January 2, 2025 • 11 mins
Just how bad is China's economy? We also discuss an archaeological find and a Tibet mega dam
China Update provides listeners with the most up to date political, economic, and geostrategic analysis on China - so that you are on top of the world's number 2 economy. These podcasts are based on hundreds of articles, think tank reports, government statements and other resources in English and Chinese every week. The views and analysis are all my own and I produce the podcasts.
My Patreon: https://www.patreon.com/chinaupdate
Disclaimer: China Update is not a financial advisory channel. While I take great care in researching everything discussed in these podcasts, nothing I say should be taken as investment advice. Please speak to a professional before making any investment decisions. #China
China Update provides listeners with the most up to date political, economic, and geostrategic analysis on China - so that you are on top of the world's number 2 economy. These podcasts are based on hundreds of articles, think tank reports, government statements and other resources in English and Chinese every week. The views and analysis are all my own and I produce the podcasts.
My Patreon: https://www.patreon.com/chinaupdate
Disclaimer: China Update is not a financial advisory channel. While I take great care in researching everything discussed in these podcasts, nothing I say should be taken as investment advice. Please speak to a professional before making any investment decisions. #China
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Happy Thursday, everybody. Welcome to another episode of China Update,
where I provide you with the most up to date political, economic,
and geostrategic analysis on the world's number two economy. My
name is Tony. Let's jump in and we begin as
we usually do, with the economy. Yesterday, Jason Douglas and
Ming Lee with the US based Wall Street Journal published
an excellent piece called China's economy is burdened by years
(00:24):
of excess. Here's how bad it really is. Overdebtedness, overbuilding,
and over capacity are causing problems at home and abroad.
The piece, through useful visuals and graphs, does a great
job at unpacking the major issues in the economy as
the country moves into twenty twenty five. On the last
day of twenty twenty four, I did my own review
(00:44):
of China's economic performance that year. For the second day
of twenty twenty five, I wanted to unpack some of
this article. We will quote selected excerpts from the piece.
Now directly, China's go go days are behind it as
the world's second largest economy struggles with the bursting of
the biggest real estate bubble ever. Now, China's goal of
(01:05):
overtaking the US as the world's largest economy might take
decades longer than Beijing expected, if it happens at all.
China's economy today is burdened with excess millions of empty,
unfinished department blocks, trillions of dollars in debt, straining local governments,
and ballooning industrial production, driving an export surge that is
(01:27):
igniting trade tensions worldwide. China still has strengths. It dominates
global manufacturing and has commanding positions in new technologies such
as electric vehicles and renewable energy. Policymakers have proven adept
at handling past crises and alreadying bold new stimulus to
support the economy. Nonetheless, the scale of the excessors plaguing
(01:51):
China's economy underscores the perilous position Beijing finds itself in
as a new trade war looms. Loss of wealth. China's
property mountdown has since twenty twenty one destroyed around eighteen
trillion US dollars of Chinese household wealth, according to an
estimate by Barclay's, equivalent to around sixty thousand US dollars
(02:14):
per household, eclipsing the losses suffered by Americans in the
financial crash of two thousand and eight through two thousand
and nine. The wealth destroyed in China's real estate bust
is greater than the value of all listed stocks in
China and as roughly the size of the country's economic
output in a year. That hit, along with the trauma
(02:35):
of Beijing's heavy handed response to the COVID nineteen pandemic,
helps explain why Chinese consumers are not spending freely. Destiny deferred.
China's rapid growth meant that for years, forecasters expected China
to overtake the US of the world's largest economy. As
recently as twenty nineteen, some forecasters were expecting China's GDP
(02:57):
to eclipse the US's around twenty three. Today, it is
the US powering the global economy and China that is
battling stumbling growth. View now expect China to catch up
with the US before mid century, if it manages to
it all ticking time bomb, China is also facing demographic
headwinds that will make it harder to restore its economic vigor.
(03:21):
China's working age population is shrinking, reversing the demographic dividend
that powered its economic ascent. Excesses all around. China's economy
has for decades been powered by heavy levels of investment.
