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Finance and Economics

Central hub for discussion on Finance & economics

Malik , An engineer turned into a student of conflict Aug, 05 2016

How long can China’s economy be this Strong ?


China's economy expanded slightly faster than expected in the second quarter but private investment growth shrank to a record low, suggesting future weakness which could pressure the government to roll out more support measures. While fears of a hard landing have eased, investors worry a further slowdown in China and any major fallout from Brexit would leave the world even more vulnerable to the risk of a global recession
China's economy expanded slightly faster than expected in the second quarter but private investment growth shrank to a record low, suggesting future weakness which could pressure the government to roll out more support measures. While fears of a hard landing have eased, investors worry a further slowdown in China and any major fallout from Brexit would leave the world even more vulnerable to the risk of a global recession

Shaurya Singh Khan , Aug, 05 2016


They have to take this opportunity to continue their reforms in SOEs, markets, energy, basic services, and the financial sector. Chinas NDRC has been announcing hundreds of reforms the last few years. The main issue is that they are not being implemented properly by the lower branches of government. Entrenched interests stand in the way. Until Xi forces these entrenched interests to accept the market reforms, until Xi slows the anti-corruption campaign, and until Xi takes his gag off the media, these entrenched interests will fight his economic reforms. China will probably grow (in reality) 5% the next few years. The main question is if private investment will rebound, or will continue at 2.8%.
They have to take this opportunity to continue their reforms in SOEs, markets, energy, basic services, and the financial sector. Chinas NDRC has been announcing hundreds of reforms the last few years. The main issue is that they are not being implemented properly by the lower branches of government


Sameer , Aug, 05 2016


In reality, if the Chinese government was following a sustainable debt track and did not help fuel a housing rebound, the quarterly growth would have been more like in Q4 2015 and Q1 2016 (1.4% and 1.1%). TE itself recognised this rebound every 3 quarters in China since 2011. Although China has not slowed down nearly as much as was predicted, it is still on an unsustainable path. Xi and Li and many economists know this, but they also were afraid of the slowdown accelerating and causing panic like in January. For example, public investment is up 19.9% YoY. Private investment is only up 2.8% YoY.
In reality, if the Chinese government was following a sustainable debt track and did not help fuel a housing rebound, the quarterly growth would have been more like in Q4 2015 and Q1 2016 (1.4% and 1.1%). TE itself recognised this rebound every 3 quarters in China since 2011. Although China has no


Alice , Aug, 05 2016


Talking of balance should reasonably at least present the ratio of the two, searching out the data I found the 2.8%-growing private investment is the private fixed asset investment, and it takes up 61.5% of the economy, weight yet sliding,but just by 3.6% YoY, what do you mean by the economy is relying mainly on the state that is taking a lesser share? Also, 20% is the medium growing rate of state investment if you look at the data from Statiscs of China, for the highest it reaches 40% and above during 2009 and 2004. How come this become a sudden savior to the economy when its rate is not even close to its highest? Plausible argument on fragmented data is especially shading your tasteful writing.
Talking of balance should reasonably at least present the ratio of the two, searching out the data I found the 2.8%-growing private investment is the private fixed asset investment, and it takes up 61.5% of the economy, weight yet sliding,but just by 3.6% YoY, what do you mean by the economy is rely


Raghav , Aug, 05 2016


China is very fortunate to have big government at this junction. These outlays on subways, sewage systems and affordable housing will create jobs for many, use up excess production capacity of steel, cement etc. for the present and will have a multiplier effect for the future. In contrast, the politicians in the US are still debating endlessly as to what to do while the economy is stagnating resulting in many people on food stamps or unemployed. China has become the scapegoat for all these ills for "manipulating" her currency, dumping of cheap goods etc. Neither Hilary Clinton nor Trump in the current election campaign is brave enough to admit that the US defence expenditure of more than the next eight countries combined, is unsustainable and that this money should be diverted to infrastructure in order to propel development for the future.
China is very fortunate to have big government at this junction. These outlays on subways, sewage systems and affordable housing will create jobs for many, use up excess production capacity of steel, cement etc. for the present and will have a multiplier effect for the future. In contrast, the polit


Pranay , Aug, 05 2016


There is now a discussion in economics regarding what is more important, the reality or the appearance. For example unemployment in the US is officially said to be around 5%. The "real" unemployment rate has been measured by Shiller and others to be around 20%, based on the older definition. Yet the markets seem to be happy with the 5%. The same with China. No one who really knows anything about the Chinese economy believes the official figures. Yet the Economist quotes them, and the market seems happy with them. So what is more important, perception or something closer to reality?
There is now a discussion in economics regarding what is more important, the reality or the appearance. For example unemployment in the US is officially said to be around 5%. The "real" unemployment rate has been measured by Shiller and others to be around 20%, based on the older definition. Yet the


Medha , Aug, 05 2016


Theres one thing to consider as Chinas economic and political might continues to grow. The huge outflow of capital is likely part of a long-term master plan in which Chinese foreign investment becomes so large, something that may have already happened, that no nation, economic block, or even the 1% can/will dare take coordinated action to halt Chinas economic, military and foreign political actions because it may result in a savage backlash by China that will cripple or crush international profits and stock market values into economic depression which, no doubt, planners have no only prepared for but in fact planned but which China, with some minor upset, will easily withstand.
Theres one thing to consider as Chinas economic and political might continues to grow. The huge outflow of capital is likely part of a long-term master plan in which Chinese foreign investment becomes so large, something that may have already happened, that no nation, economic block, or even the 1%