China's Peaceful Rise

[Perun]

1 hour ago, Josh said:

I suspect they extrapolated in some fashion, though it does raise the issue that even for the relatively bad economic news coming out of the PRC now, we are trusting official sources which have a history of inaccuracies or of simply being withheld. One of the articles I just read mentioned that consumer spending numbers simply stopped being published earlier in the year.

Thanks. Thats way asked

[Strannik]

5 hours ago, Josh said:

* "Researchers at JPMorgan Chase calculated last month that overall debt within China — including households, companies and the government — had reached 282 percent of the country’s annual economic output."

https://www.nytimes.com/2023/07/08/business/china-debt-explained.html

https://carnegieendowment.org/chinafinancialmarkets/90358

Quote

Rising debt in China is therefore a mirror image of rising debt in the United States. In both cases, severe distortions in the distribution of income have resulted in downward pressure on domestic consumption and upward pressure on ex ante savings.

The United States has resolved the resulting decline in demand by forcing up household debt or fiscal deficits to increase consumption and reduce ex post savings.

China has resolved the resulting decline in demand by forcing up nonproductive government investment, so that rising savings is matched by rising investment—however unsustainable and economically useless this investment is.

In both cases, the country’s debt burden must rise in order to accommodate the demand consequences of a highly distorted distribution of domestic income.

...

real source of China’s surging debt is Beijing’s GDP growth targets—which, for political reasons, exceed the real growth capacity of the economy and can only be met by further increases in nonproductive investment 

CONSLUSION (very Marxist like )

It is these structural reasons, and not irresponsible behavior, that explains surging debt in both countries. Until the distortions in income distribution are addressed, both will be forced to choose between rising debt and slowing growth, which means that both countries must choose between rising debt and rising unemployment.

0. Clearly both will choose rising the debt and not unemployment. 

1. Chinese debt is internal, while 25% of US debt is external, no more byers on the horizon

2. China already stopped buying US debt, but did not start selling in earnest 

3. Both countries will be looking for a "reset" opportunities - care to guess?

Edited August 11, 2023 by Strannik

[Josh]

That addresses one of the facets I mentioned. My point wasn’t that Chinese debt was unserviceable; my point was that it complicates both deflation (consumer confidence due to household debt) and the property bubble (local governments unable to service debt with reduced land leases). It’s too early to say how it will work out, but the PRC government has a huge job in front of it.

[Josh]

A number of lower than expected indicators. Also China has stopped publishing unemployment numbers broken down by age.

https://www.reuters.com/world/china/china-cuts-key-rates-industrial-output-retail-sales-growth-miss-forecasts-2023-08-15/

 

[Josh]

Fertility continues to drop:

https://www.usnews.com/news/world/articles/2023-08-15/chinas-fertility-rate-drops-to-record-low-1-09-in-2022-state-media#:~:text=HONG KONG (Reuters) -China's,declining number of new births.

[Strannik]

It would be interesting to see if this discovery could be used in practical application efficiently - might bring down sub value on a totem pole.

 

 

[Colin]

Listening to ASW guys I know, MAD is old tech already and have other methods. They are very tight lipped about what can do what.

[seahawk]

3 hours ago, Strannik said:

It would be interesting to see if this discovery could be used in practical application efficiently - might bring down sub value on a totem pole.

 

 

If it is published you can be certain it is already in use with the Chinese armed forces.

[BansheeOne]

31 minutes ago, Colin said:

Listening to ASW guys I know, MAD is old tech already and have other methods. They are very tight lipped about what can do what.

Even in the 60s there were whispers about "detecting submerged submarines by the disturbance of the surface wave pattern", though maybe it was just a theory then.

[Josh]

It’s almost pointless to delve into ASW tech. The more you learn by delving into texts on the subject and budget docs of current programs, the more you realize you know nothing and never will. I bet even inside the service knowledge is so compartmented that only a very select few have a big picture view of capabilities.

 

EDIT: I'd also point out that this is one area China is far behind the US in and likely will be indefinitely. There is very limited civilian technology cross over (and no one was willing to provide nuclear sub tech unlike many other military items), it tends the be the most restricted engineering security wise, and the Chinese have the huge disadvantage of the incumbent super power's navy and monitoring systems already being up against their coastline when they entered the game. Even the very modern PLAN diesel/electric fleet probably has a lot of tech and training limitations compared to US boats.

Edited August 16, 2023 by Josh

[Strannik]

I am skeptical on the "never ever" pronouncements, but it is true that Chinese are far behind in sub tech. 

Having said that, that's why any development that can make sub detection easier and would make the sub significantly more vulnerable  (this specific discovery is not new, it remains to be seen how practical it is and how effective it will be) will serve as force equalizer in the subsea domain.   But because of the particular secrecy with everything sub related we may never find this out sans war or radical  decrease of expenditures...

[TrustMe]

The Brazilians are build a SSN and 4 SSK's with help of the French Navy, also Australia as well and India has a SSN on loan from Russia, an Akula Mod 2 if I remember correctly.

Edited August 16, 2023 by TrustMe

[Colin]

3 hours ago, Strannik said:

I am skeptical on the "never ever" pronouncements, but it is true that Chinese are far behind in sub tech. 

Having said that, that's why any development that can make sub detection easier and would make the sub significantly more vulnerable  (this specific discovery is not new, it remains to be seen how practical it is and how effective it will be) will serve as force equalizer in the subsea domain.   But because of the particular secrecy with everything sub related we may never find this out sans war or radical  decrease of expenditures...

