Chinese Economics Thread

[tamsen_ikard]

lol you think that as China grows more developed she will be able to keep growing at the rate she is growing today? Let’s forget even that, do you think China can grow again the way she was growing when she was poorer like in the 2000s at 10% or over ? If so why is it not the case?
Do you know how fast South Korea was growing in the 70s to 90s compared to today? Why are they not growing as fast as back then?
Do you know how fast the US was growing in her heydays when she was rising as a world superpower? Why can’t they not grow at the same rate as before ?
of course when countries grow wealthier and more developed their rate and opportunities for growth reduces . A poor man has more space to grow and catch up if he implements the right policies than a rich man can maintain similar growth . It’s a natural process . So it’s not that surprising that developing countries have a higher rate of growth than developed rich countries .
Chinese leaders are now setting China’s growth rate at 5% which even achieving that is seen a major success (which it is actually), meanwhile just a decade or two ago that would have been seen as a huge failure or almost a recession by China . Different era different expectations . China growth rate will also slow even more at some point as she gets wealthier, and much more developed , she wills after growing at a rate similar to the west, Japan, Korea etc. Other poorer developing countries with more room for growth will obviously be having a higher growth rate this coming decades compared to China, that doesn’t means they are more successful than China .

As a country gets richer their growth will slow down. But Japan has been stagnant for 30 years and actually went down in gdp per capita when inflation should automatically increase gdp per capita by 2% every year in an healthy economy.

European countries had gdp per capita in 25k in the 90s. Now they are averaging 50k to 60k.

Every developed country has grown richer in the last 30 years except Japan.

That is the colossal failure.

 

[GiantCanofWater]

Its not about ppp. Its about not innovating and still being stuck in the 90s. Japan could not move up the value chain and lost whatever business they had in the 90s such as electronics dominance.

They totally destroyed their economy and now have nothing left. China will take every business they now have and the only way for them to survive is to take away business from Europe and US but they are not doing that. Hence losing their prosperity every year.

Japan will probably be the first rich country to move back into poverty.

I think most of that can be attributed to the United States. Japan was on track to surpassing the United States’ economy (doesn’t mean they were ever going to but they were a threat nonetheless) and had some progress in semiconductors but the US dropped the economic nuke that was the Plaza Accords. Combine that with the aging population and you have the lost decades. That was not because Japan was incompetent, it’s an unfortunate consequence to being to being way too close to America. On top of that, it’s not like they had a choice since America is the one with military bases in their country and the preeminent world power. I think they managed the best they can with what they had. Quality of life remains really great compared to the rest of the world despite all the sulking you see on the internet. I think most of the problems they’re really struggling with are more cultural right now.

 

[AndrewS]

I think most of that can be attributed to the United States. Japan was on track to surpassing the United States’ economy

That was simply the Japanese currency being wildly overvalued.
In terms of actual output/consumption per person, Japan peaked at 85% of the US in 1990.

and had some progress in semiconductors but the US shot them with the economical nuke that was the Plaza Accords. Combine that with the aging population and you have the lost decades. That was not because Japan was incompetent, it’s an unfortunate consequence to being to being too close to the Americans. I think they’re managing the best they can with what they have. Quality of life remains great compared to the rest of the world. I think most of the problems they’re really struggling with are more cultural right now.

The Japanese government certainly was incompetant.

In the space of 3 years, urban land prices and the stock market doubled.
Then it almost doubled again in another 2 years.

Anyone could see that was a bubble, and this was fuelled by the Japanese government printing easy money.

---

Germany had a similar experience with its currency depreciating after the Plaza Accords, but they didn't allow bubbles to form.

 

[tokenanalyst]

As a country gets richer their growth will slow down. But Japan has been stagnant for 30 years and actually went down in gdp per capita when inflation should automatically increase gdp per capita by 2% every year in an healthy economy.

European countries had gdp per capita in 25k in the 90s. Now they are averaging 50k to 60k.

Every developed country has grown richer in the last 30 years except Japan.

That is the colossal failure.

I have to admit, you are correct to an extent, in lot metrics it seems that the country is going backwards and all the kabuki theater that government of that country is doing with the stooges in the White House is not going to solve that situation. In perspective if the AI bubble pops may affect the only industry that the country has certain dominance.

