China Economy Megathread

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Oracle: Oct 9, 2004

But India's a democracy!

# ? Jun 10, 2014 15:19

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# ? May 6, 2024 10:11

computer parts: Nov 18, 2010; PLEASE CLAP

Oracle posted:

But India's a democracy!

Yeah the response was more to the question "do democratic countries fare better than undemocratic ones".

The basic lesson in general is more "developing countries are corrupt, be they autocracies or democracies".

# ? Jun 10, 2014 15:29

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

Singapore is also remarkably uncorrupt for an authoritarian country. But its officials are also paid absurd amounts of money over the table.

# ? Jun 10, 2014 16:06

dilbertschalter: Jan 12, 2010

computer parts posted:

Yeah the response was more to the question "do democratic countries fare better than undemocratic ones".

The basic lesson in general is more "developing countries are corrupt, be they autocracies or democracies".

I think the issue isn't quite as much democratic vs. undemocratic as it is whether or not there's something resembling a rule of law (though I think there's a strong correlation- it's difficult, though not impossible, for authoritarian countries to force themselves not to act in an arbitrary manner). Basically, when the government doesn't have to follow its own laws/regulations, the correct way navigate the system is to often behave in a "lawless" manner yourself.

# ? Jun 10, 2014 16:30

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

Bloodnose posted:

Singapore is also remarkably uncorrupt for an authoritarian country. But its officials are also paid absurd amounts of money over the table.

Hong Kong is also technically authoritarian since most of the important officials are unelected and Hong Kong is... mostly not corrupt. I guess we've got shitloads of crony capitalism but it's not quite the same thing as directly taking state money and running away with it.

# ? Jun 10, 2014 16:52

Modus Operandi: Oct 5, 2010

dilbertschalter posted:

I think the issue isn't quite as much democratic vs. undemocratic as it is whether or not there's something resembling a rule of law (though I think there's a strong correlation- it's difficult, though not impossible, for authoritarian countries to force themselves not to act in an arbitrary manner). Basically, when the government doesn't have to follow its own laws/regulations, the correct way navigate the system is to often behave in a "lawless" manner yourself.

There's no cohesive internal checks and balances. It's a top down hierarchy where status and power means you can make up the rules as you go along. It's like this in every corrupt developing world country.

The wealth disparity in the population institutionalizes the corruption because tea money greases everything and only the rich can afford to buy their way into power. Most of the time you don't get wealthy unless you're part of the elite already to begin with. Being noveau rich from nothing is still a new concept and usually when people manage to claw their way to the top of business first they just join the existing system of corruption rather than try to make waves.

It's an endless repeating cycle.

The only time that cycle can be broken is when the majority population gets to a certain level of education and economic affluence (middle class) and finally gets sick of it and forces broader societal changes. That doesn't happen without major investment in public infrastructure, institutions, etc.. which is hard to do when government money is being pilfered left and right by corrupt officials.

Japan, South Korea, Taiwan, etc.. were all once horribly corrupt in the fairly recent modern era as well and it's interesting to see how they managed to finally get it under control compared with let's say the Philippines or Thailand.

# ? Jun 12, 2014 18:41

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

China has an assload of noveau riches though. Almost everyone who's super rich in China today grew up eating dirt for breakfast.

The problem is that as soon as they got rich the first thing they did was buy officials and cement their wealth and create an insane wealth gap.

But they're certainly not part of an entrenched elite landlord class like in southeast Asia. Which might honestly make Chinese elites worse. They don't have the tradition excuse.

# ? Jun 12, 2014 19:37

namaste friends: Sep 18, 2004; by Smythe

Are you guys following this?

http://www.ft.com/intl/cms/s/0/85f594a8-f210-11e3-9015-00144feabdc0.html#axzz34RQHxJ2s

quote:

The port city in northeastern China is famous for its Tsingtao brewery that was founded more than a century ago with 400,000 Mexican silver dollars as capital. But in recent years, Qingdao � the beer�s name is an older spelling � has been attracting other types of metal. As Chinese traders� appetite for cheap forex funding has increased, piles of copper and aluminium used as loan collateral have accumulated in dockside warehouses.

