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@teortaxesTex @Bluebearmonkey Do you mean the US? They have a deficit of sour crude.

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@Bluebearmonkey ME imports reduced because China mothballed the teapots in Shandong and ran down product stocks. They did that through price controls and product export limits. Your story was EV and solar panel exports would permanently reduce worldwide oil demand. ME imports are rising again.

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@Bluebearmonkey My math calculates 1% of your optimism could fuel a fusion reactor... The trouble is all that good news requires years of adoption, which China's trade partners do not have. Your story isn't necessarily wrong, but lacks the time needed to unfold in the 1-2 year span of a crisis.

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@Bluebearmonkey Well, if you're watching the energy crisis carefully Doggy, everybody is screwed. That includes China and SE Asia. Also the US, UK, and Europe...

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@Bluebearmonkey $10k an hour for "Everything is Awesome"? Amazing, fair do's.

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@Bluebearmonkey I remember we discussed this a few weeks ago. You were wrong the last time as well 🤭

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@Bluebearmonkey @michaelxpettis Interesting, but not directly comparable. Chart 1 is industrial consumption: if I build and subsidise a loss making factory, it would make it into the chart. The second is not per capita: China is 4x larger than the US, so divide by 4 to compare. Shows strength in trains and EVs.

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@Bluebearmonkey @AngelicaOung @michaelxpettis Your article's main argument is 'stop trusting the consumption numbers'... Prof. Pettis makes a similar but opposite point: official GDP figures can record activity that instead of growing wealth grows what he calls 'the Bezzle': bad debt. How much of the 280% was quality growth?

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@rcampeligro @Bluebearmonkey @AngelicaOung @michaelxpettis There is no need to wait anymore, the development model is already in the middle of a crisis of overproduction.

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@michaelqcontact @Bluebearmonkey @AngelicaOung @michaelxpettis The point is that the current model, while successful for a long time, has clearly ran out of road. You have to look at development over time, including factoring in diminishing marginal returns on new infrastructure. Honestly, what critical infrastructure is missing in 2026?

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@Bluebearmonkey @AngelicaOung @michaelxpettis Prof. Pettis explains how the model works and how the balance sheets interact. If you look at the consumption chart as a percentage of GDP instead of 'percent since takeoff compared to X', you'll see how the model works too: consumption doing catch up to subsidised production.

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@Bluebearmonkey @AngelicaOung Don't get me wrong Doggy, I would love to see China do well. I just don't agree with the argument that doubling down on the old development model is the right direction. Time will tell I suppose.

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@Bluebearmonkey @AngelicaOung I'm glad Everything is Awesome, 内卷 is good for us, and central Gvt efforts to reduce it and rebalance the economy towards consumption are misguided. Any criticism stems from the Envy of the West who are Uncompetitive but it Doesn't Matter because we hardly sell them anything...

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@Bluebearmonkey @AngelicaOung It's not possible to export the model out of trouble either: the numbers are too large at this point. You mention 4 trading blocs: EU and US are already closing markets, RoW is relatively poor, and it's hard to get a competitive advantage over SE Asian currencies.

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@Bluebearmonkey @AngelicaOung The development model worked very well for some time, but it's given most of the benefits it could and is now loading the economy with bad debt. As a consumer, I can't enjoy the utility of e.g. a dealer lot of unsold EVs, or 300+ TWs of curtailed solar power a year. It's waste.

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@Bluebearmonkey @AngelicaOung Surely the Lewis turning point is irrelevant where consumer purchasing power can't absorb production? Worker availability isn't the bottleneck, it's lack of customers.

The answer to 'who is doing that?' (subsidising overcapacity) depends on which industry you're interested in:

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@Bluebearmonkey @AngelicaOung "Prices... often quickly crash into underlying costs". Or *below* them, making producers technically insolvent. Continuing to finance such producers only accumulates bad debt, kicking the can down the road. It's a good time for system reform, pretending all is well won't help.

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@Bluebearmonkey @AngelicaOung 1.7% is a sign of deflation, a flow from borrowers to savers. In China's economy, local Gvts are the net borrowers whose debts get harder to service.

If consumption outgrew production, production would be more profitable over time, with no neijuan and no deflationary pressure.

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@tonywestonuk The right's argument is that the resources going to the public sector would be more efficiently allocated by the private sector, whether they later make it to the private sector or not. The argument is not correct in all circumstances, but there is no misunderstanding.