6 ms·

What other system of value are you using here? Bottle caps? Nostalgia? While the dollar remains the global reserve currency, this is just a wild theory of trad

What other system of value are you using here? Bottle caps? Nostalgia? While the dollar remains the global reserve currency, this is just a wild theory of trade. If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie? (they clearly already do this everywhere they can)

motorest 1y ago
> If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie? If you pay attention, you'll notice that's what China is doing. For decades, China's GDP growth towered over the US's. Around 2015, China's GDP PPP overtook the US's.
- amilios 1y ago
  but not GDP per capita in purchasing power, in that the US is still far ahead. China's GDP PPP is greater, but with 4 times the population.
- AnIrishDuck 1y ago
  Growth is trivial to achieve when you are starting from zero. My footnote very much alludes to this. This is incidentally what the US did to powers like Britain a century and a half ago. I just find it amusing that in this theory of trade China has found a way to do all the work while the US does nothing and takes all the value. Perhaps all that extra money is not as easy to claim as the OP suggests. Maybe economies are changing and purely physical goods are becoming less valuable...
  - motorest 1y ago
    > Growth is trivial to achieve when you are starting from zero. China currently reports the second highest GDP in the world.
    - AnIrishDuck 1y ago
      > For decades, China's GDP growth towered over the US's. It's much easier to 100x $1k than to 10x $1m. This is not to take away from the achievements of the Chinese economy, which are gargantuan. You just can't linearly extrapolate growth rates.
      - oblio 1y ago
        > It's much easier to 100x $1k than to 10x $1m. That's kind of goes against the conventional wisdom, which largely feels true in my experience, that "the rich get richer". Countries are a bit different, but China looks poised to avoid the middle income trap up to a point, and even if they don't, their "middle income" is a lot more likely to fall somewhere near the Japanese levels, which would make the Chinese economy massively bigger than the US one, by 2050.
        teamcampapp 1y ago
        [dead]
      - motorest 1y ago
        > It's much easier to 100x $1k than to 10x $1m. China's GDP is the second largest in the world, and is around two thirds of US's. China's economy is growing continuously over 5% whereas the US already discussed facing a recession. In some metrics, such as PPP GDP, China already towers over the US. I think you're trying ver hard to diminish the second largest economy of the world at a moment where it's expected to be a few years until it's the single largest.
    - OfficeChad 1y ago
      [dead]
- jorts 1y ago
  China’s GDP growth is great but they will face a huge pain now that they face an unsustainable population decline. They have more people aged over 52 than younger. I empathize with their youth.
  - NhanH 1y ago
    You are claiming that the median age in China is 52 or did I read this wrong? That would be beyond fake news level of statement (for my reading of the meaning) The current median age of China is about 40, which is not great for their context, but a world apart from 52.
  - ReptileMan 1y ago
    The good thing about being authoritarian is that you can easily solve the births issue. The same way there was one child policy, there could be 3 or 4 with penalties for non compliance.
    - jampekka 1y ago
      Highly unlikely CCP would pursue coercive birth policy, or even could do it if it wanted. CCP is extremely powerful but it still has to rely on the consent of the governed. It has to frequently roll back policies due to public outcry. Current birth rate increase policies in China are based mostly on rewarding for births and subsidizing parenting costs.
  - aylmao 1y ago