But at the end of May, Qingdao�s metal stacks started to wobble. Local authorities began investigating whether a Chinese company had pledged the same lots of material to several banks � the equivalent of a homeowner taking out multiple mortgages on a house while telling each lender they were the only one. With potential losses running into hundreds of millions of dollars, banks and traders scrambled to assess their positions. Standard Bank and Standard Chartered Bank said they were investigating their exposure, while China�s CITIC Resources, asked courts in Qingdao to secure its metal held at Qingdao Port.

�Everybody has been going through their receipts with magnifying glasses and heading to warehouses to look for their metal,� says Vivienne Lloyd, an analyst at Macquarie.

The ripples quickly spread far beyond Qingdao. The London Metal Exchange price of three-month copper, already down 5 per cent for the year, has dropped 4 per cent since the start of last week, to $6,650 a tonne on Thursday. New financing deals for copper and other metals in China have dried up.

Commodity traders, banks, financiers and analysts were left pondering a number of questions. Was this alleged financial fraud an isolated case or are other Chinese companies and ports also involved? Will the market be flooded with copper exiting warehouses, putting further pressure on prices? And what might the long-term effect be for Chinese metals financing deals, an important part of the shadow banking sector in the country?

Two weeks on, and the investigation at Qingdao still appears to centre on a single group of companies owned by Dezheng Resources, which operates aluminium smelters, power plants and coal mines. Dezheng is reported to own up to 20,000 tonnes of copper and 100,000 tonnes of alumina at Dagang, an older docking area within Qingdao Port.

�The market is still uncertain [about the Qingdao implications],� David Lilley, co-founder of Red Kite, a metals-focused hedge fund and trader, said at a derivatives conference in London this week. �I am somewhat reassured by the fact that . . . no other area, no other problem has been uncovered.�

Qingdao has not traditionally been a hub for metals financing, but stocks built up rapidly this year. By the end of May, nearly 100,000 tonnes of copper � about 60 per cent of the copper inventories in London Metal Exchange sheds globally � was stockpiled in Qingdao, according to Macquarie. Even so, stocks elsewhere in China are much higher, with bonded warehouse districts in Shanghai holding around 800,000 tonnes of copper. Traders say that facilities at Shanghai and at other Chinese ports are organised and operated to global standards, often by international logistics companies.

For this reason, Macquarie says it �doubts that many more, if any, scandals will be uncovered�. Bank of America Merrill Lynch was less sure, noting that issuing multiple warehouse receipts for the same tonne of metal was a known issue in China, though it concluded that �copper�s Waterloo is not in Qingdao�. Meanwhile, Doug King, chief investment officer of RCMA Capital, which runs a commodity fund, said this week that he expected the Chinese financing probe to be extended to iron ore and soyabeans.

Fund managers and analysts agree that the Qingdao investigation will have an effect on commodity financing deals in the short term. Goldman Sachs said it expected foreign banks to continue scaling back its collateralised lending businesses in China. As a result, less metals will flow into bonded warehouses, and some of the stocks already there will be shifted.

Macquarie estimates that, due to the lending squeeze, around 290,000 tonnes of copper in Chinese bonded warehouses will be moved, mostly to LME warehouses, either on or off-exchange. But it expects a floor of about 600,000 tonnes of copper to remain in bonded facilities, as part of the established metal-financing transit trade run that is run by large importers and eventually feeds local factories.

�These schemes have been an integral part of the Chinese copper market for some time,� says Nic Brown, head of commodities research at Natixis. �As long as there�s no more double pledging of collateral, financing should continue in the future.�
Dezheng could not be reached for comment.

# ? Jun 12, 2014 19:56

My Imaginary GF: Jul 17, 2005; by R. Guyovich

Correct me where I'm wrong, I find it easier to view China as more similar to late Republican Rome/early Imperial Rom! than to 19th/20th-century Democratic corruption and graft.

Now, that may be too bold a claim. I see Democratic corruption as having a much more racial basis behind it, until the collectivization of white identity in response to the needs and results of the first and second world wars. As I understand China today, you can only reach the top as a Han, and the power structure of the party is thoroughly Han in its culture and traditions. Hence the Uighur troubles, as there are no political outlets for Uighurs, and the de facto rule of law is balanced heavily against them due to language and cultural barriers.

