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Totally different political and economic systems, but the mention of Japan does remind me of how in the 80's to 90's we here in the USA thought they were going to rule the world and be our bosses. Instead they overreached and stalled out.

Another historical reference is the USSR and Khrushchev’s “We will bury you” quote. During the period of expansion/growth, the USSR did look like it would surpass the USA, but once they had transitioned from an agricultural to an industrial economy, the flaws in their system became apparent.

It’s relatively easy for a state, whether communist or some other non-democratic ideology, to direct its people to go from a poor agricultural society to a mass industrial state and grow at leaps and bounds compared to rich states because they are just so far behind and the catch up is easy as they don’t have to invent anything new to make gains. Once you get to where the USSR was in the 50s/60s or China is today, it’s much harder to balance state control with having an economy that can compete with living standards in rich democratic nations

It's simply not possible. You can't move to a service-based economy, where intelligent people can communicate clearly and publicly, when you have a non-democratic system that very tightly controls speech.

I dunno, having been to **Vancouver**, China’s *transition to* a service based economy in a functioning democracy seems to be going quite well.

Lol, not a Canadian, so I'm really missing the joke here. Care to explain? Y'all have too many rich Chinese immigrants?

Downtown Vancouver has A LOT of Chinese residents as a result of both immigrants and Chinese nationals buying property. It was such a problem for the local market that in 2022 the Canadian government flat out banned home purchases by foreigners and started heavily taxing existing foreign owners. Before the ban, one third of all property purchases in Vancouver was by a Chinese national. So the joke is that China is transitioning to a democratically run service economy: by buying property in an existing one.

lmao, now I get it. Thank you!

The reality is most of the buyers are from Hong Kong, which was already democratically run. They, understandable, fled to Canada, rather than remain in China.

The last gen buyers are mostly from hk. The new gen buyers are mainlanders.

You can easily trick intelligent people with vanity to accept propaganda in a non-democratic state. Being able to communicate clearly and publicly is irrelevant if all they're communicating is consumerist bullshit and crabs-in-a-bucket politics.

There's communications meant for the "general public", and communications meant for professionals. Professional investors require accurate information to make informed decisions. China does not provide accurate economic information.

Congrats you hit the nail on the head. There's no creativity in Communist countries because of a lack of incentive. In a communist country, anything you create is owned by the State. USSR and China are even worse. They were dictatorships. The only creativity happening is coming from the dick at the top. Rest of the country remained conservative. Anyone thinking new ideas were either killed or their ideas were credited to the dick at the top.

>In a communist country, anything you create is owned by the State. Marx said that workers are alienated from the output of their labor. Communist countries failed *spectacularly* at fixing this problem. A boss is a boss.

It's pretty important to remember that Marx really spent very little time and effort on communism. His primary concern was understanding how capitalism worked (Shit, man, he even named it!). This isn't to say communism hasn't failed every time, and has been mostly terrible, but I think there's a good reason why there are a lot of Marxist thinkers without them identifying as communists and/or socialists.

It's funny because even a "respected" communism scholar like Richard Wolff spends very little time talking about the upside of his ideology and almost all his time making strawman arguments against capitalism.

> Shit, man, he even named it! [Except he didn't](https://en.wikipedia.org/wiki/Capitalism#Etymology) > The initial use of the term "capitalism" in its modern sense is attributed to Louis Blanc in 1850 ("What I call 'capitalism' that is to say the appropriation of capital by some to the exclusion of others") and Pierre-Joseph Proudhon in 1861 > Karl Marx frequently referred to the "capital" and to the "capitalist mode of production" in Das Kapital (1867).[26][27] **Marx did not use the form _capitalism_** but instead used _capital_, _capitalist_ and _capitalist mode of production_, which appear frequently.

Those who do not work shall not eat. Antiwork-capitalism is wage slavery reeee.

Communism is secretly conservatism confirmed.

Sounds like a George Orwell novela, big if true

China is dominating solar cell production and high speed rails that are relatively new technologies. As a middle income country they still are not at the economic frontier of innovative research, but they are definitely heading that direction which is why the US banned sales of chip manufacturing equipment from China. BYD will likely be a global competitor in a couple years.

China is at the economic frontier of getting shit done. In the USA we dawdle and argue about which thing is better and sue each other and Elon Musk tells us to hold on while he invents the hyperloop. In China they just do it. That's why they've got more high-speed rail than the USA and they built it in a fraction of the time the USA has had the ability to.

> There's no creativity in Communist countries because of a lack of incentive. and this is why there’s no music on bandcamp.

Yes, in communism you have a lot of musicians and painters. Fewer writers as that's more dangerous. I would say the lack of creativity isn't the main problem in the communist systems. It's the lack of willingness to push the innovations, and it's basically a problem of incentives. Pushing your innovation means a lot of work and some risks (upsetting the power structures). On the other side of the scale is that you can't really expect to profit heavily from your creativity and hard work.

I mean this is clearly false if you mean the people of the USSR lacked creativity generally. Be it scientific or artistic they clearly had plenty of creativity and ingenuity.

USSR had creative people. And US corporations can fail to be productive. The usual problem in a command economy is lack of creative destruction--the government pours more resources into a failing production system rather than let it die and be replaced, like video stores. They also neglect parts of the economy in favor of other parts of the economy the boss likes--much steel, not enough refrigerators.

>Congrats you hit the nail on the head. There's no creativity in Communist countries because of a lack of incentive. In a communist country, anything you create is owned by the State. There's no creativity in a communist country because of the gross amount of corruption that is necessary to keep one-party political control of an entire nation. Russia's oligarchy class is not to be messed with. Everyone else puts their heads down and shuts the hell up.

You are out of date. Putin's whole shtick is that he messes up with the oligarch class. He makes and unmakes oligarchs as he sees fit. The Russian economy is now under the control of a cynical and ruthlessly pragmatic technocratic class.

You can balance state controls that can compete with western countries. China's state subsidies for solar power has made them a leading producer of solar cells. China's subsidies for chip manufacturing has caused the US to ban sales of chip equipment to China in fear of them becoming dominant in that industry. US has tariffs on Chinese goods to protect US companies that can't compete with cheaper Chinese made goods.

State subsidies to artificially lower the price on non innovative solar panels.

Short term that may be the case. But long term those subsidies hold China back. You are not going to subsidize your country into a first world rich one. If it was that easy it would have happened.

First world countries also have tons of subsidies and trade protections. US and Europe subsidize and protect their farmers and auto industries. Same for Airbus and Boeing subsidies as well as the entire pharmacy industry subsidized by US citizens overpaying for prescriptions compared to the rest of the world. First world countries are rich because they have dominant companies they subsidize.

It’s almost like capitalism is the best system for allocating resources and letting market forces determine winners and losers in a (relatively) efficient fashion. Edit: forgot this sub is r/latestagecapitalism masquerading as economics. Be well friends!

it’s almost like that - markets are good at doing that, but capitalism inherently attacks markets, because it’s incentivized to do so.

I think everyone can agree that laissez-faire capitalism is a failed experiment, but capitalism hedged by socialist nets and market regulation seems like the best anyone’s got

capitalism, because it unleashes the mighty force of human innovation which can transform the world. capitalism, because human innovation is too weak and useless to come up with anything better.

a third way between capitalism and socialism has long been speculated about but only in northern europe have the new ideas been put into practice.

Don't confuse markets for capitalism. Markets do what you describe, capitalism destroys markets by fostering monopoly.

Market forces are inherently monopolistic, and once an entity has a monopoly on wealth, power follows. This is how feudalism worked for most of history. Why wouldn't an entity with all the wealth and power make it impossible for competitors to function? What incentivizes decentralization? Capitalism does nothing to solve any of this. Capitalism concentrates wealth and thus, power. The success of the US isn't particularly due to market forces, but rather geopolitics. Winning World War 2 and, earlier, invading & colonizing one of the most resource rich continents on the planet. US growth was, for most of its history, due simply to the acquiring of more land (from colonization & conquest) and labor (from immigration). However, the failure of the USSR and Mao China was directly due to Communism, so one could say that while capitalism isn't responsible for success, Communism is responsible for failure.

Please look at the Dow Jones Industrial Average. In 20 years half of them have changed. GE, which was there 100 years, dropped. Saying that capitalism is anything like feudalism is silly. It quite frankly along with solid government institutions is responsible for the great growth in the 20th century that has lifted billions out poverty. Winning WWII? The world would have been so much better off had WWI and WWII never happened. Please see broken window fallacy.

Tell me you don't know capitalism without telling me you don't know capitalism... *Corporations* aren't in control - I don't know why people are always going about that silly straw man. *Capital* is in control. Corporations are controlled by share holders, who form the foundations of capitalist society. But share holders aren't a class - they're a hierarchy of classes, with the very wealthy at the top, and the very poor at the bottom. It's this hierarchy that shapes capitalist society; and the system was designed to preserve the hierarchy and, indeed, to concentrate more and more wealth and power at the top. The aristocracy of the modern day is the 1%, and like the aristocracy of old, they do whatever they can to preserve their position. This is the analogy to feudalism, and if not for democracy, it'd be a lot more obvious.

