CHINAMacroReporter

'The competitiveness of China is eroding.'

Understanding the drivers of China’s rise to supply chain prominence gives (me anyway) insights to help analyze the changes – or not – of ‘decoupling.’
by

|

CHINADebate

June 12, 2022
'The competitiveness of China is eroding.'
Dr. Willy Shih, Harvard Business School

The U.S.-China Economic and Security Review Commission, created by and reporting to the United States Congress held an all-day hearing last week on:

  • ‘U.S.-China Competition in Global Supply Chains’

As usual the Commission brought in top experts to give testimony.

There are great descriptions of specific supply chains, such as semiconductors and rare earth.

  • But what I found especially interesting is the brief explanations of how China became crucial to so many supply chains.

In this regard, two essays stand out by  

  • Willy Shih, professor at Harvard Business School and
  • David J. Bulman, professor at Johns Hopkins School of Advanced International Studies.

Understanding the drivers of China’s rise to supply chain prominence gives (me anyway) insights to help analyze the changes – or not – of ‘decoupling.’

  • Excerpts from both essays are below.  

All the essays are excellent and worth a browse to find those that fit your interest.

Part One | 'The competitiveness of China is eroding': Willy Shih, HBS

‘China was late to industrialize, relative to the U.S., Europe, and other East Asian countries.

  • ‘In that regard it had what some authors call the “late comers’ advantage.” ’

‘When it built its electric grid, its communications network, and a fair amount of its manufacturing capacity, it didn’t have a lot of existing (and older) infrastructure that was already paid for and fully depreciated, or maybe State-owned Enterprises (SOE) didn’t have to worry about concepts like depreciation schedules.’

  • ‘In either case, since it was looking to catch up, it could start fresh with the newest technologies, and this was a huge ’

‘Some of the old Mao era manufacturing legacy was pretty archaic, but firms weren’t afraid to invest in a lot of new capacity.’

  • ‘They planned for vast growth with the domestic market and increasing access to global markets.’

2 | ‘A lot of know-how embedded in those production tools’

‘In China during the 1990s and 2000s, a period of rapid industrialization, both Chinese and foreign-invested companies imported a great deal of production equipment.’

  • ‘Some of this was the result of “lift and shift” strategies in which production equipment was moved from the S. or Europe, but there were also many instances where the latest production technologies and equipment were purchased, largely from abroad.’

‘The equipment generally comes with training, as it is in the interest of the toolmakers to provide it.’

  • ‘They therefore received a lot of know-how embedded in those production tools. I have written about this phenomena in the MIT Sloan Management Review, and I am incorporating that article by reference.’
  • ‘That is something everybody in every country does, but if you are a latecomer, it helps when you don’t have to go through a lot of learning that is abstracted and presented to you.’

3 | ‘Centralized planning with experimentation’

‘Let me add that China historically engaged in a unique combination of centralized planning with experimentation.’

  • ‘In addition to its Five-Year Plans, it engages in longer-term programs as well.’

‘I would like to highlight in particular the National High-tech R&D Program, also known as the “863 Program” named for the year and month (March, 1986) when four scholars proposed a plan to accelerate the country’s high tech development.’

  • ‘It sought to boost innovation capacity in named strategic sectors like information technologies and infrastructure, biological and pharmaceutical technologies, nanomaterials and other materials, among others.’

‘China also has a fierce form of market competition, and it is driven by policymakers in provinces and cities who take plans handed down from Beijing and implement them with their own means and methods, competing fiercely with each other.’

  • ‘For those leaders who are successful, this is a path to promotion within the Chinese Communist Party.’
  • ‘Sometimes Beijing tries to tone down this hyper-competition and rationalize markets, deeming it a waste of resources. But it’s an interesting and powerful model that had delivered results.’

4 | ‘The pandemic revealed a lot of surprise dependencies.’

‘China’s position in global supply chains is much more pervasive than many people realize.’

