Chinese Economics Thread

[TK3600]

That's just your opinion. China has made the decision to avoid food import dependence as a issue of national security importance. China cannot depend on its national survival based on the goodwill of US-led international order and goodwill of US-navy. Even if China is 4X GDP, every nation goes through cyclical downturns in power, which would be exacerbated by foreign food dependence.

This assumes China has "equal GDP per capita as US" in order to have 4X the GDP with 4X the population.

The fundamental flaw behind this assumption is that the world does not have enough resources for 1.4 billion Chinese consumer habits to match American consumer habits to achieve the same/equal GDP per capita levels. China cannot achieve $80K per capita with 1.4 billion people because there isn't enough resources on earth for 4X more US consumerism. 92% of American household has a car, with average of 1.9 cars per household. Can you imagine 1 billion cars in China? The roads would collapse with permanent traffic. The earth cannot sustain an additional 10 Billion tons of CO2 emissions annually by China to achieve the same Per Capita GDP, without irreversible global warming.

So in summary, 1.4 billion people cannot achieve $80K GDP per capita because earth cannot sustain 4X more US consumerism, CO2 emissions, and resource use. The premise that 4X GDP = 4X power is based on a fundamentally flawed assumption, not even touching that population does not linearly scale 1:1 with GDP size. Smaller countries tend to have higher GDP per capita in general too.

That is where you are wrong. US consumption habit will go down. China can certainly reach developd status 4x gdp without planet destroyed.

 

[Phead128]

That is where you are wrong. US consumption habit will go down. China can certainly reach developd status 4x gdp without planet destroyed.

Re-read my post, I said $80K GDP per capita (equal to US) is not possible for 1.4 Billion people, not that China can't achieve Developed Status or income level, which depending on definition is >$12K or >$22K, which is easily manageable for China.

This is a deeply flawed argument. Of course there aren't enough resources to consume the way the US is consuming, i.e., by burning fossil fuels and generating colossal waste, but there's more than enough sunlight, wind, and fissile material to make China's grid have zero reliance on fossil fuels. Chinese consumption can rise higher than Americans' provided there's the technology to make it clean, which there already is.

Yes, China's clean energy offsets CO2 emissions assuming you replace 1 ICE car with 1 EV car powered by solar/wind/nuclear. Still, you aren't going to have 800 million EV cars in China (2 cars per household for 92% of households like US), that level of car consumerism can't exist, not least because the roads can't handle that much traffic. I agree with your point that clean energy revolution will significantly reduce the CO2 emission footprint for China.

 

[FairAndUnbiased]

How does it finance the private consumption if it does not have money to pay for import?

Most US consumption isn't of retail goods. It's taxes, fees and payment for services that are monetized in the US for maximum profit (i.e. maximized cost) but public goods elsewhere where the incentive is to suppress costs.

Here's the distribution of US consumption:

Please, Log in or Register to view URLs content!

Of these, only transportation (vehicles and fuel), entertainment and clothing/services are net imports.

Of these, only clothing, entertainment, alcohol/tobacco and personal care are within personal control. It's not like they can opt out of taxes, rent or electricity bills.

 

[tamsen_ikard]

Re-read my post, I said $80K GDP per capita (equal to US) is not possible for 1.4 Billion people, not that China can't achieve Developed Status or income level, which depending on definition is >$12K or >$22K, which is easily manageable for China.

You haven't presented any counterarguments to dispute my earlier points. In your response, you challenged my statement about China's potential to achieve a GDP per capita equal to that of the US, citing reasons related to the world's carrying capacity in terms of resources, CO2 emissions and so on.

I have already given you credible reasons why GDP per capita level of US can go down due to Chinese competion, therefore closing the gap between two countries.

I have also given you reasons why rising Chinese GDP per capita means it will have more money to bid for the same resources US can buy right now at a cheaper price. Even more poorer countries like India, Indonesia and others are also growing in wealth. All of these countries will be bidding in the global market for the same natural resources. Thus, US will not be able to continue to consume the way it used to.

So, your argument about world's carrying capacity is wrong. The world will continue to produce the same level of natural resources. But there will be more people trying to consume it. The previous rich countries will be forced to consume less. The end result is both US and China will have equal GDP per capita and consume the same level of natural resources from the world.

 

[Phead128]

You haven't presented any counterarguments to dispute my earlier points. In your response, you challenged my statement about China's potential to achieve a GDP per capita equal to that of the US, citing reasons related to the world's carrying capacity in terms of resources, CO2 emissions and so on.

I have already given you credible reasons why GDP per capita level of US can go down due to Chinese competion, therefore closing the gap between two countries.

I have also given you reasons why rising Chinese GDP per capita means it will have more money to bid for the same resources US can buy right now at a cheaper price. Even more poorer countries like India, Indonesia and others are also growing in wealth. All of these countries will be bidding in the global market for the same natural resources. Thus, US will not be able to continue to consume the way it used to.

