China’s Economy is 60% Smaller Than We Thought

Hi I'm really sorry for your loss, best wishes for you and everyone who enjoyed Macrocat's companionship over the years.

Rest in peace Macrocat. 😪😰

Ah yes, it's very easy to manipulate numbers…. Current economic theory depends on that and it's why economy is not a hard science after all.

Could you also analyze the ASEAN economy? I want to hear about it.

Does China fake its numbers? Absolutely. Is it's economy 60% smaller than reported? Absolutely not. A simple sense check is sufficient here.

China's 2021 exports = $3.5 trillion. This number should be accurate since exports are a 2-party transaction, not possible for China to fake. China's reported 2021 GDP = $17.7 trillion. Exports = 20.3% of reported GDP (3.5 / 17.7). If you are correct and reported GDP = $17.7 trillion x 40%, then China's actual GDP = $7.1 trillion. In this case, exports = 49% of GDP. Does that seem realistic? It seems highly improbable to me. Exports are 13% of US GDP for reference.

I've lived in China for 12 years and work as a consultant for international firms. I know that they have been moving to "China for China" for about 5 years. Why? Because domestic demand is outpacing demand in their export markets. It is extremely unlikely that domestic consumption + business investment + government spending is only 51% of China's economy.

One big flaw in your premises about light growth is that the urbanization policy of China meaning concentrating much bigger population in dense areas blew a big hole in your hypothesis. In a way, you're comparing apples and oranges when saying that the growth of light in China should mirror the growth of light in USA or other countries. Have you even heard of mega cities in China compared to USA ? The growth in mega cities tends to go up in height . something I doubt a satellite picture can pick up easily. Tell us about the number of cities that exceed 10 million , 20 million and 30 million in China and try to compare with the number of cities in USA that exceed 10 million and you get the idea.

Another issue you failed to stress is that China's manipulated numbers come from the competitive nature of regional governors trying to reach targets assigned to them by the central government instead of some kind of sinister plot by a Machiavellic 'authoritarian' body out there to fool the world.

The only thing you can trust from China is that the CCP lies, and they lie about everything even when they do not have a need to lie. I do not doubt for a second that their GDP claims are false and probably wildly false.

When China makes a pen nobody trusts them to make the ballpoint, or the ink, so they only add about 5 percent to the value of the product. When they make steel [ $675 a ton] they import iron ore from Australia for $200 a ton metallurgical coal from Pakistan that really came from Australia at $375 a ton plus whatever Pakistan added to the price, so steel is produced at only the cost of the raw materials, and made at a loss to try and destroy other countries steel industries. State owned enterprises borrow money constantly [ eg steel industry], so the real economy is lower than they claim, because it makes very little money.

I'm so annoyed with myself for not seeing this. Everyone has always known that they're numbers are exaggerated. This should have been obvious.

This is the first time at this channel, and while I consider the correlation between nightlight patterns and GDP growth a stretch and credibility, I think it is an interesting postulate worth further investigation.

If you built one million apartments and leave them empty and without electricity, is that GDP?

If you built hundreds of thousands of electric vehicles with the sole purpose of letting them abandon on a remote area, Is that GDP?

Wasteful investment may be a huge portion of the GDP that doesn't show at night. That is why I hate GDP numbers. Tell me how much money every family have in their savings account. Tell me how much every family spends on vacation. Tell me how much you are spending on education and health. Those are better indicators of sustainable growth.

Ultimately I think we can all agree the Chinese economy is much smaller than reported regardless if it 60% or 30% smaller.

During the 'Cold War' the DDR (East Germany) was ranked as the 17th largest economy based on its GDP figures.
Just travelling through that country, as a youngster, in the spring of 1979, convinced me that those
statistics couldn't be correct, and that very shabby looking Eastern Germany was in fact a bankrupt
nation.
This assumption that turned out to be totally correct only 10 years later.
During my many short trips to China in the past, my conviction grew ever stronger that China's economic growth has a considerable facade element built in to it.

You thiught, did you thought before saying something so stupid? Sixty 60% smaller than what? YOU DONT HAVE A CLUE!!!

China has an energy crisis that's been going on for years, that's why the government is pushing for the building of coal plants despite green energy concerns — to be frank, Beijing has a quota for renewable energy production, but they aren't meeting it; meanwhile, coal is abundant in China, but is under stricter control, thus leading to heavy electric use restrictions during the summer and winters. "Second line" and "Third line" cities had to contribution much of their power grid output to the upper level cities since energy use on those commercial centers are unsustainable.
There's also why a part of the new agenda being pushed this year within China was to support and construct new coal power plants since there would be no other way to support a post-COVID economical revival.

How could we ever trust the official Chinese numbers??? Just look at their Covid numbers.