While it may sound impressive, China’s growth rate of more than 5% is significantly less than what its leadership had expected.
My policy, which has served me well for many a year, is to assume that any statistic coming out of China is a lie. In fact, so successful has this policy been that I’ve broadened it to include Western governments as well.
Yesterday China’s economy was ‘collapsing’ on Unherd.
Today it just ‘isn’t as strong as you think’.
That’s an excellent upwards curve.
Can’t wait till tomorrow!!
Last edited 8 months ago by Dumetrius
John Galt Was Correct
8 months ago
“If there is spirited debate among economists as to whether China will be able to escape its funk, there is broad agreement about how it sank into it.”
Economics, the science of stating what has happened whilst never being able to anticipate it.
“It will take a while before people begin to feel the cost-of-living crisis is receding, but there are reasons to believe that reversal may prove permanent.”
In history, including economic history, nothing is permanent. If nothing else, this statement by the author is delusional.
Samuel Ross
8 months ago
This article so mingled opinion with fact, that I’m unsure where one begins and one leaves off.
“…real wages have, after decades of stagnation, recently turned positive ….The consequent rise in labour’s bargaining power has shown up in recent pay settlements across the developed world, where competition to attract immigrant workers will get more fierce…”
Absolutely, but all of this is heavily caveated. Multiple playouts ongoing, each pushing and pulling each other simultaneously. It is absolutely the case that labours leverage is increasing. The primary cause is the large scale retirement of boomers across the globe and concomitant loss of expertise. So yes wages for the young are set to rise in the first instance. Their debts (student loans etc) will also start to look smaller because of the combination of inflation and rising wages. Most of all it is high end expertise that will be able to name it’s price and migrate where it will. But, the zinger is that there is era changing technological change incoming very very fast indeed, in the form of the large language models – so all bets beyond the short term are off. Moreover, this will target cognitive professions first, so there is no telling how this plays out, except it looks to me to be extremely chaotic.
Your forecast of “extremely chaotic” may be right but it is rather unhelpful. I would start at the opposite end and ask what is essential in western economies for stable and happy(ish) societies and then work out how to deliver it. In particular, I would say that, amongst other things, it is politically imperative that real wage growth resumes on a sustained basis for the less educated and the young. The absence of this for thirty years in the US has produced Trump. The resumption of flat or declining real wages would lead to even more alarming demagogues or outcomes. Once one has fixed this aim, it is a question of “we will do what it takes” even if that leads one to protectionism (as in America today), increased immigration controls (coming shortly) or even a change in the tax system to slow rather than accelerate IT led change (definitely controversial). Forecasts are good; clear aims even better.
“is politically imperative that real wage growth resumes on a sustained basis for the less educated and the young. The absence of this for thirty years in the US has produced Trump”
Nail on the head.
James Kirk
8 months ago
Apart from those who make money out of manipulating money, for most it’s for spending. Money’s only taxed when it moves. If the Chinese close their factories our shops and businesses will follow. I don’t need a new car, especially an electric one. Nor do I need a new TV, computer, toaster. I’m not much help am I? Perhaps the old school accountants had it right. Build cars that rust away, TVs you must hit in the right place with your fist, toasters with broken elements. Chinese imports of junk are probably the best way. Just make them from stuff that dissolves into nutrient fertiliser and we’ll all be happy consumers.
Samir Iker
8 months ago
The biggest question is likely to be what happens to their overinflated, oversupplied housing market.
If that goes, China is done for, and the rest of us won’t be in a very happy position either.
Android Tross
8 months ago
The Chinese having a generally high personal savings rate is supposed to be a bad thing? What rubbish.
james elliott
8 months ago
“once one strips new debt from new growth, the G7 economies are close to flatlining. They would have collapsed altogether during the pandemic had it not been for their governments borrowing trillions to keep them afloat”
Well, in fairness there would have been no real danger to Western economies in the first place if we had all realized right away what even the slowest learners have now cottoned on to: the covid episode was a marginally worse than average flu year, weaponized to make several hundred billion dollars for the shareholders of Pfizer and jumped on by the WEF to kickstart the Great Reset to Serfdom.
I mean, let’s be honest here.
