Chinese Economics Thread

[BlackWindMnt]

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Welcome to the bargaining stage

Makes you wonder has there actually been an example of a young democracy ever achieving high income status?
I know that imperialism can do it, "authoritarian" state capitalism has shown it can do it. All i have seen is democracy impoverishing countries just look at inflation and falling living standards in the west..

 

[56860]

Makes you wonder has there actually been an example of a young democracy ever achieving high income status?
I know that imperialism can do it, "authoritarian" state capitalism has shown it can do it. All i have seen is democracy impoverishing countries just look at inflation and falling living standards in the west..

There are none. When your country is poor and uneducated the last thing you need is a popularity contest that creates even more division. What you need is a strong state to allocate resources, build infrastructure, educate the masses, manage the economy, etc.

Strong state control, when that control is benevolent and competent, is always a good thing regardless of level of development. But in undeveloped countries it's essential rather than simply beneficial.

IMO the tier list goes something like this:
Competent authoritarianism (Modern China) >> competent democracy > incompetent democracy >> incompetent authoritarianism (North Korea/Maoist China)

 

[Nobo]

View attachment 92347

Welcome to the bargaining stage

yea, to ensure thriving of Citizens, we need to embrace western people's p--nhub & brazzers,where they can be more... open & sharing

 

[mossen]

I would look at the real GDP (changes in local currency adjusted for inflation) or at fixed exchange rates

That only works for China because it has had a relatively stable currency. Not a luxury for most developing countries.

For most developing countries, nominal GDP in current prices is the most fair comparison to China because if your currency keeps dropping like a stone (Argentina, Turkey and now Pakistan/Sri Lanka) then using local currencies for all of them becomes massively misleading. That's why nominal GDP per capita is best for international comparisons. For China itself, it makes sense to use local currency.

 

[mossen]

In the medium-long term, the exchange rate should converge to the PPP.

That's true only under the condition that nominal GDP per capita converges to the richest countries. That's true for China but not most developing countries. Look around you. Outside of East Asia, most of the developing world is in the dumps. The few "success stories" like Brazil are only temporarily boosted by a commodity bubble. Once it pops, so does their growth.

I don't think most people realise just how special East Asia is compared to most developing countries.

So on the back of the Chinese market, why couldn't a Chinese company grow to become larger and more technologically advanced than its foreign equivalent?

That's not the debate here. Chinese firms ares already doing that today.
The question is if it makes sense to try to domesticate absolutely everything. Just because China can theoretically replace absolutely everything foreign doesn't mean it makes financial sense in every sector. Not everything is strategic. Chips is a special category. Does it make sense for China to replace more "primitive" imports even if they can? Not clear.

In addition, we see entire sectors like semiconductors or aviation, where the denial of any *niche* component means the entire product will fail. So it has to be a completely Chinese industrial chain which is not subject to US sanctions.

The cost of any potential import bans will only increase for the West, as China will be more capable of hurting the West as time goes on.
Besides, China already imports a large amount of the components it needs for its aviation passenger project. The West hasn't prevented that. So if there was a time for the dog to bark, it is now. Yet he is strangely silent.

Instead, there's talk in Washington to lower tariffs on Chinese goods!

But there are also many cases where localised industries and locations suffer. For example, the deindustrialisation of the USA, where the rust-belt cities haven't been able to adapt and find alternative economic activity. But in the US overall, there have been significant gains.

USA pursued a uniquely bad economic model centered on financialisation. Germany has avoided that and went for manufacturing instead. Germany been richly rewarded for over the past few decades for making the better decision.

Japan and Korea are the most exposed to Chinese competition in terms of the mid-tech and hi-tech industries that China is expanding into.

I agree here. But both countries, especially Korea, is also massively benefiting from a rising China. Indeed, so is Taiwan.

 

[ansy1968]

That only works for China because it has had a relatively stable currency. Not a luxury for most developing countries.

For most developing countries, nominal GDP in current prices is the most fair comparison to China because if your currency keeps dropping like a stone (Argentina, Turkey and now Pakistan/Sri Lanka) then using local currencies for all of them becomes massively misleading. That's why nominal GDP per capita is best for international comparisons. For China itself, it makes sense to use local currency.