  • ‘It has combined what seemed like (until a few years ago) a virtually unlimited low-cost workforce that had both the discipline and the ambition to get ahead.’
  • ‘Workers there were willing to do things that American workers were not, and they did it for a tenth the cost or sometimes even ’

‘While many people focus on the high profile products like lithium-ion batteries, computers, communications equipment, or pharmaceuticals, we actually have broad dependencies that run much deeper than most Americans realize.’

  • ‘Do you shop at the big box home improvement stores or retailers? All you have to do is look at who the largest importers from China are.’

‘In the midst of the supply chain crisis that we have been living through for the past two years, imports from China have posted records month after month, because we don’t have anywhere else to go to for a lot of manufacturing capacity.’

  • ‘The pandemic revealed a lot of surprise dependencies, and I guarantee there are many more.’

5 | ‘Economies of scale and process learning’

‘China’s position is durable, though not insurmountable, because they have both the capacity and the capabilities.’

  • ‘If you want to assemble 10 million iPhones in preparation for a launch weekend, there is only one place where you can marshal the labor, enjoy the labor flexibility, and do it at a reasonable cost, at scale.’

‘Chinese companies have been willing and able to apply the latest process innovations.

  • ‘They then use learning and economies of scale to cement their ’

‘Economies of scale and process learning as exemplified by the learning curve play a crucial role.’

  • ‘These effects overlap of course, but let me start with scale economies.’

6 | ‘Economies of scale’

‘Economies of scale are cost decreases that result from expanding production.’

  • ‘If the cost per unit of output rises more slowly than the costs of inputs in the same proportions, there are economies of scale (for example, if output doubles while the total cost of inputs less than doubles).’
  • ‘The simplest scale economies arise when there are high setup costs and relatively low run costs per unit of output so that spreading setup over larger run volumes improves efficiency of labor and asset utilization.’

‘Economies of scale are frequently found in industries that require large capital expenditures on plant and equipment, or the establishment of a large infrastructure prior to the ability to begin providing service.’

  • ‘High fixed costs get apportioned across the entire product volumes, so larger production volumes mean a smaller per unit allocation.’

‘China has been able to take advantage of the tradability of its output, and as a low-cost provider combine the gigantic export market with its own growing domestic market.’

  • ‘This is something that the United States was able to take advantage of during the 20th century, but the growth of the tradable sector enabled by low-cost ocean container shipping from the late 1990s has helped China immensely.’
  • ‘Thus its firms have been able to build extraordinary positions as low cost ’

7 | ‘Process learning is essential’

‘Process learning is essential.

  • ‘The experience (learning) curve originated from the work of Theodore Wright, who studied aircraft production.’
  • ‘He observed that the more times a task was repeated, the less labor time was required in each subsequent iteration’.

‘Experience curve benefits can be attributed to improvements in labor efficiency as workers’ dexterity improves, standardization, specialization and work method improvements, improved use of tools and equipment, product redesigns to improve assembly efficiency and productivity, material substitutions and more efficient use of inputs, and a shared experience effect when multiple products share usage of common resources.’

8 | “Paying my tuition”

‘One of the key benefits that I have observed Chinese manufacturers have been able to exploit is a market breadth and depth that facilitates this learning.’

  • ‘When a firm starts out making a product, it might not be as good as international competitors, but it is good enough for many buyers in its local market.’
  • ‘Thus it is able to get practice and move down the learning curve.’
  • ‘Customers pay for this learning by buying the firm’s output, and this gives the manufacturer the cash flow to keep operating and ’
  • ‘I describe this as “paying my tuition” while I learn and improve.’

‘China didn’t invent this idea – it is a feature of market economies.’

  • ‘Japan and other Asian economies leveraged this earlier, as did the S. in the 19th and 20th centuries. But a broad tradable sector with low cost shipping facilitates it.’

9 | ‘The competitiveness of China is eroding.’

