Has China's Stimulus Already Failed?
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- Опубліковано 15 жов 2024
- Last month, China announced a stimulus package that prompted a boom in the stock market in anticipation of a policy pivot. Unfortunately, this doesn't appear to be the case and the CCP are staying the course. So what do this mean for the Chinese economy?
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A large stimulus will not compensate years or decades of underpaying workers.
It's not like the chinese government could have magically made more money to pay the workers more. It was a developing country for most of the time
the paradox is that now the Chinese workforce is too expensive. Wages were suppressed by the flow of migrants from the west, with that pressure down, an hours factory work now cost x4 that of an hours factory work in Mexico (see the book Invisible China for a short but detailed breakdown of the China workforce compared to other developing economies)
It can.
@@OttoKreml but it won't
Stimulus does not address the biggest global issue: housing and rental markets.
I live in China and spend a lot of time researching the economics of this country... and this video is spot-on.
Interesting
What kind of work do you do there ?
How can you watch this video? Do you use a VPN to overcome the great fire wall
Will China reduce purchasing iron ore from Australia?
Are you foreseeing house crash in China, USA, aus etc?
I thought UA-cam is ban in china
those who got fooled by this stimulus are the most gullible people in the world.
The thing is that the great fire wall is not allowing global views on Chinese economy to reach china, and everyone who is saying bad things about Chinese economy inside the firewall is shamed for not being patriotic enough 😢 just last two weeks of seeing everyone in the Chinese social circle pouring their savings into the stock market is so freakin sad.
@@akab1025great firewall is a myth. That thing still manages to let through a lot of info, we all here in west cnat understand that majority of Chinese population is same as majority of Russian, its not in their culture to complain or fight "the great leader" for better life standards.
@@akab1025 Precisely.
Their greed overcame their common sense.
@@akab1025 saw a bunch of people on the chinese internet saying it was dumb to invest in Chinese stocks before the drop of Oct 8th tho.
They are having the worse scenario: deflation in discretionary goods and inflation in necessities like food, utilities, public transportation.
That's the definition of poverty. Same thing will happen in the USA when people's credit cards max out.
@@personnesenki4521the USA is in a much better position to handle that though, its economy is way too strong
@@danix4883 Not if housing and rent prices continue to rise as they have been. Disposable income is the lifeblood of the economy, and it falls as housing rises.
@@danix4883 The US economy is barely treading water. Once people's credit cards max out; it's all over.
@@Soooooooooooonicablehousing market is so crazy because of corporate greed, add in the already strained market for housing due to supply and demand issues it creates a safe haven for people looking to surge their prices.
China has been shafting their working class for the past 4 decades. That's why there's so little consumption relative to per capita GDP.
For a self proclaimed socialist country, China is home to the largest population of non-unionized workers. Genuine labor unions do not exist in China; they merely rubber stamp the interests of the state and the corporatocracy.
China has no effective social security, so people are forced to save inordinate proportions of their income for their own retirement. And without typical market investment vehicles available to regular citizens, the money is parked inside bank accounts or real estate. Both approaches has a deflationary effect.
China is the "capitalist paradise". Ultra-wealthy Americans can only dream of having the same access to deprived workers compared to their Chinese counterparts.
At the top of the list of shafting components, you should put the hukou system. Unions may and may not work for the greater good in the long term, ie. Social Democratic participatory models versus the US extractive models that decimated much of US cyclical industries and regional public finances.
@@martinlund7987yes. The Hukou effectively gives China a large pool of Chinese speaking, yet illegal migrant labor that can be exploited for cheap services and labor.
@@martinlund7987 and FWIW you're right. Labor unions do exist in social corporatist states like in the Nordics and Finland. But as you said, it's a participation of workers, business owners, and the state on equal footing. Not a constant bickering like it was in New York city with the mob controlling the unions.
The social corporate model, I believe, is the ideal.
@@prfwrx2497 you say Nordics or Scandinavia+Finland.
The Finns don't want to be part of Scandinavia, despite northern Finland being the base of the Scandinavian peninsula and Denmark not having anything to do with said peninsula.
