13 ms·

China scaling and efficiency is really something else. it seems they've latched on to something that works better than even democracy and capitalism

bobthepanda 2y ago
They’re certainly good at building. Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-factories-price-cuts.html https://www.nytimes.com/2024/04/23/business/china-auto-facto... And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%.
- seanmcdirmid 2y ago
  China’s debt load fluctuates if you consider just the central government, local governments, and SOEs owned by either the central or local governments. Then you have private sector debt. SOEs are where a lot of china’s shadow debt comes from (localities ask SOEs they control to fund public projects of their own books), this is what pushes China’s debt load over 100%.
  - coliveira 2y ago
    Debt in China is not a big issue, because Chinese banks are mostly owned by the Government. They can rearrange debt to deal with problems much more freely than Western governments.
    - bobthepanda 2y ago
      while this is true, they also have to do a lot more management of capital than most and it's a very delicate balancing act. Already, you have issues with bank confidence and normal people getting fleeced by fradulent or overly risky financial products because of the government's interventions in banking. Japan used to be activist towards in its banks too, and it was very good until it was catastrophic one day.
      - coliveira 2y ago
        The existence of overly risky products is something observed in Western banking as well. And a catastrophe caused by the banking system is not unheard of in the USA. So I don't see how this is a problem unique to China. In fact they have much more flexibility to solve issues in this area.
  - bobthepanda 2y ago
    There’s that and the LGFVs financed by land sales which are all off official balance sheets.
- jdietrich 2y ago
  You are never going to get exactly the right amount of capacity, so the question is whether you want to err on the side of too much or too little. Too little might often be more efficient, but there are undeniable strategic benefits to having too much. The events of the last few years have taught us all some painful lessons about the hidden costs of JIT and lean. China might have got the balance wrong, but they aren't prima facie wrong.
  - refulgentis 2y ago
    They are prima facie wrong, their overcapacity is bad and actively harmful, this isn't a sign of it succeeding, its a sign of desperation from it failing. There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago. Dazzled by the spectacle, this misses that their economy is characterized by deflationary headwinds due to a massive, massive over-investment in property, and this just squeezes the toothpaste (debt taken on to goose GDP) to another side of the tube. (housing to batteries)
    - sangnoir 2y ago
      > There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?! There's also a type of western mind that automatically dismisses the odds of a different country succeeding, based on nothing but the fact that they are using a different approach (on the surface). It's a kind if circular reasoning: our system is the best because we're the best, because of the system we have. To subvert the Simpsons - "the best so far" Edit: I'm far from a Sinophile, but there's a certain willful blindness, concerning an almost religious belief that the west will prevail because it's the west, regardless of all the systemic weaknesses that show up again and again. It would suck for a dictator-for-life leading the biggest economy in the world, but healthy minds would introspect to see how we can do better, like we should, right? I have no doubt out leaders will pick the wrong lessons, like social credit scores and pervasive surveillance
      - 2y ago
- nl 2y ago
  In the US this model is called venture capital - build lots of things knowing lots will fail. It's a model that creates big winners and lots of losers. Ironically of course the other alternative is central planning which is a hallmark of communist economic systems. > estimated to leave Chinese debt to GDP at 117% Japan is 264%, Singapore 168%, the US 129%, France 112%, Canada is 107%, UK 97%, Germany 66%, Australia 22%, Afghanistan 7.4%, Kuwait 2.1%. A debt ratio isn't particularly useful to know on it's own.
- ZeroGravitas 2y ago
  10-year old ICE car factories idling is a sign of success in their transition to NEV. > China has more than 100 factories with the capacity to build close to 40 million internal combustion engine cars a year. That is roughly twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular.
- tsudonym 2y ago
  Not a great take - those factories are foreign owned ICE car factories. Hyundai basically underestimated how fast China's EV transition would be. That's good news for China, full speed domestic EV production.
pixelatedindex 2y ago
> it seems they've latched on to something that works better than even democracy and capitalism Wouldn’t this just be plain old fashioned authoritarianism? America can latch on to this too, and we might based on how the Trump admin turns out.
- foxglacier 2y ago
  No. One required component is plain old fashioned oversupply of labor. America doesn't have that because all employable people are too rich. China also has an oversupply of skilled labor like engineers, in part because the threat of poverty is a strong motivator to get rich. America also lacks that which you can see in capable young people doing arts degrees with no thought to their future income because it doesn't matter - they'll still live comfortably even on minimum wage.
  - meiraleal 2y ago
    There is an estimation of 11-30 million undocumented immigrants in the US. The biggest difference is that in the US they are working on fast food jobs, house cleaning, babysitting. Different priorities.
  - rangestransform 2y ago
    That’s an easy enough problem to solve if we had the appetite to solve it, why couldn’t we legitimize the roles illegal immigrants currently do right now with a Singapore style migrant worker program?
    - throwaway2037 2y ago
      To be clear, I think that there is an existing, legal migrant worker programme. They do most of the non-automated farm work in Central Valley California. Also, the Singapore system is a bit ugly if you look closely. I hope the US can do better.
    - aurareturn 2y ago
      Probably because the average Chinese is far more skilled than your average illegal immigrant. It's not just raw labor force. It's capable engineers, designers, architects, etc. How is illegal immigration going to solve this?
Dalewyn 2y ago
[flagged]
- meiraleal 2y ago
  > Basically, Chinese government wants a bigass factory and they will get a bigass factory because literally fuck you. And what's the difference from the US government when it wants a bigass factory? Isn't the difference that the US also wanted China to build bigass factories? They got too good at that.
  - Dalewyn 2y ago
    [flagged]
    - chii 2y ago
      not just that, but the fact that the US gov't does hold elections means that what they do generally is in line with the people. At this moment, what the chinese gov't is doing is _also_ (presumably) in line with their people's wishes - after all, factories and exports means jobs and economic growth. It remains to be seen if this continues to be in the face of a potential war, tariffs, or some other external shock.
- XorNot 2y ago
  No, it's when an authoritarian government wants something they'll get it. And by get it I mean "they'll take your house, ignore any local environment concerns and possibly just demolish entire villages and generational livelihoods". Everyone seems to have some "oh how great it is they just get things done" as though they haven't diligently turned up to complain about some development application of the local council. Yeah, sunshine and rainbows I suppose provided you're thousands of miles away.
  - Dalewyn 2y ago
    [flagged]
  - 2y ago
fyrn_ 2y ago
Efficient yes, generates good quality of life for the average citizen? Not as much. Plenty the west can learn from China on how to do large public works though.
- coliveira 2y ago
  Quality of life for average citizen improved must faster in China that in the US during the last 40 years.