Towards the end of the Republican era, advancement within all levels of state bureaucracy was based upon Client-Patron relations. When you took a Patron, it would be dishonorable for your whole family if you were to switch without immediately pressing circumstances like civil war. You would see your Patron as if they were Marlon Brando on the day of his daughter's wedding and obtain a request in exchange for a future favor that could not be refused. If you were ambitious and from a family qualified for politics, money and a heavy debt burden were required to buy yourself into office, and due to the legal system and its prosecution of corruption, the practical pressures were to run your position as a means of personal enrichment, so that you could purchase a future state office whose title would thereby maintain immunity from prosecution.

This system collapsed when the Senate, depending upon your choice of primary and secondary sources, either refused or were outmaneuvered in not allowing Caesar to purchase the governorship of Illyria and maintain his immunity from prosecution (and seizure of all assets he had acquired during the Gallic conquests to the control of the Roman Treasury). But in the civil wars of thr Republic, there is a clear pattern of first acquiring a patron before any advancement within the bureaucracy could proceed. While it was possible to obtain a position on the basis of merit, this was exceedingly unlikely and usually only occured when the Senate could find no other nominees would want the job.

Now, to relate this to modern China, my annecdotal understanding from living with a princeling for and dating a hidden second child of higher-ranking provincial officials is that, as with the Roman system, you must have a patron within the party if you wish to advance your career and be able to find a good wife with a proper hokou. If you want to run a business, you don't have to have a patron; if you want generous state contracts, it often helps. You want to avoid a thousand years of codified and contradictory regulations? Your patron will have a chat with the appropriate agency on your behalf. Taxes? A talk from a patron can make the issue disappear, and it is only appropriate to show your thanks with a generous and voluntary donative.

I've only read this thead and heard anecdotal stories on how China works, am I wrong in viewing Chinese policy implementation through this lens?

# ? Jun 12, 2014 20:32

Deep State of Mind: Jul 30, 2006; "It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."; Fun Shoe

Yeah I don't care about that Rome crap but tell us more about the princeling and the girl you were banging or whatever.

# ? Jun 12, 2014 20:54

Modus Operandi: Oct 5, 2010

Bloodnose posted:

China has an assload of noveau riches though. Almost everyone who's super rich in China today grew up eating dirt for breakfast.

The problem is that as soon as they got rich the first thing they did was buy officials and cement their wealth and create an insane wealth gap.

But they're certainly not part of an entrenched elite landlord class like in southeast Asia. Which might honestly make Chinese elites worse. They don't have the tradition excuse.

Even though everyone was dirt poor after the revolution the problem was that there was still an elite class which were comprised of party officials. That's the irony of the "communist" system it just becomes another fixed hierarchy. The party elite's currency was power and they could act as kingmakers in society. The system was inherently corrupt from the start. When money entered the picture it didn't really change the social dynamic that much. All it did was incentivize corruption into more materialistic pursuits instead of the usual politburo power games played during the Mao era.

# ? Jun 12, 2014 23:25

Fall Sick and Die: Nov 22, 2003

Double-selling stuff happens in the real estate market too. Since so many apartments are bought before the buildings are even finished, and such a high percentage are investment properties, the apartment most people buy is nothing more than an idea on a piece of paper. I used to tutor a girl whose parents owned a hotel and associated apartment building and one day daddy disappeared to Canada because people found out he had double-sold like half of the units in the apartment building.

# ? Jun 12, 2014 23:53

namaste friends: Sep 18, 2004; by Smythe

http://www.ft.com/intl/cms/s/0/75da...l#axzz34iadzndm

quote:

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/75da79f8-f2c4-11e3-a3f8-00144feabdc0.html#ixzz34iapcua3

The pressure on Beijing to boost economic growth with additional heavy-handed stimulus measures was partially relieved on Friday with data pointing to a stabilising economy.

Retail sales, often a volatile measure, grew 12.5 per cent year-on-year from January to May, beating expectations and up from 11.9 per cent in the year to April. Fixed-asset investment rose 17.2 per cent in the first five months, up from 17.1 per cent in the year to April and industrial output grew by 8.8 per cent, up from 8.7 per cent.

