11 ms·

It seems to me that China outplayed the West here by a wide margin. For some reason, the West has let China get away with extremely protectionist trade policie

by erdevs 10y ago

It seems to me that China outplayed the West here by a wide margin. For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt. I think this was a combination of fear that isolating China vs creating a high degree of economic interdependence could lead to war down the line, and a lack of control over Western companies who sought to break into China. The situation today is deeply concerning. I think Western nations need to take dramatic action to curb / disincent China's protectionist policies and let their market open up to the rest of the world. If they won't truly do so, then the West needs to respond in kind.

LiweiZ 10y ago
The interests for both parties are now interlocked and the stakes are very high. So things are not that simple. Change will be gradual till a tipping point.
tiatia 10y ago
> It seems to me that China outplayed the West here by a wide margin. Don't worry, the game is not over yet. >For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt. Yes. But this could be changed by Trump in one day. (Sorry, I know that this is an extremely liberal board). Chinese don't believe in win-win. They believe in win-lose. Thats great but in my experience there is a point where you run out of stupid people to screw over. Also, it is difficult to do business with Chinese. Why? Because a lot of their decisions are irrational and it is extremely difficult to have an opponent that does irrational decisions. But this will backfire or is backfirering already. Why? With 10 or 12% growth you can afford to make irrational decisions. But try this at 6,5 or 4 percent growth. Good luck with that.
- serge2k 10y ago
  > Yes. But this could be changed by Trump in one day. OH really? How will he do that?
  - tiatia 10y ago
    Tell them: Look, you can play around with your currency in whatever way you want. But if the trade balance is not balanced, we charge a 10% import tax. Per day. Cumulative. I think there are many countries that can produce cheap shoes, clothes and electronics. By now all this stuff can already be manufactured in the US again due to automation and robotics (see Adidas producing shoes in Germany AGAIN). This would be a minor problem for the US but a big problem for China, Germany and Japan. By the way, I live in China.
    - gnaritas 10y ago
      > Tell them: Look, you can play around with your currency in whatever way you want. But if the trade balance is not balanced, we charge a 10% import tax. Per day. Cumulative. Yea, that's not how the world works; the President isn't a CEO.
    - morgante 10y ago
      And watch while we are plunged into a recession due to a huge disruption in global supply chains. Sorry, but complex problems don't have simple answers. Trump can't unilaterally force China to stop its protectionism, at least not without inflicting significant hurt on the American economy. How do you think people will react to a 10% increase in prices for almost all goods?
      - giardini 10y ago
        "And watch while we are plunged into a recession due to a huge disruption in global supply chains." WHAT supply chain? There is NO supply chain anymore. JIT (Just-In-Time) inventory has been replaced by BLTN (Better-Late-Than-Never) and AGNM (Ain't-Got-No-More) inventory. Went to a large box store on the weekend. They had empty containers marked "Display" on the shelves. Two different employees explained that I should put empty containers for the desired items in my cart and, upon checking out, they would retrieve a full container of each item "from the back". Both assured me all displayed items were available. Got my display containers and proceeded to check out. Was informed that two of three displayed items were not available. I suggested to the clerk "So now you'll take these two items off display?" He replied "No, they'll probably be back in stock next week." I left the store w/o purchasing anything and they'll never see me again. We may be in a recession right now because we can't buy quality goods AT ALL! I've bought five new fingernail clippers in the last six months and, for God's sake, they won't cut my nails! They're all made in China. Many, if not most Chinese goods, especially machine tools, remain as they were 14 years ago: low quality and every item different with no standardization. And they've driven many good US manufacturers out of business. Why? Because workers buy shitty tools for one-time use, bill the customer for the work and for the tools and then throw away the tools when they're done. Of course no one's considering the external factors here: cost of shitty tools in poor workmanship, longer production times and accidents. "How do you think people will react to a 10% increase in prices for almost all goods?" If it convinces American manufacturers to produce quality products then it's great news.
- labster 10y ago
