government intentionally didn't bail out the real estate private sector when they could have easily done so like the US did in 2008, but xi chose not to because they were very corrupt and the real estate bubble was getting out of control, xi said a house is for living not for speculation, he wants people to invest in productive sectors of the economy like high tech and clean energy instead of housing, that's the real economy, it's better to deflate the real estate bubble now than let it go too big, I believe this approach will be most beneficial for China in the long run
@@HasnaaAlaaAgreed China less when it says growth is 5% . Real growth in China is 50% . U are correct China always under reports . If china says is not growing , it means china is hiding is growth of 100% .
Chinese people have been consuming in excess housing that they saw as great investments. Now there are hundreds of millions of vacant apartments that are looking like they’ll only be a loss. I can understand they want to save in gold, crypto, foreign company stock.
I think the FDI is more important to Chinese elites because it's a source of foreign currency and knowledge transfer than actual need for investment funding. Unless there's something very wrong with the banking system in China, there's enough spare capital for investment. That doesn't mean there are enough good ideas where to invest though...
What he said is true high tech is mostly used for commercial and security purpose now a days and is highly used as sanction tools. Long term it is essential but for general population they have already reached the peak of its usefulness. For population rich economy there are lot of other sectors that is losing focus due to the tech mainly infrastructure, energy, food, medical, finance etc.. the amount of tech needed for this sector is now enough. An hyper sonic missile can work with 6 year behind technology.
And important point people in this comment section simply dont understand is that he as an economy expert is saying that high tech is the big story but a nations economy is not high tech only. It is rather small portion compared to all the important industries. And a lot of chips used are simple chips too which a lot of companies produce Question to comment section: are you going to eat microchips? Are you going to build foundations and houses with microchips? Are you heating with microchips fuels? Are you wearing microchips as clothing? Are you streets build with microchips material?
I’m wondering how is the local government supposed to shift their income to households. As far as I know local governments have been going on by selling land to developers to finance themselves and investments because they had low capacity of income. This is also represented by the high level of debt local governments have accumulated which also meant insolvency for some of them.
So the problem is that people are not spending money unnecessarily? Might come as a huge surprise to the consumerist Western world but this is how we do things in Asia.
China and Japan has the same problem of too much household savings and prudent spending. I think mainly because of the turmoil history and lack of a institutional safety net like what the West have.
what do you mean they were talking about the history of consumption in china so does not need to be up to 2024 besides it sometimes takes a while to manage the backlog of data from the previous years and finally the data is not from DW news its from the chinese bureau of statistics as can be seen in the bottom left
@@pierrescheepens8063 Why because we talk about the current situation and projection of the next years and if you do not have or ignore the 2023/24 data you missing the main problem.
I totally stopped buying in Walmart. It's filled with Chinese low quality junk from one end to the other. Nothing I ever bought there lasts. Just garbage, plain and simple. One can only hope that with the re-location of ever more manufacturing to the US and Europa, there will be higher quality available in the end.
@@kamsunleong6648 A few years ago I needed a new reusable water bottle but didn't want to get one made in China because I worried about what chemicals might be in a bottle made in China. I would have happily paid twice as much for a water bottle made outside of China but couldn't find one anywhere I looked. Every store that I went into had only water bottles made in China - none made elsewhere.
@kamsunleong6648 A lot of stuff in more expensive places is just over-priced Chinese tofu-dreg. So it's more the case that you pay for what you get - pay a lot, or pay little, it's still Chinese.
You won't be able to afford all-US goods, much less European goods. American labor is 4x higher, while logistics is worse. And the quality wouldn't be better. For example, US-built Tesla is much worse than a Chinese Tesla, Tesla sent people from Shanghai to Fremont to try and teach them to make better cars. You'd see minimum 15% price increase across the board, probably more like 20-25% on branded goods, because you're a captive consumer who the company can extract more profit from.
Ironically China now has to fix something which made China superior to western manufacturing ... low labour costs. And by changing that losing the advantage of it and ending up at the same situation like America and Europe. The only way to increase their internal market to let's say EU levels is to raise wealth and distribute wealth among the 99% in form of higher wages, tax credits and/or subsidies something the CCP is not willing to do because the share goes away from the privileged CCP class. Another problem: Leave the big tier-5/4 cities of China just half an hour and you get the feeling you doing a 50 year time travel. The countryside is underdeveloped and poor and China needs to severly uplift these areas to become what China wants to be independent and self-sufficient. You can never achieve this goal 100% anyway because modern society is too technical and too complex to do everything on your own. So you need to open your society to the rest of world again something the current government really not want to do anymore. And with this change new problems come because a larger middle class will want more political say and more freedoms. And opening up to the outside allows sharing of information and creates new wishes, cultural exchanges and more "why can't we have that". It's fascinating to watch actually like a law of nature applied to human society/culture something you cannot avoid like a law of nature.
Well, they can increase efficiency and products will become affordable. You think that the west has better solution by printing money anytime politicians and bankers are incompetents. Do you think Chinese citizens are interested in politics?.
66% of China's population is in the cities. haven't you ever heard that China eradicated abject proverty? More than 3 million first Party secretaries and resident working team members have been selected and dispatched to carry out targeted poverty reduction to poor and impoverished villages all around China. The final 98.99 million impoverished rural residents in China had all been lifted out of poverty, and all 832 impoverished counties and 128,000 villages had been removed from the poverty list by the end of 2020. According to World bank, that 800 million accounted for 70% of the world total in poverty reduction.
they are taking over high tech industries internet .... only US beats them at internet at the moment. EU doesnt even have apps to compete. comac(plane), automotive especially evs, semi conductor,space exploration,pharma drugs,high level medical equipment, etc Europe is in trouble because they dont have tech advantage over china and us
Hundreds of millions of Chinese are travelling around the world and bad news to you they aren’t crying about democracy like those in Hong Kong like they had it in the first place under the Britain
I mean... it is this way since feudalism, i guess? I don't see many economic models today that even try this facts or fight inequality in any way. Let's take a look, a model that fights agsinst a class based society. Capitalism? No... this one is in the name i guess..., the capitalist class get's to decide everything on this one... in fact they thrive on inequality. Maybe there is another economic model that fights against this inequalit?. Maybe put it as the final goal of their ideology too. Let me see... a society without class division? Hmm.. one in which everyone is a worker and there is not a class proffiting off capital without working or by inherething their power... I don't know. There is no such a thing like this in the western world so maybe it does not exists...
