Is China’s GDP Overstated By 60%?

 

Some very good points here in support of the evidence of the above video. I've long thought the CCP was overstating their numbers so I'm prone to believe these claims. It could also help explain Xi Jinping's economic crackdown. Perhaps he knows the GDP lying is unsustainable and wants to try to ensure when the bill finally comes the crash is not fatal. 

As was pointed out in the comments to the post - we know for a fact that the USSR always overstated their economic numbers. Why would we believe the CCP would act differently?

RIP Henry (Macrocat)

How Xi Sacrificed China’s Future in Pursuit of Total Power

Interesting look at the state of China's economy. This article includes China's Zero Covid rules and the uncertainly that is bringing to the mix both economically and also in people's personal lives and outlooks. 

The article also factors in the crackdown on sharing or exporting any chip manufacturing equipment and expertise. China had a decade to catch up on this technology but failed to do it. Now they are really behind the eightball in a technology that is required for China to go from making just iPhone cases instead of iPhone like smartphones. Not to mention how important chip sets are to next generation military technology.

The End of the System of the World

Noah Smith with a very thoughtful analysis on how China came to be the manufacturing hub of the world and how that world is today unravelling. Thought the article was very well done. There were some things I'd disagree with (like how Noah describes China's handling of COVID - in my mind their Zero Covid policy is a disaster for China) but overall very well done.  

Two details from the article caught my eye:

• China has stopped publishing most of its economic statistics. If the numbers were good - do you think China would be hiding them?
• China's stocks are now trading below the value of their assets on paper. And with foreign investment fleeing - my guess is those stocks stay underwater.

I've never liked the term "Chimerica" because I've long thought the Chinese economy was more of a chimera (a mythical beast made up of different parts). Nothing in the article changed my opinion on that.

Two areas of potential trouble that weren't discussed in the article, IMHO, are the facts that China is neither energy nor food independent. The first can be solved by treating Russia as China's gas station (this opens up a number of other geopolitical issues) but the second will be harder to solve and could be something that becomes more and more of an issue for Xi Jinping's government. A hungry people used to having food will become less compliant and internal dissention against Xi's Marxist turn may not go over so well.

Anyway - the article is well worth you time.

What Xi Jinping's Third Term in Power Means for Investors.

"Once people walk away, the tea becomes cold." - Chinese saying 

When the Motley Fool says the "tea has grown cold" they are talking about China itself.

Xi Jinping has made it clear in word and deed that he intends to return China's economy to its Marxist roots. When the government faces a major financial challenge in the future (and those challenges are coming) - the first assets to be seized "for the common good" will be foreign assets. Think of Venezuela and the foreign oil companies.

This line from the article stood out for me, "Any investment in China absolutely, positively must be in alignment with the interests and goals of the CCP." The line immediately made me think of BlackRock and Ray Dalio. Two of the biggest proponents of Chinese investment in the West. Do you think BlackRock's investment are aligned with the interests and goals of the CCP? Or with those of America?

Why any foreigner or foreign company would invest in China at this point is beyond me.

China Might be at the Edge of an Economic Catastrophe

Disturbing analysis of the current economic situation in China.  The author does a good job of connecting various dots and all the dots seem to spell out trouble.

First take the fact that the "Shanghai Stock Exchange composite (equivalent to our S&P 500) has not yet recovered its 2008 peak, despite the Chinese GDP having tripled since then!" The Chinese seem distrustful of their own stock exchanges and instead put their money into real estate with "nearly 96% of the Chinese population having exposure to real estate and about 70% of national wealth tied up in real estate."

Problem is there seems to be a real estate bubble about to burst. Bigger problem is it's not so much a bubble as a Ponzi scheme. "Now like all Ponzi schemes, they continued to work until one day, they suddenly didn't." And that "one day" has arrived. 

The trouble has therefor spread to the banking system which has involved the government (which has been involved to a lesser extent all along). Add in rampant corruption and none of the news on the Chinese economy is good. Decouple now!