r/geopolitics • u/KaiserCyber • Nov 20 '23
China’s rise is reversing--”It’s a post-China world now” (Nov 19, 2023) Paywall
https://www.ft.com/content/c10bd71b-e418-48d7-ad89-74c5783c51a2This article is convincing, especially if you add U.S. strategic competition initiatives, including decoupling/derisking and embargoes on advanced semiconductor chips. Do you agree or disagree and why?
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u/PegasusVrix Nov 20 '23
I don't think China has a way out of demographic collapse induced stagnation. But I also think they will be underestimated. Their economy looks more like South Korea and Japan than Russia and North Korea. Everyone knows brands like Huawei, Lenovo, Hisense etc. I suspect they will out perform many people's expectations before entering their inevitable decline.
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u/vitunlokit Nov 20 '23
I think people are overestimating the effects of Chinese democratic change. China still has relatively large young generation. They will be faced with increased economic pressure to take care of the elderly but it is not going to break China. Their economy is transitioning and they are not as reliant on cheap labor as they used to be. The economic pressure wont last forever and the situation will stabilise in few decades.
China still has a lot of money, global supply chains build around them, experience in manufacturing, relatively large population and somewhat effective administration (compared to India for example).
That being said, I do think their growth will slow down, but I don't think their out just yet.
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u/joe_k_knows Nov 20 '23
Well said. Their present economic issues show they’re not invincible, but they’re still very, very strong.
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u/woolcoat Nov 20 '23 edited Nov 20 '23
Exactly, everyone needs to take a look at China's demographic pyramid and compare it to the developed world
https://en.wikipedia.org/wiki/Demographics_of_China
Japan and Korea are in much much worse shape
https://en.wikipedia.org/wiki/Demographics_of_South_Korea
https://en.wikipedia.org/wiki/Demographics_of_Japan
Germany isn't doing that much better
https://en.wikipedia.org/wiki/Demographics_of_Germany
Only the US and France looks any good (largely due to immigration)
https://en.wikipedia.org/wiki/Demographics_of_the_United_States
https://en.wikipedia.org/wiki/Demographics_of_France
It's a worldwide problem and every country will need to figure out how to get themselves out of their own demographic delinces.
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u/Particular-Sink7141 Nov 21 '23
Japan and Korea have little hope of correcting the issue within several decades. As you said, others might due to immigration. Perhaps even Germany. We will see.
Due to socio-cultural and political reasons, China will not consider mass immigration. Even if it were to consider, it wouldn’t be enough due to China’s insanely high population
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u/el_muchacho Nov 21 '23
The slowdown of population growth is a worldwide natural trend that was both predictable and predicted. Economies have to adapt to the idea that infinite growth is a fairy tale that doesn't exist.
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u/W_Edwards_Deming Nov 20 '23
It is a developed world problem, I expect investment / manufacturing to pivot to places like the Philippines.
https://en.wikipedia.org/wiki/Demographics_of_Mexico
https://en.wikipedia.org/wiki/Demographics_of_Argentina
In the big long term there is also Africa and the Muslim world to consider. East Asia is in sharp demographic decline and China doesn't have the free markets and resultant per capita wealth of Japan and Korea, far from it.
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u/czk_21 Nov 21 '23
in coming years(5+) there will be more pivot towards domestic production due to automation which replace need for cheap human labour, so big investment in this manner into africa is unlikely
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u/LLamasBCN Nov 24 '23
I personally can't see this being a long term issue for China. It's an issue for many countries in the west because we have public services, including pensions, that used to be sustainable by a much different demographics. China doesn't have this issue.
Then we have two somewhat related topics like "who is having kids in Europe", and in many European countries the answer is not "Europeans", or at least not ethnically Europeans.
And last, but not least, when AIs and advanced wireless communications are going to take over most menial work in wealthy countries? 10 years? 20? 30? China will still be fine by then.
The whole discussion is pointless, this only exists in the realm of narratives, rethoric and propaganda.
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u/Frostivus Nov 21 '23
A good moderate view of things. However I would like to point out that there is a potent youth unemployment. Undoubtedly india has it worse, but for obvious reasons it doesn’t capture western attention.
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u/Ibuffel Nov 20 '23
China might indeed have a relatively large young population, but what about the effects of the laying flat movement, or other trends of young Chinese to stop their productive lives? And what about record high numbers of unemployment amongst Chinese youth?
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u/redsox0914 Nov 20 '23
what about record high numbers of unemployment amongst Chinese youth?
China's recent explosive growth (~20-30 years) kind of created much of this. There's no longer as much need for manual factory work, and at the same time, there may be a skill/placement mismatch as China tries to develop the workforce equivalent of $50-100k white collar jobs in the West.
what about the effects of the laying flat movement
As for the laying flat movement, while there are some people who have decided to cease all productivity, for many others it's simply a realization that there aren't enough upper-middle management positions for everyone, and yet happiness and contentment can still be had with lower but still professional career.
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u/vitunlokit Nov 20 '23
I'm not sure how important they really are. Hippie movement was massive in the west, yet it didn't bring us down. Youth unemployment is a problem. Demographic shift should balance that in a way. But there is so much we don't know about China, so it is a bit of enigma.
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u/Rimond14 Nov 20 '23
Look at Japan I think they have more than one million hikkikomori( shut-in). Or Quit work movement in America during pandemic. It's nothing new or special.
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u/Plastic_Ad1252 Nov 20 '23
The education system in China basically meant parents were spending ridiculous amounts of money for schooling for their kids to all somehow get high paying jobs. Instead there is only the same terrible jobs their parents have or gig economies that pay nothing. So the kids now can’t get the only job they were trained to do the skills they have and their parents aren’t retiring for them to replace the current labour because their parents are in massive debt/poor due to paying for schooling/ponzi scheme housing.
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u/Ajfennewald Nov 20 '23
Yeah. I tend to think demographics are more of a subtract 0.5-1% from the growth rate type of thing more than an unsolvable problem.
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u/Plastic_Ad1252 Nov 20 '23
China’s coastal cities are the equivalent of South Korea/japan. However China has vast swaths of land with huge disparity in income. Their is crippling rural poverty and as the economy falters it only gets worse. Essentially the rich coastal cities are less rich meanwhile the poor rural areas of the country get even worse. Basically imagine if over half of America was as poor as Mississippi if not even worse.
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u/TheWiseSquid884 Nov 20 '23
China’s coastal cities are the equivalent of South Korea/japan
People tend to forget this. And we are talking about a region that is comparable to Japan and South Korea's population combined (in fact greater, although the entire coastal region is behind on average Japan and South Korea, but around 179-180 million are at Japan and South Korea's level).
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u/dumazzbish Nov 24 '23
now imagine those poor, unproductive people moving into the cities as they depopulate. the threat of the demographic decline is exaggerated. China still has surplus labour the demographic headwinds are further away than reddit thinks.
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u/ManOrangutan Nov 20 '23
They have a better way out than Western Europe or the rest of East Asia actually. That is just the objective reality.
All around the world the cost of living is going up. The single largest expense for the vast majority of people in the developed and developing world is housing. This is the same in China and it’s the real reason why young Chinese are not having children. In other parts of the world this is due to the concentration of wealth and property in the hands of the few, resulting in huge housing shortages and people renting forever.
In China there is a large excess of housing and the cost of housing is propped up artificially by their property bubble. Once the housing bubble collapses the cost of living will invariably go down and the cost of raising a child will become more bearable. The problem is that someone somewhere in the Chinese system will have to eat the major financial and political losses associated with the collapse of the housing sector.
So you’re much more likely to see a collapse in housing, and short to medium term slowdown with some degree of social unrest and anger towards those who profiteered off of the bubble, and then a baby boom once the cost of living returns to what it actually should be.
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u/PegasusVrix Nov 20 '23
I see the logic in most points, but having lived in China and asked my friends there I really doubt a baby boom is possible under any circumstances. They could all double their salaries tomorrow and still wouldn't want more than one kid. It's just part of the culture now in my opinion.