  > Because a lot of their decisions are irrational and it is extremely difficult to have an opponent that does irrational decisions. While I disagree in general, I downvoted because of that statement. The decisions of the Chinese government make sense in context. They are not an irrational actor just because some of us don't understand their motivations, or because they don't align with western interests. The process is obscure, which makes it frustrating, but there is logic and grand strategy involved.
  - tiatia 10y ago
    That is true (see infrastructure investments). The irrational decision makers are mainly in private enterprises. In my opinion because they are used to 10% growth. They will have to change or their companies will go belly up. Many Chinese (both in Private and SOE) are complaining that there is a "downturn" right now. This is NOT a downturn. It will never be 10% growth. They have not realized that the game has changed.
- johncolanduoni 10y ago
  > Why? Because a lot of their decisions are irrational and it is extremely difficult to have an opponent that does irrational decisions. So if I make business decisions via ouija board or in a cocaine induced rage, I'll have a leg up?
  - matwood 10y ago
    > So if I make business decisions via ouija board or in a cocaine induced rage, I'll have a leg up? No, but you'll have a job on Wall Street or maybe be a hedge fund manager.
    - tiatia 10y ago
      You mistake appetite for risk as irrational. This might be true in some cases but I don't think it is general the same. I think more of the scorpion and the frog: https://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog https://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog
  - schoen 10y ago
    > So if I make business decisions via ouija board or in a cocaine induced rage, I'll have a leg up? Thomas Schelling's book The Strategy of Conflict has a focus on the ways that people can benefit in a conflict from being, or being perceived as, irrational or constrained in their choices or access to information. Clearly you can't be better off in all areas of life by making irrational or random decisions, but there are some specific situations of conflict where you might be, if others are aware of it. One familiar example https://en.wikipedia.org/wiki/Chicken_(game) https://en.wikipedia.org/wiki/Chicken_(game) where if people think you are very irrational, you're likely to win!
  - KaoruAoiShiho 10y ago
    Surprisingly, according to game theory yes. http://lesswrong.com/lw/dc7/nash_equilibria_and_schelling_points/ http://lesswrong.com/lw/dc7/nash_equilibria_and_schelling_po...
- mratzloff 10y ago
  > (Sorry, I know that this is an extremely liberal board). Not really on economic policy, based on what I've seen. However, logical thinking is highly valued; that is to say, connecting the dots and backing up your assertions with evidence. Trite, blasé solutions to complex problems will usually earn a down vote on most topics, which is the case here. Asserting in advance that the board is extremely liberal and will therefore disagree with you based on a difference of opinion is I'm sure reassuring when you are down voted, as it insulates you from any responsibility in putting forth a poorly-considered case. You are just lying to yourself, though.
joe_the_user 10y ago
Your comment sounds like it's coming from ten years ago or something. China may (or may not, for all I know) have beaten the West in the game of getting the technology it wants but the country has enough structural problems that it's chances of getting ahead of the West broadly are looking very dim. Problems: Horrific pollution, huge loans to inefficient state-run industries, massive real state and infrastructure mal-investment and bubbles, losing conventional factory jobs to even lower waged centered without gaining better jobs in compensation, having a first world demographic structure (lots of old people) without a first world standard of living, a government that's resorting to repression and ideology to solve problems and so-doubling down on all mistakes, the falsification of statistics can barely conceal an economy in stasis, etc. So, there's little to fear from a Chinese economic "juggernaut" but the decline of China poses serious problems - especially, it seems to be what fueling the huffing and puffing over the South China sea.
- civilian 10y ago
  Yup! Additionally the Chinese government is not a smart investor, and that's led to overcapacity. Eventually these bad investments will punish China, but it make take some time. http://www.economist.com/news/business/21696552-chinas-industrial-excess-goes-beyond-steel-gluts-punishment http://www.economist.com/news/business/21696552-chinas-indus... http://www.economist.com/news/business/21693573-chinas-excess-industrial-capacity-harms-its-economy-and-riles-its-trading-partners-march http://www.economist.com/news/business/21693573-chinas-exces...
  - 6stringmerc 10y ago
    I saw a different thread about how China embraced mobile payments. One of the benefits was a consumer could pay a farmer directly using the mobile payment. My first thought following reading that was "Yeah, and then the Farmer transfers that money into the stock market, and creates the bubble effect that is only corrected by direct intervention not allowing it to go down naturally."
