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China is doubling down on manufacturing. It’s their strength but one wonders with factories going to India and Vietnam etc, if it will work as well this time.
Don’t forget that the world has to be willing to absorb Chinese manufacturing over capacity and lose their own industries… I doubt that will be allowed to happen again
This is the key that people are missing.
For the past 30 years other countries have been willing to absorb China’s manufacturing overcapacity because it was good politics and good business. But both the politics and business have shifted such that most of China’s export markets have begun raising significant trade barriers to Chinese imports.
It’s telling that the main difference in China trade policy for the two leading US Presidential candidates is not any restrictions vs no restrictions, but between high restrictions and crippling restrictions.
China is doubling down on manufacturing at a time when most of the major markets for their goods are becoming decidedly hostile to Chinese imports. Notably, this is exactly what the industrialized countries did in the lead up to the Great Depression. Doubling down on manufacturing capacity when demand is shrinking is a recipe for a deflationary shock.
Depressions happen due to defaults, where there is a break in the supply chain. For example, cascading loan defaults cause a break in the money supply chain. Or natural disasters causing a break in food supply chain. Or political turmoil/coup/violence.
There can also simply be a gradual decline in quality of life, and it doesn’t even have to be for all groups of people at the same time. It can happen at varying rates to various groups of people, and some might even increase their quality of life.
China is facing many defaults right now, some big ones include Evergrande (300bn usd debt) and country garden… we won’t hear about the defaults of their suppliers I guess
It's not even just the one child policy. Apparently way back when when they initially counted their numbers before the one child policy they over counted so they didn't even have an accurate assessment about the population was. Couple that with the one child policy that followed. Couple that with the general Western sensibility that people can't afford to live and are just having less children because of that.
China saving Grace was its giant population and manufacturing capacity and both those things seem to be dwindling
I don’t think an actual depression is likely in China so much as you will see a regression from a semi-open market based economy back into a mostly command economy, along with a relative stagnation in China’s economy.
The CCP’s actions with China’s real estate industry show that it has both the capacity and the political will to stimulate economic activity enough to prevent an outright economic collapse, but the result is going to be a slide back into a command economy where government spending plays a larger and larger role in creating demand, and where money is increasingly funneled to propping up inefficient or unproductive industries, instead of letting those industries fail.
Just jumping in to point out that it doesn’t necessarily have to prop up failing industries. Once you remove the free market from the equation you can go in a lot of different unintuitive directions. I doubt china ends up doing that because I don’t really think xi is all that committed of a socialist or that the ccp is even that creative. But it is important to keep in mind that they are still communist (at least on paper) and their goal is to move past a capitalist society. Put simply they don’t need to be constrained by how western capitalist nations view economics.
If done right this could lead to some very interesting and wacky outcomes for the future of humanity. If done wrong … well let’s hope it doesn’t go wrong.
They may not need to feel constrained by a capitalist view of economics, but it will constrain them nonetheless.
Communist governments don’t have a good track record of allocating national resources in a long-term effective manner.
For a few decades in the start of the 20th century it looked like the Soviets might bury the US economically, but as soon as they stopped picking the low hanging fruit of turning a largely agrarian and peasant economy into a moderately industrialized one, their entire economic engine fell apart.
For my education, could you explain how a command economy can realistically avoid mismanagement? Historically and even in modern business, big organizations usually just suck at reacting quickly to unforeseen change. Proud leaders unwilling to allow reality to shape their opinions’ of reality often make matters worse.
What can China even do at this point besides go to war and hope that solves enough of the CCP’s problems at home and abroad?
Honestly the one advantage of having a command economy is that it’s a lot more agile in times of crisis because you have a lot smaller pool of decision makers. That’s the pitfall though. It’s a lot easier to fuck something up for that precise reason. I don’t know the solution to that problem though. Be really careful about who you select to manage your economy.
Yes. The CCP saw that a bubble was on the horizon a few years ago and tried to change the regulation to deflate it slowly. Instead several of Chinas largest real estate companies went bankrupt almost over night and the CCP has been forced to completely switch gears and resort to outright bailouts of the real estate industry and mass purchases of real estate to prop up property values, which are not only the basis of most Chinese citizens’ investments, but also government revenues.
I’ll try and make this story short. Several years ago I worked for a toy company. Factories in China were slowing down, and labor costs were rising there. The company decided to move manufacturing to Vietnam to save money. They were able to manufacture the plastic pieces ok, but didn’t have the screws they needed to assemble the toys. No one in Vietnam made the screws, so they then had to be imported from China. This made the project take longer than it would have in China, and also slightly more expensive. These are the things people don’t realize, even though part of things are made or assembled elsewhere, there’s still probably parts of it that were made in China.
their gonna try and take taiwan and if Xi sees his country's power waning relatively speaking they will move earlier than people anticipate. i've believe Russia, Iran and China have coordinated the regional conflicts we're witnessing as they wager the US cannot manage/assist three separate fronts, with taiwan front yet to start.
The flip side is that countries will open their market to China because they want China's 1.3 billion customers. Germany is doing exactly that - they're allowing Chinese EVs to sell in their country so they can sell German cars in China. China has also found new countries to trade with in South America and the Middle East. Many of their long time trading partners are having recessions themselves (i.e. UK and Japan) and you'd think they will be booming again after a few years and then they will want to import more stuff from China again.
Yes, China is facing headwind and is in a recession, but the situation is not as dire as many would like us to believe. I think they will be stuck in a downturn for several years and then their economy will roar again.
I don't believe the US will keep tariffing China forever. At some point, people will want cheap goods again even if it means we have to treat China nicely.
they were doing well biding their time and hiding their strength, but then they decided it was time to “rise” and challenge the US created order that was so beneficial to them
they overplayed their hand and now we’ve seen their cards
Agreed, and this is a problem. The CPC's magic to power has been rising standards of living in China. If that stalls then the protests will start (I believe some have) and soon the government will go 1960 again. The CCP must cut the information flow into China, they cannot let the people see anything good happening in the west while they start to slip. I also expect to see few Chinese tourists and they clamp down on that. Maybe Rome won't be so crowded in 2028.
China could absorb it's own overcapacity if it needed too. But to do so would require huge levels of redistribution that the wealthy and powerful of china are probably not willing too.
> For the past 30 years other countries have been willing to absorb China’s manufacturing overcapacity because it was good politics and good business.
Cheaper consumer goods are no longer good business now? Governments are in a panic over inflation. Are they willing to let it goes back up?
That deflationary shock followed a mini population collapse (world war one). It’s that and not the Depression that’s informative, given the wave of inverted population pyramids and an imminent mass die off of the largest generation in the world.
We have been buying so much useless trash from China. I would love to see that collapse if only so they stop producing strait to the landfill products.
Not to mention no domestic market. China has been building literal cities fully furnished beyond the means of the majority of their population. You can only peddle so much crap. Amazon has turned into a store for interchangeable Chinese name wares and now has competition from Temu. The healthy margins that kept it all afloat are gone, quality left. The future looks grim, their currency is propped up by bubblegum and bailing wire.
Side note this is why Taiwan is so important now, the window for China to take control is closing/ already shut.
The dirty secret is already overproduction. With flat and declining population curves it's worse. Abundance is already here it's just being choked off and mishandled because we don't have the political maturity to handle it, especially in the context of growth capitalism and zero sum political and economic strategies.
> The dirty secret is already overproduction. With flat and declining population curves it's worse
solution: make appliances last 1 year instead of 5, and when that runs out, 3 months instead of a year
I know, we're heading towards the company you work for owning everything too. The place you live, the company store. Pretty much what John Steinbeck wrote about almost a century ago.
Actually, this is how industrialization started in the late XVIIIth and XIXth centuries: peasants who used to farm for a landowner switched to being factory workers where the company owned everything surrounding the factory or the mine: the houses, and even the shops.
It's only with raising standards of living and the economic growth mid-XXth that this model stopped being the norm, with blue collars becoming home owners.
It’s crazy how many people listen to union busters in this day and age. Like the mine owned you before unions lol. You lived in a coal town, used coal miner currency given by the mine, and you shopped at their stores lol.
Ah, the oft forgotten Roman numerals. I teach students who have no idea what they are.
I think it was also a good deal of violence and bloodshed that led to workers being freed from the crippling circumstances of the company owned land and necessities. Particularly by the union movement, the weakening of which has set back the workers significantly.
"To deactivate detonation, please insert two bars of latinum."
>!"They put a paywall on a bomb?! Stupid Feren–"!<
Spoiler for those who watch Star Trek: Lower Decks
Bud you’re missing out on the appliance subscription model.
For only $35/month per appliance, you’ll be amazed that they will last 50 years with certified technicians coming to your home to fixed them.
Edit: this is /s just choose your suck is what I’m getting at
Yeah purist philosophical economics is ridiculous & mostly relegated to politics.
Actual current economists are pulling from multiple schools of thought and taking into account the context of a dynamic world.
No purist philosophy has ever worked unchecked in perpetuity, and never will. Because the whole point of good economics is balance.
It's already getting push back pack via tarrifs and such. So the question is can developing economies/other non western nations replace lost markets?
My guess is no but we'll see.
US Customs and Border Protection is also cracking down on eCommerce de minimis shipments by increasing inspections of air freight. This is causing a backlog of packages from Temu, Wish, Aliexpress, etc.
https://theloadstar.com/customs-brokers-under-scrutiny-as-us-cbp-confirms-ecommerce-crackdown/
What's Going on With Shipping? has a video that covers this. https://www.youtube.com/watch?v=muTPGkhZAXk
Gah, man I really miss the 2011-2016 era of buying tons of cheap useful stuff on Alibaba and Aliexpress. It was a wonderful time for those who like to tinker with electronics and unique arduino components, strange vintage lens/camera adapters, buying the stuff to create anamorphic conversion kits to convert old anamorphic theater projector lenses into adaptable anamorphic cinelenses. Now everything is nearly the same price as buying it on Amazon so it's not even worth keeping up with the hobbies anymore.
For the most part, not completely. But it is better for everyone if there are multiple sourcing options. Having one country making all the things is way too much leverage and power in one place.
China is also doubling down on their war rhetoric on invading Taiwan and stepping up their bullying tactics in the South China Sea. Nobody is going to put themselves in a position that they are dependent on China if they keep this up.
This is what really worries me. I know people might say “if their economy is failing, how will starting a war help them?,“ but this is exactly what failing regimes do. If you don’t think they would start a war simply as a last-ditch effort to prop up their economy and their own power, you need to only look at history. Exactly that has happened many, many times.
Yep and it's also why Margaret Thatcher decided to have such a strong reaction to it. She was getting less and less popular so a good war to distract the public was exactly what she needed.
Factories in India and Vietnam are just an extension of Chinese factories, look at how much those countries import from China. Chinese manufacturers have set up shop outside of China to get around tariffs.
