4 ms·

yes just like 'murica's debt. command economies don't play by any given set of rules. they make their own rules. as long as there is demand in the world for chi

by x5n1 11y ago

yes just like 'murica's debt. command economies don't play by any given set of rules. they make their own rules. as long as there is demand in the world for chinese goods, the chinese economy will continue to function.

fennecfoxen 11y ago
I don't know how much that's true. China's current economy is built on the impact of its 1-child policy on its historical culture of children taking care of elderly parents: that's really really hard to do now, so everyone saves like crazy, and the government uses those savings (in state-run banks) to finance state-run industries with below-zero real interest rates, which are of course wildly profitable, and the plutocratic elite splurges on its take of the surplus. But they really need to watch out for a number of shocks, of the whole scheme could fall apart badly and spark social unrest. In particular, inflation (eating away at those savings) sometimes leads to riots, and their monetary policy has been very extreme for many many years. (In different ways than US policies, but still, makes "Helicopter" Ben Bernanke's interventions look like the amateur leagues.) Economists continue to worry and it's not 100% clear that China will continue to function after a real economic crisis. They might, but it's really hard to tell (they're so opaque it makes detailed analysis impossible).
- x5n1 11y ago
  What if I was to tell you that all the money that you deposit in the banks is not used for anything. The banks borrow money using a credit lending window from the central banks. They can get as much money as they want. Money doesn't actually exist. It's a virtual method of coercion to get people to do things. As long as there are things for Chinese people to do, the Chinese economy will keep running. As long as China can source raw materials and sell them for a markup to someone else, the Chinese economy will keep running. At the end of the day even if robotics threatens the Chinese economy, the government can step in and stop robotics from destroying jobs. That's the level of control they have. Any problems that they will have economically, everyone else will have first. Most of these pundits that run Western economies follow rules that they themselves make up, and then use those rules to control other people. But China don't play these games homie, China knows the game homie. China make its own rules.
  - ZoZoBee 11y ago
    China's one child policy has created a Demographic nightmare about to be realized.
  - jerf 11y ago
    China may make its own rules, but reality gets a veto. I'm perfectly even-handed with that assessment... it 100% applies to any economy, of any form.
    - x5n1 11y ago
      > but reality gets a veto. Are the Chinese working as hard as American workers? Are they productive people that produce a lot of economic output? If the answer is yes, then there is nothing reality can do for you.
      - oldmanjay 11y ago
        That's so simplified and dismissive that I fear it's missing the point about "reality" here. Or I'm missing what you think is the point, which I admit is possible. I'm out of my depth on economic issues.
      - happyscrappy 11y ago
        Mao's peasants worked really hard.
        x5n1 11y ago
        The world did not rely on Mao's peasants. No one cared about what Mao's peasants did other than Mao.
      - leoc 11y ago
        Most people agree that this view was decisively refuted in 1929, do they not?
      - jerf 11y ago
        I was talking about reality, not my opinions about reality. Real reality, if I must qualify it. Where logic and reality part ways, reality wins. China may make all the rules it likes, but reality stays real. If you are dismissive of reality's impact on, ah, reality, well, I appreciate your candor, but please don't be surprised that I just mentally dropped your credibility score to zero.
- mahranch 11y ago
  > They might, but it's really hard to tell (they're so opaque it makes detailed analysis impossible). This is actually one of the reasons why I think China is going to be worse off. More uncertainty means less foreign money coming in which is a bit of a viscous circle. Economies can't grow at a specific rate forever. There will be ups and downs, sharp rises and bubbles. As much as China tries to mitigate them, the can't fight it forever. Also, the government has total control of their monetary system. While helpful in times of economic uncertainty (they can keep propping it up, even beyond what the U.S can/will do), it shows that China's Yuan isn't ready to replace the dollar. No country is going to want to go all in on a currency where the nation could pull the rug out from under you at any time. They would be beholden to China, and give up more 'power' than they do with their competitor, the U.S. China also ranks 100th on the global corruption index (http://www.transparency.org/cpi2014/results http://www.transparency.org/cpi2014/results). There are 99 countries less corrupt than China. It truly and really is like the U.S is a legitimate bank with rules and regulations while China is more like the Mafia's version of bank, where they make their own rules and have no regulations or checks & balances on themselves.
  - jacquesm 11y ago
    The world is connected beyond the point where it can function without China, the rest of the developed world is solidly hooked.
    - wcummings 11y ago
      Are you saying China is too big to fail?
      - jacquesm 11y ago
        No, I'm saying that if China fails we will definitely feel that in ways we probably can not even imagine. China is big enough to fail without us being able to bail them out.
        curiousjorge 11y ago
curiousjorge 11y ago
What's ironic about the Chinese stock market is that it's incompatible with Beijing's controlled economy. Knowing this, we can see just how desperate the central leadership is getting with appearing to have control. The stock crash is particularly dangerous for Chinese leadership at a time when people are becoming fed up with the wealth gap. Wiping out the wealth of its citizens will have catastrophic results for the communist party. Attempts to distract the public with territorial disputes will continue and eventually lead to military conflict should the leadership feel threatened by social unrest. The mounting debt in China, corruption, social issues, stock crash is a perfect brewing for a pivotal change. Historically, such conditions have led to a military conflict, or invented threat to drum up nationalism. But none of this works if the people feel like they got robbed, which in this case, Chinese government has actively encouraged people to put their life savings into stock market and at high leverages where an enormous chunk of the population will become homeless overnight should the market crash.

