4 ms·

The doubts about the size of the investment in that Wikipedia article are funny. It's a bit like "We cannot afford to invest in education", but the Chinese are

The doubts about the size of the investment in that Wikipedia article are funny. It's a bit like "We cannot afford to invest in education", but the Chinese are saying "We cannot afford not to invest in education" (Famous quotes, it's more about R&D here). China's leadership is probably terrified of falling into the middle-income trap. It might be the biggest issue on their minds right now. At least I am watching from the sidelines, wondering "Are they gonna make it?".

toomuchtodo 2y ago
https://news.ycombinator.com/item?id=41664312 https://news.ycombinator.com/item?id=41664312
refulgentis 2y ago
Me too! My guess is 2031, but it'll feel hollow - Definition of this is 12,000 2011 USD, BLS says thats 17,600 2024 USD. Looking like 2024 closes at a little under 13,000 24 USD. If we calculate out the 6% CCP standard GDP growth rate, it'd take 5 years - GDP is not very likely to grow at the formerly-real 6% per year moving forward. Population peaked, trade is now a tailwind instead of a headwind, GDP per capita at 13,000 is 0.5x Russia and 2.5x India, and we're in year 2 of a deflationary crisis that's barely being held off, if it is, and is characterized by an significant oversupply in housing stock that'll take years to run down. So I'll tack on 2 years, make it 7 years, 2031.
Yeul 2y ago
Education has always been important in Chinese culture.
- PittleyDunkin 2y ago
  Not democratized education, to my understanding. Rural china has never had the sort of broad access to education that exists there now (and is still rapidly developing).
- jpgvm 2y ago
  You could say it's central to their culture. Sort of goes for most Asian cultures, the education of children is something Asian parents will sacrifice greatly for.
  - foobarian 2y ago
    Curious that education is valued so much, but then there are cycles of uprisings where educated people are targeted (Cambodia, Chairman Mao, ..)
    - hnthrowaway0315 2y ago
      It's a bit more complicated than that though.
    - ReptileMan 2y ago
      As always the revolution starts from the competing elites. The culture revolution happened because CCP couldn't allow any form of alternative power centers.
- adventured 2y ago
  That's pretty blatantly false. Mao had a very large number of China's teachers executed during the 1960s, which set the entire nation back two generations in education (at least). The teachers - along with many other enlightened peoples - were murdered for being so called Capitalist intellectuals. Pretending "always" for anything related to China, you can be sure their elaborate history will prove you wrong.
corimaith 2y ago
Pretty sure clean manafacturing is still part of that middle income job. Those millions of unemployed youth didn't go through the gaokao to work in a BYD factory, it's the "useless" white collar jobs that everyone wants but there is short supply of. And the often unpredictable clampdowns on those industries don't help.
petesergeant 2y ago
> China's leadership is probably terrified of falling into the middle-income trap I feel like it's more of a case of how do they get out of it, rather than avoid falling into it, at this point. The demographics are shit and the country isn't particularly attractive to immigrants, nor (unlike, America and Canada, and honestly most of Europe, despite what the right wing say) do they really have room for more immigrants.
- coliveira 2y ago
  The whole "demographics" scare about China is clear nonsense. Even if that becomes true, it will take 25 to 30 years for it to manifest, because China consumption is in a growing curve. The current young working population is more educated and productive than ever. And China still has hundreds of millions of people to be included into its consumer and labor market in the poorest areas. So don't hold your breath about a "demographics" problem for China, it will take decades for this to happen if ever at all.
  - petesergeant 2y ago
    > The whole "demographics" scare about China is clear nonsense I mean it's probably fair to call it the consensus opinion, so a claim as extraordinary as calling it "clear nonsense" probably requires extraordinary proof?
    - fspeech 2y ago
      One needs to disaggregate data to get a full picture of what happens in China due to the rapid evolution of things. Forty years ago very few people went to college. It's a big bulge of population that are not going to upgrade their skills (mostly retired but things like learning to drive or using the popular apps are still difficult for most who have not already learned). They are also very used to hardship and will consume little even if they come into unexpected wealth (say from housing). The demographic shift will not play out as everywhere else.
      - 2y ago
maxglute 2y ago
> terrified of falling into the middle-income trap Not really, there's 2 middle income traps: 1) the ACTUAL trap / thesis - countries fail to educate / upgrade workforce enough to move up supply chains to generate high income employment to bring up income, the TRAP is lack of advancement, to which PRC is basically the LEAST trapped country in the world, pursuing industrial development in all high end sectors. Issues is PRC being highly developed in every sector = still not enough high end jobs for 1.4B people. 2) the economic middle income trap, for last few years, PRC consisitly a foreskin (low single %) below world bank definition/revision of upper income, people need to ask why that is? IMO it's because PRC DOESN'T WANT to be definitionally upper income to play up developing status, and lose related perks. It would be absolutely trivial for PRC to revaluate FX by a few % and cross nominal USD high income and take a huge victory lap, but they don't. The reality is "hiding strength" is going ot be increasingly hard with time - PRC per capita is being brought down by 600m low income. The TLDR is bottom 4-5 quantiles, i.e. 40% very undereducated population who got left behind during modernization and generates about only ~5% of GDP. They skew old and will eventually phase out of stats (die) in next couple decades, and numerator is going to be increasingly high educated new cohorts working high income. Low/high income divide is largely generational, the future educated populations are going to be in disproportionately high income high skill jobs i.e. PRC is replacing 200m subsistent farmers with 200m tertiary workforce. If most of the 2 bottom quantile dies by 2050, PRC per capita will nearly double to medium high income simply doing nothing, with PPP to rival upper-high income if they hold on to production. Short of unforseen catastrophe, it's statistic inevitability. That's without mentioning FX, i.e. PRC securing enough economic clout = eventually ability to flex the FX lever to multiply nominal GDP faster than actual growth.
- saturn8601 2y ago
  600m generating 5% of GDP sounds crazy. Any source to back that up? What % of people are doing manufacturing? The American bull case is that China collapses because these 600m people die off and take their lead in manufacturing with them meanwhile the US is already at the top and continues to absorb the best people in the world hopefully sustaining their growth.
  - 2y ago

