George Magnus
@georgemagnus1
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Economist. China Centre, Oxford & SOAS. Ops/blogs on website. Also https://t.co/GbYqkMrVhk
Joined December 2013
For 1st time in almost 30 years, China’s GDP in $ fell in 2023 to about $17.5trn, while U.S. gdp rise 6% to about $27trn. The gap widened by about $2trn. And China’s share of world GDP slipped to just under 17%. How meaningful is this? 1/4
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This is just so. Brilliant. EU ref results and mad cow disease
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This is obv a big moment for China and ev’one else, looking at the cumulative wave of bad news. But it wd be mistake to think this is all about Covid, or just the 3 yr old property bust, and that there are policy tweaks that can address recent probs. 1/4
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Well done @OwenJones84. In 1 tweet you’ve demonstrated why Lab needs to split, how you’ll alienate too many Lab voters, and that you and ilk are really on back foot now. It’s the beginning of the end for you ppl.
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Well. I can see why republicans want a republic but it’s times like this that I think we should all think Clement Attlee’s words on the entire topic…
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So this dog is definitely not going to hunt. The idea you can graft a currency on to a disparate group of countries with wildly different economic, bop and market structures is a non-starter. China’s yuan isn’t even fully convertible. Russia is a sanctioned pariah. 1/3.
BRICS nations asked the bloc’s specially created bank to provide guidance on a how a potential new shared currency might work via @bpolitics.
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Can’t believe how many times we have to counter this flawed thinking that ppl have been spouting for so long. Short explainer here /1. How the Ukraine war could boost China’s global finance ambitions via @FT.
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First Evergrande, now another biggie in Country Garden. Not as big, but worse timing. And contagion risks from property into banks and shadow banks, as I explain here. And what this all signifies. China’s property sector is on the brink of disaster – again
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“The number of loss-making industrial firms in China is now at 180,000, which is at least three times as high as in any point in the last 25 years,” Think about that. That’s nearly 40% of industrial firms acc to Chinese Stats Yearbook 1/2
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Shanghai’s Covid lockdown is causing untold problems for China/beyond. Here is a story about the port and ship pile up going on which’ll take ages to work thru: /1 Supply-Chain: China Port Congestion Worsens as 477 Bulk Ships Waiting to Berth - Bloomberg
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Lol - and a 2019 troll award to the editor who came up with this headline
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Nice graphic showing how China’s inverted pop pyramid contrasts with India’s as median age in China surges to 47, while in India still only 36. China’s need is for deeper social security and productivity, India’s is for jobs.
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You're a decent journo Owen but this is not a nuanced disagreement whatever gloss you want to put on it. It's a schism
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China’s Evergrande debt crisis is the focus of the moment but property on China’s economy is the story. For the first time since the housing welfare system became a proper market, China’s property is facing up to a decade or more of stagnation. 1/7.
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This story focus is on Joerg Wuttke’s thinking about China in which he says there’s no hope that China will rejoin the world, Joerg’s considered views as a long time resident of China are noteworthy
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Given we know abt pop shrinkage, debt capacity constraints, weak gov’nce and the political awkwardness of mkt reforms, China’s tech prowess islands are not the saviour. Only a real policy shift can do that and the govt is in stasis. This is an imp year policy wise 4/4.
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Worth watching …. for the sheer arrogance of the Chinese flag wavers, Brendan’s standing his ground, and the policewoman’s spineless response.
A bunch of 🇨🇳-waving Chinese, apparently from a 🇨🇳 TV broadcaster, told pianist Brendan Kavanagh — who regularly live-streams his performances on public pianos in public venues — to stop showing their faces in his live-streaming while he’s playing the piano in a shopping mall in
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Dedollarisation, don’t you know….
U.S. Dollar is now used in 49.1% of global payments, the highest level in more than 12 years 🚨
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Thread on China's 21.3% youth unemployment rate. Awful blight on China's economy, and socially corrosive not only if young folk can't get work, but also because of hysteresis risk, ie longer they're out of work, the harder it is to get work. Some facts and thoughts 1/10.
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Video also tells interesting econ story abt China. When the blocks were built 8 yrs ago, they added to GDP, growth, and wowed. Multiply by lge 'n' across country. But they and c. 1/5th of apts lay empty, pure waste, loss, bad debt and misallocation. Will they now cut GDP back?.