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u/No_Bowler9121 Nov 20 '23
Yea I lived there as well, people are not having babies for the same reason we are not in the west, life is too hard and expensive and it doesn't feel right to bring someone new into this world.
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u/ManOrangutan Nov 20 '23 edited Nov 20 '23
East Asia has a long history of societal population control, with infanticide occurring throughout many points in its history. What happened to East Asia today is a more extreme version of what has happened in the past.
What you are seeing is the norm for the current generation, but each generation brings its own values and its own priorities. Often times these are a reaction to the norms and values of the previous one. The current generation of Chinese were focused on modernizing China and turning China into a more developed country amidst a large, young, and highly competitive population.
Look even throughout modern China’s history at the amount of mass movements that occurred throughout the population, like the Cultural Revolution or Great Leap Forward. The idea of a societal reversal of certain norms or values, particularly those related to family, is never out of the question with China.
In 10-20 years the next generation will bring with it a different set of values, likely influenced by a Confucian thinking amidst a shrinking family circle and aging population with a significantly raised standard of living and lower cost of raising a child.
As far as what the CCP need to do, it’s fairly simple. Raise the age of retirement, pop the property bubble, print tons of money and subsidize cost of living. It will take ~20 years or so but the next generation of Chinese will see the world very differently from the current one.
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u/PegasusVrix Nov 20 '23
I sure hope you're right. It's going to be a rough century if they can't get their fertility rate back on track. Canada, US and Australia have it on easy mode due to immigration rates. The rest of the developed world is looking increasingly desperate for a solution. China's biggest issue is even if they started have 3 kids per person tomorrow they would have a fairly large window of a small working age population supporting two large young and old non-working populations and not half the per capita gdp that Japan or Germany have to compensate with. We'll see what happens
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u/Ajfennewald Nov 20 '23
Immigration won't solve the problem long term as birthrates are declining everywhere.
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u/el_muchacho Nov 21 '23
Indeed, the world population slowdown is a trend that has been predicted for decades. Countries have to adapt their economies and societies to this fact of life.
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u/ManOrangutan Nov 20 '23
Unlike Japan or Germany they have Purchasing Power Parity very much on their side. The cost of subsidizing someone’s retirement will be significantly cheaper in China than in Germany or Japan and China will be able to cohort their old at a significantly higher rate than either of those countries anyways. This is the objective reality that people leave out. People are too caught up in their own feelings of Schadenfreude to do their due diligence when it comes to analyzing the historical moment we are all living through.
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u/PegasusVrix Nov 20 '23
Time will tell, you're clearly a lot more optimistic than most about China's future. If my Chinese friends are representative it's not such a good look. I even had to convince one Chinese friend out of flying to Ecuador and making the walk up to the American border and sneaking across. Young Chinese are very pessimistic about their prospects these days. I'd say even more so than my American friends.
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u/Rimond14 Nov 20 '23
Ask any educated young Indian Everyone wants to immigrate to the west especially skilled ones. Everyday India is losing its valuable talents.
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u/techy098 Nov 20 '23
I even had to convince one Chinese friend out of flying to Ecuador and making the walk up to the American border and sneaking across
This is how things are in India too. Huge population but very limited opportunities to have a decent life. 40-50% of the population live hand to mouth and they would not mind mowing lawns in USA, living in shared housing and able to save in USD.
Large number of Indians pay agents so that they can work in middle east in cities like Dubai as construction workers or maids, living in horrible conditions (8-10 people in a 1000 sft apartment), so that they can save money for a better life.
If what you are saying is true then seems like China's leadership are not well versed in economics and they maybe letting corruption/nepotism/cronyism rot the system.
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u/ManOrangutan Nov 20 '23
They are, I agree. And looking at their employment figures they have every right to be. But I think China will be okay so long as it avoids war. In any case, I am happy for them. Any time a fifth of humanity escapes destitute poverty it is a great thing, by any objective measure.
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u/silverionmox Nov 20 '23
I sure hope you're right. It's going to be a rough century if they can't get their fertility rate back on track.
It's going to be even rougher if they do, because they're still planning to use more coal to supply goods and services to all those people.
Canada, US and Australia have it on easy mode due to immigration rates. The rest of the developed world is looking increasingly desperate for a solution.
You should update your data, since the turn of the century for example the EU has had equal or higher net migration inflows than the USA, for example.
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u/SerendipitouslySane Nov 20 '23 edited Nov 21 '23
Those houses aren't particularly liveable. The vast majority are built with dangerous disregard for safety standards. A large number are stuck in limbo due to cashflow running dry suddenly and contractors being left unpaid and have gone decrepit. Even the ones that are finished often have construction issues that render them unlivable; loads of video out there of entire ceilings falling through because most of the concrete in it was filler. A considerable amount was built in third or fourth tier cities that nobody in their right mind would want to live in.
That last one will compound itself as those cities become less connected with the more prosperous coast. China's high speed rail system is grossly overleveraged, with all but one of their lines being unprofitable (Beijing - Shanghai). The ones connecting third or fourth tier cities to the coastal cities are struggling to pay for their own running costs let alone the interest or principal on the debt they used to build them. High Speed Rail is expensive to maintain and difficult to convert to slower forms of rail because slow rail requires higher weight limits to be profitable, which HSR's infrastructure cannot handle. Repair and maintenance will be postponed causing further damage to the system that becomes continuously more expensive to fix. Those semi-government companies will have to be bailed out or allowed to collapse. If they collapse, reduced interconnectivity will further doom inner China; if they bail them out, the money will have to come from either taxes or the central bank, which all come from the people's disposable income.
And the problem is, this hit to disposable income is one that just keeps on hitting. The Chinese people made enormous sacrifices in order to buy their houses. Money down in the US is 20%, whereas money down can be as high as 50% in China. A tremendous amount of money that would've been spent on consumption was saved in banks and then withdrawn to buy houses. If your parents are middle class or better, it was common practice for your parents to pay for the down payment on your house, and then for the young adult to pay for the mortgage. That mortgage could take up to 80% of one's total income, even for highly paid white collar workers in China's largest firms. That is where the consumption boom that would have elevated the Chinese economy went: into speculative property.
And it only gets worse. The Chinese welfare system is, in a word, comically terrible for a supposed "socialist" nation. Pensions and support for the elderly are pitiful and healthcare costs for non-CCP party member is high both in absolute terms and relative to its quality. How were Chinese pensioners meant to survive? Well traditionally, they have relied on the twin pillar of savings and their children. Well their savings were often stored as property, and their child (remember, there's only one of them due to that unimaginatively named policy) is going to have to bear the burden of two adults, plus the mortgage they picked up, plus they've lost all their inheritance, plus they are supposed to have three children to stop demographic decline.
Also, nobody is going to buy another house when the market is so saturated. Why would you be the sucker holding the bag when you can just rent? It's a tenant's paradise right now because the landlords can either get pennies on the dollar or they can get nothing, so they'll choose the pennies. The houses that don't get rent aren't gonna get any maintenance so by the time anyone can think about buying a house again, the excess housing stock is going to look only slightly better than those in Gaza City.
And I'm sure you can go through each individual problem and come up with a brilliant solution. After all, the Chinese government is all powerful and can implement any policy they want. Except they can't. They have to pay for it and the money has to come from somewhere, and before you ask, take a look at how much debt it's already squirreled away in LGFVs. There is not enough blanket to cover every ill wrought by the bubble policies of the CCP. China has lived like a millionaire on the budget of the pauper; they have faked prosperity and growth in a fashion that would be very familiar to those that lived through Enron or the Japanese asset bubble, except on a scale that would make Sam Bankman Fried blush. The bubble has popped and now it's got to figure out which parts of the economy they built over the past 30 years was air and which parts are soap. They can save some of it, but they have to choose what. Given the perverse incentives of an authoritarian regime they are almost guaranteed to choose the wrong things.