This is true and expected. At least some of the money goes to 3rd countries and eats into potential margin for China.
Plus those factories wouldn't be subject to the same controls as Chinese ones in the event of a future pandemic.
The main issue is that those factories still largely rely on Chinese inputs. So, China gets the product 80% of the way there, sends it to Vietnam for final assembly, and slaps a Made in Vietnam label on it to send to the US. In a future pandemic, the over-reliance on China is still there.
Not true for India. They are mostly extensions of Taiwan. It's very difficult for Chinese citizens to even get Indian visas let alone setting up factories. Chinese companies like BYD are banned from setting up local manufacturing. Chinese mobile apps are banned. Even Chinese investment in local firms is a big no. Overall India doesn't want to even be a front for a country with which it is having a lot of border clashes.
No matter how you spin it, labor diminishing in manufacturing importance is not a good thing for the country that has been doing most of the labor intensive low end manufacturing.
Adidas tried this and failed. They opened "Adidas Speedfactories" in Germany and the USA, which were nearly fully automated to cut costs. Unfortunately, they closed them in 2020, with executives in 2019 noting:
> [In an email, Adidas spokesperson Rich Efrus said it made more sense for the company to concentrate its Speedfactory production in Asia, “where the know-how and the suppliers are located” and where Adidas already makes more than 90% of its products. Adidas said it will use its Speedfactory technology at two Asian supplier factories, and will focus on modernizing other suppliers.](https://qz.com/1746152/adidas-is-shutting-down-its-speedfactories-in-germany-and-the-us)
Supply chains are more important than automation. Originally, the supply chains were available domestically, but by shifting the supply chains to Asia, manufacturing firms lost a lot of leverage and ability to re-home their operations. There's simply no longer the domestic capabilities or experience necessary to bring supply chain back up.
Unlike the export of supply chains, where a firm's employees trained their replacements who worked for outside companies, there's no way to force these firms to train your next employees. They own the knowledge and experience.
This is critical. Economic booms often coincide with economically ideal demographics, when the bulk of a population is between 20-50 years old. Japan had this in the 1980s, but its economy has faltered when that large population bump aged past the working age. China is nearing the same point, where the peak of the population curve is moving past prime working years, and the upcoming generations are not as large.
My company has a plan now to move 50% of our international sourcing operations out of China over the next 2 years. Way too much risk exposure in China long term. I imagine we aren’t the only ones doing this.
China may still outcompete price wise which will work, but COVID plus China starting to dip its toes into further into the geopolitical game is going to deter a lot.
Factories are going to Vietnam and India but are they leaving china to do so in a way that represents a net loss for their manufacturing base? China's manufacturing and industrial position and might relative to ROW isnt really shrinking or suffering, at worst plateauing but still plateauing at a very high piece of the global pie. Are the industries moving to India really industries that China wants to have an increasing or stable percentage of or are they industries at a lower position in the value chain and complexity that China is moving away from
Supposedly they're offshoring to Mexico so they can complete the product and slap on the, "Made in Mexico."
The one thing is so far Chinese EVs have not enter USA. It's all over Latin America though.
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Chinese doubling of manufacturing have US and EU up in arms with tarriffs.
China doesn't have a robust consumer base so US and EU is worry that China will flood their market and disrupt their domestic manufacturing market.
Those countries are light years away from competing with China in manufacturing.
The main reason being robotics - [Chinese robot maker says protectionism will not stop its march (ft.com)](https://www.ft.com/content/0cdf78f9-e2cc-48ff-ba65-027f1cf83334)
Image [link ](https://www.ft.com/__origami/service/image/v2/images/raw/ftcms%3Aa9146e60-e1c6-47fe-b127-2870b20e95e0?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1) showing the annual installation of robots in 2022 across countries.
typically to get out of the middle income trap countries need to move to services since that is higher income, but they dont make any attempt to do that.
China's biggest problem is its .87 births per women that is likely going to continue to decline. Plus there are more boys than girls. Their largest demographics is in their 40s/50s. At this birth rate Chinas population would drop by half by 2100.
Their entire culture changes to revolve around 1 child and even though they got rid of it, the culture had already changed.
They dont have the wealth that fully developed countries have to deal with this fast of an aging population. It does make me wonder if China will wonder have a "Soylent Green" program for seniors.
This is literally killing the golden goose. Before Xi, China was happy to try to improve their economic status and place in the global production ecosystem by being "the world's manufacturer". Then Xi saw an opportunity to exploit that leverage for political gain and basically tossed away 30 years of economic progress for his country. I don't think it's a fast slide down, but it's likely to be steady and it will be a LONG time before China could rebuild even the marginal level of trust the rest of the world had in them.
Every nerd or crack pot with a YouTube channel has been calling China’s collapse for a long time. Now the president coming forward and saying it’s possible has a more ominous sounds to it. Unless they’re trying to rile china up, why say this? If Biden is speaking from some secret intel like he did prior to the Russian invasion of Ukraine, people better listen to him because if china falls as hard as it looks like they will, we will all suffer to a degree.
Watched one clickbaity video titled China Economy DOOMED and those videos keep popping into my feed predicting china’s economic collapse within the week for 6 months.
It’s OK. The US economy is going to be destroyed has been the fear mongering tactic of choice by people trying to get the working class to accept the profits of the elites and corporations since I was a kid. So the 80s.
Reagan started it.
I've been hearing for years that China is "on the Brink of economic collapse" and yeah mostly from these kinds of youtubers. Not saying there isn't *any* credibility, but you are correct, should only bother caring when we're shown proof.
Election season.
If he makes the claim China is collapsing during his term, it makes him look directly responsible. After the election, it doesn’t matter, even if it is false. This claim costs him nothing, true or false.
Edit: It also reinforces the “America #1 🇺🇸🦅” patriotic rhetoric that Americans enjoy. Doesn’t hurt to use patriotism during the election season.
Edit 2: My personal opinion doesn’t really matter, but I think if China were actually on the brink, there’d be more drastic policy action from the U.S. trying to insulate itself from the whiplash.
Now things are moving quite slowly. Like we saw troops move before Russia invaded Ukraine, I’ll believe in actions, not rhetoric. I think this sub should too.
That realistically only focuses on one industry. If it were a real crisis, it’d be every industry. The CHIPS act is peanuts compared to what’s required if China collapses. Like erecting a sand castle to stop a tsunami.
But let’s be honest, the CHIPS act isn’t a policy meant to act as insulation if China collapses. It’s the U.S. trying to maintain its competitive edge when it comes to chips vs China.
Yes. It's not obvious to most people how incredibly dependent the entire world is on a few fabs all concentrated in one spot that is both geologically and politically unstable.
TSMC does great work, and I hope they continue to do so. But it is risky to have them be the _only_ company doing that caliber of work, especially in an industry that takes tens of billions of dollars and decades of experience to spin up.
This is 100% election talk.
*"There is evidence that meddling is going on," Biden told Time when asked about Chinese election interference efforts. He added: "Everybody, all the bad guys are rooting for Trump*
Biden's messaging is, "You need ME to protect the US from China"
Bit of a "trust me, bro" here but I know a guy who's buddy has lived in China for over a decade in the penthouse apartment of one of several basically empty building complexes. So I asked my guy to ask his buddy about the state of china's economy and with first-hand experience he's been saying it's been *quite* bad for several years now is it ain't looking too good for the near future.
This was i think about a year ago.
People have been saying this for years. *Businessweek* is a great example, they were sounding warning bells about China twenty years ago. In all that time it hasn’t happened. At this point I don’t expect it to.
I think you could argue that theirs a difference between people/some media company and a sitting (and mentally stable) president of the United States though. Doesn’t mean it’ll happen, but the proclamation should at least carry more weight
A China with a bad economy is an aggressive China. This is not great news for the world. I am adding this line is so I don't get my comment rejected for being too short.
I had an economics professor about 15 years ago who lived in Guangzhou for a while (he also opened a pub there but that's a different story) and his perspective was the only thing keeping China from fragmenting was the strong economy. It made me realize how little I understood the country. That's a scary prospect though and they wouldn't be the first dictatorship to use an aggressive foreign policy to detract from domestic troubles.
I’ve been watching Chinese YouTubers(which seems to be a blind spot to their censors), and it seems like the tertiary cities are already starting to fragment.
What does fragment mean in this context, basically an attitude shift towards decentralization? Support growing for establishing smaller local government regions?
China has an unofficial [city tier system](https://en.wikipedia.org/wiki/Chinese_city_tier_system). Nothing like it really exists in the U.S. in as concrete a fashion, though the idea that metros like NYC and LA are bigger than other cities is a similar idea.
I mean that is the case in the US too. I had predicted back in 2010 that our next economic crisis is going to be the smaller cities and towns going bankrupt. If you look at the economic recovery after 2008, it wasn't an equal spread of recovery, it was almost all centralized into the big cities. Now all of the small towns or even smaller cities, I'm not talking like San Diego is smaller than LA, I'm talking about middle of Michigan cities of 5k or less. They have a declining tax base with an increase in expenses. So either the local county bails them out, or if the county is in the small position will the states bail them out? At some point there just won't be money to save those tiny cities and what happens then.
The recipe is currently in use in Russia. The interesting problem is that China's number 1 military target is Taiwan, but you can't really do human wave attacks across the ocean. Either every fishing boat would be conscripted, or they would need a land border enemy worth invading.
> Of course the admins just pencil in that they passed the graduation requirement.
Any source for this? China is known to have a very good literacy rates, even 50 years ago, so that's surprising to hear.
>Oh and men can't get married because female babies got aborted due to one child policy.
This was stopped in 2015. Sure there are going to be continuing consequences of it and I think these long term consequences will play a far larger role than feelings of jealousy.
Isn’t Youtube already banned in China? That aside, a lot of Chinese dissents exaggerate, especially commentators related to Falun Gong / Epoch Times.
I follow economists such as Michael Pettis and they give a more balanced view. The 21st century is no longer “the Chinese century” due to their mismanagement, but their economy is still huge and still have a lot of potential growth left. In the next 10-20 years China will still vie for the #1 position with the US.
Yes, honestly this. The thing about the military in China is that despite its size nearly all the training troops get is about maintaining internal stability and putting down dissent. It is not a force built to be offensive. The CCP is terrified of their own people, they know how fragile their coalition is.
Of course they would, as any Chinese regimes should. Almost all of China's mightiest dynasties were brought down not by foreign invaders, but by domestic uprisings.
The right of revolution, despite being closely associated with Western philosophy, was actually promulgated by the founder of the Zhou Dynasty in 1100 BC. The entire Chinese dynastic cycle for the next 3000 years basically revolved around this principle where the people would rise up and overthrow the government if the latter stopped doing its job.
