Chinese Economics Thread

[ZeEa5KPul]

The equation is (1/(1-x/100) - 1) * 100, where x is the percent decrease of the population.

Simplifying for TFR effect, the working age population is expected to decrease 43% every generation with a TFR of 1.2. This corresponds to a need to increase productivity by 75% to maintain the same GDP output. That was easy for China to do back when it was industrializing; it's much harder to do now.

I was being sarcastic when I asked that, we all know how reciprocals work. The answer to the question you're ducking and dodging is the productivity gain needed to offset 1% decrease in population is 1.01%. That's it, the difference is 0.01%.

As for your South Korea fixation, I don't know how many ways to tell you that a failure like South Korea has nothing to do with China. It is a tiny statelet colonized and dominated by the US. Almost a third of South Koreans in Korea are Christian, what more does one need to say about the level of mental colonization than that? South Korea has no government, just a handful of giant conglomerates running the "country" like their own private plantation. Stop comparing it to China.

You're also far from the only one who's figured out that China's TFR is low and needs to go up. The government's figured it out as well, which means it's going to go up.

Not going to sit well with the population after you've been limiting them to 1 child for 30 years.

What are they going to do, vote? The Chinese government is not going to make decisions based on popularity. If the population doesn't like a decision needed to safeguard China and its advancement, tough. They didn't like the lockdowns, but they were forced down their throat because it was necessary at the time.

Just like the 1CP was necessary 30 years ago. That was then, this is now.

 

[56860]

What are they going to do, vote? The Chinese government is not going to make decisions based on popularity. If the population doesn't like a decision needed to safeguard China and its advancement, tough. They didn't like the lockdowns, but they were forced down their throat because it was necessary at the time.

Just like the 1CP was necessary 30 years ago. That was then, this is now.

The CPC cannot wholly disregard popular sentiment when making decisions, even if those decisions are for the sake of national interest. The reason why mandates in China are carried out so efficiently can in part be attributed to the overwhelming support the CPC enjoys among the people. Damaging that support would erode China's ability to mobilize, react and respond to circumstances as a cohesive unit. For instance, do you think the lockdowns would have worked if the approval rating for the central government was 40-50% (the level most western democracies enjoy) instead of 95%?

I'm not saying it can't be accomplished. If the CPC wants to start importing the cream of the crop from Africa, ASEAN, and Latin America, fine, but something must be done to address and shift dissenting public opinion.

 

[ZeEa5KPul]

I'm not saying it can't be accomplished. If the CPC wants to start importing the cream of the crop from Africa, ASEAN, and Latin America, fine, but something must be done to address and shift dissenting public sentiment.

My own view is that immigration won't resolve the problem. China should import the cream of the crop from around the world just on general principle, but that won't solve whatever demographic problem China faces (assuming there is such a problem, which I don't entirely accept).

I was making a broader commentary on how the Chinese government makes tough decisions when necessary despite their unpopularity. The solution to a too low TFR is to raise it by taking economic resources and opportunity away from those who don't have children and giving them to those who do. This could be an extremely unpopular policy - far more unpopular than immigration - but it's what must be done.

Example: Universal property tax coupled with an exemption for families with at least two children.

You can and should do all the PR and propaganda, but there's no smoothing over that this would hit a lot of people in their pocketbook and they won't be happy about it.

 

[Deleted member 24525]

The equation is (1/(1-x/100) - 1) * 100, where x is the percent decrease of the population.

Simplifying for TFR effect, the working age population is expected to decrease 43% every generation with a TFR of 1.2. This corresponds to a need to increase productivity by 75% to maintain the same GDP output. That was easy for China to do back when it was industrializing; it's much harder to do now.



Yes, there's still a window for growth in China due to the large rural population, but that population, make no mistake, is also aging, so there's not much time left to transform them into high productivity workers.



Again, let's compare a country like South Korea, well known for its robot density and automation. This is the productivity growth rate of South Korea, from:

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If China's productivity growth falls to 0.8% (the OECD average), it most certainly cannot make up for its impending working age population loss (which was 0.5% in 2021, but is set to accelerate due to much lower TFR in newer generations).