    China is automating at an impressive rate. Isn’t automation easier to face with population decline than with population increase? I’d imagine young people mind getting replaced by machines more than old people.
    - Ray20 1y ago
      >Isn’t automation easier to face with population decline than with population increase? No? These things do not seem to be connected in any way.
- wqaatwt 1y ago
  > GDP PPP That’s not a particularly meaningful metric.
  - psalaun 1y ago
    No more no less than GDP. They outline different realities, which are all interesting to analyse as a whole.
    - wqaatwt 1y ago
      PPP on its own is a relatively poor metric and only covers a subset of the economy. Then when you have semi closed economy like Russia with unclear currency rates (due to external capital inflow/outflow barriers) and convert the figures to USD you can end up with all sorts of wacky numbers
chabska 1y ago
> What other system of value are you using here? Bottle caps? Nostalgia? A common proxy is "metric tonnes of steel produced" and "metric tonnes of sulfuric acid produced". For China, these have been going up in-line with their GDP growth, whereas for USA they have flatlined since 1980 despite the increase in manufacturing dollar-value output.
- AnIrishDuck 1y ago
  You, of course, can choose these as your units of value. I think it is telling that the rest of the world (particularly the central banks of most countries) have instead chosen USD (well, more specifically US treasuries) as their preferred store of value. Well, at least, for now...
  - biorach 1y ago
    (Not the person you were replying to) You asked a question, they answered in good faith, and now you've dismissed their answer. I would also point out that you're dismissal is actually about a related, but separate issue - you've suddenly started talking about preferred store of value, when your original question was about how to value production. I don't think you're arguing in good faith.
    - AnIrishDuck 1y ago
      I pointed out they were providing ridiculous answers to the question of "how do you measure value" and they doubled down on the ridiculous. You are correct, there are many ways to measure value. However, I don't think picking various commodities as the "true" measure of what is "valuable" is a useful exercise. You may disagree. That's fine! I suggest you put your wisdom to use on the various markets that are set up for this purpose instead of arguing with me. EDIT: they ultimately never reached my main point anyway, which is: regardless of if you measure value in tons of steel or crushed coconut shells, if China could easily obtain that value by assembling this stuff themselves, why export all the inputs to us instead?
      - 1y ago
ozgrakkurt 1y ago
The he issue with this is the dependency direction, if the supplier learns to do the assembly then they don’t need US anymore and can sell the same thing for a fraction of the price. Or if you go to war then all those base manufacturing can be used to manufacture for military
aylmao 1y ago
China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Say a bottle of wine costs $20 in the USA, and in total one bottle is produced and sold for a total of $20 GDP. France makes 10 bottles at $2 each, for a similar GDP of $20. It's cool that the USA manages to "extract more value" from its smaller wine production, but at the end of the day, France has the stronger economy. There's more wine to go around, more resilience to the loss of a bottle, arguably this higher production means more export capacity, more employment, more generation of wine expertise, supply chains, etc. The nominal GDPs might be the same, but the GDP (PPP) of France in this case would be $200 to the USA's $20. [1]: https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/ https://www.cia.gov/the-world-factbook/field/real-gdp-purcha...
- seanmcdirmid 1y ago
