China to pass US as world’s leading economic power this year

[Orion]

Chinese have adopted measures to lessen dependence of their economy on exports. According to them, it will take time. Goal is to increase domestic consuming and spending, which would obviously, require raise in purchasing power. They are also going to centralize state further (strip regional leaders of authority) but will introduce elections for one of the less important bodies, if i remember correctly. Among other goals set on party congress, are increasing naval power, reducing pollution and environmental damage, improving human rights record and reforming social services.

Yes, overall ambitious goals, but i think they consider increase in domestic purchasing power as a top priority, as they are desperate to stop being "workshop of the west". Their economy is too dependent on global demand, which makes China vulnerable to crisis's and recessions in developed world. Apparently, they are even willing to allow drop in GDP growth temporarily, to achieve that goal, which was taboo in the past.

 

[Tail Gunner]

If America goes bankrupt, China can just start consuming their own goods instead of selling it to America.

You made some good points, but this one was way over the top. Do you really think that China wants to depend on an export economy? If China could make this happen, it would have done so long ago.

This is the Chinese leadership's freakin' dream. It would solve almost all of its many problems. But that is all it is -- a dream. Most Chinese are still dirt poor and have no purchasing power. There is also no retirement system, so any extra income goes towards purchasing gold, not consumer goods.

Do you not see the big picture? Most Chinese citizens are already poor. They are not going to lose anything if the world slips into depression. China produces enough food to feed itself.

.....

This brings us back to China. China's currency, and economy, works on the premise of being undervalued. So when the great global reset comes (it's mathematically guaranteed at this point, it was a while ago), China isn't going to suffer much if at all, while America's entire way of life will be destroyed forever.

China has nowhere to go but up, and America has nowhere to go but down. The day America did it's bailouts and started to print cash was the day America was doomed.

I actually agree with almost everything that you said about the U.S. economy. Good red pill economic thinking. You are obviously in the top 1/10th of one-percent when it comes to economic thought.

Having said that, I still disagree with you about China. It is a massive command and control economy. They ALWAYS fail. Name me one such economy, especially on the scale of China or the Soviet Union, that has ever exceeded.

What are the odds of a bunch of murderous numbskulls successfully navigating the dangerous and chaotic economic waters that you discussed? Next to nill.

In the long run, China is here to stay as an economic powerhouse. But something will eventually go horribly wrong with their massive command and control economy -- and this will necessitate huge social and economic upheavals before China eventually gets back on track.

 

[Handsome Creepy Eel]

I won't get into the fine analysis that Samseau has posted above, but I'll just add one reason for believing in China over USA: China is good at decision-making.

The USA has never been in such a political paralysis before, with a record number of filibusters and complete disunity where everyone is just interested in stuffing their pockets (to a lesser or bigger degree).

Meanwhile, the Chinese government efficiently passes whatever measures it needs. Fiscal stimulus? Done in a few days. Direct and indirect subsidies for green energy industry? Established before you can blink. Deciding to develop a 5th generation fighter? Project created. Build an important dam, railroad or airport? No decades wasted on permits, ecological studies, protests and lobbies.

Sure, China might be polluted and its officials prone to corruption, but it gets shit done. It's one of the rare points of light in being a ruthless communist dictatorship. Its decisions might be saddled with corruption, but it's better than having to wait 5-10 years for each decision to be made at all (just look at Obamacare - you might like or not like it, but it took almost a decade to be passed - how efficient is that?).

Unless almost all decisions made by China turn out to be suicidal and almost all decisions made by the USA turn out to be masterstrokes, I can't see the USA coming out on top unless serious changes are made in its governance. And I can't see such changes anywhere on the horizon either.

 

[Tail Gunner]

I won't get into the fine analysis that Samseau has posted above, but I'll just add one reason for believing in China over USA: China is good at decision-making.

Anyone can be good in the short to intermediate term, just like the handful of new forex traders each year who seem to magically turn $10,000 into $250,000 -- and then eventually go bust.

Again, name me one command and control economy, especially on the scale of China or the Soviet Union, that has ever exceeded. It has never happened. It will never happen. Because market forces always win in the end.