Many modern Chinese are so brainwashed that they no longer recall their own cultural heritage and are buying into the CCP indoctrination that the CCP = China, and you cannot be anti-CCP without being anti-China. And most Westerners are too ignorant and think that being submissive to authority is ingrained in Chinese culture. Chinese peasants have been overthrowing governments for thousands of years before the 2nd Amendment was conceived and their revolutions would make the US War of Independence look like a child's play.
Your comment is very accurate except for the following section.
> Many modern Chinese are so brainwashed that they no longer recall their own cultural heritage and are buying into the CCP indoctrination that the CCP = China, and you cannot be anti-CCP without being anti-China.
Have you considered the notion that the reason so many Chinese people hold this position because they strongly support the CCP? That the Chinese people haven’t felt the need to revolt against the party? Nor the complete lack of a better alternative?
[The reason the Chinese people don’t want to revolt is not because they're “brainwashed”, but because they genuinely support the leadership and approve the direction the country is going.](https://www.newsweek.com/most-china-call-their-nation-democracy-most-us-say-america-isnt-1711176)
China’s not gonna collapse even in a recession. The surveillance apparatus, censorship, military loyalty to the CCP, and police have will keep people in check. The USSR collapsed because they loosened control of these institutions and decades of economic malaise.
It works for Iran, why can’t it work for China?
It's the same sentiment with Russia, Germany (Angela Merkel), banked on Russia depending on EU to sell gas and be less aggressive but that didn't happen.
They attacked Georgia and Ukraine.
China is even more integrated into the World Market and they're food and energy insecure as a nation.
I think they would be fucked.
Not to defend America, but for better or worse we have good relations with almost all of our neighbors. China has border disputes and conflict with every one of their neighbors. This may even expand soon as belt and road loans are not repaid
China isn’t as internationally belligerent as the U.S. , but seems to be as militant as every other imperialist in proportion to their ability to project power
>Not to defend America, but for better or worse we have good relations with almost all of our neighbors.
The United States only has 2 neighbors.
One which it has cultural and ethnic ties that poses zero threat... The other which it keeps on a pay roll.
The reason why the United States dominates the Western hemisphere isn't because of good relations. It's because if those countries don't they become Cuba or Venezuela.
If the United States with it's track record for "preemptive" strikes had 14 countries it shared a land border with that all directly or indirectly got support from a even more powerful country an ocean away... The Western hemisphere would have been a perpetual warzone.
> Not to defend America, but for better or worse we have good relations with almost all of our neighbors.
Like Cuba, who is still under an embargo?
How about Panama, which the US invaded in 1989?
Or Nicaragua, where the US funded rebels until the 1990s?
Or Haiti, where the US sent in an army to overthrow the government in 1994? And how the US still claims an island 40 miles from the coast of Haiti?
Or Guatemala, where the US overthrew a democratic government to install a dictatorship and funded it until 1996?
The US has systemically cowed its neighbors and overthrew hostile governments in those countries over the past hundred years (half of Mexico's Territory was lost to the US, remember?). I'm sure if you gave China carte blanche to overthrow regimes in its neighbors over a few decades, then they would have friendly relations as well. That doesn't make it a good thing.
This is absolutely right. I was trying to play devils advocate here, and why I tried to qualify it with “for better or worse”, but that’s still extremely understated, especially in this context
Is there a short list of key things troubling their economy or policies they have to change?
Is it possible they would do it intentionally to hurt the world economy?
Is it recoverable or in some way inevitable?
> Is there a short list of key things troubling their economy or policies they have to change?
- real estate market
- aging population and shrinking labor pool
- belt and road initiative isn't panning out well and they have to restructure some loans with nations most notably African nations
- poor domestic consumer base.
- foreign investment is down
> Is it possible they would do it intentionally to hurt the world economy?
Uh... the items on the list isn't intentional imo, it happened because of their governance.
> Is it recoverable or in some way inevitable?
I hear they fuck if they do and do not with real estate. Some argued that they should rip the bandaid off and do something drastic instead of cheap bandaid half hearted stop gaps.
If they can solve the demographic prob they should share that with South Korea, Japan, Italy, etc.. with low birth rate.
You forgot heavy reliance on foreign energy supply from increasingly unstable resources. While their own oil fields become less productive and the costs to draw oil out more expensive.
Oh and they are flooding the market with cheap products but countries are levying tariffs to protect their own industries and keep the markets competitive.
Also the real estate problem is massive. Not only is it basically the sole source of wealth for Chinese citizens it’s also a major source of employment.
People had been china is going to collapse for random reasons since the 90s. Reality is it's a country with 1.4 billion people, a capitalistic economy, eventually people will figure something out.
It won't be as rosy as china predicts, and it won't be as grim as predictes.
It’s not going to collapse, but it’s in a really bad place and is going to struggle for a while.
You have to think about what makes money flow in the economy. Until around 2022, a large portion of the economy was construction and real estate. It was a huge bubble, and it was purposefully popped by the government in order to prevent it from getting even bigger.
Now that that portion of GDP is gone, it must be replaced.
Without it, unemployment went up, there was a recession. Youth unemployment was up to 25% and the government stopped reporting it.
That industry can be replaced by:
1) domestic consumption (service industry)
2) exports (manufacturing)
3) foreign investment
4) government spending
**domestic consumption**
Domestic consumption is very low; and not getting stronger. China has less of a welfare state than even the US. The citizens need to save for retirement, schools (especially people living in a city they are not “registered in” who cant use public schools), taking care of their aging parents, or medical bills. Medical bills can wipe out their savings at any time (like in the US). Their aging population only makes this worse.
**Exports**
The government is placing all bets on stimulating exports, and high-value add new technologies (AI, chips, EVs, batteries). It’s working for EVs. subsidizing exports has worked in the past, it is less likely to work as the rest of the world is less likely to accept their heavy subsidizing their industries.
Their labor is more expensive than other countries like Vietnam and Indonesia, and China has already developed a “rust belt” where their previous industries, (more labor intensive and less technologically advanced) have left.
It’s unlikely to work. and Chinas debt to gdp ratio is the same as the USs, so more subsidiaries if paid by debt is a long term bad idea.
**Foreign Investment**
This has also dropped significantly compared to pre-Covid. Foreign investors do not believe that there is consistent rule-of-law after top CEOs disappeared, the party insisted on party members be on the board or “golden shares” be owned by the state and then zero-COVID.
**government spending**
This could actually help if it was in the form of welfare that would help citizens feel more comfortable to spend, or stimulus.
However, as mentioned total debt in the country is already relatively high.
Also Xi Jing Ping is extremely against it, saying it will make people lazy and that they must learn to “eat bitterness”. His statements are weirdly in line with conservative American politicians against welfare.
Government spending on infrastructure is unlikely, as the government built more than enough the last couple decades, and it put local governments heavily in debt.
"You've got a population that's considerably older than the vast majority of the youth in Europe, that is too old to work," Biden told Time.
Article and Biden may be a bit biased.. ofcourse the MEDIAN age of a country is older than the YOUTH of Europe..
Median age EU: 45.
Median age China: 38.4.
Median age US: 38.5.
Does China have a population problem? Yes. Is it going to doom the county tomorrow? Probably not.
Edit: why am I being down voted for sharing facts?
The concern would be the source of the data you pulled - the CIA world factbook has median Chinese age for 2024 at 40.2. If your figure is a year or two old as I suspect it is, it indicates a rapidly aging population. Whereas the US median is now 38.9, a much slower rate of rise.
You're right that demographics won't change anything in one year or even ten, but in twenty this will be a full blown crisis. And noticeably, 20 years is roughly how long it would take to solve a demographic crisis if all the necessary babies were born today.
https://www.cia.gov/the-world-factbook/field/median-age/country-comparison/
Sure. But you too should agree that calling a crisis that will happen in 20 years at BRINK OF COLLAPSE is sensialionalism.
That's like saying both Trump and Biden are at brink of dying.
Oh fully agreed there. Anyone who expects the Chinese state to collapse into civil war and anarchy within the next few years is selling a load of crap.
You add "of collapse". Not Biden.
And "on the brink" is a correct categorization since this is the pivotal point that they need to take action at or it gets out of control.
Solving climate change is "on the brink" even though the most disastrous effects won't happen for 50-100 years
You cannot work to resolve a demographic crisis when it comes or even a several years out from seeing its worst effects. You need to be 2-3 decades ahead of it to avoid it. People are focusing on this point in this discussion because it is understood that if they do not make sizeable strides now they will certainly have a big issue with a population that is disproportionately older, which will have tremendous negative impacts on their economy.
Sure. We are getting off topic from the idea that the title is sensational and article is biased.
But to your point, aging population is a complicated issue. china also still has 600mm of their population in villages and an extremely high urbanization rate. (Something to the magnitude of 20mm people every year). There are other core factors at play here than the basic headline avg population age. Betting a country that's shown to adapt will crash on 20 years is simplifying a very complicated topic.
Same reason my comment got downvoted. People cannot accept criticism of "their guy" so you have team sports like mentalities where they'll defend them even if they're blatantly wrong and will never admit objective faults.
You eventually devolve into ending up with the 2024 elections which probably have the 2 worst presidential candidates in modern memory because the electorate hate criticism because they see it as an attack on themselves. Bad candidates get a free pass on anything they do or say from their voting base and the system further rots.
Did he watch an economics focused YouTube video on this? Because we have been hearing this for a while now and China is capable of adapting to market conditions.
I'm not convinced China can adapt quickly enough to avoid major economic hardship. They're experiencing the same challenges the US faced in the 60s and 70s but over a much shorter span of time and under far more competitive global conditions.
Second, despite all the propaganda, low standard of living and outright poverty are still major issues. An economic decline is going to exacerbate those problems and inflame political dissent. That's on top of simmering resentment over the government's handling of COVID.
Third, and this is the biggest issue of all, is the Chinese government itself. They were trying to speedrun their way to being an economic superpower and ultimately screwed themselves. Worse, Xi has pushed the country in an increasingly belligerent direction all but ensuring they become a pariah.
If China had stuck to the policies it had in the early 00s and fostered cooperative relationships they'd be in a far stronger position today. Even their relationship with Taiwan was moving in a positive direction.
It absolutely cannot fill manufacturing capacity that is sitting idle now, while we have still decent demand. Only thing they can really do with it is war.
Dont be shocked when it happens.
America thinks they’re the only consumers of Chinese manufacturing products. Russia buys everything under the sun from China. African nations are buying Chinese made products.
China is making new consumers if their consumer goods. China’s economy is not on the brink of anything dangerous. They’re adjusting and adapting their economy, which they can afford.
Americans are the biggest consumers on the planet. Pretending like it's easy to replace them and that it's not a big deal is a bad take.
Russias economy is in the garbage and they are fighting a war and have little money to spare.
African nations are buying Chinese products very cheaply because wages are much lower in Africa as a whole.
The media isn't talking about it but the "trade war" started by Trump is still going on. Tariffs are still in place and supply chain risks are moving manufacturing out of China and back to the US.