  That bottle of wine is going to be at least 400 RMB in China, so I’m not sure how PPP can be argued here. You would need to focus on things that are less expensive in China than the UsA (services mostly, low end goods and food), but things get more expensive quickly if you go for something nice outside of a restaurant. PPP is oddly calculated given that services in china’s case are mostly what is driving its higher value, and that simply means people are paid less (and increasingly they aren’t, which means PPP will shrink closer to GDP unless their automation investments really pay off).
- deaddodo 1y ago
  > China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).
  - aylmao 1y ago
    > Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Is there data that backs up this claim? Is this broadly the case? Cause I do know that local brands have been taking over foreign brands recently. Take for example Apple— sales in China plunged 50%, and reports are pointing at Huawei [1], which amongst other things has been making some impressive high-end phones. Tesla is falling to Chinese brands too [2]. Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc. But regardless of specific examples, I'd imagine the vast majority of consumption in China isn't products of foreign origin given its massive trade surplus [3] and just how much of what it imports are materials, rather than finished consumer goods [4]. [1]: https://www.asiafinancial.com/apple-sales-in-china-plunge-50-huawei-back-on-top-fortune https://www.asiafinancial.com/apple-sales-in-china-plunge-50... [2]: https://carnewschina.com/2025/05/12/teslas-sales-in-china-down-nearly-9-to-28731-in-april/ https://carnewschina.com/2025/05/12/teslas-sales-in-china-do... [3]: https://tradingeconomics.com/china/balance-of-trade https://tradingeconomics.com/china/balance-of-trade [4]: https://oec.world/en/profile/country/chn?selector343id=Import&selector359id=HS4 https://oec.world/en/profile/country/chn?selector343id=Impor...
usrbinbash 1y ago
> What other system of value are you using here? Bottle caps? Nostalgia? The system where "production" means "where has item XYZ actually been made". And for more than 1/3rd of all items, the answer to that question is: China. https://cepr.org/voxeu/columns/china-worlds-sole-manufacturing-superpower-line-sketch-rise https://cepr.org/voxeu/columns/china-worlds-sole-manufacturi...
NobodytheHobbit 1y ago
They do. If you just scroll the ubiquitous online market, that doesn't need to be named, and look for odd brand names. Intentionally odd. Like "sxrpgh" as the brand as a made up placeholder. These brands are named to quickly start a business. Why? It's an aliexpress model. Create as many legal entities as you can and let an economic Darwinism kill the ones you do poorly at and cherry pick your successful businesses. The actual labor is outsourced to the market itself with products produced in southeast Asia by a wholesaler, sent to the market by said contracted wholesaler, and sales handled by the market's fairly much only retailer. It's so automated you really only have to be lucky that consumers pick your product and luck can be bent to will at times. It's a very botnet approach to business. This does expand the approach from flooding the market with cheap goods, to making cheap goods and competing with prices from the middlemen, making less efforted profits using the same approach, but exports the profits out of the US economy. I know this is a unusual framing but that's exactly what is happening. Before a middleman within the economy would extract the wealth from that labor in this way. Why not cut out the middleman if the formula can be followed by anyone? And in the current belligerent state of trade it would politically expedient to do so or at the very least encourage this model if you are adversarial to the US because it works well. Our businesses already proved that.
pjmorris 1y ago
> If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie? As someone else pointed out, they do, under various odd brand names. You make what seems like an obvious point. However, The iPhone is assembled in China for the ballpark cost you mention, and sells for double the $450 price you mention... so they must have reasons to not take the whole pie.

