and Premier Li Qiang’s earlier “guess”.
Source: Bloomberg, accessed 1/16/2024 9:30pm CT.
For GDP growth:
Source: Bloomberg, accessed 1/16/2024 9:30pm CT.
The Q3 figure did not match the CCAT (Fernald-Hsu-Spiegel) estimate, as discussed in this post. I think I’ll wait a little to see more dissection of the numbers before passing judgment.
See pre-release discussion here.
China’s nominal ten-year yield is the lowest in at least 15 years:
https://tradingeconomics.com/china/government-bond-yield
With inflation at zero, the nominal and real yield are both around 2.5%. China is on the verge of deflation. Unemployment among recent grads is reported at 20%, with talk that a much higher rate may be the true story. Wage offers are falling. The residential real estate sector is a disaster. The government is about to announce a big stimulus plan:
“China is considering 1 trillion yuan ($139 billion) of new debt issuance under a so-called special sovereign bond plan, only the fourth such sale in the past 26 years, as authorities seek more money to finance intensifying efforts to shore up the world’s second-largest economy.
“The proposal under discussion by senior policymakers would involve the sale of ultra-long sovereign bonds to fund projects related to food, energy, supply chains and urbanization, people familiar with the matter said.”
https://www.bloomberg.com/news/articles/2024-01-16/china-weighs-more-stimulus-with-139-billion-of-special-bonds
So obviously, growth is right on target.
Wee quibble. This yield was slightly lower in April 2020. Of course that was at the start of the COVID shutdown. So your general point is well taken.
https://www.worldgovernmentbonds.com/bond-historical-data/china/10-years/#title-historical-data
China 10 Years Bond – Yield Range
For those who prefer what Dr. Chinn uses – this source of course confirms what your source noted.
“The proposal under discussion by senior policymakers would involve the sale of ultra-long sovereign bonds to fund projects related to food, energy, supply chains and urbanization, people familiar with the matter said. Prior sales of such bonds are rare: In the aftermath of the Asian Financial Crisis in 1998, for example, the government issued special debt to replenish capital for major state-owned banks. The most recent sale was in 2020, when authorities issued 1 trillion yuan worth of those bonds to pay for pandemic response measures. The deliberations underscore efforts by President Xi Jinping’s government to shift spending responsibility from debt-laden local officials to central authorities in support of an economy that is struggling to maintain momentum. Stubborn deflationary pressures, the ongoing property crisis and weak domestic demand are all weighing on activity and suppressing confidence, prompting calls among economists and investors for further stimulus. The discussions are ongoing and the plan could be changed, the people familiar said. The Ministry of Finance did not respond to a request for comment. China last year also tapped into extra government bond sales to help the economy. In that case, Beijing took the unusual step of raising 2023’s fiscal deficit ratio to about 3.8% of gross domestic product — an action that involved issuing additional sovereign debt worth 1 trillion yuan to support disaster relief and construction.”
Interesting. Does anyone know what ultra-long means? The US has issued 30 year government bonds whereas Japan has at times issued 40 year government bonds.
On my – little Jonny boy is upset that you mentioned China’s interest rates. Never mind this worthless troll is throwing a tantrum that would embarrass a two year old. I thought you might appreciate this data on 10-year German government bond rates:
https://www.worldgovernmentbonds.com/bond-historical-data/germany/10-years/#title-historical-data
Now do me a favor – call Jonny boy’s mother and tell her it is time to change the baby boy’s stinky diaper.
So much anticipatory schadenfreude here…Russia and China’s economies are doomed!!! USA is destined to win, big time! Slam dunk.
So little concern about USA’s friends and allies, who seem to be faring worse than China and Russia. ” The euro zone may have been in recession last quarter and prospects in the near term remain weak, European Central Bank policymakers said on Wednesday as they reaffirmed the bank’s policy stance.
Euro zone growth has been hovering on either size of zero for most of 2023 and only a mild pick up is seen this year, helping to cool inflation, which has overshot the ECB’s target for years and forced policymakers to raise interest rates to record highs last year.”
https://www.reuters.com/markets/europe/euro-zone-facing-weak-growth-possible-recession-ecbs-de-guindos-says-2024-01-10/
Meanwhile, the impact of the Eurozone’s poor economy, driven in part by blowback from sanctions, is driving voters to the right. Little Trumps are popping up everywhere. Yet little concern expressed here. Don’t you just love the propagandists here–shielding allies from negative news while hyping the potential economic woes of their bogeymen du jour.
“Russia and China’s economies are doomed”
No one ever said that. Oh wait – little Jonny boy does not know how to access BEA or SEC data so he has decided to act like a two year old child who has not had his poopie diaper changed all week. Of course no one is blaming your mother for abandoning little Jonny boy. The woman may be a saint but she deserves better than you.
It’s so cute when Johnny learns a new word. He’s been on “doppelganger” for ome time. He’s repeating “schadenfreude” right now, showing off his new big word every chance he gets. Aw, just look at him use those fancy words.
This time, Johnny has tacked on an adjective. He had to, because schadenfreude didn’t really fit, but it’s his new shiny “I’m a big boy!” word, so he had to work it in. Like when he learned “neocon”, and suddenly everybody was a neocon.
Won’t it be fun to see him try to use “ennui”? Or “dispeptic”? So cute.
My favorite was when Jonny boy learned that one of the two meanings of filibuster meant apparently that Senator McConnell led an invasion of Costa Rica. I have an idea – let’s buy Jonny little boy a dictionary for his 3rd birthday.
Isn’t “anticipatory schadenfreude” what little Jonny boy feels every time Putin brings his little pet poodle another film of Russian soldiers slaughtering Ukrainian children in front of their parents? Admit it troll – those doggie treats are not enough to keep you happy.
Heh, I feel I’m SOMEWHAT in my right mind now, and this post is intended as irony…… but the dumb white guy (me) missed the joke, Means Li Qiang got the notes BEFORE we did?? I’m slow on this one
Li Chiang said China has avoided major stimulus, but there are reports of a major stimulus under consideration. Is he opposed to a major stimulus, or playing mysterious, as if all the public needs to know is what the government has done, not what it will or may do?
Of course, the central government carries a fairly low debt burden, and could absorb risk from regional and local governments by taking in more of the burden of financing government from them. Regional and local government debt is where a great deal of China’s financial stress resides.
Fred no long carries Chinese central government debt data, as far as I can tell. Just general government debt. Here’s a look at debt by sector, in levels:
https://fred.stlouisfed.org/graph/?g=1eeU6
Debt by sector, as a share of GDP:
https://fred.stlouisfed.org/graph/?g=1eeVH
Note the 2013-2015 period of austerity, when government debt fell below non-financial corporate debt. Since then, government debt accumulation has accelerated. I suspect this is where we’d find an acceleration in regional government debt, if FRED had the data.
Anyone less lazy than me have a source for a series on regional government debt?