China’s Economic Landscape: Deflationary Pressures Persist
369 sats \ 12 comments \ @TomK 13 Aug econ
The latest economic data from China highlights the ongoing challenges in stabilizing its economy. July 2024 saw a significant decrease in loans to the private sector, plummeting from 33 trillion CNY in June to just 7.7 trillion CNY. This drop underscores the difficulties businesses face in accessing capital amid a cooling economic environment.
At the same time, China's money supply (M2) reached a new high of 305 trillion CNY in June 2024, reflecting the central bank’s efforts to maintain liquidity. However, despite these measures, the banking sector experienced a sharp contraction, with balance sheets shrinking from 2130 billion CNY in June to 260 billion CNY in July.
These indicators suggest that China’s economy is still grappling with deflationary forces, and we may see further monetary policies aimed at achieving stability.
https://m.stacker.news/45564
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30 sats \ 6 replies \ @Satosora 13 Aug
They either need to start aggressively changing their policy or let it free fall.
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20 sats \ 5 replies \ @Undisciplined 13 Aug
I'm usually an advocate for free fall.
However, when you have a command economy, there's no particular reason to think you'll have a sounder footing afterward.
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29 sats \ 4 replies \ @Satosora 13 Aug
If it is a free fall, the market can readjust by itself.
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20 sats \ 3 replies \ @Undisciplined 13 Aug
I know, but that's only if there are sufficiently undistorted market mechanisms. In a heavily controlled economy, I'm not sure the readjustment necessarily gets you to a healthier place. Maybe it does, but I'm not sure.
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25 sats \ 2 replies \ @Satosora 13 Aug
Is china so heavily controlled that it wouldnt be able to correct itself?
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20 sats \ 1 reply \ @Undisciplined 13 Aug
I really don't know. The Chinese people ignore a lot of the official rules, which means there are many more market dynamics than you might think.
Some of the really important markets, though, are heavily regulated. It's hard to unwind badly misallocated capital, when the financial and real estate sectors are state controlled. It also doesn't help that internal migration is tightly regulated.
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36 sats \ 0 replies \ @Satosora 13 Aug
That is true, they dont follow rules. Or they just blatantly disregard them. I wonder how much of their GDP is actually controlled?
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47 sats \ 1 reply \ @16d86e9daa 13 Aug
i believe Consumer prices in China have been experiencing a downward trend, with declining inflation rates. This deflation can result from reduced consumer spending and oversupply of goods.
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0 sats \ 0 replies \ @TomK OP 14 Aug
It's mainly demografics and the real estate collapse
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47 sats \ 0 replies \ @Satoshi__Nakamoto 13 Aug
They should consider either implementing a more assertive policy change or allowing it to plummet without intervention.
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0 sats \ 0 replies \ @supratic 13 Aug
https://m.stacker.news/45621
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47 sats \ 0 replies \ @Octopus 13 Aug outlawed
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.