Together we can the change the English Language to suit the Finns so they don't sulk, get overly drunk and knife us.
Chinese property sector, which accounts for 30% of GDP, is crashing.
- Exports and imports, accounting for 37% GDP, are down.
- Foreign investment (FDI) is falling over 90%, lowest in 3 decades.
- Foreign visitors are down 96% compared to the pre-pandemic level in 2019.
- Consumer prices are experiencing deflation.
- Youth unemployment hits over 21%, a record.
- Its fast-shrinking workforce is 10 years older than neighboring countries.
*Still, China keeps reporting outrageous GDP numbers.* Lol
Where does the growth come from?
30% of gdp solely on real estate is crazy
the growth is either fake data or state companies only
@@notusneoit's the same everywhere, it's usually just privatized
@@notusneoSame shite is everywhere, do you know why your rent is so ridiculous now?
@@AlaiasAlias im not a rentoid and rent market here isnt as ridiculous as the west
It’s a big “hell no!” For me investing in China. The CCP practically high fives the perpetrators of financially collapsing companies when it comes foreign investors trying to recoup their losses in favour of domestic investors. Trust is very valuable and China has lost a lot of it.
here we go with China's "lost decade"
They’ll still find a way to blame it on America or Japan
@@4m4n40 ain't my fault, the CCP blocked with google, youtube and literally everything else
and it ain't my fault, Xi will get another 4th term
It’s about to be lost half a century
@@4m4n40 first Mao destroys China's economy with his 30 years of ruling, then after a couple of good leaders Xi Jinping seems intended to do the same. If they encouraged some critical thinking they might stop giving rulers total power and start being more rational and less ideological in the way they handle their economy
Another century of humiliation
I have no idea what you people are talking about, when the stimulus was originally announced, everyone in the know of China economics said something along the lines of: "Um, excuse me, did you forget a zero or two?". Depending on who you asked, China needed 10x to 100x more money to pull itself out of the hole it dug itself into. Anyone who wasn't forced to be optimistic about it by the CCP said that the plan was DOA.
Seems to be covered by them pointing out people thought this was the start of a greater policy shift, not a major policy shift in and of itself.
CPC*
Most economic stimulus doesn't come 100% on day one. You release it in batches over a period of time. People were hoping that that's what this one. The 1st round of a new trend. But with the CCP throwing cold water on that idea, they now realize that is not the case.
So true. The economy is just Xi jinping's personal preferences at this point. He doesn't like stimulus, it doesn't happen.
Stimulus doesnt address the biggest global issue: housing and rental market
In Chinese, we call this move harvesting the leek (割韭菜)
판빙빙은 왜 사라진 건가요? 요즘 잘 안보이네요
@@中森明菜-n1b 판빙빙, 중앙위원회에서 중공 간부에게 집단 성폭행 당함
If I were in China, I'd definitely lie down flat. This stock market rush was too good to be true and akin to playing the lottery. I'd be off in the cheap countryside only earning enough money to feed myself and play video games. Hmm - or maybe living in an internet cafe. Not sure how good their internet is out in the countryside.
The videos on Chinese social media are pretty crazy; people are struggling.
Where did you see those videos?
@@jwong1546Go to virtually any platform and you will find dozens or even hundreds of them, if you know where and how to look and understand Mandarin.
@@jwong1546...inquired the CCP spy.🙃
Factual error @2:07. They restarted publishing youth unemployment data. From CNBC "China paused reporting the youth unemployment rate for much of the latter half of last year while it reassessed its calculation methods" They published youth unemployment data in September and it was still at a new high.
"Reassessed its calculation methods" Makes me wonder if they tried to make the numbers not look so bad. Less cynically, someone in power decided to actually report the truth so that something would be done about it.
At this point whatever data that comes out is basically meaningless garbage. Actually I guess it is helpful - you can set that as the bare minimum because the real number is definitely higher.
Another great video! Keep up the awesome work!
Minor point.. the HK stock index is called "Hang Seng Index" not "Seng Index".
CCP officials, knowing the *real* stimulus announcements to come, might have had a huge opportunity to play "pump and dump" here.
