4 ms·

Maybe simultaneous with the crash of the Chinese economy, which was predicted for 40 years now

by singularity2001 8mo ago

torginus 8mo ago
I don't understand why people expect the Chinese economy to crash - they can basically make everything, a lot of which is internationally competitive, they can trade for the resources they don't have with the goods that they do - with basically the whole world dependent on them. They have a huge internal base of poor people, and lifting them to a middle class level will alone fuel domestic demand for years to come. Their biggest problem seems to be they're too good at building stuff, whenever a new category of product pops up, they quickly build up both volume and drive down prices through competition so that they saturate their internal markets (see: housing, EVs)
- Tiktaalik 8mo ago
  > I don't understand why people expect the Chinese economy to crash - they can basically make everything, a lot of which is internationally competitive, they can trade for the resources they don't have with the goods that they do - with basically the whole world dependent on them. One absolutely would have been able to say the same thing about Japan in the 1990s when they were top of the world. So I dunno! Anything's possible!
- acuozzo 8mo ago
  > Their biggest problem[…] is demographic in nature. https://www.populationpyramid.net/china/2024/ https://www.populationpyramid.net/china/2024/
  - chillacy 8mo ago
    Korea has a similar demographic shape, and Japan already passed its peak in 2005ish https://www.populationpyramid.net/japan/2024/ https://www.populationpyramid.net/japan/2024/
    - hirako2000 8mo ago
      Roujin Z shows Japan saw what's coming over 20y ago, already.
  - torginus 8mo ago
    Great website, not going to downplay the problem, but you can check out other countries, and see that a lot of places - particularly in the West - are f*cked. That China is too, is not much of an upside, Honestly its kinda shocking how bad things are going to get, and Im not sure what can be done if anything at this point.
    - pphysch 8mo ago
      China is probably the among the best countries in the world to handle so-called "demographic collapse". Elders are relatively healthy and multigenerational households more common. Leader in robotics. News flash: you don't need a billion hard-working peasants in 2026 to be productive.
      - generativenoise 8mo ago
        People in general don't seem to look at how much "productive" population you need in the real economy to support a given population. Things look pretty fine by those metrics and if the AI claims are to believed about to rapidly get even better. How to motivate and compensate that small number of people in the real economy that supports human welfare is a different question. Also people appear to be blind to the real material limits that really start to be pushed by large populations. You could end up making life materially worse by trying to "fix" the demographics by adding more humans.
  - PeterHolzwarth 8mo ago
    This is a profoundly important - central, even - issue that I am very surprised to not see widely understood or acknowledged. China is in a life-or-death race against time. A good number of their decisions are explained when viewed through this demographic implosion-bomb they are facing.
    - acuozzo 8mo ago
      The same can be argued for Russia. Many-- myself included --believe it's the #1 reason Putin decided to invade the Ukraine as its youth are seen by the Kremlin as "Russian enough".
- ahartmetz 8mo ago
  The Chinese economy is indisputably strong and real, but rumor has it that its reported growth numbers have been inflated in the last couple of years. And why wouldn't they be - there is an autocratic government whose justification is that what they are doing is increasing economic success. No success is not an option.
  - torginus 8mo ago