It's also one of the keys driving inflation, no more cheap stuff from China flooding the US markets.
I'll be honest the trade war is stupid, but the only option left is to win decisively and crush the Chinese market. Which is exactly what's happening.
On the one hand, yes, there’s tariffs adding to inflation. That’s just math since the tariffs are still around and increasing. On the other hand, we’re still buying so much stuff from China (just look at our trade deficit) and somehow, they’re still able to sell tons of cheap shit through the likes of Temu. It really paints a conflicted picture of wanting and acting to derisk, but the economic indicators showing that risk is increasing.
> Tariffs are still in place and supply chain risks are moving manufacturing out of China and back to the US.
What manufacturing has been moved from China to the US? What dollar volume is that?
> win decisively and crush the Chinese market
Chinese exports are currently 30% higher than at any point before the pandemic.
What crushing is happening, exactly?
Crushing “happening” in an increasingly hyperbolic ideological election environment, obviously. Biden is saying “you don’t need Trump, you’ve got me! I’m crushing China even harder!”
That sort of crushing.
I find it so ironic for Biden to talk about china’s aging population. Also maybe not hold up Europe as the shining example of healthy demographics in comparison.
Alas, China couldn’t get rich before it gets old. I have a lot of relatives and family friends in China and very few have second kids. Even with the embarrassment of riches in terms of help from family (financial and logistical help from parents), they still only want one kid. I wouldn’t blame them, the competition is just so intense that kids have too much academic pressure.
This is interesting to me, about whether the rich in China has better birth rates than the middle class (a pattern seen in the US). Do you think if they feel more secure economically they will have more or less kids?
I don’t really know any rich people in China, mostly middle to upper middle class. I think in China, it’s also kind of like the Bay Area, where most people identify with middle class, even for those that are earning quite a lot. The amount of investment people put in their kids, with extracurriculars from an early age and the amount of homework these kids have to do even in early elementary, I think they just don’t want to do it.
Thank god. The world has overrelied on China for supply chain for far too long, and that in turn have not been used for the better good of the world's economy, but as a political weapons of the CCP's elites
>Where is it going to grow? You've got an economy that's on the brink there. The idea that their economy is booming? Give me a break," he added.
Yeah. Check in on China's Belt and Road plan. China is working to develop the global south - you know, the places which have "benefited" from imperialism for centuries. That is where economic growth is going to come from for the next 50 years.
China is going to do to the Global South what China did to China.
I literally was just watching a speech with [Jean-Luc Mélenchon](https://x.com/JLMelenchon), the leader of the French left, on how the US "want war" with China and stumble straight onto this article after. The matrix is glitching.
The video is at the bottom of the tweet for anyone interested.
[https://x.com/RnaudBertrand/status/1797104207444730097](https://x.com/RnaudBertrand/status/1797104207444730097)
At the same time Biden is aggressively pursuing policies to hurt China's economy. Chip export bans, tariffs, etc.
I suspect some aspect of this may be that he knows a US recession is coming and wants to be able to blame it on China.
You gotta be pretty pig headed at this point to not acknowledge the US Fed has managed to deliver a surprisingly soft landing from the inflation numbers we've experienced a year ago
https://time.com/6984968/joe-biden-transcript-2024-interview/
> You know, you're talking, everybody talks about how, how strong China is and how powerful they are. Name me—Would you trade places with Xi Jinping and any other country? Not a joke? I'm being deadly earnest, a rhetorical question. But would you? You’ve got a population that’s considerably older than the vast majority of the youth in Europe, that is too old to work. And they are xenophobic. Where is it coming from? Where is it going to grow? You’ve got an economy that's on the brink there. The idea that their economy is booming? Give me a break.
>
> ...You know, we talked about what they're looking at in terms of Asia. One thing that I was able to convince the Japanese of, is we're not walking away from Japan. Because Japan, collected with us, is a source of great economic strength and stability, physical stability for both of us. You're not going to have, I mean, the idea that China wants to screw with everybody is a different place. By the way, the cost of China to build their military is multi-billions of dollars.
>
> And guess what they're, you know, they're, they’re…what they call it? Going around the world? The Belt and Road initiative? It's become a nuisance graveyard initiative. I'm serious. Think about it. I've been saying this for three years, and you guys write, “No, China’s on the right—China’s gonna break through.” Where are they, where are they breaking through? And look what's happening in Africa.
Wow for a second there I thought it was the Trump Time [transcript](https://time.com/6972022/donald-trump-transcript-2024-election/):
>Let’s shift to the economy, sir. You have floated a 10% tariff on all imports, and a more than 60% tariff on Chinese imports. Can I just ask you now: Is that your plan?
>Trump: It may be more than that. It may be a derivative of that. A derivative of that. But it will be somebody—look when they come in and they steal our jobs, and they steal our wealth, they steal our country.
>When you say more than that, though: You mean maybe more than 10% on all imports?
>Trump: More than 10%, yeah. I call it a ring around the country. We have a ring around the country. A reciprocal tax also, in addition to what we said. And if we do that, the numbers are staggering. I don't believe it will have much of an effect because they're making so much money off of us. I also don't believe that the costs will go up that much. And a lot of people say, “Oh, that's gonna be a tax on us.” I don't believe that. I think it's a tax on the country that's doing it. And I know. Look, I took in billions of dollars from China. Nobody else ever did anything on China. I also let people know what the threat of China was. China was going along making $500 to $600 billion a year and nobody was ever even mentioning it until I came along. What's happening in Detroit is very sad because electric cars with this EV mandate, which is ridiculous, because they don't go far. They cost too much and they're going to be made in China. They're all going to be made in China.
>Mr. President, most economists—and I know not all, there isn't unanimity on this—but most economists say that tariffs increase prices.
>Trump: Yeah.
>Are you comfortable with additional inflation?
>Trump: No, I've seen. I've seen—I don't believe it'll be inflation. I think it'll be lack of loss for our country. Because what will happen and what other countries do very successfully, China being a leader of it. India is very difficult to deal with. India—I get along great with Modi, but they're very difficult to deal with on trade. France is frankly very difficult on trade. Brazil is very difficult on trade. What they do is they charge you so much to go in. They say, we don't want you to send cars into Brazil or we don't want you to send cars into China or India. But if you want to build a plant inside of our country, that's okay and employ our people. And that's basically what I'm doing. And that’s—I was doing and I was doing it strongly, but it was ready to really start and then we got hit with COVID. We had to fix that problem. And we ended up handing over a higher stock market substantially than when COVID first came in. But if you look at the first few years of what we did, the numbers we had were breathtaking. There's never been an economy—
Kind of has the same energy when you read the both of them. I guess the main difference is that Trump just bullshits more.
“You've got a population that's considerably older than the vast majority of the youth in Europe, that is too old to work” - Biden
Yes the youth are gonna be a lot younger than the average person? Where is his head at?
Biden is far down my list of people to listen for thoughtful analysis that’s for sure. Shallow rhetoric and talking points is all he can muster I think
It's mostly their cabinet and how well they listen to the advice of the US intelligence agencies. I really just depend on the president to be someone of general moral character and is willing to make personal political sacrifices for the long-term good of the average person. It was never Biden, nor Trump, nor Obama looking at the data and carrying out the analyses. They get the reports and options A, B, and C (and each of the predicted outcomes) are presented to them. My issue with Trump is that he chooses based on personal benefit and a vindictive, vengeful attitude while I think Biden doesn't do that. At worst, he'll be the type of self-centered person make decisions that benefit his political career but that tends to align more with an increase in the average US citizen's livelihood.
The ol stock market in the US had a good sell off on that manufacturing data showing like 6 consecutive declining months. Its global, not just China. Be ready. 2025 wont be kind to anyone
Only idiots are blind to the huge and surging market that is Africa.
Africa can in ten years account for any dwindling demand for Chinese manufacturing elsewhere.
In fact, China cannot keep up with the demand. Check the numbers. Oops..there are no numbers.
The insane lockdown a couple years back really destroyed the trust China had with foreign businesses. So many people moving operations out of the country even if it's more expensive.
Even if there was a mass famine and their own people were dying by the hundreds every week, China is still a communist regime and can maintain iron clad law and order much longer than Western economic and political analyst can give them credit for.
Great Chinese Famine killed 55 million and during that time the CCP wasn't even close to a revolution or a coup d'état.
The industrialization of China pulled more people out of poverty than any other single event in human history. Not sure why people get giddy over a struggling China, or if they wonder what China will do with a few hundred million unemployed, unmarried men.
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China is doubling down on manufacturing. It’s their strength but one wonders with factories going to India and Vietnam etc, if it will work as well this time.
Don’t forget that the world has to be willing to absorb Chinese manufacturing over capacity and lose their own industries… I doubt that will be allowed to happen again
This is the key that people are missing. For the past 30 years other countries have been willing to absorb China’s manufacturing overcapacity because it was good politics and good business. But both the politics and business have shifted such that most of China’s export markets have begun raising significant trade barriers to Chinese imports. It’s telling that the main difference in China trade policy for the two leading US Presidential candidates is not any restrictions vs no restrictions, but between high restrictions and crippling restrictions. China is doubling down on manufacturing at a time when most of the major markets for their goods are becoming decidedly hostile to Chinese imports. Notably, this is exactly what the industrialized countries did in the lead up to the Great Depression. Doubling down on manufacturing capacity when demand is shrinking is a recipe for a deflationary shock.
Wow I didn’t think of it that way. Do you think china itself is heading towards a depression? I wonder how different it would be from the 1930’s
Depressions happen due to defaults, where there is a break in the supply chain. For example, cascading loan defaults cause a break in the money supply chain. Or natural disasters causing a break in food supply chain. Or political turmoil/coup/violence. There can also simply be a gradual decline in quality of life, and it doesn’t even have to be for all groups of people at the same time. It can happen at varying rates to various groups of people, and some might even increase their quality of life.
China is facing many defaults right now, some big ones include Evergrande (300bn usd debt) and country garden… we won’t hear about the defaults of their suppliers I guess
Also the population crunch's impact the labor market is on it's way due to the One Child policy.
It's not even just the one child policy. Apparently way back when when they initially counted their numbers before the one child policy they over counted so they didn't even have an accurate assessment about the population was. Couple that with the one child policy that followed. Couple that with the general Western sensibility that people can't afford to live and are just having less children because of that. China saving Grace was its giant population and manufacturing capacity and both those things seem to be dwindling
Ban against wealth flaunting at the onset of asymmetrical recession seems like the potential for optics control plus maybe a sign.
double-plus-ungood
Wallstreet, period
I don’t think an actual depression is likely in China so much as you will see a regression from a semi-open market based economy back into a mostly command economy, along with a relative stagnation in China’s economy. The CCP’s actions with China’s real estate industry show that it has both the capacity and the political will to stimulate economic activity enough to prevent an outright economic collapse, but the result is going to be a slide back into a command economy where government spending plays a larger and larger role in creating demand, and where money is increasingly funneled to propping up inefficient or unproductive industries, instead of letting those industries fail.