CPC*
@@sinoroman same diffrence
like twitter and / X
everyone's sticking with CCP and sticking with twitter
even though the CCP is scared to be next to Tiananmen sqaure search results (among others) so changed names for a fresh start but failed ....
@@sinoroman no it's CCP (Chinese Communist Party)
too many investors have fallen for the "china lives in 2050" videos on social media. Rememver that face culture comes before honest reality in Asia
Since when is the PRC the champion of laissez faire economic policy?!
What reality is this?!
i think before 2012 is quite laissez faire. Now it's full interventionism.
@@fromfareast3070 bruh, how so? If China js the one advocating for not using stimuli, is that bot the entire premise of Keynsianism?
‘08 market crash coming soon, you heard it here first
I need the market to go down some anyway. The small pullback at the beginning of the month wasn't enough. Many are overpriced now and buffet sold his. I was looking for a rough setback as I am eager to capitalize on the market.
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2004: China's Stimulus Already Failed?
2014: China's Stimulus Already Failed?
2024: China's Stimulus Already Failed?
No ad spot in this video is an ominous sign for companies and their ad spend budgets.
Or no one want to sponsor this video
CCP almost certainly ordered its massive bot-farms to downvote the video so it's no surprise the sponsors are discouraged. This happens consistently to any video attempting to discern actual state of PRC economy
@@multilad816 exactly
I found it refreshing, actually. No more rushing to pause the video when the inbuilt ad starts.
Yeah it was so calming to have the video end and not me panicking to hit pause or mute before the whiney voice about brat summer and assassination attempts I've heard umpteen times
If you pile into assets because of stimulus measures you’re not an investor to begin with but a gambler.
Deflation in the context of the bull market are government policy-led, China, the United States and Europe is not different, otherwise 07-08 financial crisis, the United States printed the several trillion dollars is doing? The new crown epidemic, the dollar's unlimited qe is doing what?
@@nechoji The US is leveraging its current position as global financial hegemonic entity. The Dutch did this when we were a global power once, the British did this to pay for the cost of WW2 and decolonisation leaving a bit of a budget-shortfall.
So the moment a new potential superpower emerges, I think America will be in big trouble. I think they would have already been in trouble if China had not self-sabotaged as much as they have.
It shows the danger of dictatorships as they lack a self-correcting mechanism. They seem stable from the outside but that means harmful long term trends remain unaddressed
China's economic crisis is concerning. The reliance on exports and investment instead of domestic consumption is unsustainable.
Oh yeah. Low wages keep workers in poverty, making exports competitive but harming the economy in the long run.
The recent stimulus package was underwhelming. No large-scale household stimulus?
I'm worried about global implications. As an investor, I'm diversifying my portfolio to mitigate risks
Yeah makes sense. Have you considered consulting a CFP
I've considered it, but I haven't gotten the opportunity yet.
these videos are remarkably well made
Recent China's 🇨🇳 stimulus measure trying to fix its sagging economy
is like throwing a cup of water on the forest fire. LOL
...and missing it
the stimilus is not giving money to consumers like in US, it's actually a few rebates for select goods like household appliances and cars (which Chinese are not buying, fearful of investing in their very uncertain future), and shops are reportedly raising prices to capitalize on the stimulus themselves instead, along with manufacturers and officials who select eligable brands
Stimulus that doesn't account for the percentage of already existing non-performing loans is simply going to exacerbate the problem.
Why is the studio so dark? 💡
The problem with uploading news at the speed of light is, that you can only life in darknesss
It's TL;DR After Dark.
Cuz electricity is expensive in the UK.
Because the sun never shines anymore on Britain
I see you added your sources. Nice!
Let's all further help the Chinese out by reducing any Made-in-China purchases whenever humanly possible.
😂😂😂😂 you so funny!
Agreed
There's still margin for more stimulus and printing money. But the Taiwan, Japan, Korean scenarios are looming. Whether it ends in an Argentinian's scenario is still far away.