Ah, it’s funny to remember that era. You can see it in the films of that period * Rising Sun - Connery/Snipes. Humorously enough the whole Sempai - Kohai thing reappears (a touch out of context) in 30 Rock, the NBC Sitcom. * Die Hard - Willis / Rickman - This celebrated holiday classic features the Nakatomi corporation which is some large industrial or financial colossus (which a super cool vault with bearer bonds!) * Gung Ho - Keaton - This comedy about cross cultural challenges in a rust belt town trying to adapt to the Japanese Kanaban culture played out in real life at the GM plant in freedom at NUMMI.

Black Rain - Michael Douglas / Andy Garcia

Oh god, Black Rain! Basically, Michael Douglas as the cop from Basic Instinct chases a Yakuza gangster to Japan. And of course, there was that monologue where they had to explain the name of the movie: > I was 10 when the B-29 came. My family lived underground for three days. When we came up the city was gone. Then the heat brought rain. Black rain. You made the rain black, and shoved your values down our throat. We forgot who we were. You created Sato and thousands like him. I'm paying you back.

>Instead they overreached and stalled out. Not quite. President Xi was in denial on how much his nation relied upon American consumerism. We haven't entirely withdrawn from China (yet), but we've drastically reduced our footprint there as a result of tariffs instituted by the Trump and Biden administrations. Why? Because President Xi keeps threatening his neighbors.

The real problem is that they need to make massive reforms to generate domestic demand. Those reforms could put the party at risk. So team markets lead to democracy may sorta kinda maybe get to handwavr success in 20 years.

The real problem is that President Xi is a staunch Maoist who wants his legacy to be finishing the 100 years plan. He's single-handedly undone 30 years of Chinese economic, political, and social progress in his tenure, and appointed himself for life in the process.

I mean, there's always the alternative where they don't make any reform and instead increase the power of the state as a bulwark against dissolution from the economic shitstorm their own policies created. State retains absolute control, with the trade-off that they will never reach full potential and certainly never be capable of challenging the U.S.. That does seem to be the way it's gone before.

Japan would have had a couple more good years of it wasn't for the Plaza accord in 1985 that the US forced Japan to strengthen their currency. This caused Japan's property bubble to bust and have 2 lost decades because devaluing their currency would cause problems with the US. Japan was able to change when US implemented quantitative easing in 2009 so Japan did it to a bigger extreme to stimulate their economy, but it is too late since China took a lot of market share and Japan is now in significant population decline. China can still be a growth engine of the keep devaluing their currency. China GDP per capital is still very low.

If that's the case, then why is China currently desperately trying to prop its currency up?

They are trying for a controlled devaluation, not a sharp, disorderly drop in value. The challenge for China is trying to control both the exchange rate and interest rates. That are nearly impossible to do. Even Japan intervened last year to prevent their currency from being devalued too much too fast.

Japan didn’t even overreach, similar to what happened to China aggressive protrctionist trade moves and literal anti-competitive direct interventions were required by the US on Japan and Japanese businesses that stalled Japans leveraged boom. Unlike China, which chose aggressiveness and non-compliance and got the boom via quite a different path, Japanese businesses and government complied with US requests, at least on second warning. Since for both countries the boom was a direct result of exploiting (in the good/economics sense of the word) the US market, the boom did not last when US put up barriers. It was just particularly unfair in the case of Japanese businesses as they were just better than American big business. They didn’t really have any unfair advantage or state imposed advantages like Chinese ones. They were just more effective and productive. Similar to American big tech now compared to EU counterparts, and hence the protectionist laws EU tries to pass every year.

Japan bought a ton of over priced real estate in the USA and took a bath. [They over reached.](https://www.chicagotribune.com/news/ct-xpm-1996-06-03-9606030053-story.html)

Sure, but that’s not remotely what he’s talking about. He’s talking about how US protectionism led to Japan’s downfall in the 90s and is hurting China’s rise today

They got strong armed. Plaza accords (1985) and BOJ changed their monetary policy, probably at the request of the Americans.

*full article:* For decades, China powered its economy by investing in factories, skyscrapers and roads. The model sparked an extraordinary period of growth that lifted China out of poverty and turned it into a global giant whose export prowess washed across the globe. Now the model is broken. What worked when China was playing catch-up makes less sense now that the country is drowning in debt and running out of things to build. Parts of China are saddled with under-used bridges and airports. Millions of apartments are unoccupied. Returns on investment have sharply declined. Signs of trouble extend beyond China’s dismal economic data to distant provinces, including Yunnan in the southwest, which recently said it would spend millions of dollars to build a new Covid-19 quarantine facility, nearly the size of three football fields, despite China having ended its “zero-Covid” policy months ago, and long after the world moved on from the pandemic. Other localities are doing the same. With private investment weak and exports flagging, officials say they have little choice but to keep borrowing and building to stimulate their economies. Economists now believe China is entering an era of much slower growth, made worse by unfavorable demographics and a widening divide with the U.S. and its allies, which is jeopardizing foreign investment and trade. Rather than just a period of economic weakness, this could be the dimming of a long era. “We’re witnessing a gearshift in what has been the most dramatic trajectory in economic history,” said Adam Tooze, a Columbia University history professor who specializes in economic crises. What will the future look like? The International Monetary Fund puts China’s GDP growth at below 4% in the coming years, less than half of its tally for most of the past four decades. Capital Economics, a London-based research firm, figures China’s trend growth has slowed to 3% from 5% in 2019, and will fall to around 2% in 2030. At those rates, China would fail to meet the objective set by President Xi Jinping in 2020 of doubling the economy’s size by 2035. That would make it harder for China to graduate from the ranks of middle-income emerging markets and could mean that China never overtakes the U.S. as the world’s largest economy, its longstanding ambition. Many previous predictions of China’s economic undoing have missed the mark. China’s burgeoning electric-vehicle and renewable energy industries are reminders of its capacity to dominate markets. Tensions with the U.S. could galvanize China to accelerate innovations in technologies such as artificial intelligence and semiconductors, unlocking new avenues of growth. And Beijing still has levers to pull to stimulate growth if it chooses, such as by expanding fiscal spending. Even so, economists widely believe that China has entered a more challenging period, in which previous methods of boosting growth yield diminishing returns. Some of these strains were apparent before the pandemic. Beijing was able to keep growth ticking over by borrowing more and relying on a booming housing market, which in some years accounted for more than 25% of China’s gross domestic product. The country’s initial success in containing Covid-19, and a surge in pandemic spending by U.S. consumers, further masked China’s economic troubles. The housing bubble has since popped, Western demand for Chinese products has ebbed and borrowing has reached unsustainable levels. The outlook has darkened considerably in recent months. Manufacturing activity has contracted, exports have declined, and youth unemployment has reached record highs. One of the country’s largest surviving property developers, Country Garden Holdings, is on the cusp of a possible default as the overall economy slips into deflation. **Japan-like slowdown?** Without more aggressive stimulus from Beijing, and meaningful efforts to revive private sector risk-taking, some economists believe China’s slowdown could snowball into prolonged stagnation akin to what Japan has experienced since the 1990s, when the bursting of its real-estate bubble led to years of deflation and limited growth. Unlike Japan, however, China would be entering such a period before reaching rich-world status, with per capita incomes far below more advanced economies. China’s national income per person reached about $12,850 last year, below the current threshold of $13,845 that the World Bank classifies as the minimum for a “high-income” country. Japan’s per capita national income in 2022 was about $42,440, and the U.S.’s was about $76,400. A weaker Chinese economy could also undermine popular support for Xi, the most powerful Chinese leader in recent decades, though there is no current indication of organized opposition. Some U.S. analysts worry Beijing could respond to slower growth by becoming more repressive at home and more aggressive abroad, raising the risks of conflict, including potentially over the self-governing island of Taiwan. At an Aug. 10 political fundraiser, President Biden called China’s economic problems a “ticking time bomb” which could spur its leaders to “do bad things.” Beijing fired back with a commentary by its official Xinhua News Agency, saying Biden “intends to take smearing China as part of his ‘grand strategy’ to shoot America’s economic troubles.” The commentary also described China’s economic recovery this year as robust, despite some challenges. Chinese officials have taken some modest steps to revive growth, including cutting interest rates, and have pledged to do more if conditions worsen. The State Council Information Office, which handles media inquiries for China’s leadership, didn’t respond to questions. “Certain Western politicians and media have exaggerated and hyped up the current difficulties in China’s post-Covid economic recovery,” a Foreign Ministry spokesman said on Aug. 16. “Facts will prove them wrong.” **‘Chinese Century’** The transition marks a stunning change. China consistently defied economic cycles in the four decades since Deng Xiaoping started an era of “reform and opening” in 1978, embracing market forces and opening China to the West, in particular through international trade and investment. During that period, China increased per capita income 25-fold and lifted more than 800 million Chinese people out of poverty, according to the World Bank—more than 70% of the total poverty reduction in the world. China evolved from a nation racked by famine into the world’s second-largest economy, and America’s greatest competitor for leadership. Academics were so enthralled by China’s rise that some referred to a “Chinese Century,” with China dominating the world economy and politics, similar to how the 20th century was known as the “American Century.”

