6 ms·
In economic terms, how is this sustainable?
by adreamingsoul 8y ago
In economic terms, how is this sustainable?
- alexdrans 8y agoEndure the bubble, until you can conquer Australia and relieve the pressure
- ggm 8y agoWhy conquer when you can invest? They're investing. It's working. We're happy to have chinese investment in all spaces, ag, and mining, we buy the goods and we sell the dairy produce. The real threat is Tasmania: haven't you seen the wargames maps? We need those US-Chinese troops to fight back against the daemon armies from cradle mountain.
- alexdrans 8y agoInvestment doesn't buy you all the 'Living Space' you may want
- ggm 8y agoI've taken the train across china from Hangzhou to Beijing and there is no lack of living space, or empty housing from the speculative bubble. The threat of south-irian is basically the classic yellow-peril threat model. Its a really bad argument. As long as we are happy to export tertiary education and then proffer immigration channels, there is no basis to argue the Chinese polity wants to invade: it can get people here legally, for good benefit both sides. Pleae, don't feed the racist troll. The chinese are not swamping us and they cannot cause earthquakes by jumping up and down at the same time.
- smacktoward 8y ago> I've taken the train across china from Hangzhou to Beijing and there is no lack of living space, or empty housing from the speculative bubble. The point of the parent's reference isn't to a lack of actual space, it's to Germany's complaint in the 1930s of not having enough Lebensraum: https://en.wikipedia.org/wiki/Lebensraum https://en.wikipedia.org/wiki/Lebensraum ... which was similarly spurious -- the Germans had plenty of room for their population too. Lebensraum wasn't about actual space, it was about imperalism, about the Germans feeling strong enough to grab territory from their neighbors just because they could. One could be forgiven for looking at China's military expansionism in the South China Sea, for instance, and thinking the Chinese polity is feeling the same way.
- ggm 8y agoSpecious though the south china sea argument feels to us, Its entirely consistent with a long held vision of China and its sphere of influence. What rankles, is the extent to which the opposition to it, the open-seas sailing policy, is being taken by actors (the US, Australia) who chose otherwise to disregard mediation and international law in matters of their own spheres of influence: East Timor for instance. This is not whataboutism, its directly relevant, contradictory behaviour. The Chinese have a long standing stated claim to the spratleys (which btw, I think is entirely bogus) but in no sense simply emerged into a state of claiming them in recent times. The laws being used to push back, are entirely a product of the post-WWII polity, were an attempt to construct a legal mechanism to mediate between states, which is being (forcefully) applied here by some states, who choose to disregard the same legal basis when applied to cases of their own. Lebensraum was a manufactured need of political expediency and an explicitly expansionist act. The South China Sea is not lebensraum, its open-fishing rights, and over-flight and sailing rights, and mineral rights. It's also a vision of a defensive ring. You know, that domino theory we used to be sold about chinese expansionist policy in S.E. Asia? its being played in reverse: they need this barrier, because we are trying to re-apply opium war logic to opening chinese capital investment markets, and land in China...
- bryanlarsen 8y agoThey don't need space, they're rapidly creating tons of it in China -- people who move from the country to the city use far less area.
- deleted 8y ago[deleted]
- mlthoughts2018 8y agoThen they'll get 2 additional armies every single turn! And a territory card!
- navaati 8y agoWhat is the reference here ? Is it the same reference as neighbour comment about Tasmania and daemon armies ?
- ggm 8y agoMy tasmania comment is about what the US-AU army wargames used to use as the hypothetical invader. they were briefly stupid and used a map of indonesia because of jokes about west irianjaya and 'south iriyan' -and then changed to use the map of tasmania (which btw, is a euphemism for female pubic hair) upside down as the notional invader. the other reference is to turn-by-turn games of war on maps (I think)
- ttoinou 8y agoRISK game
- Chilinot 8y agoThe board game Risk.
- danielvf 8y agoThe cards reference is to the game of RISK. Owning every territory in the “Australian Content” gets the player a small bonus.
- jdmichal 8y agoDebt is a fixed number that doesn't expand as the economy does.
- inetknght 8y agoTell that to compound interest.
- fps_doug 8y agoIt absolutely isn't. The funny part is, for the past 12+ years voices predicting an economic collapse of China have gotten stronger and stronger, but it just doesn't happen. Every time they passed some magic number in some statistic it was all "zomg collapse is imminent!" I guess with a government like they have you have greater possibilities to cover up and postpone the effects, but who knows how this will manifest. I'm hesitant to believe any current scenarios painted by western "experts" because they have basically been wrong for the past decade, but every time they're like "but this time it's for real!"