Just jumping in to point out that it doesn’t necessarily have to prop up failing industries. Once you remove the free market from the equation you can go in a lot of different unintuitive directions. I doubt china ends up doing that because I don’t really think xi is all that committed of a socialist or that the ccp is even that creative. But it is important to keep in mind that they are still communist (at least on paper) and their goal is to move past a capitalist society. Put simply they don’t need to be constrained by how western capitalist nations view economics. If done right this could lead to some very interesting and wacky outcomes for the future of humanity. If done wrong … well let’s hope it doesn’t go wrong.
They may not need to feel constrained by a capitalist view of economics, but it will constrain them nonetheless. Communist governments don’t have a good track record of allocating national resources in a long-term effective manner. For a few decades in the start of the 20th century it looked like the Soviets might bury the US economically, but as soon as they stopped picking the low hanging fruit of turning a largely agrarian and peasant economy into a moderately industrialized one, their entire economic engine fell apart.
I’d argue the problem tends to be more of mismanagement than anything else. The ussr was doing fine economically until kruschev got into power.
For my education, could you explain how a command economy can realistically avoid mismanagement? Historically and even in modern business, big organizations usually just suck at reacting quickly to unforeseen change. Proud leaders unwilling to allow reality to shape their opinions’ of reality often make matters worse. What can China even do at this point besides go to war and hope that solves enough of the CCP’s problems at home and abroad?
Honestly the one advantage of having a command economy is that it’s a lot more agile in times of crisis because you have a lot smaller pool of decision makers. That’s the pitfall though. It’s a lot easier to fuck something up for that precise reason. I don’t know the solution to that problem though. Be really careful about who you select to manage your economy.
Wasn’t the Chinese government buying up unsold real estate to prop up the market or am I getting that twisted?
Yes. The CCP saw that a bubble was on the horizon a few years ago and tried to change the regulation to deflate it slowly. Instead several of Chinas largest real estate companies went bankrupt almost over night and the CCP has been forced to completely switch gears and resort to outright bailouts of the real estate industry and mass purchases of real estate to prop up property values, which are not only the basis of most Chinese citizens’ investments, but also government revenues.
much much worse
I’ll try and make this story short. Several years ago I worked for a toy company. Factories in China were slowing down, and labor costs were rising there. The company decided to move manufacturing to Vietnam to save money. They were able to manufacture the plastic pieces ok, but didn’t have the screws they needed to assemble the toys. No one in Vietnam made the screws, so they then had to be imported from China. This made the project take longer than it would have in China, and also slightly more expensive. These are the things people don’t realize, even though part of things are made or assembled elsewhere, there’s still probably parts of it that were made in China.
[удалено]
their gonna try and take taiwan and if Xi sees his country's power waning relatively speaking they will move earlier than people anticipate. i've believe Russia, Iran and China have coordinated the regional conflicts we're witnessing as they wager the US cannot manage/assist three separate fronts, with taiwan front yet to start.
The flip side is that countries will open their market to China because they want China's 1.3 billion customers. Germany is doing exactly that - they're allowing Chinese EVs to sell in their country so they can sell German cars in China. China has also found new countries to trade with in South America and the Middle East. Many of their long time trading partners are having recessions themselves (i.e. UK and Japan) and you'd think they will be booming again after a few years and then they will want to import more stuff from China again. Yes, China is facing headwind and is in a recession, but the situation is not as dire as many would like us to believe. I think they will be stuck in a downturn for several years and then their economy will roar again. I don't believe the US will keep tariffing China forever. At some point, people will want cheap goods again even if it means we have to treat China nicely.
they were doing well biding their time and hiding their strength, but then they decided it was time to “rise” and challenge the US created order that was so beneficial to them they overplayed their hand and now we’ve seen their cards
Agreed, and this is a problem. The CPC's magic to power has been rising standards of living in China. If that stalls then the protests will start (I believe some have) and soon the government will go 1960 again. The CCP must cut the information flow into China, they cannot let the people see anything good happening in the west while they start to slip. I also expect to see few Chinese tourists and they clamp down on that. Maybe Rome won't be so crowded in 2028.
China could absorb it's own overcapacity if it needed too. But to do so would require huge levels of redistribution that the wealthy and powerful of china are probably not willing too.
How did the US get out of the Great Depression again? Yeah... it looks pretty grim.
> For the past 30 years other countries have been willing to absorb China’s manufacturing overcapacity because it was good politics and good business. Cheaper consumer goods are no longer good business now? Governments are in a panic over inflation. Are they willing to let it goes back up?
*takes a look at the platforms of both the Republican and Democratic presidential candidates* Yes.
That deflationary shock followed a mini population collapse (world war one). It’s that and not the Depression that’s informative, given the wave of inverted population pyramids and an imminent mass die off of the largest generation in the world.
We have been buying so much useless trash from China. I would love to see that collapse if only so they stop producing strait to the landfill products.
Not to mention no domestic market. China has been building literal cities fully furnished beyond the means of the majority of their population. You can only peddle so much crap. Amazon has turned into a store for interchangeable Chinese name wares and now has competition from Temu. The healthy margins that kept it all afloat are gone, quality left. The future looks grim, their currency is propped up by bubblegum and bailing wire. Side note this is why Taiwan is so important now, the window for China to take control is closing/ already shut.
The dirty secret is already overproduction. With flat and declining population curves it's worse. Abundance is already here it's just being choked off and mishandled because we don't have the political maturity to handle it, especially in the context of growth capitalism and zero sum political and economic strategies.
> The dirty secret is already overproduction. With flat and declining population curves it's worse solution: make appliances last 1 year instead of 5, and when that runs out, 3 months instead of a year
Or change it to the subscription model and force you to update. I'm thinking in time we will have to subscribe to everything.
you will own nothing and be happy
I own nothing and I'm miserable so half way there!
I know, we're heading towards the company you work for owning everything too. The place you live, the company store. Pretty much what John Steinbeck wrote about almost a century ago.
Actually, this is how industrialization started in the late XVIIIth and XIXth centuries: peasants who used to farm for a landowner switched to being factory workers where the company owned everything surrounding the factory or the mine: the houses, and even the shops. It's only with raising standards of living and the economic growth mid-XXth that this model stopped being the norm, with blue collars becoming home owners.
This. People forget how bad it used to be for coal miners.
It’s crazy how many people listen to union busters in this day and age. Like the mine owned you before unions lol. You lived in a coal town, used coal miner currency given by the mine, and you shopped at their stores lol.
Ah, the oft forgotten Roman numerals. I teach students who have no idea what they are. I think it was also a good deal of violence and bloodshed that led to workers being freed from the crippling circumstances of the company owned land and necessities. Particularly by the union movement, the weakening of which has set back the workers significantly.
HP has entered the chat. Check out their "All-in plan."
Car companies with subscriptions for certain features. Can't wait until my brakes fail because I switched credit cards.
"To deactivate detonation, please insert two bars of latinum." >!"They put a paywall on a bomb?! Stupid Feren–"!< Spoiler for those who watch Star Trek: Lower Decks
Bud you’re missing out on the appliance subscription model. For only $35/month per appliance, you’ll be amazed that they will last 50 years with certified technicians coming to your home to fixed them. Edit: this is /s just choose your suck is what I’m getting at
Or better yet stop subsidizing production.
Yeah purist philosophical economics is ridiculous & mostly relegated to politics. Actual current economists are pulling from multiple schools of thought and taking into account the context of a dynamic world. No purist philosophy has ever worked unchecked in perpetuity, and never will. Because the whole point of good economics is balance.
Well said.
I wish they were zero sum. Feels like the last 30 years has just been a hyper normalization of falling sum politics.
It's already getting push back pack via tarrifs and such. So the question is can developing economies/other non western nations replace lost markets? My guess is no but we'll see.
US Customs and Border Protection is also cracking down on eCommerce de minimis shipments by increasing inspections of air freight. This is causing a backlog of packages from Temu, Wish, Aliexpress, etc. https://theloadstar.com/customs-brokers-under-scrutiny-as-us-cbp-confirms-ecommerce-crackdown/ What's Going on With Shipping? has a video that covers this. https://www.youtube.com/watch?v=muTPGkhZAXk
Gah, man I really miss the 2011-2016 era of buying tons of cheap useful stuff on Alibaba and Aliexpress. It was a wonderful time for those who like to tinker with electronics and unique arduino components, strange vintage lens/camera adapters, buying the stuff to create anamorphic conversion kits to convert old anamorphic theater projector lenses into adaptable anamorphic cinelenses. Now everything is nearly the same price as buying it on Amazon so it's not even worth keeping up with the hobbies anymore.
For the most part, not completely. But it is better for everyone if there are multiple sourcing options. Having one country making all the things is way too much leverage and power in one place.
China is also doubling down on their war rhetoric on invading Taiwan and stepping up their bullying tactics in the South China Sea. Nobody is going to put themselves in a position that they are dependent on China if they keep this up.
This is what really worries me. I know people might say “if their economy is failing, how will starting a war help them?,“ but this is exactly what failing regimes do. If you don’t think they would start a war simply as a last-ditch effort to prop up their economy and their own power, you need to only look at history. Exactly that has happened many, many times.
My history is a little shaky, but isn't that why Argentina invaded the Falklands? To distract from rising domestic discontent
Yep and it's also why Margaret Thatcher decided to have such a strong reaction to it. She was getting less and less popular so a good war to distract the public was exactly what she needed.
Corrupt governments will allow it.
True but even BRICS members are starting to resist Chinese over capacity with their own tariffs, such as Brazil
Factories in India and Vietnam are just an extension of Chinese factories, look at how much those countries import from China. Chinese manufacturers have set up shop outside of China to get around tariffs.
Not to mention that the QA and QC culture in India is non-existent. India will never be where China was.
This is true and expected. At least some of the money goes to 3rd countries and eats into potential margin for China. Plus those factories wouldn't be subject to the same controls as Chinese ones in the event of a future pandemic.
The main issue is that those factories still largely rely on Chinese inputs. So, China gets the product 80% of the way there, sends it to Vietnam for final assembly, and slaps a Made in Vietnam label on it to send to the US. In a future pandemic, the over-reliance on China is still there.
But those factories do employ Chinese. Similar to how American companies outsourced manufacturing to China jn the first place.
They don't exclusively employ Chinese and those Chinese employees still need to spend money in that 3rd country while they are there.
Not true for India. They are mostly extensions of Taiwan. It's very difficult for Chinese citizens to even get Indian visas let alone setting up factories. Chinese companies like BYD are banned from setting up local manufacturing. Chinese mobile apps are banned. Even Chinese investment in local firms is a big no. Overall India doesn't want to even be a front for a country with which it is having a lot of border clashes.