At first that yielded modern infrastructure and propelled the expansion
of China's manufacturing engine and its megacities, but sticking with
(03:43):
that strategy year after year has been China today is
beset by colossal debts, unneeded apartments, and industrial overcapacity. Debt
borrowing by government, households and corporations in China is approaching
three hundred percent of its annual GDP. Hidden borrowing by
local governments. Debt held off the books on their behalf
(04:04):
by opaque investment companies known as local government financing vehicles
is a major problem. On some measures, the scale of
these debts and the burden of servicing them in China
is more severe than in the US before the financial crisis,
or in Europe in the depths of its own debt
crisis a decade ago. Real estate, China's real estate boom
(04:26):
was unprecedented, and so is the ongoing bust. New construction
and sales have cratered since the government took steps to
reign in the bubble in twenty twenty. It has struggled
to stabilize the market despite measures to ease purchase restrictions
and offer cheap credit to would be buyers. One sign
of the boom's excesses, there are as many as around
(04:47):
eighty million vacant units in China, according to the latest
estimate at the end of November, equivalent to half the
total housing stock of the entire United States. Industrial overcapacity.
In response to the slowing economy and to transform China
into a technological colossus, leader Sijinping has been funneling investment
(05:09):
into China's already huge factory sector. The result has been
a surge in industrial capacity and two years of falling
prices for Chinese producers, which are increasingly looking overseas to
find buyers for goods they cannot sell at home. This
is sparking trade spats with the US, led West and
emerging markets such as Brazil and India. Here ends our
(05:33):
direct quoting of excerpts from this piece that we know
in the comments below how you feel about some of
the observations made within next up. Archaeologists have uncovered the
remains of a three thousand year old city in Huang
Si Duang Autonomous Region in the southwest of the country,
now confirmed as the earliest known urban settlement in Southern China,
(05:55):
dating to the early Chung Dynasty circa sixteen hundred through
fifty BC. The Nyo Luchong site in gung Cheong Yao
Autonomous County near Guadians spans approximately twenty three thou one
hundred square metres, offering invaluable insights into ancient Southern Chinese civilization.
The site was discovered in twenty twenty two during a
(06:16):
construction project, where patterned bricks and broken pottery were initially unearthed.
Subsequent excavations, including a three month rescue dig in twenty
twenty three, revealed significant features such as double city walls, moats,
ash pits, and pillar holes. Experts from the Chinese Academy
of Sciences, Hubei University, and the Guangxhou Municipal Institute of
(06:38):
Cultural Heritage and Archaeology confirmed its age. The west city
wall is particularly well preserved, reaching up to one point
four metres in height. The moats, rare among early Lignan settlements,
underscore the site's uniqueness. Artifacts found include pottery, stone tolls,
and a severely rusted bronze object believed to be a
(07:00):
The team plans to continue laboratory analysis to piece together
these relics and uncover more, including potential carbonized rice grains.
Lig Nan, encompassing the modern guang Si, Guangdong, and Hainan,
was historically a vibrant region known for its starting point
of the maritime Silk Road. They connected China with Asia
(07:22):
and Africa for one thousand, five hundred years. The region's
history is deeply tied to the bay Yea ethnic groups,
who thrived during the first millennium BC, with their own
civilization overlapping with the Northern Shun dynasty, typically thought to
be the cradle of Chinese civilization. The discovery of the
(07:43):
Yo Luchong site sheds light on the earliest development of
southern China and its cultural connections. Archeologists will continue excavations
to further explore the city structure and unearth more artifacts,
offering a clearer understanding of life in this ancient urban
center and its role in shaping the region's history. Next up,
(08:03):
we have one more development to cover, but just quickly.
