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Some bold claims with little evidence. GDP capita flattened at 13k is hardly “escaped the middle income trap”. IPs can be harmful to growth but then again China

Some bold claims with little evidence. GDP capita flattened at 13k is hardly “escaped the middle income trap”. IPs can be harmful to growth but then again China has never shown any intent to enforce IPs of western origin. There are no evidence of the US wanting to “keep asians down” - many of USAs asian trading partners enjoy less trade regulation. The “trade war” might be counterproductive but was a, imo mild, response to the extreme levels of protectionism exhibited by the chinese communist party.

geysersam 3y ago
> GDP capita flattened at 13k Flattened? It's growing something like 5% per year.
- oblio 3y ago
  https://news.ycombinator.com/item?id=37171762 https://news.ycombinator.com/item?id=37171762
  - throwaway4good 3y ago
    You can cherry pick negative news all you want. But if you a clear picture look at the aggregate for longer terms.
    - dmix 3y ago
      The article explains there are multiple signals which suggest we can't trust the growth numbers coming out of China. People have been ringing that bell for years. That still applies in aggregates and recent history.
    - misja111 3y ago
      The CDS (credit default swap) on Chinese government bonds went up over 30% during the last week. This means that the market believes that the chance for a default on bond payments went up considerably. If you believe you are right and the market is wrong, you should short-sell CDS'es and get rich.
- nradov 3y ago
  We really don't know how fast the Chinese economy is growing. The numbers are largely made up by Party functionaries with no oversight; they often exaggerate and falsely claim to be meeting goals in order to keep their jobs. Independent analysis based on satellite imagery and import/export volumes indicates the growth rate is probably lower, but no one knows for sure.
throwaway4good 3y ago
1. 13K is technically the point where a country goes from middle to high income. 2. The Chinese economy is still growing more than most countries. 3. The US is clearly engaged in zero/negative sum economic warfare against China at the moment - for example read this article and the quoted views by admistration officials therein: https://www.nytimes.com/2023/07/12/magazine/semiconductor-chips-us-china.html https://www.nytimes.com/2023/07/12/magazine/semiconductor-ch... ‘An Act of War’: Inside America’s Silicon Blockade Against China
- throwaway2037 3y ago
  The US is clearly engaged in zero/negative sum economic warfare against China I suggest that you read the history of post war trade relations between US and Japan. It was a bumpy ride! One big difference: General adherence to IP laws (China does whatever they want), plus both are democracies. Related: Do you think China can catch-up to developed world in fab tech? I do not. They are hopelessly behind.
  - throwawayqqq11 3y ago
    ... ehem, taiwan.
    - throwaway2037 3y ago
      Invasion or naval blockade? Your choice. Sure, for a few days, before multiple US carriers float into these waters. It won't last a month if it happens. You would have every high developed country in the world ready to support Taiwan in the event of an "unfortunate incident" with Mainland China. Plenty of people in the US are "itching" for a small military confrontation with M/C. If you think the support for Ukraine has been strong, it will be multiple times stronger for Taiwan, if only for economic (TSMC) reasons.
  - throwaway4good 3y ago
    Yes. I know the history; the US is absolutely ruthless against friend and foe in keeping its hegemony. And it has a long history of having its natsec apparatus integrated into its largest corporations. As for China "catching up": 1. China is indeed far far behind the US-controlled West if the criteria is purely Chinese designed and manufactured semiconductors using purely Chinese designed and manufactured equipment. 2. The extreme nature of the US semiconductor blockade has surprised even me (and I was kinda expecting the worst). However: 3. China is developing along a path already throtten by Western companies; far easier than developing on the leading edge. 4. The Chinese market (plus Russia, Iran whoever is on the US shit list) is massive. It can sponsor a lot of technological development. In the end there is no magic in tech. Whatever company is at the top seemingly untouchable is there because of a "natural monopoly" created by massive fixed cost and little marginal cost. History is full of tech companies that were at one point dominant but no longer is: Digital, Microsoft, Intel, Google ... The companies that are used as chokeholds today: NVDIA, ASML, TSMC will at one point join that list. In fact using them as chokeholds probably makes it happen faster.
bakuninsbart 3y ago
There are enormous economic differences within China and given the scale of the country it is much harder to make these kinds of broad-stroke arguments. Looking at gdp per region [0], the main tier one cities are already clearly a cut above middle income countries, even a province like Jiansu with 23k$ in GDP per capita has a higher GDP/capita than Poland and a larger population than Germany or the UK. [0] https://en.wikipedia.org/wiki/List_of_Chinese_administrative_divisions_by_GDP_per_capita https://en.wikipedia.org/wiki/List_of_Chinese_administrative...
- refurb 3y ago
  The problem with GDP per capita is that it doesn't necessarily correlate with wages (which is what we're talking about with middle income trap). You can look at Singapore or Ireland for another example. They have higher GDP per capita than the US, but a lot of it's due to multi-nationals storing IP in those countries, and funneling cash through for tax purposes. It's not GDP that gets converted to local wages. And in the case of certain Chinese regions, if you have companies headquartered there (with multiple sites at satellite cities), GDP measures are going to assign national GDP to that one region, so again, it doesn't necessarily reflect local wages.