@@WSOJ3How clever! I'm guessing nothing of consequence? I'm a random anonymous person and not a university professor getting paid a lot while living in a foreign country.
I am going to throw back the same question for you to answer what would happen to you if you said anything very critical about Israel, like what was going on at Gaza... 🤔
“Savings” only kill domestic demand to support exports. Per MMT a currency sovereign like China finances thru deficit spending, the central bank issues credit to commercial banks to fund loans. Savings have little to do with financing commercial loans.
We want reciprocity with the Chinese, it is not normal that a Chinese can have a real property right in France, in Spain in the USA and that the French, the Spaniard, the American can never have a real real estate property rights in China.
No,foreigners are allowed to own one residential property for own dwelling purpose.Chinese nationals are not allowed to own farmlands in the States....All country has their own rules...go google before you post anything !
Because the university never changed the way its name is Romanised, even though in Chinese characters, the name has always been the same. It also doesn't matter. There is IIT Madras (not IIT Chennai) and IIT Bombay (not IIT Mumbai).
@@michaeljiang960 Don't u know how Anti Communism works? When people went to church in USSR, that was because they hated the Atheistic regime, but when they didn't go to church, that was because they were afraid of the Atheistic regime. USSR then and China now can never look good in the eyes of westerners, no matter what they do.
He literally addressed that. Stock market is not consumption. Also economically High Tech is not in everyones food, groceries, construction, material, infrastructure, daily use items, fuel. Everyone talks about how Chips are everywhere. They are in many items but they are not essential in most of them. Just bc my water boiler has a chip doesnt mean it drives the economy. Additionally, most chips used are simple chips which dont require TSMC, Nvidia, intel and AMD. Sometimes it is simply best to just listen to the expert and try to understand them than making smartass wrong statements
China is focus in moving up the value chain into EV cars, green energy, computer chips and large scale ship building. You lost me when you said it was not important. It is VERY IMPORTANT. It is the MAIN REASON for the trade war with US. That is, China is moving up and take the cake! At this point, China is focus in taking the cake from Japan, South Korea and Germany (Germany knows it and wants to get involved in investing heavy in China). And China is also expanding the cake in Middle East, Africa and South America (easier to access but slightly, only slightly lower profit margin) And above all, China is pushing out Western high end product suppliers in China. They just recently announced that they will ban the sales of Intel and AMD chips in the name of "national security". Wow, US politics backfires in China. China is systematically avoiding US Market for these high end products. If the trend continues, US will not be able to get the affortable and new high end products from China. There is nothing wrong with that as long as US can produce their own affortble high end products. But I suspect that is the case. Instead they will get the same Chinese products through Vietnam and Mexico to avoid the 25% tax increase. And have to endure the high inflation.
China didn't ban Intel & AMD from the general market, just government offices. Same with the restriction on Apple iPhones - consumers can buy, but government officials can't use. The big one is commercial aviation. Comac is going to eat Boeing's lunch! The C919 is brand new vs the obsolete 737, and will likely get the lion's share of sales across the Global South.
Namaskar 🙏🙏🙏🙏 China is building a 1000 kmph Maglev train to connect two of its big cities India built the world's biggest statue in the middle of nowhere for crows and pigeons to sit and pewwpp on 🕊 Its like we are living in different Millennia 🙏🙏🙏🙏
For XJP, the consumer economy does not matter, the traits described here clearly show one thing - China is preparing for war. High youth unemployment and high industrial capacity are the means by which governments can prime their national economy for prolonged military conflict.
The "high youth unemployment" was artificially high due to students looking for jobs to get pocket money. China now excludes full-time students from the calculation. This wasn't an issue a decade ago, because China didn't have as many people going to university or advanced degrees. Now, they do. This type of adjustment is typical for America and other Western countries, as well. An American teenager or college looking for a part-time job isn't unemployed, so neither is her Chinese counterpart.
@@botshelomoatshe3153 In the case of an actual military conflict, the US is in big trouble. If you look at history, wars are generally won by the country with a larger population and greater industrial capacity. China has 4x the population of the US, but could "collapse" to as little as 3.5x over several decades. China has several times the manufacturing capacity, at least 10x the automation, and 200x the shipbuilding capacity. If war were to break out, and China were to shift to a wartime economy, they could churn out advanced automated drone weapons on a scale the world has never seen. OTOH, the US has lost a much of the know-how required to build large volumes of heavy industrial goods, and it's disappearing faster with every passing day. The native US birth rate is declining just as fast as China's, although the US is taking in a lot of immigrants to keep the population up. If you look at the basics of people and weapons, China has a comprehensive advantage over the USA, and a war would only exacerbate things.
The high youth unemployment is because college graduates don’t want to work at factories so I doubt they would prefer a war job than a factory ones unless the military is willing to pay what the average college graduates earn, because of the one china policy a lot of parents can afford to help their kids because they aren’t employed or studying. This is my understanding has a foreigner.
I was traveling in Guangdong a month ago. On Friday evenings, I wouldn't be able to get a fast train ticket from Guangzhou to Shenzhen. The fast train takes 30 minutes and the slow train takes over an hour. The fast train tickets would be booked up days in advance. That's how busy it still is at this time.
If you are worried about there not being enough absorption of Chinese goods just wait till much physical labor is done by robots! We may end up where goods get almost down to the cost of the base materials used to make them. Then what happens?
China’s factory exports are powering ahead faster than almost anyone expected, putting jobs around the world in jeopardy and setting off a backlash that is gaining momentum. From steel and cars to consumer electronics and solar panels, Chinese factories are finding more overseas buyers for goods. The world’s appetite for its goods is welcomed by China, which is enduring a severe downturn in what had been the economy’s biggest driver of growth: building and outfitting apartments. But other countries are increasingly concerned that China’s rise is coming partly at their expense, and are starting to take action.
It's almost as if deflation isn't the boogeyman that Western economists claim it is. 2% monetary inflation is 2% theft from all who use the currency. Deflation is often caused by increases in productivity. The USA is the biggest importer; China is the biggest exporter.
When he says sustainability he is only talking about cash flow. He is not talking about environmental sustainability. Massive consumption is not environmentally sustainable.
*Last two weeks, DW was saying that CHINESE ECONOMY is collapsing. 😂*
It's all for the "clicks"
The Chinese government deliberately discourages domestic demand, sacrificing the living standards of the Chinese people and causing overcapacity. As a result, it became export-oriented and the policy of export dumping was used to disrupt the world trade order. This is a consistent approach of dictators.
Low demand is a very bad thing..... If other countries want to reduce trade with China it means China is in trouble...