bobthepanda 2y ago

They’re certainly good at building. Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-factories-price-cuts.html https://www.nytimes.com/2024/04/23/business/china-auto-facto... And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%.

seanmcdirmid 2y ago
China’s debt load fluctuates if you consider just the central government, local governments, and SOEs owned by either the central or local governments. Then you have private sector debt. SOEs are where a lot of china’s shadow debt comes from (localities ask SOEs they control to fund public projects of their own books), this is what pushes China’s debt load over 100%.
- coliveira 2y ago
  Debt in China is not a big issue, because Chinese banks are mostly owned by the Government. They can rearrange debt to deal with problems much more freely than Western governments.
  - bobthepanda 2y ago
    while this is true, they also have to do a lot more management of capital than most and it's a very delicate balancing act. Already, you have issues with bank confidence and normal people getting fleeced by fradulent or overly risky financial products because of the government's interventions in banking. Japan used to be activist towards in its banks too, and it was very good until it was catastrophic one day.
    - coliveira 2y ago
      The existence of overly risky products is something observed in Western banking as well. And a catastrophe caused by the banking system is not unheard of in the USA. So I don't see how this is a problem unique to China. In fact they have much more flexibility to solve issues in this area.
- bobthepanda 2y ago
  There’s that and the LGFVs financed by land sales which are all off official balance sheets.
jdietrich 2y ago
You are never going to get exactly the right amount of capacity, so the question is whether you want to err on the side of too much or too little. Too little might often be more efficient, but there are undeniable strategic benefits to having too much. The events of the last few years have taught us all some painful lessons about the hidden costs of JIT and lean. China might have got the balance wrong, but they aren't prima facie wrong.
- refulgentis 2y ago
  They are prima facie wrong, their overcapacity is bad and actively harmful, this isn't a sign of it succeeding, its a sign of desperation from it failing. There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago. Dazzled by the spectacle, this misses that their economy is characterized by deflationary headwinds due to a massive, massive over-investment in property, and this just squeezes the toothpaste (debt taken on to goose GDP) to another side of the tube. (housing to batteries)
  - sangnoir 2y ago
    > There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?! There's also a type of western mind that automatically dismisses the odds of a different country succeeding, based on nothing but the fact that they are using a different approach (on the surface). It's a kind if circular reasoning: our system is the best because we're the best, because of the system we have. To subvert the Simpsons - "the best so far" Edit: I'm far from a Sinophile, but there's a certain willful blindness, concerning an almost religious belief that the west will prevail because it's the west, regardless of all the systemic weaknesses that show up again and again. It would suck for a dictator-for-life leading the biggest economy in the world, but healthy minds would introspect to see how we can do better, like we should, right? I have no doubt out leaders will pick the wrong lessons, like social credit scores and pervasive surveillance
    - 2y ago
nl 2y ago
In the US this model is called venture capital - build lots of things knowing lots will fail. It's a model that creates big winners and lots of losers. Ironically of course the other alternative is central planning which is a hallmark of communist economic systems. > estimated to leave Chinese debt to GDP at 117% Japan is 264%, Singapore 168%, the US 129%, France 112%, Canada is 107%, UK 97%, Germany 66%, Australia 22%, Afghanistan 7.4%, Kuwait 2.1%. A debt ratio isn't particularly useful to know on it's own.
ZeroGravitas 2y ago
10-year old ICE car factories idling is a sign of success in their transition to NEV. > China has more than 100 factories with the capacity to build close to 40 million internal combustion engine cars a year. That is roughly twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular.
tsudonym 2y ago
Not a great take - those factories are foreign owned ICE car factories. Hyundai basically underestimated how fast China's EV transition would be. That's good news for China, full speed domestic EV production.

