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The awkward elephant in the room here is that China appears to be much more able than the US, at least right now, to rapidly pivot and turn a near-term weakness

The awkward elephant in the room here is that China appears to be much more able than the US, at least right now, to rapidly pivot and turn a near-term weakness into a strength. There's plenty of evidence of this (their rapid transition to nuclear, rapid deployment of high speed rail, how they've generally been able to modernize their economy on a short timeline). Your questions are good ones, but I don't think we're asking the most important one: is the age of "free market" capitalism coming to a close with the rise of China (broadly defined as the more free and democratic your country is the more rapid your growth will be), and is the real competition we're entering into a conflict between a "free" and "quasi-authoritarian" vision of capitalism?

ineedasername 7y ago
Good points, as long as you consider that ability to pivot is more a matter of political will than technical capability.
- remarkEon 7y ago
  Right, which is exactly what I'm getting at. In that sense, the Chinese model is much more able, in my humble opinion, to do a massive pivot. They may be starting far behind the US, but ours is a much larger and slower moving ship.
  - Fjolsvith 7y ago
    And yet, in two years, we've decided to change the course of our ship with regards to China. China is rocking hard because of the wake we're leaving.
Spooky23 7y ago
The US has been retreating from the free market for many years. 25% of GDP is healthcare, insurance and education. Key drivers of the economy, like housing, exist in their present form to due explicit and implicit subsidy. I think China is more like the US then we care to admit, except they think on a longer timescale.
- yborg 7y ago
  This is a very good point. If you add in the GDP component of the financial and defense industries, you are looking at a massive overhead of markets managed by implicit or explicit government enforcement (or lack of it) for the benefit of a small elite. This is similar to China, but the Chinese have strategic vision for their economy; in the US it is managed by random allocation of lobbyist dollars.
  - sonnyblarney 7y ago
    "If you add in the GDP component of the financial and defense industries, you are looking at a massive overhead of markets managed by implicit or explicit government enforcement (or lack of it) for the benefit of a small elite." This is not true. To construe 'finance' a just some arguably unnecessary or inefficient 'overhead' in the economy belies a basic lack understanding of what that industry actually does. It's often opaque to outsiders, but banking is a real value creating part of the economy, and it's also right at the foundation of it. Also, 'defence spending' is a normal part of every economy, and it has existential impact for all of us. Consider for a moment that US forces keep most international waterways open for everyone to use, even economic rivals, and even military rivals (!) so long as there's no war. The Suez Canal, Panama Canal, and other critical areas would instantly be under the control of nefarious regional forces if there were a power vacuum.
    - roenxi 7y ago
      The Big Thing that the banking system does is it lends people money and charges interest. The other services it provides are important but minor compared to that central goal. Now, the US has an overt policy of controlling what interest rate is charged. So the banking system is a free market in the sense that theoretically participants could choose to leave if they wanted to. However, there is also a very overt layer of government decision making and control. The government putting a finger on the scale in a very fundamental way. Exactly how that compares to China is difficult to judge - whatever it is, I argue it isn't very capitalistic. Capitalists are supposed to go broke when they lose money and given how low interest rates are they are more likely to refinance themselves with a new loan. The damage that has been doing to wealth creation since the GFC in around '08 is profound. It is hard to say how much worse China's approach is. It isn't as clear cut as China's Government vs 10,000s of Capitalists - in which case I'd favour capitalism by the numbers. The US government is hamstringing the ability of its own economy to organise around profitable ventures. Instead it is encouraging Ubers and Lyfts.
internet_user 7y ago
its much easier to catch up by stealing proven technology than invent your own. What is truly homegrown tech in China? Is there any?
- 0815test 7y ago
  Paper, gunpowder, the compass... the list goes on and on. You probably use Chinese-origin tech every single day, without even realizing it!
  - internet_user 7y ago
    Oh yes, the famous Four Great Inventions. Unfortunately those are very shaky claims. Just look at the first one: papyrus was in use for nearly 5000 (five thousand!) years in Ancient Egypt and all over the Mediterranean before paper was conveniently invented by Cai Lun. The term paper itself is actually derives from "papyrus". It's really not any different with the rest of those claims.
    - jimclegg 7y ago
      Silkworm & tea can be included as major inventions that were stolen as well. I always find it funny/sad that Easterners in addition to suriving the crimes, have the extra task of educating the Western populations of the crimes committed in their names. I expect you've noticed that every single country that is a victim of modern Chinese espionage was directly involved in destroying the chinese economy during the 19th to early 20th century. US, UK, Japan, France, Germany, Russia (a few of the top offenders). These nations can't simply commit a bunch of crimes, get rich, change the rules, then expect to be protected from past actions.
      - camelite 7y ago
        > These nations can't simply commit a bunch of crimes, get rich, change the rules, then expect to be protected from past actions. They do it all the time. When will the Chinese Communist Party pay for the famine which killed 2-6% of the population (lower bound is based on official government figures)? Probably never is when.