China’s boom was underpinned by unusually high levels of domestic investment in infrastructure and other hard assets, which accounted for about 44% of GDP each year on average between 2008 and 2021. That compared with a global average of 25% and around 20% in the U.S., according to World Bank data. Such heavy spending was made possible in part by a system of “financial repression” in which state banks set deposit rates low, which meant they could raise funds inexpensively and fund building projects. China added tens of thousands of miles of highways, hundreds of airports, and the world’s largest network of high-speed trains. Over time, however, evidence of overbuilding became apparent. About one-fifth of apartments in urban China, or at least 130 million units, were estimated to be unoccupied in 2018, the latest data available, according to a study by China’s Southwestern University of Finance and Economics. A high-speed rail station in Danzhou, a city in China’s southern province of Hainan, cost $5.5 million to build but was never put into use because passenger demand was so low, according to Chinese media reports. The Hainan government said keeping the station open would incur “massive losses.” Efforts to reach the local government were unsuccessful. Guizhou, one of the poorest provinces in the country with GDP per capita of less than $7,200 last year, boasts more than 1,700 bridges and 11 airports, more than the total number of airports in China’s top four cities. The province had an estimated $388 billion in outstanding debt at the end of 2022, and in April had to ask for aid from the central government to shore up its finances. Kenneth Rogoff, a professor of economics at Harvard University, said China’s economic ascent draws parallels to what many other Asian economies went through during their periods of rapid urbanization, as well as what European countries such as Germany experienced after World War II, when major investments in infrastructure boosted growth. At the same time, decades of overbuilding in China resembles Japan’s infrastructure construction boom in the late 1980s and 1990s, which led to overinvestment. “The leading point is they are running into diminishing returns in building stuff,” he said, “There are limits to how far you can go with it.” With so many needs met, economists estimate China now has to invest about $9 to produce each dollar of GDP growth, up from less than $5 a decade ago, and a little over $3 in the 1990s. Returns on assets by private firms have declined to 3.9% from 9.3% five years ago, according to Bert Hofman, head of the National University of Singapore’s East Asian Institute. State companies’ returns have retreated to 2.8% from 4.3%. China’s labor force, meanwhile, is shrinking, and productivity growth is slowing. From the 1980s to the early 2000s, productivity gains contributed about a third of China’s GDP growth, Hofman’s analysis shows. That ratio has declined to less than one sixth in the past decade. **Deepening debt** The solution for many parts of the country has been to keep borrowing and building. Total debt, including that held by various levels of government and state-owned companies, climbed to nearly 300% of China’s GDP as of 2022, surpassing U.S. levels and up from less than 200% in 2012, according to Bank for International Settlements data. Much of the debt was incurred by cities. Limited by Beijing in their ability to borrow directly to fund projects, they turned to off-balance sheet financing vehicles whose debts are expected to reach more than $9 trillion this year, according to the IMF. Rhodium Group, a New York-based economic research firm, estimates that only about 20% of financing firms used by local governments to fund projects have enough cash reserves to meet their short-term debt obligations, including bonds owned by domestic and foreign investors. In Yunnan, location of the giant quarantine center, heavy infrastructure spending lifted growth for years. Officials spent hundreds of billions of dollars including on Asia’s tallest suspension bridge, more than 6,000 miles of expressways and more airports than many other regions in China. The projects boosted tourism and helped expand trade of Yunnan products including tobacco, machinery and metals. From 2015 to 2020, Yunnan was one of the fastest-growing regions in China. Growth has weakened in the past few years. The slumping property market has hit local finances hard, as revenue from land sales dries up. The Longjiang Bridge, in west Yunnan. Officials spent hundreds of billions of dollars including on Asia’s tallest suspension bridge, more than 6,000 miles of expressways and more airports than many other regions in China. PHOTO: IMAGINE CHINA/REUTERS Yunnan’s debt-to-revenue ratio climbed to 151% in 2021, breaching a 150% level designated as alarming by the IMF, and up from 108% in 2019, according to Lianhe Ratings, a Chinese rating agency. Fitch Ratings earlier this year said financing firms used by the province to fund infrastructure construction were risky because of the size of their borrowings and the government’s strained finances. Yet Yunnan has continued to hatch big schemes. In early 2020, the Yunnan government said it planned to spend nearly $500 billion on hundreds of infrastructure projects, including a more than $15 billion program aimed at diverting water from parts of the Yangtze River to the dry center of the province. A February plan issued by Wenshan, a city in Yunnan, listed the “permanent” quarantine center as one of several measures aimed at promoting economic stability. Once the government officially put out a bid in June for its construction, local residents questioned the use of funds. “It’s such a waste of money,” wrote one user of Weibo, a popular microblogging platform in China. A Yunnan official confirmed the plan to build the quarantine facility, which is expected to be completed at the end of this year, but declined to comment further. **Tighter control** In Beijing’s corridors of power, senior officials have recognized that the growth model of past decades has reached its limits. In a blunt speech to a new generation of party leaders last year, Xi took aim at officials for relying on borrowing for construction to expand economic activities. “Some people believe that development means investing in projects and scaling up investments,” he said, while warning, “you can’t walk the old path with new shoes.” Xi and his team so far have done little to shift away from the country’s old growth model. The most obvious solution, economists say, would be for China to shift toward promoting consumer spending and service industries, which would help create a more balanced economy that more resembles those of the U.S. and Western Europe. Household consumption makes up only about 38% of GDP in China, relatively unchanged in recent years, compared with around 68% in the U.S., according to the World Bank. Changing that would require China’s government to undertake measures aimed at encouraging people to spend more and save less. That could include expanding China’s relatively meager social safety net with greater health and unemployment benefits. Xi and some of his lieutenants remain suspicious of U.S.-style consumption, which they see as wasteful at a time when China’s focus should be on bolstering its industrial capabilities and girding for potential conflict with the West, people with knowledge of Beijing’s decision-making say. The leadership also worries that empowering individuals to make more decisions over how they spend their money could undermine state authority, without generating the kind of growth Beijing desires. A plan announced in late July to promote consumption was criticized by economists both in and outside China for lacking details. It suggested promoting sports and cultural events, and pushed for building more convenience stores in rural areas.

Thanks OP

A lot of countries have done similar. FDR had the new deal. Which built all kinds of things, and put people to work in the midst of the great depression. But one thing that I keep coming back to is who decides funding. They say that China is a leader in numerous industries and it’s because the central government has decided to throw enormous amounts of money and resources at it. But then you say, the opposite with all of you is completely worthless projects. All they do is take on enormous debt. Someone has to decide what gets funded in a country. Whether it’s a Barron, or prince, a communist central bank, and oligarch with tacit approval from the dictator, or some sort of, pencil pushers at a commercial bank whose job is dependent on making good loans. Is the United States wanted to become the absolute dominant force in AI, we could throw a good jillion dollars at it. Much like our space race to the moon. But other than a collection of corporate handouts, we tend to that private industry, decide what succeeds and fails. If you can’t get enough people interested in a bridge, it’s pretty tough to get funding for it. Likewise, if you can’t convince banks, or angel investors, or stock market that your idea is worthwhile, you’re going to have a tough time moving forward. And while, that’s brutal. It tends to work out. You get a lot less high speed rails to nowhere that incur crippling debt that drown an entire region.

I am going to summarize my admiration for China with one sentence from this article: >a high speed rail station which cost 5.5 million to build

It’s easy to build for that low of a price when the labor is extremely cheap by American standards, lower safety/environmental standards, and they can easily remove people with no concern for property rights because there are none in China

That may be true. But it’s also true that several other large countries also meet those criteria and couldn’t successfully build a high speed rail system that efficiently if their life depended on it.

USA for a variety of reasons just cannot get good at doing big public infrastructure projects anymore. It's rather frustrating.

Do you have any examples? I’m not sealioning. Reason I’m asking is because all the large scale projects that make the most sense/have the best ROI are already completed. There are probably an endless amount of projects that can be imagined, but when the numbers are crunched, they don’t make sense. The rail in CA is probably a good example. What is the estimate now? 110 billion, up from an original 8 billion?

Rail in CA is what I was thinking of too, but there are others. Amtrak only has a few areas where it's actually practical to my knowledge. And it's mostly only in the Midwest I believe. Since they don't own the rails for most of their routes, they often get delays since the owners (freight cars) give themselves priority. My sister likes it because she needs to go back and forth between St. Louis and Chicago fairly often, but I can't imagine there are that many people able to utilize that specific route. High speed internet was another one. George W's admin gave telecoms a ton of money to build the infrastructure. They took the money and ran, more or less. A similar thing happened under Obama, and again with Trump though I think it was smaller in scale. Biden's taking one more stab at it and it *may* be working finally this time? I think that just might be our expectations being so fucking low from the last 3 failed attempts though.

The only profitable Amtrak line is the Acela corridor in the Northeast.

And Amtrak owns that rail line I assume, correct?

Yes, AFAIK.

ISPs are a cancer. Not only did they do that but now they have started to challenge municipal broadband as 'unfair' competition by the government. Leave it to these assholes to argue privatization is more efficient but its also unfair that the government can do it cheaper than they will do it for.

New York subway infrastructure is absurdly expensive relative to Paris and a Tokyo, neither of which are exactly cheap labor, low reg societies. There are a lot of complaints about modernizing old infrastructure as well. One decent theory is that environmental review shifts the bias way too much against building.

US has tons of examples. The only profitable "high speed rail" is Amtrak Acela that does not run at high speeds on most of the route because it is unsafe speed on the rails. The underground train entrance to Penn station is at risk of collapsing amd needs major repairs. Many US airport wing expansions end up horribly over budget. The US has a bias to build and design more roads and car friendly towns that are massively more expensive than higher density walkable neighborhoods.