�The slight improvement in activity data in May was mainly due to the mini-stimulus as Beijing introduced a slew of measures including targeted [required reserve ratio] cuts and central bank relending in the past couple of months,� Ting Lu, China economist for Bank of America in Hong Kong, said in a note.

The economy remains heavily reliant on investment in infrastructure, real estate, and factory equipment, so fixed-asset investment is closely correlated with overall economic performance. Manufacture of basic materials such as steel, cement and non-ferrous metals, reflected in industrial production data, is another key driver.

The latest figures suggest that policy makers have achieved some success in preventing a collapse in these traditional growth pillars, allowing them some breathing room to pursue structural reforms aimed at boosting consumption.

�These data point to either 7.4 per cent or 7.5 per cent year-on-year GDP growth in [the second quarter of] 2014,� Mr Lu wrote.
Real estate remained a soft spot for investment, after house prices fell on a month-on-month basis in May for the first time since 2012. Real estate investment rose by 14.7 per cent for the year to May, down from 16.4 per cent growth in the first four months. The decline in real estate sales volume also accelerated, both in value and floorspace terms.

�The broader picture is that the property sector is still putting downwards pressure on the economy but this appears to have been largely offset by infrastructure spending and other targeted measures, which have shored up other areas of the economy,� Julian Evans-Pritchard, China economist at Capital Economics in Singapore, said in a note.

# ? Jun 15, 2014 15:29

namaste friends: Sep 18, 2004; by Smythe

http://www.earth-policy.org/plan_b_updates/2014/update121

quote:

Can the World Feed China?
Lester R. Brown
Overnight, China has become a leading world grain importer, set to buy a staggering 22 million tons in the 2013�14 trade year, according to the latest U.S. Department of Agriculture projections. As recently as 2006�just eight years ago�China had a grain surplus and was exporting 10 million tons. What caused this dramatic shift?

It wasn�t until 20 years ago, after I wrote an article entitled �Who Will Feed China?�, that I began to fully appreciate what a sensitive political issue food security was to the Chinese. The country�s leaders were all survivors of the Great Famine of 1959�61, when some 36 million people starved to death. Yet while the Chinese government was publicly critical of my questioning the country�s ability to feed itself, it began quietly reforming its agriculture. Among other things, Beijing adopted a policy of grain self-sufficiency, an initiative that is now faltering.

Since 2006, China�s grain use has been climbing by 17 million tons per year. (See data.) For perspective, this compares with Australia�s annual wheat harvest of 24 million tons. With population growth slowing, this rise in grain use is largely the result of China�s huge population moving up the food chain and consuming more grain-based meat, milk, and eggs.

In 2013, the world consumed an estimated 107 million tons of pork�half of which was eaten in China. China�s 1.4 billion people now consume six times as much pork as the United States does. Even with its recent surge in pork, however, China�s overall meat intake per person still totals only 120 pounds per year, scarcely half the 235 pounds in the United States. But, the Chinese, like so many others around the globe, aspire to an American lifestyle. To consume meat like Americans do, China would need to roughly double its annual meat supply from 80 million tons to 160 million tons. Using the rule of thumb of three to four pounds of grain to produce one pound of pork, an additional 80 million tons of pork would require at least 240 million tons of feedgrain.

Where will this grain come from? Farmers in China are losing irrigation water as aquifers are depleted. The water table under the North China Plain, an area that produces half of the country�s wheat and a third of its corn, is falling fast, by over 10 feet per year in some areas. Meanwhile, water supplies are being diverted to nonfarm uses and cropland is being lost to urban and industrial construction. With China�s grain yield already among the highest in the world, the potential for China to increase production within its own borders is limited.

The 2013 purchase by a Chinese conglomerate of the American firm Smithfield Foods Inc., the world�s largest pig-growing and pork-processing company, was really a pork security move. So, too, is China�s deal with Ukraine to provide $3 billion in loans in exchange for corn, as well as negotiations with Ukrainian companies for access to land. Such moves by China exemplify the new geopolitics of food scarcity that affects us all.

China is not alone in the scramble for food. An estimated 2 billion people in other countries are also moving up the food chain, consuming more grain-intensive livestock products. The combination of population growth, rising affluence, and the conversion of one third of the U.S. grain harvest into ethanol to fuel cars is expanding the world demand for grain by a record 43 million tons per year, double the annual growth of a decade ago.

