China has been bluffing about their GDP almost 2% every years growth and that also includes the figure of their last year consumption of 7 trillion dollars which was solely in domestic market. So that they can attract for investment which they directing to their real estate rather than more in industry because a lot of foreign investors may move out investment from China for their bubble economy where they are hiding 8.5 trillion dollars debt and growing expensive labour costs for illusionary bubble economy's expensive lifestyle and ever reduction in young work force with decline in public reproduction. To be honest, china's economy won't last for long, because: * their strength is low cost ability on electronic product is loosing low cost labour for a) younger generation decrease b) lifestyle cost increase c) youth are boycotting d) most companies are on government subsidises to stay in the race fighting with Western company to attract market in cheaper price and create illusions of their bubble economy * now we are on The 4th economic revolution which requires AI, automobile, EV, renewable energy, high tech industries on which china is new and trying build market by keep giving subsidises to high tech industries and creating bubble illusions to out side world which is bound to collapse today or tomorrow. *Because of their government is running a bubble economy , the rest of the world won't trade with them in their currency, so they have trade with dollars, and USA is waiting to create their big economies requirements suppliers from alternative countries so they can inflate dollars to take down Chinese massive trade which are on dollars.(same like Japan and Malaysia which USA did some decade back) *Chinese lack of transparency in trade policy, journalism and government system, belt route won't make much difference in their economy if they lose low cost labour for their bubble economy high cost life expenses. That's why Japan and South Korea withdrawing their industries settlement from China and replacing in bangladesh, Indonesia, Thailand and Vietnam. *China doesn't have brand to fight in international high tech market apart from Huawei which is banned in many countries and sanctioned for accusation of stealing the technology from MIT and darpa lab by Chinese intelligence * china failed in Geopolitical diplomacy to let them have chance to grow first then dominant world and challenge the west. But they have challenged too early. * to tackle expensive labour market big economy requires financial tools strength like dollars and euros or bonds which are backed by commodity wealth like oil, gold, high tech brands, military industries and power, foreign network like nato, 5 eyes, long time hold or permanent hold on market, stabilised stock exchange like NSD, London stock exchange, frankfurt stock exchange. Oh worth to mention, Japanese stock market was strong one point, but it has fallen by American foreign policy when they inflated dollars and crashed Japanese market stock prices...and China itself destroyed Hong Kong stock exchange to invade like territorial ruler But Bangladesh should take the advantage of their investment before they collapse for expensive labour market, then many Chinese companies will even move in alternative countries like bangladesh for cheap labour costs. As long they pay bangladesh by dollars or euro to build our infrastructure... china is subsidising its most companies to stay in market because most of the companies are up coming new and to make a established brand, because expensive high tech products only can survive in the market by brand, and China doesn't have any established brand on high tech, that's why China is planing to survive by replacing it's ordinary industries in to country like bangladesh for cheaper labour costs. On top CANZUK nations are already forming alliances to sustain their high tech bands more stronger in the market. China is following American model of bubble economy, but American and European banks tackled their credit crunch by their strong financial tools and strong stock market which china never can have until they can make the whole world to boycott petro-Dollar. In other hand america and it's allies won't by mind to inflate currancy to take over Chinese economy, because soon they will inflate, all the Chinese subsidised corporation will fall and take over by USA or their allies along with the supply chain market. American and European has more bigger private space station than Chinese national space station, let alone NASA and URSA.To be honest it's just matter of time to fall Chinese bubble economy, yet they will survive like Japan did, but they won't be able to take over western economy like Japan couldn't but Japan made negotiations and compromise by staying in 2nd or 3rd, will China would be cleaver like Japan...on top China has oppressed its neighbours like Taiwan, Hong Kong and domestic uighar Muslims, so the international stage won't trust them for any kind of leadership like Russia could not gain for oppressing former soviet neighbour countries...Chinese non Democratic culture is also a obstacle to get any trust from foreign societies...the only strengths Chinese has its domestic market of 1.4 trillion people by ordinary industries like you mentioned phone and cameras, tv etc. But Malaysia also did it like Japan. But they will always remain as a loyal supply chain not leader...Britain never would have lose their leadership if Britain and their allies western European countries transport all the gold to America to hide from Germany in the 2nd WorldWar. And back then money was gild standard, so America made their dollars the standard of international monetary system as they had all the gold of whole European banks, but later Britain and France claimed it back, when they saw America was making bubble economy by printing more money than their gold reserves, but later America although gave Britain and France their gold but tackled dollars international dominance by making deal with Saudi Arabia and its allies by making dollar is the only currency to buy and sell oil and all energy in the price of keeping Britain Americanpartner in trading oil...which won't change until nato lose military war with China...and China won't be able to win, because they don't have allies like nato or 5 eyes neither they have international stage support for their domestic violence against Muslims of uighar and war against countries like neighbour Japan, Hong Kong and Taiwan china know, that america will inflate dollar price to vacuum Chinese economy including foreign investment like they did to Japan, South Korea and Malaysia. That's why China spending more in real estate than industrial development to hold all the foreign and domestic investment in China main land to avoid vacuum or moving investment to other low price labour market than Chinese labour, as South Korea and Japan moving out their investment to Indonesia, Vietnam, Thailand and Philippin to avoid Chinese increasing labour high costs for their bubble economy expensive lifestyle experiences and Americans sanctions...in addition China is trying to build one belt route by building or buying ports from many countries, and these cities china building will be used for finance and economy hub of those ports they are building for one belt route...