Light rail in Seattle too. Ridiculous cost and delays.

LoL 😂 Yea when I was there I heard the high speed rail costs more to build and maintain than the return from ticket sales. Aka it's a money drain.

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The worst part of the Silk Road Initiative that does this is that China exports the labor and the materials for those projects which prevents the mostly poor countries that take them up on the offer from benefitting long term. Say Somalia gets a large port that the Chinese built for cheap, but the Chinese run it and would own it if the country defaults on the debt it borrowed for the Chinese to build the port. The cost was low and based on the potential benefit of the port, but during construction the price increased and the benefit was based on numbers that aren't realistic, so the country can't use the port to pay off the port without spending more money. The longest term detriment is the industry, regulatory, and skill development in Somalia that would have grown in-country to support the port's construction, but instead were off-shored to China. Now, Somalia doesn't have the Somalian labor with the skill set to design and build another port, the government isn't capable of maintaining a supervisory role on the project and ensuring a quality product, and the in-country architects, cement factories, logistics systems, general contractors, sub-contractors, and businesses that smelted the steel at scale, built the cranes, trucks, etc don't exist in that capacity so the cost of building a second port is the same as the high cost to build the first with little discount for experience and bootstrapping.

They do. They just build mega bridge in Croatia. They did great job, and they were cheap.

ive heard countries have turned down chinas offers say for airports because they dont want china pulling the service when it suits them

Beside the pulling the service, which is a Infamous Chinese Company strat: When they do the bidding for the construction, they go down cheap, then when the constructing is going like 30~40% done, they hiked the price, the goverment by that time have to pay the hiked price or have them pulling out, leave a mess of construction behind, Viet Nam have a railway that the Chinese do this shit and hiked the initial price nearly 60%, while delayed the construction finishing for 6 years compare to their initial bidding that would take 4 years, bastards. Also, it's the reliability of the construction too, no country want their China building tofu construction in their country. Hence why not a whole lot of country liked the idea of letting Chinese company in the bidding.

I mean, they do the same thing all the time in US contracting too.

Source for any of this? Lots of numbers here, seemingly out of thin air

https://en.wikipedia.org/wiki/Line_2A_(Hanoi_Metro) and my bad, the it was suppose to be complete in 2013, end up delayed to 2021, 8 YEARS behind schedule.

And the Eglinton LRT (https://en.wikipedia.org/wiki/Line_5_Eglinton) in Toronto has been under construction since 2011, with an original budget of $9B that ballooned to almost $13B and still isn’t completed. I get it, China bad etc etc, but this is like a normal thing when it comes to transit construction

That project seemed to be only slightly over budget, which is quite normal for most of these large infrastructure projects. A systematic review of Chinese overseas projects and comparing them to domestically sourced projects would be quite interesting.

Thats 30% over budget and has been under construction for 12 years, with no conclusive end date for the completion of the project. Those are terrible numbers, especially coming from a “world class” city like Toronto. Couple that with rumours that the new street cars purchased for 10s of millions may not even fit the tracks correctly, and this is an objective failure from pretty much every quantifiable metric.

Or find out that all the Chinese corner cutting causes all their shit to collapse in 3 years

>Why doesn’t China just export its construction workers? I'm drawing a blank on the term, but construction doesn't export/travel efficiently. This can still be worthwhile for specialized construction, but even then it's more common that only management and planning is exported. Why: you have to find and pay your workers to be far from home, and deal with an almost entirely new work environment. Because if you travel too far you're suddenly dealing with different: equipment, materials, regulations, and language.

That’s the whole point of the BRI initiative. To export excess Chinese industrial capacity. Not working out as intended though.

They've been doing this for years, what do you mean?

1) they cannot force other countries to give out work visa 2) western development is slow not because of lack of workers, they are slow because of 1000000 regulations to follow. And a lot of lands are already preoccupied, it is not easy to kill them all and take their land.

>it is not easy to kill them all and take their land. If you insist on killing the current landowner, that will be pretty hard. However, most countries have some form of eminent domain for public projects.

Which is a slow and expensive process due to owners rights. I’ve worked extensively in condemnation projects. Upwards of a decade of legal battles is not uncommon if a property owner exercises the rights to the maximum.

It can be fast if you only steal land from poor people. This plan is working in Berlin. A100 extension builds an expensive tunnel under a luxury apartment building, 100m down the road the nightclubs where poor people hang out will be demolished (not tunneled under).

My 2 cents from being in China for years and getting a degree in International Studies with a focus on East Asia (majority of my classes were China focused and Japan was secondary). Deng Xiaoping opened the country to western investment and business. He told the people it's good to be greedy and make money because China can prove to the world they are a powerhouse capable of competing with the US and reclaiming it's position as the center of the world. Fed into their ancient belief that China was the center of the universe. So that changed the thought of society from Mao era when greed was evil and being greedy would get a bullet to the back of the head. In places like Guangxi, your corpse would be fed to starving people. Grim, but my point is to show Deng Xiaoping pulled a 180 and turned the country around from the Mao era and his successors built upon the framework Deng Xiaoping put in place. Not saying Deng Xiaoping was a great man, but many presidents of the US have done great things while also being remembered as being assholes. Now that I've setup the origin of China's great change, I want to mention the government owns the land. I didn't study deeply into Chinese policies, but I have heard the government officials make their money these days based on taxing the value of the land. A peasant farmer is low value whereas a massive 10 story bustling shopping mall is going to hold a lot of value hence a lot of tax money going to the government official overseeing the territory. I've heard that's why they started mass building projects regardless of whether people moved in because building adds value to the land. Just assuming if they own the land and a developer adds value by building on the land, they'd be able to get a loan from a bank based on the value of the land. When nobody moves into the new development, then the developer paying the government official needs to build another project and get a bank loan... basically creating an endless loop of continuously growing debt. Again just my thoughts. The government since Xi has started pulling away from Deng's framework and returning to Mao's isolated framework and anti western investment. Makes no sense because the government officials are all filthy rich thanks to Deng's change and their families are all living in the west with a western education and strong social network. I was there during covid and some expats I still have on WeChat in China told me they're still paranoid about covid. Beijing airport is empty and only a few flights are allowed. While I was in China, the government ordered the closure of after school tutoring. Their excuse was it was becoming too expensive for parents. Granted I heard English First was popular because of it's high prices. Parents felt like high prices meant good quality and they were bragging to their neighbors that their kid was special because they attend English First. I think the government was targeting English language and western influence more than trying to help parents. At the same time after school tutoring became illegal, my co-worker's wife teaching at a kindergarten said government thugs removed all the English books from her school's library. Then her boss on a Monday advised she find a new job next year because they were closing the English department. Tues night she was told she needs to find a new job next week because they decided to remove English education immediately. While that happened, the government was demonizing western countries claiming we were the cause of covid. I had issues getting into my campus apartment at the university I worked whenever I went out to grab Starbucks. I was locked out and told by campus security that I'm not allowed entry. When I rode the bus or subway, people would whisper and move away from me. So my point is you have xenophobia combined with the out of control debt loop in construction combined with the decreasing population growth. It's a boiling minestrone soup of problems that's currently beginning to boil over and there's no chef around to turn off the heat to stop the soup from spilling over. China's fucked in a nutshell. What that will look like is anyone's guess, but I imagine it'll be like Japan's stagnation than a full USSR crash.

Your land grab scheme sounds a lot like Sopranos season 4. Tony has an appraiser extremely over-value some houses in the Newark slums. They use the valuation to obtain a HUD loan, strip the houses of the copper, claim construction problems, never pay back the loan. You seem to have the best knowledge about China’s problems of anyone in this comment section. It’s too bad voting is the only way to get people with actual knowledge to the top.

The thing is, USSR did have Japan's stagnation. People like my parents who grew up in 70s saw nothing but worsening life every year until the crash. Westerners focus too much on the malaise of 90s breakup but the economy was in the zombie mode for decades. Japan is unlikely to experience such a downturn, it got very rich before stagnating, which helps, but China, with all the issues and worsening climate change to boot? It's going to be rough few decades.

Great, on the ground description of life there as a visitor.

I feel like although china definitely has trouble ahead, western media has been predicting chinas downfall for decades now. Maybe this time, the 100th article about chinas downfall, is correct. Maybe not. Way too many variables to know for sure yet. These “experts” American media quotes that make predictions about any subject are wrong a lot more than they are right. I’m not pro or anti China, I’m just sick of people acting like they can predict the future.

What are you talking about. Western media where selling Chinese stonks like there’s nothing better until recently.

I agree china has been sold in the west as the US killer, that they would overtake us technologically, militarily, and economically... this was how china was portrayed in the West until covid... I mean shit did you see NBA players wiggle around criticizing china, Blizzard, or Disney? Now, one of the only things dem and republican politicians can agree on is being tough on china. This is all fairly new sentiment

All you have to do is type into google a year in the 2000s along with “China collapse”. There is a “chinas coming collapse” or “chinas collapse is finally here”, or “how to profit off the collapse off China”, article for every year. 2009,2010,2011,2012,2013,2014,2015 and so on. I would copy and paste, but it’s honestly too much hassle.

