14 ms·

Everything you know about China is wrong

56 points by tytso 14y ago

OllieJones 14y ago
Here's a contrarian piece on the Chinese personal savings rate: no organized retirement benefits means all kinds of hiding of assets. http://brontecapital.blogspot.com/2012/06/macroeconomics-of-chinese-kleptocracy.html http://brontecapital.blogspot.com/2012/06/macroeconomics-of-...
- nekojima 14y ago
  If anything, that piece probably understates the problems mentioned. Though there has been recent moves to provide pension schemes for urban and rural workers, even if the programs are underfunded, it still covers a huge portion of the population, where before it was mostly urban and patch-work & underfunded at that. http://www.economist.com/node/21560274 http://www.economist.com/node/21560274
- 001sky 14y ago
  Longevity in China is increasing rapidly and the one-child policy results in a grandchild potentially having four grandparents to look after. The “four grandparent policy” means the elderly cannot expect to be looked after in old age. Four grandparents, one grand-kid makes abandoning the old-folk looks easy and near certain. Nor can the elderly rely on a welfare state to look after them. There is no welfare state. So the Chinese save. Unless they save they will starve in old age. This has driven savings levels sometimes north of fifty percent of GDP. Asian savings rates have been high through all the key industrializations (Japan, Korea, Singapore etc). However Chinese savings rates are over double other Asian savings rates – this is the highest savings rate in history and the main cause is the one-child policy. - Summary of the argument
  - vorg 14y ago
    > Four grandparents, one grand-kid Under present regulations, if two people marry, who are both "only children", then they can have two children. So four grandparents means two grandkids. The one-child policy is slowly changing into a two-child policy, via the slow rollout of many exemptions. I'm guessing the policy will morph into a complete two-child policy one day (though never completely disbanded because the National Family Control Administration workers will want keep their jobs).
- eli_gottlieb 14y ago
  You know, people really ought to listen to what the early capitalists and anti-capitalists said about overproduction more often. It's the never-solved problem of capitalism. EDIT: Thanks downvoters. I hope you enjoy your ever-falling profitability, your unsold and unsaleable goods, your deflating currency, your rising indebtedness as the real value of nominally-denominated debts increases, your unemployment crises.... All of it. Keep downmodding; share and enjoy!
  - dredmorbius 14y ago
    Your post would be slightly more illuminating if you made more specific reference to whom you're referring to specifically, and where they commented on overproduction. Perhaps also a bit of the substance of what was said. Until the industrial age was moderately advanced, overproduction wasn't particularly much a problem -- most societies alternated between sufficiency and (fairly often, if not more often) insufficiency, especially in food, but also other goods and products. Sometime clarity of exposition beats stridency for illumination.
    - eli_gottlieb 14y ago
      Until the industrial age was moderately advanced, overproduction wasn't particularly much a problem -- most societies alternated between sufficiency and (fairly often, if not more often) insufficiency, especially in food, but also other goods and products. But we're not talking about the early industrial age. We're talking about today. I thought the article was actually lacking in that it didn't mention overproduction. This is the classic bane of industrialized economies: unsold inventory, rising unemployment, falling or negative inflation, falling asset yields, etc. The article describes China gaining the symptoms of overproduction. And, as many writers both pro- and anti-capitalist have noted, it tends to require a solution extrinsic to the market (think of Paul Krugman's "babysitting co-op parable"). To make things profitable again, someone or something has to purchase the excess inventory at some market-clearing price. Nominal private debts also need to be cleared from the market, allowing general price levels to adjust. Now here's the tough bit: overproduction is not the same as recession. Recession comes from malinvestment, and once capital is reallocated to genuinely productive uses it goes away. Some stimulus, especially