32:58 - This is gold, that I've never heard anywhere. "You can't compare China GDP numbers to other countries because it's a completely different number."
Great Interview ! A strong dollar to me makes a strong country who has their self interests as job one. China"s currency should never be the world standard for they will manipulate the economies of the world and degrade our freedoms. They are already imposing their will on the continent of Africa thru indebt subrogation which gives them a rich access to commodity materials at low prices. Afghanistan is another example having the largest lithium deposits in the world. Why after 20 years did the Unitred States not develop this asset with the existing government to make this country stronger ? We spent 1.5 trillion dollars and 3200 american lives. This is a bad investment both in resources and human life. Now China will walk in and control these reserves. We lack management and a cohesive goal in our goverment. I wish people like Kyle Bass and Michael Pettis were running policy in regards to China. Thank you both for your understanding of the real problems of dealing with Communist China. ed
I had to go back to the segment between 20:54 and 22:56 several times, because it seems that K. Bass and M. Pettis might have just given a "true" reason to why the Chinese regulators put a stop to the IPO of Alipay (Ant Financial) recently. Not only was it due to the dominant risk posed by the Fintech/TechFin to the PRC's banking system, but more importantly the risk that it poses on the "insolvent" Chinese state-owned banks, and the unregulated inflows/outflows of funds in and out of the country.
Much more balanced than the usual one sided biased Kyle bass view on China. I get a feeling even this professor isn't giving the full unbiased review we deserve on China.
Wow, this is the most insightful conversation about the Chinese economic and social outlook I have heard in years! The entire world "order" is very unstable and China is no exception. If it doesn't change its tune I predict it will find itself dangerously trapped between foreign antagonism and domestic revolt. We definitely live in interesting times.
What an interesting discussion! I’m pretty sure this video should not be labeled “duelling perspectives’” though. They both validated each other’s talking points at pretty much every turn. More often than not though Michael was able to elucidate more clearly on Bass’s characterizations and research. Truly a pleasure to watch these two construct and highlight the dominant features of the Chinese financial system, especially where it walls off liberalized money flows and tries desperately to mitigate the political and economic risks that expand dramatically within this closed system. Seems like COVID 19 was a great opportunity for them to write off some of those ballooning balance sheet liabilities without the average Chinese citizen noticing. That insight into Chinese GDP calculations was the highlight of the video for me. Chinese accounting isn’t much anything more than some kind of communist religion. A truly self serving and distorted tribute to the ruling parties desired infallibility.
Pettis is a highly analytical, numbers based systems thinker who understand real credit creation and also has a feel for the (economic) politics. Thanks for interviewing him!
Technically, for now, being in Hong Kong doesn't bar him from saying anything. Again, this is for now. Who knows what new rules China will shove down our throats.
Pettis regularly gives a bleak outlook about the Chinese economy here at PKU. China isn't a dictatorship where you disappear if you say anything bad about the government.
another factor to think is the increasing drag of infrastructure maintainenc e lots built over last 30, will take more and more resources to repair and replace as a drag on ability to invest in new stuff. social innfrastructure may be similar
Michael Pettis' comparison of China with Japan and the Soviet mega-power predictions overlooks the obvious....China has already become the preeminent super-power they didn't. Whatever adjustments the West is hoping China can't make to become the first mega-power, it still leaves China as the world's biggest super-power, economically today and militarily tomorrow.
China's economic strength is not as threatening to the United States as Japan in the last century. The Soviet Union is the superpower in the traditional sense. China can only be regarded as a regional power, and its military power cannot even break through the South China Sea, and it is far from reaching the level of a superpower.
Kyle Bass thinks that China has pretend GDP growth and is an international scam He is also obsessed with trading in China because most people don't realize it and are dumping money there
@@jixiangmama7780 mmmm, ponzu scheme. Everything in life is a ponzi scheme, and then you die. I suspect he's right, but also that they will fake it until they make it, and that we will be long gone before they collapse because of massive, systemic fraud.
There are only 5-6 individuals in this country that have an extensive wealth of factual information to be understood. These 2 people are among that group. Kyle Bass, you are my hero ... and an outstanding patriot. Thank you, Realvision.