- avar 10y ago
  > Horrific pollution Like how the US had horrible pollution during and after the industrial revolution and never got anywhere? China's going to get their Clean Air Act. Just give it some time.
jackcosgrove 10y ago
Don't forget the USA's ace in the hole for brewing civil unrest in other countries: Hollywood. (I'm being mordant here; not advocating for international psy-ops.) American media project a depiction of life that is very attractive by design, and this raises expectations among consumers of this media. If Chinese people were not aware of the lifestyles of westerners, the Chinese government would be under less pressure to improve standards of living. And yes everyone in every country knows that popular culture depicts dreams and aspirations rather than reality, but even with this discounting of what people in the developing world see they become aware of the quality of life in the west. This causes an expectations revolution that is putting tremendous pressure on the Chinese government, which is not necessarily a bad thing but can cause society to destabilize if growth stops.
- mmanfrin 10y ago
  I just saw the new Star Wars -- cofinanced by (e:) Alibaba films. In it, one of the moral cruxes of the main story was that the crew needed 'Unity'. I saw this as a subtle shift from american 'Freedom'. There's a <plot point, not super spoilery> point where some 'good guys' are being held prisoner. In any red-blooded American Hollywood Film, this would lead to 'GIVE US OUR FREEDOM' type resistance. In this movie, it led to 'WE NEED UNITY' resistance. Maybe I am reading too much in to it, but it felt like a shift influenced by the additional target market of the East, and I don't see Hollywood as a source of affecting moral/civic unrest.
  - jgroch 10y ago
    "Maybe I am reading too much in to it...." No, i don't think that you're reading too much into it. In fact, i like your analysis. I'll have to rewatch it, again. LOL especially concerning "unity" vs. "FREEDOMMM!"
    - jwhitlark 10y ago
      Is that a Helldivers reference?
  - mladenkovacevic 10y ago
Retric 10y ago
China exchanged trillions of goods at below market rates due to games with their exchange rate. This worked because the government does not care about it's populace and can extract a lot of value from an oppressed population. The populace benefited from increasing purchasing power though far less and far slower than most developing nations. I would say the US and communist party members got a great deal and the Chinese population is better off though still being stepped on.
- tcoppi 10y ago
  Not sure why you are downvoted, this is pretty much spot on. The artificially low renminbi has been driving Chinese exports since the 90s and will probably continue to do so for the foreseeable future. Meanwhile the Chinese people got rapid industrialization at the cost of by and large living in polluted filth and crowded cities, and their per-capita GDP, which is a fairly good measure of the wealth of the median citizen, is still middling-to-terrible despite their high overall GDP. This has been a great deal for the western citizen, who have been exchanging tons of currency for cheap goods(thanks to the low exchange rate), especially US citizens who have had their government's borrowing costs financed by the very money sent over there to buy things with. Not so great of a deal for the average Chinese, in comparison to what they might have had as a more westernized country. Edit: Let's not even talk about the demographic collapse happening as a result of the one child policy. It will make any demographic problems in the west look like child's play.
- legulere 10y ago
  You could also tell the very opposite story. In the last around 20 years, the poor and middle class in china greatly benefited from the economic growth, while the poor and middle class in the west didn't benefit at all or even had a wage cut if you look at inflation adjusted wages. China is hardly a developing nation anymore.
  - Retric 10y ago
    In economics you end up with a reversion to the mean over time. China was in a very bad state though terrible management over the preceding hundreds of years, so catching up was rather simple. US, is coming down from being the only modern state that was not destroyed by WWII. US lower and middle class benefited from cheap goods, and suffered from continued automation and imports. However, the US produces more goods now than at any point in it's history so you can't really blame things on a lack of manufacturing. IMO, I would blame 5 primary factors, massive undocumented population suppressing wages, developed economy making growth harder, tax policy's that harm workers directly and indirectly, unions shrinking, and rapid automation continuously disrupting the economy.
chrischen 10y ago
