As a Shanghainese I appreciate the point that there is a gap in economic ideology between China and US to the concept of wealth effect. Same as US Fed is struggling with monetary policy transmission, I suspect Chinese policymakers have little confidence in the pipeline through domestic consumption. It hasn’t been the engine of economy hence it won’t be, a poor logic but a sustaining narrative in the system. Great session!
Many economists and academics have been calling for improvements in social welfare and more fiscal subsidies for households. Yet somehow CCP is reluctant to do so even though domestic demand is weak and deflation is becoming entrenched. Maybe the CCP is worried that if they give people cash handouts, China will turn into a welfare state, and people will get lazy and stop working as hard. They seem to want everyone to work 24/7. These concerns are unfounded though. Chinese people are some of the hardest workers in the world, with the longest average working hours. There's barely any social security, so people save a lot to prepare for rainy days. The government keeps the household share of GDP low to subsidize manufacturers and exporters, making Chinese goods cheaper globally and helping to build up a massive trade surplus. But they’re doing this at the expense of households. Basically China is exporting deflation. Chinese workers are essentially helping other countries fight inflation, while subsidizing consumers overseas.
They don't have to give cash handouts, maybe they could make higher education free or provide free technical training, or free heatlthcare. Those are things that will improve productivity.
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As a Shanghainese I appreciate the point that there is a gap in economic ideology between China and US to the concept of wealth effect. Same as US Fed is struggling with monetary policy transmission, I suspect Chinese policymakers have little confidence in the pipeline through domestic consumption. It hasn’t been the engine of economy hence it won’t be, a poor logic but a sustaining narrative in the system. Great session!
Overcapacity = the portion of inventory used for price dumping
Nice
Okay
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Taylor Nancy Williams Eric Harris Michael
Allah hu akbar
America is not the hellhole trump and tooze describe.
Many economists and academics have been calling for improvements in social welfare and more fiscal subsidies for households. Yet somehow CCP is reluctant to do so even though domestic demand is weak and deflation is becoming entrenched. Maybe the CCP is worried that if they give people cash handouts, China will turn into a welfare state, and people will get lazy and stop working as hard. They seem to want everyone to work 24/7.
These concerns are unfounded though. Chinese people are some of the hardest workers in the world, with the longest average working hours. There's barely any social security, so people save a lot to prepare for rainy days. The government keeps the household share of GDP low to subsidize manufacturers and exporters, making Chinese goods cheaper globally and helping to build up a massive trade surplus. But they’re doing this at the expense of households. Basically China is exporting deflation. Chinese workers are essentially helping other countries fight inflation, while subsidizing consumers overseas.
They don't have to give cash handouts, maybe they could make higher education free or provide free technical training, or free heatlthcare. Those are things that will improve productivity.