This video speaks volumes about the oversupply in China's housing market. 15 tower blocks in Kunming 昆明, the capital of Yunnan province, were demolished last month after sitting unfinished for eight years.
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I know we know this. but researching for a demog presso I'm doing, i stumbled across this, and its as extraordinary as as boasts.
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This man's interview on @BBCNews yesterday is edgy. A people's hero if ever there was one
This police officer single-handedly tried to stop the London Bridge attackers, armed with just a baton.
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My explainer as to why Evergrande matters a lot. Not cos of a Lehman style contagion but because real estate downcycles, which China’s not really experienced yet, aren’t pretty. And real estate is a $50 trn odd elephant in China’s economy
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Great piece by SOAS’ Steve Tsang on how China is using U.K. academia to further its goals (and others’ btw) and what HMG should do about it. Xi’s student spy army — and how they can be outsmarted.
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Get a cuppa, glass of something, sit down and read this tour de force. Extraordinary language, writing and perspectives from @simon_schama Simon Schama: When Britain chose Europe
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A general interest piece in which I wonder about rest of world consequences of Peak China. Certainly not soapbox type economic collapse or end of CCP but a China trajectory unlike before. Is a declining China even more dangerous for the West?.
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To have a truly international currency, you have to allow foreigners to accumulate claims on you. There are only 2 ways of doing this. Run current account deficits in perpetuity, or open your capital account to free, outward movement. China will do neither /2.
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What's in store for China this year, and beyond? In this piece, I look at several of the things that have combined and coalesced to create China's systemic headwinds 1/6 | George Magnus
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If China’s economy in money terms can’t expand faster than the US, because of what’s going on systemically in China, you do the maths! The GDP gap won’t only not close much, it’ll widen. Again, prob only matters for bragging rights superficially, but there’s more to it 3/4.
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China’s property market, hailed as the most important in the world for its size and voracious demand for materials, is poised, I argue, for a decade + of stagnation. Stay well tuned. End to China’s estate market boom could spell trouble for the economy
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Chief economists of OECD,IMF and WORLD BANK. Take that male rage and just deal with it!
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Not only the 1st time XI has missed attendance but any major leader. If it isn't health related, I have a few speculative suggestions for why he's giving an Indian G20 a pass 1/5.
Xi began his third term with a diplomatic blitz that bolstered his image as a global statesman. Now, he’s skipping the world’s premier forum of world leaders. It’s not clear why -- but it's the first time Xi's missing G20 since becoming president.
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To the extent that the yuan dropped sharply, not very. Exch rates jump around all the time. But… in yuan terms, nominal GDP rose barely more than 4.5%, and this is more set than surprise, reflecting weak demand and incipient deflationary pressures. 2/4.
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Conventional narrative keeps telling us it’s only a q of time until China is the worlds largest economy, maybe 5 or 10 years. But there’s nothing inevitable about that at all. In fact it’s being stressed right now. Read on /1.
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Interesting Nicholas Eberstadt essay on depopulation in Asia in years and decades ahead, the never arriving Asian century, and US demographic exceptionalism. East Asia’s Coming Population Collapse | Foreign Affairs
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“The CCP leadership is not a group of economic magicians, and China’s economic development from a poor to a middle-income country today cannot be extrapolated as if by spreadsheet”. Why I think a China-centered future is less certain than some insist
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The CCP normally holds the 3rd (of 7) Plenums in Oct or Nov. It doesn’t now look as though it’ll happen until 2024. I want to tell you why this matters in Xi’s China. 1/5 China’s Xi Seen Delaying Key Economic Plenum, Defying Norms - Bloomberg
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So much 3rd plenum parsing about, much of it questionable. Here are a few takeaways so far but we really have to await the Decisions doc details to be fair. But here goes, for the moment 1/6
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This is a great quote from a Chinese official, who’s offering the West a lecture in trade theory and competitive advantage. The trouble is, as you might guess, it’s totally blowing smoke to deflect criticism 1/5.
Lin Jian: "The 'China overcapacity' accusation may look like an economic discussion, but the truth is, the accusation is built on false logic and ignores more than 200 years of the basic concept of comparative advantage in Western economics.".