They're not taking any u-turn here. Michael has been saying the same thing for two decades. But the CCP hasn't been able to reform. It eventually will have to.
To attract viewers
Germany recently invested heavily in China😂
No one with a rational mind would want to lose the huge market of 1.4 billion potential consumers like China and India.
People who ignores that reality are making fool of themselves.
@@catinbootsnow4267Except China is far wealthier than India
@@catinbootsnow4267 Yup that's why China has gotten rid of the USA as its biggest export destination. The result, the GDP gap between China and the USA is narrowing down.
@@blankspace1126not for long. 15-20 years and India surprasses China
Enterprises must make profits to survive.
Politicians only need to shout ideology to cheat votes.
What if the reason is simply that they don't want to become a service-focused economy and just wants all the factories to stay at all cost?
You must be a very happy factory worker
Good for you
Incredibly boring low paid work suits some people
It’s not that they don’t want to it’s that the country is organized in a way where it can’t
i think they are looking into the future far ahead, imagine they make everything for the world but everything is automated with robots and AI.@@toi_techno
Someone has to buy it.
There is no way out of that. To bring people out of poverty, you simply have to raise workers salaries and not only for factory workers, that moves you toward a service economy. China hasn't done that yet except in the developed areas / cities.
Very eloquent and knowledgeable speaker. Please have them back on!
Them?
@@alexeykulikov2739 are you unfamiliar with English grammar? Them is a pronoun, just like he/him/they or even you/your/it/us/our.
Don’t worry, I know it’s hard, but you’ll get there!
it is a pronoun, just the wrong one. @@Lords1997
He's just parroting standard Western neoliberal capitalist talking points, the latest of which being "China has too much manufacturing capacity" in addition to the older "China invests too much, and doesn't consume enough." The "excessive" manufacturing capacity one is pretty amusing, because they're complaining that Chinese goods are becoming too plentiful and too affordable for Western consumers. This anti-consumer complaint wants to protect high prices for Western manufacturers who cannot compete with Chinese manufacturing because they lack scale, input cost control, and logistics.
HIM
Great guest! Easy understanding, straight forwatd
It is going to be a monumental task to get people to save materially less and consume a lot more like in other economies . That's going against Chinese culture and habits spanning millennia. Some people say they save a lot because there are no safety nets but if you know Chinese history, even during the golden era of some past Dynasties, this was equally a 'problem'. People saved a lot despite robust safety nets in place.
Saving money is built into Chinese culture. 🎉
At the recent Two Sessions in Beijing, the populace was encouraged to replace their home appliances, etc., a way to raise household consumption.
In traditional Chinese culture, spending too much and saving too little is a behavior that should be ashamed of. 😅
It's not a cultural thing. I understand it's tempting to attribute the problems/succusses of foreign countries that you don't know much about to cultrual reasons. I am afraid the reasons we don't spend much are very simple and boring. Most of us are either too poor to begin with or too broke after buying a home, and, yes, most of us don't have social safety nets.
'Dynasty rises, people suffer; dynasty falls, people suffer'. If you really know our history, you would understand that some dynasties are considered golden is because the state prospered not the people. The emporers were absolute monachs, not leaders of your modern welfare states.
@@antonidas3812Just curious are you Chinese?😊
yes, this is the kind of speaker that gives real insight and futuristic view.
Did he seriously say the sustainable way is for people to consume more ?
I think he's referring to economic sustainability, not environmental sustainability. In that regard, he's right. You can't sustain an economy if people are hesitant to spend.
The logic of capitalism is that people must consume. If people don't consume the circuit of capital is affected and disrupted and causes a "crisis".
Well you can’t make goods if no one consumes them, so if you want to maintain your level of production you need consumption.
@@andrewharris3900 It's either the west doesn't get it because of pr0p@ganda, or they know that they can't stay rich if China continues to build up it's production capacity so that we(the global south) can afford the things privileged West are enjoying as well...
@ Simeon... This is conventional wisdom (consumption to pick up the slack in demand for industry).
In US we have opposite problem - excessive consumption, and inadequate savings & investment.
He lost me when he said the high tech sector isn’t that important… it is
Long term, probably it matters a lot due to trickle down effect.
But as it stands, the high end tech sector only make up a relatively small part of the economy, thus in short to medium is less relevant from a pure economic point of view.
It really isn't in that it employs so few Chinese people. 3/4 of Chinese has not attended high school and will never participate in advanced parts of the labor market.
For those already past 3-4 years of age, some of the intellectual potential is permanently lost due to rural childrearing methods. For young adults the situation is worse as childhood anemia, untreated visual problems and worm infection reduce their schooling outcomes (e.g. ref: "invisible china").
If/when automatization takes over more jobs, the high tech sector may even have an inverse correlation with the income of the majority of the Chinese population
Finally the high tech sector is so wasteful with direct and indirect subsidies that its net-positive contribution to the real economy is doubtful.
The latter not being an isolated problem for China, but is also reflected elsewhere. E.g. the productivity growth lag in the US correlates really nicely with zero-rate investment into silicon valley.
@@Baz.007 the importance of the high tech sector is not in pure volume of sales, it is in the dependence of all other sectors on it. You remove the high tech and most sectors can't function properly anymore
Tech side is a good catalyst. It has never been an engine of economy. They are like turbos. But if the engine sucks those turbos are not gonna be enough.
@@bulthaosen1169 without high tech some sectors stop working completely
aviation is one of those
banking and financial institutions would have troubles operating
Hi tech is not a turbo is part of the fiber of a modern economy
India has lower productivity, which fits very well with the low demand
That was informative. I like this guy.
So, they interview a china based state employee about numbers given by the Chinese bureau of statistics which is known for their rather "optimistic" calculations?
Together with the US, China has the most number of glo--bal economists and analysts going through its economy's data with a fine c--omb using a myriad of methodologies and data points. GDP is never 100% accu--rate for any economy but I can't dev-iate much for a large economy like this with so many people analyzing it. Many full time.
Ironic considering they're always interviewing Germans and Americans about what's going on in China..
@k.k.c8670 unlike US's government's data which is open to public examination, the chinese government data is "trust me bro". This is why the Chinese netizens were openly mocking government claim to 5.2% growth for 2023 despite government censorship working overtime.
@@dywang32we have many Americans and Germans who will do anything for a dollar
They should've asked a white German instead
Increasing domestic consumption in China is going to be extremely difficult with the majority of savings tied up in real estate. Real estate in China is hard to sell considering over 90% of home sold are new.
