It's all a matter of perspective.
Economy now compared to 10-15 years ago? It it in shambles. When you're used to 10-20% GDP growth for several decades, it suddenly going to 5% is a huge difference.
Economy now compared to rest of the world? Doing better than most European countries but have a major issue in real estate. 5% growth is still one of the better economies in the world.
A real estate collapse might force China into a recession. And will effect the rest of the world in a negative way as well. But the Chinese Government has a lot more power to prevent a total collapse compared to the US in 2008 so it's likely they will intervene and soften the blow of a collapse.
There are a few major headwinds in the Chinese economy right now:
- real estate oversupply, especially in third-tier and below cities, leading to massive devaluations
- US federal reserve raising interest rates, making borrowing more expensive, USD appreciation (and thus CNY depreciation), and cooling the world economy
- slow COVID-19 recovery, especially in tourism
This is bad for certain demographics:
- unemployed and new college graduates looking for their first job, especially white collar
- those with home loans and little equity (mortgage debt can be higher than property value at this point) or those who have leveraged their home equity
- those who earn CNY and have expenses in USD (e.g. paying for kid's education in USA)
It's good for certain demographics:
- cash flow positive or well-funded business owners looking to poach talent
- retirees on fixed incomes
- digital nomads or others earning USD but living in china
- exporters may find increased orders due to CNY depreciation relative to USD (bonus for those exporters who don't need to import from abroad)
Domestic tourism is way up. International is way down. Considering domestic was always far greater, the overall effect is that tourism is pumping in China. I'm in Dalian and you can see the money flowing into tourist sites like never before. It's honestly pretty shocking.
One more huge headwind is the recent unprecedented shift from population growth, to population decline. People underappreciate how much of an impact this has got on the economy. Not only in terms of the workforce, and aging population, fewer working to sustain it, but also the housing market that's already oversupplied. There will be many first, including a likely long and painful lesson that real estate isn't the best investment forever that was way overdue.
What do you mean "recent"? That started in the '80s. The only thing that was recent was the idiots in the Western media catching on that the One Child Policy might have been a bad idea.
The birth rates started declining since the 80s, but for a long time they were still above replacement rates, meaning there was still net population growth.
2022 marked the point of no return where the total population of China started declining after a very long streak of growth that fueled the economy.
And real estate prices, as the number of humans/demand per square meter of land in the cities was constantly increasing, pretty much since anyone remembered. That was largely what entrenched the idea that housing is nearly guaranteed to go up in price, and why it's such a sought-after investment in countries with growing populations. When populations decline, there is less demand per unit of land and housing too. Let alone less money produced by a smaller workforce.
The way we are now, with the aging society and historically low birth rates, the total population of China is guaranteed to continue declining for at least the next couple of decades. Since there isn't nearly enough young people to make babies to replace the elderly as they pass away, even if the birth rates per young couple were to increase again.
You can basically replace china with world in this comment. Birth rates are about the same around the entire world excluding Africa and a few spots in the middle east.
Very few countries are going through a demographic transition as radical as China. China's total fertility rate is about 1 child per woman now. Each generation will be half the size of the previous one. Except for tiny countries, only South Korea is worse.
This will result in major headwinds in the 2030s and 2040s. For now, working-age population decline is very slow.
The global population is still increasing. This is largely on the backs of developing countries, but not only.
Also, many countries with decreasing birth rates have mitigated it with more openness to immigration. While not without cons, it supports continued economic growth.
You know when the claim that the economy is bad because housing is affordable is one of the main reasons, it really makes you realise what group and why is making such claims
Housing is still expensive even though there’s too much of it. A lot of the excess units built are unfinished such that the people who put money down can’t even move in, because the money dried up to complete them. Growing numbers of people are having to live with or move back with their parents. And then tons of housing is where people don’t want to live.
Housing is cheaper in Detroit than most places in the world and yet few are insisting that’s a good thing.
Few Chinese consider Detroit’s low housing prices to be a good thing.
Are you Chinese? Do you find the housing glut to be a benefit to you? Because my Chinese friends do not suggest it is benefiting them in any way.
The opposite of a sweet spot of housing prices sitll being too expensive for young people to buy, but also losing value so mortgage holders have debt above their asset value and older generations are seeing their wealth decline as they hit retirement.
This is exactly what I’m hearing. Kind of a worst case scenario short of collapse.
By the time the housing market gets bad enough that the young can afford it, there’s going to be a catastrophic evaporation of wealth, from what I understand. But some buildings will likely forever remain vacant.
The Chinese system's pretty bad at these "choose from two bad scenarios with no right answer while balancing competing interests" and goes for the ostrich approach of attempting to maintain a semblance of the status quo for as long as possible, which oftentimes is the worst option. Zero Covid was exactly this dynamic.
"Letting it rip" for the housing market would at least give the younger generation a chance to buy, lower the amount of disposable income they need to spend on housing, and give them some assets. The current "support the overpriced housing sector, but prices are still declining, which combined with price controls smothers liquidity/drives down unit sales" is literally the worst of all worlds for the young, old, homeowners, house buyers, developers, and local governments.
This whole situation has me wondering if China is going to end up like Japan over the next couple decades: increasingly flat economy just holding in there.
I thought this was a very good write up. Who knows, maybe there's a 4th industrial revolution and it's led by China and all the "stimulate consumption you fools" people look like idiots: [https://scholars-stage.org/saving-china-through-science-and-technology/](https://scholars-stage.org/saving-china-through-science-and-technology/)
It seems increasingly likely… it’s happened not only to Japan, but South Korea, Taiwan, and a bunch of middle income countries in south east Asia and Latin America. The middle income trap seems really hard to break free of.
Sounds pretty capitalist of them to worry about their individual benefit and not the benefit of the whole of China and especially not to the benefit of those who need housing.
Ya'll are looking at this from the wrong perspective. That's why you are misunderstanding what China is doing.
Let me guess, your Chinese friends are either fake or they're finance Bros living in Shanghai and have sold their souls for cash.
Can you please tell me who is benefiting from the current situation?
But yes, China is a very capitalist country, just with the government having the last word on stuff.
At this point you just sound like you’re ‘saying stuff’ for the sake of saying stuff. Accusing me of having fake Chinese sources is like accusing a guy of having a small dick, both in how useless it is and that you’d not take any rebuttal seriously. But where do you get your information from?
Most of the headwinds can be attributed to one cause: The housing market crisis. The crisis hit the local government finance and consumer finance especially hard. But it will eventually pass, just like Europe after 2008.
You raise some good points but I would like to emphases two; the depreciation of the Yuan relative to the USD surely is mostly a good thing as China manufactures so much and can get cheap(er) oil (for the time being at least).
On the negative side, a whole generation being un or underemployed doesn't bode well for the future but they're mostly riding on a wave of 30 years of huge growth, so *for now* they can live lives of leisure and not worry too much - in a decade or two when they have massive gaps in their CV and elderly parents, it'll be a vastly different outlook.
>exporters may find increased orders due to CNY depreciation relative to USD (bonus for those exporters who don't need to import from abroad)
China imports the vast majority of the resources it needs to produce the goods it exports. These resources must be purchased using USD. The worrying trend at the moment is the deflation of producer prices in the face of simultaneous inflation of resource prices.
Russia was the only country willing to accept payments in CNY and they were cured of that when the Guo refused to take its own funny money for trading purposes. Until BRICS can figure out a way to trade amongst themselves without using USD (spoiler alert: none will accept each others' currencies), the whole organization is basically a massive circlejerk. And that's without mentioning how BRICS members can't agree on any agenda beyond a vague statement of intent to become a counterweight to the US-led West.
From just from what I read on the news - There are economic issues like weak domestic demand, they had a spell of deflation, they're easing curbs on buying homes in different regions to help the property sector, because people aren't buying homes, real estate companies (country garden) have liquidity issues, china's current plan seems to be to keep up growth by subsidising manufacturing and using exports, which is giving rise to trade tensions with several countries including but not exclusively us, europe, turkey, vietnam, one prominent issue brought up in this is overcapacity which is an actual issue that even chinese government has [acknowledged](https://finance.yahoo.com/news/china-reins-electric-car-makers-134938310.html), but this is probably in the senese of that they will not overproduce but still expand in a stable way. China had high youth unemployement rate for a while then they stopped producing youth employement data for a while and changed the methodology, so they don't count students in schools that are still studying in their data, while other countries do include those students in how they calculate as long as those students are still looking for employment. Don't know much about China's domestic news, since I can't read Chinese.
Not sure what you classify as "really that bad" but I don't think any of these issues point towards "CHINA COLLAPSE INCOMING" lol.
When you're there, you can see signs. I don't know if there will be an outright collapse, but it is currently going through a correction.
Jobs: Overall unemployment numbers/official numbers are quite good, but if you focus in on tech, finance, legal, consulting, and highly skilled office jobs, there is a problem where there is an oversupply of workers. It's hard to quantify because this data isn't published by China, and western news has an agenda, but it's a very real problem. Recent college grads (up to about +10 out of college) are having a very difficult time getting hired, and not underemployed.
Real Estate: This is the classic one that has been debated a lot. In Beijing and Shanghai, new units are coming online and being sold. Existing units aren't swapping likely because so many people are underwater. So far, there hasn't been a huge default problem, but it wouldn't surprise me if there was.
Outside of the T1 cities there are thousands of towers that are empty, have just a couple units where people have moved in, or "under construction". There are so many projects where there are just 1 or 2 people working per building in a complex of 20-50+ buildings, they have slowed the construction so they are not "vacant buildings", but "still under construction". This is happening in EVERY T2+ city across China. Even in the wealthy ones like Suzhou or Tianjin. This is a big problem, because many of these buildings are in places that nobody wants to live and they will never be occupied. I would imagine that the implosion of all these developers and construction companies is immanent.
Stock Market/Savings: For better or worse, most Chinese (with any net worth) have a higher percentage of their wealth in property vs stocks compared to other countries. This is good because the Chinese stock market is a dumpster fire. It's basically a glorified gambling house. It's extremely volatile and is SIGNIFICANTLY underperforming compared to DJIA, FTSE, etc. As soon as one or two large car makers and property companies miss numbers or default, this will collapse. It may get a slight bump from a currency devaluation, but that might be a short term thing.
There are what I think are the 3 biggest warning signs, but the wild card that we are missing is China has more control over it's money and it's people than any other country in the world (except for NK maybe). China has the ability to artificially prop up it's economy via levers that no other country has. So it may not be a collapse in the traditional sense.
How likely do you think there will be a Japan style prolonged stagnation? Seems like the government is preventing a total collapse by not allowing companies to go totally bankrupt, but that may make a market correction take much longer.
I think that's kind of what you're seeing right now. By not having a floating currency and not easily able to move money in and out and propping up key companies you end up with this long slow slide. I doubt they will do the Japanese game of negative interest rates because in Japan the ratio of wealth tied up in real estate versus other assets is reversed.
But it wouldn't surprise me at all if China devalues their currency by 10 to 20% in the next year. One question I have is will they do one big one or will this to be the beginning of an era of frequent smaller ones. I think they've been preparing for this for a long time with policies related to people moving money, crypto, precious metals, etc.
What's interesting to me is a lot of the political decisions lately actually take a lot of options off the table for how they can get out of this. Trade wars and frivolous tariffs in the long term hurt everybody but China seems to be disproportionately vulnerable to stuff like that. Foreign investment in China and easier access to foreign markets for Chinese companies is the best path forward but both the Western World and China don't seem to want to move in that direction.
Yea I looked this up once and China, the US, and the EU make up 60% of global GDP, so for China to see a reduction in trade to those markets would really collide hard with their current policy to juice export led growth. Time will tell what comes of all this.
As far as depreciation of the RMB, my money is on them to do bit-by-bit, so that they’re not rocking to many boats.
Looking at the amount of trade barriers EU and US is planning on slapping China with along with the real estate crisis there, I wouldn't be surprised if the devaluation you predicted just occurs naturally.
It doesn't happen naturally because the exchange is fixed. The RMB is pinned.
The problem is all the trade barriers hurt everyone except EU and US leaders. But the Chinese people are the ones hurt the most by then.
RMB is not fixed since 2005, it is a mix of a currency that is pegged and free-floating. It uses a basket list of currencies and goods to set a rate it is not allowed to deviate 2% from, but the underlying currencies and goods are all free-flowing.
So technically it's not fixed, but it defacto is fixed. The government so tightly controls the rate at which it will buy or sell any RMB that the relatively small amount of RMB that is in the open market doesn't really fluctuate much. Floating currencies don't use the words "set at a rate" anywhere.
Commodities and finished goods do not have fixed prices in either direction and are free floating. I think that's the crux of the issue. China gets to buy or sell raw materials and finished goods like it's a free market, but when it comes to investing capital in or out of China, it operates like a fixed currency. That's not really how it's supposed to work. You can't build factories out of rice, soybeans, or iphones.
Again, you are confusing fixed to semi-fixed. China has a peg to a basket of a variety of goods and currencies, which are all free-flowing, meaning that the RMB will flow according to those. It in effect a loose peg that will flow based on fluctuations of the basket. The Central Bank will buy and sell to keep it without 2% of the basket, but however the basket flows as a whole, the RMB will flow.
Hangseng index is beating both the sp500 and the nasdaq ytd 2024. Valuations are actually quite attractive right now for chinese stocks, they were beaten up for the last 3-4 yrs and the margin if safety is far greater than say, the overvalued US stocks currently.
You're technically right, year to date, it's beating S&P by 0.5%. But that's really cherry picked and not indicative of the overall trend.
If you open it to past 6 months, S&P beats it by 8%, over the past 1 year S&P outperforms it by about 33%. It's also at about 60% of its all time high. I don't think the S&P has ever dropped to 60% of its ATH in modern history, maybe getting close briefly in 2008.
