Nothing Miraculous about It: China's Economic Growth and Great Wall of Debt
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- Опубликовано: 27 авг 2024
- The Chinese economy is extraordinarily difficult to understand, for foreign and Chinese observers alike. Within the same prestigious financial papers, on the same day, readers are informed that China is an unstoppable economic juggernaut and that it is headed for the netherworld in handbaskets of corruption, pollution, and mismanagement.
Fortunately, former Wilson Fellow and Wall Street Journal Reporter Dinny McMahon has written China’s Great Wall of Debt, a vivid guide how China’s economic challenges stymie the Chinese government, and how they shape the lives of ordinary citizens. His cautionary tales make the book required reading for anyone who studies China’s political economy, who invests in China, or who analyzes Chinese investments in the U.S. and around the world.
1990. The Economist. China's economy has come to a halt.
1996. The Economist. China's economy will face a hard landing
1998. The Economist: China's economy entering a dangerous period of sluggish growth.
1999. Bank of Canada: Likelihood of a hard landing for the Chinese economy.
2000. Chicago Tribune: China currency move nails hard landing risk coffin.
2001. Wilbanks, Smith & Thomas: A hard landing in China.
2002. Westchester University: China Anxiously Seeks a Soft Economic Landing
2003. New York Times: Banking crisis imperils China
2004. The Economist: The great fall of China?
2005. Nouriel Roubini: The Risk of a Hard Landing in China
2006. International Economy: Can China Achieve a Soft Landing?
2007. TIME: Is China's Economy Overheating? Can China avoid a hard landing?
2008. Forbes: Hard Landing In China?
2009. Fortune: China's hard landing. China must find a way to recover.
2010: Nouriel Roubini: Hard landing coming in China.
2011: Business Insider: A Chinese Hard Landing May Be Closer Than You Think
2012: American Interest: Dismal Economic News from China: A Hard Landing
2013: Zero Hedge: A Hard Landing In China
2014. CNBC: A hard landing in China.
2015. Forbes: Congratulations, You Got Yourself A Chinese Hard Landing.
2016. The Economist: Hard landing looms for China
2017. National Interest: Is China's Economy Going To Crash?
Can not quite understand weather or not they need better analysis or better journalist?
你应该把对应美国欧猪的经济危机也写上，哈哈哈
People have been saying china will overtake America for so long most said bye 2020 and look at us now they said they same thing for a place like Japan yet it has incredible debt tight now
@@melvinklark4088 dude japan is a vassal of usa but china is not it has indepedent foreign policy
@@yiyuan2235
You should pay attention to what Dinny McMahon had to say in this video.
The CCP has been hiding the decline of it's economy for the past 10 years.
Propaganda is what they do. That's why there is no free press in China.
When we shut down thousands of factories and lay off millions of workers and hundreds of factories moving to cheaper labor markets, Vietnam, the Philippines, and India, etc. . . We call that a recession, or a decline, or an economic contraction, or a collapse of our manufacturing sector.
The CCP calls that 7% growth. . . lol
If there was real growth, they wouldn't be building dozens of ghost cities and building needless infrastructure, and overproducing products and materials that they don't need to prop up their GDP.
China's GDP numbers are fake and manipulated.
China's real debt is hidden in shadow banking.
Something McMahon didn't mention . . .
The housing, ghost cities, and infrastructure China spent Trillions on and invested Trillions into, are poorly constructed and falling apart. It will all be worthless in the next 15 or 25 years.
I have 2 questions. 1st how do China continue to obtain credit if they aren't able to pay for their debt? 2nd , aren't USA facing the highest debt in the world, so have they collapsed, if not why?
Because US debts are good and God blessed, while China debts are the worst and deviled.
@al gung I didn't say that you said that.
@@akakakakakak3084 What a joke. hahahaha.
