Money & Macro - 2025-07-14
Advertising sponsor: Get access to global coverage at an exclusive 20% discount at https://economist.com/moneymacro Further reading mentioned in the video: China has become a scientific superpower: https://www.economist.com/science-and-technology/2024/06/12/china-has-become-a-scientific-superpower China’s growth targets cause headaches—even when met: https://www.economist.com/china/2025/07/03/chinas-growth-targets-cause-headaches-even-when-met Xi Jinping wages war on price wars: https://www.economist.com/finance-and-economics/2025/06/30/xi-jinping-wages-war-on-price-wars If you appreciate the research, consider buying me a 'coffee' at https://ko-fi.com/moneymacro or supporting long-term for membership benefits via: https://www.patreon.com/moneymacro WANT AN IN-DEPTH INDUSTRIAL POLICY MASTERCLASS? △ https://school.moneymacro.net/p/industrial-policy-masterclass LIKE CHATTING ECON WITH ME? △ Follow me on Twitter: https://twitter.com/joerischasfoort △ Follow me on LinkedIn: https://www.linkedin.com/in/joeri-schasfoort/ △ I have a private Discord server for Senior and Chief economist Patrons / members. SOURCES: I've linked my sources in the blog that goes along with this video. Links are in the text: https://www.moneymacro.rocks/2025-07-14-china-weird/ Timestamps: 00:00 Intro 01:36 What is going with China’s economy? 02:46 China’s Japanification 06:39 Blowing a housing bubble? 10:21 China’s second economic miracle 12:02 Conclusion 14:21 Sponsor Attribution: Music by Epidemic Sound: http://nebula.tv/epidemic Thank you to AP Archive for access to their archival footage. Stock footage and others clips by Getty Narrated and produced by Dr. Joeri Schasfoort
Finally, someone on YouTube used the sentence "I don't know"! Thanks for your great videos.
Even outside YouTube. That kind of humility paired with curiosity makes the truth a collaborative effort.
Don't know is right. I wonder if any of this western media reports about China ever been there. I was just in China a couple of weeks ago. I went to several cities. All the malls were packed, all the restaurants are packed. There's plenty of spending. Didn't look like China is suffering or economy slowing down. China to me seems like it's thriving.
@jaiho9442 people are a bit stuck in the "China can only copy" mindset. It's not longer true! Well they can still copy, but there's much more. But when you say that people think you're believing the propaganda.
@jaiho9442Beep boop, thanks for your input Mr Chinese Bot!
@serf___he is right tho, the economy is different in different parts of china, in Shanghai it seems like is thriving in other places no, so all things can be true at the same time
The point about industrial elites fighting a move to a service economy is really good. Too often we forget that economics impacts and is impacted by politics.
The powerful and rich refusing to transition to a model in which new businesses gain market power... Seems sadly familiar.
There’s still a huge job-education mismatch even though many more are getting post high school education. 70% of the youth still live in rural areas where education is still weak and people are still restricted in where they live by the household registration system or hukou. The working age can’t get retrained fast enough to work in good service jobs. A construction worker isn’t going to go back to become an accountant. Ev and hi tech is a small segment of the economy.
Who is "we"
@homestarrunner-e9d On the bright side, those relatively poorly educated areas are untapped gold mines to fuel future growth. You can only develop your city centers so much.
CCP is its own worse enemy. Xi is not Deng. Deng was the man. Xi is a loser like Trump and Putin.
Yet putting their weight behind batteries, is a NO brainer, and I hate how our government sees technology as bipartisan.
How petty can you be.
Batteries improve our daily lives, and will open up new technologies like robots and exoskeletons. Better tools!
Yet Republicans see it for hippies like tards. Just like libs see oil as evil.
Word is screwed. The faster we get battery tech good enough - we are set. That's close like 500-750kwh/kg. .
I am not against oil. I just think ICE really sucks. So many flaws. Please design a god damn rotary at least.
And clean up fossil fuels. People complain about turbines, but don't see how much waste twenty years of producing oil accumulates for the same amount.
There is my rant. Remember Tiananmen!
The joke in China is "一三五崩溃，二四六崛起，周日休息". Translation: Collapses on Mondays, Wednesdays, and Fridays; booming on Tuesdays, Thursdays, and Saturdays; rests on Sundays.
Is all of that information really in that short sentence? Crazy efficient :O
You clearly dont understand the vide9
英语是条形码，中文是二维码。@mrcool7140
@mrcool7140Chinese syntax literally do be like that. “One three five crumble down, two four six rising strong, and Sunday’s a day off” would be a generally accurate translation that takes into account of rhythm and the meaning of individual characters.