‘In my opinion the competitiveness of China is eroding, and I would attribute this to several factors:’

  • ‘Increasing logistics costs and transit times, essentially eroding the tradability of many If you don’t have sufficient value density, it makes no economic sense to produce physical products that far away from where they are sold. Since 90% of global trade moves on water- borne trade lanes, the arrival of IMO 2023 regulations on shipping suggest to me that we are not going back to the days of the first 15 years of this century.’
  • ‘China’s population dividend has peaked, and demographic trends are not in its ’ China’s workforce is no longer seemingly limitless, and workers are demanding more pay. That die was cast with the country’s one-child policy, and there is no correcting that in the near term.’
  • ‘Heightened trade tensions between the U.S. and China have made manufacturing some commodities too high risk, and we have already seen the beginnings of a lot of
  • ‘China’s Zero Covid policy has made business much harder to conduct, and has injected a major degree of risk uncertainty. Manufacturers really dislike uncertainty.’
  • ‘The Chinese government’s willing to disrupt some of its own industries through policy and regulation have injected more uncertainty. Until the Party Congress later this year, this uncertainty is likely to continue.’

10 | ‘I am not prepared to write off China’s long-term capabilities.’

‘Meaningful shifts in production have already, and continue to take place. Countries like Vietnam, Malaysia, and Mexico have seen gains.’

  • ‘Having said this, I am not prepared to write off China’s long-term capabilities or its ability to react and respond to these shifts.’

Part Two | How China became dominant in global supply chains: David J. Bulman  


1 | ‘China’s deep integration into global supply chains’: four factors

‘From 1978 until the global financial crisis in 2008-2009, China transitioned from a nearly autarkic country to the world’s largest manufacturer and goods exporter.’

‘China’s deep integration into global supply chains in this period was enabled by:’

  1. ‘serendipitous timing given concurrent global developments,’
  2. ‘East Asian geography, ‘
  3. ‘natural comparative advantage, and’
  4. ‘policy choices, particularly trade and market liberalization. During this period, industrial policies to strengthen China’s position in global supply chains were limited in scope and effectiveness.’

‘Industrial sectors exhibit wide variation in terms of both central policy support and China’s level of global supply chain centrality/dominance.’

  • ‘These two dimensions combine to create a 2x2 matrix, seen in the Table above.’

2 | Timing

‘China’s entry into the global trading system from 1978 through 2008 coincided with a new wave of globalization and global value chain development driven by the information and communications technology (ICT) revolution and declining transportation costs.’

  • ‘The ICT revolution significantly lowered costs of outsourcing and related services, including financial services, computer and information services, and other business services, which could increasingly be traded internationally.’
  • ‘Technological developments in transportation led to lower costs for air and ocean ’

3 | East Asian geography

‘China’s centrality in an increasingly integrated East Asian region facilitated China’s entry into global supply chains.’

  • ‘East Asia has led the way globally in terms of explicit support for developing regional value chains, as trade policies have consistently ensured low tariffs on intermediate goods through a rapid increase in regional preferential trade agreements (PTA), which expanded from 3 in 2000 to 37 a decade later, with a further 72 under negotiation.’
  • ‘China took full advantage of these PTAs, implementing 13 PTAs with 21 individual economies and negotiating at least 10 more, including the 16-member Regional Comprehensive Economic Partnership (RCEP). And GVC complementarities have been an important factor in determining China’s choice of PTA partner.’

4 | Chinese diaspora

‘China’s geographic centrality within Asia also played an important role given the extensive regional Chinese diaspora.’

  • ‘Early foreign direct investment (FDI) into China in the 1980s and 1990s was driven by investment from Hong Kong,Taiwan, Singapore, and other Asian neighbors with large ethnic Chinese populations, constituting a “China circle.” ’
  • ‘As industrial production in the East Asian “tigers” moved up the value chain, China became the natural destination for outsourcing given these language and cultural ties.’
  • ‘In this sense, much of China’s rising GVC integration should be considered as relocated intra-Asian Asian trade.’

5 | Comparative advantage: a relatively educated low-cost workforce

‘Centrality in East Asia only mattered given China’s comparative advantages: most importantly, a large, relatively well-educated, and low-cost workforce.’

