The Chinese economy is not just inflated, it's now an enormous chunk of the world economy. Throw in their really wild housing bubble  and it's a time bomb. Globalization has made everything cheaper, but it's tied us all together in many ways. They won't fall over alone.
Hiding news that the economy isn't doing well distorts incentives. Those with political connections will know what's really happening and take full advantage. Those without will make poor choices. Like buying a 4th unfinished condo as an investment.
I went to college for economics during the recovery from 2008, and one of my professors was a very well respected economist managing large funds. One conversation I had with her stuck with me. We had to read the Wall Street Journal for some assignments, and I asked her why it seemed that Quantitative Easing wasn't have anywhere near the result we expected it to have. She said she thought it was because everyone was doing it. I remember reading articles about concerns that Japan was also doing QE and that it might belittle the efforts of the Fed over here.
I think globalization is a huge step forward and really beneficial overall, but it's not a panacea and it does come with some drawbacks.
So far, that policy is effective. After all, nobody want to play the Japanese character during what's after the "Japanese economic miracle". And the housing bubble thing is like textbook example of "How not do your economy".
In many cases, what we have in China is much worse than japan since artificial intervention is much deeper and prolonged.
I think it's the question of whether or not it's going to pop.
If the housing bubble did popped, then we are screwed a big time, worse than what Japanese once had. But if it didn't, then the leverage is still there and economy maybe low at worse, but stable.
I don't think everything is concluded at this point, because SSE 000001 is showing sign of very slow recover. And the censorship on economic news in my opinion is rather one effort to preventing domino effect.
A lot of economic potential is directed toward real estate and away from more productive endeavors. I remember the shops outside of my old office in zhongguancun all concerting to real estate offices. Cafes,
restaurants, stores can’t compete.
If China wants to take the next step in their economic development, they have to give up on this bubble. It will suppress a lot more economic activity than it stimulates, even if capital is preserved it isn’t doing anything useful.
"China is Now More Expensive than the USA": https://www.youtube.com/watch?v=32t8d2eQJAA
Almost everyone laughs when I say they should get some of their news from people who actually live in China rather than thinking something needs to be printed in the newspaper before it is true.
> Freda Du: are you guys comparing one of the most expensive chinese cities with the average american (suburban/rural) rent? And comparing fine western dining (cuz apparently you think the $2 chinese meals will kill westerners..) with dollar menu? I lived in Shanghai, LA and NYC, let's make a major city to major city comparison here.. a single metro ride is $0.5 in shanghai vs. $2.75 in NY and $1.75 in LA (which goes nowhere); cellphone bill costs $10 in China and $40+ in the US; you can get food as cheap as $2 in a sit-down restaurant in China, but at least $10+tax&tips in America; have you guys just been living in China for too long and forgot how damn expensive america can be? the small Chinese cities can be dirt cheap too but you guys think it's too inconvenient for people who refuse to speak Chinese. so there you go.
For your reference, I'm living in a small city in China, where ￥15 can supply my diet-mode food for a week, for better diet, that's ￥22 ($3.2 dollar) (Just to clarify, If however I don't want to diet, then that's ￥50~80 or $12 a week). That's even when I buy most of my foods from supermarket.
The key point is, you CAN live an expensive life in China if you want to, but you don't HAVE to.
If you're serious about trying to discern the reality of this situation as accurately as possible, the most useful metric I know of to look at is the affordability ratio, assuming you can find a source with genuinely honest, unmassaged data.
To me, the fundamentally important question seems to be: has the ability for the average person to own/rent the average shelter increased, decreased, or stayed constant over time? My opinion on the matter would be the whatever the answer to that question is. I don't happen to know the correct answer but I think a related question, how broadly is wealth distributed throughout the population (completely ignoring the "righteousness" of it), would be helpful in making a good guess at it.
I did it from time to time for about few weeks so I can quickly lose my belly fat. And I don't like it at all let alone recommending it.
> the most useful metric I know of to look at is the affordability ratio
Of course. I just searched a bit, the DPI seems to be ￥7,815 or $1,137 for the first quarter.
However, I don't have any information other than that, and dig the information needed is too hard for me :(
Not at all, my point was more referring to the human tendency to take one example and use it as a representation of the norm, according to the internal desires of how one thinks the world is, or "should be".