The world�s farmers are struggling to keep pace. When grain supplies tightened in times past, prices rose and farmers responded by producing more. Now the situation is far more complex. Water shortages, soil erosion, plateauing crop yields in agriculturally advanced countries, and climate change pose mounting threats to production.

As China imports increasing quantities of grain, it is competing directly with scores of other grain-importing countries, such as Japan, Mexico, and Egypt. The result will be a worldwide rise in food prices. Those living on the lower rungs of the global economic ladder�people who are already struggling just to survive�will find it even more difficult to get by. Low-income families trapped by food price inflation will be unable to afford enough food to eat every day.

The world is transitioning from an era of abundance to one dominated by scarcity. China�s turn to the outside world for massive quantities of grain is forcing us to recognize that we are in trouble on the food front. Can we reverse the trends that are tightening food supplies, or is the world moving toward a future of rising food prices and political unrest?

Strategic pork reserve.

# ? Jun 26, 2014 03:29

namaste friends: Sep 18, 2004; by Smythe

http://www.sharenet.co.za/news/China_property_primed_for_shakeup_as_downturn_drains_cash/09576c9de6c03c5667c68824c79a0b5c

quote:

China property primed for shake-up as downturn drains cash
* Developers' short-term-debt ratios at two-year lows
* EBITDA margins thinnest since 2011
* Consolidation tipped as prices fall, credit dries up
By Umesh Desai and Clare Jim

HONG KONG, June 25 (Reuters) - An oversupply of residential property and a market slowdown have left Chinese developers with their worst cash crunch in more than two years, revealing the extent of China's real estate downturn and paving the way for further consolidation in the sector.

A Reuters study of more than 80 China-listed developers that have declared March quarterly earnings showed cash to short-term-debt ratios at two-year lows amid a steady decline in margins since 2011.
That was the year the government moved to rein in the overheating housing market through measures including higher mortgage rates and limits on how many homes each family can buy.

But the government crackdown is only part of the story. A downturn in property prices, pressure to pay for last year's record land purchases, and a tighter credit market have combined to put severe strains on developers' liquidity.

The mounting pressure could lead to sales of assets such as land banks and completed projects as the government presses for consolidation in the highly fragmented sector, analysts and investors said.
Even without further government curbs this year, developers' financials will feel the pinch of subdued house prices, which fell for the first time in two years in May.

"The situation is quite severe now. Mid-sized developers are facing pressure as interest rates for trust loans are high, the impact will emerge eventually. The size of developers affected are getting larger," Hong Kong-based property agent Midland Realty COO Samuel Wong said.

"H2 will be worse than H1 when problems surface, unless there is more easing in policy or liquidity."
Caught between having to cut prices or raise capital, some developers are holding off for the moment, either using stop-gap measures or waiting for a bank rescue, according to industry insiders.

"The market isn't favourable. We haven't decided whether to cut prices," said an official at unlisted Shenzhen-based developer Guang Group, one of China's top 100 developers.

"We're in restructuring (mode) now, such as introducing financial partners and consolidating projects."
Last month, the company said it had failed to deliver some properties to homebuyers on time because of financial pressures.

MARGINS HURT, LIQUIDITY DRYING

The deterioration in developers' financials has been felt on two levels.
Firstly, competition both for land banks and apartment sales has squeezed margins. Margins on earnings before interest, taxes, depreciation, and amortisation are now in the low teens compared with nearly 20 percent at one point in 2011.

Meanwhile, the median cash to short-term debt ratio of the companies studied by Reuters has fallen to 0.77 from 1.11 at the end of 2012. A ratio below 1.0 is a red flag meaning cash is insufficient to cover debt coming due in a year.
Winsan Shanghai Industrial Corp Ltd saw its cash to short-term debt ratio decline to 0.07 in the March quarter from 0.83 in end-2011. In that same period the company saw its EBITDA margin turn negative from 18.8 percent. The company did not respond to emailed questions.