That's not considered savings. That's investment and/or consumption.
The real estate market in China is terrible.
U r correct.
2024, mark the first year of Apple’s decline?
iPhone shipments in China fell 33% year-on-year last month.
iPhone shipments in the Chinese market have declined for the second consecutive month.
Total iPhone shipments in January were approximately 5.5 million units, a decrease of approximately 39% from the same period last year.
@@kendalson7100 It's actually excellent if "homes are for living in", as Xi stated. Over 90% of Chinese own their homes, and deflating the bubble lowers cost and increases affordability, increases homeownership. What's "terrible" is the refusal of the Chinese government to bail out Western specuators who knowingly bought depressed real estate stocks that the Chinese had fled. From the Chinese perspective, those bagholders have only themselves to blame.
Chinese saving is $32 trillion ($ 4.5 trillion US ) yuan in banks.
They're a nation of clever, thrifty , workaholics with a high degree of cooperation and low crime. As long as they were just making yo- yos, windshield wipers and stuff, the U.S. didn't bother them, but when they moved up to high tech stuff, that's when the Amerikans started messing with them.
你说的对😂
Keep crying on this American app 😂
@@GoGoPooerRangersSadly he is right, it wasn't that long ago when the US didn't have any problems with china whatsoever, now the story is different...
"moved up to hi tech stuff" could be ok, but moving up to military stuff is a no no
@@TerrySalahat "Moving up to military stuff is a no no" ? Why is it not a no no for the Americans? With all the talkin' sh** and provocations by the Amerikans, how would you expect them to respond?
Ah.....the good old days. Cheap Russian oil and gas, sell Mercedes, BMW, Audis to those rich Russian thugs and Chinese elites. And all done without restrictions! No wonder that these industrialists are so sad.The good old days are gone forever.
When the people have no basic social-economic securities such as medical service and education, they have to save hard for these experiences.
I thought this video was about China, not the US.
@ryuuguu01 Exactly. He thought China is a fundamental capitalist oriented society like merrrica where costs of education and medical service are insanely high while in reality china is fundamentally a socialist society where public service such as transportation is surprisingly cheap and the costs of education and medical service is extremely low(cause most schools and hospitals in China are not private but public) esp compared to the US.
我真的无语到了😅…作为中国的医生有被冒犯到
Bro what are you talking about? The UK among other countries is flooded with Chinese masters students.. their whole system/culture is hyper focused on educational attainment.
He is wrong. The Chinese are natural savers. They are rated among the top ten savers countries in the world. Couple with a huge population, their savings will empower their banks
They have no savings
@@midbc1midbc199 agreed . China has no savings . It gives loans . Usa is under 80% chinese loans
@@midbc1midbc199agreed . Usa is under chinese loans
Chinese are buying less western luxury stuffs.
U r correct
2024, mark the first year of Apple’s decline?
iPhone shipments in China fell 33% year-on-year last month.
iPhone shipments in the Chinese market have declined for the second consecutive month.
Total iPhone shipments in January were approximately 5.5 million units, a decrease of approximately 39% from the same period last year.
Goooood for them.
@@KK-ij4mz It's because they can't afford them. That's not a good thing for the economy. It means that they are also laying off in those companies.
@@patrickt49 It's because they know where the goods are made lol.
😂That is because of the return of Huawei.@@happymelon7129
this guy is honest and brilliant.
Really enlightening analysis of China's strength and weaknesses. Not many economists can tell the story so well in just a few minutes.
when I live in Shanghai, sam’s and Costco supermarket always full of customers everyday, and both of them is America company
Full of product manufactured out side or usa
but even in the US, 90%of the products from Sam's and Costco is actually made in China
Who’s gonna tell him that Cosco is actually a Chinese company
You can't earn a cent in China without the CCP approving it
90% of product of Costco in America are made in China
Michael Pettis analysis of China's economy is definitely worth reading up on. Basically, China's issues are structural, where the economy is designed to move money away from its citizens (consumption) and funnel it to investment (savings). "Savings" is not some chinese cultural quirk - they like to spend money as much as anybody. "Savings" is the economic concept for fiscal investment vs fiscal consumption. It's apparently very difficult to change an investment driven economic model to a consumption model.
'They like to spend money as much as anyone else' does not sound like the Chinese.😊
In 2023 savings by the chinese hit record highs.
If you are not talking about reality what r u talking about
@ovariantrolley2327 It is a cultural thing. U can observe the same kind of behavior on oversea Chinese. Here in ASEAN, Chinese immigrants and their descendants are known for being generally richer than other ethnic groups due to A. They are better at making money and doing business B. They save a lot(occasionlly spend a lot) and like to prepare for rainy days. It has become a universal phenomenon in many ASEAN countries such as Singapore, Malaysia, Thailand, and Indonesia where Chinese are either dominant groups (Singapore) or significant minorities(Malaysia, Thailand and Indonesia). Chinese in other parts of the world like merrrica(a consumption driven economy Btw)is pretty much the same. So yea It is a cultural thing that the Chinese love to save money
People are saying that it's a cultural thing, how foolish.
你開心就好 (as long as you are happy)
我們還很多事要幹 (We still have a lot to work with)
Great report and knowledgeable guest.
Demand for high quality is more sustainable than low quality products.
Suggestion they are not capable of making high end products 😂
@@wyatthart2434ah yes the factories and nation which is asked to build the quality products by brands, can't build quality products. Makes sense. Maybe it's time to check if your brain can produce quality thinking.
When British Empire feared the German Empires production capabilities, they created the term "Made in Germany" to fearmonger consumers to avoid it. Nowadays it is a praise. Same goes to China. The nation that produced quality products, exporting them for 3 millenia and continues to do so now and in the future. They produce what is asked for.
They should bring out that head of lettuce used to countdown the time liz truss was in office.
Self-selecting power only think the power security only. It is as simple as that.
Straightforward and logical.
it is very obvious, if China listens to this guy in the show, or any of his alikes, China would have become another Argentina.
非常对，打着自由主义的旗帜把国民经济的命脉交给跨国大公司是非常烂的主意！
True. Look at what happened to Russia and Ukraine in the 1990s when they did as Western economists suggested. China is right to do its own thing and ignore the "noise". Western economists haven't even been good to the Western working class or middle class in the last 40 years. Neoliberalism is a proven sham. The Western worker would be better off with China's economic policies than the voodoo economic that they have been fed since the end of the Cold War.
I see Pettis quoted frequently by China watchers.
This is actually good if they're focused on localisation now. They can channel their energy to other areas that has high demand.
