China's Greatest Fear: Dead and Buried Like the Soviet Union (Closed)

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kwaigonegin

kwaigonegin

Colonel
weig2000 said:
Old Russia and USSR were much more developed and industrialized than China of the same time. China was one of the poorest country in the world; it was basically an agrarian society with over 90% of its population illiterate in 1949 when the PRC was founded. On a per capita basis, China was also rather poor, particularly compared to the USSR/Russia. Economically, USSR reached its peak in the '70s because of the high oil price. For China to be fully developed, it's difficult to follow the model of the western countries due to their earlier industrialization and colonization. It's also difficult for China to become a wealthy or even middle-income country following the example of some resource-rich countries in Middle East, Latin America or indeed USSR - and these countries eventually have become stagnant or fallen into "middle-income trap" as the best scenario.

What makes most sense for China to develop is the East Asia model, i.e., focusing on industrialization and human capital improvement, through a combination of strong central authority and market economy. This model also bootstraps itself through export to the global market, with corresponding domestic reforms. This is largely what China has done in the last thirty-plus years. And it has been quite successful, to say the least.

Don't underestimate the difficulty of industrialization and modernization, which is what really underpinned the developed countries. If you look at the world over a hundred years ago and the world today, the list of countries that were/are really developed has not changed much. The only few new entrants there are a few East Asian countries/economies, with only Japan being a large country.

For China, the nation with billion plus population to achieve where it is today is actually extremely difficult and a miracle. The per capita income improvement has been nothing but extraordinary, but I'll give it that compared to its corresponding economic growth and certainly compared to fellow East Asian countries such as Singapore or South Korea at similar stage of development, the per capita improvement definitely is not as fast.

The primary reason is because China is a much, much larger country with a much, much larger population, and it invests a much larger share of its economic output in industrialization and infrastructure. China today has by far the world's largest industrial output, and it has the broadest industrial base in the world and competes in every industry sector identified by UN, even though China may not be the most advanced in many sectors at present. It's almost like a national religion, whether it's because paranoid or ambition or simply pride. From an economic comparative advantage standpoint, this may not be the most efficient, at least in short to medium term. China also invests so much in infrastructure, it's infrastructure is world class, whether compared to developing or developed countries. Infrastructure, as we all know, is a low return business, in short or medium term. But its importance to a China of continental size with 1.4 billion population can not be overstated - its benefits are long term, more diffused and goes beyond just economy.

The investment in broad industrialization and infrastructure lays the strong foundation for China's future, as much progress as it has made so far. They are also cause for "concern" among some people.



I understand "debt" is currently the "new hope" among those who wish China collapses. But comparing debts in today's China and the former USSR is just ridiculous. Debt and asset are really a market economy thing. In the former USSR and indeed PRC before the '80s, there was no concept of debt beyond the external national debts. There were no bond markets, not even bank loans. There were not even commercial banks in China before the '90s. There was only People's Bank of China, which served as the central bank (if such a concept existed then) and it functioned really as the government's cashier. So there were no internal debts then.

I would agree debt growth is a concern in today's China and the government would need to rein the growth sooner or later. But pinning their hope on debt crippling or collapsing China's economy is simply misunderstanding the nature of debts in China.

As it stands now, China's external debts relative to its assets, e.g. foreign currency reserves, are quite small. There is no potential payment crisis; in any case China as the world's largest exporter generates $600 billion current account surplus a year. Its nominal debts are largely internal; the government's debts are quite low (40% GDP) and consumer debts are even lower and very healthy (20% GDP).

The majority of the debts therefore are corporate and commercial debts. Among them, the majority of them are attributed to the state-own enterprises (SOE), to which they owe to the state banks. It's a concern, to be sure. But in a very bottom-line sense, it's a right-pocket vs left-pocket thing. Also, one main reason that the corporate debts are higher is because overall China relies much less on equity financing (just compare the total stock market capitalization and total corporate debts as shares of respective GDP in China and the US), and more on bonds and bank loans. Additionally, some of the debts should really be financed by long-term corporate or government bonds, instead of bank loans. For example, Railway Corp of China has accumulated very large debt (3-4 trillion yuan) due to the large investments in railways and high-speed rail in the last few years, they could be financed by low-interest, long-term treasury bonds as national debt.



To characterize today's Chinese leadership as dictator is completely off the mark. It's authoritarian government that is development-focused and largely merit-based. National development is evolutionary, both in economy and governance. China has evolved its economy tremendously and its governance and political leadership have adapted well in the last several decades. Its effectiveness and performance have been proven far much successful than the vast majority of countries, both developing and developed. China still has a long way to go, and its economy and governance will continue to evolve. Judging by its past records and its ability to adapt, the evolving Chinese system will last and continue to be successful, contrary to naysayers.
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I understood at most maybe half of what you just said but it sounded very intelligent :) lol
I for one do not believe the doomsday scenario of impending economic china collapse like what many in the US believe.