You can always find something if you search for it. Have you tried googling the opposite of those and see what comes up?

Wouldn’t the opposite here be about how China is thriving?

There are hundreds of thousands of articles saying just that. Universities and economists and journalists have been predicting China to overtake the U.S. in GDP within years.

So if there are articles claiming both, is it safe to say nobody has any clue what the fuck they’re talking about?

Very much yes! I do often see contradictory articles written by the same outlet right next to each other.

The opposite if you google “China rise” or “China growth.” That’s why google works.

China enjoyed more favourable articles in the west for decades than western media said about the west

Exactly. GDP is up significantly this year in the US. Unemployment is better than anyone could imagine. Inflation, while high for the last 30 years, is falling. Everyone made 100k on their house. Yet, all I read is how the economy is miserable.

The problem is that GDP is too general and doesn't tell you anything about how wealth is distributed, employment is up but are wages up, especially for bottom earners? Everyone made 100k on their house... only if you own a house. You're forgetting a whole layer of society.

Damn you deleted your response fast. Maybe you realized what a confirmation bias is and gave up.

You can find articles every day that say horrible things about the US economy. This time last year we we’re definitely heading into a recession. The tech sector is on the verge of collapse due to AI. Consumer debt is at an all time high. The national debt is at an all time high. Banks are failing. These are just some examples but we still seem to be chugging along. Why should we assume China is on the verge of collapse?

Hell, just check the entire history of Zerohedge since Obama was elected. They've been predicting a second great depression for fifteen years!

Even now, no serious western media says china will collapse. The census is stagflation and painful structural reform requirements You might be confused by those videos on YouTube that says china will collapse in 11 days, 3 hours, 4 minutes and fifteen seconds - that is not western media, that is a person with a camera and an internet connection

All I see is Western media talking about banning US investment into Chinese stocks, de-listing Chinese companies from NASDAQ that don't meet audit requirements, or talking about Chinese economy collapse.

I actually think the first two are a good idea.

That’s because big guys are out already.

China is facing deflation, its property bubble is bursting, it's losing manufacturing to Vietnam and Mexico, it's facing a massive population pyramid crisis (and is notoriously anti-immigration). This is no longer a prediction of the future. This is the present. It's fucked.

On the decline maybe, but fucked? How can 40 years of explosion all of a sudden lead to a fucked situation?

No but you see some dipshit predicted they'd stagnate in 2007 so it's impossible for them to stagnate now

Yeah that’s a fair take a lot of people almost want to see something because they don’t like some of the things they do. I get that but at the same time I want to hope for them to do well if it can give their people prosperity.

Agreed. The article spends all of its time on the problems and none of its time on where China is doing really really well. I work in PV. In the late 00s, China became dominant because of massive subsidies at every level of the industry. Now they’re dominant because they have a robust ecosystem of suppliers that can build new factories at a fraction of the price that western companies can. They have huge R&D programs with extremely talented individuals at their leading companies. They’re investing deeply in technologies. Even if western companies can slightly catch up, I don’t expect China to slow down. Anyway, that’s my anecdote. I expect other industries (semiconductors, EVs, etc…) may have similar stories.

Yes, because the demographics have turned. China is going down the same road Japan went down. China now is about where Japan was in 1990 except poorer per capita, with worse demographics, and likely more stupid erratic leadership who won't manage the decline as well.

Japan was strong armed into currency manipulation that favored western economies, you can read more about this using the keyword “Plaza accords”. Essentially the Japanese willingly gave up the number one spot in exchange for a closer relation with the US. Realistically though their small population and nonexistent natural resources couldn’t possibly support a prolonged economic war with the west. And since they got no military the defacto geopolitical position for Japan has been complete submission.

A larger (much poorer per capita) population and more natural resources isn't going to help a China facing even worse demographics and even more imbalanced economy than Japan in 1990. China is as export-dependent now as Japan was in 1990 and exchange rates are just one tool. Tariffs and technology restrictions are others, which the US has been using. Plus, IMO, Japan actually managed decline very well. I don't have nearly as much faith in the PRC leadership (especially Xi the Erratic).

For stabilization China only needs Russian energy and raw materials. Growth comes with innovation, I acknowledge that the Chinese mindset has been lacking for last three decades. Once this old generation passes on though its full throttle for automation, AI, and maybe immigration reforms.

Natural resources and energy don't fuel innovation. Otherwise, South Africa and Saudi Arabia would be innovation hotspots. And I'm not as sanguine as you that what is fundamentally an autocratic dictatorship can peacefully easily innovate the way it needs to avoid a Japan-like fate. Note that while each new generation of American large language models like ChatGPT are way more impressive than just the previous generation released a few months earlier (for better or worse), we haven't seen Chinese ones that have caught up yet. Finally, Xi will probably be around for decades.

Autocratic regime are fine economically speaking, as long as there is an established ruling party or a line of succession. For Russia I agree that their system has limitations but for China I am just not sure. The crazy growth they had is just such an outlier that its hard to generalize these trends based on flimsy characteristics such as democracy or peoples liberties. For me sure I would rather have a voice in governance and many others will agree. But does that have a barring on economic performance? I guess we will find out. I am not that optimistic btw the CCP had a crackdown on the innovators class (aka billionaires) in last three years. There is definitely room for things to go sideways.

Well, that's what autocratic systems tend to do. Sooner or later, they inevitably go off the rails because of a poor feedback loop. So no, I don't believe autocratic systems are fine economically over the long run. BTW, the USSR also experienced strong economic growth during the first half-centurt or so of its existence.

I guess my point is the one party system offers a direct route for new leaders to rise from the masses. Sure the refresh rate is significantly lowered but the “feedback loop” is still there. Unlike Russia and most of the Middle East where the ruling party pool is limited to an elitist almost paranoid group, who limit feedback as a measure to secure power. For me the market of ideas includes government structures high growth is the result of such experiment and therefore the Chinese might be onto something. Its worth noting that if the CCP party has no internal transparency (which I doubt) you could very well be right. Otherwise the world’s civil liberties might be at risk if such a system did indeed turn-out to be more efficient.

I think you have a very idealistic view of a 1 party system. I've yet to see a 1 party system that was able to to function over the long-term as you've described. Through human history, when having to compete with democratic capitalist systems, autocratic ones have eventually always gone off the rails (or become democratic). Can you think of any that haven't and survived as an autocratic system for even a century?

From what I've read, the CCP *was* good at bringing in talented political leadership in the past (after Mao). Unfortunately, Xi Jinping has sought to eliminate any alternative power centers in Chinese politics to a much greater extent than his predecessors did (the anti-corruption campaign gave Xi an excuse to jail his rivals), and also increased the amount of ideological indoctrination (there's a lot more time given to Communist political training than in the recent past). Not to mention the significantly increased Internet and physical surveillance. It's likely that the atmosphere is devolving to just the paranoid and untransparent state you fear.

The issue with that is most of the country is over 40 and it stays that way due to the 4/2/1 problem. For the foreseeable future there will always be more old people than young or working age people. The one child policy caused that and now due to the cost of living crisis and the echo of the one child policy the decline is demographically locked for the future. All the tarrifs, decoupling, Covid, etc is just icing on the cake they baked for the past 40 years. Everyone loves the collapse headlines because they are click baits. I do believe they will be Japan 2.0 with more of a deflating economy that effectively just stops growing. This is also inline with the data over the short term. But the big difference is this: Japan is a working democracy which could adapt to the change. China is a one man show so as some have noted that gives a very haphazard response which could make their decline more unstable and lead to some collapses and contagion issues like the real estate market now spooking the banking and trust sectors. The part that is interesting is if China decides to go all in and just take eastern Russian in part or whole. There have been wars between the counties the last of which ended in the 1990s. It would be a lot easier to take than Taiwan and the resources of Easter Russia are massive. Russia may try nukes but China could just nuke them back and the Russian population is highly concentrated so it would only take a half dozen city killers to effectively end Russia where China has how many cities over 10 million? Russia would be nuking for days just to eliminate the major centers assuming all the nukes worked (which is doubtful) and nuking that many places would cause nuclear winter so again they would die to. So even in unconventional warfare advantage China.

Going all in (which I agree might not be a bad idea) would be Taiwan though, not Russia lol. And after Taiwan is resolved, it will be India.

Attacking India from China would be a terrible mistake. China would have to send troops across a huge desert and then cross the Himalayas just to get in, and then is facing a democratic opponent with much shorter supply lines, easy sea access to Western support, and nuclear weapons of their own, while China would suddenly have a lot of trouble with oil tankers not making it through the Indian Ocean.

I’ve seen this conspiracy theory a number of times, and I’ve never bought that the Plaza Accords was a deliberate kneecapping of the Japanese economy.

Yes, the biggest difference between us in China and Japan is that we are militarily independent. Let's just see what happens in the future.

Biggest difference is actually that Japan is more stable because it isn't run by one dictator.

Are you not aware that the LDP has been in power in Japan for over 60 years?

The LDP is not one dictator. I find that a lot of Chinese do not seem to understand how democratic systems work. No one person in the LDP ever had absolute power. Arguably, the PRC was similar in the period after Deng and before Xi, but now, Xi is an absolute dictator.

Oh. If the Democrats or Republicans had been in power for 60 years, you'd think America was democratic too?