> Then don't be, I'm actually not very proud of it.
I can't think of too many countries that could feel more righteously "proud" of themselves than China, considering what they've accomplished in the last 20 years, I don't think anyone comes close to touching this progress in the history of the world.
> Of course. I just searched a bit, the DPI seems to be ￥7,815 or $1,137 for the first quarter.
I'm not familiar with this term (Dynamic Price Index?), but I can't think of a single number that would be an accurate representation for "China", considering how large of a country it is, with incredibly high variances of wealth and living expenses.
Cars are super expensive compared to the states, so is gas. Real estate prices are insane, but again rents are much cheaper because most of that run up is imaginary and unsustainable. Education is super expensive if you don't have a hukou (which foreigners will never get). Clean air is impossible to buy.
I've searched the price of fast food restaurants in your city, the result: https://t.dianping.com/list/chenzhou-category_189
Base on that, I can see the average price is ranging from ￥13 to ￥45 ($2~7) per person. So I guess $5 is really pretty decent.
However, I have lived in few other cities in China, I know that live in another city other than your hometown is expensive, let alone when that city is in another country. Simply too many extra costs (like Rent and education).
Speak of educational cost,
> Education is super expensive if you don't have a hukou (which foreigners will never get).
It's actually location depended. You may want to talk with local schools or departments see if they can help you with it or at least give you a direction. It likely results a cold shoulder but you won't get warm one if you don't try. Plus, ask them directly is better than complaining online.
Also keep in mind, not many Chinese teacher can speak English. So.
BTW: The population is the total number.
Many people think it's a goal that is to hard to reach in time (year 2025 or so), but the overall direction is about right.
However, all of that is before the trade war thing. So what does the future actually holds is a bigger unknown by now.
The property bubble really isn’t worth preserving.
In 2010, the US Securities and Exchange Commission restricted the ability to sell shares short if the share price has declined more than 10%.
Curious how there is no equivalent restriction on purchases if the share price has increased by 10%.
These rules are designed to slow trading down on the order of minutes to hours so market participants can catch up and make rational decisions. This is completely different than broad market distortions pervasive in both Japan and China - both in intent and effect.
If this were true, then there would be a symmetric rule to restrict purchases when prices increase.
Since the rule only restricts sales and not purchases, its purpose must be to prevent price declines, not to regulate the velocity of trading.
Short selling amplifies downturns because you dont have to own a share to sell it. There is no non option equivalent to short selling.
That is, if you brought a house, from the time of the purchase, you can't re-sell it within 2~5 years. After that, you're free to go.
If that old condos is not within the limited time, then maybe it is real that the house have no resale value. In that case, as far as I know, the only option is to wait until local government re-sell (re-develop) the land.
But don't take my word, I don't know every policy of every local government. If you really curious, ask the question on a Chinese website like zhihu.com, then maybe you can get some information that is more useful.
"A government directive sent to journalists in China on Friday named six economic topics to be “managed,” according to a copy of the order that was reviewed by The New York Times."
From everything I've read, I would be extremely surprised if journalists are the only ones who receive implicit or explicit "suggestions" on what is acceptable to say, and what is not.
http://www.baldingsworld.com/2018/07/17/balding-out/ (It's an excellent article overall.)
I am leaving China. After nine years working for the HSBC Business School of Peking University Shenzhen Graduate School as a professor teaching international trade, negotiations, and ethics, I am leaving China. In early November 2017, the HSBC Business School informed me they would not renew my contract. In March 2018 they informed me they wished to sever all ties by April 1, 2018.
One of my biggest fears living in China has always been that I would be detained. Though I happily pointed out the absurdity of the rapidly encroaching authoritarianism, a fact which continues to elude so many experts not living in China, I tried to make sure I knew where the line was and did not cross it. There is a profound sense of relief to be leaving safely knowing others, Chinese or foreigners, who have had significantly greater difficulties than myself. There are many cases which resulted in significantly more problems for them. I know I am blessed to make it out.
I'd also be surprised if China is the only country where messaging "suggestions" are made by the government, although the degree and exactly how it is done is far more opaque some places than others. Of course it may be pure confirmation bias, but I've detected a distinct change in the nature of MSM China articles in the last 2 months or so in the US, as well as a change in public sentiment in social media and forums.