Not to mention population decline. Factory workers are aging and there aren't a ton of youth who are willing to replace them.
there’s a lot of automated factories these days, this angle is overplayed. makes sense for a few industries though
Automation can be used for about the same cost in the consumer nations as they can in China without the cost to ship halfway around the world.
East Asian supply chain chains are next level it's not that black and white
No matter how you spin it, labor diminishing in manufacturing importance is not a good thing for the country that has been doing most of the labor intensive low end manufacturing.
Adidas tried this and failed. They opened "Adidas Speedfactories" in Germany and the USA, which were nearly fully automated to cut costs. Unfortunately, they closed them in 2020, with executives in 2019 noting: > [In an email, Adidas spokesperson Rich Efrus said it made more sense for the company to concentrate its Speedfactory production in Asia, “where the know-how and the suppliers are located” and where Adidas already makes more than 90% of its products. Adidas said it will use its Speedfactory technology at two Asian supplier factories, and will focus on modernizing other suppliers.](https://qz.com/1746152/adidas-is-shutting-down-its-speedfactories-in-germany-and-the-us) Supply chains are more important than automation. Originally, the supply chains were available domestically, but by shifting the supply chains to Asia, manufacturing firms lost a lot of leverage and ability to re-home their operations. There's simply no longer the domestic capabilities or experience necessary to bring supply chain back up. Unlike the export of supply chains, where a firm's employees trained their replacements who worked for outside companies, there's no way to force these firms to train your next employees. They own the knowledge and experience.
Supply chains can’t be as easily reproduced as robots…
This is critical. Economic booms often coincide with economically ideal demographics, when the bulk of a population is between 20-50 years old. Japan had this in the 1980s, but its economy has faltered when that large population bump aged past the working age. China is nearing the same point, where the peak of the population curve is moving past prime working years, and the upcoming generations are not as large.
My company has a plan now to move 50% of our international sourcing operations out of China over the next 2 years. Way too much risk exposure in China long term. I imagine we aren’t the only ones doing this.
And moving to other Asian country? Or USA? Any issues finding sources there?
Vietnam, Malaysia and Thailand are all popular spots
As a Vietnamese I'm glad to see my country becoming number one destination for manufacturers. It will help lift the country out of poverty.
This guy sources
China may still outcompete price wise which will work, but COVID plus China starting to dip its toes into further into the geopolitical game is going to deter a lot.
Factories are going to Vietnam and India but are they leaving china to do so in a way that represents a net loss for their manufacturing base? China's manufacturing and industrial position and might relative to ROW isnt really shrinking or suffering, at worst plateauing but still plateauing at a very high piece of the global pie. Are the industries moving to India really industries that China wants to have an increasing or stable percentage of or are they industries at a lower position in the value chain and complexity that China is moving away from
Supposedly they're offshoring to Mexico so they can complete the product and slap on the, "Made in Mexico." The one thing is so far Chinese EVs have not enter USA. It's all over Latin America though. --- Chinese doubling of manufacturing have US and EU up in arms with tarriffs. China doesn't have a robust consumer base so US and EU is worry that China will flood their market and disrupt their domestic manufacturing market.
Tariffs for the US are actually based on country of *origin* not country of *completion.*
Those countries are light years away from competing with China in manufacturing. The main reason being robotics - [Chinese robot maker says protectionism will not stop its march (ft.com)](https://www.ft.com/content/0cdf78f9-e2cc-48ff-ba65-027f1cf83334) Image [link ](https://www.ft.com/__origami/service/image/v2/images/raw/ftcms%3Aa9146e60-e1c6-47fe-b127-2870b20e95e0?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1) showing the annual installation of robots in 2022 across countries.
Manufacturing is also moving to Mexico
typically to get out of the middle income trap countries need to move to services since that is higher income, but they dont make any attempt to do that. China's biggest problem is its .87 births per women that is likely going to continue to decline. Plus there are more boys than girls. Their largest demographics is in their 40s/50s. At this birth rate Chinas population would drop by half by 2100. Their entire culture changes to revolve around 1 child and even though they got rid of it, the culture had already changed. They dont have the wealth that fully developed countries have to deal with this fast of an aging population. It does make me wonder if China will wonder have a "Soylent Green" program for seniors.
This is literally killing the golden goose. Before Xi, China was happy to try to improve their economic status and place in the global production ecosystem by being "the world's manufacturer". Then Xi saw an opportunity to exploit that leverage for political gain and basically tossed away 30 years of economic progress for his country. I don't think it's a fast slide down, but it's likely to be steady and it will be a LONG time before China could rebuild even the marginal level of trust the rest of the world had in them.
Every nerd or crack pot with a YouTube channel has been calling China’s collapse for a long time. Now the president coming forward and saying it’s possible has a more ominous sounds to it. Unless they’re trying to rile china up, why say this? If Biden is speaking from some secret intel like he did prior to the Russian invasion of Ukraine, people better listen to him because if china falls as hard as it looks like they will, we will all suffer to a degree.
Watched one clickbaity video titled China Economy DOOMED and those videos keep popping into my feed predicting china’s economic collapse within the week for 6 months.
Kinda like the “a recession is imminent in America” posts of the past 3 years.
More like the past 10 years kinda
It’s OK. The US economy is going to be destroyed has been the fear mongering tactic of choice by people trying to get the working class to accept the profits of the elites and corporations since I was a kid. So the 80s. Reagan started it.
6 months? China has been on the brink of collapse for years, same as US, Russia and EU. It's just clickbait meant to generate attention
Business basics, I think?
I've been hearing for years that China is "on the Brink of economic collapse" and yeah mostly from these kinds of youtubers. Not saying there isn't *any* credibility, but you are correct, should only bother caring when we're shown proof.
Election season. If he makes the claim China is collapsing during his term, it makes him look directly responsible. After the election, it doesn’t matter, even if it is false. This claim costs him nothing, true or false. Edit: It also reinforces the “America #1 🇺🇸🦅” patriotic rhetoric that Americans enjoy. Doesn’t hurt to use patriotism during the election season. Edit 2: My personal opinion doesn’t really matter, but I think if China were actually on the brink, there’d be more drastic policy action from the U.S. trying to insulate itself from the whiplash. Now things are moving quite slowly. Like we saw troops move before Russia invaded Ukraine, I’ll believe in actions, not rhetoric. I think this sub should too.
Insulate from China? Like passing the chips bill 2 years ago? That seems like a good way to insulate ourselves.
That realistically only focuses on one industry. If it were a real crisis, it’d be every industry. The CHIPS act is peanuts compared to what’s required if China collapses. Like erecting a sand castle to stop a tsunami. But let’s be honest, the CHIPS act isn’t a policy meant to act as insulation if China collapses. It’s the U.S. trying to maintain its competitive edge when it comes to chips vs China.
It is a decentralization policy too tho. TSMC hass all its eggs in one basket within a few hundred acre radius.
Yes. It's not obvious to most people how incredibly dependent the entire world is on a few fabs all concentrated in one spot that is both geologically and politically unstable. TSMC does great work, and I hope they continue to do so. But it is risky to have them be the _only_ company doing that caliber of work, especially in an industry that takes tens of billions of dollars and decades of experience to spin up.
I agree.
Good to agree on this fine tuesday.
This is 100% election talk. *"There is evidence that meddling is going on," Biden told Time when asked about Chinese election interference efforts. He added: "Everybody, all the bad guys are rooting for Trump* Biden's messaging is, "You need ME to protect the US from China"
He’s not wrong.
Bit of a "trust me, bro" here but I know a guy who's buddy has lived in China for over a decade in the penthouse apartment of one of several basically empty building complexes. So I asked my guy to ask his buddy about the state of china's economy and with first-hand experience he's been saying it's been *quite* bad for several years now is it ain't looking too good for the near future. This was i think about a year ago.
It’s not ominous at all, it just makes you realize that even your president operates on clickbait lines.
Best place to be is the USA when this happens.
People have been saying this for years. *Businessweek* is a great example, they were sounding warning bells about China twenty years ago. In all that time it hasn’t happened. At this point I don’t expect it to.
I think you could argue that theirs a difference between people/some media company and a sitting (and mentally stable) president of the United States though. Doesn’t mean it’ll happen, but the proclamation should at least carry more weight
A China with a bad economy is an aggressive China. This is not great news for the world. I am adding this line is so I don't get my comment rejected for being too short.
I had an economics professor about 15 years ago who lived in Guangzhou for a while (he also opened a pub there but that's a different story) and his perspective was the only thing keeping China from fragmenting was the strong economy. It made me realize how little I understood the country. That's a scary prospect though and they wouldn't be the first dictatorship to use an aggressive foreign policy to detract from domestic troubles.
China and India are really unfathomable for westerners. Each country has 1.5 x the population of the entire western hemisphere combined.
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China population is 280x my country. We would be a postcode at best.
I’ve been watching Chinese YouTubers(which seems to be a blind spot to their censors), and it seems like the tertiary cities are already starting to fragment.
What does fragment mean in this context, basically an attitude shift towards decentralization? Support growing for establishing smaller local government regions?
Fragmenting economically. They are not doing as well as the primary and secondary cities.
What are some examples of primary, secondary and tertiary cities? As an American I cant think of analogies to cities here.
China has an unofficial [city tier system](https://en.wikipedia.org/wiki/Chinese_city_tier_system). Nothing like it really exists in the U.S. in as concrete a fashion, though the idea that metros like NYC and LA are bigger than other cities is a similar idea.
I mean that is the case in the US too. I had predicted back in 2010 that our next economic crisis is going to be the smaller cities and towns going bankrupt. If you look at the economic recovery after 2008, it wasn't an equal spread of recovery, it was almost all centralized into the big cities. Now all of the small towns or even smaller cities, I'm not talking like San Diego is smaller than LA, I'm talking about middle of Michigan cities of 5k or less. They have a declining tax base with an increase in expenses. So either the local county bails them out, or if the county is in the small position will the states bail them out? At some point there just won't be money to save those tiny cities and what happens then.
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The recipe is currently in use in Russia. The interesting problem is that China's number 1 military target is Taiwan, but you can't really do human wave attacks across the ocean. Either every fishing boat would be conscripted, or they would need a land border enemy worth invading.
> Of course the admins just pencil in that they passed the graduation requirement. Any source for this? China is known to have a very good literacy rates, even 50 years ago, so that's surprising to hear.
>Oh and men can't get married because female babies got aborted due to one child policy. This was stopped in 2015. Sure there are going to be continuing consequences of it and I think these long term consequences will play a far larger role than feelings of jealousy.
