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In the long run China has a lot of power here. This might be a correction in how they set up their economy but I don't think anyone doubts that China is an eco

In the long run China has a lot of power here. This might be a correction in how they set up their economy but I don't think anyone doubts that China is an economic superpower. The thing is investing in China a foreigner is a complete dice roll where you have no real power and no visibility into what you are investing in.

JumpCrisscross 5y ago
> I don't think anyone doubts that China is an economic superpower They are, but the foundation is rickety. Xi is a dictator. That increases the odds of catastrophic failure. Were an economic collapse to become protracted, it's not hard to imagine separatist movements and competing power sectors turning to violence as a political tool.
- whimsicalism 5y ago
  People have been talking about the "rickety foundation" of China for decades. I'm sure when they have an economic downturn sometime in the next two decades, those people will all come out to crow about how they had been right all along. To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West.
  - JumpCrisscross 5y ago
    > People have been talking about the "rickety foundation" of China for decades Economically, sure. (Those always struck me as sour grapes or a fundamental misunderstanding of how debt works in a centrally-planned economy.) Politically, however, the CCP had intraparty competition that avoided the sort of rot that felled the Soviets. It also kept the Party thinking long term. Hong Kong and Taiwan are good examples of Xi's impatience. Absent intervention, Hong Kong would have uncontroversially folded into China in 2047. The combination of China's military and economic prowess, then, could have encouraged peaceful unification with Taiwan. But Xi was impatient. He wanted it in his lifetime. So he rushed Hong Kong and screwed up not only Taiwan, but relations with all his neighbors, from the Philippines to India. Dictators like to style themselves as monarchs. But monarchy has a continuity that dictatorships don't. That makes them more impatient and more unstable, particularly at the transfer of power.
    - boringg 5y ago
      Agreed - the fundamental political structure is flawed. However we don't know how long it will take for that structure to break or change. Currently Xi is making some moves (with the historical resolution) to retain power indefinitely. There are also economic problems in China that Evergrande has brought to the attention - the wild speculation in real estate that is concerning for the party to maintain control. As well with the tech crackdown recently. In broad brushes it points to some problems over there (manageable probably - but risks for control of the party).
    - rgbrenner 5y ago
      In 8 years, China is not going to rot to the degree you're referring to. So Xi made a mistake and maybe cost China Taiwan... but in no way does China's future depend on Taiwan. He has to make a lot more mistakes or be in power much longer. Right now, his tenure could be compared to a bad US president... we survive that sort of damage fine (it's not good, but the country isnt going to fail).
  - majormajor 5y ago
    > To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West. How new the roads and houses are doesn't seem like the most relevant factor for future economic growth. The US built modern infra for the time, then it stagnated. Japan built modern infra for the time, then it stagnated. The US and Japan otherwise took very divergent economic growth paths. China could go either way, but the increasing central control is hardly without risk for future economic development. Miss a few big bets and you have less of a backup plan than a less-organized economy.
- puranjay 5y ago
  > Xi is a dictator. Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known.
  - JumpCrisscross 5y ago
    > Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known I'm not blaming anyone for the government model. Just staying that it comes with known risks, and one of those is economic depressions and power transitions becoming violent. The stakes are too high.
- rgbrenner 5y ago
  That is hard to imagine. We have to believe that the CCP wouldn't crack down on separatists, and they wouldn't elect a new leader. China may have eliminated the term limit (of 2x5 years), but Xi has only been president for 8 years. They still have a fresh memory of transferring power. Certainly the longer he's president, the scenario you outline becomes more likely... but not in 8 years.
  - ericmay 5y ago
    Isn’t Xi Jinping announcing his lifetime rule today or this week?

JumpCrisscross 5y ago

> I don't think anyone doubts that China is an economic superpower They are, but the foundation is rickety. Xi is a dictator. That increases the odds of catastrophic failure. Were an economic collapse to become protracted, it's not hard to imagine separatist movements and competing power sectors turning to violence as a political tool.

whimsicalism 5y ago
People have been talking about the "rickety foundation" of China for decades. I'm sure when they have an economic downturn sometime in the next two decades, those people will all come out to crow about how they had been right all along. To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West.
- JumpCrisscross 5y ago
  > People have been talking about the "rickety foundation" of China for decades Economically, sure. (Those always struck me as sour grapes or a fundamental misunderstanding of how debt works in a centrally-planned economy.) Politically, however, the CCP had intraparty competition that avoided the sort of rot that felled the Soviets. It also kept the Party thinking long term. Hong Kong and Taiwan are good examples of Xi's impatience. Absent intervention, Hong Kong would have uncontroversially folded into China in 2047. The combination of China's military and economic prowess, then, could have encouraged peaceful unification with Taiwan. But Xi was impatient. He wanted it in his lifetime. So he rushed Hong Kong and screwed up not only Taiwan, but relations with all his neighbors, from the Philippines to India. Dictators like to style themselves as monarchs. But monarchy has a continuity that dictatorships don't. That makes them more impatient and more unstable, particularly at the transfer of power.
  - boringg 5y ago
    Agreed - the fundamental political structure is flawed. However we don't know how long it will take for that structure to break or change. Currently Xi is making some moves (with the historical resolution) to retain power indefinitely. There are also economic problems in China that Evergrande has brought to the attention - the wild speculation in real estate that is concerning for the party to maintain control. As well with the tech crackdown recently. In broad brushes it points to some problems over there (manageable probably - but risks for control of the party).
  - rgbrenner 5y ago
    In 8 years, China is not going to rot to the degree you're referring to. So Xi made a mistake and maybe cost China Taiwan... but in no way does China's future depend on Taiwan. He has to make a lot more mistakes or be in power much longer. Right now, his tenure could be compared to a bad US president... we survive that sort of damage fine (it's not good, but the country isnt going to fail).
- majormajor 5y ago
  > To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West. How new the roads and houses are doesn't seem like the most relevant factor for future economic growth. The US built modern infra for the time, then it stagnated. Japan built modern infra for the time, then it stagnated. The US and Japan otherwise took very divergent economic growth paths. China could go either way, but the increasing central control is hardly without risk for future economic development. Miss a few big bets and you have less of a backup plan than a less-organized economy.
puranjay 5y ago
> Xi is a dictator. Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known.
- JumpCrisscross 5y ago
  > Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known I'm not blaming anyone for the government model. Just staying that it comes with known risks, and one of those is economic depressions and power transitions becoming violent. The stakes are too high.
rgbrenner 5y ago
That is hard to imagine. We have to believe that the CCP wouldn't crack down on separatists, and they wouldn't elect a new leader. China may have eliminated the term limit (of 2x5 years), but Xi has only been president for 8 years. They still have a fresh memory of transferring power. Certainly the longer he's president, the scenario you outline becomes more likely... but not in 8 years.
- ericmay 5y ago
  Isn’t Xi Jinping announcing his lifetime rule today or this week?