ineedasername 7y ago

Good points, as long as you consider that ability to pivot is more a matter of political will than technical capability.

remarkEon 7y ago
Right, which is exactly what I'm getting at. In that sense, the Chinese model is much more able, in my humble opinion, to do a massive pivot. They may be starting far behind the US, but ours is a much larger and slower moving ship.
- Fjolsvith 7y ago
  And yet, in two years, we've decided to change the course of our ship with regards to China. China is rocking hard because of the wake we're leaving.

Spooky23 7y ago

The US has been retreating from the free market for many years. 25% of GDP is healthcare, insurance and education. Key drivers of the economy, like housing, exist in their present form to due explicit and implicit subsidy. I think China is more like the US then we care to admit, except they think on a longer timescale.

yborg 7y ago
This is a very good point. If you add in the GDP component of the financial and defense industries, you are looking at a massive overhead of markets managed by implicit or explicit government enforcement (or lack of it) for the benefit of a small elite. This is similar to China, but the Chinese have strategic vision for their economy; in the US it is managed by random allocation of lobbyist dollars.
- sonnyblarney 7y ago
  "If you add in the GDP component of the financial and defense industries, you are looking at a massive overhead of markets managed by implicit or explicit government enforcement (or lack of it) for the benefit of a small elite." This is not true. To construe 'finance' a just some arguably unnecessary or inefficient 'overhead' in the economy belies a basic lack understanding of what that industry actually does. It's often opaque to outsiders, but banking is a real value creating part of the economy, and it's also right at the foundation of it. Also, 'defence spending' is a normal part of every economy, and it has existential impact for all of us. Consider for a moment that US forces keep most international waterways open for everyone to use, even economic rivals, and even military rivals (!) so long as there's no war. The Suez Canal, Panama Canal, and other critical areas would instantly be under the control of nefarious regional forces if there were a power vacuum.
  - roenxi 7y ago
    The Big Thing that the banking system does is it lends people money and charges interest. The other services it provides are important but minor compared to that central goal. Now, the US has an overt policy of controlling what interest rate is charged. So the banking system is a free market in the sense that theoretically participants could choose to leave if they wanted to. However, there is also a very overt layer of government decision making and control. The government putting a finger on the scale in a very fundamental way. Exactly how that compares to China is difficult to judge - whatever it is, I argue it isn't very capitalistic. Capitalists are supposed to go broke when they lose money and given how low interest rates are they are more likely to refinance themselves with a new loan. The damage that has been doing to wealth creation since the GFC in around '08 is profound. It is hard to say how much worse China's approach is. It isn't as clear cut as China's Government vs 10,000s of Capitalists - in which case I'd favour capitalism by the numbers. The US government is hamstringing the ability of its own economy to organise around profitable ventures. Instead it is encouraging Ubers and Lyfts.

internet_user 7y ago

its much easier to catch up by stealing proven technology than invent your own. What is truly homegrown tech in China? Is there any?

0815test 7y ago
Paper, gunpowder, the compass... the list goes on and on. You probably use Chinese-origin tech every single day, without even realizing it!
- internet_user 7y ago
  Oh yes, the famous Four Great Inventions. Unfortunately those are very shaky claims. Just look at the first one: papyrus was in use for nearly 5000 (five thousand!) years in Ancient Egypt and all over the Mediterranean before paper was conveniently invented by Cai Lun. The term paper itself is actually derives from "papyrus". It's really not any different with the rest of those claims.
  - jimclegg 7y ago
    Silkworm & tea can be included as major inventions that were stolen as well. I always find it funny/sad that Easterners in addition to suriving the crimes, have the extra task of educating the Western populations of the crimes committed in their names. I expect you've noticed that every single country that is a victim of modern Chinese espionage was directly involved in destroying the chinese economy during the 19th to early 20th century. US, UK, Japan, France, Germany, Russia (a few of the top offenders). These nations can't simply commit a bunch of crimes, get rich, change the rules, then expect to be protected from past actions.
    - camelite 7y ago
      > These nations can't simply commit a bunch of crimes, get rich, change the rules, then expect to be protected from past actions. They do it all the time. When will the Chinese Communist Party pay for the famine which killed 2-6% of the population (lower bound is based on official government figures)? Probably never is when.