Protectionist trade policies are common in Japan too. Ford quit the Japanese market after less than 5000 units sold in 2015. http://www.iol.co.za/motoring/industry-news/why-arent-foreign-cars-big-in-japan-2010287 http://www.iol.co.za/motoring/industry-news/why-arent-foreig... http://www.huffingtonpost.com/ian-fletcher/japan-the-forgotten-prote_b_850269.html http://www.huffingtonpost.com/ian-fletcher/japan-the-forgott...
- jgroch 10y ago
  "Protectionist trade policies are common in Japan too...." There are advantages to the way Asian economists do it. For example, not only in Japan, but especially in Korea, cell phones were standard even by the mid-90's....EVERYONE had one. And the rates were quite reasonable, too. (No contracts, either. IfIRememberRight.) But there are(/were) disadvantages to Asian Tiger economics too. After the Asian bubble burst, the Korean Wan [SouthKorean money] depreciated to the point that USArmy Sergeants were trying to buy cars (even Fords, not just Kias and Daewoos) made (or rather bought) in Korea. (The US Dollar-to-Wan rate was so out of wack that it was still more economical to buy AND ship a car back to the US across the Pacific on a boat. Unfortunately emissions standards were different; Korean cars didn't pass EPA muster.) ~circa 1998
  - chrischen 10y ago
    Protectionism in my opinion is key to helping an economy that is developing to catch up. What Should happen instead is quid pro quo trade agreements. But in Google and Uber's case Chinese industry isn't exploiting the US market, so the US companies have no right to complain.
conanbatt 10y ago
Why is it a problem if China develops a higher GDP than the US. Its not a problem for the people. It might be a problem to politicians that want to tell a story, but wishing china to do worse economically is truly backwards. If china comes out with better technology than the us, better products and services, cheaper and all that, the whole world gets better. If you dont believe that, then you must for the sake of consistency think that products that come out of the us into other countries are vultures in nature and draining in economic terms. A more mature approach would be to think what to learn and do(or not do) when someone is showing great signs of progress. Getting more products from China makes the whole richer. China's protectionis policies are probably harming them more than helping them, why play in the same game.
- paulsutter 10y ago
  Why was this downvoted? It's a perfectly good question.
- muninn_ 10y ago
  China's GDP compared to it's population is interesting. 3-4 times the population of the US but 80% of the GDP. To me it only seems natural that they will eventually overtake the United States in GDP. India should too, as should the EU
  - jld89 10y ago
    The EU has the biggest GDP in the world btw. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
  - ittekimasu 10y ago
    It's hardly that simple. China/Korea/Thai/Vietnam/India... were economically at the same level at the turn of WWII - India was probably in better shape. Now India is comparable only to S-Saharan Africa (and other S.Asian countries), in terms of educational attainment/malnourishment ... Systems matter; it's not surprising that deeply colonized countries remain basket cases. It's likely that China will be the last nation to "re-industrialize" in the near term.
stvswn 10y ago
No, the West does not need to respond in kind. Unilateral free trade is better than tit-for-tat escalations. Let them protect their own; in the long run we'll be better off for allowing free-trade even when our counterparties do not.
duncan_bayne 10y ago
> For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt. I always assumed that this was allowed because in turn, China gave American companies access to very, very cheap manufacturing labour.
terasoans 10y ago
The last time China had a huge trade imbalance with a country resulted in the Opium Wars. I can see why China is so keen on improving their military now.
- seanmcdirmid 10y ago
  But back then China wanted nothing from the rest of the world EXCEPT its silver. So in comes Opium, and then the Opium wars. These days, I think it is a bit better. At least China wants our airplanes/jet engines. And the ruling class is totally vested in overseas real estate. Military wars are just going to be bad for business at that point.
sangnoir 10y ago
> For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt The reason might be deindustrialization of the west coupled by an exploding globsl consumer goods market and large (and growing) home market. China effectively made itself the factory of the west, and a highly desirable market as well. The TPP is an attempt to deal with China because the west can't directly confront China with a tit-for-tat strategy for practical purposes: Western countries would need to rebuild and retool consume-goods factories at a high cost that the profit-maximizing corps don't want to shoulder
horsecaptin 10y ago
Maybe it's simpler than that. Maybe Western men just like Asian women. Love after all, trumps everything.
paulddraper 10y ago
Protectionist policies hurt the "protected" countries the most. Smoot-Hawley