P.S, the joke pokes fun at the media’s violently shifting narrative on China’s simultaneous rise/collapse. It’s Schrödinger’s economy lol
@mrcool7140Is just how the language work. Chinese grammar can skip a lot of things (like preposition and conjunction) while shortening nouns or verbs to form phrases. So long as the context is known to the reader then no meaning will be lost.
If you translate what he said word to word, without context, it would literally means “One, three, five collapse; two, four, six rises; Sunday to rest”.
I've been to China. There are red flags everywhere. Oh wait, that's not what you mean.😂
In our lexicon, red is the best. 😂😂 I have learned so much studying Chinese economic policy which has dispelled every neoliberal myth.
They broke up financialisation of the economy by destroying property speculation. Broke up inflation.
Invested in green and high tech industrialisation to move up the industrialisation ladder. If they transition into a post fossil fuel economy they will have the world at their feet bearing in mind that Trump has quadrupled down on fossil fuel energy. Their innovation is unprecedented and all achieved through a planned economy.
time for your nap grandpa
Especially on Chinese National Day!
😂
😂😂
Most Western economists, including this economic YouTuber, don't understand ONE basic fact about China and the Chinese economy. They don't want to become the second Soviet Union politically, and they don't want their economy to become the de-industrialized and financialized economy like the US and most of the West and Japan either; for the fact that the Chinese currency is not the US dollar and so it's not feasible to financialize the Chinese economy and focus on services. What they are trying to do is to transition their economy up the manufacturing value chains, and that's why you see what you're seeing in the Chinese economy; the traditional manufacturing sectors are slowing down, but the new high value-added manufacturing and tech sectors are growing. And they don't want to jump into the consumer economy too strongly and too prematurely before they can secure the upper end of manufacturing, thus both boom and down movements of the economy are happening simultaneously and will continue to happen like that for the next little while.
And what is the end result?
It is very strong in export markets like Solar and wind and battery Technologies and major supplier tech and over all manufraction.
Cheap high end technology@Arlo-n1o
I agree with your broader point, but "for the simple fact that the Chinese currency is not the US dollar" doesn't really fit in to me, because plenty of other countries also made the service economy transition, so what makes China fundamentally so different?
@Arlo-n1o"we don't know". If you sit and watch enough analysis of the bad parts of the economies of the Soviet Union, Japan, South Korea, and the US, you can see that they all have bad parts. So, according to this theory, the desired end results are "not those parts". But what will be in those parts? We don't know yet, but remember that for a huge chunk of history, China was self-sufficient. It survived the Bronze Age collapse. The Opium War was waged to force China to trade with Britain and Britain can buy cheap shits from China.
It can be as simple as "autarky"
4 years ago I was thinking about whether I should take AP macroeconomics or not. Then your video on money creation appeared on my feed. After the video I decided to take that class and I have been following you ever since. Your videos were where my interest in economics started and four years later in this fall I’ll be starting my bsc in economics. Thank you for your efforts. This and all the other videos are really great.
Super happy to hear that!
@MoneyMacrobtw this is a good video on why
How does China's system really work? This famous Chinese professor explains
Anyways I also read that china savings is like 30-50% compared to spendings and us only saves like 8-20% and spends the rest
Apparently in 2025, making things and selling them for money counts as a 'bizarre' economic decision.
Japan wanted to move their economy toward consumption based economy after the 1990s but stagnant till today. Meanwhile korea and taiwan follow export- growth model that helped them to reached japan level. I think china saw this study case and want to adjust between consumption based and export oriented economy. But the paradox is that china has much larger popoulation base so their industrial output will be larger and will the world can asorb it?
Didnt japaneese growth actually stop because of USA forcing currency exchange change in order to make japaneese export less competitive?
That and housing collapse too.
Yes. Plaza Accords.
It stopped because the US ceased subsidizing Japanese industries via extremely favorable exchange rates that it had allowed for decades in order to strengthen Japan.
Even that's still a gross oversimplification, but it gets to the meat that rather than the US strong-arming Japan into acting against its own interests, the US shut off the tap because American taxpayers were getting annoyed by the continued economic support of a country that was actually out-performing the US at that point.
And even THAT isn't taking into account that the Plaza Accords weren't necessarily the death knell for the Japanese economy that it's often made out to be.
