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As always China is trying to boost consumption with supply-side policies rather than with income support or other demand-side policies, in this case, by having Shanghai mandate increases in shopping hours. But Chinese consumption isn’t low because... https://www.scmp.com/business/companies/article/3091010/shanghai-bets-consumer-spending-propel-battered-local-economy?utm_source=Twitter&utm_medium=share_widget&utm_campaign=3091010
...Chinese households are unable to spend money at market stalls on weekends. It is low because household income is a low share of GDP. Even if the Shanghai authorities succeed in getting people to spend more at the Weekend Market, they will simply spend less elsewhere. This...
...is just arithmetic: the only way to increase household consumption – as opposed to shifting it around – is either to increase household income or to increase household debt, and given how high household debt has become, the latter is a bad idea.
The following People’s...
The following People’s...
...Daily article makes the same error, which it calls “upgrading” consumption. It points out the good news that online shopping has soared, without noting the bad news, that without an increase in household income or household debt, this increase must...
http://en.people.cn/n3/2020/0701/c90000-9705731.html
http://en.people.cn/n3/2020/0701/c90000-9705731.html
...come wholly at the expense of onsite shopping. “The growth in online retail sales of physical goods indicates flourishing new consumption”, the article says, but of course it indicates no such thing.
“Consumption” as I wrote a few weeks ago, seems to have become the new...
“Consumption” as I wrote a few weeks ago, seems to have become the new...
...magic word in China that local governments can use to justify any expansion in spending.