by erdevs 10y ago

LiweiZ 10y ago

The interests for both parties are now interlocked and the stakes are very high. So things are not that simple. Change will be gradual till a tipping point.

tiatia 10y ago

> It seems to me that China outplayed the West here by a wide margin. Don't worry, the game is not over yet. >For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt. Yes. But this could be changed by Trump in one day. (Sorry, I know that this is an extremely liberal board). Chinese don't believe in win-win. They believe in win-lose. Thats great but in my experience there is a point where you run out of stupid people to screw over. Also, it is difficult to do business with Chinese. Why? Because a lot of their decisions are irrational and it is extremely difficult to have an opponent that does irrational decisions. But this will backfire or is backfirering already. Why? With 10 or 12% growth you can afford to make irrational decisions. But try this at 6,5 or 4 percent growth. Good luck with that.

serge2k 10y ago
> Yes. But this could be changed by Trump in one day. OH really? How will he do that?
- tiatia 10y ago
  Tell them: Look, you can play around with your currency in whatever way you want. But if the trade balance is not balanced, we charge a 10% import tax. Per day. Cumulative. I think there are many countries that can produce cheap shoes, clothes and electronics. By now all this stuff can already be manufactured in the US again due to automation and robotics (see Adidas producing shoes in Germany AGAIN). This would be a minor problem for the US but a big problem for China, Germany and Japan. By the way, I live in China.
  - gnaritas 10y ago
    > Tell them: Look, you can play around with your currency in whatever way you want. But if the trade balance is not balanced, we charge a 10% import tax. Per day. Cumulative. Yea, that's not how the world works; the President isn't a CEO.
  - morgante 10y ago
    And watch while we are plunged into a recession due to a huge disruption in global supply chains. Sorry, but complex problems don't have simple answers. Trump can't unilaterally force China to stop its protectionism, at least not without inflicting significant hurt on the American economy. How do you think people will react to a 10% increase in prices for almost all goods?
    - giardini 10y ago
      "And watch while we are plunged into a recession due to a huge disruption in global supply chains." WHAT supply chain? There is NO supply chain anymore. JIT (Just-In-Time) inventory has been replaced by BLTN (Better-Late-Than-Never) and AGNM (Ain't-Got-No-More) inventory. Went to a large box store on the weekend. They had empty containers marked "Display" on the shelves. Two different employees explained that I should put empty containers for the desired items in my cart and, upon checking out, they would retrieve a full container of each item "from the back". Both assured me all displayed items were available. Got my display containers and proceeded to check out. Was informed that two of three displayed items were not available. I suggested to the clerk "So now you'll take these two items off display?" He replied "No, they'll probably be back in stock next week." I left the store w/o purchasing anything and they'll never see me again. We may be in a recession right now because we can't buy quality goods AT ALL! I've bought five new fingernail clippers in the last six months and, for God's sake, they won't cut my nails! They're all made in China. Many, if not most Chinese goods, especially machine tools, remain as they were 14 years ago: low quality and every item different with no standardization. And they've driven many good US manufacturers out of business. Why? Because workers buy shitty tools for one-time use, bill the customer for the work and for the tools and then throw away the tools when they're done. Of course no one's considering the external factors here: cost of shitty tools in poor workmanship, longer production times and accidents. "How do you think people will react to a 10% increase in prices for almost all goods?" If it convinces American manufacturers to produce quality products then it's great news.
labster 10y ago
> Because a lot of their decisions are irrational and it is extremely difficult to have an opponent that does irrational decisions. While I disagree in general, I downvoted because of that statement. The decisions of the Chinese government make sense in context. They are not an irrational actor just because some of us don't understand their motivations, or because they don't align with western interests. The process is obscure, which makes it frustrating, but there is logic and grand strategy involved.
- tiatia 10y ago
  That is true (see infrastructure investments). The irrational decision makers are mainly in private enterprises. In my opinion because they are used to 10% growth. They will have to change or their companies will go belly up. Many Chinese (both in Private and SOE) are complaining that there is a "downturn" right now. This is NOT a downturn. It will never be 10% growth. They have not realized that the game has changed.
johncolanduoni 10y ago
> Why? Because a lot of their decisions are irrational and it is extremely difficult to have an opponent that does irrational decisions. So if I make business decisions via ouija board or in a cocaine induced rage, I'll have a leg up?
- matwood 10y ago
  > So if I make business decisions via ouija board or in a cocaine induced rage, I'll have a leg up? No, but you'll have a job on Wall Street or maybe be a hedge fund manager.
  - tiatia 10y ago
    You mistake appetite for risk as irrational. This might be true in some cases but I don't think it is general the same. I think more of the scorpion and the frog: https://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog https://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog
- schoen 10y ago
  > So if I make business decisions via ouija board or in a cocaine induced rage, I'll have a leg up? Thomas Schelling's book The Strategy of Conflict has a focus on the ways that people can benefit in a conflict from being, or being perceived as, irrational or constrained in their choices or access to information. Clearly you can't be better off in all areas of life by making irrational or random decisions, but there are some specific situations of conflict where you might be, if others are aware of it. One familiar example https://en.wikipedia.org/wiki/Chicken_(game) https://en.wikipedia.org/wiki/Chicken_(game) where if people think you are very irrational, you're likely to win!
- KaoruAoiShiho 10y ago
  Surprisingly, according to game theory yes. http://lesswrong.com/lw/dc7/nash_equilibria_and_schelling_points/ http://lesswrong.com/lw/dc7/nash_equilibria_and_schelling_po...
mratzloff 10y ago
> (Sorry, I know that this is an extremely liberal board). Not really on economic policy, based on what I've seen. However, logical thinking is highly valued; that is to say, connecting the dots and backing up your assertions with evidence. Trite, blasé solutions to complex problems will usually earn a down vote on most topics, which is the case here. Asserting in advance that the board is extremely liberal and will therefore disagree with you based on a difference of opinion is I'm sure reassuring when you are down voted, as it insulates you from any responsibility in putting forth a poorly-considered case. You are just lying to yourself, though.