  • ‘Mao era (1949-1976) policies, despite causing economic inefficiency and human disasters, also led to considerable increases in human capital: life expectancy rose from 40 years to 68 years and literacy rose from 10% to 90%, both well above other countries at China’s level of per capita income, and the population itself grew from 540 million to nearly one billion.’
  • ‘Consequently, China entered the 1980s with a massive and relatively well-educated work force.’

‘Additionally, Mao policies restricting urbanization beginning in the late 1950s resulted in over 80% of the population remaining underemployed in rural areas, leading to a huge surplus rural labor population that could migrate for work to urban areas without driving up wage pressures.6 Along with an urban workforce with higher levels of education, China thus had an ideal combination of supervisory manpower and a vast pool of unskilled workers.’

  • ‘As a sign of the importance of low-cost labor, China’s labor-intensive exports as a share of total exports rose from 37% in 1984 to 54% in 1994.’

‘In addition to China’s well-educated yet cheap labor force, China’s huge size and relatively well-developed infrastructure (see below) also provided firms with the option to relocate production within the country.’

  • ‘This was particularly important given that GVC development and firm de- verticalization partially reshuffled global comparative advantages in trade, as GVCs required the capacity for inter-industry reallocation of inputs as well as the ability to support the operations of multinational firms.’

6 | Policy choices: trade liberalization

‘Yet the single most important factor in china's global trade dominance has been the productivity gains enabled by state-owned enterprise (SOE) reform and private sector entry in the 1990s and 2000s, and this market liberalization was itself enabled by earlier trade liberalization.’

  • ‘In this sense China’s most important policy choices were to support market-driven growth.’

‘On trade liberalization, in the 1980s China began to de-monopolize its Mao era foreign trade regime, under which the currency was entirely non-convertible, only12 foreign trade corporations (FTC) were allowed to conduct cross-border trade, and an export plan covered all of China’s exports.’

  • ‘Gradually, ministries, local governments, and special economic zones were allowed to set up FTCs, and by the late 1990s China had granted direct export/import rights to 10,000 manufacturing companies.
  • ‘By 1991, only15% of exports were covered in the plan.’

‘And from a highly overvalued currency, China in the mid-1990s moved to a market-based currency convertible on the current account.’

‘At the time, China replaced non-tariff administrative barriers to trade with high tariffs, but over the course of the 1990s these high tariffs were reduced below the developing country average to pave the way for WTO liberalization.’

7 | Policy choices: targeted support for export processing

‘Trade liberalization also included explicit policy choices to attract FDI and engage in export processing.’

  • ‘But for the most part these policies were broad-based and not targeted at the development of specific’

‘Policy makers established four SEZs in Guangdong and Fujian in 1979 – enclaves that did not threaten China’s system of domestic production—followed by 14 open cities in 1984.’

  • ‘They also created a 1986 Coastal Development Plan with explicit support for export processing that brought SEZ-type policies to China’s entire coastal region, with hundreds of millions of potential workers.’
  • ‘Export processing was exempt from duties on imported inputs, providing an important cost’
  • ‘And foreign-invested enterprises (FIE) did not have to go through FTCs to import, while also receiving special tax concessions.’
  • ‘China’s export processing trade subsequently reached as high as 56% of total exports by 1996.’

8 | Infrastructure

‘Beyond SEZs and export processing tax break policies—policies which China learned from Asia and the rest of the world - explicit attention to infrastructure development and to decentralization helped to attract FDI.’

  • ‘China spent lavishly on infrastructure, including roads, railways, ports, and telecommunications; by the mid-2000s, despite remaining a lower middle-income country, China’s infrastructure stock was similar to advanced economies, and China’s logistics performance rose well ahead of other middle income countries.’

‘Part of this infrastructure performance was driven by competition between local governments to attract investment: in the 1980s, China developed a regionally decentralized form of authoritarianism in which local officials were incentivized to attract FDI to boost economic growth and thus their career prospects.’

  • ‘Localities competed with each other by providing preferential policies including cheap land and tax breaks, and also by improving local ’
  • ‘This led to uncoordinated competition, as well as intra-national cross-border  protectionism .’
  • ‘But it also led to institutional improvements, as foreign firms were attracted to Chinese cities with more reliable contract enforcement and faster customs clearance.’