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Not crowing or anything, but private sector crackdown, leftward authoritarian governance lurch, debt crisis in real estate and elsewhere, murky growth prospects. All here in Xi’s China in jeopardy
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It’s out. Li Keqiang’s keynote opener to the twin sessions. It’s 37pp in English are more tedious to read than having root canal treatment but it’s an important doc. Key takeaways follow /1
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A 22% vacancy rate and only third or so of new home purchases as first homes. This is going to matter before long : Fifth of China’s Homes Are Empty. That’s 50 Million Apartments
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You might imagine that the Attorney-General of the U.K. would know that our being the first signatory to the European convention on Human Rights in 1950 has bugger all to do with Brexit. That she deliberately conflates or doesn’t know is testament to unsuitability for high office.
We must fully take back control of our borders. That means leaving the jurisdiction of the ECHR. #Suella4Leader
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I’m as incensed by Trump as anyone. Hope he’s indicted, impeached, incarcerated etc. But on Twitter, I see many looking at Sino-US trade and tech conflict as though there was only one party to dispute. Know what? Trump can be ev’thing we say, and still be right on this stuff 1/n.
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Think this is bang on. Heap um trouble coming. This is a window to the coming trade/fx wars that are brewing as China’s mercantilism doubles down on more mfg investment/ ‘new productive forces’. The U.S. and Europe etc simply can’t stand by idly and accept the consequences 1/3.
For all Europe’s record of disunity/weakness over China, a big confrontation is brewing. EU bosses are v,v focused on overcapacity in Chinese EVs. If millions of subsidised cars are dumped on Europe, Macron, Scholz &co have to act
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Thread on saving (mostly older peoples) lives v economy. Spoiler: rant because a lot of ppl incl on @BBCr4today misunderstand or misrepresent this. There is no choice. 1/n.
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So now you know what the agenda is… just in case you hadn’t yet twigged.
Hamas founding member Khalid Mashal calls for global Jihad, invasion of Israel, and to attack Jews worldwide on Oct. 13.
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They're top economists like you're a trade expert or Nigel Lawson a climate change scientist, or Jeremy Hunt an NHS guru
Brexit could boost UK economy by £135 billion, say top economists
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Apple, which makes 90% of its kit in China, now said to be looking to boost production in Vietnam, India. #PiedPiper Apple Looks to Boost Production Outside China - WSJ
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Weirdest thing is hearing/reading people refer to King Charles, not because it’s him but because I’ve never known out monarch as other than a Queen. Silly, but there it is. Hard to get used to.
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This is the definitive comment to Martin Wolf’s explainer today on Chinese underconsumption. My only additional is that you have to put this in a specific political context. Leninists are in control, and while and extreme autocracy are in the dna, it wasn’t smears as harsh 1/3.
1/10.Excellent Martin Wolf piece on China which, as always, does a great job of presenting a systemic view of the problem. Debt is too high and growing too rapidly, he notes, but the risk for China, is not that it might suffer a financial crisis.
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Something to make you laugh today.
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Who needs wierdo films about Kim Jong-un anyway when we have @TheFallTV ? Brilliant finale. Next series please.
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While property is the proximate cause of China’s econ distress, I argue here that its Leninist govt will find overhauling its dev model a bridge too far. China’s economic model is faltering – does it have the political will to fix it?
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Hot off the press to my house but available online and in a bookstore near you soon. Watch out.
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Cotswold wedding this weekend for our daughter Rachel ….
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In 15 words, nailed.
The evidence is now overwhelming; Brexit is a terrible idea being implemented with appalling incompetence.
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In Red Flags, latest ed 2019, I tried to explain how/why China’s economic model was flawed, increasingly accident prone, and that as probs mounted, politics and governance wd become more repressive and anti growth. 2/4.
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Speaks for many of us…. Mariana Mazzucato: ‘The McKinseys and the Deloittes have no expertise in the areas that they’re advising in’ via @FT.
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@EmporersNewC @StevePeers @afneil gotta wonder who's the journo here. comprehensive answer, bravo. We want a lot. Like where we are now.
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Right now policy makers are like rabbits in headlights. They can’t do nothing, but rightly they don’t want to throw money freely at real estate and infra as they used to. It’s tricky, and things might not have touched bottom. 4/4.
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@MayLFairweather @danwheeleruk @GastroHenley @BootstrapCook It is facile. Who seriously says British Muslims are ‘linked’ to ISIS or Saudi bombing of Yemen? Similarly, there’s nothing that connects responsibility of Israeli govt with British Jews. Ppl who make link have already crossed the line.
