[sharetea]

> This is a massive lift in real economic activity which can finance a lot of debt.

China's already hit its limit. "Also, the Chinese economy is over-indebted. The total social debt is now 300%. Together with external debt, this figure rises to about 350%." http://marketrealist.com/2016/01/george-soros-sees-crisis-re...

> Secondly there is a now huge upper middle class who are travelling the world, sending their kids to Australia or US for study and still buying Apple products. They are not going away

"their buying power doesn't compare with that of their US counterparts. Between 2010 and 2014, only 12% of these people reported a household income of more than $3,200 a year, or $8.50 a day." http://www.businessinsider.com/demand-report-on-chinas-middl...

[dang]

We've banned this account for using this site exclusively to promote a political agenda. You've been doing that for a long time, quite egregiously in fact, and it's not what HN is for.

We detached this subthread from https://news.ycombinator.com/item?id=11385444 and marked it off-topic.

[chvid]

> China's already hit its limit. "Also, the Chinese economy is over-indebted. The total social debt is now 300%. Together with external debt, this figure rises to about 350%." http://marketrealist.com/2016/01/george-soros-sees-crisis-re....

There is good and there is bad debt/investment.

If debt is used to finance productive investments then a high debt to GDP multiple is not a problem, it is in fact a sign of health.

Secondly if GDP growth is high and interest rates are lower then debt is much less of a problem in general.

> "their buying power doesn't compare with that of their US counterparts. Between 2010 and 2014, only 12% of these people reported a household income of more than $3,200 a year, or $8.50 a day." http://www.businessinsider.com/demand-report-on-chinas-middl....

These numbers are off by a factor of 10.

---

Of course the future is anyone's guess. Personally I think China is going to continue growing at a high pace until its GDP pr. capita matches Taiwan, South Korea or Japan.

[adventured]

> There is good and there is bad debt/investment. If debt is used to finance productive investments then a high debt to GDP multiple is not a problem, it is in fact a sign of health.

We already have the answer on that one, and have for a long time. The return on debt - the growth derived from taking on increasing amounts of debt - for China has plunged the last ten years. At this point, taking on more debt accomplishes absolutely nothing in regards to growth. They've saturated their ability to grow using those methods.

Their GDP per capita can never match the equivalent of Japan today. That's implying a Chinese economy that is nearly the size of the entire global economy today. That's the same kind of hype and absurdity the article is talking about. Where is the next $40 trillion in GDP going to come from? They're struggling to grow their economy at all today (and yes, the 6.x% figure is pure fiction), while taking on tens of trillions in new debt. If they can't grow their economy today, with that much debt financing, when will they be able to? The answer is: the party is long over, the only thing left now are consequences to all the bad choices that led to China becoming the world's most indebted nation in record time.

> These numbers are off by a factor of 10.

Support your position then.

[chvid]

> That's implying a Chinese economy that is nearly the size of the entire global economy today.

Yes.

> Support your position then.

The Business Insider article mistankenly says pr. year where it should have said pr. month.

Sharetea must have somehow stumbled on this as he introduces a "." in the quote so 85 USD becomes 8.50 USD.

The correct numbers are in the report:

http://demandinstitute.org/demandwp/wp-content/uploads/2015/...

"Only 12% reported monthly household income of more than 20,000 yuan ($3,200), or $85 a day."

Where group that is referred to is the group of "connected consumers". The group is 368 mio. Chinese pt.