Chinese Economics Thread

[Serb]

No, it is a meme. USD's status as a world reserve currency,

Irrelevant anymore with gold returning as the reserve asset & breaking free of the artificial shackles they had over it up until now in price.

it's dominance in the global financial system,

That sure didn't prevent Russia and China from 100% and 50% de-dollarization of their entire foreign trade activities in just 2 years.

and its existing military might are a non-issue.

They have no technological edge in any area of the military now. And without that, they are nothing, since their industrial might is meager.

Uh huh. Must be why consumer spending and wages are up

Real wages are not up, if we count on the original inflation formula, for decades already. Median real wages - probably even more so.

By the current, multiple times heavily adjusted CPI, they have been at most stagnating, but if we look at it originally, they've been falling.

Consumer spending on the other hand can be 100% sustained on debt, and they can in many cases signal weakness and not strength.

 

[abenomics12345]

Also just to correct you on your last point, no one has the full stack of technology, well no one expects China of the future perhaps.

See below - whether they have it themselves or not, they can bully to have it:

That's fine, as long as the US can bully Taiwan/Netherlands to do what it wants them to do (Build at 2-3x the cost in Arizona in the former's case, and not sell to China in the latter's case).

Or, in the case of biotech - fuck with Wuxi Biologics such that customers are reticent from using their services.

Certainly not the US. I mean are you sure not informed on how many high-tech areas China now has an edge over not only them but full West?

I've met with hundreds of Chinese leading companies in each of these fields so when I tell you I know, I really know.

Just because they can survive doing it, doesn't mean that those two things are true.

As much as we shit on Gordon Chang for calling China's collapse, it is equally as dumb to call for the collapse of the US for 10 years in a row and have it continue to plod along.

 

[Serb]

See below - whether they have it themselves or not, they can bully to have it:

I've already accounted for that. I already think of the entire West as part of the American Empire. I'm saying to you that even if we assume the US had a certain stake in controlling vassal technologies too, they still don't match China now when we look at the completeness of the technological stack.

I've met with hundreds of Chinese leading companies in each of these fields so when I tell you I know, I really know.

Then you possibly don't consider some truly high-tech areas as high-tech just because the West has no monopoly over them and China has a traditional lead in them.

As much as we shit on Gordon Chang for calling China's collapse, it is equally as dumb to call for the collapse of the US for 10 years in a row and have it continue to plod along.

That's a false equivalence fallacy, I'm sorry, but if you are a sincere and rational person, then it is impossible to equate Chinese doomers with US doomers in any way.

 

[Eventine]

The issue is that the major technological strengths of the U.S. (such as chip manufacturing and EUV machines) are not located within the U.S. itself but are shared with foreign powers like Taiwan and the Netherlands.

The major technology strengths of the US are not chips manufacturing or EUV machines.

It's software, AI, biomedical technologies, and downstream products of chips fabrication, like GPUs and data centers. You can also throw in the space industry and the weapons industry.

The moment China started challenging the US in these high margin fields, the US came down hard with sanctions. It's not to anyone's surprise. The US has no intention of losing its bread & butter and that's why the tech. war is on.

 

[abenomics12345]

Then you possibly don't consider some truly high-tech areas as high-tech just because the West has no monopoly over them and China has a traditional lead in them.

Which part of "some are in the lead and some are not yet competitive vs. global best in class" (what I said) is inconsistent with what you just said?

That's a false equivalence fallacy, I'm sorry, but if you are a sincere and rational person, then it is impossible to equate Chinese doomers with US doomers in any way.

Do elaborate more? How is it different?

 

[HighGround]

Irrelevant anymore with gold returning as the reserve asset & breaking free of the artificial shackles they had over it up until now in price.

Yeah, that might actually be relevant in 40 years, not by 2025, which was the subject of your original post.

That sure didn't prevent Russia and China from 100% and 50% de-dollarization of their entire foreign trade activities in just 2 years.

Are you going to claim now that sanctions did not hurt or provide obstacles to Russia?

If United States attempts to wage economic war on China, are you going to claim that this will have no serious economic consequences for China?

And before you answer, I obviously understand that this is a two-way street, that it hurts US and its allies just as it would hurt China.

They have no technological edge in any area of the military now. And without that, they are nothing, since their industrial might is meager.

I don't believe this is a credible assessment, especially after having spent the better part of the last two years consuming almost every bit of content on this Forum.

Real wages are not up, if we count on the original inflation formula, for decades already. Median real wages - probably even more so.

By the current, multiple times heavily adjusted CPI, they have been at most stagnating, but if we look at it originally, they've been falling.

Consumer spending on the other hand can be 100% sustained on debt, and they can in many cases signal weakness and not strength.

You do understand that you are literally proving my point for me. Real wages did indeed rise. Look at the graph since the year 2000.

 

[Biscuits]

You see, it's understandable if a mistake is 1-5% of something, but I'm afraid that there is a 50-100% lowered disbalance between true and reported GDP.

My hunch tells me it's closer to 100%, but let's be conservative. The GDP is the biggest actual economic measure that could be concealed for strategic intent.

As for consumption and retail sales, they are not that important, to be used for deception, so they are not undercounted so considerably.

Also, just to add, since the Chinese government has incentives to use this strategy, then how can we as outsiders actually get true evidence that they did so?