‘These policy reforms paved the way for foreign firms to help drive China’s initial export explosion.’

  • ‘The FIE share of exports rose from nothing in the late 1970s to 58% in 2005.’

9 | Reform

‘FDI helped drive China’s growth, but trade liberalization’s most important contribution was inducing international competition that forced deep reforms to China’s enterprise system, enabling  the entry of private  sector firms and the closure of inefficient SOEs.’

  • ‘During China’s most rapid period of economic growth in the early 2000s, productivity gains across manufacturing sub-sectors were systematically correlated with levels of tariff reductions; sectors with greater tariff reduction experienced more private sector entry and greater competitive pressures that resulted in improved SOE ’

‘Trade liberalization also helped to improve China’s institutions, as WTO accession spurred China to abolish, revise, or introduce more than 300 national laws and nearly 200,000 local regulations; such institutional reforms further helped to provide secure property rights for private and foreign firms.’

  • ‘Consequently, in the late 1990s and early 2000s, SOEs shed approximately 40 million workers.
  • ‘SOEs accounted for over two-thirds of China’s exports as late as 1995, but by 2016 accounted for only 10% of exports as the domestic private sector took off.’

10 | Industrial policy under Xi

‘China has increasingly relied on sector-specific industrial policies.’

  • ‘Butthesepolicies are predominantly implemented by local governments whose incentives are not aligned with the long-term growth objectives pursued by the’

‘These officials instead seek to maximize short term growth and minimize creative destruction and attendant unemployment.’

  • ‘Xi’s institutional reforms have not altered this calculus.’

‘Consequently, industrial policy as implemented is much less effective than U.S.policy makers often assume.’

  • ‘This is not to say that all of China’s industrial policies fail, but rather that their efficacy and explanatory power regarding broader industrial and exporting trends in China is overstated.’

