https://en.wikipedia.org/wiki/Made_in_China_2025
https://thediplomat.com/2024/04/how-china-became-the-worlds-...
- Definition of this is 12,000 2011 USD, BLS says thats 17,600 2024 USD. Looking like 2024 closes at a little under 13,000 24 USD. If we calculate out the 6% CCP standard GDP growth rate, it'd take 5 years
- GDP is not very likely to grow at the formerly-real 6% per year moving forward. Population peaked, trade is now a tailwind instead of a headwind, GDP per capita at 13,000 is 0.5x Russia and 2.5x India, and we're in year 2 of a deflationary crisis that's barely being held off, if it is, and is characterized by an significant oversupply in housing stock that'll take years to run down. So I'll tack on 2 years, make it 7 years, 2031.
Pretending "always" for anything related to China, you can be sure their elaborate history will prove you wrong.
Those millions of unemployed youth didn't go through the gaokao to work in a BYD factory, it's the "useless" white collar jobs that everyone wants but there is short supply of. And the often unpredictable clampdowns on those industries don't help.
I feel like it's more of a case of how do they get out of it, rather than avoid falling into it, at this point. The demographics are shit and the country isn't particularly attractive to immigrants, nor (unlike, America and Canada, and honestly most of Europe, despite what the right wing say) do they really have room for more immigrants.
I mean it's probably fair to call it the consensus opinion, so a claim as extraordinary as calling it "clear nonsense" probably requires extraordinary proof?
"The pace of growth of domestic coffee chains has been impressive in the past year. Luckin’s performance has been especially strong. It has proved sceptics, who once saw its ultra-cheap coffee prices and high costs as a flawed business model, wrong this year. Luckin Coffee’s operating margin hit 15.3 per cent in the latest quarter as net revenues rose more than 40 per cent to $1.5bn, adding to annual sales that nearly doubled last year. It opened 1,400 new stores in the latest quarter, bringing its total to 21,300. Meanwhile, signs of the pressure are showing with same-store sales at Starbucks down 14 per cent in China last quarter."
"Automation, a rapidly growing trend in the local coffee chain industry, is helping margins during a time when costs are rising, especially delivery, sales and marketing expenses. Cotti, which has grown rapidly since it was founded in 2022, is pushing out coffee-making robots. Luckin has fully automated pour-over coffee machines. Luckin’s coffee robots and unmanned coffee shops were key to maintaining growth during the pandemic."
https://www.ft.com/content/5f070e18-3249-4bec-999b-56535cf25...
And you would be hard pressed to find anyone middle aged or older that actually drinks any coffee.
But the TLDR is it's the quality of workforce not the demographics that drives productivity and growth. JP TFR went below 2 in mid 70s, their economy has grown by 2000% relative to Yen. Same with SKR, TFR went below 2 in mid 80s, economy grew by 2500% relative to KRW... the sauce? Skilling up relative % of workforce to compete on higher end / higher value / higher paid industries. The current limitation with both these countries is they're small, relative to PRC, they've maximized human potential, reaching around 80% skilled workforce, basically the ceiling, they can no longer generate surplus enough talent to compete past limit.
PRC went >2 TFR in 90s, but they have so much people that they're still at 20% skilled workforce, the academic reforms to churn out tertiary only put in place ~10-15 years ago, their headroom is still very high. As in generating OECD+ in skilled talent combined per year. They're on track to add more STEM in the next 25 years (birth cohorts already predetermined) than US will add people (birth and immigration inclusive) - they're on track to have 2-3x more STEM than US total. Meanwhile their catchup in last 10-15 yeras was basically going from fraction of skilled talent to ~parity with US. The TLDR is PRC is in process of undergoing the GREATEST "productive" demographic divident in recorded history, and competitors are not remotely close. Will PRC reach ceiling like JP/SKR with >2 TFR, of course, but not until way past 2050s when they reach 80% highskilled workforce and can't replace at parity. And realisitally that's also a PRC who is multiple times larger than it is now (not 2000% but substantial).
If the full demographic argument is PRC will eventually demographically collapse, likely after most of us are dead, and growing multiple times current size because they generated a workforce larger than west can compete with... then that's going to make people shit bricks.
For reference entire PRC lol demographics narrative was popularized by Zeihan... who keeps forgetting the politics in geopolitics, i.e. US has most deep coasts for ports... except PRC dredges and builds the most productive ports; US has most naturally navigatable waterways, except PRC builds out / maintain their internal waterways with signifiantly more utilitzation. US has immigration... except at PRC scale, even shit TFR properly directed is more talent than US can realistically compete with. 4:2:1 pyrmaid? Yeah kind of PIA... except highest household savings rate in the world, and large regional CoL disparity means you can dump a lot of retirees in nice inland retirement cities one day where they cost fraction to upkeep but still maintain relative good QoL, better than what they grew up with. There's a lot of arbitraging opportunities. And in cases of upper quantiles, that 4:2:1 turns into wealth transfers to the 1 gen to start families.