If you're getting some value from today's episode of China Update,
I have a huge favor to ask, that is, just
to hit the like button and if you have not done,
so already subscribe. Forty five percent of regular viewers are
not subscribed, so if you're a regular viewer and you'd
like to continue watching these episodes, it's a huge help
if you just hit that subscribe button as well. Patreon
and buy me Coffee links are also in the description
(08:25):
below for those who want to help keep the channel
financially sustainable, I rely primarily on your support to keep
going and continue publishing these episodes open and free for
all six days a week. There are also special bonus
episodes for those who provide financial support as well. Thank
you so much everybody for the ongoing support. Finally, for today,
China has approved the construction of a colossal hydropower project
(08:49):
on the Yaru Lung Tongue Pole River in Tibet, poise
to generate three times more electricity than the world's largest dam,
the three Gorgeous. With an estimated investment exceeding one trillion
Yan one hundred and thirty seven billion UIST dollars, this
landmark project will be the lot infrastructure initiative in history.
(09:09):
The dam is projected to produce three hundred billion kilowatt
hours of electricity annually, enough to power more than three
hundred million people. The Yarling t Sungpur, Tibet's longest river,
offers unique hydro power potential due to its steep vertical
drop of two thousand metres across a fifty kilometer stretch,
(09:30):
carving the deepest canyon on Earth. The project will require
unprecedented engineering, including drilling twenty kilometer long tunnels through the
num Cha Bahwa Mountain to divert the river's flow at
approximately two thousand cubic meters per second. Located in a
seismically active region with challenging geography, the project prioritizes environmental protection.
(09:53):
According to state media. At least it will form parts
of China's green energy transition and contribute to its carbon
neutrality goals. Additionally, the dam is expected to bolster regional
clean energy by supporting solar and wind power development. While
the project has raised concerns with neighbouring India regarding water
security and the potential for water related disputes, research from
(10:16):
Qinghai University in Beijing indicates it could have regional benefits
if managed cooperatively, though that is a big if. The
study suggests reservoir storage could reduce flood risks in India
and Bangladesh. While increasing dry seasoned water availability and extending
navigable waterways, Flood affected areas could shrink by up to
(10:37):
thirty two percent in India and fourteen point eight percent
in Bangladesh, offering significant agricultural and navigational benefits. While this
Chinhua report is positive from India's perspective, it is hardly
going to be attractive that this power is in the
hands of its geopolitical rival, and it will not sit
idly by as that rival exerts a greater degree of
(10:58):
control over a critical waterway for it and its neighbor, Bangladesh.
This damn project thus will continue to inflame tensions between
the two Asian giants. Okay, that is to day's episode
of China Update. Thank you so much everybody for watching.
Have a good Thursday and I will see you all tomorrow.
Happy Thursday, everybody. Welcome to another episode of China Update,
where I provide you with the most up to date political, economic,
and geostrategic analysis on the world's number two economy. My
name is Tony. Let's jump in and we begin as
we usually do, with the economy. Yesterday, Jason Douglas and
Ming Lee with the US based Wall Street Journal published
an excellent piece called China's economy is burdened by years
(00:24):
of excess. Here's how bad it really is. Overdebtedness, overbuilding,
and over capacity are causing problems at home and abroad.
The piece, through useful visuals and graphs, does a great
job at unpacking the major issues in the economy as
the country moves into twenty twenty five. On the last
day of twenty twenty four, I did my own review
(00:44):
of China's economic performance that year. For the second day
of twenty twenty five, I wanted to unpack some of
this article. We will quote selected excerpts from the piece.
Now directly, China's go go days are behind it as
the world's second largest economy struggles with the bursting of
the biggest real estate bubble ever. Now, China's goal of
(01:05):
overtaking the US as the world's largest economy might take
decades longer than Beijing expected, if it happens at all.
China's economy today is burdened with excess millions of empty,
unfinished department blocks, trillions of dollars in debt, straining local governments,
and ballooning industrial production, driving an export surge that is
(01:27):
igniting trade tensions worldwide. China still has strengths. It dominates
global manufacturing and has commanding positions in new technologies such
as electric vehicles and renewable energy. Policymakers have proven adept
at handling past crises and alreadying bold new stimulus to
support the economy. Nonetheless, the scale of the excessors plaguing
(01:51):
China's economy underscores the perilous position Beijing finds itself in
as a new trade war looms. Loss of wealth. China's
property mountdown has since twenty twenty one destroyed around eighteen
trillion US dollars of Chinese household wealth, according to an
estimate by Barclay's, equivalent to around sixty thousand US dollars
(02:14):
per household, eclipsing the losses suffered by Americans in the
financial crash of two thousand and eight through two thousand
and nine. The wealth destroyed in China's real estate bust
is greater than the value of all listed stocks in
China and as roughly the size of the country's economic
output in a year. That hit, along with the trauma
(02:35):
of Beijing's heavy handed response to the COVID nineteen pandemic,
helps explain why Chinese consumers are not spending freely. Destiny deferred.