TABLE-China bond defaults rise over 56 pct from 2017 at $8.74 bln
$8.74 bln defaulted out of the $11 trillion market .
Edit: Looks like I'm being flagged for pointing out the false accusations? Slowly losing my faith in HN.
Apologies, but all the links you posted are in chinese, and google translate just turns them into mostly garbage so Im struggling with the context of your comment.
But I'm not sure what this issue here is, the user above you pointed out "the kind of information being censored" as an example of what's being discussed in the parent article, and that seems unrelated to the argument "Stop throwing baseless accusations about X".
Is the problem with the accusation that China is censoring economic information, or is it that the default rate as used in this example is inaccurate?
The article is about censoring economic news.
The top comment suggests an example of economic news that is censored.
Anyone reading the comments would assume that the example news is indeed censored.
However, that was not the case, as shown in the links I provided. (If they were censored, the pages would have been taken down retrospectively)
I'm pointing out that example is a false accusation of the content being censored.
Unfortunately for most of us westerners the chinese web remains mostly opaque (and automated translation very mediocre) so I don't understand what your links are supposed to demonstrate. That's probably why you're getting downvoted too.
If a newsworthy event has taken place but is not reported on mainstream media because of government intervention, that is censorship.
The main purpose of censorship is not to completely stop all access to some information, it is to prevent that information from reaching a majority of its target audience.
This is what happened here. You're shrugging it off with 'ehhh but you can still find the information if you know to look for it in the first place, where most people would not look'. This apologist attitude is why you're being downvoted. You are using the Chinese government 'approved' definition of censorship with is contradictory to the definition outside of china.
He/She linked articles from sina.com and hexun, they are arguably the most popular online news outlets in China. Xinhua also have numerous news articles on the increasing defaults  -
May 2018  http://www.xinhuanet.com/finance/2018-05/29/c_1122902212.htm
August 2018  http://www.xinhuanet.com/tech/2018-08/04/c_1123221839.htm
July 2018  http://www.xinhuanet.com/finance/2018-07/13/c_1123119356.htm
How about stop commenting on something you don't even understand?
In fact I am happy that we found the root cause of our disagreement.
Edit: To be more clear, I would define censorship as denying legal means to access a piece of information.
The definition is pretty clear, and TFA pretty clearly meets that definition. You're not being downvoted simply because people disagree with your point of view, you're being downvoted because you're using alternative party-approved language which subverts the discussion.
To put it really bluntly, your comments match the heuristic of what people would consider propaganda trolling.
I got downvoted to hell for pointing out that the article doesn't provide the total size of the bond market when talking about those $8 bln defaults. I provided a link to a recent bloomberg article showing the total size is $11 trillion.
Surely those downvotes are a good show of freedom of speech! Shame on you.
In an economy, an excess must eventually be corrected. The problems are that it's a dynamic super-multi-variable system and tends to overshoot in both directions. Ideally, an excess would self-correct soon and gently, but many information loops have too long a lag. Hence, the warning that "markets can remain irrational longer than you can remain solvent".
In cases where the bubble is moderate, 'management' may well keep the psycology from falling too far and overcorrecting, buying time, so that the situation can correct without a crash.
However, it also continues the excess for far longer, and often allowing a far greater degree of excess. So, if the excess breaks through the management, the crash will be _much_ steeper and deeper, overshooting far on the downside.
I'm not sure if the PRC doesn't understand this risk, or if it does and is just in too deep to do anything else.
Either way, it is a seriously growing risk for them and globally.
Usually the central banks serve that function by raising interest rates in better times as the economy heats up. China's? Not so much. Seems they might need to learn this lesson the hard way.
Though there seems to be some relevance to the government's numbers, otherwise the market would totally ignore them.
It is possible in at least one instance.
There is a difference between a biased news source and flat-out censorship. Equating us to China is disingenuous and loopy.
In our culture there is no need to suppress the bad news, it can just be drowned down in a flurry of stupid news, contradictory statements and "why do you hate freedom" kind of finger pointing.
If random people speaking freely has close to no effect on the leading class, there is not much need to suppress free speech.
I mean, do you really believe that it's irrelevant that the conversation we are having now, without any fears, I assume, would be extremely risky in China?
With that in mind, from what I get anything political or touching the PRC will be heavily scrutinized, anything else nobody will bat an eye.