What PRC does offer countries that want to catch up is access to cheap capital goods and cheap energy infra. Something PRC had to pay premium for while climbing ladder. It will be up to respective countries to arbituage accessible PRC capital and global demand to build up their industrial base... while opportunity lasts. Issue is we're in era where labour saving technology = more difficult to uplift via mass manufacturing employment and potential for export led growth is going to be increasingly limited as surplus importers try to reconfigure their own trade blocks.
But on the other hand 80% of the world , well 60% excluding PRC is consider middle income and poorer. So there is still substantial room to increase global consumption and accomodate new entrants, especially in non strategic / non zero sum sectors, it just won't be easy. Which is ultimately the limitation, a lot of underdeveloped countries don't have much competence in nation building and no ones going to do it for them. In strategic sectors, i.e. sectors where most countries can't support indigenously, or would take generations to build out (like having your own 200k aviation base that need 300 million population bloc to support), what PRC is going to offer is cheaper access relative to western incumbants. Hence PRC and west fighting zero sum in these sectors, with PRC trying to wrestle away western share, and west trying to protect their share. But the result should be more choice, cheaper choice.
IMO that's the cynicism behind PRC strategy, they will sell countries the tools to uplift themselves on the cheap, expecting most can't, while offering those that couldn't fallback/access to unparallely cheap goods, because PRC will simply have stupendous competitive advantage from being able to coordinate a lot of talent and a lot of robots across a lot of sectors linked by a lot of supply chains.
Not really, there's 2 middle income traps:
1) the ACTUAL trap / thesis - countries fail to educate / upgrade workforce enough to move up supply chains to generate high income employment to bring up income, the TRAP is lack of advancement, to which PRC is basically the LEAST trapped country in the world, pursuing industrial development in all high end sectors. Issues is PRC being highly developed in every sector = still not enough high end jobs for 1.4B people.
2) the economic middle income trap, for last few years, PRC consisitly a foreskin (low single %) below world bank definition/revision of upper income, people need to ask why that is? IMO it's because PRC DOESN'T WANT to be definitionally upper income to play up developing status, and lose related perks. It would be absolutely trivial for PRC to revaluate FX by a few % and cross nominal USD high income and take a huge victory lap, but they don't.
The reality is "hiding strength" is going ot be increasingly hard with time - PRC per capita is being brought down by 600m low income. The TLDR is bottom 4-5 quantiles, i.e. 40% very undereducated population who got left behind during modernization and generates about only ~5% of GDP. They skew old and will eventually phase out of stats (die) in next couple decades, and numerator is going to be increasingly high educated new cohorts working high income. Low/high income divide is largely generational, the future educated populations are going to be in disproportionately high income high skill jobs i.e. PRC is replacing 200m subsistent farmers with 200m tertiary workforce. If most of the 2 bottom quantile dies by 2050, PRC per capita will nearly double to medium high income simply doing nothing, with PPP to rival upper-high income if they hold on to production. Short of unforseen catastrophe, it's statistic inevitability.
That's without mentioning FX, i.e. PRC securing enough economic clout = eventually ability to flex the FX lever to multiply nominal GDP faster than actual growth.
>people die off and take their lead in manufacturing
Unlikely, those 600m are subsistent farmers (something like 200m households), informal workers etc... they are not in manufacturing or anything advanced, where advanced is literally ability to do basic arithmatic, aka this cohort was never in a position to be retrained for manufacturing. To put PRC manufacturing in perspective, I think at height, PRC manufacturing employed "only" 300m. Now they're acquiring RoW combined in automation (industrial robots) and uptraining skilled workforce to hold onto manufacturing / dominate in high end, i.e. that lead is likely set to grow. The bodies problem is basically most new gen wants to degrees and air conditioned office jobs instead of blue collar work. There's plenty of bodies to fill factories (see youth unemployment stats) but incentives/culture not aligned for vocational work.
Those 600m bluntly are just... excess people who don't meaningfully contribute to modern economy i.e. 200m farming households can be replaced by 20m advanced farmers with automation, but PRC agriculture not broadly automated specifically because farming is massive jobs program. Well except construction, hence PRC building spree now, where labour is plentiful and cheap. IMO this is basically PRC's happy accident - many wanted hukou reforms to increase equality, but really what CCP did was create a massive structural class disparity that enables 1) arbituaging very cheap labour for low end work 2) have that low end workforce be easily supported because it doesn't cost very much to provide for them. Also why PRC focuses on production side (industrial capacity)... need to build so much shit to economies of scale than make goods cheap enough for bottom quantiles. Which also happens to translate into global competitiveness for all markets, including emerging / low income ones like bottom PRC 40%.
