I'd like to see some original thinking that stands away from the crowd for once.
Also Chinese demographic crisis overplayed IMO, China is not Japan. Consider China as two countries segregated by massive income disparity, one is high HDI coastal country that forms a bloc that can compete with other big players like US / EU on PPP basis (with gap that is only widening), another is low HDI interior underclass comparable to poor developing country. The competitive country is drawing talent from total population pool comparable to OECD countries combined with sufficient replacement fertility to match countries with massive immigration flow. This disparity can be arbitraged in ways high income countries like Japan, US/west can't.
In terms of demographic bomb, 10% of Chinese GDP can essentially keep the bottom 50% of society running with boost in QoL. Or put it this way, 10% of US GDP is 80% of India's GDP. The Chinese demographic crisis is a manageable internal "foreign" aid / redistribution program between rich and poor. But unlike wealthy countries, the have nots do not have same expectations, they're less costly to please and simultaneously a massive source of cheap labour rich countries must import to manage aging societies, which China can also "outsource" to cheaply coordinate other sectors, i.e. infrastructure, military, healthcare. IMO rich countries with expectation of comprehensive safety nets is going to have a much more difficult time dealing with aging than China. There's a reason large segments of wealthy countries are disenfranchised and protesting even though they are and will remain significant richer per capita than China. Apart from CCP just having more tools at stability maintenance, it's basic psychology, a poor Chinese citizen life will improve compared to prior generations whereas a rich OECD citizen will not.
True, long term, China has sealed its future, but even if you half China's population, it will still be no. 1 in pretty much everything it is no. 1 today.
Pretty much nothing aside of war, civil war, or a second cultural revolution scale political crisis can stop it overtaking USA economically in coming 1-2 decades.
- assassination of dictator => internal turmoil
- early death of dictator => internal turmoil
- scuffle with neighboring country => economic sanctions by the free world
- dictator can't lose face, does something stupid => economic sanctions by the free world
- (Germany, Merkel, CDU) support for the dictator wanes and disappears => economic sanctions by the free world
- local governments cover up economic losses until its too great => hyperinflation, central government collapse
- triggering business defaults leading to dollar shortages leading to faster capital outflow => hyperinflation, central government collapse
- made up economic numbers are exposed => foreign businesses pull out
- nationalization of foreign companies assets => foreign businesses pull out
- natural disasters + lack of food supply => citizen riot
I did read a lot of books which "Bright Heads" of US political scene wrote in nineties-eighties.
US royally f..king up its ally Japan is the biggest reason why Japan did not become a counterweight to China.
Basically, US assured China's victory when it both alienated, and weakened the Japan.
That both lead to Japan putting big money into China (Japan is China's biggest foreign investor,) and it becoming rather passive to US calls to do anything as about China after Washington finally got hit with understanding of its blunder.
Can you elaborate on what the United States did?
It lead to an incredible economic, and political pressure US put on Japan, which culminated in US forcing Japan into Plaza accords, and the three Japanese lost decades which followed.
They did trigger a wave of Japanese overseas investment and Japan's own asset bubble, leading to the Lost Decade when it burst, but these were hardly planned effects.
https://www.nytimes.com/1992/06/15/business/foreign-investor... "Last year (1991), the United States dropped to fifth, with less than a 5 percent share of foreign investment in China, behind Hong Kong, Germany, Taiwan and Japan." then the article talks about massive US investments.
https://en.wikipedia.org/wiki/Foreign_direct_investment_in_C... FDI spiked in 1992
700M Chinese citizens who live on $140/month income.
500M 65 year olds by 2050 (money flows up in Chinese society. One grandkid pays 2 parents who pays 4 grandparents, since it's a one child society) Oh and no social safety net. you think CCP members care about the plebs?
That's an incredible amount of space for internal economic growth.
The most probable reality is that neither the bulls, nor the bears, have any clue what will come in China. They probably make less money if they admit that though. "There's too many variables to be certain." Probably sells less than, "The Secret to the Future of China!" So they have to go one way or the other to justify their paychecks maybe?
If there were actual growth in the economy, China would not outlaw hong kong citizens from leaving to go to England, creating a wall with myanmar to prevent citizens from escaping to there, having concentration camps to force uighurs to work for free, etc.
And China has taken 700 (800?) million people out of poverty and shows a trajectory similar to the East Asian tigers.
I'm thinking about Italy: after WWII, the country was still mainly rural and much had to be rebuilt because of the war. And yet (with the help and blessing of the US, then much interested in keeping Italy on the side of the West) it experienced twenty years of rapid economic growth. It had a good education system, and it had manufacturing capacity (FIAT, Olivetti, Montedison, Ansaldo, Zanussi...) and especially, it had tens of millions who wanted to buy their first car, their first washing machine, their first tv, their first telephone, or wanted to rebuild their houses with modern techniques. It needed workers for the factories and sourced them from the poorest parts of the country, triggering an internal migration and further growth in the economic capitals of the country. China seems to have been in the same phase for the past 30 years, and it's so big it can keep up at the same pace for other 20 or 30.
I bet on tech, especially because negative population growth will put upward pressure on wages.
Even the population going down isn't really an issue, they have more poor people to take out of poverty than the entire US population, so more than enough labor force. Plus if their population declined 50% (a super far fetched scenario that could happen over an entire century), they will still have 2x the US population.
For most individuals living in China will still be mediocre to bad, but that's still enough for them to create in aggregate an economy 2x the US one.
Japan just couldn't do this, they were always smaller than the US.
His demographic data is correct. Any extrapolations he makes based on that data are usually completely off base. I used to give him credit around 2012, but not any more.
The presentation directly addresses this in slide 86.
What other changes has China recently led? Video conferencing, mass-adoption of mobile payment, death of the desktop, home food delivery (pre-COVID), online grocery, e-Health passports.
> Video conferencing
Zoom (American company) launched in 2011. DingTalk started way late in 2014 and wasn't even that popular until 2017. and still playing catchup to Zoom.
> mass-adoption of mobile payment
Japan in the 90s. I believe Chinese citizens were still mostly riding bikes then.
> death of the desktop
Japan in the 90s
> home food delivery (pre-COVID)
Grubhub was founded in 2004. IPOed in 2014.
> online grocery
Tesco direct started in UK in 1997.
I was referring clearly to mass adoption (actual market penetration). Nothing matches China, period. Look at numbers for WeChat (video), WeChat/Alipay (mobile payment), Meituan/Eleme (delivery), etc.