So, your argument about world's carrying capacity is wrong. The world will continue to produce the same level of natural resources. But there will be more people trying to consume it. The previous rich countries will be forced to consume less. The end result is both US and China will have equal GDP per capita and consume the same level of natural resources from the world

GDP consist more than just software/IT/biotech/aerospace and private consumer spending.

The composition of GDP between US and China are fundamentally diffferent, so just improving technology and access to affordable resource will not close the GDP per capita gap.

Most importantly, 20% of US GDP is healthcare expenditure, the highest healthcare-spending to GDP ratio in the world. (12% in Germany/France, and only 7% in China). This is due to US lacking a single payor healthcare system, which promotes bloated wasteful spending (thus artificially inflates GDP). US has thousands of individual private health insurers which increases administrative and billing overhead. Medicare is allowed for 65 and older and disability, but is prohibited to even negotiate drug prices, which artificially increases biotech/pharma profits and healthcare spending in general. China cannot replicate this because it has a leaner, efficient single payor healthcare system. China squeezes pharma/biotech hard for bargaining power, which lowers biotech/pharma profits. Fundamentally, China cuts excess spending, where as US healthcare system promotes excessive and wasteful spending, which again, artificially increases GDP.

Then there's the financial sector, also making up 20% of the US GDP. This isn't just about banking; it's about the creation of complex financial products, derivatives, and speculative instruments that can puff up the GDP figures. While these can boost numbers in the short term, they also bring volatility and risk, as we all saw in 2008 financial crisis. China, on the other hand, has a tighter leash on its financial sector, focusing more on stability and less on high-risk financial acrobatics, as seen with their stance on speculative practices and moves against potential monopolies like Ant Financial by Jack Ma.

So, when we talk about the world's carrying capacity and resource consumption, it's not just about who's bidding for what. It's also about understanding the nuts and bolts of each country's GDP. The US's numbers are significantly swayed by sectors where costs are more a reflection of systemic inefficiencies or complex financial products than actual economic health. Simply equating the GDP per capita of the US and China, without considering these structural nuances, doesn't quite hit the mark. It's not just about the resources; it's about how each country's system inflates or manages their slice of the economic pie.

 

[ZeEa5KPul]

Still, you aren't going to have 800 million EV cars in China (2 cars per household for 92% of households like US)

Challenge accepted.

that level of car consumerism can't exist, not least because the roads can't handle that much traffic.

There are already around 320 million cars in China. An expansion of 2.5x is eminently doable.

As others have pointed out, a lot of US GDP is simply waste, rent seeking, and other hot air. China needn't and probably won't reach the sticker number of per capita US GDP, but it will certainly reach the same standard of living like 2 cars in every household, etc.

 

[FairAndUnbiased]

Challenge accepted.

There are already around 320 million cars in China. An expansion of 2.5x is eminently doable.

As others have pointed out, a lot of US GDP is simply waste, rent seeking, and other hot air. China needn't and probably won't reach the sticker number of per capita US GDP, but it will certainly reach the same standard of living like 2 cars in every household, etc.

People won't buy 2 cars per household because they just outright won't be able to park them. There's less than 1 parking space per car in China.

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

There's simply not enough land in China to dedicate to low value added use like parking lots. And if it is, then to keep per area value on par with other higher value uses, parking fees will climb.

What is likely to happen is that everyone who wants a car will have a car, but it won't be everyone because not everyone will want or need a car due to issues with congestion, parking, permits, fees, fuel, etc. Public transit will still be the most important.

2 cars per household isn't a mark of efficiency, it is due to inefficiency where valuable land is dedicated to low value added usages and public transit is nearly nonexistent giving people no alternatives.

 

[Phead128]

Challenge accepted.

US is forced to rely on cars because of suburbia sprawl hellscape, China has really efficient public transportation system.

There are already around 320 million cars in China. An expansion of 2.5x is eminently doable.

There is only 5.3 million kilometers of roads and highways in China.
2.5X expansion means 800 million cars, @ 4.8 m length per car, equal 3.8 million kilometers length of cars bumper-to-bumper traffic, which is 75% of roads/highway total length.

We will also need to reduce 10% of Taiwan's territory as car parking lot space for the additional 480 million cars, that is doable after AR after it's glassed.

 

[tamsen_ikard]

GDP consist more than just software/IT/biotech/aerospace and private consumer spending.

The composition of GDP between US and China are fundamentally diffferent, so just improving technology and access to affordable resource will not close the GDP per capita gap.