All of the very serious problems correctly identified by Samseau in regard to the U.S. economy were caused by very limited government interference by the Fed in the free market -- at least when measured against the extreme government interference of the Chinese government.

So, multiply the eventual chaos caused by China in the free market by a factor of at least ten.

My disagreement with Samseau is that while he correctly applies valid economic analysis to the U.S. economy, he does not do the same for China.

Having said that, there is no reason that China cannot stave off serious economic repercussions for many years -- just as the U.S. did for many decades. But China will eventually pay the price for its severely distorted command economy. The markets always win in the end.

 

[Tail Gunner]

Meanwhile, the Chinese government efficiently passes whatever measures it needs. Fiscal stimulus? Done in a few days. Direct and indirect subsidies for green energy industry? Established before you can blink. Deciding to develop a 5th generation fighter? Project created. Build an important dam, railroad or airport? No decades wasted on permits, ecological studies, protests and lobbies.

Sure, China might be polluted and its officials prone to corruption, but it gets shit done. It's one of the rare points of light in being a ruthless communist dictatorship. Its decisions might be saddled with corruption, but it's better than having to wait 5-10 years for each decision to be made at all (just look at Obamacare - you might like or not like it, but it took almost a decade to be passed - how efficient is that?).

This is the very same argument made by totalitarian regimes throughout history. Trade us your freedom for economic security.

Mussolini made the trains run on time for the first time in Italian history. Hitler solved hyper-inflation and turned Germany into an economic powerhouse. The Soviet Union provided guaranteed (low quality) cradle-to-grave care.

Do this -- or I will put a bullet in your head. That always works for awhile, because it is very efficient. But, in the long run, even the threat of a bullet in the head cannot overcome the inevitable march of the free market towards equilibrium -- and economic reality.

Good discussion. I wish more guys on this forum gave thought to economics. They do not see the direct benefit to their lives in making appropriate long-term financial decisions.

 

[Orion]

I won't get into the fine analysis that Samseau has posted above, but I'll just add one reason for believing in China over USA: China is good at decision-making.

Anyone can be good in the short to intermediate term, just like the handful of new forex traders each year who seem to magically turn $10,000 into $250,000 -- and then eventually go bust.

Again, name me one command and control economy, especially on the scale of China or the Soviet Union, that has ever exceeded. It has never happened. It will never happen. Because market forces always win in the end.

All of the very serious problems correctly identified by Samseau in regard to the U.S. economy were caused by very limited government interference by the Fed in the free market -- at least when measured against the extreme government interference of the Chinese government.

So, multiply the eventual chaos caused by China in the free market by a factor of at least ten.

My disagreement with Samseau is that while he correctly applies valid economic analysis to the U.S. economy, he does not do the same for China.

Having said that, there is no reason that China cannot stave off serious economic repercussions for many years -- just as the U.S. did for many decades. But China will eventually pay the price for its severely distorted command economy. The markets always win in the end.

I do not understand ? China is market economy. It supplies world's demands in variety of shit.

Problem China faces is how to reduce it's vulnerability to global demand.

I do not see how is it better or superior to solve macro-economic issues by letting some financial sharks and other blackmail rouge credit rating house do calculations for you.

Let me say highly unpopular thing with rightists - you are getting too much brainwashed by free market cultists in universities. Guys, market forces do not create initiative, nor do they create new values. Market forces are there to supply demands with supplies. And that's it. It's a closed circuit. Market strongly favors safe long term investments, that will pay off.

And folks - shit that didn't pay off built the world as we know it.

Free market ultra sectarians are just like Catholic church denying the world is round. Although economies world wide are getting billions out of poverty through initiative, decision making, sometimes brute force economic reforms - free market cultists still deny results, apocalyptically predicting imminent collapse and chaos.

In fact, the only risk from collapse and chaos comes from foreign pressure and financial machinations orchestrated from same power centers where those free market economists come from. They are the ones creating the chaos they are pointing at.