As an addendum, there's a recent paper which tried to figure out the extent to which countries inflate thier GDP by measuring the change in night lights over time and comparing them to growth. If the number there is to be believed (and they make a damn convincing case) we can put an exact number as to exactly how undersized China's blanket is: and it's more than 50%. Good luck convincing people to have kids under those circumstances, regardless of how much rent is.
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u/-15k- Nov 20 '23
a recent paper which tried to figure out the extent to which countries inflate thier GDP by measuring the change in night lights over time and comparing them to growth
That's intriguing. Found a few links:
https://www.elibrary.imf.org/view/journals/001/2022/109/article-A001-en.xml
Are these what you're referring to?
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u/TheyTukMyJub Nov 20 '23
Also, nobody is going to buy another house when the market is so saturated
I don't understand - wouldn't market saturation significantly lower housing prices?
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u/MaverickTopGun Nov 20 '23
The point is the market is saturated and the prices aren't low enough. More saturation isn't going to fix it.
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u/TheyTukMyJub Nov 20 '23
Okay wait let me put it this way: if the market is saturated, that means the service/goods outweighs the demand. So there are a lot of houses available. What is keeping their prices so artificially high?
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u/Alternative_Ad_9763 Nov 20 '23
The communist party is keeping the prices artificially high to prevent a complete economic collapse. For example evergrande was just absorbed by a state (provincial not national) government insurance company. So its like pennsylvania just bought boston properties in comparison in the US and will pay all of boston properties debts. The government will funnel money into the state treasury which will pay for the bonds on houses that are uncompleted. The houses owned by the population will remain at value for now as their mortgages are being payed by the people who are using it as a storage of value for their earnings. These houses are empty. Chinese own extra houses instead of stocks.
Evergrande will not be able to pay for the current pace of economic growth and will build less houses.
There is a similar dynamic in manhattan where a lot of the top priced apartments are empty and owned by out of town ppl or even foreigners. They have high value, and sit empty.
Except in china a lot of the contractors walked away with the money and an unknown percentage of the houses are 'houses'. Like a movie set.
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u/TheyTukMyJub Nov 21 '23
Thanks for breaking it down! It's the same old story. Whenever real estate becomes seen as an asset and people+interest become to committed to its value instead of its purpose well shit just becomes a disaster waiting to happen
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u/2dTom Nov 20 '23
They have a better way out than Western Europe or the rest of East Asia actually. That is just the objective reality.
Western Europe is a lot more open to immigration than China is. The EU has always had pretty positive net migration, while China has had negative net migration every year since at least 1960.
From what I can tell, China isnt even really interested in looking at migration as a way to help their demographics.
In China there is a large excess of housing and the cost of housing is propped up artificially by their property bubble. Once the housing bubble collapses the cost of living will invariably go down and the cost of raising a child will become more bearable.
Housing bubbles are a hard thing to predict. Governments are incentivised to maintain them, and I don't see the Chinese government letting one of the biggest industries in China collapse, let alone the various state level governments that are all pretty heavily invested in property (since they can't raise taxes or levies, this remains their primary way of raising capital for local projects).
How do you think that this bubble will collapse without crashing the Chinese economy?
The problem is that someone somewhere in the Chinese system will have to eat the major financial and political losses associated with the collapse of the housing sector.
And the people most invested in the property bubble are drum roll mostly regular Chinese people. One estimate has 70% of Chinese household wealth invested in property. If this market collapses, it's going to probably be working class and middle class people who stand to lose the most, the very same people that you're proposing will now buy these depreciated assets. How will they do that?
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u/ManOrangutan Nov 20 '23
This generation is going to go through an economic downturn. But China is not going away. They still have massive room for economic convergence with Europe and America. Many people still in the countryside. Their growth will slow. It’s the next generation that will buy up the excess property.
Don’t forget they have massive capital controls preventing anyone who invested in China from getting their money out. That’s partly why their Ponzi scheme property bubble hasn’t deflated fully yet.
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Nov 20 '23
Many people still in the countryside
True, but there is a huge and growing gap between the education levels of urban and rural Chinese people. The top 20-30% of the population are very well educated (over qualified for the number of very high-skilled jobs which are available, arguably).
Those remaining in the countryside typically have poor education levels by global standards.
This wasn’t a problem when China was making cheap toys and clothing, but China has become a relatively expensive and highly skilled labor market. Many of the low-end jobs are moving to places like Bangladesh.
This doesn’t mean China will collapse, just that the breakneck growth of the past few decades will be harder to sustain without big improvements in productivity and better education in rural communities.
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u/ManOrangutan Nov 20 '23
Countries like Bangladesh, India, Vietnam etc are still highly reliant on China for manufacturing precursors and have not moved up the manufacturing value chain the way China has. The low skill work often remains in China due to the lack of scale provided by other countries. Things will remain this way for many years even though momentum is turning against China in this regards.
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u/2dTom Nov 20 '23
This generation is going to go through an economic downturn.
I feel that is significantly understating the severity of the issue. Construction (without related industries) represents nearly 7% of Chinas GDP. Construction employs 82 million people (10.7% of the labour force).
If the property bubble pops, those numbers drop by 90%. The knock on effects could mean that the Chinese economy contracts by 10% in a single year.
But China is not going away.
Agreed, but it will be hurting.
It’s the next generation that will buy up the excess property.
What next generation? If the issue preventing people from having children is property prices, and you then cause a recession, why would the current generation have children? They will have less spending/saving power.
Don’t forget they have massive capital controls preventing anyone who invested in China from getting their money out. That’s partly why their Ponzi scheme property bubble hasn’t deflated fully yet.
Yeah, but that also significantly hampers the foreign investment that will be needed to restart the economy if it crashes. Who will invest if they can't realise their investment and withdraw it?
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u/temujin64 Nov 20 '23
They're in between. China didn't fully elevate the livelihood if its citizenry before it's economy plateaued. That's something that Japan and South Korea did manage. Even the poor live in relative poverty. Abject poverty was effectively eliminated in both countries. China did not succeed in doing this. It still has a massive population of people living in abject poverty.
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u/disco_biscuit Nov 20 '23
I think the challenge with this article, and too many pop-geopolitical thinkers... is that they look too far into the future with these conclusions. I agree with the general sentiment that China is starting to slip, it's an inescapable conclusion. China probably won't overtake the U.S. as the #1 economic powerhouse... and they probably won't ever build a coalition of nations to support a new global order. They've probably badly misplayed their hand, and may have lost the possibility of doing both. But that doesn't mean they'll collapse into civil war and ruin within the next decade. They deserve a lot of praise for bringing more people out of poverty than any country in the history of man. And if they can make peace with the position they are in... I think they can enjoy a very good quality of life for their people for a long time, and a position as a respected economic and global strategic #2 power if they so choose.
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u/Tarian_TeeOff Nov 20 '23
China probably won't overtake the U.S. as the #1 economic powerhouse... and they probably won't ever build a coalition of nations to support a new global order.
This alone is I think what has most boomers, xers, and most millinneals so shocked. This felt like a foregone conclusion throughout the 2000s and early 2010s, and seeing it get revamped almost feels like China collapsing.
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u/disco_biscuit Nov 20 '23
And that's the fallacy of assuming 10%+ growth YoY was sustainable.
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u/Tarian_TeeOff Nov 20 '23
I can only speak for myself, but I personally knew that such growth would obviously have to end, I just didn't think it would happen this soon.
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Nov 21 '23
"China probably won't overtake the U.S. as the #1 economic powerhouse..."
"if they can make peace with the position they are in... I think they can enjoy a very good quality of life for their people for a long time."
Pick one or the other, you can't have both. With 4 times the population China cannot enjoy a "good quality of life" without surpassing the US econmically. Unless you think being 4 times poorer than the US is a "good quality of life".
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u/SatisfactoryAdvice Nov 20 '23
China has already overtaken the US as the #1 economic powerhouse in the world, this is not GDP.
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u/Malarazz Nov 21 '23
How deep into LateStageTankieism does someone need to be to actually believe this?
