China's real economy is better than ever

Discussion in 'China' started by Martian, Aug 29, 2015.

  1. Martian

    Martian Respected Member Senior Member

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    China's real economy is better than ever.

    1. China's economy is growing due to better technology, which enhances productivity. An objective measure is China's annual USPTO patents. China has surpassed Canada, Britain, France, and Italy. This means China is a major industrialized country in terms of technology.

    2. Lower commodity prices give the false appearance that Chinese exports are falling. China is a major exporter of petrochemicals and specialty chemicals. When the price of oil falls by half, China has to slash the price of its chemical exports.

    The situation is the same for iron ore, which has fallen by 50%. Chinese steel export prices have fallen commensurately. In reality, the volume of Chinese steel and chemical exports hasn't really fallen.

    The best measure of China's economic health is its merchandise trade surplus. China is on-track to hit a whopping $600 billion in its merchandise trade surplus for this year. In absolute terms, China Inc. is more profitable than ever.

    3. The fall in China's growth rate is a statistical effect and has nothing to do with China's real economy. In absolute terms, China's economy is growing faster than ever. Last year, China's nominal GDP was $10.4 trillion. A 7.5% economic growth rate means $750 billion growth in the economy.

    In 2009, China's economy was $5.1 trillion. It grew at 10%. This meant the economic growth was only $510 billion.

    In absolute terms, China's economy is growing faster than ever. Due to the "base effect" of statistics, China's economic growth is incorrectly perceived to be slowing down.

    In conclusion, China's economy is much stronger today due to ever-increasing Chinese annual USPTO patents (e.g. better technology), record merchandise trade surplus (e.g. record profitability), and unprecedented absolute economic growth.
     
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  3. Martian

    Martian Respected Member Senior Member

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  4. DingDong

    DingDong Senior Member Senior Member

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    I believe that China is graduating to next phase of growth, that is IP driven growth.

    What China needs to fear is the overcapacity in it's traditional low-price export-dependent sectors. Nothing will hurt China's political class more than sudden rise in unemployment due to stagnating exports.
     

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