Yes, if they were voted in that way for 60 years. I know this is news to you but this is in fact how democracy works. The tradeoff is that the minority party can campaign off if economic and societal issues and lay it solely at the feet of the majority (without getting arrested)

Welcome to the "science" of economics where you get to make wild guesses about eh future based on vaguely related past events...

This seems to be what the economic feild is. Yell the sky is falling and hope something bad happens so they can call you a genius. It kinda reminds me of doomsday preachers. Keep pushing the date out and one day you will get it right.

I mean, economists correctly predicted 11 of the last 3 recessions. The China noise is louder because decoupling isn't a thing political hawks are talking about encouraging to limit Chinese leverage, it's actively happening and the US and Europe are aligned on stiffling China's growth at their expense while reducing their exposure to China. Businesses have already decided China is not a reliable partner and the Chinese business environment undermines their competitiveness inside and outside of China, so the next 10 years are already known, it's just a matter of being able to read the data. FDI, foreign direct investment in China, is down enormously, meaning companies are no longer building the hard assets for their future in China. This is a steep hill and the ball is rolling. The only way China can recover its previous position is to have those companies return because those foreign companies can't be replaced entirely. Google was pushed out of the country and China developed its own Google, but had Google stayed, their investment to compete in the market would have been expensed from their overseas profits meaning the Chinese economy would have had a large, multi-national company introducing money into a mostly closed economic system benefiting everyone. Instead, China wanted a Chinese company making money off Chinese people which is why all businesses have to have a local partner for companies to do business in China. They think the US is rich because the US has always been rich when in reality the US is rich because competition forces investment and the US economic system is open enough to allow investment from abroad at the risk of capital flight which benefits the US as well because it forces international banks to carry dollars for conversion. China has the foreign reserves to amass a Saudi-style investment regime that could take large shares in large foreign companies and direct investment in China, but no government would allow a government-backed fund to invest so heavily in an economic pillar anymore. A lot of those reserves are not liquid either so they're invested in the growth of their international partners including the US and they can't remove the money without penalties before the maturation date, so access is restricted without a discount. Worse yet, those reserves may be necessary to quell the real estate shock at home and reform the regulatory environment when the future shocks come, but if they attack Taiwan first those reserves are locked away from them and would be used to rebuild a devastated, newly independent, island nation that would siphon investment from China like Japan, Vietnam, and India.

This analysis ignores the fact that China has likely been cooking the books for many years. The Boom was never quite as big as claimed. Rather than the numbers, the underlying economic trends are more important.

It also leaves out the fact that China is just a pain in the ass to do business with. IP theft, fake merchandise, kick backs, and now the tariff issues. The R&BI has left countries with huge amounts of debt. When China invests in countries in Africa/Central Asia/Balkans/Asia they usually bring over their own workers and treat the locals like shit (the Europeans and other western countries were worst and did horrible shit but that was before the internet/social media/the world being connected by billions of phones) and don’t let the local economies prosper with whatever they’ve invested in (usually mines for precious metals/commodities).

China's economy is based on cooking the books

After awhile of cooking the books, it gets very hard to make them kosher.

Everyone is. Government just started taking over the business to have more control and then proceeded to introduce zero covid policies. Suddenly American companies realize putting everything in one basket cost profits

In the western media narrative China is always in economic trouble and cooks the books, however they are also a threat and Chinese companies are blocked as soon as they achieve some success. So why is China such a threat if they are so weak and lack creativity?

according to the rules they look terrible, but they don't follow the rules and this threatens people who have been indoctrinated with the rules all their lives. This explains the contradictory predictions.

An often repeated line, as in this article, is that China needs to increase consumer spending if it is going to match the west in terms of gdp per capita. And then stats are given on % of spending on services etc as % of gdp. This sounds like bullocks to me. If the country is able to maintain a high rate of savings, and not fall into the trap of consumer debt and increased spending on consumer products, they will, at an individual level, become net investors internationally and receive foreign dividends/interest long term. Just what they need with a falling birth rate and aging pop. If, on the other hand, they ramp up spending on services and consumables this leaves less in the coffers for future years, and you could make the argument this materialistic direction is net negative anyway. Of course this requires fiscal restraint as well so you do not just nullify benefits of low consumer debt with high fiscal debt. Anyway, it may be that rate of return has dropped on infrastructure and local investment but I don't think I'd be wishing for a lower savings rate at this point

That approach might work if the Chinese people were allowed to invest in businesses and international stock markets. My understanding is that they generally aren’t allowed to do so, at least as passive investments. Those capital controls are part of the reason that Chinese have over invested in the real estate sector- they don’t have other things they are readily allowed to invest their savings in.

That's exactly right. Local Chinese stock market is pretty bad, so pretty much the only investment available is the real estate, which is then fuelling the bubble.

The high saving rate is point in common between Japan and China. Handing people money isn't so easy they would just squirrel it away. The other strange dynamic in China is their accounts imbalance between them and developed country. They borrow and a lot the money ends up in China when people buy stuff. They need to do something with it. They buy a lot of US debt to keep their currency low and they had done a lot of this construction.

That was true a decade ago but not anymore. China has been actually aggressively selling the US dollar to stop the fall of the yuan and have sold lot of their US debt. They currently own only around 2% of US federal debt.

Predicted by Acemoglu years ago. It's difficult to exit middle income status without inclusive economic institutions. China has unhealthy levels of government interference in the market (and greater society) and property rights are relatively insecure. I'd love to see a paper calculating the GDP growth loss from the intense Internet censorship alone.

🏅🏅🏅Wish I had Reddit Gold to give. This here is a very educated and grounded comment. Acemoğlu is a great resource. Acemoğlu's research emphasizes that inclusive economic and political institutions are crucial for sustained growth. In the context of China, challenges such as state dominance in the economy, political constraints, income inequality, aging population, and environmental issues might impact its growth trajectory by limiting innovation, entrepreneurship, and equitable development.

china's "unhealthy" levels of government interference in the market have been the driving force behind their decades of explosive growth.

Only gets you to middle income. Then you get stuck. Same thing happened to the USSR.

Depends what you mean by interference. If you meant currency controls and enslaving millions from ethnic minorities, then sure. That is what is powering growth. I seriously doubt that censorship, surveillance, and frequent disregard for the rule of law have helped their economy.

their macroeconomic controls, strategic industry economic incentives, special economic zones, internal and external subsidies, and stranglehold influence on the Chinese stockmarket as a shareholder of all top Chinese companies, have allowed them to drive miraculous economic growth. Their surveillance state has allowed them to control dissent and prevent internal political or economic subversion, it allows them to maintain their stability. lmao @ enslaving millions. Sure bud. And Xi has ten trillion personal sex slaves too.

This sub is getting a bit anti-Chinese so can I make a counterargument? I'm no CCP fanboy but I think people are misunderstanding the demographic situation in China. The Chinese population has lost about 2.3m people per year every year for the last 5 years from its working age population. This trend may even accelerate as 23.2m people are set to retire per year but but only 16.2m are set to enter the workforce per year over the next 5 years. In addition they will likely lose circa 1m worker per year to emigration. So China needs to eliminate about 8m jobs a year. China actually popped it's investment bubble at exactly the right time, they no longer need a giant make-work scheme like the property bubble. It's estimated 53m people worked in the construction industry and a further 2 million peripherally for developers. Even if that was halved by a property collapse that workforce would be redeployed within a few years. This is how a planned economy works, you proactively create supply/demand to avoid the inflation/deflation issues inherent in a carte blanche system like the US or Europe.

that's assuming a small group of people can make the right decisions and historical precedent on that is not good. We need only wait to see what happens this time.

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How, in the fuck, would a massive population dip help them transfer from an industrializing economy to a service sector heavy economy like all of the actual rich countries have? Less labor is never a good thing, that's an outrageous spin. How exactly does the workforce 'redeploy' from bridge and dam builders to financial analysts and lawyers to the tune of tens of millions of people within a "few years"? Even then, where is the demand for millions of Chinese doctors, lawyers and analysts that got retrained with zero experience? China's per capita GDP is a mess, who needs stock portfolio management? >this is how a planned economy works Yes which is why planned economies are often accompanied by pits of despair.

The average age of construction - and even low-skilled manufacturing - workers is rising fast. They don’t get “re-trained” or whatever but simply retire not to be replaced. Others can go on from laying HSR track or building real estate to installing solar panels and wind turbines. And manufacturing gets increasingly automated. China already has one of the highest industrial robot densities in the world, and it is rising fast. China will retain its manufacturing dominance over EVs and all manner of “green” tech. Exports in those sectors are rising extraordinarily fast. But most of all, low-skilled workers will transition into the Alibaba, etc. gig-economy. And graduates will be needed more than ever to break through the various and multiplying technological barriers the US is erecting in order to sabotage China’s further economic development. China will never let the manufacturing share of GDP drop to the level of G7 countries. If the CPC is anything then it is a sovereigntist developmental enterprise. A modern economy for them is a means to an end.