Another example among many about how this expert's opinion is off the mark is that the world is running out of usable construction quality sand. After air and water, sand is the most used resource in the world. Even DW Documentary has posted a production about this acute impending shortage of sand. How can we expect to see GDP based mainly on construction of large scale infrastructure projects to continue without sand?
"China should focus on men delivering food in a wheel and not high tech economy"
How dare is China doing better than us? 😂😂😂
Go China!🎉🎉
Don’t forget China has 1.4 billion people. Only a few elites who got excellent job can live as 1st world. Others are still living in developing society.
Germany is so scared of China downfall😂😂
Great video. Michael Pettis is a great guest. Invite him again.
Wonderful to see that DW can get hold of these real experts on China, Michael Pettis is one of the best on Chinese finance.
Source trust me bro
Anyone noticed the poster of AV大久保 in the background of this professor. It’s a rock band in china
Interesting input, thanks
According to whom? And please don't tell me according to their own data. That would be naive.
sour grape
@@fuzicastit’s fear, and desperation
Together with the US, China has the most number of glo--bal economists and analysts going through its economy's data with a fine c--omb using a myriad of methodologies and data points. GDP is never 100% accu--rate for any economy but I can't dev-iate much for a large economy like this with so many people analyzing it. Many full time.
@@k.k.c8670 That's bs for two 2 reasons. 1) Chinas baseline data is collected by local governments and send to Bejing. Since noone wants to lose the cushy job or make central government angry bad numbers are lowered and good numbers overreported. 2) All companies in China must have by law CCP representatives. They are the ones collecting the data and sending them to Bejing. And Bejing does everything to not embarrass itself on the world stage. For example data on youth unemployment were stopped last year for obvious reasons and it doesn't stop there.
@@AaronOkeanos are you an eminent economist or analyst?
Happy Easter!
USA must be having chest pains
Why china is in this position because of the US we just didn't expect them to turn on the system that built them.
Why? Because of 1 plot on a graph? First off, the US and China are still big trading partners. Many businesses and infrastructure projects in the US relies on Chinese goods, why would anyone involved in these projects want China to fail? Additionally, there’s still a hefty amount of investments in China securities, why would anyone want their investments to fail?
@@TriggaTrey361 China have no ideology anymore
Western country still cannot escape their ideology
doubt it, since data from the CCP is worthy of toilet paper only. And DW is a known German Govt apparatus which does what the current Govt tells them to do. Scholtz has been a big friend to China and the CCP in particular. Scholtz sold the port of Hamburg to the Chinese state. What a Guy!!!
We all know, USSR "split" in 1991....Is a Collapsing China....going the USSR way....??
No one wants to spend money because income isn't keeping up with cost of living. This is the problem everywhere. Everyone is too afraid to stand up to the rich.
Sure - lets believe Chinese and Russian economical data :)
Together with the US, China has the most number of glo--bal economists and analysts going through its economy's data with a fine c--omb using a myriad of methodologies and data points. GDP is never 100% accu--rate for any economy but I can't dev-iate much for a large economy like this with so many people analyzing it. Many full time.
China has contributed more to world economic growth than all the G7 combined since 2013, google that.
Stay there in the well, don’t ever come out. There’s nothing outside.
@@k.k.c8670China is the country that didn't let international disease experts into the country to explore the origins of covid until a year after the virus was discovered and you imagine that it is possible for international economists living outside of China to figure out how accurate are China's economic figures?
No.
Take any information from the CCP regime with a kg of salt.
when the number is bad, people seems have no problem of believing them
Why not report economic crash on the US, EU, UK and Australia? Their unemployment, their homeless, their drug zombies,the recent genocides, their all year long war, so much to talk about, why China? Envy?
If China invests too much and foreign direct investment is declining, isn't that a good thing?
More money never hurts
We all know, USSR "split" in 1991....Is a Collapsing China....going the USSR way....??
Like the guy said, China's investment in infrastructure isn't very profitable, like their massive overinvestment in housing. If the investment is never going to return your money or some other form of profit, it's money wasted.
The Chinese economy was majorly aided by accelerating the domestic growth of the electric car industry. It likely filled in some of the void of the real estate industry, buuutttt, worldwide sales of EV is not growing exponentially. That said, it's good to hear that China's recession seems to be occuring at a milder pace so as to not cause a worldwide recession.
it doesnt matter. China doesnt need other market becuse their car domestic market is huge and ev growth in china is exponential
only less than 30 percent of all car expoerted from China were pure EVs, still huge volume of ICE cars, so really the EV slow down will not hurt the car export that much , you may not see alot chinese ICE car in US or EUROPE yet, but theuy are already seeling pretty well in Russia , SEA, south america and middle east
What recession? Where are the two quarters of negative growth?
Well, there is no "recession" in China to begin with. It is still growing at around 5% a year, a very fast pace for an economy at its GDP per capita level. Plotting growth rate against GDP per capita, China is performing similarly as South Korea, Malaysia and Turkey at the same stage of development. A recession is two quarters of negative growth. China hasn't had one for decades. It is more like European countries hit by an energy crisis of their own making that has led to the UK and Germany having recessions.
lol, this video will not age well.
Before, I usually aggree to some of the points by Petis but now majority of them are not making sense and in fact counter intuitive if you want to build a modern economy in this coming century. Since Michael Petis is classically economist with neo classical perspective and have not technical background, I think that's why he's raising some highly mistaken points here that I will be highlighting.
1. For an economy that's transitioning to a high income and developed economy which is China is right now, science, innovation and technology sector is the most important to invest. This is what Micahel Pettis is wrong where he mentioned that high tech is not very important to the economy in general. If there is no lack in innovation and highly dependent on non-valuable service economy (like ubers drivers, financialization of economy), your economy will remain stagnant and that's what's happening in western economy. Bear in mind, Petis that although China accounts about 17% of world's manufacturing, China is still lagging behind in some high value added manufacturing sectors like Semiconductors & Aerospace. If your economy is highly innovative and have more chunk of high tech sectors, a high value service oriented economy will follow through. Because this science, tech & innovation will disrupt the economy as what this EVs are doing and will create a new opportunity & jobs for the economy. That's how modern economy was created, we won't have programmers if there's no computers and will just stick for typewriters, if you get what I mean. In fact these so called low value service jobs you're talking like online peddlers, uber drivers, etc are in fact the impact and result of investments and innovation because smartphones was commodified and the advancement of communication via internet. So in my opinion, CHINA is in fact in right direction in which majority of their investments is now concentrated to high tech, science & innovation sectors of manufacturing.