>US is already at the top and continues to absorb the best people
Remains to be seen, huge % of US S&T talent came (past tense) from PRC, and now education exchanges are being cut off. Which is secondary to the fact that @60% and increasing tertiary that bias STEM, with like 200m new borns in the past 25 years in the pipeline, PRC simply has too much talent for US to meaningfully brain drain. US projected to increase population by 40m in next 30 years. US would have to train every new born, and every immigrant to be STEM to match PRC output, that's not counting the other 80m where percentage will go into some other high skilled field, just not explicitly STEM. Hence the talent generation gap is projected to be absurd in PRC's favour.
That an PRC academic institutions have caught up and increasingly, PRC's cream of the crop stay in PRC. This isn't the 90s where many PRC diasphora were top of their class from a small academic system that trained only a few, where every brain drained hurt. Increasingly, west is a dumping ground for PRC kids who couldn't hack it in tier1 PRC institutions (didn't score enough on Gaokao) but with parents that have enough resources to send them abroad... meanwhile the Chinese B & C teams are still crowding a lot of western labs to drive US/western innovation. The TLDR is PRC's high skilled demographic divident is projected to be so large that it unlikely to be meaningfully constrained. And for strategic competition, that's the demographic trend that's important to consider especially in next 60-70 year time frame, i.e. almost 2100s, since that's how long those new brains will be in the workforce.
The constrain / challenge is on PRCs end to generate enough skilled jobs, which will be difficult. But the side effect of surplus skilled labour is cheap labour, and IMO it's better to have too much talent than not enough for strategic goals, i.e. PRC is only actor projected to not have semi conductor talent shortage in next 10 years.
Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-facto...
And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%.
Japan used to be activist towards in its banks too, and it was very good until it was catastrophic one day.
There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago.
Dazzled by the spectacle, this misses that their economy is characterized by deflationary headwinds due to a massive, massive over-investment in property, and this just squeezes the toothpaste (debt taken on to goose GDP) to another side of the tube. (housing to batteries)
Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?!
There's also a type of western mind that automatically dismisses the odds of a different country succeeding, based on nothing but the fact that they are using a different approach (on the surface). It's a kind if circular reasoning: our system is the best because we're the best, because of the system we have. To subvert the Simpsons - "the best so far"
Edit: I'm far from a Sinophile, but there's a certain willful blindness, concerning an almost religious belief that the west will prevail because it's the west, regardless of all the systemic weaknesses that show up again and again. It would suck for a dictator-for-life leading the biggest economy in the world, but healthy minds would introspect to see how we can do better, like we should, right? I have no doubt out leaders will pick the wrong lessons, like social credit scores and pervasive surveillance
>our system is the best because we're the best, because of the system we have.
This isn't what's happening at all. The causes and reasons why infrastructure and Western cities are so bad have been studied for decades and are well known, just as we've been studying what makes Tokyo or Hong Kong work so well. People are constantly critiquing the underlying system of incentives and entangled interests, you can hundreds of popular threads on HN, Reddit, MSM, hell even with Elon Musk's DOGE.
The only time when I see the mythical self-convinced westerner evoked is precisely when critique of other cultures come in, often from cultures that feel a need to constantly defend themselves.
Nowhere because the USA has an excellent internal flight and interstate highway system instead. Railways were already becoming uncompetitive by the 1920s and now live on mostly in parts of the world where they already exist, where land is at a premium.
The reason people think China will crash is that their system isn't unique, has been tried many times before and eventually always fails. That isn't circular reasoning, it's reasoning based on prior experience. China is still a communist country: we know how that story ends and why. Remember that for much of the history of the USSR people in the west were dazzled by its rapid industrialization and apparent achievements. First country to put a man in space! Many people in that era genuinely wondered if central planning was just a superior way to do things. In hindsight we can say that it wasn't: with enormous focus such economies were able to pull off heavy engineering projects at scale, but at the cost of ignoring consumer goods and with a dysfunctional economy that was brittle to its core.
End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away. He was shaken to his core and cried on the flight home, asking himself what they had done to Russia's poor people. The USSR collapsed just a few years later, Yeltsin became president and moved Russia in the direction of a market economy.
Both being impossible to decouple from fossil fuels consumption at current scale, essentially.
