Tag: economics

Michael Pettis: The China Economic Model

Michael Pettis, professor Beijing University

1930s Germany and Soviet Union,
China uses the Gerschenkron’s model
The model postulates that the more backward an economy is at the outset of economic development, the more likely certain conditions are to occur: Special institutions, including banks or the state, will be necessary to properly channel physical capital and human capital to industries. Gerschenkron’s model

Doom and Gloom, and a Decade of Depression

I found the article Why Our Economy May Be Headed for a Decade of Depression very enlightening on trying to explain the current buoyant stock market vs so much job loss, as well as shedding some light into the future of this pandemic. This is an interview with Nouriel Roubini, “Dr. Doom”, and another article Ten reasons why a ‘Greater Depression’ for the 2020s is inevitable. Dr Nouriel Roubini is a professor of economics at New York University’s Stern School of Business.

Within China, Dissenting Views: Xiang Songzuo talk 2018 Dec 16

Xiang Songzuo 向松祚, professor, Renmin University, School of Finance, former chief economist of China Agricultural Bank

2018 Dec 16 speech to CEO class at Renmin Business School
-recordings, transcripts banned within China
Thanks for the translation

Aside: 2018 Jul 24 Tsinghua law professor Xu Zhangrun’s (许章润) broadside “Imminent Fears, Immediate Hopes”,

Summary: the Chinese economy is going to be in for long-term and very difficult times.

-Within year, private business investment dropped
-politically XJP supports SOE and not private business

China’s Economics: Trying to Understand

China’s economy and its challenges are complex. Let me jot down some notes:

Overall Trends

Xi Jinping assumes office 2013
Economic reform started 2014-15, but Chinese equity markets crash Aug 2015, so reforms stop

-harsh capital controls: strict control of foreign exchange transfers, especially for purchase of int’l shares, real estate
-provincial, city gov’ts borrowed huge amounts, now deleveraging campaign
-anti-corruption campaign, increased importance of CCP -> slowed growth
-stock market down 30%
-real estate bubble
-trade war and tariffs with US
-aging of labour force
-pharmaceutical scandals
-XJP wants total allegiance to CPP for all people, companies
-yuan devalues 9% to just over 7:1 US

Chinese Demographics Benefit China but Hurts the West

It is no big news that for the majority of the 99% of regular people the last 10 years in North America has been economically tough. Our young have a difficult time finding stable employment. In fact finding stable work has been a challenge for quite a long time. Products from China undercut our domestic manufacturers who have largely gone out of business. Our kids will not have a better life than us. It is clear that larger forces than the Canadian environment are at play here.

Decimation of the Middle Class in Scarborough/Toronto, Canada

Anyone who lives here in Scarborough, Ontario, Canada, a suburb of Toronto, can tell you that incomes have markedly dropped. We see it in our schools and neighbourhood. A Toronto Star article on the widening income gaps here in Toronto brought me to a couple interesting maps by Dr. J. David Hulchanski. His paper “Report: The 3 Cities within Toronto, Income Polarization, 2007” gives much food for thought.

Dr. Hulchanski’s paper includes a couple of maps of Toronto by change in income from 1970 to 2000. It is a very sobering map for those of us who live in Scarborough, a suburb of Toronto. It is not that we are special, because other suburbs of Toronto have also experienced similar income drops.