Because US debt (Treasury bills) are highly sought after, because foreign nations purchasing it still trust the safety of the country even if you disagree it doesnt matter, because the collective masses purchasing it trusts it. Among other things the US Treasury notes market are the largest and deepest liquid instrument.
One of the reasons why US dominates the world is because of the oil transactions among all nations must be done in dollar term, which means you can only buy oil using dollar. When OPEC gives up the dollar policy, US will collapse.
4 years later, People's Republic of CHINA is the major producer and no.1 in the world of users of EV cars on the roads.
while America still promotes the use of their proud First-Grade-gasoline car driving habits in their country! ...
China does capitalism better than USA. In capitalism big fish eats small fish and All American companies are small fish when compared with deep pockets of Chinese government owned companies. As far as Chinese Debit is concerned it is 99% internal Debit as Chinese saving levels are very high, while 40% of USA Debit is external and is owned by foreigners which makes Americans more vulnerable to Debit induced economic collapse .
so many stated own companies. China contorl currecy rate. Just open market like any other develop countries before you proud of fake capitarisim in communist country.
Motorola Cheng : The west should open up its Labour market and allow Chinese to build infrastructure in the west before preaching for free trade
I see. You can say that. Open up all labor from African, South East Asia, or North Korea when China open their market in order to send many Chinese labors outside of China. Then open the market. No government control.
Pardeep Tandon Yes 40% of US debt is external but most importantly it is in US dollars , a currency created and controlled by the US government. The fact that the debt is in dollars makes the issue of external or internal a non issue.
Welcome to CHINA
🇨🇳👍🇨🇳👍🇨🇳👍🇨🇳👍🇨🇳
CHINA=PEACE
CHINA=STABILITY
CHINA=FUTURE
China is investing / lending trillions of Dollars in building infrastructure in 65 other countries under the OBOR project. It is getting better returns than it is getting for its 4 trillion invested in US treasuries. Also it enables it to spread its risk over 65 countries rather than put all its eggs in USA treasuries. China has 500 billion dollar trade surplus every year and Since 2008 ( Quantum Easing) it has not increased its holdings in US treasuries.
Stealing $3-4 hundred billion per year for now. Soon that will be over.
Pardeep Tandon
You are full of shit.
China has never owned $4 Trillion in US Treasuries.
At the most, it was $1.7 Trillion.
But now, and normally, it is between 1.1 and 1.3 Trillion.
@@RedRider1600 I think he is counting the 3 billion of foreign reserves as well. Sometimes financial writers will add that to the full amount of foreign funds china has at its disposal to invest.
China previously held 1.3trillion treasuries plus 4 trillion foreign reserves. The amounts are now down to 1 T of treasuries and 3 T of reserves. But they are increasing their holdings in gold and reducing their holdings in treasuries.
@@rf9164
Why would he do that? It's not US Treasuries and also has nothing to do with the US. It doesn't support his faulty and dishonest argument.
Look at Fortunes 2017 list, of China’s top 20 companies a full 17 of them, 85%, are state-owned. No such thing as private in Communist China. Communist China also has protectionist tariffs that dwarf Americas small tariff of 2% average, and even that’s only applied to half of manufactured imports anyway.
That’s peanuts compared to what’s going on in China this past decade. And that doesn’t speak to the total domination of political and economic life there via the communist party’s censorship and huge SOEs. The communist party put america to shame with the money printing too. By 2009 there was literally twice as many RMB in circulation as there were USD. The chinese economy was only 1/3 the size of the US! Big problem is that the RMB is mostly just used in China, and it’s not used in the world at large anywhere near as much is the USD.
Yes, RT, when my company ventured into China nearly 20 years ago it’s not like the board didn’t know about or expect problems relating to intellectual property theft, unfair treatment of foreign companies, that works. But this was nearly 20 years ago, so it was a surprise when we were forced to join a chinese “partner” which is a nonsense company created in about five minutes on paper by the communist party, and his partner is not there to add value or do anything useful. It is either a direct subsidiary of state owned enterprise, or a subsidiary of a subsidiary of state owned enterprise. Either way, it’s just the communist party’s way of extending its iron grip control to foreign companies and stealing from them.
