China Economy Megathread

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OwlBot 2000: Jun 1, 2009

Helsing posted:

Over the last five centuries there's been a fairly reliable dynamic at play where certain industries, whether its textiles or automobiles or information technology, tend to be growing at a much faster rate than any other industry. This paper gives an overview of this process. As the paper demonstrates industries tend to follow something called a "learning curve".

As we see with these examples from the textiles and footwear industries there is an initial burst of productivity growth that eventually tapers off. Eventually the technology, which was previously transformative, becomes such a ubiquitous and standard part of the economy that we barely even notice it, and productivity growth in the industry becomes measurably slower or basically stops altogether.

How does this work, if at all, from a TRPF perspective?

# ¿ Mar 26, 2014 09:00

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# ¿ May 6, 2024 21:01

OwlBot 2000: Jun 1, 2009

What happens when everything collapses, does China blame the market and start rolling back liberalization measures?

# ¿ May 10, 2014 02:18

OwlBot 2000: Jun 1, 2009

I suppose China's government has no legal, cultural or economic limitations in its ability to simply hire the unemployed to build infrastructure directly or expand its SOEs as needed, and raise taxation to make up for any budget shortfall. It will be interesting to see how they deal with an economic crisis.

# ¿ May 10, 2014 03:47

OwlBot 2000: Jun 1, 2009

I'm assuming they don't want unemployment to reach such catastrophic levels that they're forced to carry out Tiananmen times ten if they want to stay in power. Since so much is off the books and tied up in who knows what it's hard to know whether this will be a minor blip or a total, instantaneous collapse.

# ¿ May 10, 2014 05:18

OwlBot 2000: Jun 1, 2009

Things really aren't as bad as they seem.

# ¿ Aug 24, 2015 15:47

OwlBot 2000: Jun 1, 2009

freebooter posted:

I've always wondered - what happens when Vietnam's wages rise to the point where sweatshops are no longer viable, and then Indonesia's, and then Cambodia's, etc? What happens to the global economy when we no longer have super poor countries to shuck our working class jobs onto?

Thanks to globalization, which allows corporations to profit without needing to destroy all social welfare and workers' rights in the first world by shifting the worst (and most lucrative) aspects of capitalism to the third world, capitalism had been able to avoid 19th century style class warfare in developed countries. And when Mexican workers gets too expensive, there's Honduras, then China, then Bangladesh, but even they've started organizing and raising wages, so there's Cambodia.. But eventually they'll run out of countries to run away to, and the amount of capital required to develop SSA , provide electricity grids and infrastructure is too much to bear. Get ready for lower wages and more austerity in the first world.

# ¿ Aug 24, 2015 16:11

OwlBot 2000: Jun 1, 2009

Junior G-man posted:

I remember the Bear Stearns CEO saying something so similar.

See, things weren't really that bad for anybody except China and EMs. The United States will be doing just fine, if not even better.

# ¿ Aug 24, 2015 19:39

OwlBot 2000: Jun 1, 2009

Financial crisis will not, on its own, give rise to left-wing movements when there's no organized left to speak of. It's more likely that xenophobia and Trumpamania will be the result.

# ¿ Aug 24, 2015 19:48

OwlBot 2000: Jun 1, 2009

Radbot posted:

Was there ever a reason given why we didn't prosecute HSBC for that?

Capitalism.

quote:

US authorities defended their decision not to prosecute HSBC for accepting the tainted money of rogue states and drug lords on Tuesday, insisting that a $1.9bn fine for a litany of offences was preferable to the 'collateral consequences' of taking the bank to court.
....
"Had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking licence in the US, the future of the institution would have been under threat and the entire banking system would have been destabilised."

OwlBot 2000 fucked around with this message at 17:00 on Aug 26, 2015

# ¿ Aug 26, 2015 16:53

OwlBot 2000: Jun 1, 2009

Fojar38 posted:

It's a little weird that there's so much going on in this thread as if the problem here is that Beijing isn't intervening enough.

Capitalism has nothing to do with "intervention" or lack thereof.

# ¿ Aug 26, 2015 22:59

OwlBot 2000: Jun 1, 2009

Vladimir Putin posted:

So how does this go? Sell treasuries, get dollars and then exchange dollars for yuan to buffer the yuan devaluation?

Remember when China wanted to devalue the Yuan?

# ¿ Aug 27, 2015 18:49

OwlBot 2000: Jun 1, 2009

India will never be a superpower, it is too fragmented and internally hostile. Besides, the path of development they're taking is to create some tech jobs here and there, letting a small portion of the population jump to the level of service economy while they don't even have basic infrastructure like running water in much of the country.