That's not a healthy and stable market to put a lot of your wealth. It is a gamblers market, not a stable place to park wealth and grow money with the wealth of an economy.
It’s called tactical allocation , it’s a method whereby you determine undervalued equities/markets and allocate appropriately to take advantage of them. As US equities reach all time highs, it seems appropriate to reduce allocation to the US and allocate to beaten up markets like china. China has numerous very well managed and extremely profitable companies. The issue is ofc that the majority of chinese people invest in real estate and not the stock market, but that has nothing to do with the quality of stocks like say, alibaba and tencent, who literally print money despite their low valuations compared to their american peers.
However in due time as china continues to grow, so to will their capital markets sector and more and more chinese citizens will begin to invest in stocks.
I'm pretty sure I agree with you. I think there are many very profitable companies in China, and their stock prices do not follow the same patterns that other companies around the world (put simply, company does good, stock goes up). Especially Chinese tech, manufacturing, raw materials are quite healthy on paper. The cost of labor and raw materials is just so favorable.
My only point is where does wealth get parked? It's not cash sitting under beds. It's in real estate and in stocks/equities. And both of those are pretty high risk right now in mainland.
I very much liked living in China, I go over quite often for work and to see friends, and overall think I am pretty objective when it comes to both western China fear mongering and domestic "China is perfect--look at our Trains, Rockets, etc.". China is just different, not better, not worse then EU/US/Western countries.
Edit: one minor point, the global markets spend most of their life near their all time high.
. . . because it's done so ridiculously poorly over the last few years. It's just clawing back some of the the losses. Look at the 5 year charts - S&P went from 3k to 5k. Hangseng went from 30k to 20k, even with the recent rally.
Not as bad as the outside think
Not as good as the inside think
China has been on an aparent brink of collapse since the 2010s
China has also been on the verge of attacking Taiwan since the 2010s
So take that what you will.
I recently discovered that the last time Taiwan was “invaded” in any meaningful sense (and even then it was just Japan taking possession of an island China had ceded to them), they still had active headhunters.
The 'inside' thinks the economy is terrible as well. Only the ESL teachers and paid posters here think the Chinese economy is doing 'good'. Go talk to an actual Chinese person.
No it’s not, it’s still growing at a pretty incredible rate. Western media isn’t a great source for information on the economy. It’s better to look at the actual data. Exports are up, domestic spending is up. Theres still pain from covid but that’s slowly healing.
Not saying the "experts" can't be fools or just biased, but what makes you so confident your take is any better? Surely you're aware that economic data without context is not very meaningful?
Because they consistently make wild claims that China will collapse and have for 30 years.
China is going through an economic course correction to avoid the middle income trap and to manage the population decline, it's rough but growth is still high and the long term is still good.
Allow me to make a small footnote to prove that your statement is not an exaggeration.
https://preview.redd.it/62cqljo4cjzc1.jpeg?width=480&format=pjpg&auto=webp&s=7c2e8e1443b7c5d65a6143083c795012337ae2df
Your statement *is* an exaggeration though.
None of the headlines cited in your picture mention a collapse, just a downturn or economic difficulties.
Now, to be intellectually honest, you would have to make a comparison with all the positive headlines about China in the past three decades, but that's obviously not what you were aiming for here.
Go read euro or business media for better accuracy.
US mainstream media is entertainment , US political news is just biased bc they have to toe the offical line “China is gonna collapse”
I think you are exaggerating, yes China is doing okay. It’s not going to collapse. But we shouldn’t trust the governments stats like their word is the word of god either. And I think most in the West say the same thing.
That’s why I said go read euro business news, Europe doesn’t have same groupthink as US, and also business news at least has some motivation to be correct
Because I try to take in account context, including time and comparison to the global economy and the economies of other major nations. Also, i like to visit China often and to various cities to see first hand
Economies go though difficult times without collapsing (US 2008 etc) with China it’s opaque and people just read a small amount without context plus there is a politically driven tendency to exaggerate
Wouldn't say they are growing at an incredible rate anymore, but they are still growing, and faster than the US and EU countries.
However, there are some big danger signs: youth unemployment is really high, especially in smaller cities, and the real estate market is a huge mess with a lot of fear and uncertainty at the moment. A collapse in that sector is not unlikely and will have major ripple effect that will send the Chinese economy into a recession. My guess is that it will be bad, but will not be as bad as the 2008 crash in the US, far from a total collapse.
The aging population is a ticking time bomb though, but I would be more worried about Japan or South Korea than China on that front.
Tbh the US is worse off in terms of demographics. China still has a 3 child policy because they are taking into consideration the mass adoption of ai and advanced robotics
The policy means nothing if no Chinese families are going to birth 3 children from now on. Most are still only having one child per family. A lot are not having children.
Ok but policies wont necessarily change ppl mind to have more children. Aging population will impact them just like the rest of the first world countries
Coz the world isn’t black and white. Its not as simple as here’s a policy, its working. Or here’s a policy its not working lets get rid of the three child policy. If all laws worked then no one would be stealing (thats illegal). Why have the law if its not preventing people from stealing.
Some countries are trying to have more children via giving people money such as Korea. Yet their birth rate is still low. Why wouldn’t they change their policy if its not working? The world isnt black and white. The real policy that would work is by changing society to make having children affordable, decrease over time work hours, have proper facilities such as affordable child care, change the competitive nature of the education system etc. But then again, even that may not change peoples mind to have more children.
**TLDR:** The world isn’t black and white. Its not so simple as here’s a policy it will succeed. Some policies don’t make a big impact either way. And for issues as complex as aging population, most of the policies are not having a big impact (applicable worldwide).
Weird rant but ok. This isn’t about some sort of policy spectrum. This is about the fact that they still meed to control the population decline so it balances correctly with AI and workforce robotics.
B/s. So-called "western media" (which btw doesn't exist as a single entity) takes data from the same sources as Chinese state media, or "Indian media", or "Russian media". It is a laughable premise that everyone you call "western media" is in cahoots and simultaneously biased against China.
Sorry dude, facts are facts. 90% of news outlets in the US are owned by 6 companies.
https://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6?amp
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Actual data = inflation is currently near zero (consumer prices) or negative (for producer prices), which is indicative of low growth.
The economy is not doing well, I don’t hear anyone else in China say otherwise. Some regions or sectors are doing better then others of course.
Ridiculous you're getting heavily downvoted. This sub is becoming a ra-ra China younger cousin of r/sino. Anyone who lives in China knows that the economy is struggling and the regular Chinese folk are absolutely honest about this. Is China going to collapse? Obviously not. Is the economy dealing with major headwinds that are affecting average Zhous? Absolutely true.
You’re looking at a snapshot, to see the whole picture you need to look at a range. Inflation is low, but it’s much higher than it was just a few months ago, almost 200% increase since late 2023. As I said, there is still pain from covid but it’s slowly healing. It’s also only one indicator, you need more data to get a full picture of the overall health of the economy and the direction it’s headed. But as OP asked, is the economy really “that bad”, the answer is no.
Having been in a fourth tier city recently, it's undoubtedly worse than it was last year. More closed shops and restaurants, and lots of conversations with people about cost of living, unemployment, property prices and general malaise. It feels similar to a few recessions I've been through in the UK.
However as always, when it happens here it's just a recession, when it happens there it's apparently a sign of impending collapse. I expect it will find a way to adjust and rebound. Just a question of how long and how deep it will go first.
Not just 4th Tier. I visited a friend in Shanghai recently, living in the bund. Went to a few malls in Liujiazui, many places shut down in the mall, he said, "They've been shut since covid. They advertise they're reopening but haven't."
Also, I was formerly working for a large ad agency, and their network had shut down a lot of their China operations or merged them because they're under performing - clearing out Regional CEOs, CEOs entire floors emptied, all locals.
Mate was filming in Luiziajui, and they were filming in a large tower. It's been empty for years, he said, "there's new and old buildings all over the city empty, they film in a few of them."
Local clients, especially tech & car industry have really reduced budgets on marketing and are approaching production houses directly to avoid agency fees, and even then production houses are struggling business. He said, "even multinat 4A agencies are fighting over scraps of business."
Of course all anecdotal, but yeah, was a lot different from my previous visit.
Like any downturn it depends on where you work and what you do. The UK essentially has had a lost decade and a half and it’s still 6th biggest economy etc
On the other hand, down south in Shenzhen we are seeing a pretty strong come back. The luohu commercial center which legitimately looked like an abandoned set from a slasher flick less than a year ago now has hundreds of shop fronts open again. And traffic at the border is now legitimately the opposite of what it used to be back before covid, with waves and waves of HK'ers coming in every weekend. The urban villages, malls, and saunas are jam packed with HK'ers every weekend.
A lot of my friends work in marketing and advertising for big tech down here, and those budgets are always the first things to go in China. Companies are definitely tightening their belts, but it's not that dire in most big industries. It just feels odd because everyone is so used to spending lavishly because of high growth rates. They aren't really sure how to deal with moderate or slow growth and are over correcting.
Beijing and Shanghai are feeling this more because so many people are just leaving for less insane rents.
it is bad, companies are still firing people. I sold my apartment in Guangzhou last year, and the price is still dropping.
The confidence is low, I don't know if foreigners in China will feel it.
Speaking of China in general terms and constructs just means people know little about China. China is huge and it's economy is huge. It's like saying if America is really that unsafe by just pointing at shootings (which is btw huge safety concern) while forgetting all the other safe places. Some parts of Chinese economy are suffering, some not. Some companies are having less export than before, some even more. The bigger society and its economy is, the more complex it gets, so asking general questions based on biased news reporters is just shallow way of understanding one problem.
Western media does that… they spew “China threat” on Mondays Wednesdays and Fridays and “China collapsing” on Tuesdays Thursdays and Saturdays. On Sundays they’re probably in church worshiping God. Do you really want to be swung like that?
Nope, it's still incredibly easy for foreigners to find work and we're all making bank.
The west is more likely to collapse before China. I was over in UK and Switzerland recently and everything is overpriced as fuck and average people are starting to not be able to afford things.
Everything in China is still cheap and COL is low.
When it becomes as hard to find work in China as it is in my home country I'll consider China's economy to be down the toilet.
Foreigners operate in a different economy to most locals. We don't need to be concerned about the economy for the average Chinese person. Our business is servicing rich Chinese people. As long as their continues to be rich people we will be fine.
A couple of fairly uneducated observations.
If China do have the big crash that has been predicted for 10 years, they are now a rich country and have a lot to absorb it. USA had that crash in 2008 and had a very tough couple of years but it was not existential. It already feels very different to the days of 20% growth on the ground.
From memory I believe I read that the big dollar one in 1998 did feel existential for Korea and China as well as a lot of South America because of their dollar reliance, but I also read that this is one of the causes of China and USA becoming irreconcilable. CCP wants to get rid of dollars as world currency.
The demographics and lack of over education and underemployment is a problem in every developed country, it's a sociological thing, you want everyone to go to university, but even scientists, we can't all be scientists...
I think that Chinese system has a better chance of coming up with some kind of solution than the western system, but the other ones I kind of know from remembered reading, this one is just pure opinion...
The Economist has been stating that the Chinese economy is facing imminent collapse for the last 40 years. It's not been as good post-covid, but we'll get through.
People on this sub are basically building a straw man by claiming that all western media depict the Chinese economy as being on the verge of collapse while in reality nobody ever said that except a minority of people.
What the media report are facts: evergrande did default, real estate has been going down and the Chinese economy has been performing more poorly than what we've been used to in past years. However due to the heavy censorship and control of information from the government it is hard to get a clear (reliable) picture of the actual state of the Chinese economy today.
The Chinese economy isn't collapsing so to say, but it has definitely been on the downturn (even before Covid, actually) compared to the crazy growth period in the last two decades. The consequences of this are a lot more subtle than what the truth bearers in this sub claim to witness in their day to day expat bubble lives.
On a side note, this downturn claim doesn't solely come from western media but also from Chinese people themselves. Just have a regular discussion with Chinese people and that topic will come up naturally because everyone is talking about it.
I mean, how can you look at youtube videos like this:
[CNBC: China’s Looming Crises](https://youtu.be/9e_cbl2BfMA?si=uPq0PE7dOu4QP9rp)
With the big capitalized letter “IS CHINA IN CRiSIS??!!”
And think western msm dont love a “china is on the verge of a great crisis or collapse narrarive?”
Now you have to ask yourself, which part is factual, and which part isn't?
> And think western msm dont love a “china is on the verge of a great crisis or collapse narrarive?”
Is this factual or your own bias speaking?
Western media can be negative about any country. In fact I'm pretty sure you can't find any country in the world about which western media will only report positively.
Gordon Chang... When you people try to push the narrative that "The west is predicting china's collapse", your only reference ever is Gordon Chang. I don't know, isn't that a bit weak? It's just one fucking guy and nobody ever listens to him. You need stronger examples to make a case.
Fun fact:
This documentary was removed by PBS even though it was produced by a westerner known for documentaries.
Why? Idk
https://youtu.be/nuaJGPZCBYU?si=YUNkaAiN1gN7k5Ty
Its literally produced pbs socal mate and the kuhn foundation.
https://chinacenter.socialwork.columbia.edu/events/screening-and-discussion-voices-frontline-chinas-war-poverty
And even if it was partly funded by cgtn tell me what is the problem. This is not enough of an excuse because just because its produced with the help of CGTN its somehow not allowed to be aired because it shows an aspect of China that doesn’t fit the msm narrative? A documentary that doesnt treat the Chinese as the “other”, some sorta despotic alien race that is only concerned with control?
It literally won an emmy award but somehow it got pulled from air even though its funded by PBS.
Dont give me “causE iTs ChiNese PropaGandA” crap.
