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The long term trend is that Xi is fizzling Deng’s economic miracle with terrible policies. Plus the rest of the world is catching up in manufacturing as the Chi

The long term trend is that Xi is fizzling Deng’s economic miracle with terrible policies. Plus the rest of the world is catching up in manufacturing as the Chinese workforce becomes smaller and more expensive. Said bad policies mean that there is nothing to take the place of manufacturing as the party seeks to control all businesses - especially tech. Belt and road seems to have turned into an expensive incomplete project with no great returns except now they have a bunch of broke countries indebted to them which I guess has some value

satvikpendem 3y ago
Which policies? I thought the primary cause was the demographics changes which is creating knock on effects, rather than the party's policies specifically.
- gloryjulio 3y ago
  Tldr is that Deng is more on working with the US side. Xi is trying to build his own empire and working against the US and its allies. This triggered a series of events of the US sanctions and the investments which are currently leaving china. During covid they found out that it's actually viable to slowly moving the manufacturing out of China. It's a slow bleed but the downward trend of China's economy is visible
  - satvikpendem 3y ago
    It's likely that that would've happened even without the empire building, because the purchasing power of their citizenry has increased through modernizing their industrialization. So companies would still want to look for alternate sources of free labor.
    - chii 3y ago
      it would've been fine, had china been more cooperative in opening up their internal markets for investments and move up the value chain - i cite japan as an example of what could happen if they cooperate and relinquish their absolute authoritarian views, and their geopolitical ambitions of empire building.
      - hakfoo 3y ago
        It's not reasonable to ask a country like China to suppress their "geopolitical ambitions". When you're that big, politically, militarily, economically, you need to be able to "clear your orbit" of other territories that could smash into you. It might be direct military involvement, or aggressive economic intervention (Belt and Road) Was this where Japan stumbled? They were militarily neutered after WWII and largely subject to US political whims-- did that restrict their ability to prevent Taiwan and Korea from stealing their economic thunder?
        chii 3y ago
        > did that restrict their ability to prevent Taiwan and Korea from stealing their economic thunder? which is a question framed from a zero-sum game. The world isn't zero sum. The idea is that the "stolen" economic opportunities would've been there for the japanese had it not been "stolen" is wrong. It's like saying that a pirated piece of music is a stolen sale. The fact is, japan's output didn't drop - the new asian tiger economy of south korea and taiwan caught up. The world is richer because of it, even if the japanese didn't get to own a share of that wealth directly, they can benefit indirectly. I suppose china learnt the wrong lesson from this perspective observing japan. They do wish to prevent anyone else from stealing their thunder, and they are taking action right now for this purpose. And it is this very action that's causing the tension in asian pacific. Imagine if in an alternative world, the US did not invite china into the WTO, and worked to integrate them into global trade? If the US had held such a belief that the world was zero sum, china would not have had the opportunity to get foreign investment and become the manufacturing powerhouse it currently is today. And yet china cannot see how folly their current behaviour is, and insist on pursuing a geopolitical agenda that involve expansionism and coercion of their neighbours, rather than tight economic cooperation and integration.
        hakfoo 3y ago
        There's also the fact they're seeing the West trying to steal their thunder in real-time; hard not to be paranoid when everyone IS out to get you. The chipmaking-gear sanctions are both about enforcing a dependency on an independent Taiwan via TSMC, and keeping the PRC from being more militarily and economically self-sufficient. The ZTE and Huawei bans were less about security and more about cutting off a place where they had effectively undercut the Western competition. There was no hoop they could have jumped through that would have convinced regulators their gear was safe-- the fix was in from day one. We're seeing the same thing with TikTok now. It's easy to see a message of "we like you when you're making our cereal box toys, but don't get near our high value premium economic development" in those actions.
  - dirtyid 3y ago
    During COVID PRC exports increased by 1T, more in 4 years than previous 10. Primarily in global south built up by BRI which in that context has paid for itself multiple times over. What's happening is PRC moving up global value chains while shedding low end manufacturing that started precovid. The TLDR is PRC modernization/development is increasingly infringing on medium/high end value chains that was previously monopolized by US/west. Whenever PRC domestic overcapacity translates to exports, it reduces operating income of incumbents, primarily western, by 50-90%, it destroys control of sectors west dominates in. Hence containment to keep PRC down and maintain western share. Xi unwinding bad parts of Deng's unchecked economic growth policies thats no longer sustainable.
    - gloryjulio 3y ago