by x5n1 11y ago

fennecfoxen 11y ago

I don't know how much that's true. China's current economy is built on the impact of its 1-child policy on its historical culture of children taking care of elderly parents: that's really really hard to do now, so everyone saves like crazy, and the government uses those savings (in state-run banks) to finance state-run industries with below-zero real interest rates, which are of course wildly profitable, and the plutocratic elite splurges on its take of the surplus. But they really need to watch out for a number of shocks, of the whole scheme could fall apart badly and spark social unrest. In particular, inflation (eating away at those savings) sometimes leads to riots, and their monetary policy has been very extreme for many many years. (In different ways than US policies, but still, makes "Helicopter" Ben Bernanke's interventions look like the amateur leagues.) Economists continue to worry and it's not 100% clear that China will continue to function after a real economic crisis. They might, but it's really hard to tell (they're so opaque it makes detailed analysis impossible).

x5n1 11y ago
What if I was to tell you that all the money that you deposit in the banks is not used for anything. The banks borrow money using a credit lending window from the central banks. They can get as much money as they want. Money doesn't actually exist. It's a virtual method of coercion to get people to do things. As long as there are things for Chinese people to do, the Chinese economy will keep running. As long as China can source raw materials and sell them for a markup to someone else, the Chinese economy will keep running. At the end of the day even if robotics threatens the Chinese economy, the government can step in and stop robotics from destroying jobs. That's the level of control they have. Any problems that they will have economically, everyone else will have first. Most of these pundits that run Western economies follow rules that they themselves make up, and then use those rules to control other people. But China don't play these games homie, China knows the game homie. China make its own rules.
- ZoZoBee 11y ago
  China's one child policy has created a Demographic nightmare about to be realized.
- jerf 11y ago
  China may make its own rules, but reality gets a veto. I'm perfectly even-handed with that assessment... it 100% applies to any economy, of any form.
  - x5n1 11y ago
    > but reality gets a veto. Are the Chinese working as hard as American workers? Are they productive people that produce a lot of economic output? If the answer is yes, then there is nothing reality can do for you.
    - oldmanjay 11y ago
      That's so simplified and dismissive that I fear it's missing the point about "reality" here. Or I'm missing what you think is the point, which I admit is possible. I'm out of my depth on economic issues.
    - happyscrappy 11y ago
      Mao's peasants worked really hard.
      - x5n1 11y ago
        The world did not rely on Mao's peasants. No one cared about what Mao's peasants did other than Mao.
    - leoc 11y ago
      Most people agree that this view was decisively refuted in 1929, do they not?
    - jerf 11y ago
      I was talking about reality, not my opinions about reality. Real reality, if I must qualify it. Where logic and reality part ways, reality wins. China may make all the rules it likes, but reality stays real. If you are dismissive of reality's impact on, ah, reality, well, I appreciate your candor, but please don't be surprised that I just mentally dropped your credibility score to zero.
mahranch 11y ago
> They might, but it's really hard to tell (they're so opaque it makes detailed analysis impossible). This is actually one of the reasons why I think China is going to be worse off. More uncertainty means less foreign money coming in which is a bit of a viscous circle. Economies can't grow at a specific rate forever. There will be ups and downs, sharp rises and bubbles. As much as China tries to mitigate them, the can't fight it forever. Also, the government has total control of their monetary system. While helpful in times of economic uncertainty (they can keep propping it up, even beyond what the U.S can/will do), it shows that China's Yuan isn't ready to replace the dollar. No country is going to want to go all in on a currency where the nation could pull the rug out from under you at any time. They would be beholden to China, and give up more 'power' than they do with their competitor, the U.S. China also ranks 100th on the global corruption index (http://www.transparency.org/cpi2014/results http://www.transparency.org/cpi2014/results). There are 99 countries less corrupt than China. It truly and really is like the U.S is a legitimate bank with rules and regulations while China is more like the Mafia's version of bank, where they make their own rules and have no regulations or checks & balances on themselves.
- jacquesm 11y ago
  The world is connected beyond the point where it can function without China, the rest of the developed world is solidly hooked.
  - wcummings 11y ago
    Are you saying China is too big to fail?
    - jacquesm 11y ago
      No, I'm saying that if China fails we will definitely feel that in ways we probably can not even imagine. China is big enough to fail without us being able to bail them out.
      - curiousjorge 11y ago

curiousjorge 11y ago

What's ironic about the Chinese stock market is that it's incompatible with Beijing's controlled economy. Knowing this, we can see just how desperate the central leadership is getting with appearing to have control. The stock crash is particularly dangerous for Chinese leadership at a time when people are becoming fed up with the wealth gap. Wiping out the wealth of its citizens will have catastrophic results for the communist party. Attempts to distract the public with territorial disputes will continue and eventually lead to military conflict should the leadership feel threatened by social unrest. The mounting debt in China, corruption, social issues, stock crash is a perfect brewing for a pivotal change. Historically, such conditions have led to a military conflict, or invented threat to drum up nationalism. But none of this works if the people feel like they got robbed, which in this case, Chinese government has actively encouraged people to put their life savings into stock market and at high leverages where an enormous chunk of the population will become homeless overnight should the market crash.