China's Peaceful Rise

[Strannik]

1 hour ago, Josh said:

that China has right now - too many highly educated workers and not enough lower end labor. 

West will have exactly the same issue and arguably even worse considering it's more service oriented economy

1 hour ago, Josh said:

Automation might reduce the high labor costs they are encountering, but that seems far more resource intensive as a replacement for human labor than time share cloud based AIs, and I don't think there have been any industry breakthroughs in that field that change the status quo in nearly as comparable a way.

yes, robotisation requires robots to replace workers vs just IT AI enhanced systems to replace clerks/lawyers, so what - have you seen Amazon warehouses?

The IFR numbers above show that China is on it's way...

1 hour ago, Josh said:

Put it this way - China will absolutely requires some kind of massive increase in per worker productivity, be it automation or what have you, in order to allow economic growth practically at all within a decade or so. To achieve their pre pandemic level of economic growth, they would basically need a tech miracle. It seems more likely to me they revert to the mean of the rest of the world, assuming even that is an achievable goal long term.

I don't see China importing immigrants like US/EU does. 

1:  it's not a forgone conclusion that they will even need it despite "but the numbers"

2: otoh they won't face all the negative issues associated with large unassimilated immigration (and it's not like the numbers we are talking would bring diversity soon and it's associated benefits)

PS: and partially re-orienting the output to internal market would also alleviate this issue

Edited July 7, 2023 by Strannik

[urbanoid]

I also can't see China importing immigrants. Other countries in the region (Japan, South Korea, Taiwan) also have problems with low fertility rates and a shrinking workforce, but they didn't decide to contaminate their respective gardens with thirdworlders and decided in favor of more automation instead, settling for lower growth rates.

[Strannik]

8 minutes ago, urbanoid said:

 but they didn't decide to contaminate their respective gardens with thirdworlders and decided in favor of more automation instead, settling for lower growth rates.

careful there - I got the warning for "potentially racist post" when referencing Herr Borrel the Gardener's words 😅

[urbanoid]

13 minutes ago, Strannik said:

careful there - I got the warning for "potentially racist post" when referencing Herr Borrel the Gardener's words 😅

On one hand Mr Borrel apologised to those who felt offended, but on the other he doubled down on his comparison. I'm not into apologies for saying the truth, so I'll just double down.

[sunday]

[Mr. Nitpick]

Mr. Borrell

[\Mr. Nitpick]

He is a Catalan, from my neck of the woods, more or less. Not a Catalan Nationalist by any means, but a Catalan Socialist.

[Josh]

1 hour ago, urbanoid said:

I also can't see China importing immigrants. Other countries in the region (Japan, South Korea, Taiwan) also have problems with low fertility rates and a shrinking workforce, but they didn't decide to contaminate their respective gardens with thirdworlders and decided in favor of more automation instead, settling for lower growth rates.

I can't see any of the above countries ever substantially changing their immigration policies. I think that we can all agree on.

For China specifically, the question is can it automate its work force in such a way that it holds productivity/labor costs at the current rate to ensure future economic growth? That seems suspect to me. Japan doesn't seem to have achieved such a thing in the past 2-3 decades, or if it did then only just recently. It is hard to imagine China breaking the economic trends tied to population (or more specifically labor force) when it didn't reach nearly the same levels of worker productivity and GDP per capita. But we will see.

Edited July 7, 2023 by Josh

[urbanoid]

11 minutes ago, Josh said:

I can't see any of the above countries ever substantially changing their immigration policies. I think that we can all agree on.

For China specifically, the question is can it automate its work force in such a way that it holds productivity/labor costs at the current rate to ensure future economic growth? That seems suspect to me. Japan doesn't seem to have achieved such a thing in the past 2-3 decades, or if it did then only just recently. It is hard to imagine China breaking the economic trends tied to population (or more specifically labor force) when it didn't reach nearly the same levels of worker productivity and GDP per capita. But we will see.

You might have a point there. 

Japan was already rich when the effects of low birthrates and shrinking workforce started affecting them and is pretty much staying on more or less the same level since then. Sure, the GDP per capita rises, but the overall GDP stagnated and it's only going to get worse. 

Korea wasn't as rich as Japan but quite well-off already and had a higher growth than Japan since that time, simply because there was still room for growth.

China is poorer than either of those, so there will be quite a room for growth anyway, but there are limits to such growth (unless some super-duper technological breakthroughs are made) and finally there may be stagnation - just like it happened in Japan and most likely will happen in Korea). Stagnation may come well before they reach the per capita level of either Japan or SK.

