Drudge Retort: The Other Side of the News
Monday, June 17, 2019

Reforms to China's highly-leveraged economy are "the only way out" of its current economic malaise, according to a veteran government adviser, who questioned whether Beijing's stimulus measures would be effective in riding out the trade war with the United States.

The Chinese government has scaled back efforts at curbing debt levels, instead turning to infrastructure investment and consumer spending as a means of encouraging growth, with the policies enjoying popular support among many scholars.

But Li Jiange, who was secretary to former Premier Zhu Rongji, said scholars are neglecting new problems facing China's economy and suggested relying on the government to inject stimulus into the economy is not a good idea. "The fundamental solution is reform and opening-up. That is the only way out for us," Li told the Shanghai Advanced Institute of Finance forum in Beijing.

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These are the issues that forced Xi to pull out of the trade pact last month, the Communist Party is terrified of loosening control over its economy, which it believes will in turn loosen control over the populace and ultimately encourage dissent. Without fundamental change in how their economy runs, however, China will not be able to give the US what they are asking for.

With manufacturing starts in Vietnam and other ASEAN markets skyrocketing, China is increasingly in a tough position and they know it.

#1 | Posted by Rightocenter at 2019-06-17 05:35 PM | Reply

#1 | POSTED BY RIGHTOCENTER AT 2019-06-17 05:35 PM | FLAG: Also Taiwan is wooing back some of those companies that moved from them to China years ago. www.scmp.com

Also: Around 200 US Companies Considering Moving Production From China to India www.theepochtimes.com

I do believe, because unlike the USA, their economy is not doing well and that in the near future they may chose to meet somewhere in the middle with the Trump administration's demands.

#2 | Posted by MSgt at 2019-06-17 06:20 PM | Reply

The author's name...

China is going with increased debt and spending on infrastructure. The US is going with increased debt and tax cuts. It will be an interesting test to see what the results are.

#3 | Posted by bored at 2019-06-17 11:03 PM | Reply

Orange Wang has probed this issue deeply.

#4 | Posted by snoofy at 2019-06-18 05:11 AM | Reply

"China's trade surplus soared to USD 41.66 billion in May 2019 from USD 23.42 billion in the same month a year earlier and easily beating market consensus of a surplus of USD 20.5 billion. This was the largest trade surplus since December last year, as exports rose unexpectedly while imports dropped the most in nearly three years. "

tradingeconomics.com

"The Chinese economy advanced 6.4 percent year-on-year in the March quarter of 2019, the same pace as in the previous quarter but slightly above market expectations of a 6.3 percent expansion. Industrial output growth accelerated markedly and consumer demand strengthened amid government's pro-growth policies, which helped stabilize sentiments rattled by trade dispute with the US. On a quarter-on-quarter basis, the economy grew 1.4 percent in the first quarter, compared to a 1.5 percent expansion in the previous period and matching market estimates. It was the weakest quarterly growth rate since the first quarter of 2016. GDP Annual Growth Rate in China averaged 9.52 percent from 1989 until 2019, reaching an all time high of 15.40 percent in the first quarter of 1993 and a record low of 3.80 percent in the fourth quarter of 1990."

tradingeconomics.com

#5 | Posted by Nixon at 2019-06-18 08:36 AM | Reply

"The US trade deficit narrowed to USD 50.8 billion in April 2019 from a revised USD 51.9 billion in the previous month and compared to market expectations of USD 50.7 billion. The politically sensitive goods trade deficit with China increased 29.7 percent to USD 26.9 billion. Balance of Trade in the United States averaged -14786.60 USD Million from 1950 until 2019, reaching an all time high of 1946 USD Million in June of 1975 and a record low of -67823 USD Million in August of 2006."

Corporate America has sold out the United States.

#6 | Posted by Nixon at 2019-06-18 08:39 AM | Reply

With manufacturing starts in Vietnam and other ASEAN markets skyrocketing

90-99% of these "manufacturing starts" are actually Chinese owned.

Dumdum. LOL

#7 | Posted by J_Tremain at 2019-06-18 09:07 AM | Reply

China is going with increased debt and spending on infrastructure. The US is going with increased debt and tax cuts. It will be an interesting test to see what the results are.

#3 | POSTED BY BORED AT 2019-06-17 11:03 PM | FLAG:

China has a 50 year plan.

So does the GOP. It is screw this generation out of social security taxes they paid in.

The GOP has sold out the US to Corporate America.

#8 | Posted by Nixon at 2019-06-18 10:48 AM | Reply

#5-6

Huh, didn't figure you to be such a staunch supporter of Trump's China tariffs.

#9 | Posted by Rightocenter at 2019-06-18 11:53 AM | Reply

""The Chinese economy advanced 6.4 percent year-on-year in the March quarter of 2019, the same pace as in the previous quarter but slightly above
#5 | POSTED BY NIXON "

Nobody believes this numbers. China is already in a recession. Any study that looks at things like electrical usage, etc shows that China is way, way down.

#10 | Posted by iragoldberg at 2019-06-18 12:47 PM | Reply

"90-99% of these "manufacturing starts" are actually Chinese owned.
Dumdum. LOL
#7 | POSTED BY J_TREMAIN "

Actually, you have it completely inverted. 1%-10% are Chinese. Most are large MNC (USA, European) that have shifted manufacture. Companies like Intel, Bosch, etc all opened up super factories in Vietnam recently and are expanding headcount at existing facilities. The Vietnamese don't like the Chinese.

#11 | Posted by iragoldberg at 2019-06-18 12:49 PM | Reply | Funny: 1 | Newsworthy 1

#7

According to the South China Morning Post:

"A combination of higher wages and increasing environmental regulations means China's southern manufacturing powerhouse of Guangdong is no longer the low-cost hub it once was, and for many companies, Vietnam has been viewed as a logical alternative. The US-China trade war has accelerated this trend.

The first quarter of 2019 saw foreign investment in Vietnam rise by 86.2 per cent, to US$10.8 billion. Vietnam's economy grew by 7.1 per cent last year compared to 6.8 per cent, while it has attracted a plethora of multinational companies, including Intel, Samsung and LG, all of which have made huge investments.

Fred Burke, managing partner of law firm Baker McKenzie's Vietnam office, noticed a flood of manufacturers into Vietnam even before the trade war. "There is just all kinds of people coming in. There's a few coming in and saying that they're being hammered by the import duties in the US on Chinese exports. So people making things like emergency exit signs, brake cables, all kinds of specific items that were being cost-plus manufactured in China," Burke said.

The exodus of firms out of China has been predicted to continue, especially as US President Donald Trump prepares to take the trade war to the next level."

#12 | Posted by Rightocenter at 2019-06-18 01:21 PM | Reply

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