      Right. The stop of the release of the economy data is a bullish sign for the ccp ;D
      - dirtyid 3y ago
        PRC stopped releasing all sorts of data like AIS and cracked down on western compliance work to make it difficult for to enforce sanctions/export controls during cold war. Which doesn't change the fact that trade volumes are you know, bilateral data. It's easy to confirm with 3rd parties that PRC has undergone the largest pulse in globalization in human history the last 4 years. Same with PRC exports moving up value chain. Or PRC scitech moving up western science and innnovation indexes. Or rmb/yuan better performance vs other currencies inresponse to US deficit spending. Plenty of non PRC oblique indicators to suggest things are trending fine. Western news just like to focus on the few bad ones. Like retards who think 20% youth unemployment rate is end of the world when broad unemployment is 5%, i.e. people find work eventually. Or even if PRC has 50% youth unemployment (likely with this summer graduating largest tertiary cohort of 12m), with PRCs 60% tertiary rate and 5M STEM per year, that's still net 4-5x more talent being integrated into an increasingly high end economy vs west whose fundmental ability to integrate new talent is fraction of PRC even with immigration. If PRC is collapsing right now, everyone else is basically already stone dead.
- twelve40 3y ago
  Yeah this is funny. "Deng’s economic miracle" included many things, like the one-child policy, which came back to bite them now. So this simplistic "Deng miracle Xi dumb" theory doesn't seem to hold up.
- sdm 3y ago
  > I thought the primary cause was the demographics changes which is creating knock on effects Not really. Yes, China is starting to experience demographic decline but it will be a long long time before it affects them economically. They could still absorb every North American job and still have people left over. That's just how big China's population is. Demographic decline will eventually bite them but they have a very long runway. China is very different from Japan's case. As for policies, again, not really. It's more that about 10 years ago most low cost manufacturing shifted out of China because cheaper regions caught up and were able to provide better value. China has been been talking about this trend since before Xi and a big focus has be shifting to a service economy built on internal demand. This is the part where policies come into play. The shift has not gone as well as they hoped. And again, it's not really about Xi messing up Deng's work. The world, and China, is different from Deng's world. Deng's approach would not work in a world where low cost manufacturing has moved overseas. If anything, it's more of an issue that Xi has stuck to closely to Deng's approach and not adapted to the changing world.
  - chii 3y ago
    > Deng's approach would not work in a world where low cost manufacturing has moved overseas. no, but the next step, which is to mimick what japan did post lost-decade, is to move into higher value manufacturing, increase automation and increase domestic service industry. However, the required tech, research cooperation and transfers that would've been needed is going to need deep trust and cooperation between the west and china - that entails giving up the full authoritarian control of the economy. This isn't something the CCP can entertain, unlike japan. China still has ambitions of becoming a superpower that can dictate terms on the world stage. I think this is the difference between Xi and Deng. Xi cannot move past being second fiddle. And i think this is the real cause for china's downfall (if it were to happen).
  - hakfoo 3y ago
    I was under the impression that manufacturing moved to China for the bottom price first, but higher value manufacturing remained there because there's infrastructure symbiosis now. If you're a absolute lowest-value-add manufacturer (think cereal box toys), yeah, you could put that anywhere plastic stock could be delivered. But as you start to make more sophisticated products, supply chains get way more relevant. If your cereal box toy acquires a blinking LED, a coin cell battery, and a screw to hold the battery box closed, it becomes compelling to manufacture the main casting in China because all the other parts are already made there and the logistics will be cheaper and more responsive. This seems like the same play as early Silicon Valley, and Taiwan in the era of early PC clones.
bettercallsalad 3y ago
> Chinese workforce becomes smaller A question on workforce reduction due to decline in birthrate. In west, we seemed to have solved the problem with immigration. Is it possible China can also adopt the same policies? Essentially bringing in migrant labour class workforce from South East Asian countries with much less per capita income such as Laos, Cambodia, Myanmar etc.
- fnordpiglet 3y ago
  21% unemployment among recent graduates is a reduction in the workforce because there isn’t any jobs. There are plenty of young people to take employment if it were available.
  - chii 3y ago
    the issue is that they are graduates, and want a white collar, high paid job, rather than a manufacturing job.
    - fnordpiglet 3y ago
      Still not attributable to low birth rate.
- hsfzxjy 3y ago
  As a Chinese I would say a lot of people around won't expect this to happen due to a strong sense of nationalism. Most poeple are afraid that these immigrants will create severe security problems as what's happening in the west. And most importantly, people regard it a shame to share with immigrants the already limited job opportunity.