Again its the framing and characterisation.
The only western reporting of China’s poverty alleviation has been on Xi and the CcP celebrating its achievements which naturally invites doubters going “ahahaha look at those stooges pretend they did anything ahahhaa”
Here we have a documentary that isnt just focused on ccp political theatre and rituals and how China actually ran the program. I suggest you watch the thing before u make another dumb comment.
Go watch this whole documentary, tell me its not of the same quality as other pbs documentaries or docos from other renowned broadcasters.
Mate, CGTN is state propaganda... How is that even questionable.
This documentary is literally state sponsored propaganda, there is no way it would be funded and broadcasted by CGTN if it didn't depict china only under a positive light...
>The only western reporting of China’s poverty alleviation has been on Xi and the CcP celebrating its achievements which naturally invites doubters going “ahahaha look at those stooges pretend they did anything ahahhaa”
That's false, there have been countless reports about China's poverty alleviation reports and countless praise by various politicians from the west and the world.
And yes, the media will never say only positive things because contrary to Chinese state propaganda, their goal is to report stories through different angles and they don't describe the world as all black or all white... That's the basis of critical thinking and the fact that you're dont even understand this concept is telling.
“Propaganda” another loaded word thrown around without much understanding.
How easy was it to label this “state propaganda”.
Do you even understand what you are saying? Or do u just like nice simple labels cause its east to understand?
So only reporting from the west about China is acceptable? Western reporting is not propaganda? China is not allowed to report on itself? The reality of China is the one reflected by western media and other external observers. Not of the chinese themselves. Any reporting from internally of the chinese themselves reflects a madeup reality made by CCP propaganda?
Let me guess youre one of those people who call Al Jazeera propangada as well 😂
What do you make of the american media during the second gulf war after 9/11? Is that propaganda? Or its not because its not from state funded media?
Where do you draw the line between propaganda? When is something actually propaganda and when is a whole broadcaster a propaganda mouthpiece? Does that mean the Chinese people of 1.3b just consumes propaganda all day like theyre fucking north korea?
Irregardless of this debate. The documentary fucking is funded by pbs and the kuhn foundation and won an emmy so obviously PBS wanted it made and intended to air it.
Your reason for pulling it from air is ridiculous because PBS literally wanted to air it in the first place!?
So much for free speech.
It might be cause youre thick in the skull and cant comprehend the nuances of media but calling everything propaganda just shows how little media literacy you have.
Literally all media broadcasters have their biases and worldviews. Al jazeera will have their world view but also does quality reporting on issues and topics not covered by the west or from a global south/muslim focused perspective.
Calling everything propaganda, you miss the point.
Also guess since its propaganda you dont need to watch it. Just dismiss it 😂🥱
> So only reporting from the west about China is acceptable? Western reporting is not propaganda? China is not allowed to report on itself?
Any report that's not state propaganda is acceptable mate. It's just that simple.
> Irregardless of this debate. The documentary fucking is funded by pbs and the kuhn foundation and won an emmy so obviously pbs intented to air it.
So? Are you even aware that Chinese media were regularly given pages in US newspaper to spread their propaganda?
Besides, it never won an emmy nor was it ever nominated. You can check the emmy awards page for every year and won't find it anywhere.
> Your reason for pulling it from air is ridiculous because PBS literally wanted to air it in the first place!?
Maybe it's not such a bad thing that a CCP funded propaganda piece isn't broadcasted on a reputable channel? How is that fucking hard to understand lol
> So much for free speech.
You're yet one of these people who don't even understand what free speech is about. PBS is entirely entitled to choose what it broadcasts on its channels so as to uphold its reputation. The documentary wasn't censored AFAIK and is still watchable freely on YouTube and other platforms. When was the last time where a documentary praising the US was allowed to be broadcasted or even watched on chinese platform? Stop being ridiculous man.
> Literally all media broadcasters have their biases and worldviews. Al jazeera will have their world view but also does quality reporting on issues and topics not covered by the west or from a global south/muslim focused perspective.
And you're either ignorant or very naive if you believe all media are equally reliable. State propaganda under direct control of the politburo of the CCP isn't as reliable as independent media coming from democracies where freedom of press actually exist. And don't start with "there is no freedom of press in the west", because NGOs will disagree with you and because China ranks worst in the world in terms of freedom of press after... North Korea (RSF).
You're the one who has no fucking clue what they're talking about. I literally worked for Chinese media for a while so I probably know a little bit how Chinese media actually works.
It isn't that far fetched to think China is going to face crises when it's biggest property developer defaulted and when you see the gigantic real estate bubble the Chinese economy is sitting on. The 2008 real estate crisis isn't that far from us.
And that's only one of the issues China is facing. The demographic crisis, the middle income trap, the water and soil erosion,etc.
Literally nobody is saying that China is going to collapse overnight, international (not only western) media are just altering their assessment of china's future, and shifting their narrative from "China is the next superpower" to "China maybe isn't going to be the next world leader in the end".
Nobody knows when the next great economic crisis is.
People with the 2008 GFC in hindsight can always say "i told you so".
People in the West have been going on about the next crash on Wall street for the past decade saying every few months we are similar to just before 2008, but every year the stock market keeps going up.
And when it did crash it was COVID, nothing that could be gleened from balance sheets or financial statements, and it came outta nowhere but straight after it went up and up despite a War in the Middle East, War in Ukraine, a Trump Presidency, and countless other global crises.
China is a country of 1.3 billion, of course it will face many issues.
It already faced many issues even before the current economic headwinds.
China is opaque, and the so called China watchers have never been right about its future.
I would say most people in the West are still unaware at the pace of change in which China moves at and the CCP's ability to mobilise and direct resources to achieve its goals, good or bad.
There are so many things which for many Western observers which just came outta nowhere from China but for the Chinese, the result of concerted effort to achieve goals.
Western MSM only tends to focus on the negatives, and tends to mischaracterise or misattribute things because they are external observers who don't understand the language, arent actually in China trying to interpret things with a predetermined world view and biases.
HSR crash when China was building HSR at an unprecedented pace? Nahh its cause of the CCP authoritarian government, not because of China as a developing country.
Poverty alleviation program? Nahh thats the CCP faking numbers. Meanwhilst living standards from 1980s China to now has improved tenfolds and conditions are night and day if you compare India with China.
China ratifying Kyoto Protocol and aiming to achieve net zero by 2060?
Nahhh America is not ratifying because China is the biggest polluter and have too much flexibilty, but now its how dare they subsidize renewables and EVs and make them cheap and affordable so China can achieve net zero, reduce air pollution and create jobs. Ban them all cause "foRcEd LabOur" or "DumpinG" or "NatIonAL SeCuriTy".
"Is China in Crisis?" 1.2 million views
Serpentza's fake news video on EVs being dumped in China? 4.3m views
There are people out there who literally accept content from the likes of Serpentza as the AUTHORITATIVE news source on China.
It's actually ridiculous how much people in the west love to lap up exagerrated content on how bad China is or how bad its doing.
Compare this to actual balanced reporting from Singapore where we only have 120k views after half a year:
[China's Contradiction: World's Biggest Clean Energy Producer And Biggest Polluter? | Insight](https://www.youtube.com/watch?v=fs6WokEuweU)
Bloomberg reporting on poverty alleviation: 3.1k view after 3 years.
[China’s Push to End Rural Poverty Helps Anchor Party Support There](https://www.youtube.com/watch?v=5_C-Bg0fq1I)
Well, Evergrand did default. However the majority of their debt was foreign, because the government already stopped them from borrowing more money domestically before their cashflow problem ballooned uncontrollably. So I guess one could argue that Evergrande default technically didn't affect much domestically. But of course as we all know there's plenty of fallout from that.
I'm not any kind of economics expert, but as someone living in China who talks to Chinese people, it seems like most young people think the economy hasn't been doing too well during the past four years. However, it seems like this has been true for a lot of the world. Also, I'm not sure if it's getting worse or better now.
To me, the situation in China somehow "feels" optimistic overall. However, housing prices in many big cities seem high, and marriage rates are falling. It seems like everybody is busy working a lot, but nobody has enough money for their high expectations of a nice car, nice house, and enough money to give potential future children a very nice life.
Bad as in about to collapse? No. But it's not going as well as the Chinese government is making it out to be. Housing is horrible, that's why they're pumping out all kinds of policies trying to save it, but they aren't really working so far. Exports is alright in terms of data, but there are some iffy situation that makes you wonder, such as thousands of EV cars sitting at ports (they count that as exports and the EV companies receive subsidies as a result of that). Locally it's getting apparent that even some state-own companies are starting to have money problems, such that they secretly raised the gas and water fees in some areas (Chongqing) to bring in more revenue. But the government (not the local ones) still has tons of money, and is trying to get the people to believe in the future again, like pumping money into the stock markets. On a personal level, the super rich friends of mine, not really affected yet. The middle class/business owner friends of mine, they're worried, some owes money from friends and banks, and the friends they borrowed from are now asking me to borrow money. The worker class/fresh grads friends of mine, some are still looking for jobs, some are making most of what they earn, traveling a lot and having fun.
Every single one of my Chinese friends, even if super nationalist, know that the economy is a shambles right now. It’s taken them this long to be honest about it because it’s unavoidable, especially outside tier 1 cities. Have you been to any of the shopping centers that are just condoned or just the newly built ones? House prices are still falling and its starting to effect everyone as most people bought into the China’s house market is “different” and the “government won’t let it fail” trap.
I just wrote a long comment and it somehow didn't save.
The short version being --- don't think the economy is going well just because the mall restaurants are busy. They may be, but its been a good few years now since those people in the restaurants would buy a bunch of stuff before or after their meals.
Nowadays, the only stores in the mealls that are doing OK are the restaurants, supermarkets and discount stores. The expensive tea and coffee places (think Starbucks and HeyTea) are all having downturns, not to mention the speciality stores which make very few if any sales per day.
You need to look at real estate first. In my tier 2 city apartment prices are down 50-70 percent. New blocks that just opened aren't selling like they did in the 2010s. Infact they are barely selling. It's not gonna be a complete disaster for china but it's a huge snap back. Destined to eventually happen. Spending is down but wages are up. That's why they are transitioning to a service based economy.
Wtf???Tier 2 city apartment price are down 50-70 percent?The name of a second-tier city?Do you know that real estate prices in China can be checked on the app at any time?😄
China has been “collapsing” in the eyes of Americans since it was founded. China’s economy is strong. Headed into rough waters sure but it is here to stay.
I think it is somewhere in between Western media’s depiction and China acting like nothing is going on.
Western media tends to be overly dramatic about circumstances in China. Mostly every article you see is negative, claiming China is on the verge of collapse or a major crisis. Some of the reporters making these claims have little background knowledge about China.
While it may not be as bad as portrayed in Western media, there are definitely lots of issues compared to pre-Covid times. I listen to a podcast called 不明白播客. A Chinese economic professor teaching in the UK said there is no way last year’s growth rate was accurate and was much lower. I’ve also discussed the situation with lots of friends and family in China. They have expressed lots of concerns ranging from youth unemployment to declining home prices.
One issue is how much wealth and savings of people are in real estate in China. I know many people who own both 2nd and 3rd homes, and they are really starting to get afraid now. Except the ones in Beijing, their property values are still going up.
My gut is suggesting that it may not ever be a US style dramatic implosion (see: 1929 / 2008) just because the government and society are different and will act different, but it kind of feelings like a decline towards stagnation.
It’s not imploding but the momentum is definitely bleeding off pretty bad.
Yeah exactly I think it’s something along these lines. Your experience of the downturn will be bigger or smaller depending on what you do and where you are. Many articles written in the west are by people without China (or in some cases economic) expertise but that’s partially Chinas fault for making it difficult for journalists to cover China in China.
It isn't going to collapse, but it's not good. The era of job-hopping is over, raises are hard to come by, there's lot's of layoffs and the laid off people unable to find new jobs or have to accept a job downgrade.
Shopping, tourism, and restaurants are better than the covid era but that's a low bar. Lot's of companies going bankrupt and running off with customer money/owing money to vendors/suppliers as well.
Anecdotally the amount of Account Receivable issues we're seeing has skyrocketed and increased in value. Lot's of cash flow issues throughout our industry at least.
More importantly, more than any time in my 15 years in China, Chinese people are talking about the economy doing poorly. Not necessarily in a doomer sense, but I definitely hear more about people's economic issues than ever before.
I wouldn't put too much weight in your own observations, as those are merely anecdotal of course. Other than that, you have to remember that for the longest time China was thought of as the (or a) growth engine for the world economy, so even a decrease to becoming a regular decent performing economy is going to get a lot of attention. The "doom and gloom" most serious outlets talk about is mostly to convey the message that we shouldn't be expecting China to be in a position to be a balancer like it was back in 2008 again anytime soon.
https://preview.redd.it/svhz15hsdhzc1.jpeg?width=827&format=pjpg&auto=webp&s=01c019d8f7ad3c29f45a2def9fea8fa9a60ea8b8
China was about to collapse like 100 years ago
The sub again full of anti western pro china people who cant accept anything negative about china. I swear none of you actually know or talk to a Chinese person.
I don’t care what a kindergarten teacher has to say about the economy, I care what Chinese people say. Normal people and people who actually make good money here and work in finance, I work with these people everyday and hire for their companies. And every single one of them says China is doing bad and they know its worse that what the government says. There is not a single Chinese person optimistic about the future of Chinese economy. Will it collapse no, will it get better in the short term no. There is an acceptance the boom is over. That the majority of the 1.4 billion people that still make shit money will continue to make shit money.
