Dollar Devaluation and Yuan Revaluation, FOMC Changed Long-Run Goals and Monetary Policy Strategy to Target “Inflation Moderately Above 2 Percent For Some Time” If Inflation Had Been Below 2 Percent “Persistently,” US GDP Contracted at SAAR of 31.7 Percent in IIQ2020 and Decreased 9.1 Percent Relative to a Year Earlier In the Global Recession, with Output in the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown of Economic Activity in the COVID-19 Event, Mediocre Cyclical United States Economic Growth with GDP Five Trillion Dollars Below Trend in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Cyclically Stagnating Real Private Fixed Investment, Swelling Undistributed Corporate Profits with Profit Contraction in the Global Recession, with Output in the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown of Economic Activity in the COVID-19 Event, Increasing US New Home Sales and Home Prices, World Inflation Waves with Increasing Price Levels In Most Countries and Regions Worldwide, World Cyclical Slow Growth, and Government Intervention in Globalization: Part VIII
Carlos M. Pelaez
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
IA Mediocre
Cyclical United States Economic Growth
IA1
Stagnating Real Private Fixed Investment
IA2
Swelling Undistributed Corporate Profits
IID United States Terms of International Trade
IIA United States
Housing Collapse
IIA1 Sales of New Houses
IIA2
United States House Prices
I World
Inflation Waves
IA Appendix: Transmission of
Unconventional Monetary Policy
IB1 Theory
IB2 Policy
IB3 Evidence
IB4 Unwinding Strategy
IC United
States Inflation
IC Long-term US Inflation
ID Current US Inflation
IE Theory and Reality
of Economic History, Cyclical Slow Growth Not Secular Stagnation and Monetary
Policy Based on Fear of Deflation
III World Financial Turbulence
IV Global Inflation
V World Economic
Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk
Financial Assets
VII Economic
Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great Inflation
IIIB Appendix on Safe
Haven Currencies
IIIC Appendix on
Fiscal Compact
IIID Appendix on
European Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit Financing of Growth and the
Debt Crisis
Growth of
China’s GDP in IIQ2020 relative to the same period in 2019 was 3.2 percent and cumulative
growth to IIQ2020 was minus 1.6 percent in the global recession, with output in
the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event, as shown in Table VC-GDP.
Secondary industry accounts for 37.8 percent of cumulative GDP in IIQ2020.
Tertiary industry accounts for 56.5 percent of cumulative GDP in IIQ2020 and
primary industry for 5.7 percent. China’s growth strategy consisted of rapid
increases in productivity in industry to absorb population from agriculture
where incomes are lower (Pelaez and Pelaez, The Global Recession Risk
(2007), 56-80). The strategy is shifting to lower growth rates with improvement
in living standards by increasing growth of services. The bottom block of Table
VC-GDP provides quarter-on-quarter growth rates of GDP and their annual
equivalent. China’s GDP growth decelerated significantly from annual equivalent
10.0 percent in IQ2011 to 6.1 percent in IVQ2011 and 7.8 percent in IQ2012,
rebounding to 8.7 percent in IIQ2012, 7.4 percent in IIIQ2012 and 8.2 percent
in IVQ2012. Annual equivalent growth in IQ2013 eased to 7.8 percent and to 7.4
percent in IIQ2013, rebounding to 8.7 percent in IIIQ2013. Annual equivalent
growth was 6.6 percent in IVQ2013, stabilizing to 7.4 percent in IQ2014 and to
7.4 percent in IIQ2014. Annual equivalent growth stabilized at 7.4 percent in
IIIQ2014 and 7.0 percent in IVQ2014. Growth moved to annual equivalent 7.8
percent in IQ2015, 7.4 percent in IIQ2015 and 7.0 percent in IIIQ2015. Growth
slowed to 6.6 percent in annual equivalent in IVQ2015 and 6.1 percent in
IQ2016. Growth increased to annual equivalent 7.4 percent in IIQ2016 and 7.0
percent in IIIQ2016, decreasing to 6.6 percent in IVQ2016. Growth accelerated
to annual equivalent 7.0 percent in IQ2017, accelerating to 7.4 percent in
IIQ2017 and decelerating at 6.6 percent in IIIQ2017. Growth stabilized to 6.6
percent annual equivalent in IVQ2017. Growth accelerated to 7.8 percent annual
equivalent in IQ2018, stabilizing to 6.6 percent in IIQ2018. Growth decelerated
to annual equivalent 6.1 percent in IIIQ2018, stabilizing to 5.3 percent annual
equivalent in IVQ2018. Growth accelerated to 8.2 percent annual equivalent in IQ2019,
decelerating to 4.9 percent in IIQ2019. Growth decelerated to 5.7 percent
annual equivalent in IIIQ2019, decelerating to 5.3 percent annual equivalent in
IVQ2019. GDP contracted at annual equivalent 65.6 percent in IQ2020 in the
global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event. Growth increased to annual
equivalent 54.6 percent in IIQ2020.