# ¿ Aug 27, 2015 21:53

OwlBot 2000: Jun 1, 2009

Capitalism can no longer rely on growth in emerging markets or the "chinese middle class" to fuel growth, so their energies will now turn to cutting wages and benefits in developed countries. Hyper-austerity, if you will.

# ¿ Aug 27, 2015 21:57

OwlBot 2000: Jun 1, 2009

Malcolm posted:

That would have made a much better comic.

I'm sure he tried that first before the editor reminded him they already published 30 of them.

# ¿ Sep 2, 2015 01:10

OwlBot 2000: Jun 1, 2009

Deep analysis from Yahoo! Finance(TM).
It's Amateur Hour In China

Rick Newman posted:

This is the next superpower? You've got to be kidding. Anybody expecting China to dominate the world must be wondering how the Keystone Kops managed to take over the Politburo in Beijing. China has embarked on a long odyssey to prove that capitalism can work within the confines of a communist government. There have been many impressive successes. But the failures�including those we�ve seen on display this summer�reveal that China is nowhere near the global powerhouse it imagines itself to be or some western declinists fear it will become.

Then something happened that�s normal in capitalism: Investors began to think stocks were close to a peak, so they sold to lock in profits. Not what the government was expecting. The government tried to stem the selloff by enacting stimulus measures, instituting new rules and even preventing some institutional investors from selling. Authoritarianism displaced capitalism. Yet even then, stocks plunged. Since the June peak, the Shanghai market is down by nearly 40%, and it could have further to fall.

China�s government has now reverted to the ultimate absurdity: Blaming critics of the markets� performance for the whole fiasco. Authorities have rounded up and punished nearly 200 people whose acts of sedition include suggesting Chinese stocks might go down. They include several bloggers and stock market officials plus at least one journalist. That�s like indicting a weatherman who accurately predicts a storm that�s coming. As if saying the sun will shine will make the sun shine.

Here in the United States, people publish opinions all the time about what�s right or wrong with the stock market. They make predictions of all kinds -- and are often wrong. Instead of getting a prison sentence, they get to deliver their opinions on cable news shows. Western markets also tolerate short sellers and others who bet against stocks because it serves as a check on the system: When there�s money to be made by stocks going down, it forces better diligence among those betting stocks will go up. Abuses? Sure. But unleashing market forces in every direction�not just the one you want prices to go in�generates confidence that prices will gravitate toward an equilibrium based on reality.
...
Many complex factors determine the behavior of stock markets, including unpredictable and irrational human behavior. But stock markets do follow certain fundamental rules, especially the rule of supply and demand. When there�s heavy demand for stocks, prices rise. When demand is weak, prices fall. Over time, this law is immutable. The Chinese seem to think they can subvert the most basic law of economics and compel prices to rise when demand dries up.

Americans worry a lot about China, with more than half mistakenly believing it is the world's top economic power. Only 32% say the U.S. economy is most powerful. But the Potemkin mentality at the very top of China�s communist government suggests other parts of the Chinese state are a lot hollower than they seem. Economic power is the source of other forms of power, especially military and geopolitical strength. It takes a lot of money to build world-class aircraft carriers and submarines, to bully your neighbors into territorial concessions as China is trying to do in the South China Sea, to operate big multinational companies with the smarts and agility to compete with the best in the west. If the economic foundation is flimsy, other pillars will be too.

China undoubtedly has a huge economy that will eventually become the world�s largest, due to its enormous population. But it will be a long time�think decades�before China can truly match U.S. economic power. If ever. GDP per capita is still less than $8,000 in China, according to the World Bank. In the United States, it�s more than $54,000�7 times the level in China. That gap might widen rather than narrow if China keeps trying to force-feed economic growth while American capitalism continues to rely on market forces and innovation. We�ve got plenty of problems here�including our own variety of political ineptitude�but at least we let supply and demand determine most prices. When China�s leaders let that happen, maybe it will be time to worry.

# ¿ Sep 2, 2015 17:12

OwlBot 2000: Jun 1, 2009

Crashrat posted:

And this guy's analysis is pretty amateur hour too. To quote from Harcort's "Illusion of Free Markets"

I wasn't serious about "deep analysis." Supply and demand doesn't operate like that real economies.

# ¿ Sep 2, 2015 17:48

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# ¿ May 6, 2024 21:01

OwlBot 2000: Jun 1, 2009

I'm sure they are quite trustworthy, but it's as if they don't have some stake in people caring about China and seeking it out as a place to invest. Otherwise, who would care about their Beige Book or research?

# ¿ Sep 22, 2015 16:11

The Something Awful Forums > Discussion > Debate & Discussion > China Economy Megathread