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Rising power challenges the fading imperial hegemony. In this case, CNY displacing USD.

by ForHackernews 2mo ago

baxtr 2mo ago
Is China still rising or already in decline?
- ForHackernews 2mo ago
  Relative to the US or Europe? I think you know the answer to that.
  - edgyquant 2mo ago
    Relative to the US it’s not a straightforward answer but China is definitely not rising in the way it was a decade ago and has been outpaced by the us
    - myrmidon 2mo ago
      China has a massive demographic problem in the near future (after 2040ish), and it is extremely unlikely (IMO) that it is going to catch up/surpass the US in GDP per capita within the next decades. But its relative GDP growth has been higher than the US for decades, is higher stil and is probably going to stay higher for years: https://ourworldindata.org/grapher/real-gdp-growth?country=USA~CHN https://ourworldindata.org/grapher/real-gdp-growth?country=U...
      - edgyquant 2mo ago
        But the gap between the us and China in terms of GDP has widened in recent years making it look like China will never surpass the us
        myrmidon 2mo ago
        Never surpass in what exactly? If you look at absolute numbers (https://ourworldindata.org/grapher/gdp-worldbank-constant-usd?tab=line&country=USA~CHN&mapSelect=USA~CHN https://ourworldindata.org/grapher/gdp-worldbank-constant-us...), it seems likely that China will surpass the US economy pretty soon (they're a lot more people though, so per-capita is much worse). Personally I think its most likely that chinese GDP will be larger than US GDP within 2035, but that the median citizen is NOT going to catch up to US standards in the next 50 years. And their whole society will run into the exact same problems that many western countries are dealing with already (increasing fraction of retirees), so I'd be very careful with extrapolating their currently superior growth rate past 2040 or so.
  - tokai 2mo ago
    The answer is really not a clear cut as you assume any longer.
- Markoff 2mo ago
  their yough unemployment rate sure is rising, it sure ain't great to be young Chinese looking for job now https://www.nytimes.com/2023/08/15/business/china-youth-unemployment.html https://www.nytimes.com/2023/08/15/business/china-youth-unem... https://www.nippon.com/en/in-depth/d01203/ https://www.nippon.com/en/in-depth/d01203/ https://www.reddit.com/r/dataisbeautiful/comments/1pedov5/oc_the_rise_of_youth_unemployment_in_china/ https://www.reddit.com/r/dataisbeautiful/comments/1pedov5/oc... also there are salary paycuts for people who already have work, my Chinese clients tried this, but not gonna accept it, I will rather lose such client than lower my rate, I am losing money by not increasing my rates over many years already despite huge EU cummulative inflation and EU salaries growth by my experience visiting country after almost 10 years last year just by looking at salaries, restaurant prices, real estate prices/rent their economy seems to be stagnating in last 10 years, restaurant meal cost pretty much same as 10 years ago, same goes for entry level salaries like waitress, cook and other you can see in street they are getting stronger overall, though doesn't seem like middle class is benefiting from it, my CN family bought apartment many years ago and they would have problem to sell it for same price, let alone make any profit on it
  - WarmWash 2mo ago
    Yeah, but have you seen their EVs that cost $30,000 and have fold out kitchens and a movie theater in the rear?
    - hvb2 2mo ago
      I'm not sure that's relevant if you aren't paid so might self to feed yourself. Also 30k USD is a lot of money everywhere except for in the US
curuinor 2mo ago
CNY displacing USD would entail allowing people outside China to buy really significant quantities of CNY-denominated financial products. This would entail CNY/USD changing so CNY is more expensive, because the default currency for financial products currently existing is USD. Which would slap a corresponding huge price increase with 0 increase in quality to all Chinese export. Which would murder Chinese manufacturing export. Which would entail laying off some grand proportion of an industry that employs 5% of the _human_ race. Which is why they're not gonna do that.
- pocksuppet 2mo ago
  Same thing that happened to USD, right? Once the USA stopped having to actually manufacture things to get money, it stopped actually manufacturing things.
- WarmWash 2mo ago
  China is step by step learning that communism actually sucks and doesn't work. Unless you can have a super intelligence that can monitor every aspect of everything all the time to ensure optimal decisions. Hmmmm...
quickthrowman 2mo ago
I’ll believe it when I see it, there’s a spread between onshore and offshore yuan exchange rates due to currency manipulation. It becomes harder to manipulate a currency as more of it is created, and AFAIK countries are not loading up on Chinese govt debt, but I may just be unaware? The USD hegemony isn’t because of oil, it’s because everyone wants dollar-denominated assets. Treasury bonds, US real estate, US equities, etc. Possibly Chinese exports could soak up some of the yuan demand?
ImHereToVote 2mo ago
I don't think China wants to make the CNY the reserve currency because it would decimate China as a manufacturing hub. They prefer China to be Jakob to the U.S. being Esau. The red lentil soup can be quite bitter.