infrastructure investment, also helps, but recessions are a natural part of the business cycle that end more or less on their own. Society just has to withstand the economic "bad weather". Overproduction crises, however, also known as depressions, don't go away on their own. Apparent malinvestment in an overproduction crisis is only a symptom, not a cause. If I could put forth a hypothesis, the actual cause is that one of the two big pillars of production has gotten way out of price-balance with the other. Those are labor and capital. In a healthy economy, labor is costly and productive, encouraging capital investment to get the most out of limited human labor-power. Capital, in turn, is well-priced for wide distribution and developed, increasing general productivity. Knock out either of these, and you've got problems. If labor is too cheap compared to capital (ie: right now and the Great Depression), then you'll get overproduction: aggregate demand from labor wages won't exist to purchase the products of capital, and they rot. You also get low productivity growth, because it's that much cheaper to just employ humans at menial tasks (see: the service industry) rather than to automate. (As an aside, computing is currently one of the few healthy fields: labor is expensive and capital (ie: FLOPs as well as investment dollars) is cheap, encouraging massive capital investments and productivity growth.) If you knock out capital by making it too expensive or unavailable when labor is strong, you get stagflation. The capital-owning class and the working class bounce between themselves the price shock in the cost of investment or technological capital. So unemployment gets high (because where's the capital to employ people?) while price levels rise in general (because labor and consumers refuse to "take one for the team"). So to get rid of an overproduction crisis, what we actually need to do is increase the cost of labor, which feeds into aggregate demand to purchase down inventory and increase the marginal profitability of capital investments. I'd say the best way to do this is usually by either direct strengthening of workers (ie: allow labor to organize, shorten the work-week, other stuff like that), or by infrastructure investment (which employs laborers as well as yielding positive capital externalities).
giftedbygod 14y ago
Europeans won't really have their pensions too. The same is about broken American SS system. But it is just so much easier to notice problems somewhere else. At least Chinese werent promised any pension so they save. Do Americans think what will happen if their politicians break the promise? Or pay them wii heavly inflated dollars for their benefits? Have they saved? Oh, no they trust the Government. You see how Americans are stupid and Chinese wise? How can you not save trusting that the Government will pay you pension in an old society? Pensions made sense in young societies. They are temperorily phenomenon. Have existed for 60 years. Like communism. Gone!
- newbie12 14y ago
  Yeah, I'd much rather have the 12.4% a year of salary that the US government takes from my paycheck (and from my employer on my behalf). We are already getting cheated on our returns, and the Social Security program is still going off the rails in the next decade. It is going to get much much worse.
  - ixacto 14y ago
    The majority have no fucking idea how to invest their money for retirement, or not to take out 100k of student loans for some no-name private university. Credit card debt is $14.5k/head, student loans will be screwing gen x/y for many years to come. It will be interesting to see how this plays out. http://www.csmonitor.com/Business/new-economy/2012/0609/Credit-card-debt-is-down-but-don-t-cheer http://www.csmonitor.com/Business/new-economy/2012/0609/Cred...
- akgerber 14y ago
  Social insurance in Germany has been around since the 1880s. Social Security has been around since 1935, or nearly 80 years. Social insurance may change in the future, but so long as the elderly still have a vote, they will vote very heavily in favor of maintaining a social insurance program. And if the elderly don't have a vote, the socioeconomic system will have changed so much that merely having "saved" won't fix anything. Likewise, if the dollar has experienced hyperinflation and benefits are worthless, any private savings will be as well.
bsphil 14y ago
Linkbait? I'm pretty sure they do have a few buildings that are made of half styrofoam covered in plaster, and a bridge filled with garbage and covered in rebar and plaster.