More

CHINAMacroReporter

November 22, 2022
'Strangling with an intent to kill.’
I began to have some hope of getting our act together with Mr. Biden. He worked to rebuild relations with allies who could join the U.S. in the competition. And he understood the need for America to strengthen itself for competition. Hence, the infrastructure, CHIPS, and other acts. But whether Mr. Trump or Mr. Biden, one thing nagged me beyond all the rest. Why is America strengthening our competitor? — In the instant case: Why is America giving our competitor advanced semiconductor resources to strengthen itself to compete against us?
keep reading
October 31, 2022
Xi's China: 'less reliable, less predictable, and less efficient'
‘China’s predictability is being eroded by the frequent, erratic policy shifts that have taken place in recent months, such as the unexpected disruptions to power supplies that took place in 2021, and the sudden mass lockdowns that were imposed in an attempt to contain COVID.'
keep reading
October 18, 2022
Xi Jinping: ‘Crossing a threshold to outright dictatorship?’'
The view from inside China appears to be quite different. Yes, the Chinese people may grumble about the Zero-COVID lockdowns, and just a few days a banner critical of Mr. Xi and his regime was unveiled over an overpass in Beijing.
keep reading
November 22, 2022
'Strangling with an intent to kill.’
I began to have some hope of getting our act together with Mr. Biden. He worked to rebuild relations with allies who could join the U.S. in the competition. And he understood the need for America to strengthen itself for competition. Hence, the infrastructure, CHIPS, and other acts. But whether Mr. Trump or Mr. Biden, one thing nagged me beyond all the rest. Why is America strengthening our competitor? — In the instant case: Why is America giving our competitor advanced semiconductor resources to strengthen itself to compete against us?
keep reading
October 31, 2022
Xi's China: 'less reliable, less predictable, and less efficient'
‘China’s predictability is being eroded by the frequent, erratic policy shifts that have taken place in recent months, such as the unexpected disruptions to power supplies that took place in 2021, and the sudden mass lockdowns that were imposed in an attempt to contain COVID.'
keep reading
October 18, 2022
Xi Jinping: ‘Crossing a threshold to outright dictatorship?’'
The view from inside China appears to be quite different. Yes, the Chinese people may grumble about the Zero-COVID lockdowns, and just a few days a banner critical of Mr. Xi and his regime was unveiled over an overpass in Beijing.
keep reading
October 10, 2022
The 20th Party Congress with All Eyes are on Xi Jinping
The attention to Mr. Xi is in large part because he will exit the Party Congress with even greater power, no discernible opposition, and a new five-year term (with more likely to follow). And many of the constraints that may have been in place not to jeopardize his reappointment will be gone.
keep reading
September 26, 2022
China Coup: How Worried Should Xi Be?
‘Xi and the phrase #ChinaCoup trended on social media after tens of thousands of users spread unconfirmed rumors that the president was detained and overthrown by the China's People's Liberation Army.’
keep reading
September 18, 2022
'How do you spy on China?'
Many of you have asked about my own take on the issues I analyze in these pages and about my background. Today is some of both.I am honored to have been interviewed by the terrific Jeremy Goldkorn, editor-in-chief of The China Project. Below is part of that interview.
keep reading
September 5, 2022
Xi’s Dangerous Radical Secrecy
In a world of political hardball, investigative reporting, and tabloids, we know a lot (if not always accurate or unspun) about world leaders, especially those in functioning democracies. Not so with Xi Jinping.
keep reading
July 10, 2022
Building Biden's 'Great Wall' Around China
Whether you view it as an aggressive adversary or a nation asserting itself in ways commensurate with its rising status, China is creating risks – some subtle, some obvious - that, along with reactions of the U.S. and its allies, have to be factored, into every related business, investment, and policy strategy.
keep reading
July 1, 2022
A Debt Crisis of its Own Making
Ever since Xi Jinping announced ‘One Belt, One Road’ in 2013, I watched it expand China’s economic and geopolitical influence and lay the foundation for projecting its military power – and become by many accounts an exploiter of the developing world itself.
keep reading
June 22, 2022
No. Ukraine Won't Change Xi's Plans - or Timetable - for Taiwan
Ukraine won't speed up or delay Mr. Xi's timetable. (But it may cause him to work harder to strengthen China's military and insulate its economy from external pressure.)
keep reading
June 12, 2022
'The competitiveness of China is eroding.'
Understanding the drivers of China’s rise to supply chain prominence gives (me anyway) insights to help analyze the changes – or not – of ‘decoupling.’
keep reading
June 5, 2022
U.S.-China Relations: A Chinese Perspective
Wang Jisi notes that the views are his own, and certainly we don’t know how closely, if at all, they reflect the thinking of anyone in the leadership. But given his straightforward and thorough analysis, free of canned arguments and slogans, I hope they do. I also hope the Biden administration pays heed.
keep reading
May 30, 2022
Is Xi Jinping China's Biggest Problem?
And while the impact of Zero Covid may be relatively short-lived, the impact of Mr. Xi’s return to the socialist path will be felt for a very long time, both in China and the world. So the impact will no doubt be felt as long as Mr. Xi leads China.
