Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, July 19, 2023

AI Summary. Federal R&D investment for the mission to send a crewed mission to the Moon peaked at over 0.7% of GDP for NASA. The authors estimate that NASA research-and-development contractor spending had a local economic impact similar to that of typical government expenditures, and note there is no credible empirical estimate of the space program's contribution to economic growth.

Shawn Kantor and Alexander Whalley National Bureau of Economic Research
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New @NBERpubs paper finds that there is no empirical evidence that government spending related to the space race contributed to excess economic growth on the national level.

Does public R&D spending boost growth more than ordinary government spending?

Core argument: NASA received over 0.7 percent of GDP at the peak of the Space Race, an expansion of federal R&D investment large enough that local effects through a fiscal multiplier channel would be expected even absent technological spillovers.

Figure 1 shows that the ambitious mission to send a manned crew to the Moon led to a massive expansion of federal investment in R&D – NASA received over 0.7 percent of GDP at the peak of the Space Race.  Space Race spending was economically large so we might expect local effects through a fiscal multiplier channel even without technological spillovers. We compare the fiscal multiplier for NASA contractor spending implied by our estimates to the literature to get a sense of this. We find that R&D contractor spending on the Space Race had a similar impact as typical government expenditures. There is no credible empirical estimate of the space mission’s contribution to economic growth. The magnitudes of the estimated effects seem to align with those of other non-R&D types of government expenditures.

Takeaways by Macro Roundup® AI

  1. NASA received over 0.7 percent of GDP at the peak of the Space Race, an expansion of federal R&D investment large enough that local effects through a fiscal multiplier channel would be expected even absent technological spillovers.
  2. The fiscal multiplier implied by the authors' estimates for NASA R&D contractor spending during the Space Race was similar to that of typical government expenditures, with no credible empirical estimate of the space mission's contribution to economic growth.

AI Summary. The S&P 500 rose 15.91% in the first half of 2023 and the tech-heavy NASDAQ returned nearly twice that, while the expected return on stocks fell from 9.82% to 8.81% and the implied equity risk premium slipped from 5.94% to 5%. The author argues that premium, roughly its average since 2008, does not signal a bubble.

Aswath Damodaran Musings On Markets
Date Posted:

The S&P 500 equity risk premium fell back to 5% at the start of July, roughly the mean value since 2008. @AswathDamodaran

Does a strong first-half stock rally signal a bubble?

Core argument: The S&P rose 15.91% in the first half of 2023, with the NASDAQ delivering almost twice that return, reflecting its tech focus.

The S&P has had a strong first half of 2023, increasing 15.91%, the NASDAQ has delivered almost twice that return, with its tech focus.After a year for the record books, in 2022, when the expected return on stocks (the cost of equity) increased from 5.75% to 9.82%, the largest one-year increase in that number in history, we have had not just a more subdued year in 2023, but one where the expected return has come back down to 8.81%. In the process, the implied equity risk premium, which peaked at 5.94% on January 1, 2023, is back down to 5% at the start of July 2023. Even after that drop, equity risk premiums are still at roughly the average value since 2008. If the essence of a bubble is that equity risk premiums become "too low", the numbers, at least for the moment, don't seem to be signaling a bubble.

Takeaways by Macro Roundup® AI

  1. The S&P rose 15.91% in the first half of 2023, with the NASDAQ delivering almost twice that return, reflecting its tech focus.
  2. The expected return on stocks fell to 8.81% in the first half of 2023, following 2022's increase from 5.75% to 9.82%, the largest one-year rise in that number in history.
  3. The implied equity risk premium declined from a 5.94% peak on January 1, 2023 to 5% at the start of July 2023, roughly its average value since 2008, a level that does not appear to signal a bubble.

Related Articles:

  • Data Update 2 for 2023: A Rocky Year for Equities — The implied equity risk premium on the S&P 500 rose from 4.24% to 5.94% over the course of 2022, placing it near the top of its range since 1960, while the expected return on stocks of 9.82% is its highest since 1995. Whether the market is fairly valued turns on whether that risk premium is too high or too low.

AI Summary. 46m Americans owe student loan debt to the Department of Education, with three-quarters owing less than $40k and half owing under $20k. Borrowers with balances above $60k make up 16% of borrowers but hold the majority of outstanding student loan debt.

Joseph Politano Apricitas Economics
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.@JosephPolitano argues the resumption of student loan payments will only have a minor impact on consumers’ balance sheets.

