1/11
This article on the the population aspect of Guangdong's 2020-35 plan is very interesting. Even if Guangdong is successful in growing its population by the proposed 0.8% a year between now and 2035, at a time when China's population will...
scmp.com/economy/china-…
This article on the the population aspect of Guangdong's 2020-35 plan is very interesting. Even if Guangdong is successful in growing its population by the proposed 0.8% a year between now and 2035, at a time when China's population will...
scmp.com/economy/china-…
2/11
grow annually on average by only 0.1% and, more importantly, its working-age population will contract by 0.5% a year, Guangdong's success can only come at the expense of China's poorer provinces.
This isn't necessarily bad. In principle China should benefit overall...
grow annually on average by only 0.1% and, more importantly, its working-age population will contract by 0.5% a year, Guangdong's success can only come at the expense of China's poorer provinces.
This isn't necessarily bad. In principle China should benefit overall...
3/11
from greater labor mobility as workers move from slower-growing provinces to faster-growing ones (and Guangdong will not be the only wealthy province to try do this) but the amount by which it improves depends partly on the extent to which the hukou system is modified.
from greater labor mobility as workers move from slower-growing provinces to faster-growing ones (and Guangdong will not be the only wealthy province to try do this) but the amount by which it improves depends partly on the extent to which the hukou system is modified.
4/11
More importantly, the exodus of working-age Chinese from the western and northeastern provinces will make the already-high burdens for these provinces that much the worse, and this will be exacerbated by Beijing's plans to support the poorer provinces with substantial...
More importantly, the exodus of working-age Chinese from the western and northeastern provinces will make the already-high burdens for these provinces that much the worse, and this will be exacerbated by Beijing's plans to support the poorer provinces with substantial...
5/11
infrastructure-building. As it is, poorer provinces like nearby Guizhou already have far more expensive infrastructure than they can productively absorb, and they are planning to build a lot more – Guizhou's GDP growth target for 2021 is 8%, compared to the provincial...
infrastructure-building. As it is, poorer provinces like nearby Guizhou already have far more expensive infrastructure than they can productively absorb, and they are planning to build a lot more – Guizhou's GDP growth target for 2021 is 8%, compared to the provincial...
6/11
average of 6.8%, almost all of which depends on additional infrastructure building.
Unfortunately, few economists understand the ways in which many of these burdens borne by provinces – most obviously debt – have negative convexities: i.e. under certain conditions the...
average of 6.8%, almost all of which depends on additional infrastructure building.
Unfortunately, few economists understand the ways in which many of these burdens borne by provinces – most obviously debt – have negative convexities: i.e. under certain conditions the...
7/11
cost to one province of losing a unit exceeds the benefit to another province of gaining the same unit. This means that, paradoxically, it is possible that under certain conditions "good" things, like greater labor mobility, can actually make the overall economy worse off.
cost to one province of losing a unit exceeds the benefit to another province of gaining the same unit. This means that, paradoxically, it is possible that under certain conditions "good" things, like greater labor mobility, can actually make the overall economy worse off.
8/11
This won't be a new thing for China. One of China's major economic problems before Zhu Rongji was the often-destructive competition between provinces, and this even continued after him in the way certain municipalities – most famously Chongqing under Bo Xilai and...
This won't be a new thing for China. One of China's major economic problems before Zhu Rongji was the often-destructive competition between provinces, and this even continued after him in the way certain municipalities – most famously Chongqing under Bo Xilai and...
9/11
Tianjin, when it tried to become a major financial center – aggressively lured trophy businesses away from other Chinese cities with tax and other incentives.
As Chinese growth continues to slow, I suspect we are going to see a resurgence of this kind of competition...
Tianjin, when it tried to become a major financial center – aggressively lured trophy businesses away from other Chinese cities with tax and other incentives.
As Chinese growth continues to slow, I suspect we are going to see a resurgence of this kind of competition...
10/11
between provinces, this time including over working-age people. If handled well this could be positive for Chinese growth, but it could just as easily be negative and exacerbate regional disparities. Above all it can make the problem of excess infrastructure worse, by...
between provinces, this time including over working-age people. If handled well this could be positive for Chinese growth, but it could just as easily be negative and exacerbate regional disparities. Above all it can make the problem of excess infrastructure worse, by...
11/11
reducing its value in poor provinces faster than it raises it in rich provinces. Unfortunately this is exacerbated by negative feedback: slower growth makes excess infrastructure even less valuable and the debt burden higher, which in turn reduces growth even more.
reducing its value in poor provinces faster than it raises it in rich provinces. Unfortunately this is exacerbated by negative feedback: slower growth makes excess infrastructure even less valuable and the debt burden higher, which in turn reduces growth even more.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