RT Myths Debunked it's better than having Samsung own the whole country when it's 1/5 of the whole countries gdp by ITSELF..
Who needs gov corruption when you basically own the whole country
Just as much as American investments in China made the average Chinese richer and that became a profitable market for them...double benefits of cheaper cost to supply the whole world and bigger market for American companies. So similarly China is investing in Africa,etc to gain a double benefit. That was a good business model.
In1949 after the civil war, Mao Zedong took over China. Poverty was the biggest issue where people did not have enough food and proper shelters for most of the poverty stricken rural people. Through socialism where government and people became many in body and one in mind to be innovative and slowly exported consumer commodities to the outside world. When economy slowly moving up the ladder during the last 40 tears, the idea of attracting overseas through cheap labour to attract manufacturers to move to China due to low cost manufacturing process. At the same time, the Chinese required partnerships to pick up some product technology to work on a win-win policy. Through their years of learning stage together with that creative mindset when China joined the WTO in the eighties, the US imported goods from China that have had invisibly lowered the cost of living for Americans. In this 21st century, China has become the second riches country in the world. That how socialism helps to improve 800 million middle class in the last forty years China will eventually move to democracy in the next few decades when the country is fully developed without western influence.
The consequence of the dollar hegemony is a huge trade deficit, because the United States needs to flood the world with a large amount of dollars, and other countries must use inexpensive commodities in exchange for dollars. Therefore, the U.S. manufacturing industry must be unable to compete and transfer to other countries. These are the deformed economic models caused by the greedy capital of the United States! In order to transfer contradictions, American politicians say that they have been caused by other countries, thus blocking trade in other countries! If the American people are still not aware of this issue clearly, then the United States will not really be great again!
In fact, there is no absolute democracy in this world. This is just a game made by the capital group that fled from Europe to the United States in World War II. Democracy requires funds to run for elections, and it is about the capital group behind the official US government. And unlike China, they will not allow any capital to control this country, which is why Western capital wants to get the Asian market and fear the socialist countries!
The Belt and Road Initiative is actually bypassing the maritime trade channel controlled by the United States, and Americans are certainly afraid! Just like the oil China renminbi, China's global industrial division of labor competitiveness is gradually approaching the United States! Therefore, the United States began to comprehensively curb China’s development. US hegemony does not allow any country to compete with the United States! Look at the war launched by the United States. You will understand the reasons for all this! Although the United States is a highly democratized country, behind the democratic government are controlled by large interest groups, such as arms and oil finance. This will inevitably drive the United States to use war and other means to maintain its dominance. This is why U.S. spending has not been used to build the United States. After all, China has experienced a history of 5,000 years of civilization. Looking back at the history of China, the dynasty that used force to dominate was often dying, and the history of the world was also reviewed. Therefore, China will not take the old road of the United States. China's One Belt and One Road is to link the Eurasian African continent with railways, so that it can form the world's largest trade market. The advantage is that it can be separated from the US sea route control. Once the largest world trade market is formed, the United States will be marginalized. The United States will no longer be the central force of the world, and the center of the world will return to Europe, Asia and Africa! This is why the United States is so afraid of the Belt and Road. And China has begun to compete with the United States in high-end manufacturing, so the United States has to do everything to kill China! Including political diplomacy, financial warfare, media public opinion warfare, biological weapons warfare, arms competition, and finally military warfare.
In fact, let us review the history of the world and have a very clear answer. China is a country with a history of civilization of 4000-5000 years. If a country can exist for such a long time, then it must know how to rule the land. Since the World War II and the industrial revolution, the West has begun to become the center of the world, but it has only been two hundred years. Because the short sight of political gaze cannot rule the country for a long time, look at the Mongolian Empire. Historically, Many outside nations have invaded Chinese territory, but they will not rule for more than one hundred years. Because they only use force and no wisdom. Maybe technological force can be a leader in the world for a while, but it won't last long. The reason behind this is the political system!
