Sunday, January 29, 2017

Suisheng Zhao — A time of test for the China model of economic growth

This is an ideal time for Chinese leaders to move the country’s growth model focus from exports and investment to qualitative internal development. It is also the time for the Chinese government to build institutional checks on state authority and boost accountability.
If China can complete this transition on both fronts, the China model will stand. But a sustained economic downturn or a lost decade or two could mark the end of the China model....
East Asia Forum
A time of test for the China model of economic growth
Suisheng Zhao | Professor and Director of the Center for China–US Cooperation at the Josef Korbel School of International Studies, University of Denver and Editor of the Journal of Contemporary China

7 comments:

Footsoldier said...

Matt,

Have you ever graphed the fiscal flows and then compared the graph to the SP500 ?

Would it actually show anything because bank loans would not be included ?

Cheers.

John said...

What the bloody hell is going through the minds of the capitalist commie leaders in Beijing? No doubt they have a wait and see strategy, but they must be preparing a just-in-case policy of Trump going full retard on them, whatever it does to global supply chains and Walmart's and Apple's profits. They may wish to reorient their economy more towards a domestic consumption economy, but that may take some time, and in the meantime the retard in chief is again calling them "motherfuckers" and is sending more naval warships to the South China Sea.

Tom Hickey said...

War With US Becoming A "Practical Reality" Chinese Military Warns

John said...

And no doubt this was written by the cooler-heads-prevailing part of the CCP! Meanwhile the crazed nationalists have yet to raise their ugly heads, but may yet be inadvertently bolstered by loose talk and bravado by the chickenhawk Chuck Norris aficionados in the lunatic asylum that calls itself the Trump cabinet. Things spin out of control quickly enough, and US and Chinese naval warships are getting a little too close for comfort.

Matt Franko said...

Foot yes I have looked at that they are correlated...

They are both "growth functions" as Mike has called them...

I assert they exhibit a direct functional relationship for which a deterministic equation could start to be developed...

I'm working on this but will take many years...

Matt Franko said...

Here is one that needs to be updated

https://www.chartsninja.com/charts/single/7157

I personally am proceeding assuming there is a slightly non-linear functional relationship between govt spending and both bank loans and SP sales/earnings... relationship also extends to index price with Risk Free Rate as an input...

Also there is a "coefficient of hoarding" that should be included which acts to retard the function... this coefficient also varies depending on govt trade policy... it has been very high ... Trump might be changing this...

Footsoldier said...

Interesting Matt,

I wonder what the graph would look like if you added loans and government spending together

Thanks for the insight.