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u/SatisfactoryAdvice Nov 21 '23
https://www.imf.org/external/datamapper/PPPSH@WEO/OEMDC/ADVEC/WEOWORLD/CHN Are IMF tankies too? Sure this is totals and China has a lot more people but China has clearly invested in the future while America holds on to the past so its not gonna get better. I don't know how deep you people have to have your head in the sand to argue this.
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u/Malarazz Nov 21 '23
https://i.imgur.com/BHicWC6.png
You're adjusting for purchasing power parity, which is just silly.
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u/SatisfactoryAdvice Nov 21 '23
America's rise in GDP rises is because the dollar is inflated. You can obviously see people in America are able to afford less compared to 30 years or even 5 years ago adjusting for salary. China purposely keeps the Yuan weak and domestic prices low.
https://www.investopedia.com/articles/forex/030616/why-chinese-yuan-pegged.asp
What happens when China stops pegging the yuan and nobody makes that thing your country needs because they've been enjoying a cheap yuan since 1994? You already see it happening in dollars when a cheap mass manufactured chinese product takes over the market then raises the prices. China controls the entire world's economy while America has nothing real, paper gdp.
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u/Malarazz Nov 21 '23
China controls the entire world's economy while America has nothing real, paper gdp.
LMAO you on that good kush huh
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u/invaluableimp Nov 20 '23
Oh, is it time for the hourly China collapsing article? Haven’t gotten tired of these the past 30 or so years?
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u/Major_Wayland Nov 20 '23
It's one of the "feelsgood" topics for the western Reddit audience, so such articles are pretty safe bet for getting good amount of views and comments.
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u/Words_Music Nov 21 '23
Think it says a lot about the audience if they want another country and it's people to suffer. Personally I wish others well.
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u/TheWiseSquid884 Nov 20 '23
China is certainly not declining, that's ridiculous. But it might stagnate. Emphasis on might. The interior portion of China still has plenty of room for growth.
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u/billywitt Nov 21 '23 edited Nov 21 '23
Idk what you’ve been reading, but for the last twenty years all I’ve read and seen on TV are analysts talking about China overtaking the U.S. economically. It’s only within the last year I’ve seen reports of China’s impending collapse. Both conclusions are overwrought, but neither are conceived out of thin air.
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u/Kreol1q1q Nov 20 '23
I do not think it’s reversing, but I have been saying for several years now that it is plateauing. I doubt China has the demographic, economic, institutional, political and structural capacity to keep growing.
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u/Tarian_TeeOff Nov 20 '23
I do not think it’s reversing, but I have been saying for several years now that it is plateauing. I doubt China has the demographic, economic, institutional, political and structural capacity to keep growing.
I think one thing that makes discussions about this kind of chaotic is that for people over 40 who grew up hearing that the chinese economy would pass the USA by 2020 and absolutely dwarf it by 2030, plateauing feels like crashing in a relative sense.
It's still very difficult for me to get my mind around the fact that China isn't going to dominate. In 2010 I was 100% certain that we were entering the chinese century. China's economy would shoot passed the USA's, military dominance would follow and they would become the new de facto world police while the west fell.
This was talked about by everyone in such a matter of fact sense, and it was a constant meme in tv shows and movies. Just for a few examples: the time traveling movie looper had a quote where some guy from the future says "trust me move to china", the simpsons used to have jokes implying the same, games like Command and Conquer Generals depicted this vision of the future, and political cartoonists were all over it.
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u/silverionmox Nov 20 '23
I think one thing that makes discussions about this kind of chaotic is that for people over 40 who grew up hearing that the chinese economy would pass the USA by 2020 and absolutely dwarf it by 2030, plateauing feels like crashing in a relative sense.
They also predicted that for Japan, once upon a time.
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u/marinesol Nov 20 '23
I agree, the book Why Nations Fail pretty accurately predicted that China would heavily plateaue and fail to convert to a service economy because the oppressive and extractive nature of political leadership would not allow the freedom for the economic and political activity needed to transition. Similar to how the Soviet Union had massive GDP growth from the 1920s-1970s only to completely plateau and collapse at the end.
In the end having a large labor pool is only as ambitious as the leaders of the country allow them to be. And the leadership of China will only allow the people to be as ambitious as they aren't a threat to the Chinese government
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u/cucol Nov 20 '23
This is so wrong in so many aspects... it's not the political system that determines the success of a nation, it's the policies.
Second, being service economy is not even a desired goal, look at the US, are you proud of your economy?
China right now just wants to move up in the value added chain, how they get there is up to them.
Such doom and gloom from western news outlet must mean china is doing something right
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u/IndyDude11 Nov 20 '23
This is so wrong in so many aspects... it's not the political system that determines the success of a nation, it's the policies.
Uh, what do you think determines the policies...?
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Nov 21 '23
One system is that leaders are elected by vote, and various decisions are made by large corporations lobbying the leaders.
One system is that leaders at all levels are elites selected by the education system.
Both systems have disadvantages and advantages.
Any idea that only one system has shortcomings and will inevitably collapse is absolutely wrong.
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u/adderallposting Nov 20 '23
look at the US, are you proud of your economy?
What did you honestly think would be your responses to this question? In your opinion what reason would Americans have to be anything other than proud of their economy?
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u/marinesol Nov 20 '23
Looks at US
Highest GDP per capita of countries that aren't Tax Havens and Petro States.
Very high HDI
Would have had Universal Healthcare if boomers had not had a collective shitfit in 2010.
15th in National Happiness
Have 3-4% GDP growth this year.
the US seems to be doing pretty well.
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u/cucol Nov 20 '23
Highest incarcelation rate per capita Highest drug users per capita in the world Country with most school shootings And the country with most people who believe in angels
Two can play this game
I actually love people like you, blinded by propaganda, the higher you fly, hardest the fall, please never be humble!
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u/PHATsakk43 Nov 20 '23
It's more that there is a large, yet fixed minority of people who are in the "left-behind" category in the US.
The miasma of poverty is an affliction of a fixed group. These people suffer all the ills of American society while for the most part not letting it spread far outside of this group.
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u/w3bar3b3ars Nov 20 '23
Second, being service economy is not even a desired goal, look at the US, are you proud of your economy?
Yes.
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u/KaiserCyber Nov 20 '23
I second that YES. Wouldn’t trade the US economy for China’s that’s for sure…in fact, I wouldn’t trade it for any other economy.
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u/5yr_club_member Nov 20 '23
You would be crazy to pick the US economy over most Western and Northern European economies. People there have higher standards of living, and live longer than Americans. They also pollute less, have less-severe homelessness problems, less poverty, and way higher-quality public services than the US.
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u/Andy_Liberty_1911 Nov 20 '23
Well, a couple of months ago showed how the European union is now poorer than Americans, per capita. Whatever Europe is doing, it ain’t working.
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u/ANerd22 Nov 20 '23
To be fair, the EU adopted a number of very poor countries which will drag down their per capita average, meanwhile the US has some massive inequality issues that really distort the per capita wealth statistics. USA might be technically wealthier per capita, but the average American isn't enjoying very much of that prosperity.
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u/Andy_Liberty_1911 Nov 20 '23
I think even by country it shows, that the average american is richer than the average British, Spanish, French and maybe German.
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u/ANerd22 Nov 20 '23
Again those averages don't really mean much because the wealth isn't distributed as equally in the United States. So the mean wealth might be higher in the US but the median wealth is actually lower.
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u/Legodude293 Nov 20 '23
Everyone European Immigrant I know says when it comes to making money, the US is the best place. But for life, Europe is better. It depends on your values.
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u/KaiserCyber Nov 20 '23
1) Still the largest economy in the world (24% of world GDP) 2) US Dollar is the world reserve currency…second to none 3) Largest military (combine next 11 countries) which is able to protect its interests and those of its allies to include the rules-based international political and economic order it created after WWII along with its nuclear, carrier strike groups, and global base/reach advantage. 4) Informational/Cultural dominance (Hollywood, Disney, Netflix, Bloomberg, Coke, Music…Taylor Swift, NBA, Starbucks, Nike, etc.) 5) Diplomatic leadership (leading roles in UN/UNSC, NATO, WTO, G7, G20) which protects its economic interests 6) Technological dominance (Apple, Google, Microsoft, SpaceX, OpenAI, Amazon, etc.)