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Remarkable graphic showing that even though China rebalancing has made some progress, it is light years away and structurally a country mile from its developed and emerging peers. 1/n
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Who else thinks that accolade goes to David Cameron? I can forgive May being unsuitable and weak. Not the other guy though.
Theresa May will probably go down as Britain's worst post-war prime minister. But she gave us two unforgettable moments.
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No it doesn’t. No major Chinese banks will be allowed to go under - repeat after me… no major Chinese etc etc.
JUST IN: The Wall Street Journal reports investors are fearing a 'Lehman moment' in 🇨🇳 China, threatening the solvency of the country's financial system.
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Thread from my son who succumbed but is now back on duty at @uhbwNHS.
Exactly 3 months ago I was discharged from @uhbwNHS after going 'toe-to-toe' with #COVID19. 🥊.My heart is still full of love for the family, friends, colleagues & #NHS staff who saved me. Not spoken that openly about it but a few reflections here. #fridaymorning 1/6
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And here we are. You can’t change the politics without changing the economic model or vice versa. And since the CCP under Xi is nothing if not about the party leads all, and controls all, there is little basis for often hoped for solutions as things stand. 3/4.
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We always knew from outset that 2 parties would each prioritise own core interests. Diff is UK was clueless from outset and had no leverage
There will come a point when we as a nation have to recognise that the EU isn't interested in a deal that benefits anyone but them.
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To be fair, they’re making it up. Once war breaks out, you can throw all your econ models out of the window, stick fingers in the air. Don’t see any point in this sort of quant speculation. Tell us what happens to trade flows, blockades, Chinese economy, and semi mfg though….
China's invasion of Taiwan to cost around $10 trn, nearly 10% of global GDP. In a major contingency, Taiwan’s economy would be decimated. Bloomberg Economics estimates a 40% blow to GDP.
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“Behind the scenes, 9 out of 10 of Apple’s most important suppliers may be preparing large-scale moves to countries like India”. Apple’s Chinese suppliers are likely to move capacity out of country far faster than many observers anticipate via @technology.
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You know this of course hyperbole. Swift is a messaging system, not a payments system. It just reflects $ dominance. A payments system might use other than $ to a ltd extent, but it only matters how countries accumulate balances not how they invoice each other. $ rules.
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§eriously, you have to read this. Puts to the sword some of the more 'we are all doomed' stuff that ppl write about often naïvely. One of the better/more informative pieces like this on the key semiconductors turf at heart of China-western relations 1/4 .
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Interesting piece, underlines what ageing societies will do, namely to empower workers and citizens. Capitalism rewards scarcity and labour/skills are precisely what will become scarce. 1/2 The disguised blessings of Japan’s demographic decline via @FT.
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This is an interesting theme that merits a bit of delving, as I shall do now. There are close similarities, several differences, same ending? 1/10 China’s economy is looking at a new wave of Japanification
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1. UK/US free trade agreement (fta) causing bit of a stir, so let's see where this goes. Lots of legal delays and notifications likely.
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Just arrived for my wife: her right to stand in entry queues in 30 European countries.
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Guaranteed to be wrong. Seriously.
China will become world's largest economy in early 2030s, surpassing US - a look at @TheEIU projections for US 🇺🇸, China 🇨🇳, India 🇮🇳 and Japan 🇯🇵 paints striking picture of global economic reshuffling by 2050
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Next U turn. This is simply not possible along with £60 odd billion of spending cuts. And it wasn’t possible before either. Truss’s cunning plan, such as it is, is dead on arrival unless the govt bullies OBR into gdp forecast fiction, which the OBR won’t fall for. We hope
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China’s Xi Jinping is a man of the moment for all the wrong reasons, incl in China itself. He may still see out the party Congress but things are afoot. My friends at @RealAlpineMacro were kind enough to remind me today I wrote this in 2018 in the first ed of Red Flags.
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China’s real estate funk remains one of the starkest challenges for the govt despite multiple attempts to stabilise it. Rogoff and Yang return to this here and explain further why. 1/4 China’s Real Estate Challenge
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…. China is playing tag here with the yen, Swiss franc, sterling, not in the same league at all as the euro and $. Plus look at china’s capital markets, infrastructure, absence of rule of law, and lack of trust. Can’t have a global currency however good your technology is /5.
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And finally, yes, Russia’s war and pariah status will drive it and others like N Korea, Iran, Pakistan, to build defences against western sanctions and acquire RMB reserves, but we really have to distinguish the rhetoric from systemic impediments. Ends.
