China fact of the day

If China’s new debt in January were a country, it would be the world’s 27th-biggest economy.

That is from Simon Rabinovitch.

p.s. they are not deleveraging.

p.p.s. my old method of clicking on the time stamp no longer creates a separate link for a tweet, how do I link to individual tweets now?  Or does the algorithm no longer permit this?

Comments

Right-click title. Copy link address.

Click the icon that looks like three dots and click "copy link to tweet"

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Given the size of China's economy this seems like much to do about nothing,

$500 billion in one month is certainly significant.

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Are you not paying attention to everything else going on in China? They run a surplus with us but are a net debtor to the world. Their economy is slowing. Their domestic consumption is undermining their export promotion policies. They've lost control of real estate markets.

These are the death throes of the current economy. And by no means am I pessimistic about China's potential, just critical of its central planning. By the end of this decade China will collapse like the Soviet Union, and the CCP are already donning their golden parachutes.

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Click the "..." icon next to the "<3" icon. There will be a drop down menu with the first option being "Copy link to Tweet"

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Population of Denmark- 5,614,000 Population of the People's Republic- 1,357,000,000 There are 16 cities in China with a population greater than the population of Denmark.

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Clicking on the tweet itself should give you the url:

https://twitter.com/S_Rabinovitch/status/699505101782683649

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And more loans are going bad.

Tragic watching them squander the fruits of the greatest economic growth story of modern times. Looking more and more like an invluntary devaluation will be in the works. Does the ChiCom leadership not believe their regime can survive the capital flight a float would allow? Or do they really not understand what they are doing?

Care to explain why this is bad?

Lets say I had two cities that are exactly the same

City A spends 1 billion a year on homeless.

City B on the other hand spends 1 billion to prop up failing businesses.

According to most economists city b is in bad shape because they have 1 billion debt while city a has none.

This is basically what China is doing, instead of handing out welfare checks they are propping up companies and employment numbers.

As a believer in common sense I would say it's the opposite.

For the company receiving life support there is a chance they could pay the govt back while the homeless will never be productive citizens.

The chicoms know exactly what they are doing, they are forcing people to work for welfare instead of handing out ebt, ssi, section 8 and Medicare.

Your analysis of fiscal policy and incentives is intriguing, but it suffers from the common belief that governments drive their economies. China is reacting to an economy that is increasingly escaping their grasp. I agree with Dave that they will soon be forced to float their currency. Their export promotion policy is going the same way as Import Substitution Industrialization.

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Where did City A and B get the money? You're implying A didn't borrow the money but B did, but then that means A had to acquire a billion dollars through taxes that B didn't.

At any rate you can't replace social welfare spending with malinvestment.

"At any rate you can’t replace social welfare spending with malinvestment. "

Hmm, are you sure? Couldn't you describe patronage as either a form of social welfare spending or a malinvestment, depending on your point of view? Sure, it might not be economically optimum, but it could still be sufficient.

I live in Illinois, where we traditionally combine patronage, malinvestment and social welfare spending.

Seriously, though, it really depends how bad the investment is and how much utility the social welfare provides, but China is very poor and has a lot of malinvestment, so at least marginally this has to be a very bad deal.

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The tweet is confused about the difference between a stock and a flow.

I was thinking the same thing, but it says "new debt." It's a bit confusing.

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The first obvious concern is ignoring the scale of the debt to the size of the economy.

Comparing a flow to a stock in this case is not inappropriate. It would be inappropriate the other way around. If you annualized this monthly deficit, the chart would look even worse. The thumb is on the scale against the author's point.

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Why don't they just sell some treasury bonds ?

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Evidently easy linking is too much content control for creators vis a vis Twitter as publisher. This is the bad thing about the algorithm, that you cede freedom in exchange for convenience, and who knows what they prioritise? Maybe profits, but there are lots of ways to make profits and some are unseemly, like political bias in favour of de-regulators.

"political bias in favour of de-regulators" lol WTF?

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Officially, click on the "...".
https://support.twitter.com/articles/80586
Unofficially, right-click the timestamp and copy that link.

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The whole analysis of things seems to be really interesting, but of course there is a lot that we need to find out. We must pay attention to other things as well because if we ignore or forget about it then we could be facing serious trouble. I feel pretty lucky to have http://www.binoptionen.com/ site to look at with their complete platform to not just figure out right strategies, but also to understand where to start up my career with!

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