Table VC-GDP
China, Quarterly Growth of GDP, Current CNY 100 Million and Inflation Adjusted
∆%
|
Cumulative
GDP IIQ2020 |
Value
Current CNY Billion IIQ2020 |
Value
Current CNY Billion IIQ2020 to IQ2020 |
IIQ2020
Year-on-Year Constant Prices ∆% |
Cumulative
to IIQ2020 ∆% |
|
GDP |
25,011.0 |
45,661.4 |
3.2 |
-1.6 |
|
Primary
Industry |
1,586.7 |
2,605.3 |
3.3 |
0.9 |
|
Secondary
Industry |
9,912.1 |
17,275.9 |
4.7 |
-1.9 |
|
Tertiary
Industry |
13,512.2 |
25,780.2 |
1.9 |
-1.6 |
|
Growth in
Quarter Relative to Prior Quarter |
∆% on
Prior Quarter |
|
∆% Annual
Equivalent |
∆%
Year-on-Year |
|
2020 |
|
|
|
|
|
IIQ2020 |
11.5 |
|
54.6 |
3.2 |
|
IQ2020 |
-10.0 |
|
-65.6 |
-6.8 |
|
2019 |
|
|
|
|
|
IVQ2019 |
1.3 |
|
5.3 |
6.0 |
|
IIIQ2019 |
1.4 |
|
5.7 |
6.0 |
|
IIQ2019 |
1.2 |
|
4.9 |
6.2 |
|
IQ2019 |
2.0 |
|
8.2 |
6.4 |
|
2018 |
|
|
|
|
|
IVQ2018 |
1.3 |
|
5.3 |
6.5 |
|
IIIQ2018 |
1.5 |
|
6.1 |
6.7 |
|
IIQ2018 |
1.6 |
|
6.6 |
6.9 |
|
IQ2018 |
1.9 |
|
7.8 |
6.9 |
|
2017 |
|
|
|
|
|
IVQ2017 |
1.6 |
|
6.6 |
6.8 |
|
IIIQ2017 |
1.6 |
|
6.6 |
6.9 |
|
IIQ2017 |
1.8 |
|
7.4 |
7.0 |
|
IQ2017 |
1.7 |
|
7.0 |
7.0 |
|
2016 |
|
|
|
|
|
IVQ2016 |
1.6 |
|
6.6 |
6.9 |
|
IIIQ2016 |
1.7 |
|
7.0 |
6.8 |
|
IIQ2016 |
1.8 |
|
7.4 |
6.8 |
|
IQ2016 |
1.5 |
|
6.1 |
6.9 |
|
2015 |
|
|
|
|
|
IVQ2015 |
1.6 |
|
6.6 |
6.9 |
|
IIIQ2015 |
1.7 |
|
7.0 |
7.0 |
|
IIQ2015 |
1.8 |
|
7.4 |
7.1 |
|
IQ2015 |
1.9 |
|
7.8 |
7.1 |
|
2014 |
|
|
|
|
|
IVQ2014 |
1.7 |
|
7.0 |
7.3 |
|
IIIQ2014 |
1.8 |
|
7.4 |
7.2 |
|
IIQ2014 |
1.8 |
|
7.4 |
7.6 |
|
IQ2014 |
1.8 |
|
7.4 |
7.5 |
|
2013 |
|
|
|
|
|
IVQ2013 |
1.6 |
|
6.6 |
7.7 |
|
IIIQ2013 |
2.1 |
|
8.7 |
7.9 |
|
IIQ2013 |
1.8 |
|
7.4 |
7.6 |
|
IQ2013 |
1.9 |
|
7.8 |
7.9 |
|
2012 |
|
|
|
|
|
IVQ2012 |
2.0 |
|
8.2 |
8.1 |
|
IIIQ2012 |
1.8 |
|
7.4 |
7.5 |
|
IIQ2012 |
2.1 |
|
8.7 |
7.6 |
|
IQ2012 |
1.9 |
|
7.8 |
8.1 |
|
2011 |
|
|
|
|
|
IVQ2011 |
1.5 |
|
6.1 |
8.8 |
|
IIIQ2011 |
1.9 |
|
7.8 |
9.4 |
|
IIQ2011 |
2.4 |
|
10.0 |
10.0 |
|
IQ2011 |
2.4 |
|
10.0 |
10.2 |
Source:
National Bureau of Statistics of China http://www.stats.gov.cn/english/
Growth of China’s GDP in IIQ2020 relative
to the same period in 2019 was 3.2 percent and cumulative growth to IIQ2020 was
minus 1.6 percent in the global recession, with output in the US reaching a
high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event, as shown in Table VC-GDP.