The Plaza Accords are what caused Japan's late '80s "golden years", because the appreciation of the Yen boosted Japanese purchasing power. Japanese growth stopped because they let it fuel a massive asset bubbe.
@secretname4190 Nah.... That growth just after Plaza accords was "accounting growth" because Yen rose fast against USD, so in term of USD, all Yen debts (financial assets) looked like they were gaining value (while underlying asset values were nose-diving.)
Edit : It is my 2-cents. No ref. in hand though.
This is one reason why solely looking at GDP numbers is so misleading. If I take huge loans and spend them, did my economy just improve? Well, wise spending of money could lead to improvements, but you can't tell if it's an improvement just by looking at the spending. But at least this spending by China isn't as bad as Russia's, where the "GDP growth" goes straight into piling up exploded vehicles and turning working age men dead or otherwise permanently unable to work.
This thinking can be applied just as well to us, which is also heavily indebted. And Europe, which is headed that way too
IMF report in debt to GDP: Japan 250%, Italy 150%, US 123%, France 111%, UK 101%, China 84%. What this mean in the misleading world of economics you are talking about? China is even more economically powerful than appear?
@ArawnOfAnnwnas well it should?
@ArawnOfAnnwn I don't think you should ever look at just GDP numbers and call it a day. The more similar economies and societies are, the more useful GDP comparisons can be. But still, it's a blunt tool at best. A pet peeve of mine is how unpaid work in a household is ignored in economic comparisons. If e.g. three people each clean their own houses, cook their own food and care for their own children, none of that will show up in GDP. But if those three people each focus on only one of those tasks, perform it for all three and gets paid (in a way that's registered officially), then it becomes part of GDP. No more value has been produced (assuming equal skills and so on) though, but it's easy to get fooled into thinking that value has been added because a number has gone up.
@hernanuliana9111 Are you asking me? My point wasn't about comparing China's debt to other countries debt, just the practice mentioned in the video, with increased borrowing increasing GDP (at least short-term). But comparing debt between countries is as tricky as comparing GDP. You realize that China also has a lot of local government debt, not least using Local Government Financing Vehicles that can be tricky to track, right?
There is nothing new about this. That's how the west first started out in the first place. When China refused to import, they even used warships to force them to import. Japan didn't fail because its own policy per se, but because 1. it replied too much on a market that it has no negotiation power against. 2. China replaced it and forced it out of a lot of markets. 3. Capital market liberation, again being forced upon it by someone. It is funny how economists keep on coming up with new excuses for their failed predictions.
BTW, Chinese are consuming. They are the largest market for a lot of things already. Economists just choose to be blind to it while also claiming Chinese labor is too expensive to sustain its industries. So now we know, Chinese are paid a lot (according to economists), Chinese industry is booming (according to economists), Chinese are so poor that they are heavily indebted (according to the same economists), so where did the money go?
is it just me or is the audio kinda weird
High levels of static or white noise. I guess its the mic rubbing off his jacket
I think the background music is a bit too high
@CoB33333 The gate used for removing the background noise is set to aggressive and on to many channels. When the voice mic is below a certain level the all audio true that channel is killed so that explains the high level of static too.
For me it just sounded a bit muffled.
Yeah, this needs some improvements
Thanks!
I would really enjoy if you made longer videos. Clearly, you’ve done your research and have a lot of knowledge, but now it feels like we’re just quickly brushing the surface of this topic.
Love your videos!
Great content as always! But please leave out the background music next time.
Watching more, the problem is that consumption led growth is inferior to export-led growth. Economic output, in the long-run, is driven by investment. Someone has to buy the items investment outputs, and making foreigners do it is better than having your own consumers do so.
But with an economy the size of China's, you will inevitably hit saturation. China I think is aware of the need for consumption-led growth, but wants to put it off as long as possible, because that's China going from 5% to 3% growth.
Moreover, the high tech industries China wants (EVs, batteries, semiconductors) allow China to do a final investment burst; it is de facto out of the Middle Income Trap, but after that, it's stagnation.
Thanks
Yes, if the observable data does not agree with your theory, there must be something wrong with the data.
Very insightful! Thank you!
Great video! Thank you.
So, basically, when the Chinese housing market went south, the Chinese government pumped huge amounts of stimulus into their industrial sector allowing them to innovate and remain competitive. I've always said that the wailing and gnashing of teeth over US and now Chinese sovereign debt was way overblown, and I think this makes my point. It's not the debt/GDP ratio, it is what you are spending it on that matters.
Only if it pays off (last comments in the video), which is not obvious to happen.