> End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away
I have no idea whether this anecdote is true, but it wouldn't be surprise me one bit for an always-drank dude who made the army shell the parliament of his own country.
The fact that railways were becoming uncompetitive in the mid-1900s is why high-speed rail was developed. The Japanese pioneered high-speed rail in the 1960s, dramatically increasing the speed that passenger trains could run. That not only made trains competitive again, but hands-down the best mode of transportation for distances of a few hundred kilometers. The result is that new high-speed rail networks are being built around the world, not just in places where rail is already prominent.
In places where high-speed rail exists, it has taken most of the market share away from short-haul flights. If you want to get from Paris to Brussels (300 km), or from Beijing to Shanghai (1200 km), you take the train. This is despite the fact that Western Europe and China have excellent highway networks (China's highway network is now superior to the US interstate system) and plenty of airports.
> China is still a communist country: we know how that story ends and why.
China is not at all like the USSR.
> NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away.
China has an absolutely crazy abundance of consumer products. These days, Americans turn to Ali Express to get random widgets or knick-knacks of any kind. China is the place where you can pull out your smartphone, order pretty much anything, and have it arrive by courier 15 minutes later (okay, that's a slight exaggeration, but not much of one).
https://www.reddit.com/r/China/comments/vt7jrz/a_whopping_90...
> China is not at all like the USSR ... China has an absolutely crazy abundance of consumer products
Products for export, yes. It doesn't have a particularly strong consumer economy because its model is to keep Chinese labour poor whilst building up huge foreign reserves and gutting foreign competitors. That's why Chinese consumption is still far below the US:
https://capx.co/xi-jinpings-coercion-is-destroying-his-own-e...
"private consumption accounts for just 39% of the economy – extremely low by world standards (the figure in the US is 68%). But there is no consumer confidence, with 80% of family wealth tied up in property and no meaningful social safety net."
Rail in the UK requires subsidies. Once again you can play games with non-standard accounting, like by excluding the cost of track and stations, but those are the bulk of the costs. If rail subsidies were zeroed tomorrow every single railway in the UK would go bankrupt the day after. This is also true for the Tube which certainly isn't break even - where on earth did you read that? They were once able to cover daily operating costs from ticket fares, but Sadiq Khan put an end to that and now they can't even cover operational expenditure without subsidies from central government. Even back when they were able to balance the daily books they only achieved that by starving capital expenditure and not building up any kind of profit margin, meaning that any kind of upgrades or repairs have to come out of additional subsidies.
https://tfl.gov.uk/corporate/about-tfl/how-we-work/how-we-ar...
The Shinkansen has a long history of building unprofitable lines which led to JR's eventual "bankruptcy" in 1987, ending up 28 trillion yen in debt. After being semi-privatized they were given a lot more leeway to shut down their unprofitable lines, but even so, it's viable mostly due to the government ensuring they have access to nearly unlimited risk free and repayment-schedule free money (ZIRP).
Passenger railways are fundamentally not possible to run as ordinary free market companies. They were run that way once, but the railways were built out on the back of huge private sector investments in infrastructure. Governments the world over then nationalized them and redirected funds towards staff/union pay settlements or reducing ticket fares, cutting infrastructure spending to compensate. The result is a massive overhang of tech debt that now can't be paid off without unrealistically high ticket price rises.
British productivity is low because it has cheap labour due to effectively unlimited immigration. Companies invest in productivity improvements when labour becomes expensive, otherwise they don't bother, it's easier to just throw more people at a problem. None of that is really a secret, it just doesn't get talked about much because the British ruling classes don't like to criticize immigration lest they be called racist - however, this is a purely economic issue. Railways hardly matter for productivity and commuting may even harm it for many people, as evidenced by the popularity of working from home.
SNCF is profitable: https://www.lemonde.fr/en/economy/article/2023/02/24/sncf-re...
Pre-pandemic the main intercity routes were all private operated. The operators had to pay track access charges to cover maintenance costs but they also had to bid to the government to buy the rights to operate the franchise. I.e they had to say how much profit per train service they were willing to pay to the government for the right to operate. The privatised rail sector collapsed because these companies overbid for these rights not because the routes themselves were fundamentally unprofitable.
TFL operating surplus: https://tfl.gov.uk/info-for/media/press-releases/2023/march/...
Japan has never closed a shinkansen route. They have closed many rural branch lines though.
Britain has a low immigration rate compared to Europe. E.g net gain ~750k compared to 1.9m to Germany last year. Germany also has high rates of unemployment for unskilled labour yet they have a sophisticated and highly automated high tech manufacturing economy.
https://en.m.wikipedia.org/wiki/Immigration#/media/File%3ANe...