What does it mean that China was locking down internally and releasing it externally? Because from the first half of the sentence it looks like you were saying that China locked down too harsh, and from the second half not harsh enough, so which way is it? Do you mean that they should let the virus roam free in China because who cares about whether the Chinese die or not but just don't let it inconvenience you? I say this with all due respect but I hope you do realize that this is the things you say when you think a nation consists of evil subhumans whose life is only valuable when they serve you.
He means just what he said. China let the virus escape to the world, but locked down its own population. It WAS meant as a slight against their Covid policy.
I can't pretend that I understood most of this conversation. But it was phenomenal. This was the deepest and most profound discussion of the Chinese economy I've ever heard. Amazing.
I'd like to know more about the future of house prices in China. They have been rising at such a fast rate. Does anyone have any links to vids on this topic?
Housing is an unproductive "investment"....how is USA different than the Chinese description here? Aren't we failing to recognize poor investment anf just kicking the can down the road?
Phantom savings :-) savings not backed up with assets. What would China's GDP really be if it was calculated as in the west? How much longer can they play with the numbers?
So the CCP would prefer Chinese save their money in their banks. Is it possible in the wake of the "disappeared" billionaires they're rushing for the exits using Bitcon? Buying Bitcon at any price is better than losing control of all your money. Am I right? If I won the lottery in China I might be inclined to buy Bitcon at any price and send the wallet to a relative in the US.
No matter the country; if you have debt market saturation then you no longer have anywhere to go. (Who is left to borrow?) (Even after factoring in inf printing) Think about it
I hope viewers will take away from this how frightened the guest was to speak freely and openly because he was in China. That is what living in a socialist, totalitarian system does to people. Now remember there are politicians in the US who have recently stated that they are making lists of people who have cooperated and worked for the opposing political party so they can prevent them from getting employment in the near future. Those totalitarian, soviet-style impulse are present in the United States right now.
I am from China and relate everything this professor is saying.. Wow just great interview.. Kyle is biased as always but he is at least trying to listen. I think China has realize this debt problem and proposed duel circulation strategy.. Let's discuss how that impact Chinese economy.
It is one thing to realize the problem, solving it is another whole ball game. So it is remain to see if China and Xi Jinping has enough resources, financial and political, to pull through. I think the CCP fully understand the severity and the precariousness of the situation. The fact that Xi has gain enough power to be president for life means that the CCP is realizing that it need to deal with this problem in the next 10 to 15 years or everything will go down. I also think Xi is about to go the Zhuge Liang path of “devotion to death”, he probably going to make the next decade of ruling China his life’s ultimate achievement. It will be an unpredictable future to come for China and humanity.
@@lingeringsnowleaf3829 What is wrong with a dictator? Ok so he might take a share of every business, how is that different from the US where the Federal Government takes a share? You don't think the mafia controls the US? Look at the US election.
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@@USandGlobal you know that its not true, in bitcoin asian countries are much bigger ... it's the way they get the usa dollar and the volatility the bitcoin have (especially in this kind of times.) a great not great... its a amazing source of Usa Dollars. And don't forget why it's getting more importance .....in argentina we live the first kidnaped person who captures ask for bitcoin.... the government is trying to forbidden the bitcoin for that reason it's a powerful tool for really bad bad things.
Hmmmm... transfer of wealth to the households... let’s see....in the US p, do we need something like that... can we have easy transfer of wealth within the households.... the 1 percent that has a cut of over 40% of the households’ wealth and spread that to the rest of the households to create a stronger middle class?
It’s a failure because it ignores Darwin and China can’t survive by ignoring Darwin. Survival of the fittest and best. That’s why China will fail with that model and the west will be always reborn while China suffers.
@Akin Khoo : The people of China ‘should’ be able to do what they want... it’s just that the CCP thinks they can defy economic gravity - and they can’t. NOBODY CAN. Not even the USA. But that doesn’t mean that the CCP is the Chinese people. You yourself know it’s not. When the Chinese people realize that they have difficult times coming their way, they will dump the CCP like a hot potato. They may get worse for a while, but no other system can defeat Capitalism and all its aspects.
It shows how biased and unreliable Kyle bass views are if left unchecked. I'm sure a chinese professor would give you a complete opposite view that would make your head spin....
In short the Chinese government is and has openly declared that it adopts a dual track financial, economic model where the convergences of the external open track and the internal track are highly regulated, ie relatively free markets, but seperate markets. Why do think IPO of ant financial by Jack Ma was blocked? Bass just can't help but channel his inner Bannon to stay relevant.
🤣 no they can only surpass the dollar if they get the Ant Financial system running they do not want the system right now because it is dominated by the U.S. just look at their belt and road initiative construction sites which are almost fully funded by the usd but what China is trying to do is implement their digital system with their Belt and Road but I feel the CCP'S ideology is getting in the way and not letting their companies thrive and the recent Ant ipo is a perfect example even RT whooves them some China is acknowledging that if they don't get back on track then only time will tell
This debate blew me away, and I really don't say that lightly, I am a master student if Chinese government and economics and this was extremely insightful! Thank you RVF!
