Chinese Economics Thread

Randomuser

Randomuser

Senior Member
Registered Member
You know when I was younger I used to believe that kool-aid BS with private = good and government-related = bad.

But it doesn't really work with China the more I read about it. Quite a bit of China's best private stuff especially in Tech were state-owned enterprises or university projects that were transformed into private companies. Even if not directly related, the government has worked as an investor to give funding to small companies that made it big (Eg the Big Fund).

It works in stuff like sports where stuff like Olympics gets gold medals while most other stuff relying on private fundings goes nowhere. The men's football team which sucks ass now still managed to get into the world cup back in 2002 thanks to government system producing such players.

For some reason, Americans seem to think any related to government is bad and that it is impossible for governments to want to create stuff that works. Makes me wonder why they don't worship Somalia more.
 
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iewgnem

Junior Member
Registered Member
Randomuser said:
You know when I was younger I used to believe that kool-aid BS with private = good and government-related = bad.

But it doesn't really work with China the more I read about it. Quite a bit of China's best private stuff especially in Tech were state-owned enterprises or university projects that were transformed into private companies. Even if not directly related, the government has worked as an investor to give funding to small companies that made it big (Eg the Big Fund).

It works in stuff like sports where stuff like Olympics gets gold medals while most other stuff relying on private fundings goes nowhere. The men's football team which sucks ass now still managed to get into the world cup back in 2002 thanks to government system producing such players.

For some reason, Americans seem to think any related to government is bad and that it is impossible for governments to want to create stuff that works. Makes me wonder why they don't worship Somalia more.
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All corporations seek to form monopolies and fix prices, but monopolies and price fixing are both anti-capitalist and anti-free market, which means capitalism and free market can only exist when the government is above corporations.

In other words, capitalism can only exist under socialism, and western democracy can only produce feudalism.
 
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dingyibvs

Senior Member
Jiang ZeminFanboy said:
For me it's certainly not fine if it's below the market clearing rate, what's even the point with that kind of minimum wage?

You have Shanghai and Beijing with 2420 RMB minimum wage and 2700 RMB minimum wage, this lvl is ridiculous for these world class cities because even the most crap jobs there pays at least 5000-6000 RMB., so market clearing rate it's 2x!. GDP per capita in these regions and cities are higher than in Poland, or comparable if you say Jiangsu, but minimum wage should be at least 2x the current amount to have even a closiness to the market clearing rate wage.

Poland is maybe not good example for it, cause the minimum wage skyrocketed in the recent years, and a lot of people got caught by the lvl so about 25% of workforce are working for this wage +-700zł. But right now in Poland you have 4300 zł minimum wage and that's 7700 RMB!, it will rise to 4666zł from next year. Shanghai, Beijing, Jiangsu, Zhejiang at similar lvl of per capita GDP should have at least minimum wage at market clearing rate to have some impact on the market and the most low paid jobs.

That low lvl, only makes anti-China articles/pundits in Western media or goverments go with dumb Michael Pettis overcapacity and not enough demand thesis further. The good ratio of China disposable income per capita to GDP per capita in China clearly proves that minimum wage has zero impact on the Chinese wages, which are much higher.

Minimum wage, just a bit higher than very poor so called "3rd" world countres, makes China unfortunately look bad, even though the reality on the ground is different, and it have no impact on real income.

My point, China minimum wage should be set on at least 5000-6000 RMB in first tier cities such as e.g. Shanghai, Beijing, Shenzhen etc. 4000 in lower, and 3000 RMB in the poorest regions of China to have any impact on wages (market clearing rate wage), so double the current lvl of minimum wage rates at least.
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I think minimum wage in place like Beijing is designed for people who don't need jobs working jobs that are not really necessary. For example, there's a public bathroom like every other block near the city center, and each one has a cleaner assigned to it. That's a job that's not really needed. The people working there are typically grandpas and grandmas who've been long retired with a livable pension and just wants to keep working and earn a bit extra cash, they don't really need that money.

This is more of a social solution for a social problem. It keeps those grandpas and grandmas with no with no skills needed in the modern world happy at minimum cost, while providing a better experience and presenting a better image to all the tourists.
 
Z

zbb

Junior Member
Registered Member
iewgnem said:
All corporations seek to form monopolies and fix prices, but monopolies and price fixing are both anti-capitalist and anti-free market, which means capitalism and free market can only exist when the government is above corporations.

In other words, capitalism can only exist under socialism, and western democracy can only produce feudalism.
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There are many different (and in fact sometimes completely opposite) definitions of "free market".

Adam Smith and other early economists/thinkers defined the "free market" as being free from economic rents in the form of special privileges, monopolies, artificial shortages, etc. Persistent outsized profits are seen to be problematic and clear indications that the market is not "free".

The term "free market" as used in modern Western political discourse means exactly the opposite of Adam Smith's definition and instead is all about the freedom for large capital owners to establish moats (privileges), monopolies, etc. so that they are free to maximize the economic rents that they collect. In the modern Western view, persistent outsized profits for the owners of capital is one of the (if not the) main measures for a healthy "free market" economy, and hence the focus on stock market performance in the Western political and economic discourse.
 
coolgod

coolgod

Colonel
Registered Member
gelgoog said:
These people promote economic theories which, if applied, would turn East Asia into a basket case similar to Latin America.
It is surprising China still pays for him to be at one of their universities.
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It makes more sense (or could be cope) if you view him as external propaganda, not meant for internal consumption. After all western economists are way more devastating than thermonuclear weapons.
 
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