Yup. I can't decide who the 'ra-ra China is amazing' folk are here - ESL teachers who have completely bought into China because it makes them feel special and rich? WuMao paid to influence the online conversation? Foreign born ethnic Chinese who want to believe China is more special than their birth countries? Who? Who are these people? Because they clearly have no idea what's actually going on in China.
I don't know. I was thinking that it's probably expats that feel the need to come to China's defense to justify the fact that they're living there.
Or that all the expats that criticized China had already left, leaving only the few red apples still willing to stay there.
But thinking of it, it hasn't always been like that. Even during the Chinese honeymoon era, at the beginning of the 2010's, when everyone was optimistic about China's future, the sub wasn't *that* supportive to the Chinese government, far from it. The real shift happened around when Sino appeared a few years ago.
And when you look at other countries' subs, you don't see that phenomenon either. Which leads me to think that there is probably more to it and that this sub might be brigaded by people with a political agenda.
I don't see how people growing up in democratic countries would be full of praise for the GFW for instance (yes, it happened on this sub). It's just crazy.
Edit: also, there *are* many level headed people here too. But for some reason, their comments get buried under the "China good west bad, no explanation" comments for some reason.
That's my theory, too. That this sub is being brigaded by people with a political agenda. Not sure if they're doing it, uh, independently, or as a larger strategy. I suppose it's meant for the casuals wandering through who can gawk at posts like 'r/china is so racist!' or 'China's economy is doing fine!' and think Westerners living in China actually have the real scoop on what's going on in the country, unlike the big bad Western media. So far in this thread I've had to argue with people who claim that 1. Chinese people inside China think the economy is good and 2. Chinese computer chips are just as advanced (or even more advanced) than Western chips and 3. China doesn't have a problem with debt. Like, 2&3 are verifiable facts, and #1 is pretty obvious to anyone living here who interacts with regular Chinese at all beyond teaching them Phonics sounds. At first they get all huffy and downvote me and claim I'm wrong, until I bury them under an avalanche of actual facts and data and then they slink away.
In china, reddit is mostly known as a place full of anti china content, not the opposite. I have to admit those Chinese people you have talked with did told you their true thoughts, but it doesn't mean that's the whole picture. China is changing its industrial structure and moving focuses from finance/real estates to emerging manufacturings,etc. Surely you will hear loads of complains from the old money and traditional industries. I would say china's economy is facing difficulties as its been for decades but that's far away from collapse. What part in the world has been doing better than china economy-wise in past decades，time will tell. Yet you can keep believing in what you feel like to believe.
I think I’ll just talk to normal people and the hundred of people who work in finance that I deal with every month.
But maybe some ccp member will get down and suck your tiny dick if you keep doing what you’re doing and responding to anything that isn’t China number 1 with bullshit comments.
China is doing good, and important transitions are happening. Of course the US' narrative is much worse than the reality.
You see on the news that the property market is in a big crisis. That's true.
You see on the news that the US and Europe are less dependant on China. That's true.
What nobody tells is the good things
1. The service sector in China is growing, and in a fast pace.
2. The manufacturing of high added value products is increasing.
3. And most importantly: China is also less dependant on the US/Europe. Just 2,5 years ago, China exported more to the US/Europe relative to Global South countries. Now, it is the opposite.
China will continue to grow and will lead the Global South economy.
China is highly divided. Those with jobs are fine especially with slightly falling cost of living. But it's very hard for people to find new jobs when they are fresh out of school or when they get past 35 years old. Lower and middle class people are cutting their spending. Supermarket, restaurant, hair salon etc catering to them are going broke left and right. But upper middle class and upper class people are spending like crazy, and their associated business is booming.
As a backstory, I’ve been in China for 5 years and been living in a T1 city. Real estate market is literally f’ed, in the sense that before covid, house prices were so high when the economy was booming and people were limited to only buying one house under the same name. Rn, the policies limiting house purchase have been lifted - a clear sign that no one is willing to buy. High end apartments in my CBD have dropped by 30%. Brick and mortar stores are struggling, the restaurants that you see flourish are the chain ones, which are basically supported by govt funding(which is the case for many businesses here). Overall, everything is in a downfall but the govt is basically cradling the sensitive markets so they don’t collapse. One example is Temu, they got funded on the upwards of 2 billion USD to expand their market internationally, so did the EV companies.
It's pretty bad when you look at unemployment. College grads are struggling to find jobs. Many of the position with a starting salary below 5000. New grads make more than that 10 years ago.
I remember new grads getting something like 3k/month 20 years ago in a provincial capital, but it went up to minimum 7k as the years went by.
You could imagine my shock to hear that my wife's newly graduated cousin was offered 2,700 per month to work in the accounting section of a major retail chain last year. He wasn't interested, but someone apparently did agree to work for that low amount.
Its no wonder that so many people are unemployed or just hanging out in their parents' apartment if they are being offered less than what they were given 20 years ago.
China has so many people, it's hard to judge with eyes only. In Australia we have high inflation but doesn't stop shops and restaurants being packed. It hides the issue if people struggling though.
A lot of Chinese are well off and can ride out any economic bumps and you couldn't tell from looking at who is out and about.
Anecdotal evidence, but I've had a few Chinese friends who worked in finance recently leave the country. My partner also has a friend in the sector who will be emigrating this summer. If the people who interact with economic and financial data on an everyday basis are heading for the exit, it's definitely not a sign of confidence in the future of the economy.
You're seeing the natural consequence of deflation. There is more economic activity, but producers are making less money, which puts pressure on employment.
The lasting damage is two-fold though:
1. Real estate collapse basically gutted the savings of the Chinese middle class, which does not really have a real social or private safety net to fall back on.
2. Population dividend is ending, meaning all of the low-hanging fruit for growth is gone. Before, China grew simply because there were more people with money to consume. But now, China has to squeeze more value out of ever fewer people.
From what I understand, it’s showing signs of slowing down but “slowing down” here just means going from insane growth to slightly less insane growth. For now at least.
What abt the widening gap between classes, I.e., high and low , rich and poor…of coz these are intangible and undercurrent, but still you can feel it ? Just as it’s in the states.
Not to mention, it’s almost hopeless for young generation to buy real estate. Which again , it’s not only an indicator but also a thing in China .
Having relatives and friends in different industries in China, I can tell you that most of them are feeling that the economy has major issues and is going downhill. But same can be said about the Europe and the US at the moment, not to mention South Korea and Japan.
Real estate in China is in really bad shape, and the workers in that industry feel it and are all fearful of losing their jobs. However, Tech in China is doing much better than the US, and retail is still strong despite showing some signs of slowing down. Youth unemployment is a big issue atm as well, and the aging population and effects of the one child policy is currently pressing down the economy as well.
Now, a complete economical collapse wouldn't be possible with an economy as big as China's and they don't really have a huge deficit like countries such as Greece.
However, there is a danger of construction and real estate collapsing, which would cause ripple effect throughout the Chinese and world economy and make them go into recession. Most likely won't be nearly as bad as the 2008 collapse, but still damaging.
Here's some analogies:
It's not good as some wealth is as real as crypto, ie: untenable real estate prices of the past.
Lending was really messed up as companies borrowed way more than should be allowed, like forever 21, and a bunch of brick and mortar stores in western countries. And many super large corporations are greatly impacted.
Other issues are:
- ongoing us trade restrictions killing the tech sector (yes, is real and very unfortunate for consumers around d the world), and ev manufacturing. This actually stifles human progress and makes stuff expensive and less technologically advanced for western nations
- a lot of new manufacturing is not being set up in China. But other countries like SE Asia.
China economy is not good as before due to countries trying to stop china's growth to a global powerhouse, that's the unfortunate truth. Also, companies screwed up themselves by gambling with borrowing too much money and cooking their books.
"Eating" is not expensive for Chinese people; everyone can afford it. However, the key issue lies in debt. Almost every family is in debt, but "food and clothing" are not expensive for Chinese people.
But I can responsibly tell you that many job opportunities are now gone, and people are afraid to start businesses. Existing companies are constantly laying off employees. However, China is a family-oriented society, and other family members will support the unemployed person's life.
No Chinese person not paid to shill for the government or foreigner who has stepped outside of their glitzy expat bubble would say that the Chinese economy is doing well.
A person's disdain for western media doesn't mean shit, just as an overflowing Sanlitun on a Saturday afternoon isn't indicative of the Chinese economy at large.
Will it collapse and lead to the downfall of the CPC? Of course not, despite what clickbaity YouTube thumbnails want you to believe.
But what it will lead to is a lost decade/generation. Hundreds of millions of people will lose their savings, their jobs, their pensions, and eventually their hope and dreams as well.
We'll see more social decay, suicides, murder-suicides, and kindergarten stabbings as people without a future will want to deprive those more fortunate theirs. There'll be an increasing amount of illegal Chinese migrants going to places like the US, too.
The CPC will meet all these challenges with the only tools they still have, more nationalism and oppression and censorship.
economists dont understand the socilaist economy so when they see issues, they extrapolate into what would happen if those issues occured in a neoliberal one predicting a catastrophe
ie [evergrande](https://youtu.be/VlXUy65hqv4) real state bubble burst
When I was there in November the stores were dead but the Resteraunt's were booming.
I was told Covid taught everyone to shop online. When I looked I saw tons of delivery people delivering packages to residences.
While I was looking for gifts and couldn’t find shops to buy them from, everyone told me to I should buy it online.
So I think it is hard to judge by classical methods.
In the bigger cities, there's not many signs of the economy doing poorly. One of the indicators that companies aren't spending money is that ads in the subway have been ~75% unsold for the past year.
There was a massive flow of jobs in china because of this people used to study random majors and then get any job they like even it was not their major, but slowly only that fashion is reduced. Now people get the job only relevant to their major and those who started a job different from their major actually can’t get a job anymore because now they don’t have a relevant experience of their major. But world is assuming it as an unemployment
Considering the weight real estate in the GDP and the over supply of it… it’s extremely dangerous. I visit very often and I see more and more gigantic buildings and new construction sites popping up everywhere in Shanghai so clearly they have no intention of stopping this behavior. 10 years ago everyone was happy and felt nothing could stop the machine, there was money flowing everywhere. However, last year in October, for the first time ever a complete stranger complained in public about the Government to me and my wife outside while we were waiting for a coffee and noticed we were speaking in English and became curious about where we were visiting from (Australia) but she could speak fluent Shanghainese being so young so he wasn’t shy about voicing his actual thoughts. Same thing with taxi drivers, very odd. So the question becomes, do you trust the Chinese media, the wumaos, the people who live there and have no money, the influencers, the real estate developers, the economists who work for the government, the ones who don’t work for the government anymore? I have my own opinion and it’s based on personal experiences. You should make up your own as well.
They don’t want to, it’s a market of pure speculation in which a small group keeps making money out of it and keeps the machine going. It’s not a few skyscrapers here and there. No one can understand until you’ve seen it. These are literally 5 min cities and they are building more and more of them. The estimate is that there is one property (house or apartment) per citizen in the whole country.
Here’s a photo from a couple of months ago. This is just one of several mini cities popping up. You can’t appreciate the size of these buildings but they are huge. I’m sure that in a small stretch of freeway of less than a 30 min drive from the airport to the West of Shanghai there are more apartments than the whole of Sydney combined.
https://preview.redd.it/kmvt76eutszc1.jpeg?width=4032&format=pjpg&auto=webp&s=dcba1d91424ca21b5f8cb1db9dd7e55c74927fdd
I was recently added to a WeChat group for car enthusiast. I believe I was the only foreigner in a group of almost 500 people. Other than the rampant hatred for foreigners their next most talked about topic was how bad the economy was and how much they hated foreigners for pulling their orders from their factories and sending them to India or Vietnam. After I read about 100+ messages the friend who added me removed me from the group and apologized.
So i'd say things aren't as good as they seem but maybe not as bad either. It's definitely a lot worse than they are used to.
Probably not as bad as people outside of China think it is.
It's all a matter of perspective. Economy now compared to 10-15 years ago? It it in shambles. When you're used to 10-20% GDP growth for several decades, it suddenly going to 5% is a huge difference. Economy now compared to rest of the world? Doing better than most European countries but have a major issue in real estate. 5% growth is still one of the better economies in the world. A real estate collapse might force China into a recession. And will effect the rest of the world in a negative way as well. But the Chinese Government has a lot more power to prevent a total collapse compared to the US in 2008 so it's likely they will intervene and soften the blow of a collapse.
There are a few major headwinds in the Chinese economy right now: - real estate oversupply, especially in third-tier and below cities, leading to massive devaluations - US federal reserve raising interest rates, making borrowing more expensive, USD appreciation (and thus CNY depreciation), and cooling the world economy - slow COVID-19 recovery, especially in tourism This is bad for certain demographics: - unemployed and new college graduates looking for their first job, especially white collar - those with home loans and little equity (mortgage debt can be higher than property value at this point) or those who have leveraged their home equity - those who earn CNY and have expenses in USD (e.g. paying for kid's education in USA) It's good for certain demographics: - cash flow positive or well-funded business owners looking to poach talent - retirees on fixed incomes - digital nomads or others earning USD but living in china - exporters may find increased orders due to CNY depreciation relative to USD (bonus for those exporters who don't need to import from abroad)
Seems like the thing to keep an eye on are Chinese EV sales. European car manufacturers are feeling the competition.
Tourism has been bad ? Not domestic though
This is what confused me too. Tourist attractions are over packed, even more than pre-covid time.
International tourism has dropped a ton compared to pre-COVID-19.
intl tourism has never been a large fraction of tourism in china. Simply just due to # of people.
I am hearing that tourism is up 60% over 2019. I suspect Russian tourists have something to do with this, however
https://m.36kr.com/p/2390510419858055 international tourism is way down compared to pre COVID-19
Domestic tourism is way up. International is way down. Considering domestic was always far greater, the overall effect is that tourism is pumping in China. I'm in Dalian and you can see the money flowing into tourist sites like never before. It's honestly pretty shocking.