One thing that I do believe however that directly ties to the economic health and performance that is seldom mentioned in discussions is the population imbalance and flat line growth rates. Now, I do not know the true economic impact nevermind social it will have but I do believe it can and will affect the nation down the road.

Automation will somewhat mitigate the rapidly changing demographics however one thing is clear. China faces an aging population and it's a crises that has never been experienced before.

Fertility rates have declined among Chinese women and continues to be so in the forseeable future while old folks continues to live older due to medical advancement and living generally better lives then previous generations. There is an entire generation or two of Chinese families with only 1 child therefore new entrants to the labor force is not at parity with older generations.
Aside frm declining fertility the giant gap in gender ratio will also have significant economic impact on the country.

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In this paper we review prior work on the causes and consequences of China’s high SRB and offer a prospective quantification of its effects via simulations using a dynamic model of both economic and demographic behaviour. The baseline simulations show that the number of unmatched males could achieve extreme proportions by 2030, with the proportion of unmatched low-skill males of reproductive age being as high as one in four. The results suggest that an associated crime-induced productivity slowdown would outweigh the increased savings of families with boys and so further retard growth, contributing to the yet-avoidable possibility that China could fall into a “middle income trap” (Easterly 2000, World Bank 2010, Eichengreen et al. 2011). The economic impacts of policies to rebalance the sex ratio at birth will take time, and not all of them will necessarily be positive. Yet the results suggest that the beneficial effects of reduced male disaffection and crime could outweigh the losses from reduced saving and higher population.
 
AssassinsMace

AssassinsMace

Lieutenant General
Some want to believe China is an absolute police state for negative political purposes. Just like they want to believe all those females were killed. Like I've said before, the authorities don't know people who make billions of dollars until they can't hide their money anymore. That's why the Chinese economy is probably bigger than government figures say because they have no idea how much money people are making in the underground economy that goes unreported.
 
supercat

supercat

Major
suby68 said:
It confirms how bad Chinese statistics are. If millions of girls can hide for years all data on per capita income or what percentage of girls attend schools is just another fake.
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If the story is true, that 25-30 millions of girls and boys (mainly girls) were uncounted, then the Chinese population has been underestimated by about 2%. But the error was accumulated over a period of 20-25 years. The Chinese census data are probably not as bad as you thought. On the other hand, per capita income probably tends to be underestimated instead of overestimated, because the more income you report, the more tax you have to pay.
 
solarz

solarz

Brigadier
suby68 said:
It confirms how bad Chinese statistics are. If millions of girls can hide for years all data on per capita income or what percentage of girls attend schools is just another fake.
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It's the western "experts" who decided to use certain Chinese statistics and reach their erroneous conclusions. There were plenty of ways to cross-check their conclusions, but they chose to fixate on those statistics that supported their predisposed biases.

NONE of those girls were "hiding". They led normal lives. They were simply not reported under certain bureaucratic methods (i.e hukou registration), but were certainly registered with many other services, such as schools. It would have been quite straightforward to "find" them had those researchers actually wanted to.
 
I

Iron Man

Major
Registered Member
Equation said:
Define harmonious. At least the Chinese didn't enslaved Africans from thousands of miles, crusade against Muslims, and murdering millions of natives for their land like the those so called Christians.
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Harmonious:
1) forming a pleasing or consistent whole.
2) free from disagreement or dissent.

Yes, China has never abducted and enslaved another country's people, crusaded against Muslims, and murdered millions of Native Americans and took their lands; the West has plenty of blood on its hands that it has never atoned for. But that is not relevant to whether China has had a "harmonious" history. In fact it has not. Its history has been marked by frequent periods of great violence and disunity. And inexorable expansion, from the Zhou heartland outwards to its current boundaries today, conquering and/or absorbing smaller peoples and nations along the way. I think a harmonious China is a myth, a nostalgic but fanciful redaction of actual Chinese history. Like any other great nation, its history is soaked red in tooth and claw.

Equation said:
It make it as if China is made up of only Han ethnicity. Yes they are the majority group, but there are 55 other ethnic groups in China that are loyal to the PRC. It's only the China haters, doom mongers,a and naysayers that only wish to see modern China split.o_O
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It is not the ethnic minorities that give modern China its 'glue', it's the Han majority. And it's not the ethnic minorities that are settling in Xinjiang and Tibet, it's the Han majority. If modern China did not have a 91% Han majority, we may not be looking at the same country we are now. I'm not saying there is anything wrong with this picture, just pointing out the facts.

kwaigonegin said:
Fertility rates have declined among Chinese women and continues to be so in the forseeable future while old folks continues to live older due to medical advancement and living generally better lives then previous generations. There is an entire generation or two of Chinese families with only 1 child therefore new entrants to the labor force is not at parity with older generations.
Aside frm declining fertility the giant gap in gender ratio will also have significant economic impact on the country.
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Automation is the answer to a lesser, older Chinese population (and I'm not referring to fembots here). It's the same answer to why India will miss the industrialization train to prosperity.
 
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