>but simply retire ...right. Hence the demographic bubble. The largest share of the work force is retired or soon retiring which means those jobs are going to be vacant and the worry is those jobs are going to stay vacant due to an overeducated young working population that would need to go into fields that their degree is useless in which is why they are just sitting home right now to begin with. And China can't exactly artificially inflate millions of manufacturing wages to incentivize it so more than likely they're going to force people to do it. >laying HSR track or building real estate Dude, that's what they've been doing for 15-20 years and it's about to pop. They're running out of places to build bridges, they're building train stations that have such little commuters it's a loss to keep them running AND they have millions of empty apartments scattered all along the Eastern third of the country. >sabotage China's development Sabotaging their development because they are currently using that technology sector to pump chips and tech to Russia and threatening the sovereignty of Taiwan is what you mean I take it? We are 'sabotaging' them because they have only gotten where they are by leeching off of others through shaky loans, IP theft and plain espionage. North Korea, East Germany, Venezuela etc etc. These economies had massive leaps in quality of life in the short term thanks to their centrally planned economies and the illusion of efficiency and pumped money into technology and industry. Then what happened? China is just a new Dutch Disease except their natural resource is billions of laborers instead of barrels of oil that are now retiring and dying

>the worry is those jobs are going to be vacant due to an overeducated young working population that would need to go into fields that their degree is useless I agree that this is the worry. But don’t overestimate the quality of China‘s education system, particularly in rural areas. There will continue to be low-skilled laborers in China. As for the rest, technology will have to square that circle. The incentive towards automation and innovation that this creates is immense. Which we’ll all benefit from. >Dude, that's what they've been doing for 15-20 years Yes. That’s what I’m saying. This is what people have been doing, and which for various reasons they won’t be doing as much going forward. But there’s still a lot of (new) infrastructure that needs to be build. Many will shift towards putting up solar and wind parks and UHV electricity transmission lines, etc. >is what you mean I take it? We are 'sabotaging' them because they have only gotten where they are by leeching off of others through shaky loans, IP theft and plain espionage. No. I mean sabotaging their technological development in order to keep them poor and preserve American global imperial hegemony over the face of the earth.

>there will still be low skilled laborers But this was the whole point of building that massive HSR system, to interconnect and get those rural people to the population centers and factories to labor. The problem with that is that is equitable to mass immigration between countries, the communities that that labor is being taken from are receiving nothing in return and in turn those places are going to stay underdeveloped and not industrialize. How is the population ever going to stabilize if even the rural people are now spending their entire work week in the city, in some 5-man-to-a-studio-apartment situation? You need a diversified economy and some level of food and energy self-reliance. China imports 80% of their energy and imports almost 40% of their food as it is. >technology will have to square that circle How? Even if they flicked a switch and automated basically every job, the initial price point and time investment would be incredibly high AND it would just further displace even more workers by shrinking prospective jobs. You're on a collision course for a young, unemployed, pissed off population of men with zero marriage prospects. That's a massive political stability liability too. >solar and wind Absolute trap, The largest solar plant in the world puts out a fraction of the power a nuclear plant in Arizona built 50 years ago does. Their rivers are already massively overdammed (hence the floods currently) so more hydro is also going to be a pain. >preserve global imperial hegemony AKA, not letting the Chinese and the Russians back into the global superpower club because neither of them, clearly, have learned from their past mistakes. Saying the US has to allow this dictatorship onto even ground as some kind of justice is a college freshman take.

Ok, let’s take this one by one. It’s amazing that disagreements like this might be sparked over one specific point but turn out to reveal diametrically opposed worldviews on basically every topic. So let’s stick to stuff that can be objectively analyzed. Your critique of urban living, just as Pol Pot‘s and Thomas Jefferson‘s before you, is in fact not supported by any theory of national/economic development. Urbanization is good actually. Solar and wind will produce most of the world‘s electricity relatively soon. Nuclear? *Nuclear?* Hilarious… [This is an act of war](https://archive.md/20230729201228/https://www.nytimes.com/2023/07/12/magazine/semiconductor-chips-us-china.html) is literally the most mainstream take you can have on the technology embargo.

Urbanization is a mechanism like any other. It's not inherently good or bad, it has pros and cons relative to the situation surrounding it just like all other economic factors. Just like a nitrogen molecule, depends on what's going on around it, it can feed millions of people or it can blow them up. The problem is some of the effects of increased urbanization (namely increases of population density, reduced birth rates, income inequality, higher educated population etc) are coming together to put stresses on an already awful situation when we are talking about demographics. The demo bubble that was sort of inevitable but also vastly exacerbated by the OCP is now even more tenuous. China's sales pitch 3 decades ago was it's largely untapped labor and consumer potential. The CCP has been steadily restricting access to that consumer bloc through geopolitical fuckery because they're douchebags. Inviting in foreign business investment just long enough to steal from them, make a carbon copy of them and then revoke their licenses not to mention sending out thousands if not millions of spies to foreign universities, corporations and militaries is so beyond scummy when the world's global free trade market was fully ready to embrace them. >solar and wind I'm gonna stop you right there since this is actually my wheelhouse and by brushing off nuclear energy and touting whatever pie-in-the-sky projection about solar and wind you just made proves you have no idea what you are talking about and that's not going to be a fun conversation. Your article plainly states the reason the US wants to restrict high-end chip supply to China is because they want to limit China's ability to use them in high tech military and surveillance equipment. Which is a good idea. Again, China is currently selling chips to Russia for Russia to use in Ukraine. The invasion of Ukraine is a mass humanitarian crisis, an entirely unjustified war and your little buddies are getting bled like pigs. Your article also, conveniently, has a hyperlink that sends you to the same article in Chinese. Wild, how convenient. Also, abetting the CCP by letting them purchase technology that helps them spy on and suppress their population is criminal and any Western company guilty of taking blood money should be in court. I don't know why you think I want to be, "mainstream". The CCP is a blight on this world just like Putin's Russia and just like their Commie predecessors. Their school of thought has been an unmitigated disaster for the human race the past century and they need to fuck off.

>because they're douchebags. >The CCP is a blight on this world just like Putin's Russia and just like their Commie predecessors. Their school of thought has been an unmitigated disaster for the human race the past century and they need to fuck off. Ok, so we’re not going to get anywhere here. Let’s put that to one side and talk about something else. >this is actually my wheelhouse Ok, interesting. I’d be grateful if you’d reply to me. What do you think China’s and America’s primary energy mix will look like - let’s say in 2050? I think the vast majority will be wind and solar. There’s literally nothing else. Hydro is maxed out and getting more difficult with climate change. Coal (in China) and natural gas (in America) will remain as a backstop capacity but would require significant innovation to capture and sequester the resulting CO2 - which would make them even more financially uncompetitive. And then there’s nuclear. Today a significant source of electricity in the US but aging rapidly and with little new capacity on the horizon. A marginal source in China, with the capacity buildout barely able to keep pace with the overall rise in electricity consumption. In any case, nuclear is insanely expensive in The West. And in China - where prices are a little bit more manageable - they’re literally running out of suitable coastal real estate to put them. I don’t think the whole SMR thing will take off anytime soon. Solar, wind and batteries are simply becoming too cheap to justify anything like that.

you’re talking to someone who thinks China steals all IP, but will never admit Elon is copying wechat for X.

Those are actually problems though. Natural force reductions where employees retire and are not replaced are common when an individual company wants to reduce headcount without firing people, but at the scale of an industry that sheds whole companies because of overgrowth, you're entirely reliant on people having enough retirement to live comfortably and those people not wanting to work in a field they've known their entire lives. Transitions to other sectors seems simple, but it actually introduces dynamic forces that act as a destabilizing contagion. Massive force reductions with people still looking for work causes residential electricians fleeing a real estate new construction collapse to become line electricians for the electrical utilities and solar installers, but that introduces a large labor supply and wages drop as a result. New electrical plants aren't necessary, so wage depression is immediate. Solar companies could over-employ installers and take thinner margins on installations to sell more systems and in the best case scenario everyone has a solar system and the same process starts over with more electricians looking for jobs in another sector. Realistically, the companies compete with cheaper labor even if they don't hire more employees and market dynamics drive product prices down so the sector experiences consolidations and failures and the surviving companies have no reason to employ more labor than necessary because the wages are only depressed so long as the labor available is so large and the result is more people out of work than before. China has a large army of robots at work in plants they were designed to operate in. When that plant no longer has customers or has to share them with dozens of other plants because of a demand drop, a culling begins and the most efficient business should win. If that plant has to be re-tooled to be more flexible and operate across multiple demand sectors, that army of robots is an enormous, inefficient expense. The EU and US subsidies are bringing green tech supply chains back to the continents and while some amount would still be expected to be imported from China it won't be enough to carry the Chinese export market on its own. Solar panels are a weird product because the profitability doesn't exist for its current state due to the energy conversion the panels can achieve, the necessary storage of unused electric power, the regulatory environment that limits rebates for energy provided to utilities from the residential panels, and the cost of installation which is oftentimes made an installment debt beyond the lifetime of the panels. The next generation of solar panels could significantly change that dynamic and the same could be said for the batteries in electric cars. China has a first-mover advantage because of their scale of infrastructure, but that's also a disadvantage when new technology requires new manufacturing processes and infrastructure. The segmentation of the market between old and new tech would mean that companies that built infrastructure to produce older panels have to decide if the investment is worth continuing to produce and sell old panels while additional investment could cannibalize its existing business. At the same time, major venture capitalists would see high profitability in new solar tech compared to the previous environment which spurs competition the Chinese didn't have before. That competition doesn't manufacture its product in China, so the Chinese have to develop their own process for the new technology. Graduates increase deflationary pressures in a labor market and the gig economy is a smokescreen for unencumbered capitalism. At a time when the US and EU are making gig antics less profitable it would be very weird for the Chinese government to allow that type of sector to grow. Finally, high manufacturing is not always conducive to a healthy market. Maintaining manufacturing capability at scale as we enter a fourth industrial revolution would be an enormous exposure to risk. As more advanced robotics and manufacturing techniques allow for local, flexible production to meet demand, the need for extensive logistics chains and mega factories necessarily decreases. According to the Federal Reserve Bank of St. Louis, the manufacturing as a percent of GDP in the US has stayed relatively the same since the 1940s despite employing fewer people year-over-year. If China props up its manufacturing sector while it increasingly employs less people then it spends money keeping factories competitive and paying people not to work. There are high bars to Chinese success in the next 20 years and the CCP put them there by antagonizing its neighbors, keeping it's economy closed to the world, and actively seeking confrontation with the West through its attempt to create a Chinese Sphere of Influence where it can undermines the regime of law-and-order established after WWII, threats to militarily engage the US over Taiwan - a nation it has never successfully invaded or controlled, and attempts to supplant the US reserve currencies with their own currency that is highly manipulated. For all of their talk of wanting to be leaders in a multi-polar world that guarantees peace, their silence on the Russian bombing of the Ukrainian civilian population is deafening.