London-based fund manager Yerlan Syzdykov at Pioneer Investments, which owns bonds in China property, said the deterioration in developers' financial positions was likely to trigger a long-overdue shake-up in the industry.
"We see more consolidation in the sector. They are leveraged and have lower cash balances because of land acquisitions - they need banks to step in and provide more liquidity," he said.
In a recent sign of such consolidation, Sunac China Holdings Ltd last month bought a 24 percent stake in peer Greentown China Holdings Ltd for HK$6.3 billion ($807 million).

Moody's said at a conference last month it expected to see more such moves as developers tried to scale up to win cheaper loans from banks.

DON'T PANIC

Volatile as the sector may be, few expect China's property market to suffer a collapse like the sub-prime mortgage crisis that hit the United States.

"People are watching carefully but we're not worried yet," Pioneer Investments' Syzdykov said.

High downpayments, low household debt and expectations of continuing government support are commonly cited by experts forecasting the downturn will be short-lived, with prices expected to recover as economic growth steadies in the second half of the year.

Furthermore, a repeat of events that brought Zhejiang Xingrun Real Estate Co to the brink of bankruptcy is unlikely. The developer is estimated to owe 15 domestic banks 2.4 billion yuan and individual investors another 1.1 billion, with only 3 billion yuan of assets on hand.

"Full-blown defaults in this sector are rare as developers own assets which are worth something," said Thomas Kwan, head of fixed income at Harvest Global Investments Ltd in Hong Kong.

"The smaller developers can sell their projects or land in times of difficulty." (Additional reporting by Patturaja Murugaboopathy; Editing by Stephen Coates)
2014-06-24 23:00:02

# ? Jun 26, 2014 03:40

paragon1: Nov 22, 2010; FULL COMMUNISM NOW

Oh, so this is what environmentalists mean when they say everyone living an American lifestyle would destroy the planet.

# ? Jun 26, 2014 08:31

TheBalor: Jun 18, 2001

In the event of a famine, I wonder how long it'd take for China to start extorting its neighbors for cheap grain.

# ? Jun 26, 2014 11:53

Pervis: Jan 12, 2001; YOSPOS

TheBalor posted:

In the event of a famine, I wonder how long it'd take for China to start extorting its neighbors for cheap grain.

If there is a famine I'd imagine we'd finally get off our asses and stop converting massive amounts of feed corn to Ethanol, which has been driving up the cost of meat in the US (and the herds to slowly shrink due to the cost of feed). Looking at the USDA site it looks like we're currently converting 5 billion bushels/year, which is around ~120 million tons.

If there is a sharp famine, but oil prices don't keep pace, it'll be more than worth it to sell the corn rather than convert to Ethanol. Although we may already be there at the moment, eventually we'd reverse course, I'd hope.

# ? Jun 26, 2014 19:47

Eletriarnation: Apr 6, 2005; People don't appreciate the substance of things...
objects in space.; Oven Wrangler

paragon1 posted:

Oh, so this is what environmentalists mean when they say everyone living an American lifestyle would destroy the planet.

Well, I've heard it stated that America uses 25% of the world's energy with 5% of the population. Given where most of our energy comes from, using 5 times as much of it globally seems pretty perilous if it were even possible.

# ? Jun 26, 2014 21:55

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

If I recall the US produces a substantial surplus of food. The North American plains are possibly the most fertile farmlands in the world and farming technology has advanced very rapidly over the past century.

Regarding feeding China, I don't think people on either side of the pacific are going to be very receptive to "well then everyone should be less prosperous" arguments.

# ? Jun 26, 2014 22:19

computer parts: Nov 18, 2010; PLEASE CLAP

Eletriarnation posted:

Well, I've heard it stated that America uses 25% of the world's energy with 5% of the population. Given where most of our energy comes from, using 5 times as much of it globally seems pretty perilous if it were even possible.

There's a very high probability that that's including things like transportation.

# ? Jun 26, 2014 22:24

The Dipshit: Dec 21, 2005; by FactsAreUseless

Fojar38 posted:

If I recall the US produces a substantial surplus of food. The North American plains are possibly the most fertile farmlands in the world and farming technology has advanced very rapidly over the past century.

Regarding feeding China, I don't think people on either side of the pacific are going to be very receptive to "well then everyone should be less prosperous" arguments.

Ah, but we already are doing that in the U.S. Wages have remained stagnant and fixed costs have risen over the past few decades.