Instead, we probably have to go in roundabout ways to find how much higher their true GDP is. It is explained well in this

Please, Log in or Register to view URLs content!

from Han Feizi. And for consumption and retail sales, there are endless threads on Glenn's Twitter. Sometimes you need to use deductive common sense in life.

What you're saying is not that the gdp is that much higher, it's just that compared to some other countries or even the majority of countries, the productive economy is 50-100% larger.

Not all gdp is created equal, in general the higher equity your society has, the more productive it will be. Better to have 1000 millionaires than 1 billionaire.

Well, the most basic one for starters.

Nominal GDP.

Which China is still ahead by quite a bit.

Or rather its impossible to directly compare because the nominal gdp of China is in RMB while the nominal gdp of US is in dollar. But after conversion China is ahead.

Gdp already "unfairly" (in the sense that it favors countries with highly stratified economies, see India's vast gdp but piss poor productivity) favors US, but even in this measure China is ahead.

 

[HighGround]

What you're saying is not that the gdp is that much higher, it's just that compared to some other countries or even the majority of countries, the productive economy is 50-100% larger.

Not all gdp is created equal, in general the higher equity your society has, the more productive it will be. Better to have 1000 millionaires than 1 billionaire.

Depends on the context. I'd rather have Jensen Huang than 1000 rando millionnaire engineers.

Which China is still ahead by quite a bit.

Or rather its impossible to directly compare because the nominal gdp of China is in RMB while the nominal gdp of US is in dollar.

Gdp already "unfairly" (in the sense that it favors countries with highly stratified economies, see India's vast gdp but piss poor productivity) favors US, but even in this measure China is ahead.

It is entirely possible to "fairly" compare them. At some point, when the RMB appreciates, I fully expect China to surpass US in nominal GDP. And yes, nominal GDP isn't "worthless", it confers information and has its own unique set of advantages.

 

[Serb]

Do elaborate more? How is it different?

It's about the comparative weight of evidence for both arguments. Here If you are truly sincere I will link you to some of that evidence so we don't polite this thread too much. This. Ignore the Taiwan part, and please keep in mind, that in 1 year since I wrote this, dozens of similar indicators have hit my radar, that I have bookmarked in various places. Also, that was just socio-political part, not geo-economic as well.

Yeah, that might actually be relevant in 40 years, not by 2025, which was the subject of your original post.

It's relevant now, you just have not been informed. Since gold has broken out of the Western-dominated decades-long artificial price suppression, everyone can put reserves there at any moment now. They are already increasingly doing so, but give them a trigger, such as the US's aggressive financial warfare against China, and this trend will be completed in 4 months, not 40 years. These are trends from around half a year ago when I followed this, and I'm sure it only supercharged by now. This, this, this. My point is that the alternative is finally present and well thought out now! And that is half of the job already done. This too, if you are interested in de-Americanized global trade. Also, look at the CIPS usage for that, yuan share in Chinese trade, etc. The point is that there are alternatives present for every part of the American financial global hegemony architecture. There just needs to be some strong trigger for everyone to get off. Just like the financial sanctions on Russia that kickstarted this, I suspect that the US try of financial warfare against China will be the one to end it all. Just like it took US chip sanctions for the Chinese chip industry to ascend to new heights, and Huawei sanctions for China to get a complete tech ecosystem from them before.

Are you going to claim now that sanctions did not hurt or provide obstacles to Russia?

No, they objectively helped them. And not only that, but they actually also hurt the EU way more!

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

I don't believe this is a credible assessment, especially after having spent the better part of the last two years consuming almost every bit of content on this Forum.

I'm not saying that the US doesn't have good military technology, but that they don't have EDGE, this is what you said. China now totally narrowed the gap and made it useless. The competition between them will now hence be in industrial might & regional logistics there.

You do understand that you are literally proving my point for me. Real wages did indeed rise. Look at the graph since the year 2000.

You do understand that they

Please, Log in or Register to view URLs content!

in that period, the starting point coinciding with that real wage growth period? Can't you understand why? Because if you downplay inflation, then your real growth would be higher since real growth = absolute growth - inflation?

 

[virsuvei]

Yeah, China likes it when it appears weaker, it buys it more time to develop peacefully and surprise its enemies if needed. That's why their GDP is undercounted by half. I also know that consumption, and retail sales, also appear to purposefully be undercounted just to confuse outsiders. Youth unemployment rates were also always overstated up until recently. I read about this from Glenn, but he will say that this is just because the methodologies are different, but I think it's all purposeful, too much coincidence. If anything, China wants everyone to underestimate everything about them.

This game has been going on for a long time. Around 2001, I think Financial Times, had an article claiming that energy statistics from 1999 proves that China is not growing that much. The economist Andy Xie from Global Economic Forum of Morgan Stanley bank wrote a reply. He told that the national income GDP of China is not exaggerated as Western sources claimed by then and still claim. He found that in a typical year the figures are an understatement by some amount, say 0.3%. In a very bad year like 1999 they may be exaggerated by 2%. Then periodically the government may correct the figure upwards by a couple of percent. At the time he was not your average economist: He, born in Shanghai, educated at US/MIT, was the one who told that the next big thing in China are going to be cars.