Chinese Economics Thread

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AndrewS

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mossen said:
N-Europe has chosen to take some of their high productivity and work less (e.g. more vacations) instead of maximising income. That's basically a social choice. GDP per capita = GDP per hours worked (productivity) x annual hours worked.
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Arguably these shorter working hours and holidays are a better choice if you try to maximise "societal happiness" for the majority of the population.
 
FairAndUnbiased

FairAndUnbiased

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Registered Member
mossen said:
GDP per hours worked is a measure of productivity. High productivity is a condition for high wages. The two are linked; you can't have high wages without high productivity, otherwise you get high inflation and a bloated current account balance, thus leading to a downward pressure on your currency to reach an equilibrium state. The reason why Brazil can't import as many expensive things as Germany is that their exports and productivity can't pay for it.

N-Europe has chosen to take some of their high productivity and work less (e.g. more vacations) instead of maximising income. That's basically a social choice. GDP per capita = GDP per hours worked (productivity) x annual hours worked.
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I thought that can have non-labor productivity such as royalties for IP which is past labor, not present labor. Those royalties are also often repeating while the labor used to generate them is either one time or not continuous.
 
mossen

mossen

Junior Member
Registered Member
Crang said:
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A remarkably balanced article from the Western media. Perhaps they realise that if they push their propaganda lies too much, their middle-management midwits will start believing that China truly is about to collapse etc.

I didn't learn anything new, but a few things are worth highlighting.

  • China's boomers are atrociously poorly educated. The youth are not. This means that productivity increases should be very substantial for decades as a far-better educated generation slowly replaces the old ones.
  • The downside is that the newer generation may not be as willing to do "dirty" jobs as their aspirations rise.
  • China still has ~25% of its workforce in agriculture. The average for high-income countries is 3%. The potential for mechanisation is very large.
  • Despite very high investments, China's return on capital is still substantial, though it has fallen.
  • China's population barely grew last year and will likely start declining this year.
All in all, a gradual move away from investment-heavy growth, which has been ongoing since 2010, is not as bad as many assumed. China's human capital improvement between the generations is going to be massive. American boomers were remarkably well-educated thanks to the GI bill. The same is not true for China.

The article's big emphasis on China's aging and soon-to-be declining population is a bit strange to me, given that America's population grew by just 0.1%. And as many people have pointed out, China is now a net-receiver of world talent compared to the mid-2010s. So immigration is unlikely to be as helpful to the US as in the past.

The big problem on the horizon is work that is hard to automate but low-skill. Some of that can be covered by domestic labour but not all, especially as the educational levels and aspirations of Chinese youth increases. This is natural. How many western youth want to be farm hands? The West has "solved" this by cheap labour migration. China is unlikely to accept large, low-skill migration.
 
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