How is student loan debt distributed across American borrowers?

Core argument: Some 46 million Americans owe money to the Department of Education for student loans, with three-quarters of borrowers holding balances below $40,000 and half below $20,000.

46 million Americans owe some money to the Department of Education for their student loans. The vast majority of borrowers also have comparatively small balances remaining, with 3/4 of debtors having balances less than $40k and 1/2 having balances under $20k. The small contingent of borrowers with large balances holds a disproportionately large share of the outstanding debt—although they make up only 16% of total borrowers, those with balances in excess of $60,000 hold the majority of student loan debt.

Takeaways by Macro Roundup® AI

  1. Some 46 million Americans owe money to the Department of Education for student loans, with three-quarters of borrowers holding balances below $40,000 and half below $20,000.
  2. Borrowers with balances above $60,000 make up 16% of all student loan borrowers but hold the majority of outstanding student loan debt.

Related Articles:

  • Debt Moratoria: Evidence from Student Loan Forbearance — The authors estimate that borrowers whose student loan payments were frozen ended with about $1,500 more in student loan balances and $1,200 (3%) more in other household debt, including mortgage, auto, and credit card borrowing, than borrowers without a payment stoppage. The findings suggest the pause raised short-term consumption and overall leverage, with effects concentrated among borrowers never previously delinquent.

AI Summary. Widely publicized estimates put the US top 1% income share at 21% in 2019 versus 9% in 1970, while less-covered government researchers estimate 13.7% versus 9.2%, or 8.8% versus 6.8% after taxes and transfers. The author argues that media selectivity encourages academics to cater to journalists' beliefs.

Joshua Rauh and Gregory Kearney Wall Street Journal
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.@joshrauh & Gregory Kearney of @HooverInst argue academic research suffers from a feedback loop that encourages economists to produce left-leaning research to achieve widespread coverage in the mainstream media.

.@joshrauh & Gregory Kearney of @HooverInst argue academic research suffers from a feedback loop that encourages...

Does media selectivity push economists to cater to journalists' beliefs?

Core argument: Auten of the U.S. Treasury and Splinter of Congress's Joint Committee on Taxation find the top 1% income share rose to 13.7% in 2019 from 9.2% in 1970, while Saez, Zucman and Piketty's data put the rise at 9% to 21%.

Social sciences researchers hoping to become public influencers have one clear path: through the mainstream media. Unfortunately, journalists aren’t unbiased arbiters. For more than a decade, the media has praised economists Saez, Zucman and Piketty. Their data purport to show the income share of the top 1% of [US] earners climbed to 21% in 2019 from 9% in 1970. In a recent paper that has received far less attention, Auten of the U.S. Treasury and Splinter of Congress’s Joint Committee on Taxation find the income share of the top 1% climbed to 13.7% in 2019 from 9.2% in 1970. and, incorporating increases in redistributive government policy, the income share of the top 1% only increased to 8.8% in 2019 from 6.8% in 1970. In 2017, [Harvard’s Raj Chetty]  published findings that U.S. trends in the likelihood of children achieving a higher income status than their parents has grown progressively worse, a point that received intense media coverage. Research published by Scott Winship of the American Enterprise Institute shows the fall in mobility was a direct consequence, not of inequality, but of slowing economic growth that began in the 1970s. Journalists’ propensity to ignore research that refutes their beliefs encourages academics to pander to the liberal tilt of mainstream news organizations, leading to the general public’s misunderstanding of important policy issues.

Takeaways by Macro Roundup® AI

  1. Auten of the U.S. Treasury and Splinter of Congress's Joint Committee on Taxation find the top 1% income share rose to 13.7% in 2019 from 9.2% in 1970, while Saez, Zucman and Piketty's data put the rise at 9% to 21%.
  2. Incorporating increases in redistributive government policy, Auten and Splinter find the top 1% income share rose only to 8.8% in 2019 from 6.8% in 1970.
  3. Research by Scott Winship of the American Enterprise Institute argues the decline in U.S. intergenerational mobility reported by Harvard's Raj Chetty in 2017 stemmed from slowing economic growth that began in the 1970s rather than from inequality.

AI Summary. China's political environment poses a threat to its technological momentum, with Chinese undergraduates in the US reporting that their parents urge them not to return to the mainland. China retains strengths independent of slowing growth and demographic drags, chiefly an entrenched workforce that continues to advance manufacturing complexity.