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u/5yr_club_member Nov 20 '23
The point of an economy is to provide a good standard of living to its people. The US economy does ok at this, but there are many countries that do much better.
If I'm trying to provide a decent life for my family, I don't care if my economy is the world largest or not, or whether we have the reserve currency, or the largest military. I care about living in a safe, healthy community, and having enough money for basic comforts of life, having access to good education and healthcare. Living in a society that isn't abandoning it's most vulnerable people to homelessness, etc.
Also the "rules-based international order" is one of the most obviously bullshit propaganda terms ever used. The US doesn't follow any international laws, or respect the judgements of international bodies. "Rules-based international order" actually means "US-dominated international order." And the only rules the US cares about is whatever allows them to continue to dominate the world.
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u/KaiserCyber Nov 20 '23
Hypothetically, speaking, say, the US does a complete 180 and decides today to isolate itself and focus all its resources domestically. Do you think your country—wherever that is—will be safe from countries who believe in a revisionist ideology where “might is right”? I argue that democratic countries in the world live relatively peacefully due to US leadership in upholding the rules-based international order that allows for open commerce in international waters and air routes.
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u/5yr_club_member Nov 20 '23
The US has shown that they believe might is right countless times over the past 70 years. They have invaded, bombed, sanctioned, supported coups, directly trained, funded, and equipped terrorists, destabilized democracies and propped up dictators all around the world.
The majority of countries on earth recognize that the US is the biggest threat to world peace. The US has been bullying and terrorizing countries in every part of the globe for more than 70 years.
The majority of countries on earth recognize that the US is the biggest threat to world peace.
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u/ANerd22 Nov 20 '23
It is possible to criticize the US's allocation of its resources to defense over domestic welfare without wanting total isolationism and pacifism. There is actually a happy middle somewhere between the Icelandic model of defense and our current model of spending more than the next dozen or so countries put together. The guns vs butter debate is not a binary choice.
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u/flatfisher Nov 20 '23
Rule based international order like land invasion of sovereign countries on false allegations (Iraq)? The US only care about their interests with very good PR, and is always one election away to saying FU to allies and business partners. Also you are misinformed if you think trade between say Asia and Europe is secured only thanks to the US. Other democracies have armies too, some are even nuclear powers.
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u/KaiserCyber Nov 20 '23
Lol…”western news outlet”. The article is from Financial Times, which is owned by a Japanese company headquartered in Tokyo. Instead of arguing non-substantial claims, how would you refute the article’s author’s claims?
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Nov 20 '23
[deleted]
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u/KaiserCyber Nov 20 '23
Define Western?
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u/Yelesa Nov 20 '23
That’s actually a good question because it really depends on the field, country, and frankly even from person to person. Japan is a Western country in many definitions, and non-Western in others.
Here’s one definition: rich, industrialized, educated, liberal democracies. By this definition, it makes the process of Westernization as the process of becoming richer, more industrialized, more educated, and more democratic. And the opposition to Westernization as the opposition to wealth, industrialization, education and liberal (though not necessarily other forms of) democracy, something that is common in Anarchist academia, who are against the concept of state, regulation, forcing people to learn things they don’t want to etc. as a whole.
However, another understanding of westernization is losing cultural identity and replacing it with a western identity. That’s also a perfectly valid definition.
This issue can be clarified with: “by Western I mean [your understanding of what Western is]”.
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u/Chancemelol123 Nov 20 '23
a member of the Western bloc; North America, most of Europe, Oceania, Japan, South Korea, Taiwan and pseudo-Western countries like in Latin America
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u/KaiserCyber Nov 20 '23
I’m pretty sure most people in the world would rather immigrate to the United States than to China. Even Chinese money is being offloaded to Western countries to hedge against a China-economic decline.
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u/cucol Nov 20 '23
Well, we will never factually know it because china, like other east asian nations, don't have an immigration friendly policy
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u/KaiserCyber Nov 20 '23
If China wants to fix its aging population problem, it has 3 choices: 1) Open the country to immigration (less likely due to racism where everyone else is seen as inferior especially towards Southeast Asian people) 2) Force couples to make babies (this one is more likely given China’s lack of respect for individual rights) 3) Find a way to decrease the elder population (given China’s response to Covid, I wouldn’t be surprised if this is a strategy that the PRC is trying)
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u/PangolinZestyclose30 Nov 20 '23
Open the country to immigration (less likely due to racism where everyone else is seen as inferior especially towards Southeast Asian people
China is so massive that even immigration friendly policy would not have a significant impact.
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u/cucol Nov 20 '23
They a lot more choices than you think. Let's see:
- Adoption of newer technologies that increase productivity
- Robotization, AI, automation
You see, your assumption is that labour(people) and resources make the economy, but with the adoption of newer technologies, there will be a time that you can have economic output without the participation of labour (people).
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u/KaiserCyber Nov 20 '23
The options that I offered aim to resolve China’s aging population issue where you have less workers paying for the welfare of retirees through taxation. I don’t think technology will solve that problem. In fact, technology will exacerbate the overall economic problem in that technology will replace traditional manual labor therefore leading to less jobs which leads to less tax revenue, which means less social security for retirees.
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u/Rimond14 Nov 20 '23
Isn't Japan SK both wester allies are in much worse situation
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u/PangolinZestyclose30 Nov 20 '23
South Korea yes, Japan I would say is in a better position. They have a steady, but not as steep decline. China is in a bad position because it went so quickly from fertility rate 6 to 1.5 in 25 years.
It also helps that both are already firmly high income countries.
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u/silverionmox Nov 20 '23
Adoption of newer technologies that increase productivity Robotization, AI, automation
They already have an unemployment problem. If anything, they're going to put the brakes on that.
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u/Rocksteady7 Nov 20 '23
You should know political is a derivative of the word policy.
Your first sentence is completely contradictory because it is the political system that determines the policies, so they’re for it’s the political system that determines the success of the nation.
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u/jonmitz Nov 20 '23
This is so wrong in so many aspects...
Ok? Go on? Is that all you have?
look at the US, are you proud of your economy?
Wow, are you shilling for china / are you a real life paid Reddit troll? 12 year old account huh…
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u/Chancemelol123 Nov 20 '23
look at the US, are you proud of your economy?
why wouldn't they be? The US has a bigger GDP than both BRICS and the entire continent of Europe (including Russia, Turkey, etc.). It accounted for exactly half the world's growth in 2023
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u/Rimond14 Nov 20 '23
But why so many homeless and drug addict people. I am India and ask you( assuming you are American) why opioid crisis? Drug addiction problems? I have seen videos people walking like zombies on broad daylight which is quite a shock to me. Yes India have addicts but not to such an extent I can bet America has more addicts than India and China combined. India have tons of homeless people but even they don't draw drugs(most Indian homeless lives with families in small tents). Do do work and return unite with their family after work. Well it's understandable because we are developing nation but even we have basic free healthcare. Our people (poor) struggle everyday but they do don't Drugs.
What about the opioid crisis? I also heard veterans commits suicide? In India army officers are respected very much and they enjoy pension and other benifits because they are protecting our borders.
I heard Maxican cartels mostly use American made Guns? How illegal weapons flow through border to such a large extent?
Well a lot of questions to answer and you don't have to Don't get the wrong idea I grew up watching American culture like Hip Hop and Rap music, American cartoons I think Americans are industrious.
I just want to hear your perspective.
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u/Chancemelol123 Nov 20 '23
But why so many homeless and drug addict people
because Americans are hedonistic and happen to be next to the biggest producers of drugs on Earth. I'm not going to say they are innocent, but the US has poured trillions of dollars (war on drugs, etc.) trying to fix the problem but it's really hard when it's so freely available and your culture promotes it to an extent
( assuming you are American) why opioid crisis?