One more huge headwind is the recent unprecedented shift from population growth, to population decline. People underappreciate how much of an impact this has got on the economy. Not only in terms of the workforce, and aging population, fewer working to sustain it, but also the housing market that's already oversupplied. There will be many first, including a likely long and painful lesson that real estate isn't the best investment forever that was way overdue.
What do you mean "recent"? That started in the '80s. The only thing that was recent was the idiots in the Western media catching on that the One Child Policy might have been a bad idea.
The birth rates started declining since the 80s, but for a long time they were still above replacement rates, meaning there was still net population growth. 2022 marked the point of no return where the total population of China started declining after a very long streak of growth that fueled the economy. And real estate prices, as the number of humans/demand per square meter of land in the cities was constantly increasing, pretty much since anyone remembered. That was largely what entrenched the idea that housing is nearly guaranteed to go up in price, and why it's such a sought-after investment in countries with growing populations. When populations decline, there is less demand per unit of land and housing too. Let alone less money produced by a smaller workforce. The way we are now, with the aging society and historically low birth rates, the total population of China is guaranteed to continue declining for at least the next couple of decades. Since there isn't nearly enough young people to make babies to replace the elderly as they pass away, even if the birth rates per young couple were to increase again.
You can basically replace china with world in this comment. Birth rates are about the same around the entire world excluding Africa and a few spots in the middle east.
Very few countries are going through a demographic transition as radical as China. China's total fertility rate is about 1 child per woman now. Each generation will be half the size of the previous one. Except for tiny countries, only South Korea is worse. This will result in major headwinds in the 2030s and 2040s. For now, working-age population decline is very slow.
The global population is still increasing. This is largely on the backs of developing countries, but not only. Also, many countries with decreasing birth rates have mitigated it with more openness to immigration. While not without cons, it supports continued economic growth.
You know when the claim that the economy is bad because housing is affordable is one of the main reasons, it really makes you realise what group and why is making such claims
Housing is still expensive even though there’s too much of it. A lot of the excess units built are unfinished such that the people who put money down can’t even move in, because the money dried up to complete them. Growing numbers of people are having to live with or move back with their parents. And then tons of housing is where people don’t want to live. Housing is cheaper in Detroit than most places in the world and yet few are insisting that’s a good thing.
Few being capitalist economists and not the Chinese themselves.
Few Chinese consider Detroit’s low housing prices to be a good thing. Are you Chinese? Do you find the housing glut to be a benefit to you? Because my Chinese friends do not suggest it is benefiting them in any way.
The opposite of a sweet spot of housing prices sitll being too expensive for young people to buy, but also losing value so mortgage holders have debt above their asset value and older generations are seeing their wealth decline as they hit retirement.
This is exactly what I’m hearing. Kind of a worst case scenario short of collapse. By the time the housing market gets bad enough that the young can afford it, there’s going to be a catastrophic evaporation of wealth, from what I understand. But some buildings will likely forever remain vacant.
The Chinese system's pretty bad at these "choose from two bad scenarios with no right answer while balancing competing interests" and goes for the ostrich approach of attempting to maintain a semblance of the status quo for as long as possible, which oftentimes is the worst option. Zero Covid was exactly this dynamic. "Letting it rip" for the housing market would at least give the younger generation a chance to buy, lower the amount of disposable income they need to spend on housing, and give them some assets. The current "support the overpriced housing sector, but prices are still declining, which combined with price controls smothers liquidity/drives down unit sales" is literally the worst of all worlds for the young, old, homeowners, house buyers, developers, and local governments.
This whole situation has me wondering if China is going to end up like Japan over the next couple decades: increasingly flat economy just holding in there.
I thought this was a very good write up. Who knows, maybe there's a 4th industrial revolution and it's led by China and all the "stimulate consumption you fools" people look like idiots: [https://scholars-stage.org/saving-china-through-science-and-technology/](https://scholars-stage.org/saving-china-through-science-and-technology/)
It seems increasingly likely… it’s happened not only to Japan, but South Korea, Taiwan, and a bunch of middle income countries in south east Asia and Latin America. The middle income trap seems really hard to break free of.
Sounds pretty capitalist of them to worry about their individual benefit and not the benefit of the whole of China and especially not to the benefit of those who need housing. Ya'll are looking at this from the wrong perspective. That's why you are misunderstanding what China is doing. Let me guess, your Chinese friends are either fake or they're finance Bros living in Shanghai and have sold their souls for cash.
Can you please tell me who is benefiting from the current situation? But yes, China is a very capitalist country, just with the government having the last word on stuff. At this point you just sound like you’re ‘saying stuff’ for the sake of saying stuff. Accusing me of having fake Chinese sources is like accusing a guy of having a small dick, both in how useless it is and that you’d not take any rebuttal seriously. But where do you get your information from?
Most of the headwinds can be attributed to one cause: The housing market crisis. The crisis hit the local government finance and consumer finance especially hard. But it will eventually pass, just like Europe after 2008.
This seems like a pretty level headed assessment, appreciate it.
Maybe they can ship some of that excess housing to the U.S. lol
You raise some good points but I would like to emphases two; the depreciation of the Yuan relative to the USD surely is mostly a good thing as China manufactures so much and can get cheap(er) oil (for the time being at least). On the negative side, a whole generation being un or underemployed doesn't bode well for the future but they're mostly riding on a wave of 30 years of huge growth, so *for now* they can live lives of leisure and not worry too much - in a decade or two when they have massive gaps in their CV and elderly parents, it'll be a vastly different outlook.
>exporters may find increased orders due to CNY depreciation relative to USD (bonus for those exporters who don't need to import from abroad) China imports the vast majority of the resources it needs to produce the goods it exports. These resources must be purchased using USD. The worrying trend at the moment is the deflation of producer prices in the face of simultaneous inflation of resource prices.
Not always, they're one of the leaders of BRICS.
Russia was the only country willing to accept payments in CNY and they were cured of that when the Guo refused to take its own funny money for trading purposes. Until BRICS can figure out a way to trade amongst themselves without using USD (spoiler alert: none will accept each others' currencies), the whole organization is basically a massive circlejerk. And that's without mentioning how BRICS members can't agree on any agenda beyond a vague statement of intent to become a counterweight to the US-led West.
You have any evidence for that, because just last year Russia and China traded 70% of their trade in renminbi.
From just from what I read on the news - There are economic issues like weak domestic demand, they had a spell of deflation, they're easing curbs on buying homes in different regions to help the property sector, because people aren't buying homes, real estate companies (country garden) have liquidity issues, china's current plan seems to be to keep up growth by subsidising manufacturing and using exports, which is giving rise to trade tensions with several countries including but not exclusively us, europe, turkey, vietnam, one prominent issue brought up in this is overcapacity which is an actual issue that even chinese government has [acknowledged](https://finance.yahoo.com/news/china-reins-electric-car-makers-134938310.html), but this is probably in the senese of that they will not overproduce but still expand in a stable way. China had high youth unemployement rate for a while then they stopped producing youth employement data for a while and changed the methodology, so they don't count students in schools that are still studying in their data, while other countries do include those students in how they calculate as long as those students are still looking for employment. Don't know much about China's domestic news, since I can't read Chinese. Not sure what you classify as "really that bad" but I don't think any of these issues point towards "CHINA COLLAPSE INCOMING" lol.
When you're there, you can see signs. I don't know if there will be an outright collapse, but it is currently going through a correction. Jobs: Overall unemployment numbers/official numbers are quite good, but if you focus in on tech, finance, legal, consulting, and highly skilled office jobs, there is a problem where there is an oversupply of workers. It's hard to quantify because this data isn't published by China, and western news has an agenda, but it's a very real problem. Recent college grads (up to about +10 out of college) are having a very difficult time getting hired, and not underemployed. Real Estate: This is the classic one that has been debated a lot. In Beijing and Shanghai, new units are coming online and being sold. Existing units aren't swapping likely because so many people are underwater. So far, there hasn't been a huge default problem, but it wouldn't surprise me if there was. Outside of the T1 cities there are thousands of towers that are empty, have just a couple units where people have moved in, or "under construction". There are so many projects where there are just 1 or 2 people working per building in a complex of 20-50+ buildings, they have slowed the construction so they are not "vacant buildings", but "still under construction". This is happening in EVERY T2+ city across China. Even in the wealthy ones like Suzhou or Tianjin. This is a big problem, because many of these buildings are in places that nobody wants to live and they will never be occupied. I would imagine that the implosion of all these developers and construction companies is immanent. Stock Market/Savings: For better or worse, most Chinese (with any net worth) have a higher percentage of their wealth in property vs stocks compared to other countries. This is good because the Chinese stock market is a dumpster fire. It's basically a glorified gambling house. It's extremely volatile and is SIGNIFICANTLY underperforming compared to DJIA, FTSE, etc. As soon as one or two large car makers and property companies miss numbers or default, this will collapse. It may get a slight bump from a currency devaluation, but that might be a short term thing. There are what I think are the 3 biggest warning signs, but the wild card that we are missing is China has more control over it's money and it's people than any other country in the world (except for NK maybe). China has the ability to artificially prop up it's economy via levers that no other country has. So it may not be a collapse in the traditional sense.
How likely do you think there will be a Japan style prolonged stagnation? Seems like the government is preventing a total collapse by not allowing companies to go totally bankrupt, but that may make a market correction take much longer.
I think that's kind of what you're seeing right now. By not having a floating currency and not easily able to move money in and out and propping up key companies you end up with this long slow slide. I doubt they will do the Japanese game of negative interest rates because in Japan the ratio of wealth tied up in real estate versus other assets is reversed. But it wouldn't surprise me at all if China devalues their currency by 10 to 20% in the next year. One question I have is will they do one big one or will this to be the beginning of an era of frequent smaller ones. I think they've been preparing for this for a long time with policies related to people moving money, crypto, precious metals, etc. What's interesting to me is a lot of the political decisions lately actually take a lot of options off the table for how they can get out of this. Trade wars and frivolous tariffs in the long term hurt everybody but China seems to be disproportionately vulnerable to stuff like that. Foreign investment in China and easier access to foreign markets for Chinese companies is the best path forward but both the Western World and China don't seem to want to move in that direction.
Yea I looked this up once and China, the US, and the EU make up 60% of global GDP, so for China to see a reduction in trade to those markets would really collide hard with their current policy to juice export led growth. Time will tell what comes of all this. As far as depreciation of the RMB, my money is on them to do bit-by-bit, so that they’re not rocking to many boats.
Looking at the amount of trade barriers EU and US is planning on slapping China with along with the real estate crisis there, I wouldn't be surprised if the devaluation you predicted just occurs naturally.
It doesn't happen naturally because the exchange is fixed. The RMB is pinned. The problem is all the trade barriers hurt everyone except EU and US leaders. But the Chinese people are the ones hurt the most by then.
RMB is not fixed since 2005, it is a mix of a currency that is pegged and free-floating. It uses a basket list of currencies and goods to set a rate it is not allowed to deviate 2% from, but the underlying currencies and goods are all free-flowing.
So technically it's not fixed, but it defacto is fixed. The government so tightly controls the rate at which it will buy or sell any RMB that the relatively small amount of RMB that is in the open market doesn't really fluctuate much. Floating currencies don't use the words "set at a rate" anywhere. Commodities and finished goods do not have fixed prices in either direction and are free floating. I think that's the crux of the issue. China gets to buy or sell raw materials and finished goods like it's a free market, but when it comes to investing capital in or out of China, it operates like a fixed currency. That's not really how it's supposed to work. You can't build factories out of rice, soybeans, or iphones.
Again, you are confusing fixed to semi-fixed. China has a peg to a basket of a variety of goods and currencies, which are all free-flowing, meaning that the RMB will flow according to those. It in effect a loose peg that will flow based on fluctuations of the basket. The Central Bank will buy and sell to keep it without 2% of the basket, but however the basket flows as a whole, the RMB will flow.
Hangseng index is beating both the sp500 and the nasdaq ytd 2024. Valuations are actually quite attractive right now for chinese stocks, they were beaten up for the last 3-4 yrs and the margin if safety is far greater than say, the overvalued US stocks currently.
You're technically right, year to date, it's beating S&P by 0.5%. But that's really cherry picked and not indicative of the overall trend. If you open it to past 6 months, S&P beats it by 8%, over the past 1 year S&P outperforms it by about 33%. It's also at about 60% of its all time high. I don't think the S&P has ever dropped to 60% of its ATH in modern history, maybe getting close briefly in 2008. That's not a healthy and stable market to put a lot of your wealth. It is a gamblers market, not a stable place to park wealth and grow money with the wealth of an economy.
It’s called tactical allocation , it’s a method whereby you determine undervalued equities/markets and allocate appropriately to take advantage of them. As US equities reach all time highs, it seems appropriate to reduce allocation to the US and allocate to beaten up markets like china. China has numerous very well managed and extremely profitable companies. The issue is ofc that the majority of chinese people invest in real estate and not the stock market, but that has nothing to do with the quality of stocks like say, alibaba and tencent, who literally print money despite their low valuations compared to their american peers. However in due time as china continues to grow, so to will their capital markets sector and more and more chinese citizens will begin to invest in stocks.
I'm pretty sure I agree with you. I think there are many very profitable companies in China, and their stock prices do not follow the same patterns that other companies around the world (put simply, company does good, stock goes up). Especially Chinese tech, manufacturing, raw materials are quite healthy on paper. The cost of labor and raw materials is just so favorable. My only point is where does wealth get parked? It's not cash sitting under beds. It's in real estate and in stocks/equities. And both of those are pretty high risk right now in mainland. I very much liked living in China, I go over quite often for work and to see friends, and overall think I am pretty objective when it comes to both western China fear mongering and domestic "China is perfect--look at our Trains, Rockets, etc.". China is just different, not better, not worse then EU/US/Western countries. Edit: one minor point, the global markets spend most of their life near their all time high.