    Personally I'm less and less inclined to believe in capitalism and money as a concept - we've long past moved the concept of money as universal barter, and into strange and speculative theories about how things ought to be valued, with the most valuable things either emerging from immediately unclear value propositions (impossibly valued companies, high-paid jobs that seemingly dont contribute to society) or artificially created shortages (housing, overpriced infrastructure projects due to government regulation and meddling). If for example, BYD makes a car that's substantially similar between the China and Europe versions, and sells said car for $15k eqv RMB in China, but $30k in the EU, it makes double the revenue for the same 'value'. Even the argument of the EU being generally richer, and thus the car having higher monetary utility doesnt hold - a well-paid EU surgeon wont pay more for it than your average office worker. So I feel money is increasingly a poor proxy for actual value/wealth etc.
    - JackFr 8mo ago
      Much of the difference in the BYD cost is accounted for by a 27% tariff on the cars, transport and increased costs for warranty and compliance certification costs, as well as likely subsidies in the domestic market. Of those, you’ll see that only transport costs are a function of “capitalism” the rest is government.
      - tonyedgecombe 8mo ago
        The UK doesn’t apply tariffs on Chinese cars yet the situation is similar here.
      - torginus 8mo ago
- tim333 8mo ago
  There were worries that they'd issued a lot of debt to build real estate that wasn't needed resulting in ghost towns and people thought prices would fall and the banks lending would collapse but they seem to have managed ok. The Chinese actually seem quite smart at managing their system.
  - dmix 8mo ago
    They managed okay up until now because the Chinese gov takes a ton of revenue directly from their industry. They have very low income taxes on the public and instead make a lot of money from their huge state companies and investments in their manufacturing, industrial, and tech businesses which are still booming. That helps offset the losses from real estate, which they also make money off from land sales. They act more like a giant bank than one that simply taxes and spends. But their fiscal deficits have been growing quite a bit, particularly their local governments and they've had some pretty bad deflationary issues recently. https://rhg.com/research/chinas-harsh-fiscal-winter/ https://rhg.com/research/chinas-harsh-fiscal-winter/
    - tim333 8mo ago
      It seems to me there are two parts to the economy - physical stuff like like buildings, trains, factories, people working etc which you can see if you look around, and the financial side like bank balances, debt which are basically numbers in databases which you can only see on screens and paper. If the financial side goes wrong the government can kind of fix it overnight but printing/lending money, nationalizing bust banks and so on. But the physical takes a long time - you can't suddenly have a lot of high speed rail or trained engineers overnight - it takes decades. The Chinese seem to plan ahead on the physical stuff like houses factories universities and don't worry too much about the financial. The west seems more to worry about regulating the financial side and leave what to build to the market but that seems to have some aspects that can be inefficient. Not that it's just east - west. The US has built loads of infrastructure at times and socialists have had many screw ups. Still there may be something to be said for having some sort of long term plan on the physical side.
    - torginus 8mo ago
- deleted 8mo ago
  [deleted]
- Dumblydorr 8mo ago
  Their biggest problem is demographics. They’re living on borrowed time. There won’t be enough young people to do all this work in future with all the old folks to care for.
refurb 8mo ago
Depends on your definition of crash? Real estate prices dropped 30% blowing up most people’s savings. The debt overhang is slowly bankrupting various companies. Growth is an anemic 5% (should be double for a country with China’s per capita income) and means it will never enter middle income status. Unemployment, especially for grads is very high and the lack of babies or immigration means the worker base will shrink while the demand for social services will skyrocket. Doesn’t seem great to be honest.