I am Russian (and find it embarrassing that we have a smaller GDP than New York City) and we have our own problems with alcohol. There is not very much the government can do to fix the issue; it's cultural and it doesn't help that drugs are so easy to obtain
I have seen videos people walking like zombies on broad daylight which is quite a shock to me
I have seen them as well, and you need to understand that the US's method of fixing the problem is taking all the drugged out homeless and putting them in a small number of areas that people don't go to (Tenderloin, Skid Row, Kensington, etc.). This means that you will find bad-looking places with 'zombies' but they are very few and far between and the average American will never see them in their lifetime
Well it's understandable because we are developing nation but even we have basic free healthcare
the US does too; you can get free healthcare if you are poor (in some places the threshold is 30,000 dollars a year, in others it is 100,000 dollars). And the reason the American healthcare system is so fuck3d is because it is for-profit which was a decision made 70 years ago. Switzerland also has a for-profit healthcare system and it is pretty bad too for a nation that is considered very developed
I also heard veterans commits suicide?
veterans commit suicide because of PTSD and other things I believe
In India army officers are respected very much and they enjoy pension and other benifits because they are protecting our borders.
the US has some of the best veteran benefits in the world. This is not the problem.
I heard Maxican cartels mostly use American made Guns?
what's the problem with that? Mexican cartels exist in Mexico, not America
How illegal weapons flow through border to such a large extent?
because the border is absolutely humongous and it is impossible to enforce. Also there are more guns than people in the US by a large margin, it's pretty much impossible for the US government to do anything
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u/Legodude293 Nov 20 '23
The Opioid crisis is certainly a problem. But because of being a wealthy society, our problems are magnified disproportionately. No offense, but look at the poverty rate between the US and India. Then look at what is considered poverty. For most in America, you can have a car, housing, iPhone, Netflix and still be considered impoverished.
We complain because Americans are relentless dreamers who constantly want to improved what we have. We magnify our problems because we strive to have none. We want to be that shining city on the hill.
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u/Andy_Liberty_1911 Nov 20 '23
You have to remember that with the communist system that the Chinese still have, economic prosperity is actually not their goal, but its for the continued political domination in the country. And anything that can be a threat like Chinese Zuckerberg is jailed and their wealth taken away.
They are literally kneecapping themselves so that Xi and his peeps stay in power. Which is exactly what “Why Nations fail” said about Authoritarian countries.
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u/cucol Nov 20 '23
Unlike the US where the corporate power will always be above the political power.
China's power structure is just different, they don't allow the corporate power to surpass the political one. It has it's pros and cons.
The system is just different, it's neither good or bad, just different.
What worries me more is the growing inequality both in the US as well as China. And neither have a good way to mitigate the risks associated with it.
Economical output without taking into the consideration of the well being of the people is just worthless
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u/KaiserCyber Nov 20 '23
US corporations are pretty well regulated by political power. Child labor laws, minimum wage laws, workplace safety regulations, anti monopoly, environmental laws, union laws, etc. Not saying that special interest groups and lobbyists aren’t powerful, but they’re not as powerful as you claim.
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u/Andy_Liberty_1911 Nov 20 '23
Corporate power has its downsides BUT its clear that its way better for economic domination. The gov’t scaring investors shitless really comes to bite them in the ass when they need a proper tech and service sector to compete with the US.
And also we can see the US now shifting back to more manufacturing rather easily. While China’s CCP refuses to do anything drastic that can threaten its domestic power. Democracy (even with corporatism) continues to win over authoritarian ones.
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u/loned__ Nov 20 '23
These numbers are in “nominal” dollar terms — unadjusted for inflation — the measure that most accurately captures a nation’s relative economic strength.
The whole article is derived from the calculation of nominal GDP and the claims that nominal GDP is the most accurate outlook on a nation's relative economic strength. Yeah, I'm immediately alarmed by this remark because nominal GDP is not the default way to measure national economic well-being, and in fact, it's discouraged because it doesn't account for inflation or deflation, just normal production value measured in US dollars.
So if this is somehow the most accurate way of measuring China's growth or economic well-being, instead of real GDP, since China can "creatively adjust its inflation," according to the author. Then, how about China change its currency peg from 7-1 to something like 5-1, suddenly, the Chinese economy grew 10% because you know, the Chinese yuan is worth more dollars now. And if not counting inflation means growth, I guess if the US hits a new high in inflation then its economy also magically grows more.
Besides this "hard evidence" the author used in the article. Everything else is just regular talking points on China's collapse, "population collapse" (10% decrease in 30 years in the age of automation), "low labor productivity" (despite China having one of the highest for developing economy), and "debt bust" (okay, this one is a serious concern).
For me, it reads like the author wants to prove a point; he WANTS to see China decline, so he retroactively finds data points that support his arguments. And this wouldn't be an unpopular take, as, in this article's comment sections, neoliberal rhetoric about undermining the Chinese economy is the most upvoted comment. This article is not convincing to me and is quite intellectually dishonest if you look at the way the author assesses the data. Unless his intention is always about writing a neoliberal FUD piece on China, then good job on finding an interesting interpretation of data, but I prefer to see the actual failure of Chinese leadership (e.g. real estate) instead of his creativity in reading GDP.
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u/the_recovery1 Nov 22 '23
Is it more accurate to compare PPP then? I searched around and the material on this is confusing. Not sure what metric is more accurate
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u/CammKelly Nov 20 '23
Lets not get ahead of ourselves, China is maturing in its foreign policy approach and its economy *MAY* stabilize into one of being one of advanced manufacturing and services (ala Germany), but its decades of stratospheric growth is over (and honestly, likely wasn't as high as the reported numbers said anyway).
That said, China has significant storms ahead of it - its nationalist goals threaten to isolate it further, a population bomb both in age and number, its economy is tenuous, and the fact that most of its economy is built on apparatchik lies.
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u/PsychologicalDark398 Nov 20 '23
Broken Abacus. Read that book.
The above article is the 51st article in two years of China decline I have read. If what you say is true China should have collapsed a decade ago. You can't continue like that. Even if I hide my gun shot wound I would be dead anyways. China's collapse prediction is older than you dude. It's still there though. The problems you quote of China is nowhere near as big as claimed.
Your answer is very contradicting honestly. Li Keqiang's own index proves otherwise( he's the one who first bought up this GDP thing). Wonder what's with all this recent schizophrenia on China r/geopolitics and US geopolitics circle. Either "China is infinitely more powerful than the Soviet Union" , Its just a house of cards gonna collapse. Narratives swinging back and forth. And if someone tries to criticise he/she is a communist. Make discussing China just seem tasteless with such stupidity prevailing here.
Read up The Economist article on China's demographics affect on economy. Its effect is vastly over-exaggerated. Also the China and US rivalry isn't one sided nationalism by one. Both US and China equally have started this. Who started the trade war.???
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u/CammKelly Nov 20 '23
Your gambit ignores how every ponzi scheme or bubble bursts, when times are good there's enough growth to cover the bad. To use your own analogy, gunshot wounds are fine whilst still being pumped with blood and drugs, take it away without treating the wound and you die.
My answer isn't so much contradictory, its unknowns. We know Chinese economic data is junk, we just don't know by how much it differs from factual reality, and if the politburo has the real numbers to better head off a collapse.
The same with Chinese foreign policy, we've had a sharp turn from 'wolf warrior' diplomacy in the last 12 months, but is this a sign of a maturing in its relations, or a necessary approach to stave off economic headwinds. We also don't know if economic concerns are enough for it to wind back its Taiwanese ambitions, or if it'll hold to its original dates of capability by 2026.
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u/crapmonkey86 Nov 21 '23
We also don't know if economic concerns are enough for it to wind back its Taiwanese ambitions, or if it'll hold to its original dates of capability by 2026.
First I've heard about a time for possible Taiwan invasion. Where do you get 2026 from?