> The 2023/24 budget has been developed on the assumption that the current funding agreement with Government, which lasts until April 2024, remains in place and is fully honoured, including in relation to adjusting the quantum of support provided to TfL in 2023/24 to reflect latest inflation rates.
While TfL has a current funding agreement with the Government until the end of March 2024, there is also a pressing need for the Government to confirm the £475m that TfL needs in 2024/25 to support the delivery of the committed contracts for rolling stock and signalling on the Piccadilly line and the DLR.
The Government has consistently recognised in the funding settlements that TfL is not expected to fund major capital projects from its operating incomes.
https://en.wikipedia.org/wiki/Aviation_taxation_and_subsidie...
Road travel is usually profitable for the government as fuel taxes cover more than the costs of building and maintaining the roads. Drivers end up subsidizing rail in every country that I know of. It's possible EV cars will start to change this.
US passenger rail is nationalized. Amtrak is majority owned by the federal government, for example.
On what you would probably term the more ideological side, there is noise pollution, environmental costs (this one is admittedly likely a wash -- it's not as if our airports would be nature reserves if they weren't used for aviation), and presumably a major hit to revenue and quality in major metro areas -- is O'Hare really the best possible use of that extremely extremely valuable piece of Chicago real estate, or could it generate more revenue for the city and happiness for citizens as housing, shops, commercial and industrial space, and parks?
Anyway have a good day. I'm glad you're a fan of motoring and aviation and hope it brings you great joy.
So we go unto the breach once more: in the USA the government run parts of the air system are funded by taxes on fliers, not direct subsidies. ATS is a part of the FAA which is funded by such taxes:
https://usafacts.org/articles/who-funds-the-faa-you-whenever...
Airports usually fund themselves via fees charged to airlines, which are then ultimately charged to the flier. You can see them in the fare breakdowns sometimes. I'm sure there are tiny airports in the US that are subsidized because governments love subsidizing uneconomic things for prestige reasons, but it isn't structurally needed.
https://taxpolicycenter.org/briefing-book/what-highway-trust...
"Congress could pay for projected highway and mass transit spending by simply raising the federal tax rate on gasoline and diesel fuel. Increasing those rates by 15 cents per gallon along with indexing the rates for inflation would increase federal revenues by $240 billion over ten years (CBO 2022)."
Balancing the highway books in the USA would be easy, and it's done already in most other parts of the world.
I just looked up how Germany funds its road network. It turns out that 2/3rds of the funding comes from taxes (subsidies, in other words).[0]
0. https://bmdv.bund.de/DE/Themen/Mobilitaet/Infrastrukturplanu...
Germany spends ~16B EUR per year on roads at the federal level:
https://www.statista.com/statistics/1293915/federal-expendit...
The amount it gets from motor taxes is vastly in excess of that:
https://www.destatis.de/EN/Themes/Society-Environment/Enviro...
That's not surprising because Germany has the highest motor taxes in Europe:
https://www.acea.auto/press-release/motor-vehicle-taxation-b...
The US does subsidize roads but it doesn't have to, hasn't done so in the recent past and arguably shouldn't be doing so.
From what I see in your 2nd link, motor taxes do not even cover the federal government's contribution to road construction and maintenance, not to even mention what state and local governments pay.
You're saying the US doesn't have to subsidize roads, but removing that subsidy would require the US to raise fuel taxes and tolls by 200%. Rail can also break even if prices are increased. The reason governments subsidize HSR is because it has positive externalities.
Most forms of transportation are subsidized. Good transportation infrastructure benefits the entire economy, so governments subsidize it. The fact that people can travel between cities easily and quickly facilitates business.
> China's railway is in a staggering amount of debt due to mass overbuilding
HSR is heavily utilized in China. A lot of the continued rail construction is because existing lines are butting up against capacity constraints.
> Products for export, yes.
I'm talking about products in their own shops. Chinese consumers have access to a much wider array of consumer products than Americans have.
> private consumption accounts for just 39% of the economy
Now, you're mixing completely different topics. Lower spending on consumption isn't because there aren't products on the shelves. It has to do with things like Chinese people's propensity to save, China directing more of its GDP into investment, and on the flipside, the United States' trade deficit.
china consumes 30% of cars, 20% of mobile phones, 40% of televisions, 25% of furniture, etc. in basically every consumer category they exceed 20%. how can that be true and at the same time they have an abnormally low "true" consumption rate?
https://www.project-syndicate.org/commentary/china-household...
https://asiatimes.com/2023/11/consumption-in-china-is-it-rea...
> The fact that people can travel between cities easily and quickly facilitates business.
