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>one major factor is that the one child policy was very successful and lead to a drastic hollowing out of their younger workforce and consumer base IMO just th

>one major factor is that the one child policy was very successful and lead to a drastic hollowing out of their younger workforce and consumer base IMO just the opposite. One child policy was also "very successful" in concentrating wealth and is largely responsible for why PRC is spitting out 11M STEM graduates a year, around all OECD combined. There will be generation wealth transfers once old folks start dying (many in tier1/2 own homes + have enough savings) and analysts are predicting increasing consumption when multiple inheritances get concentrated in the one-child gen households. > improbable 11M STEM grads per year = PRC has the LARGEST demographic divident of SKILLED LABOUR in human history trying to capture high tech supply chains by itself. They just started moving up Academic + S+T + R&D over last few years, will take another 5-10 years to filter way through industry. The chances are not only good PRC will succeed but it's likely PRC will eclipse west in medium term. As for internal market share, the point of moving up value chain is to produce wealthier consumers. Shedding 600M lower income who buys $1000 rmb phones while gaining 60M upper income who buys 10000rmb will increase the value of the consumer base. Meanwhile we're still looking at PRC with ~700M until 2100s, which is still a stupid large market to serve. It's the kind of scale that enables PRC to drive down costs in any industry state decides to focus on. > thwart its progress. Once PRC starts reaching parity, it will start to thwart back. Not only will western high tech lose 1/3 of PRC revenue, they'll start losing market share from emerging economies, meanwhile PRC could turn on that industrial policy valve to ensure western high-tech become permenantly loss making unless supported by huge industrial policy.

nyokodo 4y ago
> 11M STEM graduates a year, around all OECD combined. There will be generation wealth transfers once old folks start dying (many in tier1/2 own homes + have enough savings) and analysts are predicting increasing consumption If STEM graduates alone could increase a country’s wealth then India would be the global superpower. You need a consumer base in proportion to your production which China lacks, and your production needs to be focused on high value add production which China’s is not. Wealth transfer between generations only works if there is a large enough number of people to buy or at least value the assets being transferred. When your population is going down sharply then there are too few people chasing too many assets which leads to an asset price crash so that wealth will go up in smoke to a significant degree. Similarly, a surge in spending based on concentration of inheritance is inflationary which leads to a loss of wealth. This is not a recipe for economic strength.
- dirtyid 4y ago
  Good thing PRC isn't India and has the infra and institutions to move up value chain, which it has consistently over the past decade, from capturing 8$ in iphone assembing fees to 25%/~100$ by iPhoneX to YMTC and other suppliers chasing after rest of BOM, which triggered current US efforts to contain. PRC export data over couple few years reflect PRC exporting much less low-end goods and more intermediate/high end (i.e. passing Germany in car exports), and trend is only continuing specifically because PRC is focused and succeeding in transitioning into high value add production. So PRC not only has talent but also the base to support it, she's is demonstrably moving up various innovation/S&T indexes and value chain. Unlike India, PRC is by all acounts a super power. >economic strength. Hence the huge savings rate. Yes, a lot of housing wealth will (hopefully) get inflated away / go up in smoke. There still is significant amounts of general savings currently locked away will naturally be released into consumption, particularly by T1/T2 consumers which is enough to drive demand to sustain competitive indigenous industries. Like the shit tier consumption right now from small % of high-income PRC markets is still enough to make PRC significant market for many global companies, that share is set to increase as population mix shift away from poor migrant workers in informal economy to high income, high skilled workers. Overall the share of consumers who sustains transition into advanced economy will be growing, which is a recipe for economic / comprehensive national strength. The wealth transfer release won't be a surge (deaths spread out over time) but over decades along the predictable demographic pyramid slope that is also relatively easy to plan for. Also historically, countries moved up value chain fine without the recent absurd financialization of "wealth", which is arguably a social detriment. IMO PRC that address issues relating to wealth is one that will be "stronger" than societies that can't.
- roenxi 4y ago
  > If STEM graduates alone could increase a country’s wealth then India would be the global superpower. India is plausibly on the way to being a global superpower [0]. Unless something changes that they can outdo the US in the next 20 years. If the Chinese government goes dictatorial and predictably suicides their own economy, and the US government keeps committing to the print-money-no-worries "strategy" it isn't out of the question that India could be the global superpower by 2040. [0] https://www.weforum.org/agenda/2019/01/india-will-overtake-the-us-economy-by-2030/ https://www.weforum.org/agenda/2019/01/india-will-overtake-t...

nyokodo 4y ago

> 11M STEM graduates a year, around all OECD combined. There will be generation wealth transfers once old folks start dying (many in tier1/2 own homes + have enough savings) and analysts are predicting increasing consumption If STEM graduates alone could increase a country’s wealth then India would be the global superpower. You need a consumer base in proportion to your production which China lacks, and your production needs to be focused on high value add production which China’s is not. Wealth transfer between generations only works if there is a large enough number of people to buy or at least value the assets being transferred. When your population is going down sharply then there are too few people chasing too many assets which leads to an asset price crash so that wealth will go up in smoke to a significant degree. Similarly, a surge in spending based on concentration of inheritance is inflationary which leads to a loss of wealth. This is not a recipe for economic strength.

dirtyid 4y ago
Good thing PRC isn't India and has the infra and institutions to move up value chain, which it has consistently over the past decade, from capturing 8$ in iphone assembing fees to 25%/~100$ by iPhoneX to YMTC and other suppliers chasing after rest of BOM, which triggered current US efforts to contain. PRC export data over couple few years reflect PRC exporting much less low-end goods and more intermediate/high end (i.e. passing Germany in car exports), and trend is only continuing specifically because PRC is focused and succeeding in transitioning into high value add production. So PRC not only has talent but also the base to support it, she's is demonstrably moving up various innovation/S&T indexes and value chain. Unlike India, PRC is by all acounts a super power. >economic strength. Hence the huge savings rate. Yes, a lot of housing wealth will (hopefully) get inflated away / go up in smoke. There still is significant amounts of general savings currently locked away will naturally be released into consumption, particularly by T1/T2 consumers which is enough to drive demand to sustain competitive indigenous industries. Like the shit tier consumption right now from small % of high-income PRC markets is still enough to make PRC significant market for many global companies, that share is set to increase as population mix shift away from poor migrant workers in informal economy to high income, high skilled workers. Overall the share of consumers who sustains transition into advanced economy will be growing, which is a recipe for economic / comprehensive national strength. The wealth transfer release won't be a surge (deaths spread out over time) but over decades along the predictable demographic pyramid slope that is also relatively easy to plan for. Also historically, countries moved up value chain fine without the recent absurd financialization of "wealth", which is arguably a social detriment. IMO PRC that address issues relating to wealth is one that will be "stronger" than societies that can't.
roenxi 4y ago
> If STEM graduates alone could increase a country’s wealth then India would be the global superpower. India is plausibly on the way to being a global superpower [0]. Unless something changes that they can outdo the US in the next 20 years. If the Chinese government goes dictatorial and predictably suicides their own economy, and the US government keeps committing to the print-money-no-worries "strategy" it isn't out of the question that India could be the global superpower by 2040. [0] https://www.weforum.org/agenda/2019/01/india-will-overtake-the-us-economy-by-2030/ https://www.weforum.org/agenda/2019/01/india-will-overtake-t...