Secondary industry accounts for 37.8 percent of cumulative GDP in IIQ2020.
Tertiary industry accounts for 56.5 percent of cumulative GDP in IIQ2020 and
primary industry for 5.7 percent. China’s growth strategy consisted of rapid
increases in productivity in industry to absorb population from agriculture
where incomes are lower (Pelaez and Pelaez, The Global Recession Risk
(2007), 56-80). The strategy is shifting to lower growth rates with improvement
in living standards by increasing growth of services. Table VC-GDPA shows that
growth decelerated from 12.1 percent in IQ2010 and 11.2 percent in IIQ2010 to
7.9 percent in IQ2013, 7.6 percent in IIQ2013 and 7.9 percent in IIIQ2013. GDP
grew 7.7 percent in IVQ2013 relative to a year earlier and 1.6 percent relative
to IIIQ2013, which is equivalent to 6.6 percent per year. GDP grew 7.5 percent
in IQ2014 relative to a year earlier and 1.8 percent in IQ2014 that is
equivalent to 7.4 percent per year. GDP grew 7.6 percent in IIQ2014 relative to
a year earlier and 1.8 percent relative to the prior quarter, which is annual
equivalent 7.4 percent. In IIIQ2014, GDP grew 7.2 percent relative to a year
earlier and 1.8 percent relative to the prior quarter, which is 7.4 percent in
annual equivalent. GDP grew 1.7 percent in IVQ2014, which is 7.0 percent in
annual equivalent and 7.3 percent relative to a year earlier. In IQ2015, GDP
grew 1.9 percent, which is equivalent to 7.8 in a year and 7.1 percent relative
to a year earlier. GDP grew 1.8 percent in IIQ2015, which is equivalent to 7.4
percent in a year, and grew 7.1 percent relative to a year earlier. GDP grew at
1.7 percent in IIIQ2015, which is equivalent to 7.0 percent in a year, and grew
7.0 percent relative to a year earlier. GDP grew at 1.6 percent in IVQ2015,
which is equivalent to 6.6 percent in a year and increased 6.9 percent relative
to a year earlier. In IQ2016, GDP grew at 1.5 percent, which is equivalent to
6.1 percent in a year, and increased 6.9 percent relative to a year earlier.