Governments like claiming this but dig in and you'll find they have no robust evidence for it. It also just fails a quick reality check: if it were true then passenger railways would be profitable in their own right, as businesses would be happy to buy tickets for employees at their true costs. Yet passenger rail is never profitable and what we see in reality is lots of workers preferring to work from home than take even the subsidized railways into the cities.
You can argue for trains as a lifestyle thing, maybe even an environmental thing although EV are changing that. But you can't argue for them economically.
> HSR is heavily utilized in China.
HSR is famously mostly empty in China. Go read accounts of anyone who has travelled on the newer lines.
> Lower spending on consumption isn't because there aren't products on the shelves
Nobody stacks shelves with products that will never be sold. Lower spending on consumption means the goods are being exported, and Chinese people aren't buying what they make because they don't have enough trust in the system to do so. Hence so much money being ploughed into real estate bubbles (an attempt to save money in something that's hard to confiscate).
I don't know about cargo shipping, but both air and road travel are subsidized (and I strongly suspect the same is the case for cargo shipping).
> It also just fails a quick reality check: if it were true then passenger railways would be profitable in their own right, as businesses would be happy to buy tickets for employees at their true costs.
What you're effectively arguing is that the only way to measure whether basic infrastructure has positive externalities is to ask whether it turns a profit. By that argument, all government spending on infrastructure is wasteful - a position that I think is obviously wrong.
> HSR is famously mostly empty in China. Go read accounts of anyone who has travelled on the newer lines.
I've traveled on Chinese HSR many times. It is extremely heavily used. Trains are usually packed. I've had to buy first-class tickets before, simply because the regular carriages were completely sold out (luckily, first class is not too expensive on Chinese HSR, and the upgrade is definitely worth it).
What are you basing your impression of HSR being empty on? Are you basing that on newspaper articles in Western press, on first-hand experience, on data, or on something else?
> Nobody stacks shelves with products that will never be sold.
You began by comparing China to the USSR, and talking about Yeltsin was shaken by the abundance of consumer products in the US. This comparison just completely fails when it comes to China. The China of today has a crazy abundance of consumer goods for sale. The malls are full of every type of shop with full shelves. There are packed markets with stalls selling everything. You can buy pretty much any consumer product you can imagine on your smartphone. There are endless numbers of couriers driving on electric scooters throughout every Chinese city, delivering people's online orders. Your image of what China is like is just completely out of date.
This isn’t to say the Soviet Union was, like, a good pleasant place to live. But we shouldn’t accept Soviet propaganda just because it happens to align with our priors.
https://www.cato.org/blog/happy-yeltsin-supermarket-day
Soviet supermarkets were drastically more impoverished at that time. No comparison.
Censorship is a problem because it affects everyone, especially the higher ups. That's why he'd got into the habit of demanding surprise inspections. As a factory manager he'd accepted that everyone was always hiding the truth from him. In systems like that there isn't any point in the hierarchy where you your boss takes you to one side and says Boris, listen, there's a vault with all our secrets and truths, let me show you. It never happens. The people at the top have to believe in the system the most of all.
This isn’t really evidence that it wasn’t staged by him though. That is, he doesn’t need to tell the host that he’s going to react strongly. He was a political operator, I’m sure he’d be happy to dupe some supermarket owner.
> Soviet supermarkets were drastically more impoverished at that time. No comparison.
> Censorship is a problem because it affects everyone, especially the higher ups. That's why he'd got into the habit of demanding surprise inspections. As a factory manager he'd accepted that everyone was always hiding the truth from him. In systems like that there isn't any point in the hierarchy where you your boss takes you to one side and says Boris, listen, there's a vault with all our secrets and truths, let me show you. It never happens. The people at the top have to believe in the system the most of all.
Sure, but this wasn’t secret information. America was broadcasting information about our wealth around the world. I guess we probably have people on this site who were in the Soviet Union during the 80’s. Maybe they can recall what they thought was going on over here.
Of course it was! All information about the true state of the west was censored and controlled. Today North Korea does the same thing for the same reason.
"Censorship in the Soviet Union was pervasive and strictly enforced":
https://en.wikipedia.org/wiki/Censorship_in_the_Soviet_Union
"Due to the appearance of foreign radio stations broadcasting in Russian territory and their immunity from censorship, as well as the appearance of a large number of shortwave receivers, massive jamming of these stations was applied in the USSR using high-power radio-electronic equipment. It continued for almost 60 years until the end of the Cold War. The Soviet radio censorship network was the most extensive in the world."
Do you suppose Yeltsin didn't have access to the uncensored information before his visit? Or that Soviet spies who sent in hyper-accurate maps of US city infrastructure wouldn't be asked to report on the booming economic success of American retail?