If China's working population is declining at a very rapid rate of 3% a year then it would need a productivity growth of 3.1% a year to maintain gdp. 1/(1-x) very closely approximates 1-x for small values of x and China's rate of working population decline is always going to be small in absolute terms. I don't understand why you are so pessimistic about the ability of the Chinese system to generate productivity growth, especially since its urban workforce is going to continue expanding by ten million a year until 2035. Its capital/labor ratio is only a quarter of that of the US and its productivity is one fifth. There's a huge amount of growth potential left.

 

[Deleted member 24525]

If China's working population is declining at a very rapid rate of 3% a year then it would need a productivity growth of 3.1% a year to maintain gdp. 1/(1-x) very closely approximates 1-x for small values of x and China's rate of working population decline is always going to be small in absolute terms. I don't understand why you are so pessimistic about the ability of the Chinese system to generate productivity growth, especially since its urban workforce is going to continue expanding by ten million a year until 2035. Its capital/labor ratio is only a quarter of that of the US and its productivity is one fifth. There's a huge amount of growth potential left.

I honestly think it would be a good idea to introduce mandatory reading lists for certain topics including China's demography because I've seen this debate go in circles for several months and it's frustrating to watch.

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[lube]

From who? The people who most want to immigrate to China are Southeast Asians but entire ASEAN only is 0.5 billion.

There's permanent immigration and there's guest workers.
The numbers might be too big for the former but for addressing labor shortages, having wages and salaries that are multiples of someone's home country will always attract interest.

The Gulf states are an example.

 

[vincent]

What are they going to do, vote? The Chinese government is not going to make decisions based on popularity. If the population doesn't like a decision needed to safeguard China and its advancement, tough. They didn't like the lockdowns, but they were forced down their throat because it was necessary at the time.

Just like the 1CP was necessary 30 years ago. That was then, this is now.

Nope, you are wrong. The COVID policies were supported by the populace for the first two years because they were scared of the disease. Omicron caused much more lockdowns and the support waned so the Chinese government opened the gate. Xi Jinping had written in the past that leaders needs to follow the people sometimes even if it means jumping into fire pits with them.

习主席在《干在实处 走在前列》一书中，针对群众工作有一段十分形象的描述：“我们的方针再正确，如果不被群众理解，也难以贯彻施行。如果群众不听，你就先跟着群众走，群众跳火坑，你也跟着跳下去。群众觉悟了，从火坑里爬出来，最终还是要跟你走。群众跳，你不跳，干群关系就疏远了。你一起跳，感情上拉近了，工作就好做了。”

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[Deleted member 24525]

approximates 1-x for small values of x

I meant it approximates 1+x

 

[FairAndUnbiased]

There's permanent immigration and there's guest workers.
The numbers might be too big for the former but for addressing labor shortages, having wages and salaries that are multiples of someone's home country will always attract interest.

The Gulf states are an example.

Historically, immigration and guest work to dwindles after a country passes about 1/3 to 1/6 of host country GDP per capita.

There was a drop in Mexican immigration to US after 2008. Mexican to US GDP per capita was 9k to 47k in 2008. Mexico was consistently >10k afterwards.

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Gulf states with ~30k GDP per capita are mostly attracting Indians, Pakistanis, Indonesians and Filipinos with ~3k GDP per capita.

Russia with ~15k GDP per capita are mostly attracting Central Asians with ~2k GDP per capita that already speak Russian.

From this theory, China today can attract people from countries with about ~4k GDP per capita. This matches observation, which is that foreign workers in China are mostly from Vietnam and Myanmar.

China in 2030 years with ~20k GDP per capita will probably add a few countries to the list like Thailand, Brazil and Serbia, and maybe cultural affinity will add Malaysian Chinese and some South Koreans, but the pool will still be restricted mostly to ASEAN, eastern Europe and Latin America.

Central Asians will still prefer emigrating to Russia due to language. Eastern Europeans will still prefer EU or NA. Latin Americans outside Brazil will probably prefer NA as well. So really, the pool is ASEAN + Brazil.

 

[CMP]

Africa too.