Once again, China to the rescue!
In 2009, China was the first to recover. As growth there surged in 2009, it began pulling the rest of the world away from the brink.
Now it seems to be happening again. Here’s the FT:
Factories across Europe are buzzing with activity again, encouraging some industrial bosses to invest in extra production as they shrug off the rise in coronavirus infections that is casting a shadow over the continent’s economic recovery.
Many manufacturers adapted production sites quickly to protect their workers after the pandemic hit, and in recent months they have benefited from rising demand, driven by a rebound in exports, particularly to the resurgent Chinese market. . . .
Ola Kallenius, chief executive of Daimler, said the maker of Mercedes-Benz cars was also enjoying a “remarkable recovery in China” where its sales have grown at double-digit rates for four consecutive months. “It is almost too good to be true,” he said. “They’ve managed a V-shaped recovery in the Chinese economy.”
Companies in other areas are benefiting from rising sales in China such as Gea Group, the German maker of machines that produce half the world’s beer, a quarter of its processed milk and a third of all instant coffee.
“The strongest recovery now is definitely in China, where the virus has virtually gone and I would say people there are back to normal, so that is driving demand,” said Stefan Klebert, chief executive of Gea, which has five Chinese factories.
PS. My comment section has recently been overrun by morons. So I need to say it again:
China: A very good country of 1.4 billion people
The CCP: A very evil government
Go China!!!
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22. October 2020 at 10:34
Whether a government is good or bad is determined by its deeds. given the continuous rising standard of living of the Chinese people, I would say the ccp is far from Evil. I cannot say the same thing about western governments tho.
22. October 2020 at 11:25
> The CCP: A very evil government
But much more competent managers, it seems…
22. October 2020 at 14:31
Cindy, I’d say putting a million Muslims into concentration camps is evil. And there are many other abuses. But I concede they’ve done some good things, mostly taking their boot off the throat of Chinese entrepreneurs.
whimsicalism, For some things. If you travel in China, you also notice lots of screwed up things.
22. October 2020 at 16:05
Scott Sumner–
Can you explain the role of the People’s Bank of China in the remarkable resilience of the Sino economy, both in 2009 and presently?
Is the CCP macroeconomic model sturdy?
Michael Pettis says the CCP macroeconomic model depends upon repressed household consumption and higher investment. Is he right?
22. October 2020 at 16:25
https://www.baldingsworld.com/2020/10/22/report-on-biden-activities-with-china/
Tyler Cowen linked to the above. Interesting study, but does not report on the links between the CCP and the Penn Biden Center for Diplomacy and Global Engagement.
If one considers money a fungible commodity, then we have official China putting money into the Center and the university giving a lot of money to Joe Biden… and campus newspapers complain that Joe Biden did nothing for his money…at least before he became the presidential candidate…
Do not abase yourself. Vote for Pat Paulsen for president.
22. October 2020 at 19:10
I’m still waiting for a blog post on Joe Biden’s corruption.
Any courage? Or does your bias towards the democratic party prohibit you from reporting honestly? No worries. You can wait for the NYT’s first. But eventually you will have to concede your candidate’s corrupt.
22. October 2020 at 20:19
Jayne, There are no credible accusations of corruption against Biden. If there were, you can be sure that Trump would be all over the issue.
Perhaps you are confusing Joe with Hunter. Hunter’s not running.
As for my love of the Democratic Party, I’ve never voted for a Democratic presidential candidate in my life.
Reagan was the best president during my life.
23. October 2020 at 00:26
And Reagan had the the best astrologers!
https://timeline.com/ronald-reagan-astrology-quigley-aa81632662d9
Reagan also wanted to place the Federal Reserve into the Treasury Department, so the central bank would report to the Oval Office.
The above is a good idea, although I do not know if astrologers recommended the move.
https://www.nytimes.com/1982/09/18/us/reagan-suggests-tighter-control-of-central-bank.html
Those were the days. A few snags around Iran-Contra, and AG Meese had a total boner for fighting pornographers, but The Gipper was always fun to watch.
23. October 2020 at 09:05
@Scott Sumner
I like Reagan myself. I’m still curious why you rate him highest in your lifetime. Are you not counting Eisenhower because you were too young?
23. October 2020 at 09:49
> whimsicalism, For some things. If you travel in China, you also notice lots of screwed up things.
I traveled in China earlier this year. Certainly, I noticed some problems (smog, racism, mismanagement/creation of large projects/complexes that are underused), but all-in-all it seemed to be a place where smart improvements were being made all over the place.
23. October 2020 at 10:28
I wonder if anyone from official Chinese security agencies reads this blog? Maybe everyone who comments is an agent.
Since I’m younger than Scott I might live long enough to see the 4th or 5th act of the China-United States play. I’m not sure yet if it’s a comedy or a tragedy.
My greatest concern is that there will be some military play against Taiwan that will be somewhat equivalent to the Sudetenland. Maybe the odds of that happening are as high as the U.S. invading British Columbia.
23. October 2020 at 12:35
Scott,
I don’t if this is any consolation, but if you feel that your comment sections were abused by morons due to your views on China, take a look at the Ray Dalio article also at FT and its comments.
“Don’t be blind to China’s rise in a changing world
Anti-Beijing bias has blinded too many for too long to opportunities”
https://www.ft.com/content/8749b742-d3c9-41b4-910e-80e8693c36e6
23. October 2020 at 13:21
Carl, Yes.
whimsicalism. Yes, I also see lots of rapid improvements, but some setbacks, such as over the top security on subways (even before Covid)
David, That’s also my greatest worry; indeed it’s the only military threat from China that I lose sleep over.