loeschg 14y ago
I fully expected this article to say pretty much the exact opposite. That our view of China is "too weak."
tokenadult 14y ago
The author of this piece, Minxin Pei, has been writing about national policy in China for a long time for a variety of publications. I get the sense, from what I remember of his earlier writings, that his own views on issues have been updated by observing the path that China's development has followed since the end of the Cultural Revolution (back when I began studying the Chinese language and Sinology). There are an increasing number of observers who think the current governance and policies of China are unsustainable. I too think much of the gee-whiz reporting about China's "inevitable rise" in the last few years is very reminiscent of overoptimistic predictions of "Japan as Number One" back in the 1980s. Most likely, the more entrenched democracy and ability to criticize the government openly that the United States has as compared to China will help the United States muddle through and continue to be the world's sole superpower. First-generation immigrants from China like Pei will help that process of the United States adjusting to new world realities of the twenty-first century.
- 001sky 14y ago
  China is of a order of magnitude larger than Japan. 1200m vs 120m people. If china modernizes along the lines of Japan pre WWI, it doesn't really matter if they "stall" at some stage. Chineese construction sites look like something out of the movie Contact. The game has been changed. US needs to be paying attention. Technology has increased the ability to "play catch up." On the other hand, its had minimal impact ability to differentiate amongst the more advanced economies.
  - wisty 14y ago
    $7 Trillion GDP, 1344 Million people. $15 Trillion GDP, 312 Million people. When China only catches up to 25% of the US GDP per capita (where Brazil and Russia are), it will overtake the US. The the US will have to boast about its per-capita GDP, which really isn't that good (compared to many other OECD countries, most importantly Canada). I get the impression that a lot of US things go unchallenged (by most Americans) because they are "number 1", so they are obviously doing everything right.
    - 14y ago
quanticle 14y ago
I'm a huge fan of Foreign Policy, but I do think that this article is one of their weaker pieces. It basically boils down to saying, "Well, yes, China looks strong, but it has many internal weaknesses that may bring it down, and therefore we should be careful to plan for a future in which the Communist Party falls." Well, that may be true, but it's also unhelpful. It can be said for any country. I mean, no nation is invincible or omnipotent. Yes, China has flaws in its growth model. But are those flaws large enough to knock down the Chinese Communist Party within the next two decades? I personally don't think so.
- vilius 14y ago
  I wish there was a place, where you could read objective summaries of HN articles. Like yours "Well, yes, China looks strong, but it has many internal weaknesses that may bring it down, and therefore we should be careful to plan for a future in which the Communist Party falls."
  - F_J_H 14y ago
    I'm not sure that is an "objective" summary, and hence the challenge with the type of site/place you are wishing for...
- mhurron 14y ago
  They don't necessarily have to be flaws big enough to bring down the Communist government, they just have to be big enough to bring down their rise as a global power, or at least cause something of a contraction.
- paulsutter 14y ago
  Moreover, even if the Communist party fails (or evolves) hardly means that China will have failed. China will have crises proportionate to their incredible growth rate. But China's strong cultural emphasis on hard work, investment, and planning for the future indicate a strong future for China and the Chinese people. I see more eagerness to find an achilles heel in China than I do blind faith that it will grow or dominate.
deleted 14y ago
[deleted]
JumpCrisscross 14y ago
If China continues as an ascendant power the U.S. will need an offshore balancing presence in Asia-Pacific. If it dramatically implodes, ditto - a reunifying Korean Peninsula and reforming SE Asia, to say nothing of a politically ruptured China, merit our attention. Either way, it seems, the criticism Asia-Pacific pivot appears premature. The only case where it is overshooting is in the case that China stalls and/or enters a period of slow, decades-long decline. Given the nationalist tensions in the South China Sea and the country's addiction to growth for social stability that seems unlikely.