@mossen or Capital Control, China want investment not Financialization, under IMF diktat a lot of country open up unnecessarily , exposing themselves from Western financial institution or vulture capitalist gobbling up utility and state assets for a song, a subtle form of slavery.

 

[AndrewS]

@mossen or Capital Control, China want investment not Financialization, under IMF diktat a lot of country open up unnecessarily , exposing themselves from Western financial institution or vulture capitalist gobbling up utility and state assets for a song, a subtle form of slavery.

It's the difference between financial capitalism and industrial capitalism

 

[BlackWindMnt]

That only works for China because it has had a relatively stable currency. Not a luxury for most developing countries.

For most developing countries, nominal GDP in current prices is the most fair comparison to China because if your currency keeps dropping like a stone (Argentina, Turkey and now Pakistan/Sri Lanka) then using local currencies for all of them becomes massively misleading. That's why nominal GDP per capita is best for international comparisons. For China itself, it makes sense to use local currency.

This does make it interesting how things will change you have people talking about resources backed currencies. The Gas for Rubbles or Grain for Rubbles kind of schemes.

 

[AndrewS]

As long as China doesn’t again become arrogant and continue their progress while dealing with the one problem that refuses to stop being stupid (everyone one knows who I am referring to) whilst making sure not to take too much losses, then a world lead by a more reasonable power instead of a genocidal power that paints itself as the main hero will be a truly welcome one

Genocidal power is a stretch too far, but let's look at the performance of US officials like Bliken.

For over 2 years, Blinken has kept repeating that American will engage China from a position of strength.
Just last month, we've seen the exact same words being fed into Joe Biden's speeches.

But we can all see that reality is actually that the US and China are roughly equal.

For example, the Pentagon says that the US would decisively lose in any war against China in the Western Pacific, at least in the short term. In terms of the economy, China is somewhat smaller in exchange rate terms or somewhat larger in terms of actual output when measured using PPP.

Both the economic and military balances continue to move in China's favour every year. At the same time, China has a decisive lead in the areas of the incoming Third Industrial Revolution (Solar, Wind, Nuclear, Batteries, Electric transport, 5G) that will reshape how our societies are organised and managed.

So at best, the US can only speak from a position of equality, not superiority. Any country outside of the USA can see this.

---

Given this situation and how the US-China relationship is the most important one for Secretary of State Blinken to understand, that leads to one of two conclusions.

If Blinken really believes that the US can speak from a position of strength over China, it means Blinken is completely delusional and therefore grossly incompetent in how he approaches China policy. That says a lot about Blinken.

But if Blinken know it isn't true, and is talking to a domestic US audience with this feel-good lie, then what do the rest of the world's political leaders think of this absurd lie?

---
This kind of leads onto another point.

In a world where everyone has caught up, how can US politicians like Blinken accept a world where countries like Indonesia or Pakistan have a larger population and also a larger economy than the USA?

 

[FairAndUnbiased]

There are none. When your country is poor and uneducated the last thing you need is a popularity contest that creates even more division. What you need is a strong state to allocate resources, build infrastructure, educate the masses, manage the economy, etc.

Strong state control, when that control is benevolent and competent, is always a good thing regardless of level of development. But in undeveloped countries it's essential rather than simply beneficial.

IMO the tier list goes something like this:
Competent authoritarianism (Modern China) >> competent democracy > incompetent democracy >> incompetent authoritarianism (North Korea/Maoist China)

Disagree. Maoist China started worse than India and overpowered India in every metric within 10 years including literacy, average life expectancy, GDP per capita, every single measure of technology, etc. India had a slightly higher GDP per capita only for a few years in the 1980s (after Mao died) due to a currency devaluation.

North Korea had a higher GDP per capita than South Korea for 20 years until US pumping billions into South Korea made a difference. Even today they still have a better ground force and space program than India.

You have to realize that in 1950-1970 the US was 40% of global GDP. They could pick and choose economic winners at will.