Jim888

China’s August Data Confirms Both Optimists and Pessimists

I also think Alphameister is a bit off base by thinking Retail Sales IS consumption, while Mr. Pettis is correct in his discarding of it as a partial and perhaps irrelevant value except at a gross level over a period of time. I remember that consumption is the amount the entire economy consumed - of which Retail Sales is a component of - but not the end all - of that value (I hope the US learns this, but fear it is groveling for the consumer to spurge more instead). As for any spin here - you can read it many ways, and Mr Pettis allows us to make up our own mind, while making clear his own viewpoint - judge that from the last several articles - a review of this past work will show he is consistant.


On Sep 12 04:55 AM Michael Pettis wrote:

> CautiousInv, I am not sure China should be looking for new export
> markets to replace the US. Europe for structural and political reasons
> cannot absorb anywhere close to the deficit levels of the US and
> no other market is big enough. At any rate, a continental sized economy,
> and soon to be the second biggest in the world, should not rely so
> heavily on foreign consumptionj for its growth.
>
> Alphameister, I wonder if you are old enough to remember the same
> nonsense that was said during the credit-fueled bubble in Japan in
> 1988 and 1989. And if you really do look closely at Chinese data
> you may be one of the few who do who nonetheless accepts retail sales
> as a measure of consumption growth. For the past five years retail
> sales have always been higher than GDP growth, and yet consumption
> as a share of GDP has declined, which at the very least is mathematically
> curious.

Just How Big is the China Bubble?

Not trying to hide my head in the sand - but these charts have nothing to do with each other. Why not overlay the 1920-1933 market on the FXI - has as much meaning as the above? Focus on reality (growth numbers - ForeX rates - China's new investment group CIC - etc...) - not the speculation.