- w1ntermute 14y ago
  > If China continues as an ascendant power the U.S. will need an offshore balancing presence in Asia-Pacific. Isn't that what bases in South Korea & Japan are for?
- skrebbel 14y ago
  Damn, you guys really talk about people and countries like they're pawns on a chess board.
  - legutierr 14y ago
    Maybe queens and bishops, not pawns. But I think you have it backwards. Chess was created to teach tactics and politics, was it not (at least apocryphally)? This way of thinking may be where chess came from, rather than the other way around.
    - skrebbel 14y ago
      Good point! Still, I don't know which is scarier. The fact that even some HN'ers consider countries and peoples things to be molded and manipulated for the country's good, or the fact that this kind of thinking has been such a common idea for so long that a popular game was modeled after it.
stupandaus 14y ago
The thing about China is that outsiders fundamentally do not know the inner workings of the PRC Politboro. In recent years, there have already been major changes in the structure of the system (see: Xi Jinping, Bo Xilai, etc.) that were unforeseen.
batista 14y ago
>In the late 1980s, they feared that Japan was going to economically overtake the United States, yet the crony capitalism, speculative madness, and political corruption evident throughout the 1980s led to the collapse of the Japanese economy in 1991. Crony capitalism, speculative madness, and political corruption? Yes, those things are not prevalent in the US at all... cough dot com bubble, Haliburton, housing bubble, Bush and co, Enron, trillion dollar bailout cough
- batgaijin 14y ago
  I've always been curious about the debt of the Japanese government... http://www.independent.co.uk/news/business/japans-crime-incorporated-the-years-of-the-bubble-economy-lured-japans-yakuza-gangs-to-muscle-into-big-business-terry-mccarthy-in-tokyo-explores-their-corporate-web-1479105.html http://www.independent.co.uk/news/business/japans-crime-inco... http://www.independent.co.uk/news/world/yakuza-settle-bad-debts-with-a-bullet-as-japan-bubble-bursts-1317210.html http://www.independent.co.uk/news/world/yakuza-settle-bad-de...
- VMG 14y ago
  You're not refuting the argument. (http://en.wikipedia.org/wiki/Tu_quoque http://en.wikipedia.org/wiki/Tu_quoque)
danso 14y ago
I'm surprised the OP didn't mention the inevitable demographic shift, as the number of able-bodied citizens drops in comparison to the over-60 population: http://www.guardian.co.uk/world/2012/mar/20/china-next-generation-ageing-population http://www.guardian.co.uk/world/2012/mar/20/china-next-gener... Of course, every modern nation faces this problem. But China has had a particularly aggressive birth control policy, which makes repopulation inherently difficult.
stcredzero 14y ago
> ...two left-leaning think tanks, released a report forecasting that China will have 200 million college graduates by 2030. The report (which also estimates India's progress in creating human capital) paints a grim picture of U.S. decline and demands decisive action. What is the quality of those 200 million college graduates, however? One can liken human capital to architecture and building. A house can look like an impressive fortress of concrete and rebar, while the underlying reality is quite different. Witness the buildings in the earthquake stricken regions of Turkey and Sichuan province that fell down because of cost cutting. Companies can be like this as well. Most large corporations have a façade of solidity while much of the interior is actually made out of fluff, with particular strong structures contained within. In this analogy, good Startups are like little pillboxes or maybe even like tanks. They're all strength. (Or, in William Gibson's words, "all edge.") I spoke at length with another resident of the hacker hostel I'm at. Her parents moved from China, and the family goes back periodically. She also just graduated from Stanford. Her take on the situation there is that there's a minority who relate very much to western tech culture. They view themselves as part of the same extended tribe that the SV tech belongs to. In other words, they view themselves as being like us. They are likely to be an influential and affluent minority, however.

