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HorseLord posted:"hey guys! China is capitalist now! They're full free market and everything! Clearly they're not real communists at all" China's a kleptocracy, plain and simple. The businesses that succeed are the ones that suck up to the party. SOEs are graft machines set up for the benefit of the party elite. Sure, it's not free market capitalism, but proper communism it is not (and if it is that's a pretty loving dire sign for communism). And China's going to have an economic reckoning soon enough. Or do you think that the bloated housing market, propped-up bubble of a stock exchange, high domestic debt levels, and attempt to switch to a consumption economy with a tiny middle class is going to magically work out on its own? The party can't just wish that away.
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Jul 24, 2015 20:39
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You don't get to handwave it away like that. China does not exist in some parallel universe where the laws of physics are wildly different. There are tons of Chinese citizens who have money in the stock market because it was hugely encouraged, and many of them bought on the margin. Either the market crashes, in which case a huge chunk of the population is completely hosed, or you prop up the market with government funds--which is quickly a huge drain on the government, or you just do what they're doing and turn the entire market so illiquid that the shares are worthless anyways because nobody wants to buy into that farce. I don't c are how authoritarian you are, you can't make that scale of event unhappen.
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Jul 24, 2015 21:22
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Rent-A-Cop posted:You are arguing economics with a guy who is on record in this thread supporting the Holodomor. True, but I really want to hear HorseLord's account of why the mystical Orient is entirely incomparable to the rest of the world.
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Jul 25, 2015 00:18
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HorseLord posted:Pointing out that China is a different country with a different economic base and political system to western countries isn't orientalist. Alright, so what aspect of China's economy or political system is going to make it immune to a stock market crash? Because until you have actually provided a cogent argument as to why that's the case, you're just saying it's different in mysterious ways that make it immune to the economic forces of the world at large. China's stock market is enormously inflated (laffo if you think 117% growth in a year is remotely real), and the populace at large is hugely exposed to the stock market, because the message being yelled at them is "INVEST", and credit has been made consistently easier to get, to the point where you can now use your house as collateral for margin trading. When the bubble finally pops, a huge number of people are going to lose everything, a lot of institutional investors are going to eat giant losses because they have literally been ordered to buy more stock, lenders are going to get a bunch of real estate they can't possibly unload given the housing glut and the shrinking of the buyers market because everyone just lost a bunch of money. And you're probably going to see some political instability as well, because that's a natural part of a recession, and because the CCP has been using the message that everything in China is getting better for everyone under them, so don't stop the good times.
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Jul 25, 2015 02:31
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