What might make a difference is how much the CCP lied about demographics. Japanese TFR stabilised at around 1,3-1,4 and it causes them quite a headache. South Korea doesn't feel the effects as badly as Japan yet, but their birthrate is substantially lower - below 1, which means that the shrinking population might affect them even worse. At least in their cases everything is clear, because data is rock solid and believable. PRC is a totalitarian state and basic statistical information can be withheld or simply other figures can be fabricated. We're supposed to believe that their TFR went below replacement level ~30 years after the introduction of one-child policy. It's clear that they lie, the question is how much and how long they've been doing it. Even if the official data were true, it would already mean they're going to have a problem (not one impossible to solve, but a problem nonetheless). If Fu Xian is right and their population is already ~10% smaller than they claim it is and all the 'lacking' people are supposed to be under ~30, maybe with current TFR already below 1, the problem suddenly gets a lot more serious.

[Josh]

I think there aren't reliable numbers for China, but even the official numbers paint a pretty clear case of population collapse that exceeds that of any other Asian nation (or indeed any nation historically). This seems directly attributed to One Child. The general trend of lower birthrates in industrialized countries is well documented, and One Child is no longer a hindrance, but that policy likely pre-empted any "natural" trend in that direction and normalized a small family culturally.

On the one hand there is a lot of room grow in terms of per capita productivity and GDP; on the other hand it seems like some kind of "middle income trap" is just as likely as well. What I think is very unlikely is the large GDP gains of the past continuing (and I'd question some of the more recent numbers published in any case). The low single digit growth more typical of most industrialized nations seems more likely to me. If that ends up being the case, then the PRC will have to accept a relative economic parity with the US, and that could make for a rather open ended cold war. Or a rather abrupt and decisive hot one.

Edited July 7, 2023 by Josh

[urbanoid]

Or an undecisive hot one and open ended cold one afterwards

[Josh]

1 hour ago, urbanoid said:

Or an undecisive hot one and open ended cold one afterwards

That seems less likely to me, given the prolific nature of PGMs and the quantities both sides would almost certainly use.

[urbanoid]

3 minutes ago, Josh said:

That seems less likely to me, given the prolific nature of PGMs and the quantities both sides would almost certainly use.

I believe we might have already kinda discussed that. Let's say there's a war over Taiwan and China takes the island, but suffers major losses and the US establishes itself on the 'next island chain'. Result? Coldwar-ish, I'd say. Or there's a war over Taiwan, both sides suffer major losses but the US manages to defend Taiwan - you think both sides will return to business as usual after that?

[Wouter2]

2 minutes ago, urbanoid said:

I believe we might have already kinda discussed that. Let's say there's a war over Taiwan and China takes the island, but suffers major losses and the US establishes itself on the 'next island chain'. Result? Coldwar-ish, I'd say. Or there's a war over Taiwan, both sides suffer major losses but the US manages to defend Taiwan - you think both sides will return to business as usual after that?

Taking Taiwan, which is mountanous and on paper relatively well defended and which would require an extremely ambitious amphibious invasion, seems unlikely though (I suppose it's possible if Taiwanese morale has a total collapse). Wouldn't such a conflict rather be about China attempting to completely isolate it by controlling sea and air space around it (or at least having the ability to destroy most things operating there, except subs, so they can cut off all trade and supplies)?

[urbanoid]

4 minutes ago, Wouter2 said:

Taking Taiwan, which is mountanous and on paper relatively well defended and which would require an extremely ambitious amphibious invasion, seems unlikely though (I suppose it's possible if Taiwanese morale has a total collapse). Wouldn't such a conflict rather be about China attempting to completely isolate it by controlling sea and air space around it (or at least having the ability to destroy most things operating there, except subs, so they can cut off all trade and supplies)?

I'm not sure they would be able to only cut off Taiwan for long, as the reinforcements would be arriving. They have to take those into consideration, possibly even including JMSDF.

[Wouter2]

1 minute ago, urbanoid said:

I'm not sure they would be able to only cut off Taiwan for long, as the reinforcements would be arriving. They have to take those into consideration, possibly even including JMSDF.

Yes, but they are probably counting on a combination of hypersonic antiship weapons (coupled with satellite and/or drone and/or balloon reconnaissance), stealth fighter like the J20 and submarines to be able to stop all civilian shipping and airtraffic indefinitely, if not sink and down all military ship and planes of Taiwan, US and Japan except for those pesky submarines. The B21, 6th gen fighter + drones etc, as well as possible Taiwanese counterstrikes with their own drones and missiles may make that difficult, though.

[urbanoid]

Just now, Wouter2 said:

Yes, but they are probably counting on a combination of hypersonic antiship weapons (coupled with satellite and/or drone and/or balloon reconnaissance), stealth fighter like the J20 and submarines to be able to stop all civilian shipping and airtraffic indefinitely, if not sink and down all military ship and planes of Taiwan, US and Japan except for those pesky submarines. The B21, 6th gen fighter + drones etc, as well as possible Taiwanese counterstrikes with their own drones and missiles may make that difficult, though.

I don't think they actually believe in their (yet untested in combat) Wunderwaffe as much as the internet fanboys do. They must take into consideration that the other side also has quite a lot of advanced weapons as well as countermeasures and works on the better ones, just as they do themselves.  