56 points by tytso 14y ago

Here's a contrarian piece on the Chinese personal savings rate: no organized retirement benefits means all kinds of hiding of assets. http://brontecapital.blogspot.com/2012/06/macroeconomics-of-chinese-kleptocracy.html http://brontecapital.blogspot.com/2012/06/macroeconomics-of-...

nekojima 14y ago
If anything, that piece probably understates the problems mentioned. Though there has been recent moves to provide pension schemes for urban and rural workers, even if the programs are underfunded, it still covers a huge portion of the population, where before it was mostly urban and patch-work & underfunded at that. http://www.economist.com/node/21560274 http://www.economist.com/node/21560274
001sky 14y ago
Longevity in China is increasing rapidly and the one-child policy results in a grandchild potentially having four grandparents to look after. The “four grandparent policy” means the elderly cannot expect to be looked after in old age. Four grandparents, one grand-kid makes abandoning the old-folk looks easy and near certain. Nor can the elderly rely on a welfare state to look after them. There is no welfare state. So the Chinese save. Unless they save they will starve in old age. This has driven savings levels sometimes north of fifty percent of GDP. Asian savings rates have been high through all the key industrializations (Japan, Korea, Singapore etc). However Chinese savings rates are over double other Asian savings rates – this is the highest savings rate in history and the main cause is the one-child policy. - Summary of the argument
- vorg 14y ago
  > Four grandparents, one grand-kid Under present regulations, if two people marry, who are both "only children", then they can have two children. So four grandparents means two grandkids. The one-child policy is slowly changing into a two-child policy, via the slow rollout of many exemptions. I'm guessing the policy will morph into a complete two-child policy one day (though never completely disbanded because the National Family Control Administration workers will want keep their jobs).
eli_gottlieb 14y ago
You know, people really ought to listen to what the early capitalists and anti-capitalists said about overproduction more often. It's the never-solved problem of capitalism. EDIT: Thanks downvoters. I hope you enjoy your ever-falling profitability, your unsold and unsaleable goods, your deflating currency, your rising indebtedness as the real value of nominally-denominated debts increases, your unemployment crises.... All of it. Keep downmodding; share and enjoy!
- dredmorbius 14y ago
  Your post would be slightly more illuminating if you made more specific reference to whom you're referring to specifically, and where they commented on overproduction. Perhaps also a bit of the substance of what was said. Until the industrial age was moderately advanced, overproduction wasn't particularly much a problem -- most societies alternated between sufficiency and (fairly often, if not more often) insufficiency, especially in food, but also other goods and products. Sometime clarity of exposition beats stridency for illumination.
  - eli_gottlieb 14y ago
    Until the industrial age was moderately advanced, overproduction wasn't particularly much a problem -- most societies alternated between sufficiency and (fairly often, if not more often) insufficiency, especially in food, but also other goods and products. But we're not talking about the early industrial age. We're talking about today. I thought the article was actually lacking in that it didn't mention overproduction. This is the classic bane of industrialized economies: unsold inventory, rising unemployment, falling or negative inflation, falling asset yields, etc. The article describes China gaining the symptoms of overproduction. And, as many writers both pro- and anti-capitalist have noted, it tends to require a solution extrinsic to the market (think of Paul Krugman's "babysitting co-op parable"). To make things profitable again, someone or something has to purchase the excess inventory at some market-clearing price. Nominal private debts also need to be cleared from the market, allowing general price levels to adjust. Now here's the tough bit: overproduction is not the same as recession. Recession comes from malinvestment, and once capital is reallocated to genuinely productive uses it goes away. Some stimulus, especially infrastructure investment, also helps, but recessions are a natural part of the business cycle that end more or less on their own. Society just has to withstand the economic "bad weather". Overproduction crises, however, also known as depressions, don't go away on their own. Apparent malinvestment in an overproduction crisis is only a symptom, not a cause. If I could put forth a hypothesis, the actual cause is that one of the two big pillars of production has gotten way out of price-balance with the other. Those are labor and capital. In a healthy economy, labor is costly and productive, encouraging capital investment to get the most out of limited human labor-power. Capital, in turn, is well-priced for wide distribution and developed, increasing general productivity. Knock out either of these, and you've got problems. If labor is too cheap compared to capital (ie: right now and the Great Depression), then you'll get overproduction: aggregate demand from labor wages won't exist to purchase the products of capital, and they rot. You also get low productivity growth, because it's that much cheaper to just employ humans at menial tasks (see: the service industry) rather than to automate. (As an aside, computing is currently one of the few healthy fields: labor is expensive and capital (ie: FLOPs as well as investment dollars) is cheap, encouraging massive capital investments and productivity growth.) If you knock out capital by making it too expensive or unavailable when labor is strong, you get stagflation. The capital-owning class and the working class bounce between themselves the price shock in the cost of investment or technological capital. So unemployment gets high (because where's the capital to employ people?) while price levels rise in general (because labor and consumers refuse to "take one for the team"). So to get rid of an overproduction crisis, what we actually need to do is increase the cost of labor, which feeds into aggregate demand to purchase down inventory and increase the marginal profitability of capital investments. I'd say the best way to do this is usually by either direct strengthening of workers (ie: allow labor to organize, shorten the work-week, other stuff like that), or by infrastructure investment (which employs laborers as well as yielding positive capital externalities).

giftedbygod 14y ago

Europeans won't really have their pensions too. The same is about broken American SS system. But it is just so much easier to notice problems somewhere else. At least Chinese werent promised any pension so they save. Do Americans think what will happen if their politicians break the promise? Or pay them wii heavly inflated dollars for their benefits? Have they saved? Oh, no they trust the Government. You see how Americans are stupid and Chinese wise? How can you not save trusting that the Government will pay you pension in an old society? Pensions made sense in young societies. They are temperorily phenomenon. Have existed for 60 years. Like communism. Gone!