Dan Wang The Secure Transport Of Light
Date Posted:

.@danwwang notes that China’s strength is its ability to manufacture complex goods. Wang is not worried about slowing growth and a demographic drag affecting China’s manufacturing dominance, but he does see China’s nonliberal environment as a threat.

.@danwwang notes that China’s strength is its ability to manufacture complex goods. Wang is not worried about slowing...

Does China's political environment threaten its technological momentum?

Core argument: Chinese undergraduates in the US told the author almost to a person that their parents urge them not to return to the mainland, part of a political environment he calls perhaps the greatest threat to China's technological momentum.

The general political environment poses perhaps the greatest threat to technological momentum. In the last few months, I’ve chatted with a good number of Chinese undergrads in the US, who almost to a person tell me that their parents are urging them not to return to the mainland. China retains considerable strengths, one which doesn’t depend so much on slowing economic growth or demographic drags. The main one is its entrenched workforce that continues to advance manufacturing complexity. I think about the humming engine that is outlined by Kevin Kelly’s concept of the “technium” that describes an ecosystem of intertwined, co-dependent, and complex technologies with a mind of its own. But I grow less certain that a third-Xi term China will sustain an innovative drive.

Takeaways by Macro Roundup® AI

  1. Chinese undergraduates in the US told the author almost to a person that their parents urge them not to return to the mainland, part of a political environment he calls perhaps the greatest threat to China's technological momentum.
  2. The author identifies China's entrenched workforce, which continues to advance manufacturing complexity, as a strength less dependent on slowing economic growth or demographic drags.
  3. The author invokes Kevin Kelly's "technium" concept, an ecosystem of intertwined, co-dependent, and complex technologies with a mind of its own, while growing less certain that China under a third Xi term will sustain an innovative drive.

Related Articles:

  • 2022 Letter — The author argues that China's economic growth will slow further, settling closer to US rates rather than returning to mid-single-digit levels, with successes in some technologies unable to offset broad deceleration. Fear of abrupt state interventions is dampening enthusiasm among businesspeople and young people, producing more foot-dragging and less initiative in response to centralized campaigns.
  • U.S. Bound Migrants Surge at Darien Jungle Crossing in Panama — Panamanian immigration data show 49,291 migrants crossed the Darien Gap rainforest between Colombia and Panama en route to the U.S. over a two-month span, more than a fivefold increase from 8,964 in the same period a year earlier. Chinese nationals accounted for about 2,200 of those crossings, up from 71.

AI Summary. China's economic output was 5.5% higher than a year earlier and grew 0.8% between the first and second quarters, below the 2017-2019 quarterly average of 1.6%, with some evidence output may have shrunk in the most recent quarter. Nominal consumer spending has grown about 3.9% a year since 2019, versus roughly 7.4% before the pandemic.

Matt Klein The Overshoot
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Despite the end of Covid Zero, Chinese growth remains anemic. There is no evidence of “revenge spending” from Chinese consumers. @M_C_Klein

Has China's economy failed to rebound after the pandemic?

Core argument: China's GDP grew 0.8% between 2023Q1 and Q2, half the 1.6% quarterly average of 2017–2019, with first-half 2023 output only 5.5% above the first half of 2022.

Chinese growth in 2023 has been anemic, especially relative to the starting point. So far this year, economic output was just 5.5% higher than in the first half of 2022, which in turn was up only 2.5% compared to the first half of 2021. Officially, China’s Gross Domestic Product (GDP) grew just 0.8% between 2023Q1 and Q2 compared to the 2017-2019 quarterly average of 1.6%. That would be bad enough, but there is also reason to think that output may actually have shrunk in the most recent quarter. Nominal spending in March-June 2023 was 16.6% higher than in March-June 2019, which corresponds to an average yearly growth rate of just 3.9%. Before the pandemic, Chinese consumer spending was rising about 7.4% a year.

Takeaways by Macro Roundup® AI

  1. China's GDP grew 0.8% between 2023Q1 and Q2, half the 1.6% quarterly average of 2017–2019, with first-half 2023 output only 5.5% above the first half of 2022.
  2. Nominal Chinese spending in March–June 2023 was 16.6% above the same months of 2019, an average annual rate of 3.9%, versus consumer spending growth of about 7.4% a year before the pandemic.
  3. Chinese output in the first half of 2022 was only 2.5% above the first half of 2021, and there is reason to think output may have shrunk in the most recent quarter.