Of course, i do acknowledge that free market is the only model of economy today that can generate stable and prosperous societies - But it's not perfect model. Nothing on this world is perfect. When problems appear, they need to be solved. And crossing your legs and stating "nah, market will solve it" is conformism and decadence.

 

[Samseau]

The USA has never been in such a political paralysis before, with a record number of filibusters and complete disunity where everyone is just interested in stuffing their pockets (to a lesser or bigger degree).

No, you are forgetting that one other time America was in a political paralysis.

Right in the build-up before the Civil War.

 

[Samseau]

Let me say highly unpopular thing with rightists - you are getting too much brainwashed by free market cultists in universities. Guys, market forces do not create initiative, nor do they create new values. Market forces are there to supply demands with supplies. And that's it. It's a closed circuit. Market strongly favors safe long term investments, that will pay off.

Actually, what you've said is extremely popular with "rightists." Conservatives are the biggest critics of economics as a profession.

It's the leftists who worship money. It's the leftists who believe that they can control the economic to bring about heaven on earth. It's leftists and their Marxist ideas about there being no God and believing money and science are all that is necessary for humanity. Whenever you hear a feminist talk, what do they talk about? How women need careers ($$$), how women need to overcome the glass ceiling ($$$), how women need college ($$$), how women need this and that and this and that ($$$$$$$$$$$$$$$$$$$$$$$$$$).

I guarantee you most of America's major economists vote Democrat as well.

The left only talks about money. It is the party of money worship.

Conversely, Conservatives are the ones who believe in community values. Conservatives believe in God. They believe in the family. Conservatives believe in the pursuit of knowledge for knowledge's sake. Conservatives believe in the free and open inquiry of ideas, unlike leftists who want to censor everything with political correctness. Conservatives believe money is just one value among many. Conservatives do not believe the government can bring any sort of success to the world merely through economics, because conservatives understand that human nature is much more complex than money worship.

 

[Tail Gunner]

I won't get into the fine analysis that Samseau has posted above, but I'll just add one reason for believing in China over USA: China is good at decision-making.

Anyone can be good in the short to intermediate term, just like the handful of new forex traders each year who seem to magically turn $10,000 into $250,000 -- and then eventually go bust.

Again, name me one command and control economy, especially on the scale of China or the Soviet Union, that has ever exceeded. It has never happened. It will never happen. Because market forces always win in the end.

All of the very serious problems correctly identified by Samseau in regard to the U.S. economy were caused by very limited government interference by the Fed in the free market -- at least when measured against the extreme government interference of the Chinese government.

So, multiply the eventual chaos caused by China in the free market by a factor of at least ten.

My disagreement with Samseau is that while he correctly applies valid economic analysis to the U.S. economy, he does not do the same for China.

Having said that, there is no reason that China cannot stave off serious economic repercussions for many years -- just as the U.S. did for many decades. But China will eventually pay the price for its severely distorted command economy. The markets always win in the end.

I do not understand ? China is market economy. It supplies world's demands in variety of shit.

If you really believe that China has a market economy this discussion is probably not for you. I say that with all due respect.

China allows just enough free enterprise to stave off a full-fledged rebellion, instead of the hundreds of riots that it endures each year.

 

[Handsome Creepy Eel]

This is the very same argument made by totalitarian regimes throughout history. Trade us your freedom for economic security.

That is another point that I was trying to make. People by nature don't like totalitarian regimes, because a desire for at least some freedom is strongly embedded in the human spirit. However, people also by nature don't like being hungry and poor. Thus, if conditions get bad enough in a democracy (i.e. if a democracy flounders in political paralysis and produces abysmal economic results), people are almost guaranteed to opt for totalitarianism in order to get better economic security. It has happened in the Weimar republic 80 years ago, and it is happening in Greece right now.

(the opposite process is also true, of course - see the recent fall of the vastly corrupt and inefficient Ukrainian despot)

Of course, it is a valid argument that the economic results of totalitarianism can't last in the long run and thus it shouldn't be chosen in any case, no matter how bad democracy fucks up things - but that's just you thinking that as a sort of an enlightened citizen. The average person will follow their belly and won't bother with long-term considerations.

