Comments on: China’s Case of the Missing Cars

By: jimi

jimi — Fri, 19 Jun 2009 11:28:30 +0000

Foreign trade comprises 60% of China GDP. With the US & European economies in recession – Chinese factories are not getting export orders and many have closed. It is common for govt officials to doctor the statistics for their industries or states that they are responsible for as a “poor” numbers that are not in keeping with central govt’s directions will cause them their promotion or their job. I will not be surprised if China has zero growth in 2009 based on the performance in the real economy.

By: cathyf

cathyf — Mon, 15 Jun 2009 15:41:00 +0000

Well, one thing worth a second thought is that China, as a totalitarian kleptocracy, misallocates capital in a particular way: instead of the profits of new enterprises getting spread around to lots of individual property owners and entrepreneurs, it is concentrated in the hands of a few powerful people. When the profits are spread widely, a much larger fraction gets immediately consumed, whereas when it is concentrated the major fraction ends up “parked” in treasury bonds, etc. The flip side of that coin is that the labor of the Chinese has to go into export goods because that gets the foreign currency to finance the kleptocrats investment priorities.

Another way to look at this is that China is very much ripe for increases in pay for Chinese people, which would increase Chinese demand for the things that Chinese people make. Or still another perspective: the party leadership could take some of the export profits that they have been giving to foreigners to finance the foreigners’ purchases of Chinese-made goods and instead give them to Chinese people to purchase Chinese-made goods.

My point is that 1) China is clearly trying to manage some sort of “soft landing” transition to a market economy, so we should expect to see this movement in this direction, and 2) they are so far away from that goal and also it’s such a huge place that even modest moves towards a less totalitarian investment allocation schema will produce some fairly large shifts.

So, yeah, they are probably lying about the size of domestic demand growth, but on the other hand, we should be seeing growth and it’s more an exaggeration than an outright lie.

I mean let’s get real here — it’s just crazy to have a world where it is economically viable to ship Happy Meal toys across an ocean when there are hundreds of millions of little children who live (relatively speaking) right next door to the factories where they are made.

By: Links for Today » The Ethereal Voice

Links for Today » The Ethereal Voice — Sat, 13 Jun 2009 22:35:15 +0000

[...] Dubious statistics are the Chinese way. [...]

By: E-Sourcing Forum » Sourcing Blogs: MetalMiner

E-Sourcing Forum » Sourcing Blogs: MetalMiner — Fri, 12 Jun 2009 19:17:05 +0000

[...] China’s Case of the Missing Cars [...]

By: Sorting out China’s economic propaganda « Dregs of the Future

Sorting out China’s economic propaganda « Dregs of the Future — Fri, 12 Jun 2009 12:31:00 +0000

[...] There are some apparently contradictory numbers coming out of China at the moment. Take car sales as an example. BYD, a noted Chinese car maker, reported 30,000 car sales of one model by end of last year, but the number plate agency recorded only 10,000 new cars of that model registered for use on the road. What happened to the other 20,000 are they running around without number plates? In a police state, I don’t think so. Our understanding is auto sales are recorded in China when they leave the factory, not when they are registered on the road. (Source.) [...]

By: stuart

stuart — Thu, 11 Jun 2009 21:32:31 +0000

Thanks Thomas, that’s an interesting point, we will do a little digging and see what we can turn up.

By: Thomas

Thomas — Thu, 11 Jun 2009 17:43:46 +0000

The comment about car sales vs. car registrations is intriguing. Any way to countercheck this regarding a few other brands? (Maybe BYD is struggling and wants to show that it’s keeping up with the competition…)