It’s a lot of malinvestment in China though, dumping all their efforts into producing for customers who are increasingly serious about becoming direct competitors, as opposed to growing a demand base for all that stuff at home.
@doujinflipWhat’s your source for this bullplop? The sponsor of this video at 14:30 ?
LOL
@doujinflipWishful thinking since the 1980s. US and Western Colonies keep dreaming of China's collapse. Get a chair, this 21st Century belongs to China. Just like the past 17 Centuries.
The ratio is still relevant. But sure, as long as you earn more then the interest rate cost you, then it's maybe still a good business. But at some point manufacturing won't be able to do that. Like a trade war with the USA will shift a lot of numbers here.
Can you please analyze the algerian economy?
Great content! Keep up the good work!
Thanks, will do!
@MoneyMacrodidn't you made same absurd claims as before
Quality vid, as always.
Thank you so much! 🙏🏻
Sees economic planning "Omg guys it's another miracle!!"
you can fuck up economic planning as easily as you can make it succeed, that's what makes successful planning "a miracle"...
I wished the housing bubble would pop in Canada too. China could've easily bailed out its most indebted developer Evergrande, but chose not to. This controlled demolition did hurt the equity of many existing homeowners, but also provided hope to a generation of youth who saw housing as completely unattainable.
I thought it popped.
Ignorance is bliss. You can only say this because you are not in the situation the Chinese are. First, imagine you're 50 years old and you invest your life savings in an apartment that will soon be built by Evergrande. Except, the construction never happens, and you realize a 100% loss on your entire life's work. That's the reality of millions of Chinese. Second, the collapse of the housing market is a fatal blow to provinces' ability to generate tax revenues. Provinces made basically all their money by selling land, and with millions of abandoned units in China, and falling property values, nobody wants to buy property and construct on it. The result: provinces lose their greatest tool in generating tax revenue, and must find other ways to fill the void. Thing is, you can only take money (tax) from those that are making money. The only sector making significant money in China is the Industrial sector. So what happens when China has to siphon away money from its Industrial sector to fund public amenities? Well, their industrial sector will become less competitive, which spells doom for their industry based economy. Thing is, China realizes that, so they are filling the funding shortfalls by simply borrowing more. However, all they are doing is kicking the can down the road and praying. If China cannot properly navigate the situation, their current strategy of filling the void with debt with backfire in a horrific way.
@nathaniellowe1215 So we should sacrifice housing for the youth in favor of the elderly...
@peach7469 No youth are even buying properties as there is a massive 20% youth unemployment rate in China. And many of the youth that do have jobs have garbage jobs that pay a couple USD a day with brutal working conditions. I encourage you to read "I Deliver Parcels in Beijing" by Hu AnYan.
@nathaniellowe1215 source ? Proof ?
Us youth unemployment is 23% btw
Source : s &p global
Economists forget supply-side deflation is good, when production dramatically increases (like USA after civil war, during industrialization) but examples are few, so they default to to the other (demand side deflation, which actually is bad)
If there’s deflation, people spend less knowing goods will be cheaper later. So either deflation eventually leads to demand side deflation.
As always just an amazing video!
Fascinating, great video!
The key differnce between Japan and China for the housing bubble is that China poked the bubble itself, so its banks can gradually shifted to industry lending. But Japan bubble was busted by market, so the Bank was in danger itself. This is the sign of great leadership.
That's where the "democratic" governments fail. They can't take such bold decisions nor do they've much control over the mostly private capital.
This is simply not true! - it was the Bank of Japan itself that ended the bubble by raising the inter bank loan rate
@MalaksMessage
But the results speak for themselves. China manage the slow deflation of the Housing market and bankrupt the biggest troubling companies one at a time. So this is a managed bubble-busting. In few years it will achieve the soft-landing.
On the other hand Japan had lost 3 decades after its housing bubble busting.
@qingzhou9983nah the issue is japan was already highly developed in the 80s when the bubble was popped and it coincided with theh Population slump. CHINA still as a LOT more low-wage earners unlike Japan. Japan had no direction but to go down, china still as some room but is squandering it
“Great leadership” is the 3 fingers Basterds inglorious moment in this phrase here. Go away umao
Isn't GDP always a lie? If I pay you to dig a hole and then you pay me to fill it in, we just grew GDP.
Your example is correct. But, in normal economies that does not happen that much.
i would argue the US GDP is also inflated, due to inefficient healthcare, insurance, legal costs, expensive education etc.
