Chinese Economics Thread

[mossen]

Is India really catching up?

Yes, even if they will never fully catch up. India will partially catch-up until they hit a plateau and then stagnate. But they are not yet at that moment.

What's amazing is how fast India is growing despite all the problems you listed. It's an incredibly "top-heavy" economic model which focuses on software exports to pull everyone else up. I would have expected their growth rate to have crashed years ago, but they are still posting near 7% growth rates.

That said, because their industrial base is weak, it means they will never achieve broad-based prosperity like China. But life for the top 10% is pretty good and ultimately they influence politics far more than poor people.

Should also be mentioned that Western fantasies about replacing Chinese industrial might with India has been a colossal failure. There is simply no alternative to China.

 

[mossen]

Good luck trying find jobs for all those young Indians with AI devastating back offices and help centers. While China, East Asia, Europe and America will hold on to the advantages they have in their respective industries through automation.

If you remove East Asia from the general non-Western category, I can't think of any other group of nations that can compete at the highest end of the value-chain. As years go by, it becomes harder and harder to blame things like "the legacy of colonialism".

By the same token, I wonder how much of the recent "convergence" of the RoW is just a story of China. I suspect most of it is.

 

[Michaelsinodef]

An interesting piece on economic models, bugs as features, and theoretical vs practical tradeoffs. Particularly the section on alleged overcapacity.

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Of course, I don't expect the verboten idea that China is doing something right which should be emulated as opposed to something wrong which must be punished to gain much traction in mainstream Western circles. Though it was

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, of all people.

The author behind that piece has at least reached the acceptance stage (economic policy of west were shit in last couple of decades).

But more than that, and it's rather superficial tbh.

 

[Index]

If you remove East Asia from the general non-Western category, I can't think of any other group of nations that can compete at the highest end of the value-chain. As years go by, it becomes harder and harder to blame things like "the legacy of colonialism".

By the same token, I wonder how much of the recent "convergence" of the RoW is just a story of China. I suspect most of it is.

Looking too much at gdp isn't that smart.

From the start, China has not targeted having x gdp. They're going for living quality and productivity indicators, because gdp is a result that may correlate with increased prosperity, while the former factors are the direct causes for prosperity.

China's history of cooking gdp numbers goes deeper than just deliberately using old models that don't include internet. They also manipulate statistics to push down the gdp adjustment factor. As an example, China's officially provided gdp adjustment coefficient is just 3.64, while Russia's is 26.6. At face values, this implies that russian living standards is 8 times cheaper than China's, which just isn't true. The factor can be manipulated by cherry picking what products are considered representative in your country.

China does this so they can export Yuan through CIPS to other countries at prices even relatively poor countries can afford, so the circulation can take root. In return, it causes prices from imports to be jacked up in China, but the thing is it doesn't matter because the domestic industry already covers all needs, and people are highly paid enough they can tank the import upcharge difference without noticing much.

Being from China, I would not call my own government out for economic deception in public media, knowing they do what they do to improve China's long term geopolitical prosperity and foothold.
But this sort of disparity between reality and lie is revealed if you check stats you can't hide such as electricity output/consumption and big ticket physical products like cars, appliances etc.

So I think ultimately tracking how many trillion $ lead China has in gdp is kinda entirely pointless. More interesting if the amount of industries/markets they can dominate, since it directly correlates to the actual prosperity of China.

 

[GiantPanda]

Looking too much at gdp isn't that smart.

From the start, China has not targeted having x gdp. They're going for living quality and productivity indicators, because gdp is a result that may correlate with increased prosperity, while the former factors are the direct causes for prosperity.

China's history of cooking gdp numbers goes deeper than just deliberately using old models that don't include internet. They also manipulate statistics to push down the gdp adjustment factor. As an example, China's officially provided gdp adjustment coefficient is just 3.64, while Russia's is 26.6. At face values, this implies that russian living standards is 8 times cheaper than China's, which just isn't true. The factor can be manipulated by cherry picking what products are considered representative in your country.