In the future, the United States will be difficult to compete with China at many levels, such as market size and demand and consumption levels, industry chain, talent pool, political system and reform capabilities.
Well said. Thanks
China’s debt is in yuan. The Chinese central bank is the sole creator of the yuan. China will not collapse because of debt issues. There might be inflationary issues, but I will bet the Chinese are sophisticated enough to avoid it without major damage.
Inflationary issues is what usually causes a collapse, like in Venezuela. Are the Chinese sophisticated enough to stop building ghost cities, and stop going into Trillions more debt? Are they sophisticated enough to prevent thousands of companies from moving out of China and avoiding a trade war and tariff war with the US? Doesn't look like it.
@@RedRider1600 well its 2021 and china won the trade war lol
@@sophisticatedthumb5364
Where do you get that China won the trade war?
@@RedRider1600 because american farmers arent happy
@@sophisticatedthumb5364
Really? Then why did 85% of farmers vote for Trump in 2020?
The speaker made no mention about the hard working and disciplined nature of Chinese workers. China now has the most competent and yet relatively low cost work force in the world. No other country has that. Only Germany and Japan can come anywhere near close. A country is made not just by money, and debt and infrastructure - it is made by people who live in that country. And China has the most technically trained and scientific minded work force in the world. So GOOD LUCK to all commentators who are predicting China's collapse. I have been hearing this for last 10 years - and in the meanwhile China's economy kept increasing at a record pace.
lol yeah sitting on phones playing games and watching tiktok videos all day cause no one can leave till the boss does.
They just jealous of China. As long as you bash China in anyway you will make money by talking how china collapse. 😂 😂 😂
The world two greatest debtors are US and UK. The world two greatest creditors are China and Japan. The Chinese government owes money itself, just like the Japanese government. When you owe a lot of money to yourself, why is it a problem? Japan's government debt is 2.5 times of its GDP; no problem at all. It would be a problem if a country owes a lot of money to foreigners. Not so for China and Japan.
The tittle is just perfect - it attracts one's curiosity. Good lecture
Nothing has changed in that part of the world, just dirty tricks and clinch on power at expense of its own people.
It's own people have seen a massive increase in their living standards. So why wouldn't they be supportive of what their government is doing?
Their own people have seen a massive increase in their living standards, so why wouldn't they be supportive of what their government is doing.
It's so weird to see China apply it's odd credit habits both at home and abroad
So from the comments we Americans are stupid. We also own are own current so all we need to do is print a whole bunch more money invest it in building cities and trains. Our economy will grow at 10 percent then we will be ok cause we only owe ourselves. Why aren’t we printing more money.
That's the million dollar question right? You possible also would need to hold half your country at less than USD150 per month, so they can supply food and raw materials to the people riding the high speed trains
Most economic activity in China is owned and controlled by the government, hence all debit \ loans are in fact cash moving from left pocket to the right pocket . So their will be no Debit induced economic collapse
What you say is true for many countries. Government can be indebted to its central bank or to its own citizens. Still it's a problem because prices are inflated, the money goes to unproductive things, and when faith is lost in the system, the currency goes down the toilet.
The Chinese government has false assumptions about revolts. People are revolting because they don't have enough in terms of working hours and wages relative to each other or because they are afraid of losing everything. Growth itself has nothing to do with satisfactory level of people. If one wants a sustainable economy there has to be done something different. I would cut the working hours, subsidize real income (or whats lef of income) and educate the population instead of building this huge amount of debt driven mountain of nonsense and void. Then I would start to reform toward the transition. It's kind of strange that one does not overthink the consequences of growth based measures. Now exactly these measures did everything that should be avoided with these measures. Because there can not be growth and a transition and there can not be a sustainable economy without a transition and no transition without better human capital and less state owned enterprises and there can not be no unrest without transitions but that destroys the satisfaction and leads to a revolt, right ? Not necceraly. They should really overthink paradigmas and think more then one step forward instead of doing things that worked in the past but lead to a catastrophe in the future. Now it's too late; way too late.... The real growth is 1-2 % less then offical numbers suggest and that over many years. And still; people have those really strange assumption about China. China checkmated itself by building an inescapable debt trap that they can't get out without causing social unrest. How can they reforme now? Really really slow obviously.
