Chinese Economics Thread
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Processing aluminum from bauxite is a highly energy intensive process. No surprise that they are picking up the slack from lack of capacity elsewhere around the world.
I think if China wants to succeed in their new five year plan. (increasing wages and consumption etc) they need to fix their labor market. Way too much control by companies and employers and lacking worker rights. They can control and pay little to no overtime wages etc without major penalties. This leads to a lack of jobs that should be filled with more workers instead of pressing the employees to work overtime.
It doesn't lead to lack of jobs. Lack of jobs is what leads to this system. There's still too much competition. China is now at the top of the world league in terms of automation. Xiaomi is bragging that its new factories are almost completely empty of humans. That's great for productivity. Not so great for jobs.
It used to be the case that you could just get a job almost off the street but now that era is over. Another issue is that people's standards have risen. Young Chinese are among the most well-educated on the planet. Even if factory jobs were available, many don't want to work that life.
This is something I've noted before. The weakness of the East Asian economies is typically the service sector. It's the industrial sector which is world-class. China does have an edge over Japan or Korea in that it has frontier AI companies. But most Chinese cannot work those jobs. It's the general service sector which is still underdeveloped.
Another issue is that labour markets are bifurcated. As an example: some teacher jobs are highly protected and given huge benefits. But you could have teachers working in the same school without any such benefits and being underpaid and overworked with scant job security. Those cushy jobs are subsidised by local govts and they are fiscally unsustainable, but they still exist which is why there is such fierce competition for them.
I am not the first person to note that China is marxist in name only. Its economic system is very cutthroat. It's more akin to a nationalist-capitalist system without any elections rather than genuine communism. You don't have hundreds of billionaires in a Marxist system.
Yes, Huawei is a behemoth and they are very meticulous at everything they do(usually aiming to be the best/at forefront ).
plus the fact that they spend 3times more on R&D as percentage of Revenue than BYD makes it natural that their spending will be so high
At this stage abit of inflation is not such a bad thing for China after having such a long period of deflation
China definitely has a Marxist political economy and a political leadership that use a materialist framework to determine their form of governance, Marx never disputed that capitalism in the short term would lead to the rapid development of productive forces of an economy, even if the mode of production was based of off capitalist exploitation, and Chinese leadership definitely seem to understand this as well. And still the most foundational parts of the Chinese economy are owned and managed by the state in a way which doesn't mainly prioritize perpetually increasing profits, e.g.
Even the existence of billionaires is really conditioned on whether they can allocate capital that is in line with the goals of the government. That's why China lost several hundred billionaires in the past few years after the real estate bubble popped (and that the former billionaire head of Evergrande is detained in Shenzhen currently for fraud), a large number of those billionaires were heavily invested in real estate and the Chinese government didn't want to continue the real estate bubble as it was unsustainable and siphoned off fiscal resources from other parts of the economy that needed investment. The former billionaires didn't have much of a say in this process.