Mind you it's a good chunk of their sub fleet that will be vulnerable, as a lot of them are older and nosier. The Chinese can dominate and deny the Littoral from Western subs for the most part, but will lose subs in the deep oceans if attempting to range out.  

[Strannik]

49 minutes ago, Colin said:

Mind you it's a good chunk of their sub fleet that will be vulnerable, as a lot of them are older and nosier. The Chinese can dominate and deny the Littoral from Western subs for the most part, but will lose subs in the deep oceans if attempting to range out.  

Fair assessment.  At this point China likely is interested more in ability to consistently detect US subs in a 1500 ml radius from their shores zone than putting their own subs closer to US. 

[Josh]

52 minutes ago, Colin said:

Mind you it's a good chunk of their sub fleet that will be vulnerable, as a lot of them are older and nosier. The Chinese can dominate and deny the Littoral from Western subs for the most part, but will lose subs in the deep oceans if attempting to range out.  

The Chinese D/E fleet is largely modern Yuan/Kilo at this point, with around two dozen of these types altogether. These are considered modern, up to par SSK platforms. The older song class adds an additional dozen. They would probably be at a disadvantage against USN nuke boats in deep water, but there are a lot of them.

[Strannik]

9 minutes ago, Josh said:

The Chinese D/E fleet is largely modern Yuan/Kilo at this point,

D/E subs do not go across oceans, so this doesn't negate @Colin's point.

Chinese, while surely working on proper nuc subs, are likely betting on XLUUVs now as cost effective asymmetric answer to their sub weakness.

[Josh]

2 minutes ago, Strannik said:

D/E subs do not go across oceans, so this doesn't negate @Colin's point.

Chinese, while surely working on proper nuc subs, are likely betting on XLUUVs now as cost effective asymmetric answer to their sub weakness.

Indeed, the Chinese nuke fleet is quite small and not competitive with the other nuclear powers' boats. The D/E fleet would struggle to leave the second island chain and getting out even that far would take a week+.

When it comes to XLUUVs, it isn't clear to me that adds much in the PLAN's favor: the speed and range is if anything inferior to a full D/E. They can more completely saturate their region with platforms, but that's about it. For the US the big advantage of XLUUVs is as forward deployed sensor/mine layers in the shallow water inside the first chain where they would generally be loath to risk their nuke boats. That's a cheap fix to bulk out their underwater portfolio, even if the type is never capable enough to be used to directly attack other boats.

[Colin]

3 hours ago, Strannik said:

D/E subs do not go across oceans, so this doesn't negate @Colin's point.

Chinese, while surely working on proper nuc subs, are likely betting on XLUUVs now as cost effective asymmetric answer to their sub weakness.

Canada's Victoria class has and so has the Collins. The SK KSS-III will do similar. The difference is DE subs need a base of operations. Hawaii, Australia,SK and Japan are the main staging points.   

[Strannik]

16 minutes ago, Colin said:

Canada's Victoria class has and so has the Collins. The SK KSS-III will do similar. The difference is DE subs need a base of operations. Hawaii, Australia,SK and Japan are the main staging points.   

In peacetime.  Against an opponent with large MPA assets it's a suicide mission.

[Josh]

2 hours ago, Strannik said:

In peacetime.  Against an opponent with large MPA assets it's a suicide mission.

Not particularly. Finding a snorting boat’s snorkel is difficult using radar and requires the MPA to emit. And the MPA requires clear skies.

[Strannik]

2 hours ago, Josh said:

Not particularly. Finding a snorting boat’s snorkel is difficult using radar and requires the MPA to emit. And the MPA requires clear skies.

A Chinese boat, what would it even being doing in the middle of Pacific? - trying to stalk US CBG?  It would become an easy prey.

Around Taiwan- sure, closer to Japan's shores - possible, but out there in a big blue - I don't think so.

Edited August 17, 2023 by Strannik

[Strannik]

Chip War Update: 

Intel calls off its planned acquisition of Tower Semiconductor, an Israeli chip maker, after waiting in vain for 18 months for a review by Chinese regulators.

https://www.nytimes.com/2023/08/16/business/intel-tower-semiconductor-china.html

• Intel wanted to buy Tower as it's foundry is the only viable candidate to complete with TSMC/Samsung that make chips for third parties
• the deal had to be approved by Chinese regulators due to the newly expanded Anti-Monopoly Law that gives its antitrust regulator authority to review mergers in which both parties earn at least $55 million in revenue from Mainland China and their combined annual revenue is over $1.4 billion
• China was worried that Intel's acquisition of Tower could make it harder for Chinese firms to partner with Tower given increasing US restrictions on China's tech sector that limit Intel's room to maneuver
• Intel has dropped its bid to acquire Tower and agreed to pay $350 million for failing to close the deal  

[Josh]

Housing bubble update: official numbers likely obscuring a much larger problem:

 

https://fortune.com/2023/08/17/china-home-sales-worse-than-official-data-real-estate-crisis/amp/

[Strannik]

1 hour ago, Josh said:

Housing bubble update: official numbers likely obscuring a much larger problem:

 

https://fortune.com/2023/08/17/china-home-sales-worse-than-official-data-real-estate-crisis/amp/

So in a worst case (crash) scenario Chinese growth would slow down to 3%

https://www.bloomberg.com/news/articles/2023-04-17/china-property-crash-would-cap-growth-at-3-bloomberg-economics#xj4y7vzkg 

To put things into a context:

EU growth rates = -0.1 (neg) -  0.0%

US  growth rates = 1.9 - 2.1%

[glenn239]

I guess the question is, is a Chinese recession 3% growth rate or less than 0%?