It's how we get three-day special operations in Ukraine.
Case in point: https://www.nbcnews.com/news/world/ukraine-war-russia-genera...
That was the case yes. I don't understand this insistence that he was faking anything. Why would he do that? The whole episode just made him and his delegation look stupid to the Americans, would not have been reported in the USSR itself, and he stated clearly that he was shocked by what he saw.
The way all far left regimes work whether the USSR, North Korea, Cuba or China is that due to pervasive censorship information can only flow top down, not organically as it does in societies with freedom of speech. But information is also progressively hidden and distorted as it gets passed up the chain from the underlings who discover it originally. The result is that people at the top aren't really more informed than people at the bottom. They think they are because they have access to secret reports, but they're being fed whatever they want to hear. This is why nobody trusts Chinese GDP numbers.
Yeltsin especially wouldn't have known anything. In the 1980s he wasn't the leader of the USSR, that was Gorbachev. Gorbachev did understand the weakness in abstract terms, but probably didn't realize the true extent of the differences for people on the ground. Yeltsin was a member of the nomenklatura in Moscow in charge of city construction projects, so high ranking but not high enough to be given foreign intelligence. Moreover just a year before his trip to Randalls (the supermarket) he was in a bitter fight with the party and had just been purged. The pressure was so intense he resigned from the Politburo - something nobody had ever done before - and then tried to kill himself.
But Yeltsin recovered and his criticism of the party was popular. In May 1989 he was elected to a seat on the Supreme Soviet, the fake Soviet parliament. He still didn't matter and still wouldn't have had any exemption from censorship, or access to sensitive foreign intelligence. He visited NASA in September 1989, just a few months later. At no point in his career up to that point would he have ever been trusted with sensitive information.
Leon Aron, quoting a Yeltsin associate, wrote in his 2000 biography, Yeltsin, A Revolutionary Life (St. Martin's Press): "For a long time, on the plane to Miami, he sat motionless, his head in his hands. 'What have they done to our poor people?' he said after a long silence." He added, "On his return to Moscow, Yeltsin would confess the pain he had felt after the Houston excursion: the 'pain for all of us, for our country so rich, so talented and so exhausted by incessant experiments'." He wrote that Mr. Yeltsin added, "I think we have committed a crime against our people by making their standard of living so incomparably lower than that of the Americans." An aide, Lev Sukhanov, was reported to have said that it was at that moment that "the last vestige of Bolshevism collapsed" inside his boss.[95]
There's a difference between hearing something and seeing it everywhere.
The merger of Canadian Pacific with Kansas City Southern is even larger, and is now a railway that spans North America from Vancouver to Veracruz.
The freight railway system in North America is massive.
But even more so, markets enforce discipline on capital that state directed firms don't have. Everyone decries executives who "only look as far as next quarter's profits", and while admittedly at the margins that can have perverse incentives, in the large it demands that management put capital to work at profitable enterprises selling goods and services the public actually want.
> But even more so, markets enforce discipline on capital that state directed firms don't have
I struggle to reconcile this with stock buy-backs.
Also, China seems to have deployed a hybrid strategy: the national and regional governments provide incentives to industries, but the individual companies compete against each other. Product-wise, US defense contractors have done surprisingly well under a more extreme version of this regime (cost-plus contracts) for decades.
Would it offend your sensibilities less if they paid dividends with that money?
Buybacks are simply a more tax advantageous means of returning profits to share holders.
Similarly debt financed buybacks are a morally neutral way to change the capital structure of the firm by replacing equity with debt.
Thinking whether you're a Sinophile is a subject of discussion, and then most damningly, your closing thought being whether other people think "the west will prevail" shows there's a lot more going on here than the idea that maybe overcapacity is good. Way more than I expected, so I'll leave it at "overcapacity is bad". :)
* n.b. for future arguments I'd avoid this, a map shows china's is cross country in that you can piece together, exactly one route that is high speed only, requires multiple transfers, and leaves you about 20% short of a full horizontal trip cross country while taking a winding route that wasn't designed for it.
> Asking why we don't have a high speed cross country railroad
I asked where the high speed rail is, because parent claimed China is building out infrastructure "we built a 100 years ago" - which is patently untrue. I even quoted parent, so you can't have missed that.
> damningly, your closing thought being whether other people think "the west will prevail"
Bravo! That's a tabloid-worthy recontextualization hit-job - you cut off the part I considered so important I originally added emphasis to it, and added your commentary to give my surviving words an unflattering meaning of your choosing that was never there. I said "...an almost religious belief that the west will prevail because it's the west"
A good day to you.
china also had many airports before they built the high speed system.