Greg, I can imagine. I wonder how much of the difference depends on whether people have spent much time there. When I read some commenters it’s as if they are talking about North Korea, or Maoist China
23. October 2020 at 15:03
> as over the top security on subways
Oh yes, that was annoying, although the lines were not too bad when I was there in the winter. They appear to be going through the same sort of terrorist-paraonia circa ’01-’04 – checkpoints, lots of cameras, and the hukou system is a disaster.
But all in all people seemed to feel like things kept getting way better.
24. October 2020 at 06:15
This is evidence that the ECB had not been doing its job of maintaining demand.
“China: A very good country of 1.4 billion people.
The CCP: A very evil government”
Agreed. We should be trying to attract several million of “best and brightest” per year to come raise our per capita income and geopolitical weight against that evil government.
24. October 2020 at 08:59
whimsical, Yes, compared to when I visited China in 1994, living standards are vastly higher. Even human rights are arguably better, despite there being less free speech than in 1994. Human rights in other areas have improved, such as child bearing, gay rights, criminal justice rights, etc.
Thomas, I’ve made the same argument. Accepting immigrants from China is the best way to maintain our advantage.
24. October 2020 at 08:59
I realize you are (I assume) making a joke with your “Go China” comment—like rooting for your favorite team. But you would not have said (have you said?) Go USA. Maybe its assumed—okay, its assumed—even with your banana republic obsession
But it really does not “look good”. the CCP (too paraphrase a well know economist on this site) is evil.
It makes me wonder. China is a tragedy to the extreme—giving them “credit” for recovering first is absurd. You may have “inside” evidence their death rates are low—I doubt it though.—
We are 3 months behind—assuming Jorgensen or Trump win—and much further behind if the old guy and the laughing lady win
24. October 2020 at 12:19
Dr. Sumner,
Do you think 🤔 the right and LEFT establishments in the United States 🇺🇸 truly understand how much of their soft power (almost all global hegemonic power the US has held since WWII) is up for grabs coming out of this Pandemic? The left allowed the right to allow prevent almost any changes to the system coming out of the last recession as China exploded out, because of bad faith beliefs/self-importance in their own understanding of their position in the global political economy. The right is currently listening to 85 yr old propagandists who have made all their money (Home Depot founder) as to proper macro economic positioning…sad. Sure, the right in America is delusional to try and run the same “get nothing done, shut it all down” approach they ran from lay ‘08-2010 based on a bastardized misrepresentation the NRO founder terribly misreading Burke, but the left is just as much on trial with global capital flows…the most powerful force in our political economy.
…Especially, when you have 2 successful left-wing countries showing how to get things done financially and fiscally…one with very supportive civil and individual rights, one with none. New Zealand and China.
The American political system is the current defendant, and the elites don’t even realize how their failing, much less outside of DT, that they are.
P.S. America got a lot of benefit of the doubt breaks since WWII and 1991, to do much navel gazing (and they did quite a bit on the self-congratulatory hubris of quite a few factors that made the US geopoliticallly and economically great)…the clock has run out on that era. Amen.
The world is watching and our leaders don’t understand what in the broadcast really matters. Lack of historical understanding, ignorance or bad faith (which would be the worst of these methinks).
Regards
Jack A
25. October 2020 at 09:02
Michael, No, I’m serious when I say Go China! I want all countries to do well. I’m not an evil person who wants people to suffer.
You said:
But it really does not “look good”. the CCP (too paraphrase a well know economist on this site) is evil.”
Um, did you read my post? I said:
“The CCP: A very evil government”
You do know that plagiarism is wrong, don’t you?
Jack, I agree that our leadership is letting us down, but I question this:
“Especially, when you have 2 successful left-wing countries showing how to get things done financially and fiscally…one with very supportive civil and individual rights, one with none. New Zealand and China.”
It’s important not to lump these two countries together. New Zealand is one of the most capitalist countries in the world (#3 in some rankings) and China is a mixed economy. Of course they also differ greatly on human rights. Terms like “left” have no real meaning when applied to these countries. Xi Jinping is a is more fascist than communist. America’s left would be horrified by some aspects of New Zealand’s economic policies, like their tax system.
26. October 2020 at 07:16
Of course, I know you wrote CCP is evil!?—–I was saying it did not “look good”–an opinion. I agree its virtually always better when more do better. But it may not be better when an evil govt does better—due to unintended consequences—like repression in HK–or future attacks on Taiwan. We should want that CCP gone—and if doing worse than otherwise in the short to medium run—then its better. Opinion—-no proofs
26. October 2020 at 09:13
Vladimir Lenin said: “The worse, the better”. I.e. the more peasants starve to death, the better it is for Russia in the long run.
I don’t agree.
Chile had a brutal dictatorship. Then the economy got much better. Eventually the political situation did as well. I’m not saying it will happen this way in China (so far it hasn’t), but it’s equally likely to the claim that suffering will improve the political situation in China–that usually doesn’t work either. And if it’s a coin flip, why impose suffering on a billion people if you have no idea which theory is better?
It’s like a doctor saying “I’m going to give you this toxic drug with bad side effects, which is equally likely to make your disease worse than better.”
If you want to retaliate against the Chinese government with moves like military support for Taiwan, taking in HK immigrants, etc. that’s much more defensible. Don’t punish the Chinese people.
26. October 2020 at 15:11
“PS. My comment section has recently been overrun by morons. So I need to say it again:
China: A very good country of 1.4 billion people
The CCP: A very evil government
Go China!!!”
Lol, so funny. You’ve consistently had an entertaining comments section for the past decade at least. I’m surprised you still bother to read the comments actually. But I’m glad you do.