Hooray, I have found a soul mate in @CapEconomics whose latest rpt says 'Our long-run forecasts suggest that China will still be the second largest economy, measured at market exchange rates, in 2050'. My view too. Read on /1
They say that if China hasn't overtaken the US by 2030, it won't. and even if it did, the bragging rights might not last (my words). They say China's poorer demographics and output per worker are the key drivers of this non consensus view. I think there's more /2
So I would add 2 things. First, the prod'ty part of this is key. I'm also more optimistic that US economic structure, assets and strengths still give it an edge, along with politics permitting more robust institutions and stronger tech branding and commercialising capability /3
Second, the RMB. Not now, but in the next 3-5 years, I think there'll be another meaningful depreciation in the RMB, which will have a material consequence on the economy and on the $ based GDP trajectory. /4
In the end though, as my soul mate also says, the thing that matters is real income per head, not nominal GDP, and on that score China may catch up a bit, but there's next to no chance of 'sorpasso' any time that makes a difference to us. End
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Thread on saving (mostly older peoples) lives v economy. Spoiler: rant because a lot of ppl incl on @BBCr4today misunderstand or misrepresent this. There is no choice. 1/n
Ppl, incl a Bristol Univ Prof in risk mgt, say economic slumps are injurious to health and we have the balance wrong. We should protect economy more and presumably be more tolerant of higher cv fatalities. 2/n
It’s true that slumps take a heavy toll on physical and mental health. Which is partly why we have well developed if not always adequately funded social sec and healthcare progs. But in today’s cv world, the deaths vs economy argument is a total red herring and wrong 3/n
On HK protest movement against the E law, lots of thoughts swirling around. No question it’s been a huge boost for HKers, who must feel buoyed that if the govt or Beijing persist in erosion of civil liberties, they know what to do. Yet, this is ultimately toxic for the CCP 1/n
At same time, also no question that this is the biggest climb down Xi Jinping has made since coming to power. The all-powerful, truck no nonsense, leader of China has had to bow to street politics. This will not have made him happy or quiescent.2/n
Under the circumstances though, and with a G20 coming up in Osaka next week, he had no choice. Interesting though, that faced with international and domestic pushback, the gov has virtually eradicated Made in China 25 rhetoric, moderated its Belt and Road strategy (pro tem) 3/n
Remarkable graphic showing that even though China rebalancing has made some progress, it is light years away and structurally a country mile from its developed and emerging peers. 1/n
Though China has GDP per capita about same as Brazil, its consumption per capita is comparable to Nigeria. Can you imagine? Not what you see in glitzy Shanghai or Shenzhen, but a truism regardless. Now look at the debate about rebalancing and reform, and you'll see.... 2/n
....the emptiness of the agenda on what's needed to really move China from top left to middle or bottom left in the chart (first tweet). Of course, as the investment rate drops away, pushing growth much lower, the Consumption share will rise, but that's just maths, and not... 3/n
Been pitching Red Flags in U.K. and at a private China and the world conference for invitees only/Chatham house rules conference out of town. Can’t say much but some impressions:
The pro-China lobby in the US has evaporated, and it’s on life support elsewhere. This is a huge thing. Think about the last 2-3 decades as comparison 2/n
Xi Jinping has committed 2 cardinal errors. Losing the support of US especially but also EU businesses, and misreading the fortitude of the WH on prosecuting this trade conflict. Major fails. Someone’s going to pay for this, and it’s a loooong way back for XJP 3/n