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Have We Seen "Peak" China?


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#1 LFC

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Posted 13 November 2017 - 01:43 PM

I don't know this author over at TAC but they make the case that China's economy is not likely to keep on humming and, if fact, has likely already stalled to a point of very low single digits. (The gov't keeps the books so it's tough to know what reality is ... much like Kansas.) On top of that they have an aging population. The article also states that China has national debt of roughly of roughly 260 percent of GDP and climbing fast which caused a downgrade to be issued by Moody's. Interesting stuff but I'd love to hear from TRSers who've followed China more closely than I have. Here's the opening:

Quote

As President Trump travels through Asia this week trying to rally support against North Korea, we are missing what is an even greater challenge, something that could very well change the very nature of international politics as we perceive it. In fact, Asia’s greatest challenge today is not a nuclear Pyongyang armed with missiles that can hit most parts of the planet, but something far more complex: a People’s Republic of China that is out of space to grow economically, and has in fact peaked. The ramifications of this fact could be profound, and indeed reorder our thinking of global politics not just in the Asia-Pacific, but on a global scale.

To be fair, a few years ago, I would have argued that anyone who uttered such a phrase was completely nuts. I would point them to the hundreds of millions of people the Chinese government has pulled out of poverty, an economy that is second only to America in terms of total GDP, and a growing military that is on the verge of not only achieving regional dominance but has global aspirations. The headlines seem to suggest a rosy future for a nation that seems almost destined to take its place as not only a great power, but as one that could even displace America as a global hegemon.

But the conventional wisdom is wrong. Beijing will have a hard time developing its economy at the breakneck speed of years past and—unless China wants to bankrupt itself—won’t have the resources to become a global military superpower to rival America. China, for all intents and purposes, has peaked.

" 'Individual conscience' means that women only get contraceptives if their employers, their physicians, their pharmacists, their husbands and/or fathers, pastors, and possibly their mayors, Governors, State Secretaries of Health, Congressmen, Senators, and President all agree that in that particular case they're justifiable." --D.C. Sessions

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#2 Traveler

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Posted 13 November 2017 - 03:43 PM

I am not convinced. The demographic and health crisis is still a decade away. But it is coming, in spades. Which is why the Chinese are now busting buns on environmental technologies. They will definitely be the leader there in less than a decade.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#3 AnBr

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Posted 13 November 2017 - 04:20 PM

What is it like to live in a country that looks to the future and researches it & invests resources towards that future? I forget as it has been so long.
"Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children's or grandchildren's time - when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers arc in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what's true, we slide, almost without noticing, back into superstition and darkness.

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1995


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#4 Traveler

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Posted 13 November 2017 - 05:13 PM

I introduce a perspective on China that may be even more troubling. Mandatory reading for anyone who wants to understand China. I can verify that this is exactly what happens. You can supervise till the cows come home, but if you dont, beware.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#5 Progressive whisperer

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Posted 13 November 2017 - 05:33 PM

 Traveler, on 13 November 2017 - 05:13 PM, said:

I introduce a perspective on China that may be even more troubling. Mandatory reading for anyone who wants to understand China. I can verify that this is exactly what happens. You can supervise till the cows come home, but if you dont, beware.

Seems like a lot of that is coming here too.

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#6 J-CA

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Posted 13 November 2017 - 05:40 PM

 Traveler, on 13 November 2017 - 05:13 PM, said:

I introduce a perspective on China that may be even more troubling. Mandatory reading for anyone who wants to understand China. I can verify that this is exactly what happens. You can supervise till the cows come home, but if you dont, beware.
I think that one manifestation of chabuduo is the product of an overheated economy, where demand so outstrips supply that there are no repercussions for shoddy work because there is more new business available than can be completed in the time available. Plumbers are in high demand in my area, you can get one at a reasonable rate but you'd best be ready to live with his mistakes, alternatively you can pay a large premium for one that is willing to double-back and fix something they do wrong.
I saw this in construction in Malaysia from 2004-2008, then suddenly quality improved.. people showed up to fix things on new home warranties and the like.

Certainly there are cultural elements to this as well, the size of the community and the relationship between those who do the work and those who receive the product is a factor, cited in the article:

Quote

Why is China caught in this trap? In most industries here, vital feedback loops are severed. To understand how to make things, you have to use them. Ford’s workers in the US drove their own cars, and Western builders dwelt, or hoped to dwell, in homes like the ones they made. But the migrants lining factory belts in Guangdong make knick-knacks for US households thousands of miles away. The men and women who build China’s houses will never live in them.
Of course the article is taking some liberties with the term too, it is also in the spirit of someone doing something truly clever in the face of limited resources - which is an admirable quality you can find the world over, in China too.
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#7 Traveler

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Posted 14 November 2017 - 10:12 AM

Thanks for picking out the nuance there J-CA. With the slowdown in China the last few years, the quality of construction seems to have gone up substantially. Buildings built in the 2000s are already crumbling, and represent what that article is all about. Those built in the early 2010 era are better, but still have a lot of faults (I installed a lot of experiments in a 2011 building at Shenzhen U). Roofs leaked horribly, and the stucco was already cracked before occupancy. The experimental construction was totally shoddy, but they would fix the stuff that I could monitor. Zip ties would break under hand tensioning, and wood screws would fracture as often as they went in. Very frustrating. Construction built in the last couple of years looks a lot better, concidentally with a major slowdown since 2013. So maybe this attitude is declining. But I still see it in the technical reports and modeling that I supervise. It's like they were written with a crayon. Again, this is a hot new field in China, and they are grasping at concepts as rapidly as they can. With pretty poor results. However, I will give them credit for making me use technologies that I never would have considered to make these systems work better and avoid malfunctioning. It is remarkable how resourceful the Chinese can be.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#8 LFC

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Posted 14 November 2017 - 10:30 AM

The quality issue seems to tie in with the article posted here before about China creating fill piles without properly compacting them and then putting large buildings on top. It's just a matter of time before disaster strikes and they come tumbling down.
" 'Individual conscience' means that women only get contraceptives if their employers, their physicians, their pharmacists, their husbands and/or fathers, pastors, and possibly their mayors, Governors, State Secretaries of Health, Congressmen, Senators, and President all agree that in that particular case they're justifiable." --D.C. Sessions

"That's the problem with being implacable foes - no one has any incentive to treat you as anything more than an obstacle to be overcome."

"The 'Road to Serfdom' is really all right turns." --Progressive Whisperer

""The GOP ... where every accusation is also a confession." --Progressive Whisperer





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