joe_the_user 10y ago

Your comment sounds like it's coming from ten years ago or something. China may (or may not, for all I know) have beaten the West in the game of getting the technology it wants but the country has enough structural problems that it's chances of getting ahead of the West broadly are looking very dim. Problems: Horrific pollution, huge loans to inefficient state-run industries, massive real state and infrastructure mal-investment and bubbles, losing conventional factory jobs to even lower waged centered without gaining better jobs in compensation, having a first world demographic structure (lots of old people) without a first world standard of living, a government that's resorting to repression and ideology to solve problems and so-doubling down on all mistakes, the falsification of statistics can barely conceal an economy in stasis, etc. So, there's little to fear from a Chinese economic "juggernaut" but the decline of China poses serious problems - especially, it seems to be what fueling the huffing and puffing over the South China sea.

civilian 10y ago
Yup! Additionally the Chinese government is not a smart investor, and that's led to overcapacity. Eventually these bad investments will punish China, but it make take some time. http://www.economist.com/news/business/21696552-chinas-industrial-excess-goes-beyond-steel-gluts-punishment http://www.economist.com/news/business/21696552-chinas-indus... http://www.economist.com/news/business/21693573-chinas-excess-industrial-capacity-harms-its-economy-and-riles-its-trading-partners-march http://www.economist.com/news/business/21693573-chinas-exces...
- 6stringmerc 10y ago
  I saw a different thread about how China embraced mobile payments. One of the benefits was a consumer could pay a farmer directly using the mobile payment. My first thought following reading that was "Yeah, and then the Farmer transfers that money into the stock market, and creates the bubble effect that is only corrected by direct intervention not allowing it to go down naturally."
avar 10y ago
> Horrific pollution Like how the US had horrible pollution during and after the industrial revolution and never got anywhere? China's going to get their Clean Air Act. Just give it some time.