China's rapid growth meant that for years, forecasters expected China
to overtake the US of the world's largest economy. As
recently as twenty nineteen, some forecasters were expecting China's GDP
(02:57):
to eclipse the US's around twenty three. Today, it is
the US powering the global economy and China that is
battling stumbling growth. View now expect China to catch up
with the US before mid century, if it manages to
it all ticking time bomb, China is also facing demographic
headwinds that will make it harder to restore its economic vigor.
(03:21):
China's working age population is shrinking, reversing the demographic dividend
that powered its economic ascent. Excesses all around. China's economy
has for decades been powered by heavy levels of investment.
At first that yielded modern infrastructure and propelled the expansion
of China's manufacturing engine and its megacities, but sticking with
(03:43):
that strategy year after year has been China today is
beset by colossal debts, unneeded apartments, and industrial overcapacity. Debt
borrowing by government, households and corporations in China is approaching
three hundred percent of its annual GDP. Hidden borrowing by
local governments. Debt held off the books on their behalf
(04:04):
by opaque investment companies known as local government financing vehicles
is a major problem. On some measures, the scale of
these debts and the burden of servicing them in China
is more severe than in the US before the financial crisis,
or in Europe in the depths of its own debt
crisis a decade ago. Real estate, China's real estate boom
(04:26):
was unprecedented, and so is the ongoing bust. New construction
and sales have cratered since the government took steps to
reign in the bubble in twenty twenty. It has struggled
to stabilize the market despite measures to ease purchase restrictions
and offer cheap credit to would be buyers. One sign
of the boom's excesses, there are as many as around
(04:47):
eighty million vacant units in China, according to the latest
estimate at the end of November, equivalent to half the
total housing stock of the entire United States. Industrial overcapacity.
In response to the slowing economy and to transform China
into a technological colossus, leader Sijinping has been funneling investment
(05:09):
into China's already huge factory sector. The result has been
a surge in industrial capacity and two years of falling
prices for Chinese producers, which are increasingly looking overseas to
find buyers for goods they cannot sell at home. This
is sparking trade spats with the US, led West and
emerging markets such as Brazil and India. Here ends our
(05:33):
direct quoting of excerpts from this piece that we know
in the comments below how you feel about some of
the observations made within next up. Archaeologists have uncovered the
remains of a three thousand year old city in Huang
Si Duang Autonomous Region in the southwest of the country,
now confirmed as the earliest known urban settlement in Southern China,
(05:55):
dating to the early Chung Dynasty circa sixteen hundred through
fifty BC. The Nyo Luchong site in gung Cheong Yao
Autonomous County near Guadians spans approximately twenty three thou one
hundred square metres, offering invaluable insights into ancient Southern Chinese civilization.
The site was discovered in twenty twenty two during a
(06:16):
construction project, where patterned bricks and broken pottery were initially unearthed.
Subsequent excavations, including a three month rescue dig in twenty
twenty three, revealed significant features such as double city walls, moats,
ash pits, and pillar holes. Experts from the Chinese Academy
of Sciences, Hubei University, and the Guangxhou Municipal Institute of
(06:38):
Cultural Heritage and Archaeology confirmed its age. The west city
wall is particularly well preserved, reaching up to one point
four metres in height. The moats, rare among early Lignan settlements,
underscore the site's uniqueness. Artifacts found include pottery, stone tolls,
and a severely rusted bronze object believed to be a
(07:00):
The team plans to continue laboratory analysis to piece together
these relics and uncover more, including potential carbonized rice grains.
