Chinese Economics Thread
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FriedRiceNSpice
Captain
Do you have any data to support this claim? Out of the proportion of unemployed youth, what proportion of those had STEM degrees vs those that had other degrees? How do those proportions compare to the overall proportions of young Chinese that pursue STEM vs non STEM? What data do you have to actually suggest there is a STEM oversupply?
I interpret it as Chinese strategists siphoning off western capital that would otherwise go to London and NY, to HK.
Crypto is basically gambling and rather than allowing the Americans to use it as a reservoir of their USD hegemony (by tying the value of BTC and crypto to USD), better to force americans to use it for its intended purpose: as a mode of exchange replacing the USD and fiat currency in america.
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Deleted member 24525
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With respect to the government kneecapping the hiring growth of consumer software and private tutoring I do think that was a deliberate move to force stem grads into more productive pursuits. COVID zero scarring is obviously different though.
Think about the bigger picture, cryptocurrencies are undermining the foundation of USD, this is why the SEC and Treasury is going after the big players in the crypto space. China needs to give crypto a helping hand right now because the dedollarization of the gray and black market is still very important. For example, how is the CIA suppose to balance their budget if drug and weapon dealers all use crypto + non-USD currencies? The DEA is going to have a harder time dealing with drug cartels once Hong Kong & Macau become the top hub for illicit transactions. There is a reason why Snowden ran to HK to whistleblow and why Russian billionaires park their yachts in HK.
The best way for China to help crypto is to provide a jurisdiction for crypto exchanges like Binance and Coinbase to headquarter in.
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Honestly they should just treat crypto as another tradeable asset for regulatory purposes and let investors assume the risk as they do with any investment product or asset. There is nothing novel about trading digital tokens. I mean, people trade digital characters in games and cosmetic skins, so its not that far removed. If the SEC want to crackdown on crypto or "digital currencies" there is nothing stopping people who want to transact in another non-fiat based currency from selecting another digital medium and monetizing it. The only advantage to having the transactions take place on a exchange is some degree of transparency and recourse if things go haywire. But if people want to transact for the purposes of staying off the grid, cracking down on crypto will just be playing whack a mole.
FriedRiceNSpice
Captain
I can understand the social reasons for wanting to rein in the private tutoring industry, but I'm baffled at why government wanted to kneecap high growth tech companies. They are either seeing it from a higher dimension than I can comprehend or it's just a power play by Xi.
There are several reasons, but the most important one is that these companies are siphoning scarce resources (STEM talent) and investment away from strategic sectors like semiconductors, EDA, OS, etc. China needs to develop a world-class portfolio of core technologies, it doesn't need more e-commerce sites and food delivery apps.
Some other reasons include their lax data security (putting it mildly), gaming the financial system like Ant and dumping risk on the state-owned banks, and extremely toxic work culture (996).
And it wouldn't surprise me in the slightest if some of these companies got too big for their britches and thought to translate their economic heft into political power. Jack Ma certainly seems stupid enough to try it.
There is no attempt to kneecap high growth out of tech companies. It is an attempt to breakdown monopolies and barriers. The exception is gaming. There is gaming addiction issue for kids and teenagers that the government decided to crackdown.
As for Alibaba and Didi, Alibaba wanted to pursue fintech that would put banks, insurance, and loans under one roof. Alibaba's Ant would become a super financial powerhouse that doesn't assume any risks. Ant makes a loan and takes a cut and banks would assume the risks if the loan went sour. Both financial meltdown in 08 due to derivatives and a recent P2P meltdown in China point to the fact that this is a very bad idea. It is just that Jack Ma didn't like the answer of No from the regulators and the central government and decided to use a forum to speak out against regulators for being conservative and old schools and lack of vision which resulted in a blowback that hurts Alibaba greatly.
Didi didn't listen to regulators not to pursue a listing in the US as the Chinese government wanted Didi to list on HKSE. DiDi listing is very sensitive as it has stored a lot of data of many Chinese clients that needed to be examined by the US accountants and auditors. Chinese regulators probably were more angry for the fact that Didi lied to the regulators in order to list in the US. It is really shown that Didi thought that it could get away with anything because it has strong tie with many well connected people.
FAANG used to hire all the best and brightest college graduates from top universities even if these people never fully utilized by these companies. We have witnessed how Meta fired so many dead-weight without any stress. I won't rule out it is deliberately attempt from these companies to stifle innovation from competitors.
If that were the case, then I won't rule out the central government wanted to weaken Chinese high tech companies from hiring talent without investing in R&D. Many hardware companies such SMIC were able to hire talent much more easily lately due to the job conditions of STEM students as Alibaba, Tencent or Meituan have stopped hiring as much.
If that were the case, then I won't rule out the central government wanted to weaken Chinese high tech companies from hiring talent without investing in R&D. Many hardware companies such SMIC were able to hire talent much more easily lately due to the job conditions of STEM students as Alibaba, Tencent or Meituan have stopped hiring as much.