spot on
He must have seen how Gordon chang make his living. Write a book about china's mismanaged it economy.
Yeah, you still try to make people think that the Western ways is still the best and everything is fine. Keep talking, you walk in your sleep, you are living in your own Shangri La .
The in equality as measured by the GINI index of both USA and China is similar today.
When will be the next China bust. Another Gordon Chang?
Rules to be rigid rules are not strategically correct...Rules are rules.....and sometime can come with a different point of view...a different kind of applications.
Everything the speaker said about China is true.
just love how the Chinese trolls are beating their chest here in the comments section
Of course ... Just as China bashing is fashionable ... Bash for the sake of bashing.
I'm italian and I support China. Western racism is simply disgusting, I'm so happy Chinese people living a good life right now.
The sort of wasted money that he is talking about is very badly constructed infrastructure projects that can not possibly add to the efficiency of the economy, and massive building projects which no one will ever live in, and are already crumbling, often after only 2-3 years after being built. There are also countless other examples of state sponsored capitalism at its worse including bike sharing schemes producing over 1 billion pedel cycles that hardly any one uses.
If you think that countries such as the US and UK have been doing utterly insane things with borrowed money, then compared to what has been going on in China, this is prudent common sense.
China has NOT been investing is its people or their future, it has been investing in corrupt Ponzi schemes.
In the comment section, the 50 Cent Army in full offensive haha.
Chinese debt is not the same as American debt. It is based on investment more than consumption. We will have to see how this plays out.
Investment in unoccupied concrete boxes that start falling apart 5 years after they've been built is just like consumption except you don't get to enjoy it at least.
@Kevan ...that was a deadly issue, sweet dream!
With the domino effect from the reactions of the 40% international debtor countries, the worthiness of american printed paper money shall be in danger of collapse, without the backing of physical gold couple with huge inflation inside the country!
By certain time in the future, say 2035, that number of external debtors would be reduced due to the diminished status of those pieces of little green paper money, churned out by the Federal Reserve printing machines owned by the private all-for-themselves Wall Street bankers, capitalist financers, and world renowned Jewish investors bankers like George Soros! ...good dreams.
China is the factory of the world and is producing more than it needs in China but it can always export to the world like it is currently doing. Under its one belt one road infrastructure project it is building in 65 countries. 2/3 of Americans do not have 500 $ emergency funds while Chinese have it because of its saving habits. So Who is Poor?
What nonsense!!??
Western fairy tales
thanks for the fantastic and precise and conclusive summarizing. paper tiger always tries hard pretending to be real tiger.
Unless u can 'pretend' for decades and decades...in that case, IS it still pretending?
He should have consulted Yukon Huang before writing his book.
come back after covid economic crisis, guess what? China is the only major economy that survives. But we have been constantly told by the 'experts' like in this video that the China's economy should be so fragile and pile of debt, right?
There is no satistical analysis and support. You should talk to economist Dr Yukon to have a more indepth understanding of China rises.
Yep...he knows China..
What a joke ... these clowns are clueless.
This guy gets it completely wrong. According the Bank for International Settlements, China's debt-to-GDP ratio in 4Q 2017 was the same as the US and the EU (with much lower shadow banking exposure), but there they part ways because
1. China's economy is growing 300% faster than theirs and growth eats debt.
2. China's debt is 98% domestic.
3. China's asset to debt ratio is 3.8:1
4. China's debt is productive, and of very high quality. Its Keynesian multiplier is 200-300%, according to one Federal Reserve study.