From the latest statistics, real estate is now down around 19% of GDP while high tech manufacturing accounts 14.3% of the GDP. With this they're are on target for the high tech manufacturing to have bigger share over real estate by next year. Considering the real estate flatline growth and majority of credit flow to manufacturing now than real estate. Hence, China is in the midst of re orientation of their economy to a more sustainable and high value added path.
2. I agree that China has high savings rate but saying FDI is not that important is a mistake. Although, China can self sustain to invest itself without relying to FDI, it would be much better to have FDI as supplementary as you transition towards a more consumption based economy.
DW should invite you not those China Hands
Re 1. Pettis is talking about high tech sector being small part relative to the size of the Chinese economy, to achieve desired 5% growth China needs around 1000 new unicorns each year. Second problem is that world doesn't want to accommodate Chinese surpluses due to its size + political reasons , USA, Europe, Japan, Korea, India, Brazil, are already putting trade barriers what's left is not that much and usually with poor credit rating. Without domestic consumers to buy Chinese goods the factories will close.
Everytime onwards, after Chinese New Year, consumption rises because the overall spirit of the Chinese is rejuvenated to look forward better prospects after the new year period restarts.
Laughed out loud because yesterday I watched a news outlet saying China was at rock bottom because of its poor policies 😂 the media can’t make up its mind
He’s a professor at Peking University - what else would he say?
@@kevoreilly6557Yeah, why believe someone actually lives over those ”experts” who can’t even find China on a map?
China isn't doing its job of transforming its economy into a consumption-based one through increasing minimum wages and social safety nets, but dumping excess manufactured goods abroad while destroying the manufacturing bases in Europe and the US, no different from what Japan did in the 1980s.
It is only possible to switch into consumption-based one after USD crash.
Economies based on consumption are not considered sustainable or beneficial practices.
When you make your ppl work so hard they dont need anything else except a bed
Chinese accounting defies reality.
What do you know ?
He is trying to be a smart alec with zero knowledge.
you dont lie your data when china is the world #1 trading nation in the world. export and import from and to china does not lie. that is why china is the world second largest economy.
It's too bad that Harvard or oxford uni didn't hire u as their economics professor
Another hater here 😂
BIP and all those factors are a smoke screen - what counts is food, water, resources and people doing the production. China has plenty of all of it
Sorry, a quick question about saving rate... Assuming people don't put their savings in a tin can under their beds... With countless wonderful infrastructure and buildings (um... Some are still building in progress), where does the money come from (apart from the investment banks outside China)? If those things are built using money from Chinese banks, do you think the people can still withdraw their money and start spending? Sorry that I don't have any data on this but this is really a question I wanna ask
Have you heard of a mortgage? How about spending less than you earn and saving the rest? Those habits have not gone out of style.
china, like us and japan, can always issue more money for goods and/or service it deems necessary. It's called monetary sovereignty
@@k.k.c8670sorry... I don't understand... If you count on the general public to spend more, you want them to start spending their savings or borrow money, right? So, my point is... where does the money come from? Banks? How much more could Chinese banks lend out? Don't you think the Chinese banks had lent out a lot to build bridges and empty houses?
@@ZETA14.88who want to keep rmb instead of usd?
It's internal debt, so it can be cleared at any time. External debt to foreigners is problematic, because printing money returns as inflation.
Chinese bridges and houses get used and lived in. It's not a problem. ALL of the so-called "ghost cities" are thriving. China just likes to plan and build ahead on a much bigger scale than most. It's the same as building a new house vs renovating the one you're living in, but on a city-wide scale.
Houses should be for living not for making money, I am with china on cracking down on the real estate bubble
cracking down?😂 you made it sounds like they want it to happen?
@@norm701 they did, the government intentionally didn't bail out the real estate private sector when they could have easily done so like the US did in 2008, but xi chose not to because they were very corrupt and the real estate bubble was getting out of control, xi said a house is for living not for speculation, he wants people to invest in productive sectors of the economy like high tech and clean energy instead of housing, that's the real economy, it's better to deflate the real estate bubble now than let it go too big, I believe this approach will be most beneficial for China in the long run
@@HasnaaAlaaAgreed
China less when it says growth is 5% . Real growth in China is 50% . U are correct
China always under reports .
If china says is not growing , it means china is hiding is growth of 100% .
Chinese people have been consuming in excess housing that they saw as great investments. Now there are hundreds of millions of vacant apartments that are looking like they’ll only be a loss. I can understand they want to save in gold, crypto, foreign company stock.
Similarly of their EV industry . Too much output slow to small sales
pettis is my guy on china!
😂😂😂😂
I think the FDI is more important to Chinese elites because it's a source of foreign currency and knowledge transfer than actual need for investment funding. Unless there's something very wrong with the banking system in China, there's enough spare capital for investment. That doesn't mean there are enough good ideas where to invest though...
Very insightful and objective opinion without western stereotype bias.
What he said is true high tech is mostly used for commercial and security purpose now a days and is highly used as sanction tools. Long term it is essential but for general population they have already reached the peak of its usefulness. For population rich economy there are lot of other sectors that is losing focus due to the tech mainly infrastructure, energy, food, medical, finance etc.. the amount of tech needed for this sector is now enough. An hyper sonic missile can work with 6 year behind technology.
And important point people in this comment section simply dont understand is that he as an economy expert is saying that high tech is the big story but a nations economy is not high tech only. It is rather small portion compared to all the important industries. And a lot of chips used are simple chips too which a lot of companies produce
Question to comment section: are you going to eat microchips? Are you going to build foundations and houses with microchips? Are you heating with microchips fuels? Are you wearing microchips as clothing? Are you streets build with microchips material?
@@ReuterLliterally that is what I said.
@@iamnothing85 thats why it was an "And" comment. starting with the word
@@ReuterL Gotcha
I’m wondering how is the local government supposed to shift their income to households. As far as I know local governments have been going on by selling land to developers to finance themselves and investments because they had low capacity of income. This is also represented by the high level of debt local governments have accumulated which also meant insolvency for some of them.
So the problem is that people are not spending money unnecessarily? Might come as a huge surprise to the consumerist Western world but this is how we do things in Asia.
LOL, Germany believes ccp lies.
Why not? German invented communism.
Their export and import figures significantly outperformed expectations
@@michaeljiang960this is so true lmao 😂
Dude has good music taste with some Chinese indie-rock posters back there.