Related Articles:

  • Can China’s Long-Term Growth Rate Exceed 2–3 Percent? — China invests roughly 42–44% of its GDP, while more mature, capital-intensive economies typically invest about 15–20%. Modeling a ten-year path that lowers China's investment share to 30% of GDP, the author argues the resulting growth rate depends mainly on how fast consumption grows.
  • The Neoclassical Growth of China — China's per capita GDP growth path closely tracks those of Japan, South Korea, and Taiwan from similar starting income levels, indicating nothing unusual about its growth rate. The authors' model projects China's per capita GDP will level off at about 41% of the US level, reflecting a slowdown in productivity catch-up.

AI Summary. The US current account deficit, the largest in the world, is financed mainly through portfolio debt flows and, increasingly, intermediated by financial centers rather than reserve accumulation by surplus countries. Balance-of-payments data show a declining role for China in financing it.

IMF Staff International Monetary Fund
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The American current account deficit is mainly financed via portfolio debt flows, a change from the pre-GFC period when the deficit was funded by reserve accumulation. @IMFNews data shows a declining role for China.

How is the US current account deficit financed today?

Core argument: The US current account deficit is the largest of all and is financed mainly through portfolio debt flows.

The US current account deficit, the largest deficit of all, is mainly financed via portfolio debt flows. Geographically, the financing of the US current account deficit has become increasingly mediated by financial centers in recent years. This contrasts with the pre-GFC period, when the US current account deficit was financed largely through reserve accumulation from surplus countries. Balance-of-payments data show a declining role for China.

Takeaways by Macro Roundup® AI

  1. The US current account deficit is the largest of all and is financed mainly through portfolio debt flows.
  2. Financing of the US current account deficit has become increasingly mediated by financial centers, in contrast with the pre-global-financial-crisis period, when it was financed largely through reserve accumulation by surplus countries.
  3. Balance-of-payments data show a declining role for China in financing the US current account deficit.

Related Articles:

  • Brad Sester On The Balance Of Payments — Foreign demand for US bonds remained strong on a trailing four-quarter basis, with mark-to-market losses on low-yielding bonds not appearing to impede total inflows, though official demand from foreign central banks and sovereign wealth funds fell and shifted toward agency debt. Overall demand for US assets tailed off faster than the goods deficit, a potential source of dollar weakness.
  • How Was the U.S. Current Account Deficit Financed In 2022? — As the Federal Reserve allowed some bonds to mature under quantitative tightening, new buyers of Treasury debt were needed, and money-market funds shifted from Treasury bills and coupons into reverse repurchase agreements with the Federal Reserve. The entire net issuance was absorbed by two opaque sectors: households and nonprofit organizations, and the rest of the world.

Thursday, July 20, 2023

AI Summary. Saudi Arabia's Public Investment Fund appears to have taken over a significant portion of the foreign asset allocation previously handled by the Saudi Central Bank, making its balance sheet a window into a new form of petrodollar recycling. Of roughly $777bn in total assets, $305bn were current and $472bn non-current, with $225bn of the latter held as investment securities.

Alex Etra Money: Inside and Out
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.@EtraAlex documents the shift in petrodollar recycling from FX reserves at central banks to sovereign wealth funds, most notably Saudi Arabia’s Public Investment Fund (PIF).

Has a sovereign wealth fund taken over central bank petrodollar recycling?

Core argument: Saudi Arabia's Public Investment Fund held roughly $777bn in total assets at end-2022, split between $305bn of current assets and $472bn of non-current assets.

While clearly not all of the foreign asset allocation that was previously done by Saudi Central Bank is now being done by the Public Investment Fund (PIF), some significant portion of it does seem to be. Hence a look at PIF’s Annual Reports can provide some basic insights into some aspects of the new form of petro-dollar recycling. In particular, we focus on the more transparent and traditional assets PIF shows on balance sheet. Of the roughly $777bn in total assets at end 2022, $305bn are listed as current assets, and $472bn are listed as non-current assets. However, of the non-current assets, nearly half—$225bn—are held as investment securities.

