Chinese Economics Thread
- Thread starter Norfolk
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Something to consider for job losses in China from trade war. China actually has a blue collar labor shrinkage issue so just out of necessity, some labor displacement is not a bad thing. There will be some early retirements out of this and some relocations.
solarz
Brigadier
This is how manufacturing get outsourced, not just because of greedy capitalists, but also because people want high paying office jobs.
The solution is AI and automation.
Its not the first time Italians have done this for businesses involving China.
No wonder the Mafia came from there. These westoids really have a lot of nerve preaching all these values.
I agree that this doesn't make sense, but this is how the calculation is done and analyzed to determine a country's GDP.
In reality, exporting a lot and importing little does not generate much growth and is the path to poverty. That is why I am so involved in the case of China in trying to reverse the scenario in which it depends largely on the export market, because the production of what they manufacture ends up being sent to generate well-being and economic development for the world and not China itself, which should be the greatest beneficiary of this production. This only ends up benefiting the entire export chain but not the entire Chinese population, which should have greater access to the goods that they themselves manufacture.
A country's standard of living is determined by the abundance of goods and services. The greater the quantity of goods and services offered, and the greater the diversity of this offer, the higher the population's standard of living. Thus, a people who export more in order to import more will become richer and improve their standard of living; A people who export more just to export more and, with that, "improve their trade balance" will reduce their standard of living -- after all, by sending more products abroad and not bringing more products in, the domestic supply of products will fall. Fewer products in the domestic market directly imply a reduction in the standard of living.
The US achieved its current standard of living basically by importing goods and services from all over the world, benefiting the general population, despite the various problems that arose in this economic arrangement that are direct consequences but also not the only reason to explain the current American economic failure.
The problem with America is one of distribution. Even if it does not have reserve currency or tech most Americans should be able to live relatively well off just from the sheer amount of natural resources available. The problem stems from vulture capitalists who are simply insatiable.
You do realize two thirds of China's production is consumed within China, with the remaining third being surplus that is exported, right?
Its not like everything China produces is exported, leaving barren empty warehouses at home.
Which is exactly what production 'overcapacity' brings - e.g. Electronics and EVs.
Exporting more to import more works when others have competitive products you want to buy; when they don't and/or will not sell what you want, then this logic falls over. It also doesn't work when "the one we have at home" is better than foreign competitors by a wide margin.
Countries that need to import to survive are typically low resource (whether of the natural or human type) that in an earlier age could only get rich by stealing.
This is the problem. China's industrial production is about US$5 trillion, even if Chinese industrial production jumped to US$10 trillion, which is about 4x more than the US produces, China's standard of living would still be lower than the US's, because of China's large population, which is more than 4x larger.
That is not what is under discussion, but the issue of China's need to import. What China exports allows it to import the same amount of goods and services that it exports. A surplus of US$1 trillion is an economic aberration, because if this surplus were used to import more goods and services, the standard of living of the Chinese population would be higher than it is today.
And it is not just a question of who has the most competitive products, the exchange rate factor weighs on the decision to import. If Chinese monetary policy were more suited to providing a higher standard of living for the population, the renminbi would have already appreciated against the dollar, allowing the Chinese to access even more goods and services from around the world.
Countries that need to import do not need to survive, they need to provide a higher quality of life for their population. Access to goods from all over the world at affordable prices transforms a higher quality of life for their population, whether a country is poor in resources or has abundance. What guarantees a high-quality standard of living is having access to goods and services. Even if China produced twice as much as it does now, they would not even have come close to a European standard of living.
I think we should stop talking about China here, the topic is about the American economy. If you want, reply to me on the Chinese economy topic.
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