motorest 1y ago

> If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie? If you pay attention, you'll notice that's what China is doing. For decades, China's GDP growth towered over the US's. Around 2015, China's GDP PPP overtook the US's.

amilios 1y ago
but not GDP per capita in purchasing power, in that the US is still far ahead. China's GDP PPP is greater, but with 4 times the population.
AnIrishDuck 1y ago
Growth is trivial to achieve when you are starting from zero. My footnote very much alludes to this. This is incidentally what the US did to powers like Britain a century and a half ago. I just find it amusing that in this theory of trade China has found a way to do all the work while the US does nothing and takes all the value. Perhaps all that extra money is not as easy to claim as the OP suggests. Maybe economies are changing and purely physical goods are becoming less valuable...
- motorest 1y ago
  > Growth is trivial to achieve when you are starting from zero. China currently reports the second highest GDP in the world.
  - AnIrishDuck 1y ago
    > For decades, China's GDP growth towered over the US's. It's much easier to 100x $1k than to 10x $1m. This is not to take away from the achievements of the Chinese economy, which are gargantuan. You just can't linearly extrapolate growth rates.
    - oblio 1y ago
      > It's much easier to 100x $1k than to 10x $1m. That's kind of goes against the conventional wisdom, which largely feels true in my experience, that "the rich get richer". Countries are a bit different, but China looks poised to avoid the middle income trap up to a point, and even if they don't, their "middle income" is a lot more likely to fall somewhere near the Japanese levels, which would make the Chinese economy massively bigger than the US one, by 2050.
      - teamcampapp 1y ago
        [dead]
    - motorest 1y ago
      > It's much easier to 100x $1k than to 10x $1m. China's GDP is the second largest in the world, and is around two thirds of US's. China's economy is growing continuously over 5% whereas the US already discussed facing a recession. In some metrics, such as PPP GDP, China already towers over the US. I think you're trying ver hard to diminish the second largest economy of the world at a moment where it's expected to be a few years until it's the single largest.
  - OfficeChad 1y ago
    [dead]
jorts 1y ago
China’s GDP growth is great but they will face a huge pain now that they face an unsustainable population decline. They have more people aged over 52 than younger. I empathize with their youth.
- NhanH 1y ago
  You are claiming that the median age in China is 52 or did I read this wrong? That would be beyond fake news level of statement (for my reading of the meaning) The current median age of China is about 40, which is not great for their context, but a world apart from 52.
- ReptileMan 1y ago
  The good thing about being authoritarian is that you can easily solve the births issue. The same way there was one child policy, there could be 3 or 4 with penalties for non compliance.
  - jampekka 1y ago
    Highly unlikely CCP would pursue coercive birth policy, or even could do it if it wanted. CCP is extremely powerful but it still has to rely on the consent of the governed. It has to frequently roll back policies due to public outcry. Current birth rate increase policies in China are based mostly on rewarding for births and subsidizing parenting costs.
- aylmao 1y ago
  China is automating at an impressive rate. Isn’t automation easier to face with population decline than with population increase? I’d imagine young people mind getting replaced by machines more than old people.
  - Ray20 1y ago
    >Isn’t automation easier to face with population decline than with population increase? No? These things do not seem to be connected in any way.
wqaatwt 1y ago
> GDP PPP That’s not a particularly meaningful metric.
- psalaun 1y ago
  No more no less than GDP. They outline different realities, which are all interesting to analyse as a whole.
  - wqaatwt 1y ago
    PPP on its own is a relatively poor metric and only covers a subset of the economy. Then when you have semi closed economy like Russia with unclear currency rates (due to external capital inflow/outflow barriers) and convert the figures to USD you can end up with all sorts of wacky numbers

chabska 1y ago

> What other system of value are you using here? Bottle caps? Nostalgia? A common proxy is "metric tonnes of steel produced" and "metric tonnes of sulfuric acid produced". For China, these have been going up in-line with their GDP growth, whereas for USA they have flatlined since 1980 despite the increase in manufacturing dollar-value output.

AnIrishDuck 1y ago
You, of course, can choose these as your units of value. I think it is telling that the rest of the world (particularly the central banks of most countries) have instead chosen USD (well, more specifically US treasuries) as their preferred store of value. Well, at least, for now...
- biorach 1y ago
  (Not the person you were replying to) You asked a question, they answered in good faith, and now you've dismissed their answer. I would also point out that you're dismissal is actually about a related, but separate issue - you've suddenly started talking about preferred store of value, when your original question was about how to value production. I don't think you're arguing in good faith.
  - AnIrishDuck 1y ago
    I pointed out they were providing ridiculous answers to the question of "how do you measure value" and they doubled down on the ridiculous. You are correct, there are many ways to measure value. However, I don't think picking various commodities as the "true" measure of what is "valuable" is a useful exercise. You may disagree. That's fine! I suggest you put your wisdom to use on the various markets that are set up for this purpose instead of arguing with me. EDIT: they ultimately never reached my main point anyway, which is: regardless of if you measure value in tons of steel or crushed coconut shells, if China could easily obtain that value by assembling this stuff themselves, why export all the inputs to us instead?
    - 1y ago

ozgrakkurt 1y ago

The he issue with this is the dependency direction, if the supplier learns to do the assembly then they don’t need US anymore and can sell the same thing for a fraction of the price. Or if you go to war then all those base manufacturing can be used to manufacture for military

aylmao 1y ago

China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Say a bottle of wine costs $20 in the USA, and in total one bottle is produced and sold for a total of $20 GDP. France makes 10 bottles at $2 each, for a similar GDP of $20. It's cool that the USA manages to "extract more value" from its smaller wine production, but at the end of the day, France has the stronger economy. There's more wine to go around, more resilience to the loss of a bottle, arguably this higher production means more export capacity, more employment, more generation of wine expertise, supply chains, etc. The nominal GDPs might be the same, but the GDP (PPP) of France in this case would be $200 to the USA's $20. [1]: https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/ https://www.cia.gov/the-world-factbook/field/real-gdp-purcha...