The thing is, overcapacity combined with the 996 week and labor exploitation can be used to outcompete any Western company - especially the old ones, who are spread around the country. Look at the supply chain of the established (i.e. everyone but Tesla) companies... dozens of manufacturing plants, thousands of suppliers, almost zero vertical integration because "manufacturing batteries, ECUs or windshield wipers is not our core competency, let Bosch do that".
The only car manufacturer in the Western world not following that is Tesla. They have only very few, but very large factories that vertically integrate as much as possible on site, which not only gives them the advantage of cutting out the middlemen and their profit margin but also allows for much, much faster iteration cycles when everything is done in-house with no bureaucratic bullshit associated with change requests.
Typically, a car model, its design and parts are fixed for around 2-5 years after the prototype manufacturing run, no changes are possible at all outside of maybe the software, unless the design change is necessary to meet regulatory compliance or if it's something horribly defective. Then the model gets a "rebrush" integrating a few changes, which lives on for another 2-3 years, and then a fully new iteration crops up. Tesla (and SpaceX) in contrast, they do iteration times of weeks.
The disadvantage of that model is of course spare parts logistics and repair training, because holding stock for hundreds of subvariants and iterations is all but impossible, and that shows in every statistic for Tesla's average body shop waiting time.
And to come back to China's automotive sector - they're copying that model of iterative speed just as well. We've seen them come from piles of junk barely roadworthy (or not road-legal in Europe at all) a few years ago to be able to fight heads-on with the European car giants.
Don't ever go long on an investment in the democratic military-industrial complex, surely. Elon Musk's Tesla and SpaceX are like baby boomers disguising themselves as healthy young kids of the future. Don't be fooled or tempted by the likely spiked Kool-Aid drink. Partaking in the ideology of techno-commercialist futurism will yield a negative return on investment. As the conceptual dynamics of optimal manufacturing methods' soteriology, looked at through democratic aspirations, is nothing but booby trapped thinking. In other words, much more blunt words, Tesla's theoretical economics and strategy is a wannabe Mark Zuckerberg, especially when there's an impending giant rug pull in the investment arena.
As long as your side of the discussion hasn't loaded the debate with propaganda-rich religious expectations like the modern implementation of capitalism being on the road to perfection, some sort of leftist-progressive singularity possible with enough faith based endorsement and mere belief, then I'm willing to have an argument founded on facts. Otherwise, your sociopolitically biased school of economics will have to forever deal with me presenting grounds for arguments as thoughtless speculation, due to the skewed perspective your political incentives create. In other words, I have already given basic facts from which tentative socioeconomic engineering arguments can be made. Namely that liberal democracy's military-industrial complex is a poor attempt at satisfying the requirement for both secure and intelligent domestic commerce.
It's actually not rocket science: it's more like a real time strategy game like Command and Conquer. Because what base building ever occurs without an area being violently secured from enemy ganks and such first? And, abstracting from this illustration, unless Elon Musk plans to form a private military company for his Tesla and Space X ventures like a proper cyberpunk megacorporation character, we shouldn't expect actually competent or pure vertical business integration. Instead, we should be expecting a ghetto version of what capitalism truly is. Because the best players, our wealthy and powerful billionaires, are not really wealthy and powerful, if you look closely at what capitalism means and what it means without semantically corrupting political lobbyists like Keynesian economics, supply and demand formulations, and just horribly ineffective fascist socialism high school type proposals.
It's a model that creates big winners and lots of losers.
Ironically of course the other alternative is central planning which is a hallmark of communist economic systems.
> estimated to leave Chinese debt to GDP at 117%
Japan is 264%, Singapore 168%, the US 129%, France 112%, Canada is 107%, UK 97%, Germany 66%, Australia 22%, Afghanistan 7.4%, Kuwait 2.1%.
A debt ratio isn't particularly useful to know on it's own.
> China has more than 100 factories with the capacity to build close to 40 million internal combustion engine cars a year. That is roughly twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular.
That's good news for China, full speed domestic EV production.
Wouldn’t this just be plain old fashioned authoritarianism? America can latch on to this too, and we might based on how the Trump admin turns out.
It's not just raw labor force. It's capable engineers, designers, architects, etc. How is illegal immigration going to solve this?
> they'll still live comfortably even on minimum wage.
105K RMB yearly is close to or above average even in the above cities.
for some state the minimum wage can be $15 or higher, this is wayyyy better than China.
Ask your local waiter with a college degree if they would have studied something else if they got the chance. My experience is that many would.
The problem of bad choices is orthogonal to the problem you are describing.
'HEY 17 YEAR OLD! Get a sellable skill! English literature is probably not enough! Working for minimum wage sucks!'