China does this so they can export Yuan through CIPS to other countries at prices even relatively poor countries can afford, so the circulation can take root. In return, it causes prices from imports to be jacked up in China, but the thing is it doesn't matter because the domestic industry already covers all needs, and people are highly paid enough they can tank the import upcharge difference without noticing much.

Being from China, I would not call my own government out for economic deception in public media, knowing they do what they do to improve China's long term geopolitical prosperity and foothold.
But this sort of disparity between reality and lie is revealed if you check stats you can't hide such as electricity output/consumption and big ticket physical products like cars, appliances etc.

So I think ultimately tracking how many trillion $ lead China has in gdp is kinda entirely pointless. More interesting if the amount of industries/markets they can dominate, since it directly correlates to the actual prosperity of China.

Yes. You can't hide electricity and end products. There is simply no way the US can have a bigger GDP than a country that uses twice as much electricity and where demand is growing at 7% every year while the US stays flat or in decline like in 2023.

All real economic activities involve energy. Yes, the consumption figures can't be hidden when everything from cars to ACs to pork are bought multiples of the US.

That brings us to the stupidity of Western press pushing the "low consumption" narrative.

 

[MortyandRick]

A lot of people post about the potential of India with its large population, to grow and become more powerful.

They've been having that "potential" for decades. Still the have not caught up. If they didn't catch up on the last 30 years, how would they catch up in the next 30 with even more population? More mouths to feed? Even more jobs to create? While their entire political structure has not changed?

Also do all posters here have kids? In this day and age, it's expensive and quite tiring to raise good kids. It's tough and to be honest, I can see why the one child policy was initiated at that time. Definitely could have been better implemented but overall I think it actually contributed to the raise in Chinas HDI.

 

[GiantPanda]

A lot of people post about the potential of India with its large population, to grow and become more powerful.

They've been having that "potential" for decades. Still the have not caught up. If they didn't catch up on the last 30 years, how would they catch up in the next 30 with even more population? More mouths to feed? Even more jobs to create? While their entire political structure has not changed?

Also do all posters here have kids? In this day and age, it's expensive and quite tiring to raise good kids. It's tough and to be honest, I can see why the one child policy was initiated at that time. Definitely could have been better implemented but overall I think it actually contributed to the raise in Chinas HDI.

IT employs about 5M people today in India. Besides exporting food, that is the one sector they have any hold on. And that sector depends on the West exclusively. East Asia does not need Indian back office.

So best of luck to them in generating jobs in 30 years when their population grows another 200 million and with AI by then being a few thousand times more capable at handling anything in the office than it is today.

People thinking that it is easy to create jobs and consumption for huge populations in the Global South have only the singular example of China but believe they can apply it across the board.

There was a reason why big fast-growing young populations were tagged as a major impediment to development until the 2000s. It was China after WTO that broke the norm. Most Global South countries cannot create enough proper jobs for young people entering the market place while resources for health and education get divided into smaller and smaller portions with every new child born.

 

[tphuang]

a little bit here on the effort some companies are putting in to create a Rare earth supply chain outside of China.

I still wonder where they get the electricity for these projects that they are dreaming off when AI data center can't even get online.

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[supercat]

China's auto industry in the first half of 2024 - sales is at an annualized rate of 28 million units:

https://twitter.com/i/web/status/1836237709553098770

 

[Index]

a little bit here on the effort some companies are putting in to create a Rare earth supply chain outside of China.

I still wonder where they get the electricity for these projects that they are dreaming off when AI data center can't even get online.

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The process of refining, especially in commercially viable sized batches, is essentially an incredible difficult art form, requiring large scale deployment of cutting edge industrial equipment. Most materials in the sector cannot have any impurities at all, and some must be alloyed with other substances according to recipes that are guarded trade secrets.

Countries like US have the 80s era version of the tech used for some refining procedures, but to get in commercial competition with China is for them impossible in the current conditions. They can at most make 1 off products at exorbitant costs fit only for military supply if even enough to cover those needs at all.