# ? Jun 26, 2014 22:49

Eletriarnation: Apr 6, 2005; People don't appreciate the substance of things...
objects in space.; Oven Wrangler

computer parts posted:

There's a very high probability that that's including things like transportation.

I imagine so, yes. Obviously a rough figure like that isn't going to capture all the intricacies of how other countries would develop differently.

# ? Jun 27, 2014 19:03

Pimpmust: Oct 1, 2008

Pervis posted:

If there is a famine I'd imagine we'd finally get off our asses and stop converting massive amounts of feed corn to Ethanol, which has been driving up the cost of meat in the US (and the herds to slowly shrink due to the cost of feed). Looking at the USDA site it looks like we're currently converting 5 billion bushels/year, which is around ~120 million tons.

If there is a sharp famine, but oil prices don't keep pace, it'll be more than worth it to sell the corn rather than convert to Ethanol. Although we may already be there at the moment, eventually we'd reverse course, I'd hope.

Feed costs are a tiny part of what you actually end up paying for your food though, like only 13% and the corn price has been bouncing up and down in relation to the harvests without having much of an effect on the food price (at least not downwards).

Energy costs on the other hand is a pretty big part of the price of food:

http://www.aisthetica.com/resources/energy-cost-of-food/

# ? Jun 27, 2014 21:31

TheBalor: Jun 18, 2001

Fojar38 posted:

If I recall the US produces a substantial surplus of food. The North American plains are possibly the most fertile farmlands in the world and farming technology has advanced very rapidly over the past century.

Unfortunately, plains agriculture isn't something that can be relied on in the long term. Most of the plains are reliant on aquifers to irrigate, and these are all being drained at a rapid clip.

# ? Jun 28, 2014 08:58

Arglebargle III: Feb 21, 2006

That goes double for the North China Plain! :shepicide:

# ? Jun 28, 2014 09:08

paragon1: Nov 22, 2010; FULL COMMUNISM NOW

Apologies in advance to anyone I kill for their food during the Great Famine of 2050.

# ? Jun 28, 2014 09:54

computer parts: Nov 18, 2010; PLEASE CLAP

TheBalor posted:

Unfortunately, plains agriculture isn't something that can be relied on in the long term. Most of the plains are reliant on aquifers to irrigate, and these are all being drained at a rapid clip.

And that's why we should ban drought resistant GMOs.

# ? Jun 28, 2014 14:03

Nintendo Kid: Aug 4, 2011; by Smythe

TheBalor posted:

Unfortunately, plains agriculture isn't something that can be relied on in the long term. Most of the plains are reliant on aquifers to irrigate, and these are all being drained at a rapid clip.

We don't do most of our agriculture on the plains. If the plains go than so what? We're down to only producing 2.5x the food we need instead of 4x.

# ? Jun 28, 2014 16:45

TheBalor: Jun 18, 2001

Nintendo Kid posted:

We don't do most of our agriculture on the plains. If the plains go than so what? We're down to only producing 2.5x the food we need instead of 4x.

I was specifically responding to a comment about the North American plains. :P

Anyway, the chance of a new Dustbowl happening isn't exactly a "So what?" problem, and the plains aren't the only place where water shortages are going to be an issue. Even if American can remain self-sufficient, we might not be able to meet the demand of an increasing Chinese population, as well as those of our allies in a world where the amount of properly arable land is rapidly shrinking.

# ? Jun 28, 2014 23:43

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

TheBalor posted:

I was specifically responding to a comment about the North American plains. :P

Anyway, the chance of a new Dustbowl happening isn't exactly a "So what?" problem, and the plains aren't the only place where water shortages are going to be an issue. Even if American can remain self-sufficient, we might not be able to meet the demand of an increasing Chinese population, as well as those of our allies in a world where the amount of properly arable land is rapidly shrinking.

North American and European populations are pretty stable and the world isn't going to turn into a massive desert. This is a problem that will be felt everywhere but it is unlikely to impact the life of your average Joe Westerner like it will if you live in China, India, or Africa.

# ? Jun 28, 2014 23:57

TheBalor: Jun 18, 2001

Fojar38 posted:

North American and European populations are pretty stable and the world isn't going to turn into a massive desert. This is a problem that will be felt everywhere but it is unlikely to impact the life of your average Joe Westerner like it will if you live in China, India, or Africa.