pixelatedindex 2y ago

> it seems they've latched on to something that works better than even democracy and capitalism Wouldn’t this just be plain old fashioned authoritarianism? America can latch on to this too, and we might based on how the Trump admin turns out.

foxglacier 2y ago
No. One required component is plain old fashioned oversupply of labor. America doesn't have that because all employable people are too rich. China also has an oversupply of skilled labor like engineers, in part because the threat of poverty is a strong motivator to get rich. America also lacks that which you can see in capable young people doing arts degrees with no thought to their future income because it doesn't matter - they'll still live comfortably even on minimum wage.
- meiraleal 2y ago
  There is an estimation of 11-30 million undocumented immigrants in the US. The biggest difference is that in the US they are working on fast food jobs, house cleaning, babysitting. Different priorities.
- rangestransform 2y ago
  That’s an easy enough problem to solve if we had the appetite to solve it, why couldn’t we legitimize the roles illegal immigrants currently do right now with a Singapore style migrant worker program?
  - throwaway2037 2y ago
    To be clear, I think that there is an existing, legal migrant worker programme. They do most of the non-automated farm work in Central Valley California. Also, the Singapore system is a bit ugly if you look closely. I hope the US can do better.
  - aurareturn 2y ago
    Probably because the average Chinese is far more skilled than your average illegal immigrant. It's not just raw labor force. It's capable engineers, designers, architects, etc. How is illegal immigration going to solve this?

Dalewyn 2y ago

[flagged]

meiraleal 2y ago
> Basically, Chinese government wants a bigass factory and they will get a bigass factory because literally fuck you. And what's the difference from the US government when it wants a bigass factory? Isn't the difference that the US also wanted China to build bigass factories? They got too good at that.
- Dalewyn 2y ago
  [flagged]
  - chii 2y ago
    not just that, but the fact that the US gov't does hold elections means that what they do generally is in line with the people. At this moment, what the chinese gov't is doing is _also_ (presumably) in line with their people's wishes - after all, factories and exports means jobs and economic growth. It remains to be seen if this continues to be in the face of a potential war, tariffs, or some other external shock.
XorNot 2y ago
No, it's when an authoritarian government wants something they'll get it. And by get it I mean "they'll take your house, ignore any local environment concerns and possibly just demolish entire villages and generational livelihoods". Everyone seems to have some "oh how great it is they just get things done" as though they haven't diligently turned up to complain about some development application of the local council. Yeah, sunshine and rainbows I suppose provided you're thousands of miles away.
- Dalewyn 2y ago
  [flagged]
- 2y ago

fyrn_ 2y ago

Efficient yes, generates good quality of life for the average citizen? Not as much. Plenty the west can learn from China on how to do large public works though.

coliveira 2y ago
Quality of life for average citizen improved must faster in China that in the US during the last 40 years.