jackcosgrove 10y ago

Don't forget the USA's ace in the hole for brewing civil unrest in other countries: Hollywood. (I'm being mordant here; not advocating for international psy-ops.) American media project a depiction of life that is very attractive by design, and this raises expectations among consumers of this media. If Chinese people were not aware of the lifestyles of westerners, the Chinese government would be under less pressure to improve standards of living. And yes everyone in every country knows that popular culture depicts dreams and aspirations rather than reality, but even with this discounting of what people in the developing world see they become aware of the quality of life in the west. This causes an expectations revolution that is putting tremendous pressure on the Chinese government, which is not necessarily a bad thing but can cause society to destabilize if growth stops.

mmanfrin 10y ago
I just saw the new Star Wars -- cofinanced by (e:) Alibaba films. In it, one of the moral cruxes of the main story was that the crew needed 'Unity'. I saw this as a subtle shift from american 'Freedom'. There's a <plot point, not super spoilery> point where some 'good guys' are being held prisoner. In any red-blooded American Hollywood Film, this would lead to 'GIVE US OUR FREEDOM' type resistance. In this movie, it led to 'WE NEED UNITY' resistance. Maybe I am reading too much in to it, but it felt like a shift influenced by the additional target market of the East, and I don't see Hollywood as a source of affecting moral/civic unrest.
- jgroch 10y ago
  "Maybe I am reading too much in to it...." No, i don't think that you're reading too much into it. In fact, i like your analysis. I'll have to rewatch it, again. LOL especially concerning "unity" vs. "FREEDOMMM!"
  - jwhitlark 10y ago
    Is that a Helldivers reference?
- mladenkovacevic 10y ago

Retric 10y ago

China exchanged trillions of goods at below market rates due to games with their exchange rate. This worked because the government does not care about it's populace and can extract a lot of value from an oppressed population. The populace benefited from increasing purchasing power though far less and far slower than most developing nations. I would say the US and communist party members got a great deal and the Chinese population is better off though still being stepped on.

tcoppi 10y ago
Not sure why you are downvoted, this is pretty much spot on. The artificially low renminbi has been driving Chinese exports since the 90s and will probably continue to do so for the foreseeable future. Meanwhile the Chinese people got rapid industrialization at the cost of by and large living in polluted filth and crowded cities, and their per-capita GDP, which is a fairly good measure of the wealth of the median citizen, is still middling-to-terrible despite their high overall GDP. This has been a great deal for the western citizen, who have been exchanging tons of currency for cheap goods(thanks to the low exchange rate), especially US citizens who have had their government's borrowing costs financed by the very money sent over there to buy things with. Not so great of a deal for the average Chinese, in comparison to what they might have had as a more westernized country. Edit: Let's not even talk about the demographic collapse happening as a result of the one child policy. It will make any demographic problems in the west look like child's play.
legulere 10y ago
You could also tell the very opposite story. In the last around 20 years, the poor and middle class in china greatly benefited from the economic growth, while the poor and middle class in the west didn't benefit at all or even had a wage cut if you look at inflation adjusted wages. China is hardly a developing nation anymore.
- Retric 10y ago
  In economics you end up with a reversion to the mean over time. China was in a very bad state though terrible management over the preceding hundreds of years, so catching up was rather simple. US, is coming down from being the only modern state that was not destroyed by WWII. US lower and middle class benefited from cheap goods, and suffered from continued automation and imports. However, the US produces more goods now than at any point in it's history so you can't really blame things on a lack of manufacturing. IMO, I would blame 5 primary factors, massive undocumented population suppressing wages, developed economy making growth harder, tax policy's that harm workers directly and indirectly, unions shrinking, and rapid automation continuously disrupting the economy.

chrischen 10y ago

Protectionist trade policies are common in Japan too. Ford quit the Japanese market after less than 5000 units sold in 2015. http://www.iol.co.za/motoring/industry-news/why-arent-foreign-cars-big-in-japan-2010287 http://www.iol.co.za/motoring/industry-news/why-arent-foreig... http://www.huffingtonpost.com/ian-fletcher/japan-the-forgotten-prote_b_850269.html http://www.huffingtonpost.com/ian-fletcher/japan-the-forgott...