Rising power challenges the fading imperial hegemony. In this case, CNY displacing USD.

baxtr 2mo ago

Is China still rising or already in decline?

ForHackernews 2mo ago
Relative to the US or Europe? I think you know the answer to that.
- edgyquant 2mo ago
  Relative to the US it’s not a straightforward answer but China is definitely not rising in the way it was a decade ago and has been outpaced by the us
  - myrmidon 2mo ago
    China has a massive demographic problem in the near future (after 2040ish), and it is extremely unlikely (IMO) that it is going to catch up/surpass the US in GDP per capita within the next decades. But its relative GDP growth has been higher than the US for decades, is higher stil and is probably going to stay higher for years: https://ourworldindata.org/grapher/real-gdp-growth?country=USA~CHN https://ourworldindata.org/grapher/real-gdp-growth?country=U...
    - edgyquant 2mo ago
      But the gap between the us and China in terms of GDP has widened in recent years making it look like China will never surpass the us
      - myrmidon 2mo ago
        Never surpass in what exactly? If you look at absolute numbers (https://ourworldindata.org/grapher/gdp-worldbank-constant-usd?tab=line&country=USA~CHN&mapSelect=USA~CHN https://ourworldindata.org/grapher/gdp-worldbank-constant-us...), it seems likely that China will surpass the US economy pretty soon (they're a lot more people though, so per-capita is much worse). Personally I think its most likely that chinese GDP will be larger than US GDP within 2035, but that the median citizen is NOT going to catch up to US standards in the next 50 years. And their whole society will run into the exact same problems that many western countries are dealing with already (increasing fraction of retirees), so I'd be very careful with extrapolating their currently superior growth rate past 2040 or so.
- tokai 2mo ago
  The answer is really not a clear cut as you assume any longer.
Markoff 2mo ago
their yough unemployment rate sure is rising, it sure ain't great to be young Chinese looking for job now https://www.nytimes.com/2023/08/15/business/china-youth-unemployment.html https://www.nytimes.com/2023/08/15/business/china-youth-unem... https://www.nippon.com/en/in-depth/d01203/ https://www.nippon.com/en/in-depth/d01203/ https://www.reddit.com/r/dataisbeautiful/comments/1pedov5/oc_the_rise_of_youth_unemployment_in_china/ https://www.reddit.com/r/dataisbeautiful/comments/1pedov5/oc... also there are salary paycuts for people who already have work, my Chinese clients tried this, but not gonna accept it, I will rather lose such client than lower my rate, I am losing money by not increasing my rates over many years already despite huge EU cummulative inflation and EU salaries growth by my experience visiting country after almost 10 years last year just by looking at salaries, restaurant prices, real estate prices/rent their economy seems to be stagnating in last 10 years, restaurant meal cost pretty much same as 10 years ago, same goes for entry level salaries like waitress, cook and other you can see in street they are getting stronger overall, though doesn't seem like middle class is benefiting from it, my CN family bought apartment many years ago and they would have problem to sell it for same price, let alone make any profit on it
- WarmWash 2mo ago
  Yeah, but have you seen their EVs that cost $30,000 and have fold out kitchens and a movie theater in the rear?
  - hvb2 2mo ago
    I'm not sure that's relevant if you aren't paid so might self to feed yourself. Also 30k USD is a lot of money everywhere except for in the US

curuinor 2mo ago

CNY displacing USD would entail allowing people outside China to buy really significant quantities of CNY-denominated financial products. This would entail CNY/USD changing so CNY is more expensive, because the default currency for financial products currently existing is USD. Which would slap a corresponding huge price increase with 0 increase in quality to all Chinese export. Which would murder Chinese manufacturing export. Which would entail laying off some grand proportion of an industry that employs 5% of the _human_ race. Which is why they're not gonna do that.

pocksuppet 2mo ago
Same thing that happened to USD, right? Once the USA stopped having to actually manufacture things to get money, it stopped actually manufacturing things.
WarmWash 2mo ago
China is step by step learning that communism actually sucks and doesn't work. Unless you can have a super intelligence that can monitor every aspect of everything all the time to ensure optimal decisions. Hmmmm...

quickthrowman 2mo ago

I’ll believe it when I see it, there’s a spread between onshore and offshore yuan exchange rates due to currency manipulation. It becomes harder to manipulate a currency as more of it is created, and AFAIK countries are not loading up on Chinese govt debt, but I may just be unaware? The USD hegemony isn’t because of oil, it’s because everyone wants dollar-denominated assets. Treasury bonds, US real estate, US equities, etc. Possibly Chinese exports could soak up some of the yuan demand?

ImHereToVote 2mo ago

I don't think China wants to make the CNY the reserve currency because it would decimate China as a manufacturing hub. They prefer China to be Jakob to the U.S. being Esau. The red lentil soup can be quite bitter.