satvikpendem 3y ago

Which policies? I thought the primary cause was the demographics changes which is creating knock on effects, rather than the party's policies specifically.

gloryjulio 3y ago
Tldr is that Deng is more on working with the US side. Xi is trying to build his own empire and working against the US and its allies. This triggered a series of events of the US sanctions and the investments which are currently leaving china. During covid they found out that it's actually viable to slowly moving the manufacturing out of China. It's a slow bleed but the downward trend of China's economy is visible
- satvikpendem 3y ago
  It's likely that that would've happened even without the empire building, because the purchasing power of their citizenry has increased through modernizing their industrialization. So companies would still want to look for alternate sources of free labor.
  - chii 3y ago
    it would've been fine, had china been more cooperative in opening up their internal markets for investments and move up the value chain - i cite japan as an example of what could happen if they cooperate and relinquish their absolute authoritarian views, and their geopolitical ambitions of empire building.
    - hakfoo 3y ago
      It's not reasonable to ask a country like China to suppress their "geopolitical ambitions". When you're that big, politically, militarily, economically, you need to be able to "clear your orbit" of other territories that could smash into you. It might be direct military involvement, or aggressive economic intervention (Belt and Road) Was this where Japan stumbled? They were militarily neutered after WWII and largely subject to US political whims-- did that restrict their ability to prevent Taiwan and Korea from stealing their economic thunder?
      - chii 3y ago
        > did that restrict their ability to prevent Taiwan and Korea from stealing their economic thunder? which is a question framed from a zero-sum game. The world isn't zero sum. The idea is that the "stolen" economic opportunities would've been there for the japanese had it not been "stolen" is wrong. It's like saying that a pirated piece of music is a stolen sale. The fact is, japan's output didn't drop - the new asian tiger economy of south korea and taiwan caught up. The world is richer because of it, even if the japanese didn't get to own a share of that wealth directly, they can benefit indirectly. I suppose china learnt the wrong lesson from this perspective observing japan. They do wish to prevent anyone else from stealing their thunder, and they are taking action right now for this purpose. And it is this very action that's causing the tension in asian pacific. Imagine if in an alternative world, the US did not invite china into the WTO, and worked to integrate them into global trade? If the US had held such a belief that the world was zero sum, china would not have had the opportunity to get foreign investment and become the manufacturing powerhouse it currently is today. And yet china cannot see how folly their current behaviour is, and insist on pursuing a geopolitical agenda that involve expansionism and coercion of their neighbours, rather than tight economic cooperation and integration.
        hakfoo 3y ago
        There's also the fact they're seeing the West trying to steal their thunder in real-time; hard not to be paranoid when everyone IS out to get you. The chipmaking-gear sanctions are both about enforcing a dependency on an independent Taiwan via TSMC, and keeping the PRC from being more militarily and economically self-sufficient. The ZTE and Huawei bans were less about security and more about cutting off a place where they had effectively undercut the Western competition. There was no hoop they could have jumped through that would have convinced regulators their gear was safe-- the fix was in from day one. We're seeing the same thing with TikTok now. It's easy to see a message of "we like you when you're making our cereal box toys, but don't get near our high value premium economic development" in those actions.
- dirtyid 3y ago
  During COVID PRC exports increased by 1T, more in 4 years than previous 10. Primarily in global south built up by BRI which in that context has paid for itself multiple times over. What's happening is PRC moving up global value chains while shedding low end manufacturing that started precovid. The TLDR is PRC modernization/development is increasingly infringing on medium/high end value chains that was previously monopolized by US/west. Whenever PRC domestic overcapacity translates to exports, it reduces operating income of incumbents, primarily western, by 50-90%, it destroys control of sectors west dominates in. Hence containment to keep PRC down and maintain western share. Xi unwinding bad parts of Deng's unchecked economic growth policies thats no longer sustainable.
  - gloryjulio 3y ago
    Right. The stop of the release of the economy data is a bullish sign for the ccp ;D
    - dirtyid 3y ago