toomuchtodo 2y ago

https://news.ycombinator.com/item?id=41664312 https://news.ycombinator.com/item?id=41664312

refulgentis 2y ago

Me too! My guess is 2031, but it'll feel hollow - Definition of this is 12,000 2011 USD, BLS says thats 17,600 2024 USD. Looking like 2024 closes at a little under 13,000 24 USD. If we calculate out the 6% CCP standard GDP growth rate, it'd take 5 years - GDP is not very likely to grow at the formerly-real 6% per year moving forward. Population peaked, trade is now a tailwind instead of a headwind, GDP per capita at 13,000 is 0.5x Russia and 2.5x India, and we're in year 2 of a deflationary crisis that's barely being held off, if it is, and is characterized by an significant oversupply in housing stock that'll take years to run down. So I'll tack on 2 years, make it 7 years, 2031.

Yeul 2y ago

Education has always been important in Chinese culture.

PittleyDunkin 2y ago
Not democratized education, to my understanding. Rural china has never had the sort of broad access to education that exists there now (and is still rapidly developing).
jpgvm 2y ago
You could say it's central to their culture. Sort of goes for most Asian cultures, the education of children is something Asian parents will sacrifice greatly for.
- foobarian 2y ago
  Curious that education is valued so much, but then there are cycles of uprisings where educated people are targeted (Cambodia, Chairman Mao, ..)
  - hnthrowaway0315 2y ago
    It's a bit more complicated than that though.
  - ReptileMan 2y ago
    As always the revolution starts from the competing elites. The culture revolution happened because CCP couldn't allow any form of alternative power centers.
adventured 2y ago
That's pretty blatantly false. Mao had a very large number of China's teachers executed during the 1960s, which set the entire nation back two generations in education (at least). The teachers - along with many other enlightened peoples - were murdered for being so called Capitalist intellectuals. Pretending "always" for anything related to China, you can be sure their elaborate history will prove you wrong.