Michael Layman
4 months ago
BRICS? Seems like India is the only brick standing.
While it may sound impressive, China’s growth rate of more than 5% is significantly less than what its leadership had expected.
My policy, which has served me well for many a year, is to assume that any statistic coming out of China is a lie. In fact, so successful has this policy been that I’ve broadened it to include Western governments as well.
Very sound.
Yesterday China’s economy was ‘collapsing’ on Unherd.
Today it just ‘isn’t as strong as you think’.
That’s an excellent upwards curve.
Can’t wait till tomorrow!!
“If there is spirited debate among economists as to whether China will be able to escape its funk, there is broad agreement about how it sank into it.”
Economics, the science of stating what has happened whilst never being able to anticipate it.
More art(ifice) than science, surely.
“It will take a while before people begin to feel the cost-of-living crisis is receding, but there are reasons to believe that reversal may prove permanent.”
In history, including economic history, nothing is permanent. If nothing else, this statement by the author is delusional.
This article so mingled opinion with fact, that I’m unsure where one begins and one leaves off.
It’s what’s known as “Economics”.
“mangled” works too.
“…real wages have, after decades of stagnation, recently turned positive ….The consequent rise in labour’s bargaining power has shown up in recent pay settlements across the developed world, where competition to attract immigrant workers will get more fierce…”
Absolutely, but all of this is heavily caveated. Multiple playouts ongoing, each pushing and pulling each other simultaneously. It is absolutely the case that labours leverage is increasing. The primary cause is the large scale retirement of boomers across the globe and concomitant loss of expertise. So yes wages for the young are set to rise in the first instance. Their debts (student loans etc) will also start to look smaller because of the combination of inflation and rising wages. Most of all it is high end expertise that will be able to name it’s price and migrate where it will. But, the zinger is that there is era changing technological change incoming very very fast indeed, in the form of the large language models – so all bets beyond the short term are off. Moreover, this will target cognitive professions first, so there is no telling how this plays out, except it looks to me to be extremely chaotic.
Your forecast of “extremely chaotic” may be right but it is rather unhelpful. I would start at the opposite end and ask what is essential in western economies for stable and happy(ish) societies and then work out how to deliver it. In particular, I would say that, amongst other things, it is politically imperative that real wage growth resumes on a sustained basis for the less educated and the young. The absence of this for thirty years in the US has produced Trump. The resumption of flat or declining real wages would lead to even more alarming demagogues or outcomes. Once one has fixed this aim, it is a question of “we will do what it takes” even if that leads one to protectionism (as in America today), increased immigration controls (coming shortly) or even a change in the tax system to slow rather than accelerate IT led change (definitely controversial). Forecasts are good; clear aims even better.
“is politically imperative that real wage growth resumes on a sustained basis for the less educated and the young. The absence of this for thirty years in the US has produced Trump”
Nail on the head.
Apart from those who make money out of manipulating money, for most it’s for spending. Money’s only taxed when it moves. If the Chinese close their factories our shops and businesses will follow. I don’t need a new car, especially an electric one. Nor do I need a new TV, computer, toaster. I’m not much help am I? Perhaps the old school accountants had it right. Build cars that rust away, TVs you must hit in the right place with your fist, toasters with broken elements. Chinese imports of junk are probably the best way. Just make them from stuff that dissolves into nutrient fertiliser and we’ll all be happy consumers.
The biggest question is likely to be what happens to their overinflated, oversupplied housing market.
If that goes, China is done for, and the rest of us won’t be in a very happy position either.
The Chinese having a generally high personal savings rate is supposed to be a bad thing? What rubbish.
“once one strips new debt from new growth, the G7 economies are close to flatlining. They would have collapsed altogether during the pandemic had it not been for their governments borrowing trillions to keep them afloat”
Well, in fairness there would have been no real danger to Western economies in the first place if we had all realized right away what even the slowest learners have now cottoned on to: the covid episode was a marginally worse than average flu year, weaponized to make several hundred billion dollars for the shareholders of Pfizer and jumped on by the WEF to kickstart the Great Reset to Serfdom.
I mean, let’s be honest here.
BRICS? Seems like India is the only brick standing.