jgroch 10y ago
"Protectionist trade policies are common in Japan too...." There are advantages to the way Asian economists do it. For example, not only in Japan, but especially in Korea, cell phones were standard even by the mid-90's....EVERYONE had one. And the rates were quite reasonable, too. (No contracts, either. IfIRememberRight.) But there are(/were) disadvantages to Asian Tiger economics too. After the Asian bubble burst, the Korean Wan [SouthKorean money] depreciated to the point that USArmy Sergeants were trying to buy cars (even Fords, not just Kias and Daewoos) made (or rather bought) in Korea. (The US Dollar-to-Wan rate was so out of wack that it was still more economical to buy AND ship a car back to the US across the Pacific on a boat. Unfortunately emissions standards were different; Korean cars didn't pass EPA muster.) ~circa 1998
- chrischen 10y ago
  Protectionism in my opinion is key to helping an economy that is developing to catch up. What Should happen instead is quid pro quo trade agreements. But in Google and Uber's case Chinese industry isn't exploiting the US market, so the US companies have no right to complain.

conanbatt 10y ago

Why is it a problem if China develops a higher GDP than the US. Its not a problem for the people. It might be a problem to politicians that want to tell a story, but wishing china to do worse economically is truly backwards. If china comes out with better technology than the us, better products and services, cheaper and all that, the whole world gets better. If you dont believe that, then you must for the sake of consistency think that products that come out of the us into other countries are vultures in nature and draining in economic terms. A more mature approach would be to think what to learn and do(or not do) when someone is showing great signs of progress. Getting more products from China makes the whole richer. China's protectionis policies are probably harming them more than helping them, why play in the same game.

paulsutter 10y ago
Why was this downvoted? It's a perfectly good question.
muninn_ 10y ago
China's GDP compared to it's population is interesting. 3-4 times the population of the US but 80% of the GDP. To me it only seems natural that they will eventually overtake the United States in GDP. India should too, as should the EU
- jld89 10y ago
  The EU has the biggest GDP in the world btw. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
- ittekimasu 10y ago
  It's hardly that simple. China/Korea/Thai/Vietnam/India... were economically at the same level at the turn of WWII - India was probably in better shape. Now India is comparable only to S-Saharan Africa (and other S.Asian countries), in terms of educational attainment/malnourishment ... Systems matter; it's not surprising that deeply colonized countries remain basket cases. It's likely that China will be the last nation to "re-industrialize" in the near term.

stvswn 10y ago

No, the West does not need to respond in kind. Unilateral free trade is better than tit-for-tat escalations. Let them protect their own; in the long run we'll be better off for allowing free-trade even when our counterparties do not.

duncan_bayne 10y ago

> For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt. I always assumed that this was allowed because in turn, China gave American companies access to very, very cheap manufacturing labour.

terasoans 10y ago

The last time China had a huge trade imbalance with a country resulted in the Opium Wars. I can see why China is so keen on improving their military now.

seanmcdirmid 10y ago
But back then China wanted nothing from the rest of the world EXCEPT its silver. So in comes Opium, and then the Opium wars. These days, I think it is a bit better. At least China wants our airplanes/jet engines. And the ruling class is totally vested in overseas real estate. Military wars are just going to be bad for business at that point.

sangnoir 10y ago

> For some reason, the West has let China get away with extremely protectionist trade policies the likes of which no one else in the world would dare even attempt The reason might be deindustrialization of the west coupled by an exploding globsl consumer goods market and large (and growing) home market. China effectively made itself the factory of the west, and a highly desirable market as well. The TPP is an attempt to deal with China because the west can't directly confront China with a tit-for-tat strategy for practical purposes: Western countries would need to rebuild and retool consume-goods factories at a high cost that the profit-maximizing corps don't want to shoulder

horsecaptin 10y ago

Maybe it's simpler than that. Maybe Western men just like Asian women. Love after all, trumps everything.

paulddraper 10y ago

Protectionist policies hurt the "protected" countries the most. Smoot-Hawley