@austinli8891 Yes, the U.S. GDP includes bloated sectors like healthcare and education — that's a fair criticism. But that’s not the same as fake GDP.
In the U.S., inefficiencies come from market failures and bad policies, but the data is generally transparent, independently collected, and debated openly. In China, GDP is often artificially inflated through top-down pressure, overbuilding, shadow banking, and local officials massaging numbers to meet political growth targets.
Both economies have flaws — but let’s not confuse expensive healthcare with entire ghost cities built to hit a spreadsheet goal. One is inefficient; the other is structurally distorted.
@SWSSIAR Yes, there is no denying that there are still substantial differences between the two events, but it really does show that GDP numbers aren't a reliable method of assessing an economy without considering other factors
No, because in that economy the currency has collapsed and real GDP is zero.
I'm not an economist, I'm studying History, but I'm moderately familiar with Japanese economic history. While it's not very accurate or productive to make 1 to 1 analogies I do think China's current situation since 2020 matches that of Japan in the early 70s with the Nixon shock (1971) and Arab oil crisis (1973), rather than the beginning of the Lost Decades (1989/91).
1971 and 1973 serve as the rough dividing line between the 高度成長期 (High growth period, roughly 1955/60 to 1971/73), what most think of when they refer to the "Japanese economic miracle" (Tokyo Olympics, unveiling of shinkansen, massive postwar recovery) and the 安定成長期 (stable growth period, 1973 to 1991).
In the high growth period, we saw Japan focus on low end export manufacturing (gadgets/portable tech, textiles, etc. the very same sort of thing China became known for in the 2000s and 2010s), whilst in the stable growth period it focused on high end manufacturing (cars, computers, consoles, semiconductors, etc., the type of thing China is beginning to be known for), as well as developing a larger domestic sector with their newfound export-gained wealth and purchasing power.
China, as another proponent of the East asian economic model pioneered by Japan, has a situation that kind of mirrors this, though whether it will be able to develop a proper domestic sector is unknown. It's also fundamentally different because its relationship to the US (its main export market) is adversarial, meaning its situation is far more precarious than that of Japan in the 70s and 80s. Also: trade wars, demographics hitting earlier than in Japan, dealing with the broader trend of deglobalization and reindustrialization (whereas Japan rode the wave of globalization and offshoring during its stable growth period), etc.
Also don't forget China has a centrally planned economy whereas Japan did not. That comes with some benefits but also issues with corruption and inefficiencies.
@quietus13 I wouldn't say it's a planned economy anymore after 1991. The current industry policy strategy is based on lessons learned from Japan.
Excellent analysis. I have three quibbles, though: one is that China enjoys the benefit of hindsight, which means it can foresee the pitfalls inherent to the “Japanese strategy”; another is that China has been practicing economic colonialism, which was absolutely not a factor for Japan, and massively complicates things; and the last is that its relationship to the US is adversarial (ha ha). This means no Plaza Accords, no strongarming by an ally, no codependent industrial chain. China is aiming for a weird mix of technological self-sufficiency and international commercial cooperation, something that has never been tried before at this scale. I wouldn’t write them off, at all.
Similarities : housing , cars, tech. But china trying * to dominate almost all high end sectors unlike Japan.
@Ildskalliespecially with how many people they've got , how much they produce , how many smart people they have , ability to solve any problems in the economy by force .
They're competent and knew well America will try to do what it did to Japan so they already diversified they exports to latin america , Europe , Aisa , Oceania , etc .
Also japan was defenceless, small land area , smaller population(low self sufficiency)
Great vid. Thanks!
Super interesting analysis, thank you!
So 5% for the second biggest economy is slow? In my opinion, the main reason for the ''slowing' is China becoming too big.
fejk Numbers
It is not becoming too big for its population. It GDP Per capita is still about 13k USD, it's not supposed to be slow down yet unless the economy is unhealthy in the first place
Higher, Faster and Stronger
@phunweng962 it's also faked
@Creativados every GDP number is faked
What you call "economic collapse," we call "strategic transformation," and what the country refers to as "macroeconomic regulation and control." For us, we actually hope that housing prices can come down a bit. If our monthly mortgage payments decrease, we'll have more money to spend on daily consumption. It's just simple logic.
Lmfao cope.
But in this climate to allow wage growth will put nail in their coffin
That's the trap. And with the dependent to earner ratio set to go up massively, they're going to HAVE to do it. I think it's quaint though, that they think they are "doing it" differently. Nope, you're not. And unlike Russia and the US, you don't have almost limitless natural resources and millions of acres of farmable land (in the case of the US) The geographic makeup of the US renders it not "completely" bullet proof, but as close as any country can get. There is no other place on the globe that in such a unique situation.