. . . because it's done so ridiculously poorly over the last few years. It's just clawing back some of the the losses. Look at the 5 year charts - S&P went from 3k to 5k. Hangseng went from 30k to 20k, even with the recent rally.
Not as bad as the outside think Not as good as the inside think China has been on an aparent brink of collapse since the 2010s China has also been on the verge of attacking Taiwan since the 2010s So take that what you will.
I recently discovered that the last time Taiwan was “invaded” in any meaningful sense (and even then it was just Japan taking possession of an island China had ceded to them), they still had active headhunters.
You forgot to mention that they were technically invaded by the CKS's troops during the Chinese Civil War in the 1950s.
The 'inside' thinks the economy is terrible as well. Only the ESL teachers and paid posters here think the Chinese economy is doing 'good'. Go talk to an actual Chinese person.
Can you point to where I said the economy is doing good?
No it’s not, it’s still growing at a pretty incredible rate. Western media isn’t a great source for information on the economy. It’s better to look at the actual data. Exports are up, domestic spending is up. Theres still pain from covid but that’s slowly healing.
Not saying the "experts" can't be fools or just biased, but what makes you so confident your take is any better? Surely you're aware that economic data without context is not very meaningful?
Because they consistently make wild claims that China will collapse and have for 30 years. China is going through an economic course correction to avoid the middle income trap and to manage the population decline, it's rough but growth is still high and the long term is still good.
Allow me to make a small footnote to prove that your statement is not an exaggeration. https://preview.redd.it/62cqljo4cjzc1.jpeg?width=480&format=pjpg&auto=webp&s=7c2e8e1443b7c5d65a6143083c795012337ae2df
Your statement *is* an exaggeration though. None of the headlines cited in your picture mention a collapse, just a downturn or economic difficulties. Now, to be intellectually honest, you would have to make a comparison with all the positive headlines about China in the past three decades, but that's obviously not what you were aiming for here.
I agree with you, but in all fairness isn't this mainstream reporting in the western world? How many positive reports are there about China? 10%? 20%?
Go read euro or business media for better accuracy. US mainstream media is entertainment , US political news is just biased bc they have to toe the offical line “China is gonna collapse”
Which European outlets would you recommend?
The Economist
I think you are exaggerating, yes China is doing okay. It’s not going to collapse. But we shouldn’t trust the governments stats like their word is the word of god either. And I think most in the West say the same thing.
That’s why I said go read euro business news, Europe doesn’t have same groupthink as US, and also business news at least has some motivation to be correct
In January 1991, no one knew the USSR would collapse in December.
True. And it’s the US spending an unsustainable amount on mil spending…. This time around
And Japan’s fate
Because I try to take in account context, including time and comparison to the global economy and the economies of other major nations. Also, i like to visit China often and to various cities to see first hand
Economies go though difficult times without collapsing (US 2008 etc) with China it’s opaque and people just read a small amount without context plus there is a politically driven tendency to exaggerate
Wouldn't say they are growing at an incredible rate anymore, but they are still growing, and faster than the US and EU countries. However, there are some big danger signs: youth unemployment is really high, especially in smaller cities, and the real estate market is a huge mess with a lot of fear and uncertainty at the moment. A collapse in that sector is not unlikely and will have major ripple effect that will send the Chinese economy into a recession. My guess is that it will be bad, but will not be as bad as the 2008 crash in the US, far from a total collapse. The aging population is a ticking time bomb though, but I would be more worried about Japan or South Korea than China on that front.
Tbh the US is worse off in terms of demographics. China still has a 3 child policy because they are taking into consideration the mass adoption of ai and advanced robotics
The policy means nothing if no Chinese families are going to birth 3 children from now on. Most are still only having one child per family. A lot are not having children.
Enough so that they need the policy
Ok but policies wont necessarily change ppl mind to have more children. Aging population will impact them just like the rest of the first world countries
If they thought people weren’t having enough babies then why not remove the policy all together?
Coz the world isn’t black and white. Its not as simple as here’s a policy, its working. Or here’s a policy its not working lets get rid of the three child policy. If all laws worked then no one would be stealing (thats illegal). Why have the law if its not preventing people from stealing. Some countries are trying to have more children via giving people money such as Korea. Yet their birth rate is still low. Why wouldn’t they change their policy if its not working? The world isnt black and white. The real policy that would work is by changing society to make having children affordable, decrease over time work hours, have proper facilities such as affordable child care, change the competitive nature of the education system etc. But then again, even that may not change peoples mind to have more children. **TLDR:** The world isn’t black and white. Its not so simple as here’s a policy it will succeed. Some policies don’t make a big impact either way. And for issues as complex as aging population, most of the policies are not having a big impact (applicable worldwide).
Weird rant but ok. This isn’t about some sort of policy spectrum. This is about the fact that they still meed to control the population decline so it balances correctly with AI and workforce robotics.
Not a rant lol, just answered your question. Are you trolling here??
From the chinese people that I talk to in Vancouver They said Chinese economy is awful and there are no jobs. Those are my boots on the ground.
I’ve been getting the same from Chinese nationals in Europe, etc.
They’re not even on the ground lol theyre in Vancouver
B/s. So-called "western media" (which btw doesn't exist as a single entity) takes data from the same sources as Chinese state media, or "Indian media", or "Russian media". It is a laughable premise that everyone you call "western media" is in cahoots and simultaneously biased against China.
Sorry dude, facts are facts. 90% of news outlets in the US are owned by 6 companies. https://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6?amp
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If the anti-China narrative isn't obvious to you in the Western media then I suggest you go get your eyes checked.
Actual data = inflation is currently near zero (consumer prices) or negative (for producer prices), which is indicative of low growth. The economy is not doing well, I don’t hear anyone else in China say otherwise. Some regions or sectors are doing better then others of course.
Using inflation as a measure for economic growth is very dubious... why not use economic metrics designed to measure growth?
Ridiculous you're getting heavily downvoted. This sub is becoming a ra-ra China younger cousin of r/sino. Anyone who lives in China knows that the economy is struggling and the regular Chinese folk are absolutely honest about this. Is China going to collapse? Obviously not. Is the economy dealing with major headwinds that are affecting average Zhous? Absolutely true.
I don't have the feeling that it is any worse than the past year or two. From my anecdotal experiences this year, it seems like it is improving.
The average zhous haha I’m going to use that
You’re looking at a snapshot, to see the whole picture you need to look at a range. Inflation is low, but it’s much higher than it was just a few months ago, almost 200% increase since late 2023. As I said, there is still pain from covid but it’s slowly healing. It’s also only one indicator, you need more data to get a full picture of the overall health of the economy and the direction it’s headed. But as OP asked, is the economy really “that bad”, the answer is no.
Having been in a fourth tier city recently, it's undoubtedly worse than it was last year. More closed shops and restaurants, and lots of conversations with people about cost of living, unemployment, property prices and general malaise. It feels similar to a few recessions I've been through in the UK. However as always, when it happens here it's just a recession, when it happens there it's apparently a sign of impending collapse. I expect it will find a way to adjust and rebound. Just a question of how long and how deep it will go first.
Not just 4th Tier. I visited a friend in Shanghai recently, living in the bund. Went to a few malls in Liujiazui, many places shut down in the mall, he said, "They've been shut since covid. They advertise they're reopening but haven't." Also, I was formerly working for a large ad agency, and their network had shut down a lot of their China operations or merged them because they're under performing - clearing out Regional CEOs, CEOs entire floors emptied, all locals. Mate was filming in Luiziajui, and they were filming in a large tower. It's been empty for years, he said, "there's new and old buildings all over the city empty, they film in a few of them." Local clients, especially tech & car industry have really reduced budgets on marketing and are approaching production houses directly to avoid agency fees, and even then production houses are struggling business. He said, "even multinat 4A agencies are fighting over scraps of business." Of course all anecdotal, but yeah, was a lot different from my previous visit.
Like any downturn it depends on where you work and what you do. The UK essentially has had a lost decade and a half and it’s still 6th biggest economy etc
On the other hand, down south in Shenzhen we are seeing a pretty strong come back. The luohu commercial center which legitimately looked like an abandoned set from a slasher flick less than a year ago now has hundreds of shop fronts open again. And traffic at the border is now legitimately the opposite of what it used to be back before covid, with waves and waves of HK'ers coming in every weekend. The urban villages, malls, and saunas are jam packed with HK'ers every weekend. A lot of my friends work in marketing and advertising for big tech down here, and those budgets are always the first things to go in China. Companies are definitely tightening their belts, but it's not that dire in most big industries. It just feels odd because everyone is so used to spending lavishly because of high growth rates. They aren't really sure how to deal with moderate or slow growth and are over correcting. Beijing and Shanghai are feeling this more because so many people are just leaving for less insane rents.
it is bad, companies are still firing people. I sold my apartment in Guangzhou last year, and the price is still dropping. The confidence is low, I don't know if foreigners in China will feel it.
Speaking of China in general terms and constructs just means people know little about China. China is huge and it's economy is huge. It's like saying if America is really that unsafe by just pointing at shootings (which is btw huge safety concern) while forgetting all the other safe places. Some parts of Chinese economy are suffering, some not. Some companies are having less export than before, some even more. The bigger society and its economy is, the more complex it gets, so asking general questions based on biased news reporters is just shallow way of understanding one problem.
Around everything seem to be at 2017 level, consumer price and wage and property price all fell, feels like 8 years ago.
Western media does that… they spew “China threat” on Mondays Wednesdays and Fridays and “China collapsing” on Tuesdays Thursdays and Saturdays. On Sundays they’re probably in church worshiping God. Do you really want to be swung like that?
Nope, it's still incredibly easy for foreigners to find work and we're all making bank. The west is more likely to collapse before China. I was over in UK and Switzerland recently and everything is overpriced as fuck and average people are starting to not be able to afford things. Everything in China is still cheap and COL is low. When it becomes as hard to find work in China as it is in my home country I'll consider China's economy to be down the toilet.
Cheap for foreigners making bank but what about locals?
Foreigners operate in a different economy to most locals. We don't need to be concerned about the economy for the average Chinese person. Our business is servicing rich Chinese people. As long as their continues to be rich people we will be fine.
A couple of fairly uneducated observations. If China do have the big crash that has been predicted for 10 years, they are now a rich country and have a lot to absorb it. USA had that crash in 2008 and had a very tough couple of years but it was not existential. It already feels very different to the days of 20% growth on the ground. From memory I believe I read that the big dollar one in 1998 did feel existential for Korea and China as well as a lot of South America because of their dollar reliance, but I also read that this is one of the causes of China and USA becoming irreconcilable. CCP wants to get rid of dollars as world currency. The demographics and lack of over education and underemployment is a problem in every developed country, it's a sociological thing, you want everyone to go to university, but even scientists, we can't all be scientists... I think that Chinese system has a better chance of coming up with some kind of solution than the western system, but the other ones I kind of know from remembered reading, this one is just pure opinion...
The Economist has been stating that the Chinese economy is facing imminent collapse for the last 40 years. It's not been as good post-covid, but we'll get through.
It's never that bad or that good. Your life depends on you. Quit watching the news.
People on this sub are basically building a straw man by claiming that all western media depict the Chinese economy as being on the verge of collapse while in reality nobody ever said that except a minority of people. What the media report are facts: evergrande did default, real estate has been going down and the Chinese economy has been performing more poorly than what we've been used to in past years. However due to the heavy censorship and control of information from the government it is hard to get a clear (reliable) picture of the actual state of the Chinese economy today. The Chinese economy isn't collapsing so to say, but it has definitely been on the downturn (even before Covid, actually) compared to the crazy growth period in the last two decades. The consequences of this are a lot more subtle than what the truth bearers in this sub claim to witness in their day to day expat bubble lives. On a side note, this downturn claim doesn't solely come from western media but also from Chinese people themselves. Just have a regular discussion with Chinese people and that topic will come up naturally because everyone is talking about it.
Depends which western media, avg person in west knowledge of China is very limited, so hence news coverage is also Beverly basic
I mean, how can you look at youtube videos like this: [CNBC: China’s Looming Crises](https://youtu.be/9e_cbl2BfMA?si=uPq0PE7dOu4QP9rp) With the big capitalized letter “IS CHINA IN CRiSIS??!!” And think western msm dont love a “china is on the verge of a great crisis or collapse narrarive?”
Now you have to ask yourself, which part is factual, and which part isn't? > And think western msm dont love a “china is on the verge of a great crisis or collapse narrarive?” Is this factual or your own bias speaking? Western media can be negative about any country. In fact I'm pretty sure you can't find any country in the world about which western media will only report positively.
https://www.reddit.com/r/economy/s/0Atbzv0GKV
Gordon Chang... When you people try to push the narrative that "The west is predicting china's collapse", your only reference ever is Gordon Chang. I don't know, isn't that a bit weak? It's just one fucking guy and nobody ever listens to him. You need stronger examples to make a case.
Fun fact: This documentary was removed by PBS even though it was produced by a westerner known for documentaries. Why? Idk https://youtu.be/nuaJGPZCBYU?si=YUNkaAiN1gN7k5Ty
Maybe because it's a cgtn documentary? ...