The entire point of stimuls is you spend more to get confidentce
Arrow going down: Check
Fire: Check
Sad Xi: Check
Inevitable answer: No it hasn't.
not a fan of CCP. But to judge any stimulus it takes time. Monetary stimulus take at least 6months. Fiscal stimulus take more than 3 months. THis is way too early assessment by journalist who does not understand basic economic. You could be embarrassing down the road.
"It's not funny"😭🤣
the thing is, the chinese government doesn't care about financial markets the same way we in the west do. they value productive capacity, infrastructure and technology way more. in the end gdp, inflation, debt and similar metrics are just numbers, dependent on monetary and fiscal policy, expectations and market sentiment. they are in control of both of the former two and don't care about the latter two as long as the actually real values like infrastructure and technology keep increasing.
that's why we always see "china is on the brink of economic collapse!" videos and newspaper pieces for decades now, and it never happens.
Excellent channel, brilliant and useful graphics and I love how you fully contextualise each concept with extra examples
The fact that you use Renminbi and Yuan interchangeably and separately without explaining the two names, is really confusing.
they do refer to the same thing here. Renminbi is the currency and yuan is the unit of currency. similar how in the UK you would have 1 pound sterling
@@badvideosto yes - I know that now (had to Wikipedia it), which is why they either have footnot it or stuck with one name
@@guss77You said Wikipedia without explaining it to me what that was. You said the word footnot without defining it. It’s really confusing
@@guss77you don't need to be told that the currency of the USA is the dollar. Likewise you shouldn't need to be told the currency of China is the Yuan / Renminbi. It's the largest country on earth, you should know the name of its currency.
I agree that TLDR needs to tell us a bit what renminbi and yuan is. This is NOT a China-centric UA-cam channel. Yes, it is a world channel but they need to assume people only know the dollar and euro.
Also, China is so unique that it uses two terms. Most countries don't do that. Anybody who watches this video who has no idea about Chinese currency nomenclature cannot rely on the common sense knowledge of foreign currencies, where there is only ONE NAME.
Edit: it seems that the UK does the same thing. I am not a westerner so I don't know that. But I will excuse this channel if it does not define it because it is a channel with western slant.
What stimulus? It is more about saying something but not doing anything.
I was in Hong Kong on the day the index fell 9.5%! My parents were just explaining to me how the markets had been roaring up until then, and we ironically got to be there to see the evidence to the contrary in real time.
I would be interested to know how much of the foreign investments went in early, but also pulled out early, recognizing this as a pump and dump.
We had already predicted on your previous videos that the stimulus package was not big enough. Bravo! All your videos are excellent 🎉!
If there weren't people squatting on 10 homes then the property market wouldn't be so ballooned. Bailouts are always more politically viable than real corrections.
So, was lowering the amount banks must keep in reserve during a housing crisis really a good idea? Thats like placing a large barrel of petrol next to an uncontrolled wildfire.
I'd say it's like encouraging people to use up water out of the barrel meant for quenching wildfires when already on fire, and the barrel already half-empty
Please take a look at labour rates in China. 30 years ago Chinese worker used to get paid CNY1000, 20 Years ago they used to get paid 2000 Yuan, 10 Years ago they used to get paid 3000 Yuan, Now they are being paid 7000 Yuan a month. Which is close to $1000 per month.
Is now that China is going to colapse?? I hear this for more than 10 years already. Give them more sanctions and say that they are not making imports or exports. This is insane and tiring.
I don't know if it's just me, but are you guys trying to save money on energy saving bulbs? Footage of you folks at the desk is really dark
I second this. Looks like their camera failed or something like that
Chinese economy is mostly driven by investment not soo much by exports
literal tech bro country lol
Malinvestment though, as the demand isn't there to pay off the costs of its construction and maintenance.
Tldr budgetnis so bad they cant afford to turn the lights on in their studios
Really dark studio, looks weird.
Re-capitalize banks just means keeping banks from collapsing due to years of non performing loans mandated by the government.
They should just stop resisting the deflation. Let it happen. Let the currency move towards its real value. Let prices go down to match wages
First step would be to stop waging war on your customers.
Another terrible take on China. The stimulus package is not out yet. China has to wait for the NPC standing committee meeting for any change to the budget, and it convenes in late October.
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oh! How is the UK economy these days?
