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> TBH PRC "growth rate" is roughly in line with expectations Iirc the expectation in the early teens was a slowdown to 3-5% growth around the middle of the las

by zhdc1 3y ago

> TBH PRC "growth rate" is roughly in line with expectations Iirc the expectation in the early teens was a slowdown to 3-5% growth around the middle of the last decade. The argument then was that PRC officials knew they needed to transition to a more balanced growth model. Instead, they continued over investing in manufacturing and infrastructure. The end result is a sizable amount of debt across the entire economy that is, likely, unsustainable if and when a market downturn occurs. > TLDR PRC is at 25% skilled workforce I think there's a bias on here to think that skilled = STEM. There's an argument to be made that what China really needs is skilled service workers. People also need to realize that, when it comes to demographics and population mobility, China is far more akin to the EU than the US. If we go by your argument, Europe also has a very large reserve of unskilled or semi-skilled workers. However, moving from Sophia to Frankfurt != moving from Boise to San Fransisco. I'll even argue that it's much easier to move from Bulgaria to Germany than it is to move from Sannxi to Beijing.

dirtyid 3y ago
PRC national debt is ~75% of GDP vs US ~120%, total aggregate debt PRC ~270% vs US ~760%. Basically +40-50% in the last 10 years to fund the largest infra expansion in human history. Why is infra and manufacturing over invested? Except some western analysis state it is so. PRC per capita infra is still not advanced economy levels - PRC still has infra shortage. Meanwhile manufacturing is why PRC is moving up various value chains. Past 4 years, PRC export increased by 1T predominantly in global south, and holding onto most of gains - by all metrics of current export slump across export dependent economies (which PRC is not @20% export GDP), PRC export is doing near top in terms of capturing/retaining market share. This is not 1 step forward 2 steps back in market downturn, this is sustainable 3 step forward, 1 steps back. >think that skilled = STEM. No I'm just highlighting out of 250m bodies entering workforce, at current rate about 50-100m will be STEM. 50-100m will be other high skill either skilled vocational or skilled services. The point is PRC transitioning from 25% skilled to 60-80% is basically piling up multiple current PRC worth of competitive talent into the mix. > easier to move from Bulgaria to Germany than it is to move from Sannxi to Beijing PRC tertiary enrollment is more or less correlated to urban migration and urban workforce. The youth unemployment stat for example was about urban youth unemployment where 2/3 youth cohorts are - mostly for education. Skilled talent are naturally concentrated in productive centres in tier 1/2 cities (and increasingly growing interior 3/4 industrializing clusters) just by virtue of where tertiary networks are located. Yes unskilled / semiskilled have limited migration optionsin PRC via Hukao, but it's not causing a labour shortage problem since that cohort is 200m+ trapped in informal economy. Most of them are basically so underskilled and undereducated that they can't even be trained for assembly line jobs (hence blue collar / manufacturing shortage). They're not the reserve you're looking for. The actual reserve are basically overeducated kids still too proud to take factory/vocational job because it's beneath them. They're already where the jobs are, but won't make the jump until sufficient stress. It's akin to US (well also EU), which has skilled/semiskilled blue collar shortage because people don't want to do those jobs even if they're well compensated. Difference is US/EU also has broad labour shortage, they simply don't have the bodies. Especially in high skill / STEM. Hard to get that literature major to engineer or other shortage jobs US needs filling. Opposite is true for PRC who has broad skilled labour surplus who can be retrained to work lower skilled jobs if desperate. That compsci graduate can assemble widgets if his life depends on it. Problem is of course is credentialled kids want to paper push. Will take few years for active cultural change to drive people into blue collar.

by zhdc1 3y ago

dirtyid 3y ago

PRC national debt is ~75% of GDP vs US ~120%, total aggregate debt PRC ~270% vs US ~760%. Basically +40-50% in the last 10 years to fund the largest infra expansion in human history. Why is infra and manufacturing over invested? Except some western analysis state it is so. PRC per capita infra is still not advanced economy levels - PRC still has infra shortage. Meanwhile manufacturing is why PRC is moving up various value chains. Past 4 years, PRC export increased by 1T predominantly in global south, and holding onto most of gains - by all metrics of current export slump across export dependent economies (which PRC is not @20% export GDP), PRC export is doing near top in terms of capturing/retaining market share. This is not 1 step forward 2 steps back in market downturn, this is sustainable 3 step forward, 1 steps back. >think that skilled = STEM. No I'm just highlighting out of 250m bodies entering workforce, at current rate about 50-100m will be STEM. 50-100m will be other high skill either skilled vocational or skilled services. The point is PRC transitioning from 25% skilled to 60-80% is basically piling up multiple current PRC worth of competitive talent into the mix. > easier to move from Bulgaria to Germany than it is to move from Sannxi to Beijing PRC tertiary enrollment is more or less correlated to urban migration and urban workforce. The youth unemployment stat for example was about urban youth unemployment where 2/3 youth cohorts are - mostly for education. Skilled talent are naturally concentrated in productive centres in tier 1/2 cities (and increasingly growing interior 3/4 industrializing clusters) just by virtue of where tertiary networks are located. Yes unskilled / semiskilled have limited migration optionsin PRC via Hukao, but it's not causing a labour shortage problem since that cohort is 200m+ trapped in informal economy. Most of them are basically so underskilled and undereducated that they can't even be trained for assembly line jobs (hence blue collar / manufacturing shortage). They're not the reserve you're looking for. The actual reserve are basically overeducated kids still too proud to take factory/vocational job because it's beneath them. They're already where the jobs are, but won't make the jump until sufficient stress. It's akin to US (well also EU), which has skilled/semiskilled blue collar shortage because people don't want to do those jobs even if they're well compensated. Difference is US/EU also has broad labour shortage, they simply don't have the bodies. Especially in high skill / STEM. Hard to get that literature major to engineer or other shortage jobs US needs filling. Opposite is true for PRC who has broad skilled labour surplus who can be retrained to work lower skilled jobs if desperate. That compsci graduate can assemble widgets if his life depends on it. Problem is of course is credentialled kids want to paper push. Will take few years for active cultural change to drive people into blue collar.