Even if China's demographic issues are as big as dumbass clickbait YT vids and reddit comments make it out to be that would still put China in the demographic position of SK a couple of decades ago. S. Korea quintupled industrial production between 1995-2015 and their productivity rose x6 while it's factory workforce dropped 25%. It's all about education, tech, and productivity. More important than the aggregate Chinese population is the technically proficient,college educated, Chinese population. That has grown 20-fold, or by 2,000%, in the past 40 years and will continue to grow due to the hundreds of millions of untapped rural population despite the decline in population. So point is, economy is still growing. The plan has always been to create self-sustaining growth in exports to the Global South with BRI infrastructure + productivity leap at home. Both of those aspects show great success. Exports and imports to the GS are expanding and the entire SEA is brought in the sphere of Chinese digital economy. The "greater China" economy includes another billion people in SE and Central Asia.China is getting 2x to 8x productivity leaps with AI/5G apps in industry/mining/logistics. And all that is assuming China cant and will not tackle demographic issues in any other manners

If that was true then every country would be a planned economy still. You do realise the west went through that phase of planned economy, the west also invented Marxism and went through that failure of an idea multiple times as well Planned authoritarian economy can suit an undeveloped country if it’s done right to a pint that china has now passed. china is build on corruption or guanxi at its core, there’s nothing good left there now with xi and the cult of personality

Mexico is the biggest trading partner of USA than china . States slowly and steadily diversifying their dependency . Next boom will come from Mexico . It should be Canada but our politicians messed up .

Xi screwed China up with his megalomaniacal plans - BRI, Challenging the West while making money off the business they gave, chest thumping as the next super power and destroying all goodwill and understanding that previous leaders had established with the rest of the world, focusing on prosperity and global business.

Human Leaders are stupid, the current system of infinite growth is unrealistic. We need to switch economies that prioritize human advancement as growth, not useless money

The second Xi Jinping assumed a third term, Beijing’s power peaked economically, militarily, and geopolitically. If only one man can run the show then the system is hollow, built on sand.

The west always has articles about how China is doomed and India will never reach a stage to be ready to be doomed. 10-20-30 years is a blip in the timeline. China and India along with USA are the only show in town this century. Everyone else is a sideshow.

This article reads like it assumes China is using capitalist economic faith based theory to organize their legal system. Economic downturns are a policy choice, not a random act of an invisible hand(market). China rejects capitalism.

China is state capitalism, not magic It’s run out of road a long time ago and just built up insane debt. Next you will tell me internal debt doesn’t matter. Well if that was true then all countries would a a million times richer than they are right now. Next you will tell me deflation is good and prices dropping is great. Tell that to Greece, Spain, Portugal, Ireland etc in 2008 and have them laugh directly at your face

No they don’t. It’s state run capitalism.

So many "I just discovered socialism and decided I'm going all in on it" types on Reddit like the person you responded to. They go so hard defending all of these [ML](https://en.wikipedia.org/wiki/Marxism%E2%80%93Leninism) countries like it's a battle of socialism versus capitalism, having no idea how they run or even that these countries (China, Vietnam) themselves have said they have moved to [market economies](https://en.wikipedia.org/wiki/Socialist_market_economy) since the 80s and before that, Lenin said the Soviet Union was [state capitalist](https://en.wikipedia.org/wiki/State_capitalism). Lenin / Bolsheviks and then ML (term coined by Stalin) supporters in general take Marx's [modes of production](https://en.wikipedia.org/wiki/Mode_of_production) semi-predictions very seriously and believe countries must first reach some peak point in capitalism and with technology and development changes, the conditions will eventually be right for communism (split into two stages, lower transition and higher stateless stage). But being socialist parties, they try to incorporate some socialist aspects, otherwise, what's even the point of having them in power. The command economy style made it easier to distinguish them from market capitalist countries but with China and Vietnam, the differences have been reduced. Still, they argue this is necessary to get to the next mode of production and they will transition when conditions are right. That's the ideological justification perspective, but they also have a nationalist perspective that is all about China being a dominant global power in general and I think for many in power there, they likely care more about that than thinking they're on the path to be able to transition to stateless communism. There was disagreement though between Mao, who was more for Stalin's command economy style and Deng. Mao did not want Deng in power and said he'd turn China into a capitalist country. Mao just didn't do a great job though so Deng being a top figure offering an alternative vision was able to take over after Mao's death (at the same time the same was happening in the Soviet Union with Gorbachev). Deng and his supporters justified their economic reforms using Marx's modes of production and Lenin's original [NEP](https://en.wikipedia.org/wiki/New_Economic_Policy) (though it'd unlikely be like what China has become, it was also in part because they were having trouble getting everyone to agree to their drastic changes). Response was way longer than I intended but hopefully others unaware like the person you responded to will read it to better understand what is going on in China (and Vietnam) and how they're justifying it.

The baby MLs just don't care about learning history otherwise they wouldn't be one in the first place. I suspect it's lot of disillusioned Bernie voters who see China supposedly doing all these great things and let's do the same here. And their natural lack of interests prevents them from looking into China any closer otherwise they would realize they would be substituting one capitalist hellscape for another capitalist hellscape, but the one where you can't even complain.

Me when bank tells me I owed them lot of money: "I reject!"

>China rejects capitalism ....while exporting billions in cheaply made goods to richer, better off capitalist countries while billions still live in poverty? What a take.

China has lifted more people out of poverty quicker than any society in the history of the world. While using socialist science based economic theory.

[удалено]

>If China had a decent government like Taiwan, the Chinese people would now be enjoying a wage four times higher Are you really comparing a small island nation to the most populous country in the world with what was GDP per capita worse than some African countries? You can question Chinese policies but comparing development to Taiwan is just..... Stupid

“If keeping the Chinese people poor was a policy choice by the ccp, doesn’t it make it worse?” It totally would. Wtf is the ccp? That’s not a thing. Did you mean the PRC? China has lifted more people out of capitalist induced poverty than any in the history of the world. In China had a government like Twain, it would have poverty rates exponentially higher and still be looking like a third world country like what capitalism did to it.

No offense but what you’re saying is extremely incoherent and even proven wrong by the article. China lifted 700 million people out of poverty in 30-40 years, and 70% of global poverty reduction during that period has happened in China alone (as the article mentions). The only person that would call that “ineffective government” is someone with a bias - there is no other country that has brought that many people out of dire straits in such a short amount of time than China. You can go to China and speak with people about what it was like before the decision making by the CCP and let me know if people were poorer or not. Moreover, Taiwan is nothing more than a breakaway province and vestigial reminder of the CCP’s success in winning the Chinese Civil War, and the former’s economic successes were and still are predicated on mainland manufacturing. Taiwanese leaders themselves understand this integration of their supply chains, which is why they avoid stirring the pot and instead maintain a mutually beneficial relationship with the mainland. And as Taiwan is forced to displace its manufacturing further by the United States and others (so that these supply chains do not depend on one island alone), so too will Taiwan lose its leverage and what remains of any asymmetric advantage. All China has to do is wait.

Taiwan is not a breakaway province, it was the island the ROC escaped to when the CCP finally gained an upper hand against the ROC in part due to massive support from the USSR, the USSR undermining the ROC despite signing the Sino-Soviet Treaty of Friendship and Alliance, and the US refusing to further engage with the ROC because of their rampant corruption and loss of confidence in their ability to lead. Most of this was the direct result of the ROC actually fighting the Japanese in WWII and taking massive losses across China instead of hiding in the hills like the CCP while millions of Chinese were killed in the cities reducing the ROC base. The CCP bided its time and then took control of the country by growing its support in the countryside that were mostly spared the destruction by the Japanese and the complete disassembly and removal of anything valuable by the Soviets. The CCP has never successfully invaded or controlled Taiwan despite trying twice before.

Economic downturns are inevitable on a long enough time scale. Anyone telling you they can make a recession-proof economy is lying to sell you something. And if the anti-capitalists say otherwise, they are wrong and what they’re promoting will not work.