Lig Nan, encompassing the modern guang Si, Guangdong, and Hainan,
was historically a vibrant region known for its starting point
of the maritime Silk Road. They connected China with Asia
(07:22):
and Africa for one thousand, five hundred years. The region's
history is deeply tied to the bay Yea ethnic groups,
who thrived during the first millennium BC, with their own
civilization overlapping with the Northern Shun dynasty, typically thought to
be the cradle of Chinese civilization. The discovery of the
(07:43):
Yo Luchong site sheds light on the earliest development of
southern China and its cultural connections. Archeologists will continue excavations
to further explore the city structure and unearth more artifacts,
offering a clearer understanding of life in this ancient urban
center and its role in shaping the region's history. Next up,
(08:03):
we have one more development to cover, but just quickly.
If you're getting some value from today's episode of China Update,
I have a huge favor to ask, that is, just
to hit the like button and if you have not done,
so already subscribe. Forty five percent of regular viewers are
not subscribed, so if you're a regular viewer and you'd
like to continue watching these episodes, it's a huge help
if you just hit that subscribe button as well. Patreon
and buy me Coffee links are also in the description
(08:25):
below for those who want to help keep the channel
financially sustainable, I rely primarily on your support to keep
going and continue publishing these episodes open and free for
all six days a week. There are also special bonus
episodes for those who provide financial support as well. Thank
you so much everybody for the ongoing support. Finally, for today,
China has approved the construction of a colossal hydropower project
(08:49):
on the Yaru Lung Tongue Pole River in Tibet, poise
to generate three times more electricity than the world's largest dam,
the three Gorgeous. With an estimated investment exceeding one trillion
Yan one hundred and thirty seven billion UIST dollars, this
landmark project will be the lot infrastructure initiative in history.
(09:09):
The dam is projected to produce three hundred billion kilowatt
hours of electricity annually, enough to power more than three
hundred million people. The Yarling t Sungpur, Tibet's longest river,
offers unique hydro power potential due to its steep vertical
drop of two thousand metres across a fifty kilometer stretch,
(09:30):
carving the deepest canyon on Earth. The project will require
unprecedented engineering, including drilling twenty kilometer long tunnels through the
num Cha Bahwa Mountain to divert the river's flow at
approximately two thousand cubic meters per second. Located in a
seismically active region with challenging geography, the project prioritizes environmental protection.
(09:53):
According to state media. At least it will form parts
of China's green energy transition and contribute to its carbon
neutrality goals. Additionally, the dam is expected to bolster regional
clean energy by supporting solar and wind power development. While
the project has raised concerns with neighbouring India regarding water
security and the potential for water related disputes, research from
(10:16):
Qinghai University in Beijing indicates it could have regional benefits
if managed cooperatively, though that is a big if. The
study suggests reservoir storage could reduce flood risks in India
and Bangladesh. While increasing dry seasoned water availability and extending
navigable waterways, Flood affected areas could shrink by up to
(10:37):
thirty two percent in India and fourteen point eight percent
in Bangladesh, offering significant agricultural and navigational benefits. While this
Chinhua report is positive from India's perspective, it is hardly
going to be attractive that this power is in the
hands of its geopolitical rival, and it will not sit
idly by as that rival exerts a greater degree of
(10:58):
control over a critical waterway for it and its neighbor, Bangladesh.
This damn project thus will continue to inflame tensions between
the two Asian giants. Okay, that is to day's episode
of China Update. Thank you so much everybody for watching.
Have a good Thursday and I will see you all tomorrow.
Popular Podcasts
New Heights with Jason & Travis Kelce
Football’s funniest family duo — Jason Kelce of the Philadelphia Eagles and Travis Kelce of the Kansas City Chiefs — team up to provide next-level access to life in the league as it unfolds. The two brothers and Super Bowl champions drop weekly insights about the weekly slate of games and share their INSIDE perspectives on trending NFL news and sports headlines. They also endlessly rag on each other as brothers do, chat the latest in pop culture and welcome some very popular and well-known friends to chat with them. Check out new episodes every Wednesday. Follow New Heights on the Wondery App, YouTube or wherever you get your podcasts. You can listen to new episodes early and ad-free, and get exclusive content on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. And join our new membership for a unique fan experience by going to the New Heights YouTube channel now!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!