GDP grew at 1.8 percent in IIQ2016, which is annual equivalent to 7.4 percent,
and increased 6.8 percent relative to a year earlier. In IIIQ2016, GDP grew at
1.7 percent, which is equivalent to 7.0 percent in a year and increased 6.8
percent relative to a year earlier. In IVQ2016, GDP grew at 1.6 percent,
equivalent to 6.6 percent in a year, and increased 6.9 percent relative to a
year earlier. GDP grew 7.0 percent in IQ2017 relative to a year earlier and
increased at 1.7 percent, which is 7.0 percent in annual equivalent. In
IIQ2017, GDP grew at 1.8 percent, which is annual equivalent at 7.4 percent,
and increased 7.0 percent relative to a year earlier. GDP grew at 1.6 percent
in IIIQ2017, which is annual equivalent at 6.6 percent, and increased at 6.9
percent relative to a year earlier. In IVQ2017, GDP grew 1.6 percent, which is
annual equivalent to 6.6 percent, and increased 6.8 percent relative to a year
earlier. GDP grew at 1.9 percent in IQ2018, which is annual equivalent at 7.8
percent, and increased 6.9 percent relative to a year earlier. In IIQ2018, GDP grew at 1.6 percent, which is
annual equivalent to 6.6 percent, and increased 6.9 percent relative to a year
earlier. GDP grew at 1.5 percent in IIIQ2018, which is annual equivalent at 6.1
percent, and increased 6.7 percent relative to a year earlier. In IVQ2018, GDP
grew at 1.3 percent, which is annual equivalent to 5.3 percent, and increased
6.5 percent relative to a year earlier. GDP grew at 2.0 percent in IQ2019,
which is annual equivalent to 8.2 percent, and increased 6.4 percent relative
to a year earlier. In IIQ2019, GDP grew at 1.2 percent, which is annual
equivalent to 4.9 percent and increased 6.2 percent relative to a year earlier.
GDP grew at 1.4 percent in IIIQ2019, which is annual equivalent to 5.7 percent,
and increased 6.0 percent relative to a year earlier. In IVQ2019, GDP grew at
1.3 percent, which is annual equivalent to 5.3 percent, and increased 6.0
percent relative to a year earlier. GDP contracted minus 10.0 percent in
IQ2020, which is annual equivalent to minus 65.6 percent, and contracted minus
6.8 percent in IQ2020, in the global recession, with output in the US reaching
a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event. GDP grew at 11.5 percent
in IIQ2020, which is equivalent to 54.6 percent in a year and grew 3.2 percent
relative to a year earlier.
Table
VC-GDPA China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆%
Relative to Prior Quarter
|
|
IQ2020 |
IIQ2020 |
|
|
|
GDP |
-6.8 |
3.2 |
|
|
|
Primary
Industry |
-3.2 |
3.3 |
|
|
|
Secondary
Industry |
-9.6 |
4.7 |
|
|
|
Tertiary
Industry |
-5.2 |
1.9 |
|
|
|
GDP ∆%
Relative to a Prior Quarter |
-10.0 (-65.6) |
11.5 (54.6) |
|
|
|
|
I Q2019 |
II Q2019 |
III Q2019 |
IV Q2019 |
|
GDP |
6.4 |
6.2 |
6.0 |
6.0 |
|
Primary
Industry |
2.7 |
3.3 |
2.7 |
3.4 |
|
Secondary
Industry |
6.1 |
5.6 |
5.2 |
5.8 |
|
Tertiary
Industry |
7.0 |
7.0 |