In that respect, the fact we can discuss this freely is nice. But I’d be cautious to declare we’re freer than them just on that fact alone. I just don’t know.
Compound to that, the fact that we went through series of very serious crisis (the banking crash 10 years ago comes to my mind) with almost no long lasting structural change of the same order as the crisis, despite people’s engagement.
This to me brings the question: how much impact does free public discussion have on the real world ? Does it even have a real impact on public opinion ? Or are we just set in a sandbox, toying with whatever we want, while everything else rolls around ?
Effecting change in government policy is a poor metric of personal freedom as there are a number of competing interests, each rooted in their personal freedom to try to effect change. Yes, many of us are disappointed in how things were handled since 2008, but clear policy solutions don't always exist, and I do not think the people clearly coalesced around any set of them and then failed to implement them. Why? Because the actions taken to effect a recovery were good enough that we didn't collectively starve. Revolutions and huge political upheavals take starvation (The Depression), death (Vietnam), or a clear solution to unfair suffering (Civil Rights Movement).
Before the crisis both the right and the left had achieved their main political goal (capitalism and the welfare state, respectively), and both accepted the status quo.
It is astonishing that after a crisis that was caused by capitalist greed, it was the welfare state that was compromised.
This has damaged the establishment left, which is being replaced by populists that, although often branded as far-right, are big defenders of the welfare state and "the people".
The western liberal capitalist elites, which control the media, are struggling to contain these populists. So, although, in particular, the US media is under their control, they couldn't stop Trump, whose supporters in the fringe media had no trouble spreading their opinions.
Although a westerner, I have first-hand experience of life in an authoritarian country.
Of course, I will never claim that this makes me an expert, but an interesting observation that I have made is that educated people in dictatorships seem not to believe anything from their country's media.
So far so good. The interesting bit is that they seem to give enormous credibility to rumours and conspiracy theories, no matter how outlandish.
I have the suspicion that often these rumours originate from the opposition in the diaspora, who I believe are just as biased and self-serving as the officials.
I find this side-effect of censorship quite fascinating.
In fact, China recently cracked down on those spreading rumours. 
> Of course, I will never claim that this makes me an expert, but an interesting observation that I have made is that educated people in dictatorships seem not to believe anything from their country's media.
Just one example of these two points is Thomas Frank, whose type of message you will rarely see anywhere in the mainstream (or even elsewhere (whether intentional or not): "You're posting too fast. Please slow down. Thanks."), and therefore will likely have no influence on "informed" people in the US.
But as you say, the message is getting to some people, and when people hear these types of messages and if they realize it isn't covered in the mainstream, and is "discouraged" on social media, and start putting two and two together, it can become a very potent political tool that can be leveraged by populists.
And don't forget that this lack of knowledge about the true state surely contributed to the famines that killed tens of millions of Chinese during the Great Leap Forward. https://en.wikipedia.org/wiki/Great_Chinese_Famine
A Facebook bubble can be similarly truth-distorting, but your bubble is ultimately a reflection of your individual choices, and it barely takes a couple of clicks before you can find conflicting information or alternate opinions.
In the West, for all our defects, you can get all the points of view you want.
That is for example the CNN or NYT looking with microscope whatever Republicans do badly and ignoring what Hillary or Obama does wrong could be extremely valuable is there are "opposite biased media" that looks with microscope whatever Hillary does wrong.
This happens in multiple levels, there are financial interest that own media and will never criticize its masters.
The Churches also own media, the Unions own media, the military and farma industry own media. Google or Facebook ARE media.
People in power should be controlled, and that is one of the most realistic ways to control people in power. Wanting media to be unbiased is a dream. Most people are biased.
We have so much light censorship and politicians get to lie without any consequences. The institutions who play along are rewarded and those who try to speak out about it are discredited.
There's illegal surveillance that we only get to know about from whistleblowers.
Political correctness is used to silence millions of people and invalidate opinions without having to debate anyone.
Elections are won through illegal social media campaigns.
If anything, China is copying us.
China is not copying us. Corruption is universal. It’s a question of degrees. The US has less corruption and more access to correct what does exist than the Chinese. What they learned from us, if anything, is how technology can control things. Given that they’ve had advanced tech on the past and did similar things to suppress inconvenient truth, I’d say they are pretty much doing what they’ve always done back to the days of the emperor.