China and Japan has the same problem of too much household savings and prudent spending. I think mainly because of the turmoil history and lack of a institutional safety net like what the West have.
Why is the statistic at 01:15 ending at 2022? Come on DWNews what are you doing?!
what do you mean they were talking about the history of consumption in china so does not need to be up to 2024 besides it sometimes takes a while to manage the backlog of data from the previous years and finally the data is not from DW news its from the chinese bureau of statistics as can be seen in the bottom left
@@pierrescheepens8063 Why because we talk about the current situation and projection of the next years and if you do not have or ignore the 2023/24 data you missing the main problem.
I totally stopped buying in Walmart. It's filled with Chinese low quality junk from one end to the other. Nothing I ever bought there lasts. Just garbage, plain and simple. One can only hope that with the re-location of ever more manufacturing to the US and Europa, there will be higher quality available in the end.
You get what you paid for.
@@kamsunleong6648
A few years ago I needed a new reusable water bottle but didn't want to get one made in China because I worried about what chemicals might be in a bottle made in China.
I would have happily paid twice as much for a water bottle made outside of China
but couldn't find one anywhere I looked.
Every store that I went into had only water bottles made in China - none made elsewhere.
@kamsunleong6648 A lot of stuff in more expensive places is just over-priced Chinese tofu-dreg. So it's more the case that you pay for what you get - pay a lot, or pay little, it's still Chinese.
just because you are poor.
You won't be able to afford all-US goods, much less European goods. American labor is 4x higher, while logistics is worse. And the quality wouldn't be better. For example, US-built Tesla is much worse than a Chinese Tesla, Tesla sent people from Shanghai to Fremont to try and teach them to make better cars. You'd see minimum 15% price increase across the board, probably more like 20-25% on branded goods, because you're a captive consumer who the company can extract more profit from.
Ironically China now has to fix something which made China superior to western manufacturing ... low labour costs. And by changing that losing the advantage of it and ending up at the same situation like America and Europe.
The only way to increase their internal market to let's say EU levels is to raise wealth and distribute wealth among the 99% in form of higher wages, tax credits and/or subsidies something the CCP is not willing to do because the share goes away from the privileged CCP class.
Another problem: Leave the big tier-5/4 cities of China just half an hour and you get the feeling you doing a 50 year time travel. The countryside is underdeveloped and poor and China needs to severly uplift these areas to become what China wants to be independent and self-sufficient.
You can never achieve this goal 100% anyway because modern society is too technical and too complex to do everything on your own. So you need to open your society to the rest of world again something the current government really not want to do anymore.
And with this change new problems come because a larger middle class will want more political say and more freedoms. And opening up to the outside allows sharing of information and creates new wishes, cultural exchanges and more "why can't we have that". It's fascinating to watch actually like a law of nature applied to human society/culture something you cannot avoid like a law of nature.
Well, they can increase efficiency and products will become affordable. You think that the west has better solution by printing money anytime politicians and bankers are incompetents. Do you think Chinese citizens are interested in politics?.
66% of China's population is in the cities. haven't you ever heard that China eradicated abject proverty? More than 3 million first Party secretaries and resident working team members have been selected and dispatched to carry out targeted poverty reduction to poor and impoverished villages all around China. The final 98.99 million impoverished rural residents in China had all been lifted out of poverty, and all 832 impoverished counties and 128,000 villages had been removed from the poverty list by the end of 2020. According to World bank, that 800 million accounted for 70% of the world total in poverty reduction.
they are taking over high tech industries internet .... only US beats them at internet at the moment. EU doesnt even have apps to compete. comac(plane), automotive especially evs, semi conductor,space exploration,pharma drugs,high level medical equipment, etc
Europe is in trouble because they dont have tech advantage over china and us
If people at the coastal cities are getting expansive they can just move it westward
Hundreds of millions of Chinese are travelling around the world and bad news to you they aren’t crying about democracy like those in Hong Kong like they had it in the first place under the Britain
Middle class and poor are Modern slaves 😔
where? in your country
Like India where their richest men are even richer than those in China?😂😂😂😂taking about inequality
@@adamsaciid4919china. Look up lying down protest
I mean... it is this way since feudalism, i guess?
I don't see many economic models today that even try this facts or fight inequality in any way.
Let's take a look, a model that fights agsinst a class based society. Capitalism? No... this one is in the name i guess..., the capitalist class get's to decide everything on this one... in fact they thrive on inequality.
Maybe there is another economic model that fights against this inequalit?. Maybe put it as the final goal of their ideology too. Let me see... a society without class division? Hmm.. one in which everyone is a worker and there is not a class proffiting off capital without working or by inherething their power... I don't know. There is no such a thing like this in the western world so maybe it does not exists...
where 80% Americans are living paycheck to paycheck.@@adamsaciid4919
What was behind the better than expected growth is lies
I wonder what would happen to him if he said anything very critical about China
He was very analytical and straight forward
I wonder what would happen to you if you said anything very good about China
@@WSOJ3How clever! I'm guessing nothing of consequence? I'm a random anonymous person and not a university professor getting paid a lot while living in a foreign country.
I am going to throw back the same question for you to answer what would happen to you if you said anything very critical about Israel, like what was going on at Gaza... 🤔
I see a person with small mind creeping out from his hiding hole.
this guy knows what hes talking about. not often DW brings in a knowledgeable guest
“Savings” only kill domestic demand to support exports. Per MMT a currency sovereign like China finances thru deficit spending, the central bank issues credit to commercial banks to fund loans. Savings have little to do with financing commercial loans.
We want reciprocity with the Chinese, it is not normal that a Chinese can have a real property right in France, in Spain in the USA and that the French, the Spaniard, the American can never have a real real estate property rights in China.
No,foreigners are allowed to own one residential property for own dwelling purpose.Chinese nationals are not allowed to own farmlands in the States....All country has their own rules...go google before you post anything !
Why is it still called Peking University instead of Beijing University?
A lot of muyangqian there.
Because the university never changed the way its name is Romanised, even though in Chinese characters, the name has always been the same. It also doesn't matter. There is IIT Madras (not IIT Chennai) and IIT Bombay (not IIT Mumbai).
Great quality Copium on display here... this is how you professionally Cope
DW should make a documentary comparing todays china and Germany before WW1
China 0 recession
China 0 inflation
Usa recession
Uk recession
France recession
Germany recessing
India recession
Taiwan recession
Right. CCP numbers are very reliable. lol 😂
when those numbers are bad, they are very reliable for sure. when they are good, they are unreliable.
