1/7
The headline is a little deceptive. While October's retail sales (a proxy for consumption) were 4.3% higher than last October, the increase was well below expectations and, more importantly, much less than the 6.9% growth in industrial production.
bloomberg.com/news/articles/…
The headline is a little deceptive. While October's retail sales (a proxy for consumption) were 4.3% higher than last October, the increase was well below expectations and, more importantly, much less than the 6.9% growth in industrial production.
bloomberg.com/news/articles/…
2/7
October, in other words, contributed to a worsening of the domestic consumption imbalance, not an improvement. While we are seeing the beginning of a recovery in consumption, there is no way consumption this year will be up – retail sales were down 5.9% in the...
October, in other words, contributed to a worsening of the domestic consumption imbalance, not an improvement. While we are seeing the beginning of a recovery in consumption, there is no way consumption this year will be up – retail sales were down 5.9% in the...
3/7
first 10 months of 2020, compared to the same period in 2019. GDP, however, will probably be up 2-3% for the year. This means that the consumption share of GDP will actually decline this year by around 2 percentage points.
first 10 months of 2020, compared to the same period in 2019. GDP, however, will probably be up 2-3% for the year. This means that the consumption share of GDP will actually decline this year by around 2 percentage points.
4/7
If we think about consumption, exports and private sector investment (excluding real estate) as the main proxies for "healthy" growth in China, the healthy part of the Chinese economy will contract this year, as it did in every other major economy.
If we think about consumption, exports and private sector investment (excluding real estate) as the main proxies for "healthy" growth in China, the healthy part of the Chinese economy will contract this year, as it did in every other major economy.
5/7
It's only because of the sharp increase in spending on infrastructure and real estate (much of it adding to GDP but not to the real value of the economy) that reported GDP will be up. Of course this inexorably comes at the cost of a 21-24 percentage-point increase in...
It's only because of the sharp increase in spending on infrastructure and real estate (much of it adding to GDP but not to the real value of the economy) that reported GDP will be up. Of course this inexorably comes at the cost of a 21-24 percentage-point increase in...
6/7
the country's debt-to-GDP ratio and a 2 percentage-point worsening of the domestic demand imbalance, which mainly shows up in the form of a higher trade surplus.
Given the impact of Covid-19 on China and the world, I don't think we could have reasonably expected things...
the country's debt-to-GDP ratio and a 2 percentage-point worsening of the domestic demand imbalance, which mainly shows up in the form of a higher trade surplus.
Given the impact of Covid-19 on China and the world, I don't think we could have reasonably expected things...
7/7
to be much better, but we should recognize how lopsided and partial China's recovery has been, and how this was largely the consequence of Beijing's supply-side policy response to what was mostly a demand-side problem, unlike the responses in most other major economies.
to be much better, but we should recognize how lopsided and partial China's recovery has been, and how this was largely the consequence of Beijing's supply-side policy response to what was mostly a demand-side problem, unlike the responses in most other major economies.
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