newbie12 14y ago
Yeah, I'd much rather have the 12.4% a year of salary that the US government takes from my paycheck (and from my employer on my behalf). We are already getting cheated on our returns, and the Social Security program is still going off the rails in the next decade. It is going to get much much worse.
- ixacto 14y ago
  The majority have no fucking idea how to invest their money for retirement, or not to take out 100k of student loans for some no-name private university. Credit card debt is $14.5k/head, student loans will be screwing gen x/y for many years to come. It will be interesting to see how this plays out. http://www.csmonitor.com/Business/new-economy/2012/0609/Credit-card-debt-is-down-but-don-t-cheer http://www.csmonitor.com/Business/new-economy/2012/0609/Cred...
akgerber 14y ago
Social insurance in Germany has been around since the 1880s. Social Security has been around since 1935, or nearly 80 years. Social insurance may change in the future, but so long as the elderly still have a vote, they will vote very heavily in favor of maintaining a social insurance program. And if the elderly don't have a vote, the socioeconomic system will have changed so much that merely having "saved" won't fix anything. Likewise, if the dollar has experienced hyperinflation and benefits are worthless, any private savings will be as well.

bsphil 14y ago

Linkbait? I'm pretty sure they do have a few buildings that are made of half styrofoam covered in plaster, and a bridge filled with garbage and covered in rebar and plaster.

loeschg 14y ago

I fully expected this article to say pretty much the exact opposite. That our view of China is "too weak."

tokenadult 14y ago

The author of this piece, Minxin Pei, has been writing about national policy in China for a long time for a variety of publications. I get the sense, from what I remember of his earlier writings, that his own views on issues have been updated by observing the path that China's development has followed since the end of the Cultural Revolution (back when I began studying the Chinese language and Sinology). There are an increasing number of observers who think the current governance and policies of China are unsustainable. I too think much of the gee-whiz reporting about China's "inevitable rise" in the last few years is very reminiscent of overoptimistic predictions of "Japan as Number One" back in the 1980s. Most likely, the more entrenched democracy and ability to criticize the government openly that the United States has as compared to China will help the United States muddle through and continue to be the world's sole superpower. First-generation immigrants from China like Pei will help that process of the United States adjusting to new world realities of the twenty-first century.

001sky 14y ago
China is of a order of magnitude larger than Japan. 1200m vs 120m people. If china modernizes along the lines of Japan pre WWI, it doesn't really matter if they "stall" at some stage. Chineese construction sites look like something out of the movie Contact. The game has been changed. US needs to be paying attention. Technology has increased the ability to "play catch up." On the other hand, its had minimal impact ability to differentiate amongst the more advanced economies.
- wisty 14y ago
  $7 Trillion GDP, 1344 Million people. $15 Trillion GDP, 312 Million people. When China only catches up to 25% of the US GDP per capita (where Brazil and Russia are), it will overtake the US. The the US will have to boast about its per-capita GDP, which really isn't that good (compared to many other OECD countries, most importantly Canada). I get the impression that a lot of US things go unchallenged (by most Americans) because they are "number 1", so they are obviously doing everything right.
  - 14y ago

quanticle 14y ago

I'm a huge fan of Foreign Policy, but I do think that this article is one of their weaker pieces. It basically boils down to saying, "Well, yes, China looks strong, but it has many internal weaknesses that may bring it down, and therefore we should be careful to plan for a future in which the Communist Party falls." Well, that may be true, but it's also unhelpful. It can be said for any country. I mean, no nation is invincible or omnipotent. Yes, China has flaws in its growth model. But are those flaws large enough to knock down the Chinese Communist Party within the next two decades? I personally don't think so.

vilius 14y ago
I wish there was a place, where you could read objective summaries of HN articles. Like yours "Well, yes, China looks strong, but it has many internal weaknesses that may bring it down, and therefore we should be careful to plan for a future in which the Communist Party falls."
- F_J_H 14y ago
  I'm not sure that is an "objective" summary, and hence the challenge with the type of site/place you are wishing for...
mhurron 14y ago
They don't necessarily have to be flaws big enough to bring down the Communist government, they just have to be big enough to bring down their rise as a global power, or at least cause something of a contraction.
paulsutter 14y ago
Moreover, even if the Communist party fails (or evolves) hardly means that China will have failed. China will have crises proportionate to their incredible growth rate. But China's strong cultural emphasis on hard work, investment, and planning for the future indicate a strong future for China and the Chinese people. I see more eagerness to find an achilles heel in China than I do blind faith that it will grow or dominate.

deleted 14y ago

[deleted]