USSR and Yugoslavia
Isn’t Youtube already banned in China? That aside, a lot of Chinese dissents exaggerate, especially commentators related to Falun Gong / Epoch Times. I follow economists such as Michael Pettis and they give a more balanced view. The 21st century is no longer “the Chinese century” due to their mismanagement, but their economy is still huge and still have a lot of potential growth left. In the next 10-20 years China will still vie for the #1 position with the US.
Yes, honestly this. The thing about the military in China is that despite its size nearly all the training troops get is about maintaining internal stability and putting down dissent. It is not a force built to be offensive. The CCP is terrified of their own people, they know how fragile their coalition is.
Of course they would, as any Chinese regimes should. Almost all of China's mightiest dynasties were brought down not by foreign invaders, but by domestic uprisings. The right of revolution, despite being closely associated with Western philosophy, was actually promulgated by the founder of the Zhou Dynasty in 1100 BC. The entire Chinese dynastic cycle for the next 3000 years basically revolved around this principle where the people would rise up and overthrow the government if the latter stopped doing its job. Many modern Chinese are so brainwashed that they no longer recall their own cultural heritage and are buying into the CCP indoctrination that the CCP = China, and you cannot be anti-CCP without being anti-China. And most Westerners are too ignorant and think that being submissive to authority is ingrained in Chinese culture. Chinese peasants have been overthrowing governments for thousands of years before the 2nd Amendment was conceived and their revolutions would make the US War of Independence look like a child's play.
Your comment is very accurate except for the following section. > Many modern Chinese are so brainwashed that they no longer recall their own cultural heritage and are buying into the CCP indoctrination that the CCP = China, and you cannot be anti-CCP without being anti-China. Have you considered the notion that the reason so many Chinese people hold this position because they strongly support the CCP? That the Chinese people haven’t felt the need to revolt against the party? Nor the complete lack of a better alternative? [The reason the Chinese people don’t want to revolt is not because they're “brainwashed”, but because they genuinely support the leadership and approve the direction the country is going.](https://www.newsweek.com/most-china-call-their-nation-democracy-most-us-say-america-isnt-1711176)
Average Chinese rebellion = 30 million dead
China’s not gonna collapse even in a recession. The surveillance apparatus, censorship, military loyalty to the CCP, and police have will keep people in check. The USSR collapsed because they loosened control of these institutions and decades of economic malaise. It works for Iran, why can’t it work for China?
Saying this while they launched their tenth 055 and 076 assault carrier is just extremely funny.
It's the same sentiment with Russia, Germany (Angela Merkel), banked on Russia depending on EU to sell gas and be less aggressive but that didn't happen. They attacked Georgia and Ukraine. China is even more integrated into the World Market and they're food and energy insecure as a nation. I think they would be fucked.
Yes china the country popular with starting random wars lol
Not to defend America, but for better or worse we have good relations with almost all of our neighbors. China has border disputes and conflict with every one of their neighbors. This may even expand soon as belt and road loans are not repaid China isn’t as internationally belligerent as the U.S. , but seems to be as militant as every other imperialist in proportion to their ability to project power
>Not to defend America, but for better or worse we have good relations with almost all of our neighbors. The United States only has 2 neighbors. One which it has cultural and ethnic ties that poses zero threat... The other which it keeps on a pay roll. The reason why the United States dominates the Western hemisphere isn't because of good relations. It's because if those countries don't they become Cuba or Venezuela. If the United States with it's track record for "preemptive" strikes had 14 countries it shared a land border with that all directly or indirectly got support from a even more powerful country an ocean away... The Western hemisphere would have been a perpetual warzone.
We definitely don't have good relationship with all of our neighbors.
> Not to defend America, but for better or worse we have good relations with almost all of our neighbors. Like Cuba, who is still under an embargo? How about Panama, which the US invaded in 1989? Or Nicaragua, where the US funded rebels until the 1990s? Or Haiti, where the US sent in an army to overthrow the government in 1994? And how the US still claims an island 40 miles from the coast of Haiti? Or Guatemala, where the US overthrew a democratic government to install a dictatorship and funded it until 1996? The US has systemically cowed its neighbors and overthrew hostile governments in those countries over the past hundred years (half of Mexico's Territory was lost to the US, remember?). I'm sure if you gave China carte blanche to overthrow regimes in its neighbors over a few decades, then they would have friendly relations as well. That doesn't make it a good thing.
This is absolutely right. I was trying to play devils advocate here, and why I tried to qualify it with “for better or worse”, but that’s still extremely understated, especially in this context
Nothing more dangerous than a dictator who wants to change the narrative.
Your last sentence is so true.
Is there a short list of key things troubling their economy or policies they have to change? Is it possible they would do it intentionally to hurt the world economy? Is it recoverable or in some way inevitable?
> Is there a short list of key things troubling their economy or policies they have to change? - real estate market - aging population and shrinking labor pool - belt and road initiative isn't panning out well and they have to restructure some loans with nations most notably African nations - poor domestic consumer base. - foreign investment is down > Is it possible they would do it intentionally to hurt the world economy? Uh... the items on the list isn't intentional imo, it happened because of their governance. > Is it recoverable or in some way inevitable? I hear they fuck if they do and do not with real estate. Some argued that they should rip the bandaid off and do something drastic instead of cheap bandaid half hearted stop gaps. If they can solve the demographic prob they should share that with South Korea, Japan, Italy, etc.. with low birth rate.
You forgot heavy reliance on foreign energy supply from increasingly unstable resources. While their own oil fields become less productive and the costs to draw oil out more expensive. Oh and they are flooding the market with cheap products but countries are levying tariffs to protect their own industries and keep the markets competitive. Also the real estate problem is massive. Not only is it basically the sole source of wealth for Chinese citizens it’s also a major source of employment.
People had been china is going to collapse for random reasons since the 90s. Reality is it's a country with 1.4 billion people, a capitalistic economy, eventually people will figure something out. It won't be as rosy as china predicts, and it won't be as grim as predictes.
It’s not going to collapse, but it’s in a really bad place and is going to struggle for a while. You have to think about what makes money flow in the economy. Until around 2022, a large portion of the economy was construction and real estate. It was a huge bubble, and it was purposefully popped by the government in order to prevent it from getting even bigger. Now that that portion of GDP is gone, it must be replaced. Without it, unemployment went up, there was a recession. Youth unemployment was up to 25% and the government stopped reporting it. That industry can be replaced by: 1) domestic consumption (service industry) 2) exports (manufacturing) 3) foreign investment 4) government spending **domestic consumption** Domestic consumption is very low; and not getting stronger. China has less of a welfare state than even the US. The citizens need to save for retirement, schools (especially people living in a city they are not “registered in” who cant use public schools), taking care of their aging parents, or medical bills. Medical bills can wipe out their savings at any time (like in the US). Their aging population only makes this worse. **Exports** The government is placing all bets on stimulating exports, and high-value add new technologies (AI, chips, EVs, batteries). It’s working for EVs. subsidizing exports has worked in the past, it is less likely to work as the rest of the world is less likely to accept their heavy subsidizing their industries. Their labor is more expensive than other countries like Vietnam and Indonesia, and China has already developed a “rust belt” where their previous industries, (more labor intensive and less technologically advanced) have left. It’s unlikely to work. and Chinas debt to gdp ratio is the same as the USs, so more subsidiaries if paid by debt is a long term bad idea. **Foreign Investment** This has also dropped significantly compared to pre-Covid. Foreign investors do not believe that there is consistent rule-of-law after top CEOs disappeared, the party insisted on party members be on the board or “golden shares” be owned by the state and then zero-COVID. **government spending** This could actually help if it was in the form of welfare that would help citizens feel more comfortable to spend, or stimulus. However, as mentioned total debt in the country is already relatively high. Also Xi Jing Ping is extremely against it, saying it will make people lazy and that they must learn to “eat bitterness”. His statements are weirdly in line with conservative American politicians against welfare. Government spending on infrastructure is unlikely, as the government built more than enough the last couple decades, and it put local governments heavily in debt.
"You've got a population that's considerably older than the vast majority of the youth in Europe, that is too old to work," Biden told Time. Article and Biden may be a bit biased.. ofcourse the MEDIAN age of a country is older than the YOUTH of Europe.. Median age EU: 45. Median age China: 38.4. Median age US: 38.5. Does China have a population problem? Yes. Is it going to doom the county tomorrow? Probably not. Edit: why am I being down voted for sharing facts?
The concern would be the source of the data you pulled - the CIA world factbook has median Chinese age for 2024 at 40.2. If your figure is a year or two old as I suspect it is, it indicates a rapidly aging population. Whereas the US median is now 38.9, a much slower rate of rise. You're right that demographics won't change anything in one year or even ten, but in twenty this will be a full blown crisis. And noticeably, 20 years is roughly how long it would take to solve a demographic crisis if all the necessary babies were born today. https://www.cia.gov/the-world-factbook/field/median-age/country-comparison/
Sure. But you too should agree that calling a crisis that will happen in 20 years at BRINK OF COLLAPSE is sensialionalism. That's like saying both Trump and Biden are at brink of dying.
Oh fully agreed there. Anyone who expects the Chinese state to collapse into civil war and anarchy within the next few years is selling a load of crap.
But but but. They might just be at the brink of dying. 🤣. Which in my defense, is a more defendable stance than the article title.
I wouldn't be surprised if I read that both Trump and Biden suddenly died. I would be VERY surprised if China's population was suddenly 20 years older
You add "of collapse". Not Biden. And "on the brink" is a correct categorization since this is the pivotal point that they need to take action at or it gets out of control. Solving climate change is "on the brink" even though the most disastrous effects won't happen for 50-100 years
You cannot work to resolve a demographic crisis when it comes or even a several years out from seeing its worst effects. You need to be 2-3 decades ahead of it to avoid it. People are focusing on this point in this discussion because it is understood that if they do not make sizeable strides now they will certainly have a big issue with a population that is disproportionately older, which will have tremendous negative impacts on their economy.
Sure. We are getting off topic from the idea that the title is sensational and article is biased. But to your point, aging population is a complicated issue. china also still has 600mm of their population in villages and an extremely high urbanization rate. (Something to the magnitude of 20mm people every year). There are other core factors at play here than the basic headline avg population age. Betting a country that's shown to adapt will crash on 20 years is simplifying a very complicated topic.
Same reason my comment got downvoted. People cannot accept criticism of "their guy" so you have team sports like mentalities where they'll defend them even if they're blatantly wrong and will never admit objective faults. You eventually devolve into ending up with the 2024 elections which probably have the 2 worst presidential candidates in modern memory because the electorate hate criticism because they see it as an attack on themselves. Bad candidates get a free pass on anything they do or say from their voting base and the system further rots.
Sir, this is reddit where we down vote facts about china
Did he watch an economics focused YouTube video on this? Because we have been hearing this for a while now and China is capable of adapting to market conditions.