Takeaways by Macro Roundup® AI

  1. Saudi Arabia's Public Investment Fund held roughly $777bn in total assets at end-2022, split between $305bn of current assets and $472bn of non-current assets.
  2. Nearly half of PIF's non-current assets, $225bn, were held as investment securities.
  3. Some significant portion of the foreign asset allocation previously done by the Saudi Central Bank appears to be done now by PIF, so PIF's annual reports offer insights into the new form of petrodollar recycling.

Related Articles:

  • The New Geopolitics of Global Finance — Trade surpluses of energy-exporting autocracies and China are projected to total roughly $1tn, with Russia's topping $250bn and Saudi Arabia's topping $200bn. Because these surplus countries are not adding to official foreign exchange reserves, private financial intermediaries globally must absorb U.S. Treasury bonds and the associated interest rate risk.

AI Summary. Analysis of US patent data finds that the largest firms are more likely to file novel patents even after controlling for size, industry, and patent counts, and that firms produce more novel patents as they become mega firms. Venture-backed startups also account for a disproportionate share of novel patents.

Serguey Braguinsky, Joonkyu Choi, Yuheng Ding, Karam Jo and Seula Kim National Bureau of Economic Research
Date Posted:
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.@_seulakim documents the importance of the 50 largest US firms in generating novel patents that combine technical components in new ways.

Do the largest firms produce more novel patents?

Core argument: The share of U.S. mega firms in novel patent applications declined for nearly two decades before turning around in the early-mid 2000s, reaching by the mid-2010s its highest level since the sample begins in 1980.

The share of mega firms in novel patent applications had been declining for almost two decades but there has been a turnaround since the early-mid 2000s. By the mid-2010s, the share of mega-firms was the highest since 1980 when our sample starts. We show that mega firms are more likely to apply for novel patents even after controlling for various firm characteristics including size, industry, and the total number of patents. This finding also holds within firms––firms produce more novel patents than before as they become mega firms. This suggests that closing on market leadership is associated with more, not less new combinations. We also examine the opposite side of the spectrum, the not-yet-public VC-backed startups, and find that those also play a disproportionately large role in generating novel patents, especially “hit” novel patents, so that successful novel patents appear to be produced in a bi-modal pattern, both by super large mega firms and relatively small startups.

Takeaways by Macro Roundup® AI

  1. The share of U.S. mega firms in novel patent applications declined for nearly two decades before turning around in the early-mid 2000s, reaching by the mid-2010s its highest level since the sample begins in 1980.
  2. Mega firms are more likely to apply for novel patents even after controlling for firm size, industry, and total patent counts, and the same pattern holds within firms as they become mega firms.
  3. Not-yet-public venture-capital-backed startups also play a disproportionately large role in generating novel patents, especially "hit" novel patents, so successful novel patents appear to follow a bi-modal pattern across mega firms and relatively small startups.

Related Articles:

AI Summary. More than 650,000 US workers are on strike or threatening to strike, a level of union activity not seen in decades, with actors and writers already out and unions at UPS and Detroit's three largest automakers poised to join if contract talks fail. One Bank of America analyst put the odds of a United Auto Workers strike above 90%.

Josh Eidelson Bloomberg
Date Posted:

While only 6% of American private sector workers are unionized, as many as 650,000 workers might soon be on strike according to a Bloomberg tracker. @markets

Is US strike activity reaching levels unseen in decades?

Core argument: More than 650,000 American workers are threatening to strike this summer or have already walked out, a scale of union activity not seen in the US in decades.

More than 650,000 American workers are threatening to go on strike this summer — or have already done so — in an avalanche of union activity not seen in the US in decades. The combined actors and writers strikes in Hollywood are already a once-in-a-generation event. Unions for UPS and Detroit’s Big Three automakers are poised to join them in coming weeks if contract negotiations fall through. One Bank of America Corp. analyst put the odds of a United Auto Workers strike at more than 90%. And while logistics experts and financial analysts expected the Teamsters to reach a deal with UPS, their confidence has dwindled as the July 31 deadline approaches. Even before the 100,000-plus actors joined in last week, both the number of strikes and workers on strike were up in the first half of this year.

Takeaways by Macro Roundup® AI

  1. More than 650,000 American workers are threatening to strike this summer or have already walked out, a scale of union activity not seen in the US in decades.
  2. A Bank of America analyst puts the odds of a United Auto Workers strike at more than 90%, while unions at UPS and Detroit's Big Three automakers are poised to strike if contract negotiations fall through.
  3. Both the number of strikes and the number of workers on strike rose in the first half of this year, before more than 100,000 Hollywood actors joined the writers already on strike.

