China’s Hunger for Commodities Wanes, and Pain Spreads Among Producers | Hacker News Reader

China’s Hunger for Commodities Wanes, and Pain Spreads Among Producers

nytimes.com

58 pointsjseliger20 comments

China's economy is transitioning from being manufacturing-based to consumer-based. We all knew it would happen, it's just happening quicker than most assumed. The sky is not going to fall.

China will keep on rolling, maybe not growing by 7% each year, but certainly by 3-4%. They've already developed at an astonishing rate, perhaps quicker than any other large nation in world history.

I wouldn't count them out...

Agree. It is simplistic to conclude China's economy is slumping just because the demand for raw material is falling. There is a finite number of infrastructure a country can build and once these are completed, the demand for raw material will naturally slow down. Growth will be slow, but I won't say it is 'slumping' for now.

> They've already developed at an astonishing rate, perhaps quicker than any other large nation in world history.

Although I think that says more about the incompetence of the Mao government. China had a long history of education, commerce, technology, and relative peace. It had no business being that poor.

Immediately prior to Mao however they had colonialism, the Opium Wars, the Boxer rebellion, civil war, invasion by the Japanese and WWII. They were a poor, war ravaged agrarian state. And in ~65 years the world's largest economy.

When China consume too many ressources she is draining the world, but if consumption weakens she is "rattling" the world.

I sense that you think this is derogatory towards China when it is not. Or at least I don't read it that way. It reads to me as though it shows how connected our world is and how when a large consumer falters it affects all of its suppliers, especially when those suppliers overbuilt capacity. If anything it shows how much of an impact China has on the world due to its sheer size.

Well, to me it shows one main point: China and most other countries, and actually anyone or any entity, will do better not listening to the "advices" and "suggestions" from the newspapers. This reminds me of "The Miller, His Son, and the Ass": just do what you have to do without worrying about what people say or think.

But about China there is a special case: Some rampant China-bashing from the US who can't stand someone else getting closer and closer. So we need to be careful, xxx-bashing is bad, except if xxx == self.

Look at it this way: Enron (China) engaged in accounting fraud (lied about debt and gdp) in order to obtain massive investment (massive dollar denominated debt), and spent all the money on parties and drugs (empty cities and roads to nowhere. steel factories that are kept open despite losing money. league of legend game studio and AMC. all the north korea's crude supply) and pretty soon will declare bankruptcy (yuan devaluation and chinese company bankruptcies), to the detriment of investors (European companies, US funds, people everywhere). Will anyone go to jail? (China won't be able to get any FDI for a a long time. Economic depression)...and do investors have the right to be angry (sure)

I'm sorry, but your analogy is pretty far off the mark.

> China won't be able to get any FDI for a a long time. Economic depression

China has been a net exporter of FDI for some time; it doesn't really need more FDI especially given how far the economic transition has progressed. The party was been expressly working to remove the dependency on FDI for some time and it's paid off. None of this implies economic depression in any way.

> yuan devaluation and chinese company bankruptcies

The Yuan has been rising. Yes, the USD has been rising faster but against most currencies the Yuan is up and has been very strong. I'm curious which bankruptcies you're referring to. There haven't been any more bankruptcies here than you'd expect for an economy of this size.

> European companies, US funds, people everywhere

Any evidence of this? China is always going to put social stability first. Anyone dealing in China knows this. The ground rules are well established. The same claim could easily be made against the US and it's restrictions, through it's tax laws, on retail investors holding foreign financial instruments. You always play by the rules of the country you're in; no country on the planet is an open free market.

> empty cities and roads to nowhere.

This is a classic argument that don't understand China's scale or pay attention the five year plans and policy documents issued by the two sessions. China is in the process of massive urbanization. Those cities need to be built ahead of time. It's a necessary consequence of the scale involved. And as we've seen, the empty cities of 5 years ago have filled up.

> league of legend game studio and AMC.

I'm not sure what private companies investing outside of China has to do with this. These are not connected to the Chinese government any more than an US private company buying a foreign company is. Actually, it's likely even less connected given how much more the US government facilitates American companies purchasing foreign assists. Again, China has been a next exporter of investment for some time.

China is a developing nation and it doesn't make much sense to compare it to developed nations. It has a long way to go; the party's own goal is to start approaching developed nation status in the 2050s. Investing in developing nations always entails more risk and more uncertainty. Beside the literal inaccuracy, your Enron analogy is largely not apt because it's trying to situate it in a developed environment.

That said, compared to most developing nations China is a pretty well run one.

Why are you taking offense at a description of market conditions?

Environment and economy are related but separate realities.

The context of the article is economy.

In a large perspective of course excessive consumption is a reasonable worry, but it's important to understand that by making a statement about ecology (draining...), we're reasoning within a different context.

This is for example, the same reason why stating that "Bitcoin wastes electricity" is nothing more than a gimmick.

If China consumes too many resources, other consuming countries get worried and say: "she is draining the world".

If China stops growing its consumption of resources, the resources producing countries (and those who invested there) get worried and say: "she is rattling the world".

In other words, it's good or bad depending on who you are.

Haters gonna hate. Given the West's history with China, they're not in a position to preach about anything.

Not sure it's hating or preaching. It just that a lot of businesses supplying China will make losses or go bust if they stop buying. More of an oh shit, what do we do now moment.

Haters gonna hate, wumaos gonna wumao. There is plenty of bias all around, but right now I want economic news on China that isn't propaganda, what other choices do we have?

Economic news is propaganda anyways, just don't trust that. Information is power, scepticism is the defense of the weaks (us) against this power.

That accusation is uncalled for. I'm not a Chinese person, I've never set foot on China, and the most contact I've ever had with Chinese people other than my grandparents was on IRC and other online avenues of discussion, but I happen to have, um, a little bit of historical awareness.

I didn't accuse you have being a wumao, I just said "haters gonna hate" like "wumaos gonna wumao".

These are interesting times, we need the critical articles to get us through it, not the wumao or chinadaily "all is sunshine" variety.

It's incredible that planners have fallen into the cobweb [1]. For enterprises with long lag from set-up should be aware that you are not the only one thinking "I'll have me a bit of that" and that you'll all be on-stream together and then there will be too much.

It was first noted in the pig breeding in 1925 [2]. Breeders saw today's prices, bred pigs based on it and then too many pigs were all born at the same time depressing prices, so nobody breeds and then prices go up - repeat

> Companies that took advantage of the cheap debt to increase production are now stuck with a big bill that will be difficult to cover.

And they will be blamed, like householders that borrowed to buy McMansions.

[1] https://en.wikipedia.org/wiki/Cobweb_model

[2] https://en.wikipedia.org/wiki/Pork_cycle

You can't expect China to keep growing at double digit rates. Everyone's GDP normalizes over time ( see Japan, South Korea etc) and China is no exception.

Add to that a debt bubble because of cheap lending. Also, weren't most companies taking out bonds or loans to do stock buybacks to drive share prices up.

The slowdown is going to hurt most of the developing world while the dollar gets stronger as folks flee their markets.

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