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It won’t run current account deficits because it’s a mercantilist and the savings> investment imbalance is baked in. China’s consumption per head is about the same as Peru. It won’t open flows out because it doesn’t trust its own citizens and fears chronic instability/3.
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What the feck do @BBCNews and @BBCSimonJack mean by the Governor of the BoE ‘intervening’ in the Brexit debate? It’s his job for heavens’ sakes. You all sound like the Brexiteers PR team.
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Brazil and S Af are commodity currencies that are hinged to the $. India would pool reserves with China et al? You can see how the Euro has periodically struggled when incompatible policies among MS were a problem. Imagine this group trying to coordinate incompatibilities. 2/3.
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You’d expect this from a govt official. But she’s setting up 2 huge straw men: serious analysts don’t think China is collapsing , but that it’s model is faltering w/imp consequences. And China as a surplus nation is not an engine of global growth.
China’s economy is not collapsing, but the prediction that it will, has collapsed—many times over the years. The IMF puts China’s growth forecast at 5.2 percent this year. Our economy remains a major engine for the global economy.
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Decoupling can’t happen you hear ppl say, but the reality is that gradually and in key areas, it is. UK plc is cutting ties to China, says CBI boss via @FT.
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The BRICS bank should inform its shareholders that they are chasing shadows. And the polite thing to do is to kick this can so far down the road to join all the other unworkable schemes that ppl seem desperate to air 3/3.
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Just so you can see China still digging itself into deeper and deeper hole. 1) no condemnation of military aggression 2) no demand for Russian withdrawal and proper talks 3) of course no recognition that China has sanctioned Norway, Philippines, S Korea, Japan, Australia, US, EU.
China doesn’t agree with resolving issues with sanctions, still less unilateral ones without basis of international law. Sanctions not only fail to resolve problems, but will create new ones. It will make multiple players lose and disrupt the process of political settlement.
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This is absolutely, historically and empirically plain wrong. Boot on other foot. It’s is the far left’s focus on undermining or destroying the centre that opens the door to far right politics. These ppl are spinning very familiar self-serving myths.
'Centrists' have historically defined themselves through attacking the left. In an era of rising nativism and far right politics they need to grasp whose interests that serves. @OwenJones84 nails it .
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CIPS, a payment system, isn’t an alt to SWIFT, a messaging system, but uses it. CIPS is an alt to CHIPS, but a fraction of the size. RMB usage in trade is clearly up, but what matters isn’t how you invoice but what you accumulate balances in. And it ain’t RMB,.
🇨🇳 - China now settles half of its crossborder trade in renminbi, up from zero in 2010.• Rise in RMB use highlights sanctions-proofing strategy of Beijing and its allies, such as Russia.• China's promotion of CIPS, its homegrown alternative to Swift, may support rise in RMB use
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Good thread over China’s faltering economy and imminent stimulus conundrum. Monetary easing just announced as down payment. As Michael says, the measures apparently being considered are old school, more if same, ineffective. There’s more …. 1/4.
1/9.As the FT notes, "many economists believe stronger action will be needed to reinvigorate the world’s second-biggest economy.". But what stronger action? Without the long-postponed partial revival in consumption, what can Beijing do?.
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Sadly this is mistaken. I wish it were not, but we are already in a beggar-thy-neighbour world. China’s industrial strategy isnt about comparative advantage as much as it is about huge subsidies systemic econ imbalances and mercantilism. for us,Nat Sec risks, and deindust’sn.
Have to disagree with @EdConwaySky. If Chinese factories produce good and cheap electric cars, blocking their import damages Britons. And blocking imports would not build a UK car industry but mean more imports from other countries
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Timely report on Chinese industrial policy w/ focus on how EVs and EV firms like BYD received billions in state aid. And these numbers are an understatement as authors recognise. 1/2
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@andrew_lilico You’re a disgrace. Once as right of centre economist, you had a point of view. Now it’s just the bile of a bad loser.
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China’s leaders are spooked. Big monetary relief & an expected 2 trillion yuan of borrowing by Beijing have sent stocks to their biggest weekly rise in 15 years. What about the economy though? 1/3 Beijing is seriously concerned about the Chinese economy
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Why does deflation matter? This is one reason. In a world where nominal values are falling, firms profits do too. This is now the 3rd consecutive year and the trouble is there’s little respite 1/2 China corporate profits set for third year of declines .
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