Christ, are people reading my posts at all, or just banging their faces against reply? That's exactly what I'm saying! I'm not saying that Californians will be starving, I'm saying Chinese people will!

# ? Jun 29, 2014 00:07

computer parts: Nov 18, 2010; PLEASE CLAP

TheBalor posted:

Christ, are people reading my posts at all, or just banging their faces against reply? That's exactly what I'm saying! I'm not saying that Californians will be starving, I'm saying Chinese people will!

Except the population in China is expected to peak within the next 30-40 years.

Actually maybe even sooner than that.

# ? Jun 29, 2014 00:27

Nintendo Kid: Aug 4, 2011; by Smythe

TheBalor posted:

I was specifically responding to a comment about the North American plains. :P

Anyway, the chance of a new Dustbowl happening isn't exactly a "So what?" problem, and the plains aren't the only place where water shortages are going to be an issue. Even if American can remain self-sufficient, we might not be able to meet the demand of an increasing Chinese population, as well as those of our allies in a world where the amount of properly arable land is rapidly shrinking.

China will still be able to eat heartily from our still massively overproducing country even with the entire great plains reduced to dust. In fact we might get better meat out of it since grasslands are much less water intensive and you can go bull-wild raising cattle across that.

# ? Jun 29, 2014 02:04

whatever7: Jul 26, 2001; by LITERALLY AN ADMIN

I read in one of the economy lecture that the forecoming global warming (something like 2-3 degrees in the next 80 years) will be bad for Europe and subcontinent but benefitial to countries like US and China.

# ? Jun 29, 2014 02:33

Fojar38: Sep 2, 2011; Sorry I meant to say I hope that the police use maximum force and kill or maim a bunch of innocent people, thus paving a way for a proletarian uprising and socialist utopia

also here's a stupid take
---------------------------->

Isn't it supposed to be beneficial for Britain? Like, you'll be able to have wineries in Scotland?

North America has such an huge amount of geographic diversity that yeah it'll probably be fine.

I don't know enough about China's geography but isn't most of China's farmland in the south?

# ? Jun 29, 2014 02:36

Berke Negri: Feb 15, 2012; Les Ricains tuent et moi je mue
Mao Mao
Les fous sont rois et moi je bois
Mao Mao
Les bombes tonnent et moi je sonne
Mao Mao
Les bebes fuient et moi je fuis
Mao Mao

America has so much resource rich land you could lose both coasts and just move everyone back inland and itd be okay*.

edit: for being horribly catastrophic. I sometimes wonder if some anti-climate change people think on that kind of zero-game calculus.

# ? Jun 29, 2014 03:12

computer parts: Nov 18, 2010; PLEASE CLAP

whatever7 posted:

I read in one of the economy lecture that the forecoming global warming (something like 2-3 degrees in the next 80 years) will be bad for Europe and subcontinent but benefitial to countries like US and China.

The main impact on Europe would be disruption of the Gulf Stream which would cause their winters to get a lot colder (seriously look at how north Europe is, it's crazy).

Fojar38 posted:

I don't know enough about China's geography but isn't most of China's farmland in the south?

Not especially, there's definitely an impact but what you'll probably see is rice creeping northwards:

(Shanghai is ~31 N)

computer parts fucked around with this message at 05:36 on Jun 29, 2014

# ? Jun 29, 2014 05:33

Nintendo Kid: Aug 4, 2011; by Smythe

The main thing with global warming is that most areas that are already hosed over will get hosed over harder, and most poor areas will not be able to adapt or move the way richer areas will be able to. It will significantly ruin people all over the planet, but large countries have more room to maneuver in these situations.

# ? Jun 29, 2014 05:37

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# ? May 6, 2024 10:11

Arglebargle III: Feb 21, 2006

whatever7 posted:

I read in one of the economy lecture that the forecoming global warming (something like 2-3 degrees in the next 80 years) will be bad for Europe and subcontinent but benefitial to countries like US and China.

You're Chinese. Do you think whatever course it is wasn't simply lying to you?

# ? Jun 29, 2014 12:30

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