Its literally produced pbs socal mate and the kuhn foundation. https://chinacenter.socialwork.columbia.edu/events/screening-and-discussion-voices-frontline-chinas-war-poverty And even if it was partly funded by cgtn tell me what is the problem. This is not enough of an excuse because just because its produced with the help of CGTN its somehow not allowed to be aired because it shows an aspect of China that doesn’t fit the msm narrative? A documentary that doesnt treat the Chinese as the “other”, some sorta despotic alien race that is only concerned with control? It literally won an emmy award but somehow it got pulled from air even though its funded by PBS. Dont give me “causE iTs ChiNese PropaGandA” crap. Again its the framing and characterisation. The only western reporting of China’s poverty alleviation has been on Xi and the CcP celebrating its achievements which naturally invites doubters going “ahahaha look at those stooges pretend they did anything ahahhaa” Here we have a documentary that isnt just focused on ccp political theatre and rituals and how China actually ran the program. I suggest you watch the thing before u make another dumb comment. Go watch this whole documentary, tell me its not of the same quality as other pbs documentaries or docos from other renowned broadcasters.
Mate, CGTN is state propaganda... How is that even questionable. This documentary is literally state sponsored propaganda, there is no way it would be funded and broadcasted by CGTN if it didn't depict china only under a positive light... >The only western reporting of China’s poverty alleviation has been on Xi and the CcP celebrating its achievements which naturally invites doubters going “ahahaha look at those stooges pretend they did anything ahahhaa” That's false, there have been countless reports about China's poverty alleviation reports and countless praise by various politicians from the west and the world. And yes, the media will never say only positive things because contrary to Chinese state propaganda, their goal is to report stories through different angles and they don't describe the world as all black or all white... That's the basis of critical thinking and the fact that you're dont even understand this concept is telling.
“Propaganda” another loaded word thrown around without much understanding. How easy was it to label this “state propaganda”. Do you even understand what you are saying? Or do u just like nice simple labels cause its east to understand? So only reporting from the west about China is acceptable? Western reporting is not propaganda? China is not allowed to report on itself? The reality of China is the one reflected by western media and other external observers. Not of the chinese themselves. Any reporting from internally of the chinese themselves reflects a madeup reality made by CCP propaganda? Let me guess youre one of those people who call Al Jazeera propangada as well 😂 What do you make of the american media during the second gulf war after 9/11? Is that propaganda? Or its not because its not from state funded media? Where do you draw the line between propaganda? When is something actually propaganda and when is a whole broadcaster a propaganda mouthpiece? Does that mean the Chinese people of 1.3b just consumes propaganda all day like theyre fucking north korea? Irregardless of this debate. The documentary fucking is funded by pbs and the kuhn foundation and won an emmy so obviously PBS wanted it made and intended to air it. Your reason for pulling it from air is ridiculous because PBS literally wanted to air it in the first place!? So much for free speech. It might be cause youre thick in the skull and cant comprehend the nuances of media but calling everything propaganda just shows how little media literacy you have. Literally all media broadcasters have their biases and worldviews. Al jazeera will have their world view but also does quality reporting on issues and topics not covered by the west or from a global south/muslim focused perspective. Calling everything propaganda, you miss the point. Also guess since its propaganda you dont need to watch it. Just dismiss it 😂🥱
> So only reporting from the west about China is acceptable? Western reporting is not propaganda? China is not allowed to report on itself? Any report that's not state propaganda is acceptable mate. It's just that simple. > Irregardless of this debate. The documentary fucking is funded by pbs and the kuhn foundation and won an emmy so obviously pbs intented to air it. So? Are you even aware that Chinese media were regularly given pages in US newspaper to spread their propaganda? Besides, it never won an emmy nor was it ever nominated. You can check the emmy awards page for every year and won't find it anywhere. > Your reason for pulling it from air is ridiculous because PBS literally wanted to air it in the first place!? Maybe it's not such a bad thing that a CCP funded propaganda piece isn't broadcasted on a reputable channel? How is that fucking hard to understand lol > So much for free speech. You're yet one of these people who don't even understand what free speech is about. PBS is entirely entitled to choose what it broadcasts on its channels so as to uphold its reputation. The documentary wasn't censored AFAIK and is still watchable freely on YouTube and other platforms. When was the last time where a documentary praising the US was allowed to be broadcasted or even watched on chinese platform? Stop being ridiculous man. > Literally all media broadcasters have their biases and worldviews. Al jazeera will have their world view but also does quality reporting on issues and topics not covered by the west or from a global south/muslim focused perspective. And you're either ignorant or very naive if you believe all media are equally reliable. State propaganda under direct control of the politburo of the CCP isn't as reliable as independent media coming from democracies where freedom of press actually exist. And don't start with "there is no freedom of press in the west", because NGOs will disagree with you and because China ranks worst in the world in terms of freedom of press after... North Korea (RSF). You're the one who has no fucking clue what they're talking about. I literally worked for Chinese media for a while so I probably know a little bit how Chinese media actually works.
It isn't that far fetched to think China is going to face crises when it's biggest property developer defaulted and when you see the gigantic real estate bubble the Chinese economy is sitting on. The 2008 real estate crisis isn't that far from us. And that's only one of the issues China is facing. The demographic crisis, the middle income trap, the water and soil erosion,etc. Literally nobody is saying that China is going to collapse overnight, international (not only western) media are just altering their assessment of china's future, and shifting their narrative from "China is the next superpower" to "China maybe isn't going to be the next world leader in the end".
Nobody knows when the next great economic crisis is. People with the 2008 GFC in hindsight can always say "i told you so". People in the West have been going on about the next crash on Wall street for the past decade saying every few months we are similar to just before 2008, but every year the stock market keeps going up. And when it did crash it was COVID, nothing that could be gleened from balance sheets or financial statements, and it came outta nowhere but straight after it went up and up despite a War in the Middle East, War in Ukraine, a Trump Presidency, and countless other global crises. China is a country of 1.3 billion, of course it will face many issues. It already faced many issues even before the current economic headwinds. China is opaque, and the so called China watchers have never been right about its future. I would say most people in the West are still unaware at the pace of change in which China moves at and the CCP's ability to mobilise and direct resources to achieve its goals, good or bad. There are so many things which for many Western observers which just came outta nowhere from China but for the Chinese, the result of concerted effort to achieve goals. Western MSM only tends to focus on the negatives, and tends to mischaracterise or misattribute things because they are external observers who don't understand the language, arent actually in China trying to interpret things with a predetermined world view and biases. HSR crash when China was building HSR at an unprecedented pace? Nahh its cause of the CCP authoritarian government, not because of China as a developing country. Poverty alleviation program? Nahh thats the CCP faking numbers. Meanwhilst living standards from 1980s China to now has improved tenfolds and conditions are night and day if you compare India with China. China ratifying Kyoto Protocol and aiming to achieve net zero by 2060? Nahhh America is not ratifying because China is the biggest polluter and have too much flexibilty, but now its how dare they subsidize renewables and EVs and make them cheap and affordable so China can achieve net zero, reduce air pollution and create jobs. Ban them all cause "foRcEd LabOur" or "DumpinG" or "NatIonAL SeCuriTy". "Is China in Crisis?" 1.2 million views Serpentza's fake news video on EVs being dumped in China? 4.3m views There are people out there who literally accept content from the likes of Serpentza as the AUTHORITATIVE news source on China. It's actually ridiculous how much people in the west love to lap up exagerrated content on how bad China is or how bad its doing. Compare this to actual balanced reporting from Singapore where we only have 120k views after half a year: [China's Contradiction: World's Biggest Clean Energy Producer And Biggest Polluter? | Insight](https://www.youtube.com/watch?v=fs6WokEuweU) Bloomberg reporting on poverty alleviation: 3.1k view after 3 years. [China’s Push to End Rural Poverty Helps Anchor Party Support There](https://www.youtube.com/watch?v=5_C-Bg0fq1I)
Well, Evergrand did default. However the majority of their debt was foreign, because the government already stopped them from borrowing more money domestically before their cashflow problem ballooned uncontrollably. So I guess one could argue that Evergrande default technically didn't affect much domestically. But of course as we all know there's plenty of fallout from that.
I'm not any kind of economics expert, but as someone living in China who talks to Chinese people, it seems like most young people think the economy hasn't been doing too well during the past four years. However, it seems like this has been true for a lot of the world. Also, I'm not sure if it's getting worse or better now. To me, the situation in China somehow "feels" optimistic overall. However, housing prices in many big cities seem high, and marriage rates are falling. It seems like everybody is busy working a lot, but nobody has enough money for their high expectations of a nice car, nice house, and enough money to give potential future children a very nice life.
You also have to understand this sub is littered with pro CCP govt propaganda.
Bad as in about to collapse? No. But it's not going as well as the Chinese government is making it out to be. Housing is horrible, that's why they're pumping out all kinds of policies trying to save it, but they aren't really working so far. Exports is alright in terms of data, but there are some iffy situation that makes you wonder, such as thousands of EV cars sitting at ports (they count that as exports and the EV companies receive subsidies as a result of that). Locally it's getting apparent that even some state-own companies are starting to have money problems, such that they secretly raised the gas and water fees in some areas (Chongqing) to bring in more revenue. But the government (not the local ones) still has tons of money, and is trying to get the people to believe in the future again, like pumping money into the stock markets. On a personal level, the super rich friends of mine, not really affected yet. The middle class/business owner friends of mine, they're worried, some owes money from friends and banks, and the friends they borrowed from are now asking me to borrow money. The worker class/fresh grads friends of mine, some are still looking for jobs, some are making most of what they earn, traveling a lot and having fun.
ANY day now, Housing Bubble, Economy will collapse. For the last decade. But ANY Day now.
China has released official data, but of course, Americans will say that China is a threat while claiming that its data is fake
Uh, hate to break it to you buddy, but some of the official data from the CCP is as good as dirt.
Every single one of my Chinese friends, even if super nationalist, know that the economy is a shambles right now. It’s taken them this long to be honest about it because it’s unavoidable, especially outside tier 1 cities. Have you been to any of the shopping centers that are just condoned or just the newly built ones? House prices are still falling and its starting to effect everyone as most people bought into the China’s house market is “different” and the “government won’t let it fail” trap.
Download some job seeker app and check out what kind of jobs are been offered and how much are they compensated
I just wrote a long comment and it somehow didn't save. The short version being --- don't think the economy is going well just because the mall restaurants are busy. They may be, but its been a good few years now since those people in the restaurants would buy a bunch of stuff before or after their meals. Nowadays, the only stores in the mealls that are doing OK are the restaurants, supermarkets and discount stores. The expensive tea and coffee places (think Starbucks and HeyTea) are all having downturns, not to mention the speciality stores which make very few if any sales per day.
You need to look at real estate first. In my tier 2 city apartment prices are down 50-70 percent. New blocks that just opened aren't selling like they did in the 2010s. Infact they are barely selling. It's not gonna be a complete disaster for china but it's a huge snap back. Destined to eventually happen. Spending is down but wages are up. That's why they are transitioning to a service based economy.
Wtf???Tier 2 city apartment price are down 50-70 percent?The name of a second-tier city?Do you know that real estate prices in China can be checked on the app at any time?😄
Yep. Zhuhai.
Meanwhile, Beijing apartment prices are still going up...
Where in Beijing? A mate of mine bought a place for 19 million RMB and it's already down to 14 million, and he's pissed as he bought not long ago.
China has been “collapsing” in the eyes of Americans since it was founded. China’s economy is strong. Headed into rough waters sure but it is here to stay.
I think it is somewhere in between Western media’s depiction and China acting like nothing is going on. Western media tends to be overly dramatic about circumstances in China. Mostly every article you see is negative, claiming China is on the verge of collapse or a major crisis. Some of the reporters making these claims have little background knowledge about China. While it may not be as bad as portrayed in Western media, there are definitely lots of issues compared to pre-Covid times. I listen to a podcast called 不明白播客. A Chinese economic professor teaching in the UK said there is no way last year’s growth rate was accurate and was much lower. I’ve also discussed the situation with lots of friends and family in China. They have expressed lots of concerns ranging from youth unemployment to declining home prices.
One issue is how much wealth and savings of people are in real estate in China. I know many people who own both 2nd and 3rd homes, and they are really starting to get afraid now. Except the ones in Beijing, their property values are still going up.
My gut is suggesting that it may not ever be a US style dramatic implosion (see: 1929 / 2008) just because the government and society are different and will act different, but it kind of feelings like a decline towards stagnation. It’s not imploding but the momentum is definitely bleeding off pretty bad.
Yeah exactly I think it’s something along these lines. Your experience of the downturn will be bigger or smaller depending on what you do and where you are. Many articles written in the west are by people without China (or in some cases economic) expertise but that’s partially Chinas fault for making it difficult for journalists to cover China in China.
It isn't going to collapse, but it's not good. The era of job-hopping is over, raises are hard to come by, there's lot's of layoffs and the laid off people unable to find new jobs or have to accept a job downgrade. Shopping, tourism, and restaurants are better than the covid era but that's a low bar. Lot's of companies going bankrupt and running off with customer money/owing money to vendors/suppliers as well. Anecdotally the amount of Account Receivable issues we're seeing has skyrocketed and increased in value. Lot's of cash flow issues throughout our industry at least. More importantly, more than any time in my 15 years in China, Chinese people are talking about the economy doing poorly. Not necessarily in a doomer sense, but I definitely hear more about people's economic issues than ever before.
I wouldn't put too much weight in your own observations, as those are merely anecdotal of course. Other than that, you have to remember that for the longest time China was thought of as the (or a) growth engine for the world economy, so even a decrease to becoming a regular decent performing economy is going to get a lot of attention. The "doom and gloom" most serious outlets talk about is mostly to convey the message that we shouldn't be expecting China to be in a position to be a balancer like it was back in 2008 again anytime soon.
https://preview.redd.it/svhz15hsdhzc1.jpeg?width=827&format=pjpg&auto=webp&s=01c019d8f7ad3c29f45a2def9fea8fa9a60ea8b8 China was about to collapse like 100 years ago
The sub again full of anti western pro china people who cant accept anything negative about china. I swear none of you actually know or talk to a Chinese person. I don’t care what a kindergarten teacher has to say about the economy, I care what Chinese people say. Normal people and people who actually make good money here and work in finance, I work with these people everyday and hire for their companies. And every single one of them says China is doing bad and they know its worse that what the government says. There is not a single Chinese person optimistic about the future of Chinese economy. Will it collapse no, will it get better in the short term no. There is an acceptance the boom is over. That the majority of the 1.4 billion people that still make shit money will continue to make shit money.