[Wouter2]

2 minutes ago, urbanoid said:

I don't think they actually believe in their (yet untested in combat) Wunderwaffe as much as the internet fanboys do. They must take into consideration that the other side also has quite a lot of advanced weapons as well as countermeasures and works on the better ones, just as they do themselves.  

Yes, but the leadership can be unrealistic if surrounded with yes-men, which seems or seemed to be the case with Putin and may be the case with Xi as well. 

And they may not feel they are ready now, but I guess such a scenario is what they want to build up too, in a race with Taiwan (which is also developing new possibilities, like submarines and missiles) and especially the US. China may hope they can win the race to a 6th gen fighter/drone swarm and to fielding reliable hypersonic weapons (with the ability to target moving ships).

[urbanoid]

42 minutes ago, Wouter2 said:

Yes, but the leadership can be unrealistic if surrounded with yes-men, which seems or seemed to be the case with Putin and may be the case with Xi as well. 

And they may not feel they are ready now, but I guess such a scenario is what they want to build up too, in a race with Taiwan (which is also developing new possibilities, like submarines and missiles) and especially the US. China may hope they can win the race to a 6th gen fighter/drone swarm and to fielding reliable hypersonic weapons (with the ability to target moving ships).

The leadership can be unrealistic if surrounded with yes-men - true, but I assume they are not. Just like I assume they're not going va-banque - if our wunderwaffe works we win, it it doesn't we lose.

I don't think our enemies are stupid. Evil - yeah, kinda, but not stupid. If they indeed turn out to be stupid, that's great, unexpected bonus.

[Josh]

1 hour ago, urbanoid said:

I believe we might have already kinda discussed that. Let's say there's a war over Taiwan and China takes the island, but suffers major losses and the US establishes itself on the 'next island chain'. Result? Coldwar-ish, I'd say. Or there's a war over Taiwan, both sides suffer major losses but the US manages to defend Taiwan - you think both sides will return to business as usual after that?

A conflict can be decisive without a return to the status quo. IMO the PRC taking Taiwan or being firmly prevented from taking Taiwan would be pretty decisive. But fair enough, since both are nuclear powers, it is unlikely even a fast, one sided conflict actually resolves the situation permanently.

[Strannik]

3 hours ago, sunday said:

[Mr. Nitpick]

Mr. Borrell

[\Mr. Nitpick]

He is a Catalan, from my neck of the woods, more or less. Not a Catalan Nationalist by any means, but a Catalan Socialist.

He sounds like Herr 

[sunday]

9 minutes ago, Strannik said:

He sounds like Herr 

Well, he studied Aerospace Engineering, so that would come as standard.

[Strannik]

Yellen in China:

- wants China to end "unfair economic practices" (criticizes treatment of U.S. companies)

- says U.S. Doesn’t Seek ‘Winner Take All’ Fight With China

- says she’s ‘concerned’ about China’s new export controls (🙄)

Rumors: Yellen is offering taking away section 301 China tariffs (30%) in exchange for China re-starting to buy U.S debt.

[KV7]

4 hours ago, Josh said:

On the one hand there is a lot of room grow in terms of per capita productivity and GDP; on the other hand it seems like some kind of "middle income trap" is just as likely as well. What I think is very unlikely is the large GDP gains of the past continuing (and I'd question some of the more recent numbers published in any case). The low single digit growth more typical of most industrialized nations seems more likely to me. If that ends up being the case, then the PRC will have to accept a relative economic parity with the US, and that could make for a rather open ended cold war. Or a rather abrupt and decisive hot one.

Productivity growth now will require more inputs for a given gain, but it can be achieved quite reliably. They have shown that they can get near and beyond the rest of the world productivity frontier in many technologies, and so strong productivity growth can be achieved by continuing to make investments that bring the less advanced parts (regions and firms) of the economy up towards the frontier - i.e. a sort of internal catch up. This will require large investments, but the savings and investment rate is very high, and so convergence should by historical standards also be fast, just as it was in Japan and South Korea during their catch-up phases. 

There also is scope for continued productivity growth by frontier expansion, which is harder, but in some sectors they have shown considerable ability to do it. 

They still could stuff it up, but it would take a monumental blunder, and/or some sort of intense political instability, or major war. 
 

[Strannik]

Yellen completes China visit.

According to Asian press this is Yellen's Proposal Upon Arriving in Beijing:

1) China agrees to purchase $850 billion worth of U.S. bonds.
2) China withdraws its retaliation against U.S. sanctions.
3) China clearly states its non-support for Russia.
4) The U.S. reduces tariffs on China.

[urbanoid]

Sooo... can we say that the supposed deal favors the US more?

[Josh]

8 minutes ago, urbanoid said:

Sooo... can we say that the supposed deal favors the US more?

I certainly can’t imagine Xi accepting such an arrangement. I don’t know enough about the economics to know how much that buys China, but point 3 seems like a non starter and not something that the Fed would sully its hands with. I’m guessing this isn’t how the actual offer went down, assuming one was made.