Maybe simultaneous with the crash of the Chinese economy, which was predicted for 40 years now

I don't understand why people expect the Chinese economy to crash - they can basically make everything, a lot of which is internationally competitive, they can trade for the resources they don't have with the goods that they do - with basically the whole world dependent on them. They have a huge internal base of poor people, and lifting them to a middle class level will alone fuel domestic demand for years to come. Their biggest problem seems to be they're too good at building stuff, whenever a new category of product pops up, they quickly build up both volume and drive down prices through competition so that they saturate their internal markets (see: housing, EVs)

Tiktaalik 8mo ago
> I don't understand why people expect the Chinese economy to crash - they can basically make everything, a lot of which is internationally competitive, they can trade for the resources they don't have with the goods that they do - with basically the whole world dependent on them. One absolutely would have been able to say the same thing about Japan in the 1990s when they were top of the world. So I dunno! Anything's possible!
acuozzo 8mo ago
> Their biggest problem[…] is demographic in nature. https://www.populationpyramid.net/china/2024/ https://www.populationpyramid.net/china/2024/
- chillacy 8mo ago
  Korea has a similar demographic shape, and Japan already passed its peak in 2005ish https://www.populationpyramid.net/japan/2024/ https://www.populationpyramid.net/japan/2024/
  - hirako2000 8mo ago
    Roujin Z shows Japan saw what's coming over 20y ago, already.
- torginus 8mo ago
  Great website, not going to downplay the problem, but you can check out other countries, and see that a lot of places - particularly in the West - are f*cked. That China is too, is not much of an upside, Honestly its kinda shocking how bad things are going to get, and Im not sure what can be done if anything at this point.
  - pphysch 8mo ago
    China is probably the among the best countries in the world to handle so-called "demographic collapse". Elders are relatively healthy and multigenerational households more common. Leader in robotics. News flash: you don't need a billion hard-working peasants in 2026 to be productive.
    - generativenoise 8mo ago
      People in general don't seem to look at how much "productive" population you need in the real economy to support a given population. Things look pretty fine by those metrics and if the AI claims are to believed about to rapidly get even better. How to motivate and compensate that small number of people in the real economy that supports human welfare is a different question. Also people appear to be blind to the real material limits that really start to be pushed by large populations. You could end up making life materially worse by trying to "fix" the demographics by adding more humans.
- PeterHolzwarth 8mo ago
  This is a profoundly important - central, even - issue that I am very surprised to not see widely understood or acknowledged. China is in a life-or-death race against time. A good number of their decisions are explained when viewed through this demographic implosion-bomb they are facing.
  - acuozzo 8mo ago
    The same can be argued for Russia. Many-- myself included --believe it's the #1 reason Putin decided to invade the Ukraine as its youth are seen by the Kremlin as "Russian enough".
ahartmetz 8mo ago
The Chinese economy is indisputably strong and real, but rumor has it that its reported growth numbers have been inflated in the last couple of years. And why wouldn't they be - there is an autocratic government whose justification is that what they are doing is increasing economic success. No success is not an option.
- torginus 8mo ago
  Personally I'm less and less inclined to believe in capitalism and money as a concept - we've long past moved the concept of money as universal barter, and into strange and speculative theories about how things ought to be valued, with the most valuable things either emerging from immediately unclear value propositions (impossibly valued companies, high-paid jobs that seemingly dont contribute to society) or artificially created shortages (housing, overpriced infrastructure projects due to government regulation and meddling). If for example, BYD makes a car that's substantially similar between the China and Europe versions, and sells said car for $15k eqv RMB in China, but $30k in the EU, it makes double the revenue for the same 'value'. Even the argument of the EU being generally richer, and thus the car having higher monetary utility doesnt hold - a well-paid EU surgeon wont pay more for it than your average office worker. So I feel money is increasingly a poor proxy for actual value/wealth etc.
  - JackFr 8mo ago
    Much of the difference in the BYD cost is accounted for by a 27% tariff on the cars, transport and increased costs for warranty and compliance certification costs, as well as likely subsidies in the domestic market. Of those, you’ll see that only transport costs are a function of “capitalism” the rest is government.
    - tonyedgecombe 8mo ago
      The UK doesn’t apply tariffs on Chinese cars yet the situation is similar here.
    - torginus 8mo ago
tim333 8mo ago
There were worries that they'd issued a lot of debt to build real estate that wasn't needed resulting in ghost towns and people thought prices would fall and the banks lending would collapse but they seem to have managed ok. The Chinese actually seem quite smart at managing their system.
- dmix 8mo ago
  They managed okay up until now because the Chinese gov takes a ton of revenue directly from their industry. They have very low income taxes on the public and instead make a lot of money from their huge state companies and investments in their manufacturing, industrial, and tech businesses which are still booming. That helps offset the losses from real estate, which they also make money off from land sales. They act more like a giant bank than one that simply taxes and spends. But their fiscal deficits have been growing quite a bit, particularly their local governments and they've had some pretty bad deflationary issues recently. https://rhg.com/research/chinas-harsh-fiscal-winter/ https://rhg.com/research/chinas-harsh-fiscal-winter/
  - tim333 8mo ago
    It seems to me there are two parts to the economy - physical stuff like like buildings, trains, factories, people working etc which you can see if you look around, and the financial side like bank balances, debt which are basically numbers in databases which you can only see on screens and paper. If the financial side goes wrong the government can kind of fix it overnight but printing/lending money, nationalizing bust banks and so on. But the physical takes a long time - you can't suddenly have a lot of high speed rail or trained engineers overnight - it takes decades. The Chinese seem to plan ahead on the physical stuff like houses factories universities and don't worry too much about the financial. The west seems more to worry about regulating the financial side and leave what to build to the market but that seems to have some aspects that can be inefficient. Not that it's just east - west. The US has built loads of infrastructure at times and socialists have had many screw ups. Still there may be something to be said for having some sort of long term plan on the physical side.
  - torginus 8mo ago
deleted 8mo ago
[deleted]
Dumblydorr 8mo ago
Their biggest problem is demographics. They’re living on borrowed time. There won’t be enough young people to do all this work in future with all the old folks to care for.

refurb 8mo ago

Depends on your definition of crash? Real estate prices dropped 30% blowing up most people’s savings. The debt overhang is slowly bankrupting various companies. Growth is an anemic 5% (should be double for a country with China’s per capita income) and means it will never enter middle income status. Unemployment, especially for grads is very high and the lack of babies or immigration means the worker base will shrink while the demand for social services will skyrocket. Doesn’t seem great to be honest.