Guys, please increase the brightness of the light bulbs in your studio. It looks like you're recording during a power outage or something.
Raise workers pay instead of giving banks more money.
The keynesian trying to explain to me how my money not losing purchasing power is bad and that the government should spend more on social issues.
Giving them one month isn’t enough time.
2:24 How many videos do you want to make about China's economic crisis?
TLDR: Yes.
Chinese pops probably know, that such "generosity" is temporary. The only way for the country to move forward is to focus on domestic market. You cant export away your economic problems.
Where my Gordon Chang!
‘08 market crash coming soon, you heard it here first
Year of the lagging I suppose...
At what point do we call it stagflation? Praying for anyone struggling
To be happy, you must either be free or prosperous.
*clone trooper voice*
“They just don’t learn do they?”
We thought China would be finished last week
While the CPC are really annoying, there is no pleasure to take from this given how important China is to the global economy
happens when half the money you print has triplicated serial numbers lmao, they f-ed them selves.
Wonder how all this affects the US economic development and growth.
"Corruption is RAMPANT in China!" -Victor Gao, August 2024 in front of a live international audience.
if it aint rampant, commie lockodowns would have never occurred in china
If China increases its domestic consum with higher wages, China will get the same situation like Japan at the end of Japans rise after 1990. Up to 1990 it was proposed, that Japan will become a world monopol player in industries. The same what currently is expected for China. But if China increase wages, then production in the West becomes more possible than currently given. Therewith China would become a "ripe" industry nation like western states have been since 20 years. Ripe people go into the retirement house like Europeans etc. do. No longer agil youngster in economics.
And if it doesn't it becomes something like Argentina
@@jwhite5008 China is far away from becoming something like Argentina. China is still advancing in its industrial take over of the world. Currently the West loses its cars and wind turbines industries to China. Most other industries like solar, textile, toys etc. etc. are completely taken from China and partly India. So if China shows some weakness in retaining 10 % growth per year, it is nothing compered to the dcline of european nations. Also the fertility crisis in China is not so dramatic. If population shrinks from 1500 Million to 1200 Million it is still 10 times of Japan and 3 times of Europe. The real crash of the worlds happens currently in Europe and not in China. China is still much stroger than India. And India surpasses Germany in industrial strength currently. And this is only the beginning.
How many years are we waiting for the Chinese crash? .... remember that china was a 3rd world country just 35y ago
Outside of the big cities, it still is.
Is this a re-upload?
Reupload?
This is the worst case scenario for china... Rip.
Idk why china thought itd win a tradewar with america and slowly europe too when its economy was so unbalanced
Thing is, well-paid workers whose consumption underpins the economy start to ask awkward questions like "why don't I have a say on how the economy is run". Call it the tyranny trap.
The brightness settings on your videos seems to be low. Every time I watch one of your videos it's at least half as bright as everything else on my TV screen is.
The Chinese stock market has turned hopeful and confident investors in China, as well as beginners studying Chinese stocks, into something more akin to desperate survivors, like cornered dogs fighting for their lives.
They make it hard so they can bring their children to sign up for their army
It works for Russia.
Maybe China is planning to invade one of its neighbours.
I've assumed there will be no war between the US and China, over Taiwan, due to the generational law regarding the one child policy.
No one is going to allow their only child, no matter how old, to sign up for the military to die over Taiwan.
Getting recruited into the PLA is difficult too. It's not uncommon to bribe a local officer to accept the kid into their ranks.
Chinese tourists are funding European tourism
i aint no economist i am just watching this coz i am fed up with middle eas t situations
Does anyone know what happened with their sponsor Imprint? You can see the add read for a few frames at the end of the video.
My guess is the sponsor probably got bombarded by thousands of wumao and pulled out.
This administration has no idea how much people are suffering, things are getting so hard that we can't take it anymore. Many people are struggling financially to keep food on the table and a roof over their heads. I appreciate your advice Stephanie. Imagine I invested $2,000 and got $10,600 back.
HOW please? I know it's possible, I would appreciate it if you could show me how to do it.
