Chinese Economics Thread

[horse]

This is the graph for their justifcation:

1. Agree. That is nutz.

2. Comrade Chang wrote that article. Perhaps not directly, but indirectly for sure.

3. US Federal Reverse Bank not printing the money fast enough.

 

[daifo]

1. Agree. That is nutz.

2. Comrade Chang wrote that article. Perhaps not directly, but indirectly for sure.

3. US Federal Reverse Bank not printing the money fast enough.

Some countries like to value random junk like "art", "antiques", "pokemon cards", crpto, video game boxes and other stuff at high prices to create money/gdp.

 

[Deleted member 15887]

The US one is in fact almost impossible. Remember, the US is facing declining population growth (in fact it has been hit much harder than China by COVID). You can't also say the US will accept more immigrants because i) relative attractiveness of US as an immigration destination is in long-term decline (at least relative to Canada, UK, Australia, Middle east) ii) attractiveness of immigrating out from other traditional target countries decrease as poorer countries converge in GDP iii) population growth is actually declining in developing countries at faster rates, which means there is less people to immigrate out assuming i) and ii) are false.

I dont think the $80BN figure of china's GDP is wrong at ~$60K GDP per capita at ~1.3BN people. The calc for the US requires 500 million people at $200,000 GDP per capita in 30 years, which statistically is impossible. That's 180 million more people and more than tripling of GDP from $63,000 in 2021.

America better get working then...

America's not going to have anywhere close to 500 million by 2050. It's barely going to reach 400 million by then (and likely might even not), which this model probably assumes. GDP per capita by that standard is $250,000 USD. That's not going to happen, to say the least; no need to dive any further.

(1) For the first scenario, I entertain, I'm gonna be charitable, and take the average growth rate between 2021-25 and extrapolate that out to 2050 (it's obviously going to be much higher than normal due to this year's recovery growth). By that standard, the GDP per capita should, at most, be $190,000, if we are being charitable to the US. Not enough to have the top GDP; it would be $4-5 trillion USD smaller than China's forecasted GDP. Current USD GDP per capita is $63,050 USD. Even then, that is a much faster growth over 30 years than the growth over the past 30 years.

(2) GDP per capita increased more than 2.75 times since 1990, 30 years ago. If we multiply the same to the current GDP per capita, then US GDP per capita by 2050 (30 years from now) in this standard is just over $170,000 USD. This would mean a GDP likely $70 trillion USD by 2050, sizeably smaller than China's economy as predicted by the forecast by $10 trillion USD. Flaw with this is that this includes the period between 1990-2008 when US growth rates could exceed 4-5%. Those kinds of days are gone in the post-2008 world, where growth straddles at ~2% on average.

(3) GDP per capita increased by 1.30 times between 2010 and 2020; extrapolating this for 30 years into the future gives a US GDP per capita of just under $140,000 USD by 2050. At this level, US economy would only be at around 2/3 the size of China's economy, far from overtaking it.

My personal view is that US GDP per capita will straddle between scenario (2) and scenario (3) at best, but not close enough to overtaking China's GDP by 2050. Beyond 2050, and we are basically forecasting astrology.

 

[localizer]

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What I am skeptical of this approach is that China’s free high tech industries will lose competitiveness due to high costs of low tech industries that support everything from the bottom.

And livelihood commodities can be high tech so I don’t think they should put prices controls on those.

Pretty much everything can be done in a high tech manner.

 

[AssassinsMace]

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Do it! The US would if the roles were reversed. Back in the 90s rare earths were actually banned to sell to China by the US. They're taunting even now how the will break China's monopoly by creating a domestic industry... and it'll cost them more than ever. They're teasing how China won't make any money from rare earths. China tried to limit exports of rare earths to Western countries before and the West ran to the WTO to stop it. China wasn't thinking about profits then so that's meaningless except it'll still cost the US more than ever to produce them themselves. I see no downside especially when China can flood the market costing the US even more money.

 

[Tam]

America's not going to have anywhere close to 500 million by 2050. It's barely going to reach 400 million by then (and likely might even not), which this model probably assumes. GDP per capita by that standard is $250,000 USD. That's not going to happen, to say the least; no need to dive any further.

(1) For the first scenario, I entertain, I'm gonna be charitable, and take the average growth rate between 2021-25 and extrapolate that out to 2050 (it's obviously going to be much higher than normal due to this year's recovery growth). By that standard, the GDP per capita should, at most, be $190,000, if we are being charitable to the US. Not enough to have the top GDP; it would be $4-5 trillion USD smaller than China's forecasted GDP. Current USD GDP per capita is $63,050 USD. Even then, that is a much faster growth over 30 years than the growth over the past 30 years.

(2) GDP per capita increased more than 2.75 times since 1990, 30 years ago. If we multiply the same to the current GDP per capita, then US GDP per capita by 2050 (30 years from now) in this standard is just over $170,000 USD. This would mean a GDP likely $70 trillion USD by 2050, sizeably smaller than China's economy as predicted by the forecast by $10 trillion USD. Flaw with this is that this includes the period between 1990-2008 when US growth rates could exceed 4-5%. Those kinds of days are gone in the post-2008 world, where growth straddles at ~2% on average.

(3) GDP per capita increased by 1.30 times between 2010 and 2020; extrapolating this for 30 years into the future gives a US GDP per capita of just under $140,000 USD by 2050. At this level, US economy would only be at around 2/3 the size of China's economy, far from overtaking it.

My personal view is that US GDP per capita will straddle between scenario (2) and scenario (3) at best, but not close enough to overtaking China's GDP by 2050. Beyond 2050, and we are basically forecasting astrology.

The problem of using nominal GDP is that it uses US dollars. Real GDP should be lower because inflation rate takes about 2 to 3 percent each year. Inflation may accelerate this year.

 

[bettydice]

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Do it! The US would if the roles were reversed. Back in the 90s rare earths were actually banned to sell to China by the US. They're taunting even now how the will break China's monopoly by creating a domestic industry... and it'll cost them more than ever. They're teasing how China won't make any money from rare earths. China tried to limit exports of rare earths to Western countries before and the West ran to the WTO to stop it. China wasn't thinking about profits then so that's meaningless except it'll still cost the US more than ever to produce them themselves. I see no downside especially when China can flood the market costing the US even more money.

I agree, and think it's better to do sooner than later before the supply gets more diversified as the production from a few other countries has been increasing.

 

[B.I.B.]

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Do it! The US would if the roles were reversed. Back in the 90s rare earths were actually banned to sell to China by the US. They're taunting even now how the will break China's monopoly by creating a domestic industry... and it'll cost them more than ever. They're teasing how China won't make any money from rare earths. China tried to limit exports of rare earths to Western countries before and the West ran to the WTO to stop it. China wasn't thinking about profits then so that's meaningless except it'll still cost the US more than ever to produce them themselves. I see no downside especially when China can flood the market costing the US even more money.

Would that mean she is no longer going to process U.S.and Australian mined ore?

 

[localizer]

Please don't tell me rhenium or precursors for F135 has been processed by China this whole time.

 

[siegecrossbow]

Please don't tell me rhenium or precursors for F135 has been processed by China this whole time.

Then you'd be devastated to learn that American F-15s used cheap electrical components from HuaqiangBei to save a buck (which backfired).

Fact of matter is cost effectiveness is actually a pretty important part of arms procurement unless you want to fleece some third party country.