- dnomad 8y agoEh it's absolutely sustainable. China is a monetary sovereign. All of this debt is issued in a currency that they can literally create out of thin air. There is zero possiblity that China will default on this debt. And China has been very careful to avoid externally denominated debt. The only real risk here currency revulsion. At some point there is a risk that nobody will want the currency. But the risk of internal revulsion is low. Chinese citizens have to pay taxes and many other kinds of fees and fines in the currency. They have no choice. External revulsion is a threat but here again the Chinese have opted to buy out their external dependencies. This is why China wants to own all that farmland in Brazil. It never wants to find itself in a situation where it must buy dollars in order to buy soybeans and other critical food stuffs. People will go on and on about China's sovereign debt. They just don't get it. This is basic MMT (modern monetary theory). The bigger risk for China is that they grow too slowly not that they grow too fast.
- frogpelt 8y agoCreating currency out of thin air also creates inflation. Inflation must be kept in check or bad things happen. Maybe the current levels are sustainable. But not all increases in deficit are sustainable.
- dnomad 8y agoThat's now how any of this works. That's certainly not how inflation works. At some point, particularly given the last 40 years of evidence to the contrary, people need to simply accept that monetary expansion does not "cause" inflation [1]. Inflation is not a monetary phenomenon at all. Inflation is a price level [2] phenomenon largely driven by trade imbalances. Inflation is about market power, or what some call pricing power. The common case here, btw, is when your external partners from whom you need to import critical goods get even a little bit pricing power then you will get inflation. China is seeking to own all its externals and deliberately suppress any such pricing power not driven by its own banks. [1] https://www.bloomberg.com/news/articles/2018-03-22/the-great-inflation-mystery https://www.bloomberg.com/news/articles/2018-03-22/the-great... [2] http://bilbo.economicoutlook.net/blog/?p=10554 http://bilbo.economicoutlook.net/blog/?p=10554
- moomin 8y agoBroadly, constant borrowing is sustainable, just look at any European economy. As long as your tax base grows faster than your interest payments there’s no unavoidable problem. This? It’s not sustainable. Sooner or later this will result in a correction. This could range from aggressive budgetary measures, an internal crisis all the way to China monetising its overseas investments (which are extremely extensive).
- repolfx 8y agoEuropean economies are hardly poster children for constant borrowing. Most of them have been in enforced austerity for years, and have only managed to avoid much tighter spending cuts because the ECB is funding governments through vast amounts of money printing (which boils down to confiscation of savings). Result: huge government spending overruns, ever-falling savings rates.
- moomin 8y agoErm... Spain and Greece has been in enforced austerity, no other countries I can think of. And neither have had typical, responsible borrowing patterns. (Nor does Italy, but it’s dodged that bullet.) (Ireland had some problems just after the crunch but a) entirely because they took on a bank they could have let fail and b) they’ve paid that off now.)
- repolfx 8y agoPortugal, the UK, Italy to some extent (though nowhere near the level they need). Europe is basically a continent of governments trying to cut their spending levels, some with more success than others.
- moomin 8y agoThe UK isn't in enforced austerity. Austerity is a political choice here (driven by a desire to eliminate the deficit), and a pretty bad one (the IMF said we should be spending more, also it looks like we will be irrespective of what the public wants soon because of Brexit). Basically, whilst the UK's economic woes are self-inflicted, over-borrowing isn't the cause of them. Italy definitely has over-borrowed, but its problems go way deeper than that and I wouldn't describe its spending right now as "austerity". Portugal, like Ireland, has already dug itself out of the hole. Going back to my original point: if increasing your revenue faster than increasing your interest payments, you can do this forever. Sure, the credit crunch gave some countries a shock, but you really should read up on exactly how egregious the Greek borrowing situation was. It was insanely unsustainable. Germany, Denmark, Sweden, France, Slovenia? They'll be fine.
- MLR 8y agoChina is (officially) growing at ~7% per year right now, so adding $700 billion to their debt pile barely changes the debt/GDP ratio, it might even still fall but I'd have to check the exact figures.
- tonyedgecombe 8y agoDoes anybody believe that growth rate anymore?
- seanmcdirmid 8y agoThe official reported rate is less than 7%, the actual rate is probably 5-6%. But the problem is the growth of debt, not its absolute value. They most definitely have to hit the brake on growth sometime soon, or they are screwed. Even the Chinese governmebt states this, we are only debating the consequences of hitting the brakes, not whether it will happen or not.
- deleted 8y ago[deleted]
- tempodox 8y agoIt doesn't have to. It only has to hold while the current elite is around.
- crdoconnor 8y agoIf a government prints its own currency there's not even a theoretical limit to the total amount it can borrow. There is a limit to the total rate of government spending - spending beyond the rate of the economy's ability to produce - which causes hyperinflation. That is unrelated to the deficit though (theoretically it could even happen in surplus e.g. if you destroyed all your factories and farms).
- swfsql 8y agoIt's sustainable because they keep the money printing press running, which implies they force citizens to sustain (pay for) it. Even in the US, "lowering the printing speed, which is high", is considered a ""tightening""