corimaith 2y ago

Pretty sure clean manafacturing is still part of that middle income job. Those millions of unemployed youth didn't go through the gaokao to work in a BYD factory, it's the "useless" white collar jobs that everyone wants but there is short supply of. And the often unpredictable clampdowns on those industries don't help.

petesergeant 2y ago

> China's leadership is probably terrified of falling into the middle-income trap I feel like it's more of a case of how do they get out of it, rather than avoid falling into it, at this point. The demographics are shit and the country isn't particularly attractive to immigrants, nor (unlike, America and Canada, and honestly most of Europe, despite what the right wing say) do they really have room for more immigrants.

coliveira 2y ago
The whole "demographics" scare about China is clear nonsense. Even if that becomes true, it will take 25 to 30 years for it to manifest, because China consumption is in a growing curve. The current young working population is more educated and productive than ever. And China still has hundreds of millions of people to be included into its consumer and labor market in the poorest areas. So don't hold your breath about a "demographics" problem for China, it will take decades for this to happen if ever at all.
- petesergeant 2y ago
  > The whole "demographics" scare about China is clear nonsense I mean it's probably fair to call it the consensus opinion, so a claim as extraordinary as calling it "clear nonsense" probably requires extraordinary proof?
  - fspeech 2y ago
    One needs to disaggregate data to get a full picture of what happens in China due to the rapid evolution of things. Forty years ago very few people went to college. It's a big bulge of population that are not going to upgrade their skills (mostly retired but things like learning to drive or using the popular apps are still difficult for most who have not already learned). They are also very used to hardship and will consume little even if they come into unexpected wealth (say from housing). The demographic shift will not play out as everywhere else.
    - 2y ago

maxglute 2y ago

> terrified of falling into the middle-income trap Not really, there's 2 middle income traps: 1) the ACTUAL trap / thesis - countries fail to educate / upgrade workforce enough to move up supply chains to generate high income employment to bring up income, the TRAP is lack of advancement, to which PRC is basically the LEAST trapped country in the world, pursuing industrial development in all high end sectors. Issues is PRC being highly developed in every sector = still not enough high end jobs for 1.4B people. 2) the economic middle income trap, for last few years, PRC consisitly a foreskin (low single %) below world bank definition/revision of upper income, people need to ask why that is? IMO it's because PRC DOESN'T WANT to be definitionally upper income to play up developing status, and lose related perks. It would be absolutely trivial for PRC to revaluate FX by a few % and cross nominal USD high income and take a huge victory lap, but they don't. The reality is "hiding strength" is going ot be increasingly hard with time - PRC per capita is being brought down by 600m low income. The TLDR is bottom 4-5 quantiles, i.e. 40% very undereducated population who got left behind during modernization and generates about only ~5% of GDP. They skew old and will eventually phase out of stats (die) in next couple decades, and numerator is going to be increasingly high educated new cohorts working high income. Low/high income divide is largely generational, the future educated populations are going to be in disproportionately high income high skill jobs i.e. PRC is replacing 200m subsistent farmers with 200m tertiary workforce. If most of the 2 bottom quantile dies by 2050, PRC per capita will nearly double to medium high income simply doing nothing, with PPP to rival upper-high income if they hold on to production. Short of unforseen catastrophe, it's statistic inevitability. That's without mentioning FX, i.e. PRC securing enough economic clout = eventually ability to flex the FX lever to multiply nominal GDP faster than actual growth.

saturn8601 2y ago
600m generating 5% of GDP sounds crazy. Any source to back that up? What % of people are doing manufacturing? The American bull case is that China collapses because these 600m people die off and take their lead in manufacturing with them meanwhile the US is already at the top and continues to absorb the best people in the world hopefully sustaining their growth.
- 2y ago