JumpCrisscross 14y ago

If China continues as an ascendant power the U.S. will need an offshore balancing presence in Asia-Pacific. If it dramatically implodes, ditto - a reunifying Korean Peninsula and reforming SE Asia, to say nothing of a politically ruptured China, merit our attention. Either way, it seems, the criticism Asia-Pacific pivot appears premature. The only case where it is overshooting is in the case that China stalls and/or enters a period of slow, decades-long decline. Given the nationalist tensions in the South China Sea and the country's addiction to growth for social stability that seems unlikely.

w1ntermute 14y ago
> If China continues as an ascendant power the U.S. will need an offshore balancing presence in Asia-Pacific. Isn't that what bases in South Korea & Japan are for?
skrebbel 14y ago
Damn, you guys really talk about people and countries like they're pawns on a chess board.
- legutierr 14y ago
  Maybe queens and bishops, not pawns. But I think you have it backwards. Chess was created to teach tactics and politics, was it not (at least apocryphally)? This way of thinking may be where chess came from, rather than the other way around.
  - skrebbel 14y ago
    Good point! Still, I don't know which is scarier. The fact that even some HN'ers consider countries and peoples things to be molded and manipulated for the country's good, or the fact that this kind of thinking has been such a common idea for so long that a popular game was modeled after it.

stupandaus 14y ago

The thing about China is that outsiders fundamentally do not know the inner workings of the PRC Politboro. In recent years, there have already been major changes in the structure of the system (see: Xi Jinping, Bo Xilai, etc.) that were unforeseen.

batista 14y ago

>In the late 1980s, they feared that Japan was going to economically overtake the United States, yet the crony capitalism, speculative madness, and political corruption evident throughout the 1980s led to the collapse of the Japanese economy in 1991. Crony capitalism, speculative madness, and political corruption? Yes, those things are not prevalent in the US at all... cough dot com bubble, Haliburton, housing bubble, Bush and co, Enron, trillion dollar bailout cough

batgaijin 14y ago
I've always been curious about the debt of the Japanese government... http://www.independent.co.uk/news/business/japans-crime-incorporated-the-years-of-the-bubble-economy-lured-japans-yakuza-gangs-to-muscle-into-big-business-terry-mccarthy-in-tokyo-explores-their-corporate-web-1479105.html http://www.independent.co.uk/news/business/japans-crime-inco... http://www.independent.co.uk/news/world/yakuza-settle-bad-debts-with-a-bullet-as-japan-bubble-bursts-1317210.html http://www.independent.co.uk/news/world/yakuza-settle-bad-de...
VMG 14y ago
You're not refuting the argument. (http://en.wikipedia.org/wiki/Tu_quoque http://en.wikipedia.org/wiki/Tu_quoque)

danso 14y ago

I'm surprised the OP didn't mention the inevitable demographic shift, as the number of able-bodied citizens drops in comparison to the over-60 population: http://www.guardian.co.uk/world/2012/mar/20/china-next-generation-ageing-population http://www.guardian.co.uk/world/2012/mar/20/china-next-gener... Of course, every modern nation faces this problem. But China has had a particularly aggressive birth control policy, which makes repopulation inherently difficult.

stcredzero 14y ago

> ...two left-leaning think tanks, released a report forecasting that China will have 200 million college graduates by 2030. The report (which also estimates India's progress in creating human capital) paints a grim picture of U.S. decline and demands decisive action. What is the quality of those 200 million college graduates, however? One can liken human capital to architecture and building. A house can look like an impressive fortress of concrete and rebar, while the underlying reality is quite different. Witness the buildings in the earthquake stricken regions of Turkey and Sichuan province that fell down because of cost cutting. Companies can be like this as well. Most large corporations have a façade of solidity while much of the interior is actually made out of fluff, with particular strong structures contained within. In this analogy, good Startups are like little pillboxes or maybe even like tanks. They're all strength. (Or, in William Gibson's words, "all edge.") I spoke at length with another resident of the hacker hostel I'm at. Her parents moved from China, and the family goes back periodically. She also just graduated from Stanford. Her take on the situation there is that there's a minority who relate very much to western tech culture. They view themselves as part of the same extended tribe that the SV tech belongs to. In other words, they view themselves as being like us. They are likely to be an influential and affluent minority, however.