Largely a misguided diagnosis and prognosis. I’ve dealt with many of these issues in detail on my own Substack with detailed essays, so won’t go into it again here.
Just the fact that someone feels comfortable to publicly expound such "Keynesian" views is a little unsettling to me. I note that the first draft of the 15th FYP seeming quite balanced, indeed enlightened, though. With the threat of neo-fascism in the West and even possible civil wars there, retaining the economic focus on exporting to those countries must be tackled, Urgently, in my opinion.
What is your (rough) view of how acceptable Mr. Lian Ping's views are to other market watchers/opinion-makers/bureaucrats?
One: Preemptive deployment of fiscal resources - agree.
Two: Further loosening of monetary policy in the fourth quarter - increasing reserves in the banking system or lowering reserve requirements for commercial banks will not increase lending significantly as the quantity of new loans is largely determined by the availability of credit worthy willing customers for new loans.
Three: Propping up the stock market with central bank support and state-owned investors - why do this? Speculation in shares is not part of the productive economy. Shares should only rise in proportion to profits or expected future profit growth. Share buy backs should be prohibited.
Four: Rescuing the real estate market with lower home loan rates - again speculation should not be incentivised by government and should in general be disincentived. Speculative bubble market crashes can however be generally harmful and a managed deflation of real estate prices is preferable to a rapid and deep crash. Correct market discipline necessitates that those businesses with excessive debt or poor cash flow should fail. Long term low housing costs should be the aim as housing is a necessity of life. Real estate investors should depend only on rental income, improvements to the real underlying value of that property and not speculation driven capital gains.
Five: Intensifying support for domestic consumption - Lian Ping apparently recommended in other articles improving the full range of government provided services including making education and healthcare better and cheaper and improving the social safety net to increase the spending capacity and the willingness to spend of consumers. This makes more sense than 'cash for clunkers' schemes that can be wasteful of resources. Subsidies for improving energy efficiency, reducing pollution and improving the quality of life of citizens are also more beneficial ways to stimulate consumption.
Six: Stepping up transitional support for the export sector - The core problem here is excess export capacity. The extreme trade surpluses of China over many decades are no longer sustainable especially as the US and Europe increasingly restrict imports and as developing world suppliers increase their production capacity. Even if Trump loses office in 2028 it is likely that some trade barriers will remain. China's labour costs are increasing which will drive up local demand but will also make many existing exports less competitive. Subsidised exports will help some Chinese exporters into those international markets that care little for their own industries, like the world's poorest countries and the most incompetently governed neoliberal countries like the UK and Australia, but trade barriers will likely be imposed at some point there as well.
Largely a misguided diagnosis and prognosis. I’ve dealt with many of these issues in detail on my own Substack with detailed essays, so won’t go into it again here.
Could you share a few of those links, please, Mr. Powell?
Just the fact that someone feels comfortable to publicly expound such "Keynesian" views is a little unsettling to me. I note that the first draft of the 15th FYP seeming quite balanced, indeed enlightened, though. With the threat of neo-fascism in the West and even possible civil wars there, retaining the economic focus on exporting to those countries must be tackled, Urgently, in my opinion.
What is your (rough) view of how acceptable Mr. Lian Ping's views are to other market watchers/opinion-makers/bureaucrats?
One: Preemptive deployment of fiscal resources - agree.
Two: Further loosening of monetary policy in the fourth quarter - increasing reserves in the banking system or lowering reserve requirements for commercial banks will not increase lending significantly as the quantity of new loans is largely determined by the availability of credit worthy willing customers for new loans.
Three: Propping up the stock market with central bank support and state-owned investors - why do this? Speculation in shares is not part of the productive economy. Shares should only rise in proportion to profits or expected future profit growth. Share buy backs should be prohibited.
Four: Rescuing the real estate market with lower home loan rates - again speculation should not be incentivised by government and should in general be disincentived. Speculative bubble market crashes can however be generally harmful and a managed deflation of real estate prices is preferable to a rapid and deep crash. Correct market discipline necessitates that those businesses with excessive debt or poor cash flow should fail. Long term low housing costs should be the aim as housing is a necessity of life. Real estate investors should depend only on rental income, improvements to the real underlying value of that property and not speculation driven capital gains.
Five: Intensifying support for domestic consumption - Lian Ping apparently recommended in other articles improving the full range of government provided services including making education and healthcare better and cheaper and improving the social safety net to increase the spending capacity and the willingness to spend of consumers. This makes more sense than 'cash for clunkers' schemes that can be wasteful of resources. Subsidies for improving energy efficiency, reducing pollution and improving the quality of life of citizens are also more beneficial ways to stimulate consumption.
Six: Stepping up transitional support for the export sector - The core problem here is excess export capacity. The extreme trade surpluses of China over many decades are no longer sustainable especially as the US and Europe increasingly restrict imports and as developing world suppliers increase their production capacity. Even if Trump loses office in 2028 it is likely that some trade barriers will remain. China's labour costs are increasing which will drive up local demand but will also make many existing exports less competitive. Subsidised exports will help some Chinese exporters into those international markets that care little for their own industries, like the world's poorest countries and the most incompetently governed neoliberal countries like the UK and Australia, but trade barriers will likely be imposed at some point there as well.