seanmcdirmid 1y ago
That bottle of wine is going to be at least 400 RMB in China, so I’m not sure how PPP can be argued here. You would need to focus on things that are less expensive in China than the UsA (services mostly, low end goods and food), but things get more expensive quickly if you go for something nice outside of a restaurant. PPP is oddly calculated given that services in china’s case are mostly what is driving its higher value, and that simply means people are paid less (and increasingly they aren’t, which means PPP will shrink closer to GDP unless their automation investments really pay off).
deaddodo 1y ago
> China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).
- aylmao 1y ago
  > Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Is there data that backs up this claim? Is this broadly the case? Cause I do know that local brands have been taking over foreign brands recently. Take for example Apple— sales in China plunged 50%, and reports are pointing at Huawei [1], which amongst other things has been making some impressive high-end phones. Tesla is falling to Chinese brands too [2]. Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc. But regardless of specific examples, I'd imagine the vast majority of consumption in China isn't products of foreign origin given its massive trade surplus [3] and just how much of what it imports are materials, rather than finished consumer goods [4]. [1]: https://www.asiafinancial.com/apple-sales-in-china-plunge-50-huawei-back-on-top-fortune https://www.asiafinancial.com/apple-sales-in-china-plunge-50... [2]: https://carnewschina.com/2025/05/12/teslas-sales-in-china-down-nearly-9-to-28731-in-april/ https://carnewschina.com/2025/05/12/teslas-sales-in-china-do... [3]: https://tradingeconomics.com/china/balance-of-trade https://tradingeconomics.com/china/balance-of-trade [4]: https://oec.world/en/profile/country/chn?selector343id=Import&selector359id=HS4 https://oec.world/en/profile/country/chn?selector343id=Impor...

usrbinbash 1y ago

> What other system of value are you using here? Bottle caps? Nostalgia? The system where "production" means "where has item XYZ actually been made". And for more than 1/3rd of all items, the answer to that question is: China. https://cepr.org/voxeu/columns/china-worlds-sole-manufacturing-superpower-line-sketch-rise https://cepr.org/voxeu/columns/china-worlds-sole-manufacturi...

NobodytheHobbit 1y ago

They do. If you just scroll the ubiquitous online market, that doesn't need to be named, and look for odd brand names. Intentionally odd. Like "sxrpgh" as the brand as a made up placeholder. These brands are named to quickly start a business. Why? It's an aliexpress model. Create as many legal entities as you can and let an economic Darwinism kill the ones you do poorly at and cherry pick your successful businesses. The actual labor is outsourced to the market itself with products produced in southeast Asia by a wholesaler, sent to the market by said contracted wholesaler, and sales handled by the market's fairly much only retailer. It's so automated you really only have to be lucky that consumers pick your product and luck can be bent to will at times. It's a very botnet approach to business. This does expand the approach from flooding the market with cheap goods, to making cheap goods and competing with prices from the middlemen, making less efforted profits using the same approach, but exports the profits out of the US economy. I know this is a unusual framing but that's exactly what is happening. Before a middleman within the economy would extract the wealth from that labor in this way. Why not cut out the middleman if the formula can be followed by anyone? And in the current belligerent state of trade it would politically expedient to do so or at the very least encourage this model if you are adversarial to the US because it works well. Our businesses already proved that.

pjmorris 1y ago

> If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie? As someone else pointed out, they do, under various odd brand names. You make what seems like an obvious point. However, The iPhone is assembled in China for the ballpark cost you mention, and sells for double the $450 price you mention... so they must have reasons to not take the whole pie.