7.2 |
6.6 |
|
GDP ∆%
Relative to a Prior Quarter |
2.0 (8.2) |
1.2 (4.9) |
1.4 (5.7) |
1.3 (5.3) |
|
|
IQ2018 |
IIQ2018 |
IIIQ2018 |
IVQ2018 |
|
GDP |
6.9 |
6.9 |
6.7 |
6.5 |
|
Primary
Industry |
3.2 |
3.2 |
3.6 |
3.5 |
|
Secondary
Industry |
6.3 |
6.0 |
5.3 |
5.8 |
|
Tertiary
Industry |
7.5 |
7.8 |
7.9 |
7.4 |
|
GDP ∆%
Relative to a Prior Quarter |
1.9 (7.8) |
1.6 (6.6) |
1.5 (6.1) |
1.3 (5.3) |
|
|
IQ2017 |
IIQ2017 |
IIIQ2017 |
IVQ2017 |
|
GDP |
7.0 |
7.0 |
6.9 |
6.8 |
|
Primary Industry |
3.0 |
3.8 |
3.9 |
4.4 |
|
Secondary
Industry |
6.4 |
6.4 |
6.0 |
5.7 |
|
Tertiary
Industry |
7.7 |
7.6 |
8.0 |
8.3 |
|
GDP ∆%
Relative to a Prior Quarter |
1.7 (7.0) |
1.8 (7.4) |
1.6 (6.6) |
1.6 (6.6) |
|
|
IQ2016 |
IIQ2016 |
IIIQ2016 |
IVQ2016 |
|
GDP |
6.9 |
6.8 |
6.8 |
6.9 |
|
Primary
Industry |
2.9 |
3.1 |
3.5 |
2.9 |
|
Secondary
Industry |
5.8 |
6.3 |
6.1 |
6.1 |
|
Tertiary
Industry |
7.6 |
7.5 |
7.6 |
8.3 |
|
GDP ∆%
Relative to a Prior Quarter |
1.5 (6.1) |
1.8 (7.4) |
1.7 (7.0) |
1.6 (6.6) |
|
|
IQ2015 |
IIQ2015 |
IIIQ2015 |
IVQ2015 |
|
GDP |
7.1 |
7.1 |
7.0 |
6.9 |
|
Primary
Industry |
3.2 |
3.5 |
3.8 |
4.1 |
|
Secondary
Industry |
6.4 |
6.1 |
6.0 |
6.1 |
|
Tertiary
Industry |
7.9 |
8.4 |
8.4 |
8.2 |
|
GDP ∆%
Relative to a Prior Quarter |
1.9 (7.8) |
1.8 (7.4) |
1.7 (7.0) |
1.6 (6.6) |
|
|
IQ2014 |
IIQ2014 |
IIIQ2014 |
IVQ2014 |
|
GDP |
7.5 |
7.6 |
7.2 |
7.3 |
|
Primary
Industry |
3.5 |
3.9 |
4.2 |
4.1 |
|
Secondary Industry |
7.3 |
7.4 |
7.4 |
7.3 |
|
Tertiary
Industry |
7.1 |
8.0 |
7.9 |
8.1 |
|
GDP ∆%
Relative to a Prior Quarter |
1.8 (7.4) |
1.8 (7.4) |
1.8 (7.4) |
1.7 (7.0) |
|
|
IQ2013 |
IIQ2013 |
IIIQ2013 |
IVQ2013 |
|
GDP |
7.9 |
7.6 |
7.9 |
7.7 |
|
Primary
Industry |
3.4 |
3.0 |
3.4 |
4.0 |
|
Secondary
Industry |
7.8 |
7.6 |
7.8 |
7.8 |
|
Tertiary
Industry |
8.3 |
8.3 |
8.4 |
8.3 |
|
GDP ∆%
Relative to a Prior Quarter |
1.9 (7.8) |
1.8 (7.4) |
2.1 (8.7) |
1.6 (6.6) |
|
|
IQ2012 |
IIQ2012 |
IIIQ2012 |
IVQ2012 |
|
|
|
|
|
|
|
GDP |
8.1 |
7.6 |
7.5 |
8.1 |
|
Primary
Industry |
3.8 |
4.3 |
4.2 |
4.5 |
|
Secondary
Industry |
9.1 |
8.3 |
8.1 |
8.1 |
|
Tertiary
Industry |
7.5 |
7.7 |
7.9 |
8.1 |
|
GDP ∆%
Relative to a Prior Quarter |
1.9 (7.8) |
2.1 (8.7) |
1.8 (7.4) |
2.0 (8.2) |
|
|
IQ2011 |
IIQ2011 |
IIIQ2011 |
IVQ2011 |
|
GDP |
10.2 |
10.0 |
9.4 |
8.8 |
|
Primary
Industry |
3.5 |
3.2 |
3.8 |
4.5 |
|
Secondary
Industry |
11.1 |
11.0 |
10.8 |
10.6 |
|
Tertiary
Industry |
9.1 |
9.2 |
9.0 |
8.9 |
|
GDP ∆%
Relative to a Prior Quarter |
2.4 (10.0) |
2.4 (10.0) |
1.9 (7.8) |
1.5 (6.1) |
|
|
IQ2010 |
IIQ2010 |
IIIQ2010 |
IVQ2010 |
|
GDP |
12.1 |
11.2 |
10.7 |
12.1 |
|
Primary
Industry |
3.8 |
3.6 |
4.0 |
3.8 |
|
Secondary
Industry |
14.5 |
13.3 |
12.6 |
14.5 |
|
Tertiary
Industry |
10.5 |
9.9 |
9.7 |
10.5 |
Source:
National Bureau of Statistics of China http://www.stats.gov.cn/english/
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
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