5. China can turn on a dime: everyone is on board and cooperative with whatever measures the government prescribes.
6. 95% of Chinese trust their government.
In 2018, Chinese total debt to GDP was 266%, according to the US-based financial media service Bloomberg whereas those of the US, EU and Japan were, respectively, over 310% and 307.0%. When taking external debt to GDP into consideration, China’s 15% versus the average G7 country’s 156%, its financial posture is in even better shape, according to Wikipedia. China’s debt is largely internal.
According to the China National Bureau of Statistics (CNBS), SOE debt totaled US$17 trillion (125% of GDP) in 2018. The total corporate debt-GDP ratio is approximately 156%, and since SOEs borrow from SOBs, the lending-borrowing arrangement is a “family affair.” It is more of an accounting issue than a debt burden issue.
Thailand Retirement China economic growth numbers are all fake and lots of waste
Alfred Vinciguerra can you be more specific?
Godfree Roberts www.investors.com/politics/editorials/new-study-shines-light-literally-on-chinas-and-russias-fake-gdp-data/
@@alfredvinciguerra532 IBD is not an authority on China. The Bank for International Settlements, the World Bank and the IMF are authorities and all of them say that China's stats are solid. Go there yourself and you can see that reality matches the stats.
He us a product of supply side philosophy posing as economics.
The Chinese doesn’t need anything? Great insight. Keep the effort on, we need guys like this.
Five months later, lots of P2P companies blew and investors lost their money without government guarantees, obviously.
wow so the us owes trillions . that is what the great space of debt ?
Public projects have more circulation then arms...
Over investment in transportation, airports etc is nonproductive in China Because of underuse but what about spending money on military hardwares for imaginary world conflicts. Are they more productive? Prez Xi is more concerned about lifting 30 millions poor to the middle class status than escaping the middle income trap by 2020.
There's no nutrition I can get from this sensational politicalized video, no more intelligent speech any more?
You are wrong.
Another wannabe Gordon Chang.
Woodrow Wilson center,
If all these people are so clever, together they would have solve the USA trillion dollars debts.
nono, they are just as greedy as many others, pretending everything is under control
Oh look, look , a white version of Gordon Chan. LOL.
k lu Sorry man, he actually has some basis for what he is saying. Chan has been out of China for a long time. Not this guy.
It true Nothing Miraculous about China's Economic Growth.
This also applies to Democracy and Freedom of Speech, maybe Human Rights
one ten two hours
chen wongs loved mothers flowers
golden cross showers
Very well explaine
More Western theories or fallacies ?
15:57 "[Nothing happened] for years. And so I was always kind of looking for a way to write about it."
There is journalism for you.
And many bullshit jobs in corporate America as well.
jodys mothers sneeze
francois charpentiers cool breeze
six four dollar fees
hongmeizhous ai
christmas egg nog coopers pie
solopertos tie
B
Pretty dry stuff!
Tick tock tick tock tick tock...fallacies die over time. Only truths and reality remain.
P.s. few on earth collectively are as industrious and pragmatic as the Chinese. that makes betting against them very risky.
Sounds like sour grape.
I just don't get why you westerners so concern about china.
Its interesting because maybe the West is wrong. Maybe by providing unlimited funds to the corporate and infrastructure sectors the price reductions can outrun the expected inflation. If for example, we take an open mind and plan to take a similar approach, it's still necessary to examine the underpinnings of the China model. For China side audiences, it is not common to criticise leaders etc this seems offensive. It's necessary to understand that in the USA people criticise all politicians, strategies, policies constantly - it is not just CCP. you could set fire to Donald Trump pictures daily, it's not seen as dangerous or humiliating the country.
Way of life
@@thewiseplayer6880 china dont give dam about usa ,the way of life of china.they are so busy making money and study to excel in future.🤣🤣🤣