👏 Hitting 100,000 today. I'm really grateful for all the knowledge and nuggets you've given me over the past few months. Started with 20k in August 2023.
Yes, and that is true. The current global economy is not helping. Keep in mind that people are really succeeding in cryptocurrency and Forex trading.
After raising up to 75k negotiating with Mrs. Stephanie Weaver, I bought a new house and a car here in the United States = and also paid for my son's (Sergio) surgery. Glory to God.shalom..
Same, I met Mrs. Stephanie Weaver last year for the first time at a Stock Exchange conference in New York, then my family changed forever. God bless Stephanie Weaver,
My Econ prof told me that 15 percent inflation is better than 1 percent deflation
What is hilarious is Chinese locals putting their entire savings and going into loans believing the market was going to moon
Seeing ordinary people struggling isn’t particularly funny.
That’s actually extremely sad and worrying. People losing their savings is bad enough on its own. A wealthy dictatorship going through an economic crisis is particularly bad, because they have a tendency to seek out international crisis in order to distract from domestic problems.
Like Taiwan… for example…
Greed and Fomo. Chinese are very keen on anything that may provide a short term gain. Their gambling addiction problem is massive.
yuan is one syllable, like quack -- not qu-ack
English speakers pronounce it with two syllables.
@@MrOvipare that's fair, I'm just saying that it's not a difficult sound for English speakers to make
I know deflation is way worse than inflation, but honestly wished we had some some of then I can finally afford stuff at home
Good for China! Long live Xidada!😉
And the US economy just continues to boom. After recent revisions to 2021 to 2023 GDP growth, the US economy was found to have grown even faster than earlier.
Our GDP in 2024 is actually over $30 Billion, not $28.8 Trillion.
AFTER ADJUSTING FOR INFLATION. Our 2021 GDP growth was 6.1%, 2022 growth was 2.5% and 2023 growth was 2.9%. And the US economy will grow another 3% in 2024.
By far the fastest growing developed economy, growing about 5 times faster than Western Europe since 2019
bet these people don't make a penny from their thesis.
The thing they refuse to do is to just give people money. Many of the problems they worry about would go away if the did that.
I wouldn't say the problems would go away, but it could deescalate some of the pressure.
Or at least it could do that if they've done it in time, not it's too late.
@@jwhite5008 I suppose that's fair. It would be more of a patch.
Hahaha, ladies and gentlemen, the country people said it would surpass the U.S.
Why aren't people paying attention to China's demographic collapse? There aren't enough young Chinese to support a consumption based economy anymore.
There were at least 10 videos about that on this channel already and thousands elsewhere.
Everyone knows of it, China is doomed, and there is nothing that can be done about it at this point.
But the current sharp fall of consumption is not because of that - actually even the lower number of young Chinese that do exist cannot find sustainable work, they don't want to buy goods like appliances, cars and real estate - i.e. invest in their future - when that money may be required later for basic sustenance if they cannot earn any in the future.
The lack of young people WILL cause an even bigger problem but they cannot even fix the current crisis
We should all be concerned. China is "too big to fail" in that if they have a true economic collapse they will take the rest of the worlds economy down too. Lets hope for their success in dealing with this.
China economy isn’t gonna completely collapse. They are most likely gonna stagnate like japan.
To be fair I can't see how the stimulus would have helped.
The huge impact of the real-estate market collapse makes it very difficult to push domestic consumption (people are too scared to spend).
It was likely that the CCP knew this, hence their resistance of going down this road.
I don't know how they can fix this honestly, it is a very tight spot.
More debt more stimulus. Tick tock tick tock....
China's debt is massive, like their provinces in their country are all nearly bankrupt. The fact that people thought they would keep pumping money into their own economy was short sighted.
It also doesn't help that their own people are in survival mode, they aren't consuming their own products and countries are trying to stop China's dumping policies.
They also clamp down on successful business's that threaten the CCP rule.
So after the burst real estate bubble they are now inflating a stock market bubble😅😅
A British accent makes everything sound better. Haha 😅
It's amazing how stupid investors are sometimes. Just because you want something to be true, it doesn't make it so.
They should pull out of China and invest where profits can actually be made instead of speculative profits