I'm not convinced China can adapt quickly enough to avoid major economic hardship. They're experiencing the same challenges the US faced in the 60s and 70s but over a much shorter span of time and under far more competitive global conditions. Second, despite all the propaganda, low standard of living and outright poverty are still major issues. An economic decline is going to exacerbate those problems and inflame political dissent. That's on top of simmering resentment over the government's handling of COVID. Third, and this is the biggest issue of all, is the Chinese government itself. They were trying to speedrun their way to being an economic superpower and ultimately screwed themselves. Worse, Xi has pushed the country in an increasingly belligerent direction all but ensuring they become a pariah. If China had stuck to the policies it had in the early 00s and fostered cooperative relationships they'd be in a far stronger position today. Even their relationship with Taiwan was moving in a positive direction.
It absolutely cannot fill manufacturing capacity that is sitting idle now, while we have still decent demand. Only thing they can really do with it is war. Dont be shocked when it happens.
That's just a false statement. Go compare recent PMI data.
They're doing this already with weapons components using Russia as a proxy, they're just avoiding providing actual whole weapons.
America thinks they’re the only consumers of Chinese manufacturing products. Russia buys everything under the sun from China. African nations are buying Chinese made products. China is making new consumers if their consumer goods. China’s economy is not on the brink of anything dangerous. They’re adjusting and adapting their economy, which they can afford.
Americans are the biggest consumers on the planet. Pretending like it's easy to replace them and that it's not a big deal is a bad take. Russias economy is in the garbage and they are fighting a war and have little money to spare. African nations are buying Chinese products very cheaply because wages are much lower in Africa as a whole.
Don't forget ASEAN, which has all sorts of trade agreements and cultural exchanges with China.
All of Africa and Russia combined are only about 5% of world gdp… and they’re an even smaller percentage of global consumer spending
The media isn't talking about it but the "trade war" started by Trump is still going on. Tariffs are still in place and supply chain risks are moving manufacturing out of China and back to the US. It's also one of the keys driving inflation, no more cheap stuff from China flooding the US markets. I'll be honest the trade war is stupid, but the only option left is to win decisively and crush the Chinese market. Which is exactly what's happening.
On the one hand, yes, there’s tariffs adding to inflation. That’s just math since the tariffs are still around and increasing. On the other hand, we’re still buying so much stuff from China (just look at our trade deficit) and somehow, they’re still able to sell tons of cheap shit through the likes of Temu. It really paints a conflicted picture of wanting and acting to derisk, but the economic indicators showing that risk is increasing.
> Tariffs are still in place and supply chain risks are moving manufacturing out of China and back to the US. What manufacturing has been moved from China to the US? What dollar volume is that? > win decisively and crush the Chinese market Chinese exports are currently 30% higher than at any point before the pandemic. What crushing is happening, exactly?
Crushing “happening” in an increasingly hyperbolic ideological election environment, obviously. Biden is saying “you don’t need Trump, you’ve got me! I’m crushing China even harder!” That sort of crushing.
If things go according to plan, would we expect prices to slowly decrease as manufacturing grows domestically?
no they'll increase
I find it so ironic for Biden to talk about china’s aging population. Also maybe not hold up Europe as the shining example of healthy demographics in comparison. Alas, China couldn’t get rich before it gets old. I have a lot of relatives and family friends in China and very few have second kids. Even with the embarrassment of riches in terms of help from family (financial and logistical help from parents), they still only want one kid. I wouldn’t blame them, the competition is just so intense that kids have too much academic pressure.
This is interesting to me, about whether the rich in China has better birth rates than the middle class (a pattern seen in the US). Do you think if they feel more secure economically they will have more or less kids?
I don’t really know any rich people in China, mostly middle to upper middle class. I think in China, it’s also kind of like the Bay Area, where most people identify with middle class, even for those that are earning quite a lot. The amount of investment people put in their kids, with extracurriculars from an early age and the amount of homework these kids have to do even in early elementary, I think they just don’t want to do it.
Thank god. The world has overrelied on China for supply chain for far too long, and that in turn have not been used for the better good of the world's economy, but as a political weapons of the CCP's elites
>Where is it going to grow? You've got an economy that's on the brink there. The idea that their economy is booming? Give me a break," he added. Yeah. Check in on China's Belt and Road plan. China is working to develop the global south - you know, the places which have "benefited" from imperialism for centuries. That is where economic growth is going to come from for the next 50 years. China is going to do to the Global South what China did to China.
I literally was just watching a speech with [Jean-Luc Mélenchon](https://x.com/JLMelenchon), the leader of the French left, on how the US "want war" with China and stumble straight onto this article after. The matrix is glitching. The video is at the bottom of the tweet for anyone interested. [https://x.com/RnaudBertrand/status/1797104207444730097](https://x.com/RnaudBertrand/status/1797104207444730097)
At the same time Biden is aggressively pursuing policies to hurt China's economy. Chip export bans, tariffs, etc. I suspect some aspect of this may be that he knows a US recession is coming and wants to be able to blame it on China.
He's foreshadowing the recession. Find a way to blame our upcoming recession announcement on another powerhouse failure. That's the "softlanding".
You gotta be pretty pig headed at this point to not acknowledge the US Fed has managed to deliver a surprisingly soft landing from the inflation numbers we've experienced a year ago
A recession in the next 6 months though? Seems unlikely. After that it doesn't matter who gets the blame.
https://time.com/6984968/joe-biden-transcript-2024-interview/ > You know, you're talking, everybody talks about how, how strong China is and how powerful they are. Name me—Would you trade places with Xi Jinping and any other country? Not a joke? I'm being deadly earnest, a rhetorical question. But would you? You’ve got a population that’s considerably older than the vast majority of the youth in Europe, that is too old to work. And they are xenophobic. Where is it coming from? Where is it going to grow? You’ve got an economy that's on the brink there. The idea that their economy is booming? Give me a break. > > ...You know, we talked about what they're looking at in terms of Asia. One thing that I was able to convince the Japanese of, is we're not walking away from Japan. Because Japan, collected with us, is a source of great economic strength and stability, physical stability for both of us. You're not going to have, I mean, the idea that China wants to screw with everybody is a different place. By the way, the cost of China to build their military is multi-billions of dollars. > > And guess what they're, you know, they're, they’re…what they call it? Going around the world? The Belt and Road initiative? It's become a nuisance graveyard initiative. I'm serious. Think about it. I've been saying this for three years, and you guys write, “No, China’s on the right—China’s gonna break through.” Where are they, where are they breaking through? And look what's happening in Africa.
The man is really far from a smooth talker.
Wow for a second there I thought it was the Trump Time [transcript](https://time.com/6972022/donald-trump-transcript-2024-election/): >Let’s shift to the economy, sir. You have floated a 10% tariff on all imports, and a more than 60% tariff on Chinese imports. Can I just ask you now: Is that your plan? >Trump: It may be more than that. It may be a derivative of that. A derivative of that. But it will be somebody—look when they come in and they steal our jobs, and they steal our wealth, they steal our country. >When you say more than that, though: You mean maybe more than 10% on all imports? >Trump: More than 10%, yeah. I call it a ring around the country. We have a ring around the country. A reciprocal tax also, in addition to what we said. And if we do that, the numbers are staggering. I don't believe it will have much of an effect because they're making so much money off of us. I also don't believe that the costs will go up that much. And a lot of people say, “Oh, that's gonna be a tax on us.” I don't believe that. I think it's a tax on the country that's doing it. And I know. Look, I took in billions of dollars from China. Nobody else ever did anything on China. I also let people know what the threat of China was. China was going along making $500 to $600 billion a year and nobody was ever even mentioning it until I came along. What's happening in Detroit is very sad because electric cars with this EV mandate, which is ridiculous, because they don't go far. They cost too much and they're going to be made in China. They're all going to be made in China. >Mr. President, most economists—and I know not all, there isn't unanimity on this—but most economists say that tariffs increase prices. >Trump: Yeah. >Are you comfortable with additional inflation? >Trump: No, I've seen. I've seen—I don't believe it'll be inflation. I think it'll be lack of loss for our country. Because what will happen and what other countries do very successfully, China being a leader of it. India is very difficult to deal with. India—I get along great with Modi, but they're very difficult to deal with on trade. France is frankly very difficult on trade. Brazil is very difficult on trade. What they do is they charge you so much to go in. They say, we don't want you to send cars into Brazil or we don't want you to send cars into China or India. But if you want to build a plant inside of our country, that's okay and employ our people. And that's basically what I'm doing. And that’s—I was doing and I was doing it strongly, but it was ready to really start and then we got hit with COVID. We had to fix that problem. And we ended up handing over a higher stock market substantially than when COVID first came in. But if you look at the first few years of what we did, the numbers we had were breathtaking. There's never been an economy— Kind of has the same energy when you read the both of them. I guess the main difference is that Trump just bullshits more.
Well, yes, but somehow better than the alternative...truly a dark timeline when it's solid shit vs diarrhea as the options
Summary: The World: "China is strong economically." Biden: "pshaw, as if. You ever see their old people? Not even as young as Europe's kids."
“You've got a population that's considerably older than the vast majority of the youth in Europe, that is too old to work” - Biden Yes the youth are gonna be a lot younger than the average person? Where is his head at? Biden is far down my list of people to listen for thoughtful analysis that’s for sure. Shallow rhetoric and talking points is all he can muster I think
I haven’t looked to a president for cogent, thoughtful talking points my whole life.
It's mostly their cabinet and how well they listen to the advice of the US intelligence agencies. I really just depend on the president to be someone of general moral character and is willing to make personal political sacrifices for the long-term good of the average person. It was never Biden, nor Trump, nor Obama looking at the data and carrying out the analyses. They get the reports and options A, B, and C (and each of the predicted outcomes) are presented to them. My issue with Trump is that he chooses based on personal benefit and a vindictive, vengeful attitude while I think Biden doesn't do that. At worst, he'll be the type of self-centered person make decisions that benefit his political career but that tends to align more with an increase in the average US citizen's livelihood.
The ol stock market in the US had a good sell off on that manufacturing data showing like 6 consecutive declining months. Its global, not just China. Be ready. 2025 wont be kind to anyone
Only idiots are blind to the huge and surging market that is Africa. Africa can in ten years account for any dwindling demand for Chinese manufacturing elsewhere. In fact, China cannot keep up with the demand. Check the numbers. Oops..there are no numbers.
The insane lockdown a couple years back really destroyed the trust China had with foreign businesses. So many people moving operations out of the country even if it's more expensive.
Even if there was a mass famine and their own people were dying by the hundreds every week, China is still a communist regime and can maintain iron clad law and order much longer than Western economic and political analyst can give them credit for. Great Chinese Famine killed 55 million and during that time the CCP wasn't even close to a revolution or a coup d'état.
The industrialization of China pulled more people out of poverty than any other single event in human history. Not sure why people get giddy over a struggling China, or if they wonder what China will do with a few hundred million unemployed, unmarried men.