@@michaeljiang960 Don't u know how Anti Communism works? When people went to church in USSR, that was because they hated the Atheistic regime, but when they didn't go to church, that was because they were afraid of the Atheistic regime. USSR then and China now can never look good in the eyes of westerners, no matter what they do.
This cope is all you have left in the denial bank isn't it?
@@morningstararun6278 In Xinjiang, when Uighurs pray in the mosque, the CIA says because the Evil CCP forced them to. It's ridiculous.
Sounds like a woke victim of the West Brainwashing program..
They have high savings because old people save for retirement. They are screwed
We are in a global economic downturn. Let’s remember that context
AI just drove one of the biggest rallies in stock history and he is downplaying it.
He literally addressed that. Stock market is not consumption. Also economically High Tech is not in everyones food, groceries, construction, material, infrastructure, daily use items, fuel. Everyone talks about how Chips are everywhere. They are in many items but they are not essential in most of them. Just bc my water boiler has a chip doesnt mean it drives the economy. Additionally, most chips used are simple chips which dont require TSMC, Nvidia, intel and AMD.
Sometimes it is simply best to just listen to the expert and try to understand them than making smartass wrong statements
China is focus in moving up the value chain into EV cars, green energy, computer chips and large scale ship building. You lost me when you said it was not important. It is VERY IMPORTANT. It is the MAIN REASON for the trade war with US. That is, China is moving up and take the cake! At this point, China is focus in taking the cake from Japan, South Korea and Germany (Germany knows it and wants to get involved in investing heavy in China). And China is also expanding the cake in Middle East, Africa and South America (easier to access but slightly, only slightly lower profit margin)
And above all, China is pushing out Western high end product suppliers in China. They just recently announced that they will ban the sales of Intel and AMD chips in the name of "national security". Wow, US politics backfires in China.
China is systematically avoiding US Market for these high end products. If the trend continues, US will not be able to get the affortable and new high end products from China. There is nothing wrong with that as long as US can produce their own affortble high end products. But I suspect that is the case. Instead they will get the same Chinese products through Vietnam and Mexico to avoid the 25% tax increase. And have to endure the high inflation.
China didn't ban Intel & AMD from the general market, just government offices. Same with the restriction on Apple iPhones - consumers can buy, but government officials can't use.
The big one is commercial aviation. Comac is going to eat Boeing's lunch! The C919 is brand new vs the obsolete 737, and will likely get the lion's share of sales across the Global South.
I am going to china. There is tianjin city. Fa mouse capital of all China. I'd rather go to china than go to Singapore.
Namaskar 🙏🙏🙏🙏
China is building a 1000 kmph Maglev train to connect two of its big cities
India built the world's biggest statue in the middle of nowhere for crows and pigeons to sit and pewwpp on 🕊
Its like we are living in different Millennia 🙏🙏🙏🙏
Chinese/pakistani bot they talking about how unreliable your products are. 😅
Western media should not evaluate China based on western standard and system.
China is likely cooking the books
Source ? Proof ?.
shifting GDP from the public sector to the private sector? no it's not gonna happen mate
For XJP, the consumer economy does not matter, the traits described here clearly show one thing - China is preparing for war. High youth unemployment and high industrial capacity are the means by which governments can prime their national economy for prolonged military conflict.
Where does that leave the US?
The "high youth unemployment" was artificially high due to students looking for jobs to get pocket money. China now excludes full-time students from the calculation. This wasn't an issue a decade ago, because China didn't have as many people going to university or advanced degrees. Now, they do. This type of adjustment is typical for America and other Western countries, as well. An American teenager or college looking for a part-time job isn't unemployed, so neither is her Chinese counterpart.
@@botshelomoatshe3153 In the case of an actual military conflict, the US is in big trouble. If you look at history, wars are generally won by the country with a larger population and greater industrial capacity. China has 4x the population of the US, but could "collapse" to as little as 3.5x over several decades. China has several times the manufacturing capacity, at least 10x the automation, and 200x the shipbuilding capacity. If war were to break out, and China were to shift to a wartime economy, they could churn out advanced automated drone weapons on a scale the world has never seen. OTOH, the US has lost a much of the know-how required to build large volumes of heavy industrial goods, and it's disappearing faster with every passing day. The native US birth rate is declining just as fast as China's, although the US is taking in a lot of immigrants to keep the population up. If you look at the basics of people and weapons, China has a comprehensive advantage over the USA, and a war would only exacerbate things.
The high youth unemployment is because college graduates don’t want to work at factories so I doubt they would prefer a war job than a factory ones unless the military is willing to pay what the average college graduates earn, because of the one china policy a lot of parents can afford to help their kids because they aren’t employed or studying.
This is my understanding has a foreigner.
It's also because China is getting offshored, meaning less orders and jobs in general.
I was traveling in Guangdong a month ago. On Friday evenings, I wouldn't be able to get a fast train ticket from Guangzhou to Shenzhen. The fast train takes 30 minutes and the slow train takes over an hour. The fast train tickets would be booked up days in advance. That's how busy it still is at this time.
I think it was because of Chinese new year.
What if people were just tired of owning "things".
That’ll be the day. Can’t even convince people to forgo physical for digital
If you are worried about there not being enough absorption of Chinese goods just wait till much physical labor is done by robots!
We may end up where goods get almost down to the cost of the base materials used to make them.
Then what happens?
Nobody has ever won betting against the communist party of China and the hardworking Chinese people 😂😂
How did USA solve the risks of real estate?
China stocks rise after factory activity data
Chinese Stocks Gain as Upbeat PMI Data Reinforce Recovery Hopes
DW:
Back in game?
Carnegie pronounced correctly puts the emphasis on the second syllable
China’s factory exports are powering ahead faster than almost anyone expected, putting jobs around the world in jeopardy and setting off a backlash that is gaining momentum.
From steel and cars to consumer electronics and solar panels, Chinese factories are finding more overseas buyers for goods. The world’s appetite for its goods is welcomed by China, which is enduring a severe downturn in what had been the economy’s biggest driver of growth: building and outfitting apartments. But other countries are increasingly concerned that China’s rise is coming partly at their expense, and are starting to take action.
It's almost as if deflation isn't the boogeyman that Western economists claim it is.
2% monetary inflation is 2% theft from all who use the currency.
Deflation is often caused by increases in productivity.
The USA is the biggest importer; China is the biggest exporter.
When he says sustainability he is only talking about cash flow. He is not talking about environmental sustainability. Massive consumption is not environmentally sustainable.
Rich has too much money. Simple problem, complicated solution.