Related Articles:

  • Unions Inflation Warning — The share of people aged 16 and over working or looking for work fell when the pandemic hit and has only partly recovered, with population aging accounting for most of the remaining shortfall. That implies economic activity must run at a lower level to avoid persistent wage and price inflation.

AI Summary. The Joint Economic Committee's Social Capital Index ranks Louisiana, Nevada, New Mexico, Florida, and Arizona lowest and Utah, Minnesota, Wisconsin, New Hampshire, Vermont, and Colorado highest, with low- and high-ranking states falling consistently below or above the median across subindexes. All but one of the 21 cross-state correlations among the seven subindexes are positive.

Scott Winship and Thomas O’Rourke American Enterprise Institute
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.@swinshi Thomas O’Rourke @AEIecon find that the Southeastern/Southwestern US have the lowest levels of social capital, while the Upper Midwest, Mountain West, and northern New England regions have the highest levels.

Can social capital be reliably measured across states?

Core argument: The Joint Economic Committee's Social Capital Index shows that of 21 cross-state correlations among its seven subindexes, all but one are positive.

Consider the Social Capital Index developed by the Joint Economic Committee. States shaded red and orange have the lowest levels of social capital, whereas states shaded green and blue have the highest levels of social capital. Each of the five states in the lowest decile of social capital—Louisiana, Nevada, New Mexico, Florida, and Arizona—consistently rank below the median on each subindex, suggesting that each subindex captures related features of social capital. Similarly, the six states in the highest decile of social capital—Utah, Minnesota, Wisconsin, New Hampshire, Vermont, and Colorado—tend to rank above the median across subindexes. Of the 21 cross-state correlations among the seven subindexes, all but one are positive.

Takeaways by Macro Roundup® AI

  1. The Joint Economic Committee's Social Capital Index shows that of 21 cross-state correlations among its seven subindexes, all but one are positive.
  2. Louisiana, Nevada, New Mexico, Florida, and Arizona make up the lowest decile of the Social Capital Index and consistently rank below the median on each subindex.
  3. Utah, Minnesota, Wisconsin, New Hampshire, Vermont, and Colorado make up the highest decile of the Social Capital Index and tend to rank above the median across subindexes.

AI Summary. A real estate firm estimates about 712,000 people will migrate from China to the US, Canada, and Australia over a three-year period, a sustained exodus likely to keep driving Chinese property purchases abroad. Capital flight from mainland China could reach $150bn in a year as people move money offshore.

Selina Xu Bloomberg
Date Posted:

Real estate firm Juwai IQI estimates 712,000 Chinese will migrate to the US, Canada, and Australia between 2023 and 2025.

Is Chinese emigration driving property purchases and capital flight abroad?

Core argument: Real estate firm Juwai IQI estimates about 712,000 people will migrate from China to the US, Canada, and Australia over 2023–2025, an exodus expected to keep driving Chinese property investment abroad.

A sustained exodus over the next few years will likely continue to drive Chinese property investments abroad. About 712,000 people from the country will migrate to the US, Canada, and Australia from 2023 to 2025, a report by real estate firm Juwai IQI’s estimated. Capital flight from the mainland could reach $150 billion this year, as more people park their money abroad for fear of additional measures at home.

Takeaways by Macro Roundup® AI

  1. Real estate firm Juwai IQI estimates about 712,000 people will migrate from China to the US, Canada, and Australia over 2023–2025, an exodus expected to keep driving Chinese property investment abroad.
  2. Capital flight from mainland China could reach $150 billion this year, as more people park money abroad for fear of additional measures at home.

Related Articles:

  • Booming Chinese Family Offices Recruit Top Bankers in Singapore — Wealthy mainland Chinese moving assets out of China account for up to half of the increase in Singapore-based single-family offices, private wealth managers for rich individuals and their relatives, whose numbers have nearly tripled since the coronavirus pandemic began to an estimated 1,500. Singapore has tightened rules with higher minimum capital and hiring requirements.
  • China Notes, July ’23: On Technological Momentum — China's political environment poses a threat to its technological momentum, with Chinese undergraduates in the US reporting that their parents urge them not to return to the mainland. China retains strengths independent of slowing growth and demographic drags, chiefly an entrenched workforce that continues to advance manufacturing complexity.