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The "China collapse" claim is indeed not new, and it is as wrong as ever. The demographic situation is manageable, especially given how the generation entering

The "China collapse" claim is indeed not new, and it is as wrong as ever. The demographic situation is manageable, especially given how the generation entering retirement are factory workers, who are being replaced by automation on a massive scale. The generation which enters the labor market has a much higher number of college degrees. Real estate bubble doesn't concern most Chinese citizens, but only those who used it to speculate, despite being warned by Xi not to[1]. If you own a house for living inside, you don't need to care if its resale value goes up or down. Still, deflating the housing bubble was painful, but China managed to grow the economy through this anyway. About war, I don't think so, at least not in the next 4 years. Trump and several Republican leaders made it clear already that they don't want to defend Taiwan, so the Taiwanese government will likely refrain from things which could trigger armed conflict. Even if things escalated, a naval blockade would be more likely, and the US public largely doesn't support entering into direct conflict over that[2]. [1] https://www.scmp.com/business/article/2116621/what-president-xis-congress-message-means-chinas-housing-market https://www.scmp.com/business/article/2116621/what-president... [2] https://globalaffairs.org/research/public-opinion-survey/taiwan-americans-favor-status-quo https://globalaffairs.org/research/public-opinion-survey/tai...

seanmcdirmid 2y ago
> Still, deflating the housing bubble was painful, but China managed to grow the economy through this anyway. China hasn't deflated its housing bubble yet. Yes, real estate turn over has basically ground to a standstill, but that doesn't mean many have been forced to take a loss yet. The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens. Still, the US is screwed since China is basically going to own automation via its current investments (along with investments in EVs, green energy, and HSR). If they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment), they have everything in the bag, so to speak.
- chithanh 2y ago
  > The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens While there are still risks for the economy from real estate, I think China has shown the ability to manage them. For one, they were able to slow-walk the Evergrande collapse and move developments to state-owned companies. If it should become necessary again they will repeat the process. Besides that, new Hukou regulations are planned to encourage rural migrants to move to urban areas with housing oversupply. > they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment) China can produce 65nm chipmaking gear domestically which is like 20 years behind the West. Even if they develop at twice the speed, this means in 10 years they will be where the West is today. The question is rather, can the West keep the rate of progress? ASML has already warned that lost business from sanctions will impact their ability to invest in R&D.
  - seanmcdirmid 2y ago
    Rural migrants can’t afford $1 million for a one bedroom flat in Shanghai or Beijing, or a $2-300k one bedroom in a tier 88 city. This bubble is going to pop, and real estate in China will stabilize to more affordable Japanese housing prices (well, that’s my prediction). Just letting the real estate companies fail isn’t going to much, everyone knew Evergrande was doomed back in 2012 when that trader in HK was banned for shorting it.

seanmcdirmid 2y ago

> Still, deflating the housing bubble was painful, but China managed to grow the economy through this anyway. China hasn't deflated its housing bubble yet. Yes, real estate turn over has basically ground to a standstill, but that doesn't mean many have been forced to take a loss yet. The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens. Still, the US is screwed since China is basically going to own automation via its current investments (along with investments in EVs, green energy, and HSR). If they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment), they have everything in the bag, so to speak.

chithanh 2y ago
> The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens While there are still risks for the economy from real estate, I think China has shown the ability to manage them. For one, they were able to slow-walk the Evergrande collapse and move developments to state-owned companies. If it should become necessary again they will repeat the process. Besides that, new Hukou regulations are planned to encourage rural migrants to move to urban areas with housing oversupply. > they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment) China can produce 65nm chipmaking gear domestically which is like 20 years behind the West. Even if they develop at twice the speed, this means in 10 years they will be where the West is today. The question is rather, can the West keep the rate of progress? ASML has already warned that lost business from sanctions will impact their ability to invest in R&D.
- seanmcdirmid 2y ago
  Rural migrants can’t afford $1 million for a one bedroom flat in Shanghai or Beijing, or a $2-300k one bedroom in a tier 88 city. This bubble is going to pop, and real estate in China will stabilize to more affordable Japanese housing prices (well, that’s my prediction). Just letting the real estate companies fail isn’t going to much, everyone knew Evergrande was doomed back in 2012 when that trader in HK was banned for shorting it.