Is China's rise over?

[Hawkeye10]

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.

Cheap money always needed to be medicine not diet.

 

[Geeko Sportivo]

It is a worrisome to know that China's deficit is now up over a trillion dollars, and they are holding 870 Billion dollars of our own American debt.

I mean, if China suddenly wanted a quick-fix, they could pretty much relinquish their entire National debt by cashing in, and leaving us in somewhat of a peril!

So, we better keep all of this in mind while dealing diplomatically with China an any number of things!

Just sayin'

 

[Hawkeye10]

It is a worrisome to know that China's deficit is now up over a trillion dollars, and they are holding 870 Billion dollars of our own American debt.

I mean, if China suddenly wanted a quick-fix, they could pretty much relinquish their entire National debt by cashing in, and leaving us in somewhat of a peril!

So, we better keep all of this in mind while dealing diplomatically with China an any number of things!

Just sayin'

If they stop selling to us huge numbers of Americans would be dying with-in weeks....that is their ace.

We cant do that to them.

 

[Taichiliberal]

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

Hmm, China loves to play the "long game". Let's see how their endeavors onto the continent of Africa work out.

 

[Hawkeye10]

Hmm, China loves to play the "long game". Let's see how their endeavors onto the continent of Africa work out.

It is working great so far. Ditto their efforts in South and Central America. Next up is to split off Europe from the US.....which the war in Ukraine will almost certainly accomplish.

 

[Nordberg]

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.

Capitalism is not into long-term growth. The career of a CEO is short, and they want all they can get now. When companies were owned by founders they cared about keeping it profitable down the line for their families. They built up for the future. Family corporations were gobbled up during the merger and buyout times. That is what makes offshoring so prevalent. They have no ties to Americans. Just more money now.

 

[QP!]

Capitalism is not into long-term growth. The career of a CEO is short, and they want all they can get now.


When companies were owned by founders they cared about keeping it profitable down the line for their families. They built up for the future. Family corporations were gobbled up during the merger and buyout times. That is what makes offshoring so prevalent. They have no ties to Americans. Just more money now.

It used to be. That is why i made the distinction.

In the age before CEO's were treated like Celebrity rock stars, a CEO made good money (like a top Dr) but did not get super rich, unless he grew his company over many decades and then cashed out his small percent of stock options that had built up. Most companies and CEO's were all in the Warren Buffett mode of long term strategy and investment.

That all changed when CEO's started to get treated like Rock Star celebrities, and they understood, thanks to Wall Street, they did not need to spend 30 Years building a company up, and could do things that hurt long term growth and wealthy but improved the bottom line in the short term, and they could see immediate significant returns on their heavily weighted Stock Pay Incentivized Packages. So what if 10 or 20 years the company had no new lines of business or was struggling as they did not innovate or spend on Capital Improvements or needs to stay competitive. They were already cashed out.


When Warren Buffett dies, the pressure and financial incentive to switch the entire portfolio of companies to the short term method of gutting all the companies for Short term stock increases will be immense. The portfolio of companies and stock of Berkshire will soar, if it is known they are going 'short term' and the new CEO will make more money in a few years than he would by playing the long investment game. And some will argue Warren 'held back the company' and 'he made the stock underperform', as the long term value is diminished, and the jobs and other societal benefits shrink, but stock holders celebrate.

 

[Dutch Uncle]

Is China's rise over?

...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

COVID fucked up all the world economies. China also has the problem if rising capitalism bumping up against a communist authoritarian leadership.

My guess is that the Chinese people will win the day.