Is China's rise over?

T

Tranquillus in Exile

New member
China’s multi-decade ascent was aided by strong tailwinds that have now become headwinds. China’s government is concealing a serious economic slowdown and sliding back into brittle totalitarianism. The country is suffering severe resource scarcity and faces the worst peacetime demographic collapse in history. Welcome to the age of “peak China”.

As China has become more assertive and authoritarian, the world has become less conducive to Chinese growth. Most of the world’s largest economies are walling off their telecommunications networks from Chinese influence. India, Japan and other countries are looking to cut China out of their supply chains.

Most of China’s GDP growth since 2008 has resulted from the government force-feeding capital through the economy. Subtract stimulus spending and China’s economy is hardly growing at all. Productivity, the key ingredient for wealth creation, declined ten percent between 2010 and 2019—the worst drop-off in a great power since the Soviet Union in the 1980s.

China’s total debt jumped eightfold between 2008 and 2019. We know how this story ends: with investment-led bubbles that collapse into prolonged slumps. In Japan, excessive lending resulted in three lost decades of negligible growth. In the United States it caused the Great Depression. Given the size of China’s debt mountain, its downturn could be even worse.

https://www.foreignaffairs.com/arti...welcome&utm_term=email_1&utm_content=20230221
 
Tranquillus in Exile said:
China’s multi-decade ascent was aided by strong tailwinds that have now become headwinds. China’s government is concealing a serious economic slowdown and sliding back into brittle totalitarianism. The country is suffering severe resource scarcity and faces the worst peacetime demographic collapse in history. Welcome to the age of “peak China”.

As China has become more assertive and authoritarian, the world has become less conducive to Chinese growth. Most of the world’s largest economies are walling off their telecommunications networks from Chinese influence. India, Japan and other countries are looking to cut China out of their supply chains.

Most of China’s GDP growth since 2008 has resulted from the government force-feeding capital through the economy. Subtract stimulus spending and China’s economy is hardly growing at all. Productivity, the key ingredient for wealth creation, declined ten percent between 2010 and 2019—the worst drop-off in a great power since the Soviet Union in the 1980s.

China’s total debt jumped eightfold between 2008 and 2019. We know how this story ends: with investment-led bubbles that collapse into prolonged slumps. In Japan, excessive lending resulted in three lost decades of negligible growth. In the United States it caused the Great Depression. Given the size of China’s debt mountain, its downturn could be even worse.

https://www.foreignaffairs.com/arti...welcome&utm_term=email_1&utm_content=20230221
Click to expand...

Not if Brandon has anything to say about.
 
Tranquillus in Exile said:
China’s multi-decade ascent was aided by strong tailwinds that have now become headwinds. China’s government is concealing a serious economic slowdown and sliding back into brittle totalitarianism. The country is suffering severe resource scarcity and faces the worst peacetime demographic collapse in history. Welcome to the age of “peak China”.

As China has become more assertive and authoritarian, the world has become less conducive to Chinese growth. Most of the world’s largest economies are walling off their telecommunications networks from Chinese influence. India, Japan and other countries are looking to cut China out of their supply chains.

Most of China’s GDP growth since 2008 has resulted from the government force-feeding capital through the economy. Subtract stimulus spending and China’s economy is hardly growing at all. Productivity, the key ingredient for wealth creation, declined ten percent between 2010 and 2019—the worst drop-off in a great power since the Soviet Union in the 1980s.

China’s total debt jumped eightfold between 2008 and 2019. We know how this story ends: with investment-led bubbles that collapse into prolonged slumps. In Japan, excessive lending resulted in three lost decades of negligible growth. In the United States it caused the Great Depression. Given the size of China’s debt mountain, its downturn could be even worse.

https://www.foreignaffairs.com/arti...welcome&utm_term=email_1&utm_content=20230221
Click to expand...

It's a great question. I don't pretend to know the answer but the first thing that pops into my mind is the Japanese ascendence in the 80's and the concern they were going to take over America etc. and we all see how that turned out. I don't know that China will necessarily go that route but as the article states you can create an economic model that gives you incredible growth like China has achieved over the past couple of decades but it doesn't guarantee that it's sustainable.
 
I have seen articles claiming China way, way overbuilt homes, and apartments. They are entering a financial crash as unsold homes and apartments sit. The loans are due.
 
Nordberg said:
I have seen articles claiming China way, way overbuilt homes, and apartments. They are entering a financial crash as unsold homes and apartments sit. The loans are due.
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The entire world is in them process of financial collapse. China is strong enough socially to survive the transition to what comes next, America is not.
 
Nordberg said:
I have seen articles claiming China way, way overbuilt homes, and apartments. They are entering a financial crash as unsold homes and apartments sit. The loans are due.
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I believe that was going on just before Covid?

It was a big thing. Govt. refused to bail out the investors.

I think the world was ready to move on from China a long time ago, but large corporations were in over their heads both physically and with respect to signing away rights to proprietary designs.

They invested billions in China in order to reap hundreds of billions in profits, while American manufacturing disappeared.
 
America makes almost nothing now....innovation in manufacturing will not come from America, it will come from China and other places which do.
 
TS, everything you point to is cyclical and expected. Conditions will improve again and so to will China's growth.


The biggest threat to CHina is that when Xi loses power, he is replaced with a person more like Putin, than himself. Someone who is 'short term greedy' and wants to pull as much out of the economy and into friendly Oligarch hands, such that the country always underperforms, in good or bad times, as opposed to Xi who is long term greedy, and recognized that while he and his supporters can be very rich, they should not be so greedy as to harm the economic growth, which allows them to take even more later.


This is also the pressure the US is under now. Post WW2 most were long term greedy, recognizing that overall US growth would make them and everyone richer. Rising tide raises all ships. In the last few years Wall Street and Corporations have switched to 'short term' greedy. Divesting of R&D, paying the money out via Stock Buy backs or dividends instead of investing in growth, and laying people off, all to gain a short term stock blip at the cost of the future.
 
QP! said:
This is also the pressure the US is under now. Post WW2 most were long term greedy, recognizing that overall US growth would make them and everyone richer. Rising tide raises all ships. In the last few years Wall Street and Corporations have switched to 'short term' greedy. Divesting of R&D, paying the money out via Stock Buy backs or dividends instead of investing in growth, and laying people off, all to gain a short term stock blip at the cost of the future.
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Yes. With the Fed. there to pump money into the market, increasing share buybacks, dividends, and CEO pay.

Then they all whine about the economy when the Fed. shuts off the spiggot.
 
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