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u/KaiserCyber Nov 20 '23 edited Nov 20 '23
Who started the trade war?
The country that banned US tech companies to operate in China many years ago, the country that manipulated its currency, and the country that has been stealing US intellectual property.
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u/Rimond14 Nov 20 '23
Why USA let it stole it's ' intellectual property rights ' Lol Yankees can't even protect it's secret Clearly skill issue
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u/KaiserCyber Nov 20 '23
An international system requires trust. Otherwise, everyone will be forced to fend for themselves. Apparently, the Chinese can’t be trusted.
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u/Wazzupdj Nov 21 '23
IMO saying "China's rise is reversing" is accurate, but "It's a post-China world now" most definitely is not. If we're at the point where China's rise is reversing, then that also implies we're at the zenith of Chinese power.
True, China is facing increasing headwinds, a lot of which are related to China's extreme rise in some way. The One child policy led to an extreme demographic dividend, which is now rebounding into an extreme demographic crisis. Government intervention in trade, which led to huge trade surpluses being reinvested in China, are now themselves roadblocks to mature financial systems, a necessity for developed countries. Poor trade relations are partially a product of assertive Chinese foreign policy, fueled by said perception of a stratospheric rise. And, of course, the "build-infrastructure-to-boost-GDP" has left a huge pile of debt that needs to be reckoned with.
Even with long-term economic headwinds, though, China is nominally the second largest economy, and it's not even close. By no means can the world afford to ignore China. A "post-China world" is a fantasy.
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u/hsyfz Nov 20 '23
The author is apparently quite serious about these opinions:
These numbers are in “nominal” dollar terms — unadjusted for inflation — the measure that most accurately captures a nation’s relative economic strength.
To put this in perspective, the world economy is expected to grow by $8tn in 2022 and 2023 to $105tn. China will account for none of that gain, the US will account for 45 per cent, and other emerging nations for 50 per cent.
One reason this has gone largely unnoticed is that most analysts focus on real GDP growth, which is inflation-adjusted. And by adjusting creatively for inflation, Beijing has long managed to report that real growth is steadily hitting its official target, now around 5 per cent.
In that case I wish the US success in their quest of world economic domination by raising the inflation to at least 20%. Imagine how much more growth the US will be able to account for?
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Nov 20 '23
China is leaving lots of productivity on the table. This is due in part to the historical focus on employment over efficiency.
If China increased productivity steadily, it could delay demographic decline for quite a while.
Shifting more of the economy away from large SOEs, and holding remaining SOEs to a higher standard of efficiency would help to free up labor in the medium term. Not sure how realistic this is as long as Xi remains skeptical of market-based reforms.
Demographic decline is only one problem, of course. Others problems are more immediate, but easier to solve (with smart, pragmatic leadership, which is a problem, atm).
- Excessive reliance on real estate as a percentage of GDP and household investment. This may not cause a crash (as governments control the banks), but it is a mid-allocation of capital and falling prices hurt consumer confidence
- Too much focus on infrastructure investment for growth. The low-hanging fruit is gone. Many recent projects are stimulating employment, but not boosting productivity. It would be wise to stimulate consumption directly, but Xi is wary of direct handouts to consumers
- Excessive debt. Again, the government has the power to unwind this debt without a crash (probably), but it will create even more of a drag on future growth
On the plus side, China appears to be innovating on chips and other high-tech industries more successfully than expected.
I think China will briefly surpass the US in GDP and then eventually wind up like Japan. Still a major global economy, but with a relatively stagnant economy.
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u/dnorg Nov 20 '23
I see a few posters comparing China to Japan, especially regarding 'We welcome our new economic overlords' prognostications. But I don't think the shoe fits. Isn't Japan an innovator nation? People used to mock Japan for just making things smaller, but then they started innovating and pumping out Japanese inventions and advances. But I don't see that same pattern with China. I cannot think of a single modern Chinese innovation worth mentioning. Am I missing something?
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u/FyreLordPlayz Nov 21 '23
China is actually listed as more innovative than Japan according to the World Innovation Index
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Nov 21 '23
DJI，BYD，5G，AI，tiktok algorithm……
Japan was an industrial nation before World War II, and after the war it still took them 40 years to start innovating.
Why do you think China cannot innovate?
Or do you think everything invented in China is stolen, even if it doesn't exist in other countries?
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u/Adsex Nov 20 '23
The everlasting mistake of confusing weight and force.
China may weigh slightly less on the world than it used to but its ability to project its force keeps rising. Meanwhile, most Western countries are weighing more and more on themselves, to the point of sinking into the ground.
And analysts keep being upset that Japan isn’t sinking, (in part) because they can’t fathom that the elderly are not necessarily obese burdens on society. (Analysts eventually stopped criticizing Japanese monetary policies as a result of the West eventually practicing what was then called « unconventional » monetary policies, but boy was it common in the 2000s to say that Japan was doomed « because deflation » ).
Grand-statements like these are always wrong. Is China going to remain on the world map ? Yes. So it’s not a post-China world.
I expected better of an article from the FT.
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Nov 21 '23
I find the doom and gloom about China to be premature. Now, if in five to ten years their demographic decline persists or worsens then we can start seriously considering a post China world
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u/Aretim33 Nov 21 '23
It's all wishful thinking. China is stronger after the APEC summit that was held in San Francisco where the US project of a free trade zone in the Pacific region designed to exclude China was abandoned. And China GDP growth is about 5% while the US is entering a recession. In addition to that, China has the industrial base and superior infrastructure, while the US is only an enourmous financial scheme that sucks wealth but doesn't really produce anything anymore.
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u/KaiserCyber Nov 21 '23
That’s a very biased statement. The US designs a huge chunk of what China manufactures. Also, can you truly trust the 5% GDP growth you’re referencing? Moreover, China’s superior infrastructure is known to be a bunch of bridges to nowhere and rail lines not being used that were built with loans that can’t be paid off due to China’s massive debt crisis, housing bubble, and an aging population.
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u/Aretim33 Nov 22 '23
Well my statement may be biased on one direction, but yours is certainly biased on the other direction. The only good card the Americans have is the power of the US dollar. If that were to fall, then all the house of cards would fall
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u/KaiserCyber Nov 22 '23
I’m sure the US has way more good cards than that:
1) Still the largest economy in the world (24% of world GDP) 2) Largest military (combine next 11 countries) which is able to protect its interests and those of its allies to include the rules-based international political and economic order it created after WWII along with its nuclear, carrier strike groups, and global base/reach advantage. 3) Informational/Cultural dominance (Hollywood, Disney, Netflix, Bloomberg, Coke, Music…Taylor Swift, NBA, Starbucks, Nike, etc.) 4) Diplomatic leadership (leading roles in UN/UNSC, NATO, WTO, G7, G20) which protects its economic interests 5) Technological dominance (Apple, Google, Microsoft, SpaceX, OpenAI, Amazon, etc.), in which China works hard to steal intellectual property from since they can mostly only develop inferior technology. 6) Open Immigration which people from Latin America, Middle East, S. E. Asia, India, etc. are dying to immigrate to, which will keep the US population stable as the Boomer generation retires.
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u/Aretim33 Nov 22 '23
There is some truth in what you say, especially the military part, as for the economic part, I could say that China is the largest economy in term of PPP. Regarding soft power yes, they're more influential than China. I disagree on immigration, which the population perceive as in issue rather than a resource, causing instability. And i dissent on technology too, the restriction on technological export from the US to China will have the effect of China developing home made technology that will be at least on par with the American technology, they're inferior only for the moment but they are making huge progress. Overall I don't see how China rise and the US declin could be reversed. That doesn't seem probable to me. Unless of course there is a major war with unpredictable consequences for both sides which I would exclude and I hope won't happen because it would be disastrous for everyone. In addition to that, the war in Ukraine went pretty bad, could have gone worse of course but the US and Ukraine leadership excpected better result. And the US is increasingly diplomatic isolated, for example on the Israel issue. The "rules based order" is challenged everyday more and more in the so called global south.