 

[antiterror13]

I am generally not a fan of these sort of reductive economic comparisons since they occlude as much as they reveal. Nevertheless, the graphic is worth a thousand words.

View attachment 176561

And remember that China's GDP calculation is very pragmatic compared to Japan, USA and EU, etc .. a good example is imputed rent is included in Japan while in China is not, also so much small economies in China are not included in China's GDP.

If we are talking about PPP GDP, even much worse for Japan

 

[vincent]

In some ways Japans rise as Asias first developed industrialized country from a feudal backward agrarian country in the 1860s to an industrialized world power in just a few decades(40 years) was as much a miracle as China’s recent rapid rise.

Far from a miracle. They got a huge sum of silver from China after defeating the Qing.

 

[Wrought]

It seems that export controls on tungsten are starting to bite. @tphuang has written extensively on the subject.

Two major Japanese chemical manufacturers could halt production of a gas crucial to AI chipmaking starting next month, as supply tightens and prices surge amid Beijing’s

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.

Showa Denko Kanto and Central Glass – two major Japanese producers of specialty gases used in semiconductor manufacturing – were planning to suspend production in July as inventories dwindled, according to an earlier report by The Elec, an electronics industry media outlet in South Korea. The firms had notified major chip manufacturers, including Samsung Electronics and DB HiTek, of potential disruptions, according to the report. Japan’s imports of tungsten from China fell 50 per cent in April compared with the 2025 monthly average, Nikkei Asia reported in late May. The country’s firms had struggled to secure alternative suppliers, according to a note published by

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earlier this year, as the world’s second-largest economy dominated global reserves and production.

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[GiantCanofWater]

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Related article to the recent discussion. They’re saying that China’s approach is actually very similar to Japan’s approach to addressing domestic demand which while making them competitive in new technologies at the time, didn't work to address demand.


“In fact, most economic historians would

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that Tokyo in the late 1980s and 1990s, like Beijing today, found it politically difficult to address its deep, demand-side imbalances and instead hoped to accelerate supply-side reforms by focusing on the development of new technology.

At the time, Tokyo expected that technological advancement would lead to large enough technological breakthroughs and productivity gains for the overall economy that Japan would be able to rebalance its economy towards a greater role for domestic demand without slowing the growth of the supply side. It would be growth in supply that would drive even faster growth in demand.”

thoughts? I think there’s something missing here.

 

[Mar ling]

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Related article to the recent discussion. They’re saying that China’s approach is actually very similar to Japan’s approach to addressing domestic demand which while making them competitive in new technologies at the time, didn't work to address demand.


“In fact, most economic historians would

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that Tokyo in the late 1980s and 1990s, like Beijing today, found it politically difficult to address its deep, demand-side imbalances and instead hoped to accelerate supply-side reforms by focusing on the development of new technology.

At the time, Tokyo expected that technological advancement would lead to large enough technological breakthroughs and productivity gains for the overall economy that Japan would be able to rebalance its economy towards a greater role for domestic demand without slowing the growth of the supply side. It would be growth in supply that would drive even faster growth in demand.”

thoughts? I think there’s something missing here.

I must have made a politically incorrect statement. The key point is that war, just like WW2 helped Americans emerge from the Great Depression.

 

[tamsen_ikard]

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Related article to the recent discussion. They’re saying that China’s approach is actually very similar to Japan’s approach to addressing domestic demand which while making them competitive in new technologies at the time, didn't work to address demand.


“In fact, most economic historians would

Please, Log in or Register to view URLs content!

that Tokyo in the late 1980s and 1990s, like Beijing today, found it politically difficult to address its deep, demand-side imbalances and instead hoped to accelerate supply-side reforms by focusing on the development of new technology.

At the time, Tokyo expected that technological advancement would lead to large enough technological breakthroughs and productivity gains for the overall economy that Japan would be able to rebalance its economy towards a greater role for domestic demand without slowing the growth of the supply side. It would be growth in supply that would drive even faster growth in demand.”

thoughts? I think there’s something missing here.

Japan in 80s had higher GDP per capita then the US. No catch up growth left. China is 6 times poorer. Somehow every China japan analogy by these so called western experts forget to think about that.

China can keep growing without any technology innovation just by catchup growth alone.