geysersam 3y ago

> GDP capita flattened at 13k Flattened? It's growing something like 5% per year.

oblio 3y ago
https://news.ycombinator.com/item?id=37171762 https://news.ycombinator.com/item?id=37171762
- throwaway4good 3y ago
  You can cherry pick negative news all you want. But if you a clear picture look at the aggregate for longer terms.
  - dmix 3y ago
    The article explains there are multiple signals which suggest we can't trust the growth numbers coming out of China. People have been ringing that bell for years. That still applies in aggregates and recent history.
  - misja111 3y ago
    The CDS (credit default swap) on Chinese government bonds went up over 30% during the last week. This means that the market believes that the chance for a default on bond payments went up considerably. If you believe you are right and the market is wrong, you should short-sell CDS'es and get rich.
nradov 3y ago
We really don't know how fast the Chinese economy is growing. The numbers are largely made up by Party functionaries with no oversight; they often exaggerate and falsely claim to be meeting goals in order to keep their jobs. Independent analysis based on satellite imagery and import/export volumes indicates the growth rate is probably lower, but no one knows for sure.

throwaway4good 3y ago

1. 13K is technically the point where a country goes from middle to high income. 2. The Chinese economy is still growing more than most countries. 3. The US is clearly engaged in zero/negative sum economic warfare against China at the moment - for example read this article and the quoted views by admistration officials therein: https://www.nytimes.com/2023/07/12/magazine/semiconductor-chips-us-china.html https://www.nytimes.com/2023/07/12/magazine/semiconductor-ch... ‘An Act of War’: Inside America’s Silicon Blockade Against China

throwaway2037 3y ago
The US is clearly engaged in zero/negative sum economic warfare against China I suggest that you read the history of post war trade relations between US and Japan. It was a bumpy ride! One big difference: General adherence to IP laws (China does whatever they want), plus both are democracies. Related: Do you think China can catch-up to developed world in fab tech? I do not. They are hopelessly behind.
- throwawayqqq11 3y ago
  ... ehem, taiwan.
  - throwaway2037 3y ago
    Invasion or naval blockade? Your choice. Sure, for a few days, before multiple US carriers float into these waters. It won't last a month if it happens. You would have every high developed country in the world ready to support Taiwan in the event of an "unfortunate incident" with Mainland China. Plenty of people in the US are "itching" for a small military confrontation with M/C. If you think the support for Ukraine has been strong, it will be multiple times stronger for Taiwan, if only for economic (TSMC) reasons.
- throwaway4good 3y ago
  Yes. I know the history; the US is absolutely ruthless against friend and foe in keeping its hegemony. And it has a long history of having its natsec apparatus integrated into its largest corporations. As for China "catching up": 1. China is indeed far far behind the US-controlled West if the criteria is purely Chinese designed and manufactured semiconductors using purely Chinese designed and manufactured equipment. 2. The extreme nature of the US semiconductor blockade has surprised even me (and I was kinda expecting the worst). However: 3. China is developing along a path already throtten by Western companies; far easier than developing on the leading edge. 4. The Chinese market (plus Russia, Iran whoever is on the US shit list) is massive. It can sponsor a lot of technological development. In the end there is no magic in tech. Whatever company is at the top seemingly untouchable is there because of a "natural monopoly" created by massive fixed cost and little marginal cost. History is full of tech companies that were at one point dominant but no longer is: Digital, Microsoft, Intel, Google ... The companies that are used as chokeholds today: NVDIA, ASML, TSMC will at one point join that list. In fact using them as chokeholds probably makes it happen faster.

bakuninsbart 3y ago

There are enormous economic differences within China and given the scale of the country it is much harder to make these kinds of broad-stroke arguments. Looking at gdp per region [0], the main tier one cities are already clearly a cut above middle income countries, even a province like Jiansu with 23k$ in GDP per capita has a higher GDP/capita than Poland and a larger population than Germany or the UK. [0] https://en.wikipedia.org/wiki/List_of_Chinese_administrative_divisions_by_GDP_per_capita https://en.wikipedia.org/wiki/List_of_Chinese_administrative...

refurb 3y ago
The problem with GDP per capita is that it doesn't necessarily correlate with wages (which is what we're talking about with middle income trap). You can look at Singapore or Ireland for another example. They have higher GDP per capita than the US, but a lot of it's due to multi-nationals storing IP in those countries, and funneling cash through for tax purposes. It's not GDP that gets converted to local wages. And in the case of certain Chinese regions, if you have companies headquartered there (with multiple sites at satellite cities), GDP measures are going to assign national GDP to that one region, so again, it doesn't necessarily reflect local wages.