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Sorry, a decade of 1-2% growth is just not happening. There is still so much low hanging fruit in the Chinese economy and plenty of talented (perhaps overqualif

Sorry, a decade of 1-2% growth is just not happening. There is still so much low hanging fruit in the Chinese economy and plenty of talented (perhaps overqualified) workers to pick them. I suppose this is where we disagree. Thier automobile industry is just begining in earnest, for example. They are in 1965-1970 era Japan, not 1990. This was Japan's economy: Junk -> steel -> automobiles -> computers/chemicals China is only now geting to automobiles. They are making good progress on electronics as well. Thinking they will suddenly go to 1% is just ridiculus in my view when they have so much left. They also aren't strictly speaking as dependent on exports as Japan was considering the size of their domestic market. To me all of this signals that China will stay in the 6-7% range and will reach 40k GDP per ca in 15-20 years or so.

stale2002 3y ago
Growth isn't just determined by some video game tech tree. It is determined by a large number of other factors. > Thinking they will suddenly go to 1% is just ridiculus in my view when they have so much left. One way that "growth" can go down is by simply marking down the value of existing capital projects. In China's case, this would be all the debt and real estate that they have, which is overvalued. You can borrow lots of money over the short and medium term, to create fake growth, but eventually there is a limit to debt fueled projects. And china is starting to hit that limit of an overleveraged economy. IE, that powerplant, that was previously "included" in previous growth rate metrics as being "worth" 1 billion dollars, is actually only worth 500 million dollars, even if "the books" say otherwise right now. If all those capital intensive to create buildings that they have are actually worth half as much as they are incorrect marked on the books right now, that would account for the "apparent" decrease in growth that will happen over the next decades, even though technically it would just be revealing past fake/debt fueled growth. Does that make sense how if they lose X trillion dollars (but over time!) because of overvalued real estate/capital projects, that this would account for an apparent decrease in growth, even if china still has gains from other parts of the economy?

stale2002 3y ago

Growth isn't just determined by some video game tech tree. It is determined by a large number of other factors. > Thinking they will suddenly go to 1% is just ridiculus in my view when they have so much left. One way that "growth" can go down is by simply marking down the value of existing capital projects. In China's case, this would be all the debt and real estate that they have, which is overvalued. You can borrow lots of money over the short and medium term, to create fake growth, but eventually there is a limit to debt fueled projects. And china is starting to hit that limit of an overleveraged economy. IE, that powerplant, that was previously "included" in previous growth rate metrics as being "worth" 1 billion dollars, is actually only worth 500 million dollars, even if "the books" say otherwise right now. If all those capital intensive to create buildings that they have are actually worth half as much as they are incorrect marked on the books right now, that would account for the "apparent" decrease in growth that will happen over the next decades, even though technically it would just be revealing past fake/debt fueled growth. Does that make sense how if they lose X trillion dollars (but over time!) because of overvalued real estate/capital projects, that this would account for an apparent decrease in growth, even if china still has gains from other parts of the economy?