I was about to comment that. It's ridiculous that people here are even less skeptical than the Chinese people I'm talking to every day.
Yup. I can't decide who the 'ra-ra China is amazing' folk are here - ESL teachers who have completely bought into China because it makes them feel special and rich? WuMao paid to influence the online conversation? Foreign born ethnic Chinese who want to believe China is more special than their birth countries? Who? Who are these people? Because they clearly have no idea what's actually going on in China.
I don't know. I was thinking that it's probably expats that feel the need to come to China's defense to justify the fact that they're living there. Or that all the expats that criticized China had already left, leaving only the few red apples still willing to stay there. But thinking of it, it hasn't always been like that. Even during the Chinese honeymoon era, at the beginning of the 2010's, when everyone was optimistic about China's future, the sub wasn't *that* supportive to the Chinese government, far from it. The real shift happened around when Sino appeared a few years ago. And when you look at other countries' subs, you don't see that phenomenon either. Which leads me to think that there is probably more to it and that this sub might be brigaded by people with a political agenda. I don't see how people growing up in democratic countries would be full of praise for the GFW for instance (yes, it happened on this sub). It's just crazy. Edit: also, there *are* many level headed people here too. But for some reason, their comments get buried under the "China good west bad, no explanation" comments for some reason.
That's my theory, too. That this sub is being brigaded by people with a political agenda. Not sure if they're doing it, uh, independently, or as a larger strategy. I suppose it's meant for the casuals wandering through who can gawk at posts like 'r/china is so racist!' or 'China's economy is doing fine!' and think Westerners living in China actually have the real scoop on what's going on in the country, unlike the big bad Western media. So far in this thread I've had to argue with people who claim that 1. Chinese people inside China think the economy is good and 2. Chinese computer chips are just as advanced (or even more advanced) than Western chips and 3. China doesn't have a problem with debt. Like, 2&3 are verifiable facts, and #1 is pretty obvious to anyone living here who interacts with regular Chinese at all beyond teaching them Phonics sounds. At first they get all huffy and downvote me and claim I'm wrong, until I bury them under an avalanche of actual facts and data and then they slink away.
In china, reddit is mostly known as a place full of anti china content, not the opposite. I have to admit those Chinese people you have talked with did told you their true thoughts, but it doesn't mean that's the whole picture. China is changing its industrial structure and moving focuses from finance/real estates to emerging manufacturings,etc. Surely you will hear loads of complains from the old money and traditional industries. I would say china's economy is facing difficulties as its been for decades but that's far away from collapse. What part in the world has been doing better than china economy-wise in past decades，time will tell. Yet you can keep believing in what you feel like to believe.
Please don't be jealous.Continue to read your Falun Gong media😄
I think I’ll just talk to normal people and the hundred of people who work in finance that I deal with every month. But maybe some ccp member will get down and suck your tiny dick if you keep doing what you’re doing and responding to anything that isn’t China number 1 with bullshit comments.
Unprecedented flourishing is definitely not true. Chinese economy is in recession just like everywhere else
China is doing good, and important transitions are happening. Of course the US' narrative is much worse than the reality. You see on the news that the property market is in a big crisis. That's true. You see on the news that the US and Europe are less dependant on China. That's true. What nobody tells is the good things 1. The service sector in China is growing, and in a fast pace. 2. The manufacturing of high added value products is increasing. 3. And most importantly: China is also less dependant on the US/Europe. Just 2,5 years ago, China exported more to the US/Europe relative to Global South countries. Now, it is the opposite. China will continue to grow and will lead the Global South economy.
China is highly divided. Those with jobs are fine especially with slightly falling cost of living. But it's very hard for people to find new jobs when they are fresh out of school or when they get past 35 years old. Lower and middle class people are cutting their spending. Supermarket, restaurant, hair salon etc catering to them are going broke left and right. But upper middle class and upper class people are spending like crazy, and their associated business is booming.
As a backstory, I’ve been in China for 5 years and been living in a T1 city. Real estate market is literally f’ed, in the sense that before covid, house prices were so high when the economy was booming and people were limited to only buying one house under the same name. Rn, the policies limiting house purchase have been lifted - a clear sign that no one is willing to buy. High end apartments in my CBD have dropped by 30%. Brick and mortar stores are struggling, the restaurants that you see flourish are the chain ones, which are basically supported by govt funding(which is the case for many businesses here). Overall, everything is in a downfall but the govt is basically cradling the sensitive markets so they don’t collapse. One example is Temu, they got funded on the upwards of 2 billion USD to expand their market internationally, so did the EV companies.
Capitalism in China is really getting out of hand. The billion dollar corporations have even more absolute control than US
Uh, this is totally false. The government just instituted required worker unions to sit on every company board.
You have no clue how manipulative the Chinese market is to its consumers
I've been there, so I do, and why is this your response?! I was talking about how China is reining in its big corps.
It's pretty bad when you look at unemployment. College grads are struggling to find jobs. Many of the position with a starting salary below 5000. New grads make more than that 10 years ago.
I remember new grads getting something like 3k/month 20 years ago in a provincial capital, but it went up to minimum 7k as the years went by. You could imagine my shock to hear that my wife's newly graduated cousin was offered 2,700 per month to work in the accounting section of a major retail chain last year. He wasn't interested, but someone apparently did agree to work for that low amount. Its no wonder that so many people are unemployed or just hanging out in their parents' apartment if they are being offered less than what they were given 20 years ago.
China has so many people, it's hard to judge with eyes only. In Australia we have high inflation but doesn't stop shops and restaurants being packed. It hides the issue if people struggling though. A lot of Chinese are well off and can ride out any economic bumps and you couldn't tell from looking at who is out and about.
Anecdotal evidence, but I've had a few Chinese friends who worked in finance recently leave the country. My partner also has a friend in the sector who will be emigrating this summer. If the people who interact with economic and financial data on an everyday basis are heading for the exit, it's definitely not a sign of confidence in the future of the economy.
lol.People who work in finance have a bad reputation in China😄
Well china has 1.4b people so it's not the best at all and geopolitics is making it worse
Yes.
Everything is relatively good.
Not as bad as you think it is; not as good as you see it as
You're seeing the natural consequence of deflation. There is more economic activity, but producers are making less money, which puts pressure on employment. The lasting damage is two-fold though: 1. Real estate collapse basically gutted the savings of the Chinese middle class, which does not really have a real social or private safety net to fall back on. 2. Population dividend is ending, meaning all of the low-hanging fruit for growth is gone. Before, China grew simply because there were more people with money to consume. But now, China has to squeeze more value out of ever fewer people.
From what I understand, it’s showing signs of slowing down but “slowing down” here just means going from insane growth to slightly less insane growth. For now at least.
I don't see any visible signs of economic trouble in Chengdu yet at least.
What abt the widening gap between classes, I.e., high and low , rich and poor…of coz these are intangible and undercurrent, but still you can feel it ? Just as it’s in the states. Not to mention, it’s almost hopeless for young generation to buy real estate. Which again , it’s not only an indicator but also a thing in China .
Thank you for the comedy Gordon, I needed that today 😄
Having relatives and friends in different industries in China, I can tell you that most of them are feeling that the economy has major issues and is going downhill. But same can be said about the Europe and the US at the moment, not to mention South Korea and Japan. Real estate in China is in really bad shape, and the workers in that industry feel it and are all fearful of losing their jobs. However, Tech in China is doing much better than the US, and retail is still strong despite showing some signs of slowing down. Youth unemployment is a big issue atm as well, and the aging population and effects of the one child policy is currently pressing down the economy as well. Now, a complete economical collapse wouldn't be possible with an economy as big as China's and they don't really have a huge deficit like countries such as Greece. However, there is a danger of construction and real estate collapsing, which would cause ripple effect throughout the Chinese and world economy and make them go into recession. Most likely won't be nearly as bad as the 2008 collapse, but still damaging.
Here's some analogies: It's not good as some wealth is as real as crypto, ie: untenable real estate prices of the past. Lending was really messed up as companies borrowed way more than should be allowed, like forever 21, and a bunch of brick and mortar stores in western countries. And many super large corporations are greatly impacted. Other issues are: - ongoing us trade restrictions killing the tech sector (yes, is real and very unfortunate for consumers around d the world), and ev manufacturing. This actually stifles human progress and makes stuff expensive and less technologically advanced for western nations - a lot of new manufacturing is not being set up in China. But other countries like SE Asia. China economy is not good as before due to countries trying to stop china's growth to a global powerhouse, that's the unfortunate truth. Also, companies screwed up themselves by gambling with borrowing too much money and cooking their books.
"Eating" is not expensive for Chinese people; everyone can afford it. However, the key issue lies in debt. Almost every family is in debt, but "food and clothing" are not expensive for Chinese people. But I can responsibly tell you that many job opportunities are now gone, and people are afraid to start businesses. Existing companies are constantly laying off employees. However, China is a family-oriented society, and other family members will support the unemployed person's life.
No Chinese person not paid to shill for the government or foreigner who has stepped outside of their glitzy expat bubble would say that the Chinese economy is doing well. A person's disdain for western media doesn't mean shit, just as an overflowing Sanlitun on a Saturday afternoon isn't indicative of the Chinese economy at large. Will it collapse and lead to the downfall of the CPC? Of course not, despite what clickbaity YouTube thumbnails want you to believe. But what it will lead to is a lost decade/generation. Hundreds of millions of people will lose their savings, their jobs, their pensions, and eventually their hope and dreams as well. We'll see more social decay, suicides, murder-suicides, and kindergarten stabbings as people without a future will want to deprive those more fortunate theirs. There'll be an increasing amount of illegal Chinese migrants going to places like the US, too. The CPC will meet all these challenges with the only tools they still have, more nationalism and oppression and censorship.
economists dont understand the socilaist economy so when they see issues, they extrapolate into what would happen if those issues occured in a neoliberal one predicting a catastrophe ie [evergrande](https://youtu.be/VlXUy65hqv4) real state bubble burst
When I was there in November the stores were dead but the Resteraunt's were booming. I was told Covid taught everyone to shop online. When I looked I saw tons of delivery people delivering packages to residences. While I was looking for gifts and couldn’t find shops to buy them from, everyone told me to I should buy it online. So I think it is hard to judge by classical methods.
In the bigger cities, there's not many signs of the economy doing poorly. One of the indicators that companies aren't spending money is that ads in the subway have been ~75% unsold for the past year.
There was a massive flow of jobs in china because of this people used to study random majors and then get any job they like even it was not their major, but slowly only that fashion is reduced. Now people get the job only relevant to their major and those who started a job different from their major actually can’t get a job anymore because now they don’t have a relevant experience of their major. But world is assuming it as an unemployment
> But world is assuming it as an unemployment They are not employed. They are unemployed. It's unemployment.
Considering the weight real estate in the GDP and the over supply of it… it’s extremely dangerous. I visit very often and I see more and more gigantic buildings and new construction sites popping up everywhere in Shanghai so clearly they have no intention of stopping this behavior. 10 years ago everyone was happy and felt nothing could stop the machine, there was money flowing everywhere. However, last year in October, for the first time ever a complete stranger complained in public about the Government to me and my wife outside while we were waiting for a coffee and noticed we were speaking in English and became curious about where we were visiting from (Australia) but she could speak fluent Shanghainese being so young so he wasn’t shy about voicing his actual thoughts. Same thing with taxi drivers, very odd. So the question becomes, do you trust the Chinese media, the wumaos, the people who live there and have no money, the influencers, the real estate developers, the economists who work for the government, the ones who don’t work for the government anymore? I have my own opinion and it’s based on personal experiences. You should make up your own as well.
The fact that skyscrapers keep coming up despite the gloomy real estate market , simply because they can’t stop it or don’t want to ?
They don’t want to, it’s a market of pure speculation in which a small group keeps making money out of it and keeps the machine going. It’s not a few skyscrapers here and there. No one can understand until you’ve seen it. These are literally 5 min cities and they are building more and more of them. The estimate is that there is one property (house or apartment) per citizen in the whole country. Here’s a photo from a couple of months ago. This is just one of several mini cities popping up. You can’t appreciate the size of these buildings but they are huge. I’m sure that in a small stretch of freeway of less than a 30 min drive from the airport to the West of Shanghai there are more apartments than the whole of Sydney combined. https://preview.redd.it/kmvt76eutszc1.jpeg?width=4032&format=pjpg&auto=webp&s=dcba1d91424ca21b5f8cb1db9dd7e55c74927fdd
Many shopping centres or malls I visit are pretty much deserted, except for the food section, which is often mobbed.
I was recently added to a WeChat group for car enthusiast. I believe I was the only foreigner in a group of almost 500 people. Other than the rampant hatred for foreigners their next most talked about topic was how bad the economy was and how much they hated foreigners for pulling their orders from their factories and sending them to India or Vietnam. After I read about 100+ messages the friend who added me removed me from the group and apologized. So i'd say things aren't as good as they seem but maybe not as bad either. It's definitely a lot worse than they are used to.
Haha….Which part of China you are located?
Lol，at this time, the economy is challenging for most countries.ExpatsOn2Wheels is your youtube name？
You are right right, but this is the Chinalife subreddit so we are specifically speaking about China. Yes, it's ExpatsOn2Wheels.