Most importantly, 20% of US GDP is healthcare expenditure, the highest healthcare-spending to GDP ratio in the world. (12% in Germany/France, and only 7% in China). This is due to US lacking a single payor healthcare system, which promotes bloated wasteful spending (thus artificially inflates GDP). US has thousands of individual private health insurers which increases administrative and billing overhead. Medicare is allowed for 65 and older and disability, but is prohibited to even negotiate drug prices, which artificially increases biotech/pharma profits and healthcare spending in general. China cannot replicate this because it has a leaner, efficient single payor healthcare system. China squeezes pharma/biotech hard for bargaining power, which lowers biotech/pharma profits. Fundamentally, China cuts excess spending, where as US healthcare system promotes excessive and wasteful spending, which again, artificially increases GDP.

Then there's the financial sector, also making up 20% of the US GDP. This isn't just about banking; it's about the creation of complex financial products, derivatives, and speculative instruments that can puff up the GDP figures. While these can boost numbers in the short term, they also bring volatility and risk, as we all saw in 2008 financial crisis. China, on the other hand, has a tighter leash on its financial sector, focusing more on stability and less on high-risk financial acrobatics, as seen with their stance on speculative practices and moves against potential monopolies like Ant Financial by Jack Ma.

So, when we talk about the world's carrying capacity and resource consumption, it's not just about who's bidding for what. It's also about understanding the nuts and bolts of each country's GDP. The US's numbers are significantly swayed by sectors where costs are more a reflection of systemic inefficiencies or complex financial products than actual economic health. Simply equating the GDP per capita of the US and China, without considering these structural nuances, doesn't quite hit the mark. It's not just about the resources; it's about how each country's system inflates or manages their slice of the economic pie.

It's good that you have moved on from the world's carrying capacity in terms of resources. Your next argument is now that the US GDP is inflated by the healthcare and financial sector, and because China is so efficient and competent, it will not inflate its GDP with healthcare and finance, and thus it can't reach US GDP per capita.

First, let's tackle healthcare. The goal of the healthcare sector is to keep people healthy. If this goal can be achieved with less money being spent, then that's a good thing. Now you are saying the US is spending more on healthcare, and thus its GDP is being inflated by that.

But here is the problem: if US people and the government are spending more on healthcare, that means that money is gone. But for China, since they are spending less on healthcare, they have more money to spend on other productive sectors. Chinese consumers now have more money to spend on household items, a bigger house, a better car, maybe an extra vacation. All of these activities will boost GDP.

Or maybe they save that money and put it away for a new investment in stocks or bonds. That means companies have more money to spend on their investments, maybe boosting innovation or boosting market share in the process, thus gaining even more income and boosting GDP.

Just because a non-productive sector has less money to spend doesn't mean your GDP will be less. Instead, you saved that money and put it into other more productive sectors.

Now let's tackle finance. You yourself said inflating GDP with derivatives is not a good thing and is likely a bubble, and you gave an example of 2008 when that bubble burst. Well, if the US finance sector is full of bubbles, then that will eventually burst, and many good businesses and people will go bankrupt. This will likely lead to a big fall in overall consumption and thus US GDP will fall in a major way.

There is no perpetual bubble; all bubbles are by nature bound to collapse. If China can avoid such bubbles, then its predictable economic performance will likely boost people's confidence. They will invest more in the economy. They will borrow more. Overall, this will boost China's GDP more than the US.

So, in conclusion, inflated GDP by the US through non-productive sectors will eventually lead to either a recession and GDP collapse or will lead to an inefficient economy, which again will lead to less economic growth. China, by avoiding that, will boost its GDP even more. The likely result of this will be China's GDP per capita will be even bigger than the US.

You are actually giving us faith that China can actually be richer than US in the future!!

 

[manqiangrexue]

Regardless, of how many people the US and their vassals have combined together.

LOL You brought it up. Then you can't support the argument so now it becomes "regardless."

China still needs to grow its population, for its own good. We don't even need to care about their population as long as we have more people.

This is fool's mentality. Do something just to do it without understanding why or whether it's needed. You cannot supply any logical reason for why a China of 1B people cannot overtake the US and do better than it is today with 1.4B so you just repeated your defeated broken points, even saying you don't care about the specifics but just want it your way.

The US has always been obsessed about large numbers.

So? The US is obsessed with mass shootings too.

They were scared about China's big population.

Once again, you were already proven wrong. They weren't scared of China's big population 30 years ago and they're not scared of India's today. They're not scared of big populations; they are scared by innovation and quality overtaking theirs.

Now they are even more scared about a big motivated and highly education Chinese population.

Congratulations, you said 1 right thing.

We need to maintain our big and educated population,

Those are different things. A big population, I don't think anyone things that 1B is not big. Maintain? That means 1.4B, and you cannot find any reason why that is needed other than because it's what you want. But a big educated population? China's is growing. More and more educated useful people from massive investment into education and improvement in quality of life, but overall a slight drop because it's China's poorest that are dwindling.

rather than coming up with stupid excuses of having a smaller population.

No, rather you need to stop coming up with stupid nonexistant reasons that you can't even explain logically for why China's population MUST be maintained at 1.4B.