Great video!
good analysis. This is a new phenomenon. We have to waitand see.
You completely miss the mark on foreign demand for green tech made in China.
Everything made in china is in high demand . That's why tariffs are placed to stop people buying from china
No China GDP is not fake. It is just CNBC has no fake news.
CNBC is not supporting ccp
GDP is meaningless... that's why the RUSSIAN Economy is still standing, what matters is PPP, and Many Pro US NEWSOUTLETS ignore it willingly.
70 years non stop grown == "bizarre economy"
5% GDP grown == slowdown
"Their system will fall in the next couple years" for the last 2 decades...
Prpaganda reached it's limit, we now begining to see the truth...
I've been hearing about CHINA's collapse since I was a TEENAGER, today I'm 41... 😂
Awesome video 🎉 Thank You
Enlightening and informative!
😂😂😂😂天天奔溃
Great video!
So it's helicopter money, but then for the manufacturing sector rather than the consumer sector.
He is misleading
but it is an investment though as those are legitimate manufacturers selling legitimate goods overseas and earning legitimate money.
Thank you for this Analysis
@MoneyMacro - 2025-07-14
Get access to global coverage at an exclusive 20% discount at https://economist.com/moneymacro
Further reading from the Economist:
1. https://www.economist.com/science-and-technology/2024/06/12/china-has-become-a-scientific-superpower
2. https://www.economist.com/china/2025/07/03/chinas-growth-targets-cause-headaches-even-when-met
3. https://www.economist.com/finance-and-economics/2025/06/30/xi-jinping-wages-war-on-price-wars
@matrixfull - 2025-07-14
Hmmm I don't like China per say but I also don't want their downfall. It would negatively impact consumers all over the world. I hope there is some good status quo solution where both "west" and "asia" can be prosperious together. Economical ties also prevent many wars ( unless you have complete madman like Putin who doesn't care about pros vs con calculations but he's kinda exception ). There were so manyy wars in Europe before EU. Protectionistic economical system worldwide is very dangerous. More intertwined we are more we talk and understand each other higher the price of starting a war gets thus making it too high to be worthwhile.
@zodiacfml - 2025-07-14
simple, there is too much propaganda against china. truth is China's economy not comparable to anything especially they have more sense of urgency and less local politics/corruption. EVs and renewable energy are no brainers for prosperity but no other country does it like China whereas US should be the powerhouse of investments into these. US also slacked on semicon or chips which I think China will dominate in a decade or two, depending on perspective.
@youxkio - 2025-07-15
China will beat the EU's green targets before anyone else. Soon, the EU will have to adapt fast and competitively, compared to China, if the EU really wants to achieve its self-imposed green targets. Otherwise, the EU will have to import more green products from China to achieve the green targets, as China becomes SPECIALIZED IN ITS MAIN INDUSTRY ;). Thanks, Joeri. This is quite an inspiring one.
@sumanadasawijayapala5372 - 2025-07-15
Respectfully, the Economist and most Western outlets are poor sources for understanding the Chinese economy.
None of them predicted how far China has come.
6:00 Again respectfully, it is utter nonsense and mirror-imaging to believe that Chicom decisionmaking rests on lobbies as in the West. Just look what happened to Jack Ma. They keep their big business on a tight leash while letting the smaller players compete ferociously and drive down prices. We have the opposite model in the West where we keep the small guy on a leash while letting big business dictate to the govt.
The Chicoms rely on real-world production concepts like labor force composition, human capital, tech/IP, institutions etc., not abstract Western economic ideas like savings and consumption.
There is a point of view that the Chicoms do not necessarily oppose consumption as a component of domestic demand but they do oppose direct income transfers to households.
They prioritizes full employment as employed people make the best consumers.
The export sector is no longer driving growth. This Western view of China is 15-20 years out of date. The export market is now shifting to the developing world bc China is much less dependent on Western tech.
Since the GFC, construction has been the driver. Beijing is trying to transition to advanced manufacturing primarily for the domestic market (and secondarily for the developing world). For now, CHina is utilizing its aging blue collar labor to build as much as it can before it disappears.
There will be fewer advanced manufacturing jobs, but that high-productivity sector will result in high wages which in turn will support service sector jobs.
Credit to Glenn Luk
@wuwuyu-lz9py - 2025-07-15
😊