keep reading
May 22, 2022
The Next U.S.-China Crisis: CEOs & Boards Are Not Ready
‘The bad news is that very few corporations engaged in China have contingency plans or long-term strategies to hedge against the downside risks of growing geopolitical competition.’
keep reading
May 14, 2022
China GDP: 'A very long period of Japan-style low growth.’
Here are some of the insights from ‘The Only Five Paths China’s Economy Can Follow’ by Peking University’s Michael Pettis. This excellent analysis of China’s economy is worth a careful reading.
keep reading
May 1, 2022
'Zero Covid' & the Shanghai lockdown
Joerg Wuttke is the president of the EU Chamber of Commerce in China - the 'official voice of European business in China.'
keep reading
April 17, 2022
Is China's Tech 'Crackdown' Really Over?
Today, I’m sharing with you a bit of Ms. Schaefer’s analysis of the tech ‘crackdown’ (but not of the AI and algorithm law). She explains why...
keep reading
April 17, 2022
China: 'Sleep Walking into Sanctions?'
A looming risk is Russia-like sanctions on China. The sanctions on Russia are causing plenty of disruptions. But those disruptions would be nothing compared to the catastrophe of Russia-like sanctions on China. The good news is that if China does violate the sanctions, the violations would likely be narrow and specific - even unintentional. So secondary sanctions - if they come at all - likely won't hit China’s economy and financial system deeply – or (fingers crossed) U.S.-China relations.
keep reading
April 5, 2022
Russian Sanctions' Impact on China
In the meantime, some contend, China has a payment system, the Cross-Border Interbank Payment System or CIPS, that could make it independent of SWIFT.
keep reading
March 21, 2022
Faint Cracks
For some time now we’ve taken it for granted that Xi Jinping has so consolidated his power that his will is China policy.
keep reading
March 13, 2022
Is China in a Bind?
It wants to support Russia, but also wants to support the international order from which benefits and doesn’t want to alienate the major economies its own economy is intertwined with.
keep reading
February 19, 2022
Under Construction: Two (Opposing) World Orders
Years ago, before the so-called ‘New Cold War,’ when asked what China issue interested me most, I said, ‘China and the liberal world order.’
keep reading
February 17, 2022
'A Fateful Error'
As the 1904 cartoon from Puck magazine shows, this isn’t the first time in the past 100 or so years that Russia has shattered the peace. [Or has been defeated, as it was in 1905 by the Japanese in the Russo-Japanese War.]
keep reading
February 2, 2022
Ukraine, Taiwan, & the 'Nightmare Scenario'
This in no way diminishes the calamity of a war with China. But the ability of the U.S. to wage that war would not be diminished by having to fight Russia at the same time.
keep reading
January 18, 2022
This is Mr. Xi's Big Year - and Nothing Better Spoil It
Every politician going into an election wants a strong economy. Xi Jinping is aiming to be reelected (and all indications are he will be) to a third five-year term at the National Party Congress this autumn. So Mr. Xi will ease (and stimulate ) as much as he can without creating major headaches to deal with after his reelection - all in the name of 'stability.'
keep reading
January 5, 2022
Bachelors, Mother-in-Laws, & China's Economy
‘In the long-term, demographics is one of the most important forces that will shape the growth momentum of China for the next decades. Two demographic features that are especially worth paying attention:’
keep reading
December 30, 2021
Q&A 6 | China Reverse Its Declining Birthrate?
‘A lot of people feel like the ideal, the optimum number of children is a maximum of two children. So it's not a surprise to me that the three-child policy hasn’t had a high response in the short term. But I think in the long term it will be much better.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-1 | Drivers of Growth Momentum
‘In the last year and a half we saw a spate of government actions all contributed to not just falling stock prices for companies in certain sectors but a deterioration in investor sentiment more broadly. These include:...’
keep reading
December 30, 2021
Q&A 1 | How Much Does the Gender Imbalance Contribute to China’s Rising Housing Prices?
‘Gender imbalance accounts for about one-third of the increase in China’s housing prices in the last two decades or so.’
keep reading
December 30, 2021
Q&A 4 | Is China Exporting Inflation?
'‘China has its own issues. If you look at the CPI inflation, it looks more moderate. ‘If you look at the producer price inflation, it looks more severe.’
keep reading
December 30, 2021
Q&A 2 | Will the Gender Imbalance Keep Housing Prices Firm in the Medium Term?
‘The part of housing prices caused by gender-ratio imbalance is not going to go away in the medium term. But the government has ways to create volatility in the housing market.’
keep reading
December 30, 2021
Q&A 3 | Property 2022: Stabilization or Growth?
‘The goal is to stabilize housing prices while having housing sector grow.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-3 | Analyzing the Gender Imbalance Data
‘Compare these with graph showing the impact of the same factors on rental prices...'
keep reading
December 30, 2021
Shang-jin Wei Presentation-2 | Gender Imbalance as a Driver of Housing Prices
‘Why does gender imbalance have such an outsize impact on China’s housing prices?'
keep reading

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.