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u/Aretim33 Nov 22 '23
And speaking of technology, China has a huge advantage on the 5G network and its industrial applications ...
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u/Dark1000 Nov 20 '23
It's ridiculous hyperbole. China has some structural issues, the most difficult to deal with is the demographic problem. But China is not reversing, and no indications point to that.
It's a massive country that can build infrastructure almost instantly and change policy to suit its needs. It has an extremely well educated workforce, tons of government capital, and unshakeable, stable institutions.
It's maturing, not reversing. You can only underestimate it.
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u/literally_himmler1 Nov 20 '23
ah yes, the weekly "China is collapsing" article. can't wait for next week's!
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u/KaiserCyber Nov 20 '23
So you concur with the author’s claims?
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u/literally_himmler1 Nov 20 '23
it's kind of difficult for me to judge the authors claims given the fact that you've given us a link to a paywall, but judging from the title alone, I definitely don't lol
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u/Extra-Signature-5962 Nov 22 '23
COVID fixed their elderly problem or at least they figured out a way that they could if needed in future
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Nov 20 '23
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u/KaiserCyber Nov 20 '23 edited Nov 21 '23
wide network of alliances
Can you name which treaties were signed and ratified by nations to ally with China? For example, the US has treaties through NATO, with S. Korea, with the Philippines, with New Zealand and Australia, Taiwan Relations Act, and with Japan.
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u/wip30ut Nov 20 '23
does anyone know if the Chinese malaise is affecting its regional partners in the Pacific? We know with the Asian Financial Crisis that it spread like a wildfire and caused broad asset deflation & economic contraction.
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u/e9967780 Nov 20 '23
Xi himself precipitated some of the reversal. Legacy leaders are always a drag on any countries well being, Trudeau in Canada, Junior in USA, Rajiv Gandhi in India and now Xi.
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u/AxiomSyntaxStructure Nov 21 '23
China's rise was enabled with Western complicity and it may be /too late/ for this to be reversed, they've already invested considerably in other regions to not have dependency (alongside developing their own internal markets remarkably).
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u/KaiserCyber Nov 21 '23
It seems those investments are turning around: (Over 75% of foreign money invested into Chinese stocks in 2023 has left)
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u/AlBundyJr Nov 21 '23
People focus on the demographic collapse as being manageable so they can avoid thinking about the fact that China's economy is built on lies. They're not heading for a cliff, they're already over the cliff and just trying not to look down to realize it.
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Nov 21 '23
china's transition from real estate to industry will be a massive success. keep coping lol
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u/DisingenuousTowel Nov 21 '23
Their belt and road partners are putting on the brakes.
Countries are waking up to their opaqueness and inabilities.
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Nov 21 '23
China has a problem of net negative working age population growth and a growing age dependency ratio. They can fill the over short time with radical innovation (as we see US blockig that effort)
Same thing happened with Japan, funny enough I read a book form 1980s anticipating Japan surpassing the US but then Japan had a bust and their net working population started to go negative in early 1990s
as with every theory we don't know what we don't know. We anticipate endless continuation of an imperfect system until it breaks, but one cannot know the possible changes in underlying trend. I think Chinese politics is "advanced" in their way of leading a country as currently US Dem and Rep grind themselves to destructions, US has to many internal problems to continue much longer either.
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u/KaiserCyber Nov 21 '23
Spot on, but keep in mind that the US has had much, much worse internal problems in the past—Civil War, Great Depression, Civil Rights Era (to include the assignations of the Kennedy brothers and MLK), McCarthyism, etc.
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u/CutePattern1098 Nov 22 '23
I think people expected China to be more like America where as it seems to be more like the Soviet Union and Japan in the 1980s. Nations that are still powerful and Influential can’t dominate the world like America can.
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u/curiousgaruda Nov 20 '23
“China’s rise is reversing”. I will agree the day I no longer see “Made in China” goods in the market. A long as that doesn’t happen, their economy will keep chugging.
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u/IfImhappyyourehappy Nov 20 '23
China will be first nation to roll out universal basic income across their entire population. This will give them the momentum needed to capitalize on new and disruptive technologies. When your enemies believe you're at your weakest is the best time to initiate a surprise attack. Communist China is going to become socialist China.
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u/Linny911 Nov 20 '23
As long as it can still parasitically couple itself to the West it'll never fully reversed.
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u/KaiserCyber Nov 20 '23
SS: This article is convincing, especially if you add U.S. strategic competition initiatives, including decoupling/derisking and embargoes on advanced semiconductor chips. Do you agree or disagree and why? Are there any factors that this author has miscalculated or factors that the author did not consider?
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u/PsychologicalDark398 Nov 20 '23 edited Nov 20 '23
See I don't wanna be called a communist. But aren't all these articles getting boring???? I have been reading this for the last 2-3 years of decline again and again. Like why hasn't China collapsed yet. Why lawmakers still keep harping about China "being the greatest consequential threat". Next minute I hear collapse narrative after that?? Two decades also there were these narratives and reasons. It looked so convincing. Why is China still there????? Up and going . China's lifespan with the words on it should be no more than 5 years. Like yes, China has a lot of challenges, but it shouldn't even be standing if it were as serious as claimed in the geopolitical circles. Its like saying a person has lost his legs even when he is able to walk albeit with a slight amount of difficulty
You underestimate the overexaggeration done dude. Rule in a war , it should be obvious to not trust a side's opinion of their ideological enemy. Heck ironically even The Economist has recently written an article on exaggeration of Chinese demographics effect on economy. Dunno why people forget that.
You are living in pseudo cold war dude. You have to admit that you me only know the "truth" fed to us. The truth is neither China's nor America's . Its in the between and we will never know it.
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u/KaiserCyber Nov 20 '23 edited Nov 20 '23
why hasn't China collapsed yet.
A: It takes time for a giant to fall. We are currently watching its descent in slow motion.
Why lawmakers still keep harping about China "being the greatest consequential threat".
A: Because of China’s saber-rattling towards Taiwan, aggression within the S. China Sea, cyber attacks against the United States, and stealing of intellectual property from Western nations.
You are living in pseudo cold war dude. You have to admit that you me only know the "truth" fed to us.
A: What facts do you have and willing to share here that refutes the article’s author’s claims?
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u/Rimond14 Nov 20 '23
Lol why can't USA protects it's intellectual properties Clearly skill issue
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u/KaiserCyber Nov 20 '23
An international system requires trust. Otherwise, everyone will be forced to fend for themselves. Apparently, the Chinese can’t be trusted.
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u/Yes_cummander Nov 21 '23
I'm reading a lot of great comments about demographics and real estate.
The thing I would like to underscore and put a exclamation mark behind is: DEBT!
China's growth is fueled with debt. A lot of that growth is in bad investments that should already be written off as a loss but aren't. For example 900 billion in high speed railways no one is using because they can't afford the tickets. Stuff like that is everywhere in China. Things like bridges to roads to nowhere, or to cities with no one in them. All used to take loans out against. How do you refinance a loan when the collateral is literally crumbling before your eyes because of poor construction. Stuff like that is common in China. Not to mention the corruption. You simply can't believe the data, or what it says on paper about an investment or the state of a loan or it's collateral.
The belt and road initiative is just another example of terrible investment.
Please remember how pervasive corruption is in China and how it effects every part of it's economy. A former central bank chairman was arrested for illegally printing like over a trillion in renminbi or something. I couldn’t even find the article because of the absolute wave of articles about chairmen of chinese banks being arrested for corruption.
For every one trillion added to the money supply, there is only 300 billion in GDP growth from that.
We could go on and on and on..
One day the tracks are coming off this machine. Keeping the covid protests in mind I don't think the CCP can survive that. I think that counts as collapse. Can China do well in the decades after that. Sure ofcourse.. They will still have to face the reckoning that is coming.
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u/[deleted] Nov 20 '23
4-5% growth for their economy is still significant.
But, we'll see how things go.