      PRC stopped releasing all sorts of data like AIS and cracked down on western compliance work to make it difficult for to enforce sanctions/export controls during cold war. Which doesn't change the fact that trade volumes are you know, bilateral data. It's easy to confirm with 3rd parties that PRC has undergone the largest pulse in globalization in human history the last 4 years. Same with PRC exports moving up value chain. Or PRC scitech moving up western science and innnovation indexes. Or rmb/yuan better performance vs other currencies inresponse to US deficit spending. Plenty of non PRC oblique indicators to suggest things are trending fine. Western news just like to focus on the few bad ones. Like retards who think 20% youth unemployment rate is end of the world when broad unemployment is 5%, i.e. people find work eventually. Or even if PRC has 50% youth unemployment (likely with this summer graduating largest tertiary cohort of 12m), with PRCs 60% tertiary rate and 5M STEM per year, that's still net 4-5x more talent being integrated into an increasingly high end economy vs west whose fundmental ability to integrate new talent is fraction of PRC even with immigration. If PRC is collapsing right now, everyone else is basically already stone dead.
twelve40 3y ago
Yeah this is funny. "Deng’s economic miracle" included many things, like the one-child policy, which came back to bite them now. So this simplistic "Deng miracle Xi dumb" theory doesn't seem to hold up.
sdm 3y ago
> I thought the primary cause was the demographics changes which is creating knock on effects Not really. Yes, China is starting to experience demographic decline but it will be a long long time before it affects them economically. They could still absorb every North American job and still have people left over. That's just how big China's population is. Demographic decline will eventually bite them but they have a very long runway. China is very different from Japan's case. As for policies, again, not really. It's more that about 10 years ago most low cost manufacturing shifted out of China because cheaper regions caught up and were able to provide better value. China has been been talking about this trend since before Xi and a big focus has be shifting to a service economy built on internal demand. This is the part where policies come into play. The shift has not gone as well as they hoped. And again, it's not really about Xi messing up Deng's work. The world, and China, is different from Deng's world. Deng's approach would not work in a world where low cost manufacturing has moved overseas. If anything, it's more of an issue that Xi has stuck to closely to Deng's approach and not adapted to the changing world.
- chii 3y ago
  > Deng's approach would not work in a world where low cost manufacturing has moved overseas. no, but the next step, which is to mimick what japan did post lost-decade, is to move into higher value manufacturing, increase automation and increase domestic service industry. However, the required tech, research cooperation and transfers that would've been needed is going to need deep trust and cooperation between the west and china - that entails giving up the full authoritarian control of the economy. This isn't something the CCP can entertain, unlike japan. China still has ambitions of becoming a superpower that can dictate terms on the world stage. I think this is the difference between Xi and Deng. Xi cannot move past being second fiddle. And i think this is the real cause for china's downfall (if it were to happen).
- hakfoo 3y ago
  I was under the impression that manufacturing moved to China for the bottom price first, but higher value manufacturing remained there because there's infrastructure symbiosis now. If you're a absolute lowest-value-add manufacturer (think cereal box toys), yeah, you could put that anywhere plastic stock could be delivered. But as you start to make more sophisticated products, supply chains get way more relevant. If your cereal box toy acquires a blinking LED, a coin cell battery, and a screw to hold the battery box closed, it becomes compelling to manufacture the main casting in China because all the other parts are already made there and the logistics will be cheaper and more responsive. This seems like the same play as early Silicon Valley, and Taiwan in the era of early PC clones.

bettercallsalad 3y ago

> Chinese workforce becomes smaller A question on workforce reduction due to decline in birthrate. In west, we seemed to have solved the problem with immigration. Is it possible China can also adopt the same policies? Essentially bringing in migrant labour class workforce from South East Asian countries with much less per capita income such as Laos, Cambodia, Myanmar etc.

fnordpiglet 3y ago
21% unemployment among recent graduates is a reduction in the workforce because there isn’t any jobs. There are plenty of young people to take employment if it were available.
- chii 3y ago
  the issue is that they are graduates, and want a white collar, high paid job, rather than a manufacturing job.
  - fnordpiglet 3y ago
    Still not attributable to low birth rate.
hsfzxjy 3y ago
As a Chinese I would say a lot of people around won't expect this to happen due to a strong sense of nationalism. Most poeple are afraid that these immigrants will create severe security problems as what's happening in the west. And most importantly, people regard it a shame to share with immigrants the already limited job opportunity.