Right now, given China's speedy rise and the advancement of its common people (because even though its totalitarian regime has many weaknesses, the current batch of western democracies seems to have even more), I can well see how the Chinese people are glad to tolerate it and find solace in actually getting important things done thanks to totalitarianism. I don't condone this in the moral sense, of course, but that's how it is at the moment. And as long as Politburo keeps producing comparatively better results because of its increased ability at decision-making (in comparison to the paralysed, anemic institutions of Senate & Congress), it's going to stay that way.

 

[Orion]

China allows just enough free enterprise to stave off a full-fledged rebellion, instead of the hundreds of riots that it endures each year.

"Riot" in China is quite a relative thing. China has dozens of million + cities.

Yes, there is enough free enterprise in China - it is a main driving force of Urbanization. Poor peasants who leave villages for big cities in order to find prosperity. It's only a dream for millions, yes. But it is there. Once done it cannot be undone. China realizes (as was stated in previous congress led by new Chairman) that further liberalization of economy is unavoidable. The only thing is - they are not going to move towards it by shock therapy. They are not imbeciles. They want to pass power to domestic entrepreneurs and billionaires, while tightening judicial system and central government. Goal is to increase purchase and spending with domestic citizens, sort of a move towards being a more developed society.

Now they have tons of puzzles to solve on their way. Everyone will try to hamper them down. Maybe they will fail. Who knows. But point is, they are not living in denial. They acknowledged it.

Yes, government will remain central planner of life. Shitty, yes. But only they know how much they want to strip themselves of economical duties they need not be taking care about. It's huge apparatus for god's sake.

Wanna see how things work without it ? Try India.

 

[Samseau]

Death spiral:

To sum:

Less people working than ever and getting worse. Young people can't find jobs because older workers (boomers) can't retire.

What's sad is that America's problems are quite easy to fix, but since we're a democracy and the people are fools the system is going to die.

 

[Travesty]

^

A huge reason not to have kids unless you are making bank.

The cost to raise them and maybe even help support after college years is insane and will only get worse as time goes on.

 

[Pepini]

Name one chinese brand? You can´t. China is a centralized economy. They don´t create wealth. Chinese can imitate, but only in a democracy and free market ideas flow. Unless they become a democracy and free market China will always be behind the economies which are.
This is the one of the biggest challenges China is facing. But how can you manage a 1,4Billion democracy? It´s a dead end. Chinese know about this.

 

[Orion]

Name one chinese brand? You can´t.

Name me one Soviet Union brand.

China is a centralized economy. They don´t create wealth.

So where is all this decade long budget surplus coming from, and how the hell did they stack up insane amount of foreign gold and currency reserves.

Chinese can imitate, but only in a democracy and free market ideas flow.

Yuri Gagarin disagrees.

Unless they become a democracy and free market China will always be behind the economies which are.

No, they used to be behind when Mao ruled with iron fist. Now they changed, and evolved. Today, they are worlds no 1 economy. Are you denying the obvious ? Newspapers around the world are writing about Chinese imminent overtake, yet, people are still stubbornly denying it.

 

[Pepini]

Name one chinese brand? You can´t.

Name me one Soviet Union brand.

Soviet Union collapsed.

China is a centralized economy. They don´t create wealth.

So where is all this decade long budget surplus coming from, and how the hell did they stack up insane amount of foreign gold and currency reserves.

See above posts. Totalitarian regimes work for short period of time. Until they collapse.

Chinese can imitate, but only in a democracy and free market ideas flow.

Yuri Gagarin disagrees.

History don´t.

Unless they become a democracy and free market China will always be behind the economies which are.

No, they used to be behind when Mao ruled with iron fist. Now they changed, and evolved. Today, they are worlds no 1 economy. Are you denying the obvious ? Newspapers around the world are writing about Chinese imminent overtake, yet, people are still stubbornly denying it.

No they aren´t. European Union is the number 1 economy in the world.
Did you know that chinese workers in factories are tied up in ropes so they don´t hurt themselves when they fall asleep because of the inhuman hours of work?

 

[Orion]

European Union is not an economy. Only Eurozone can be regarded as an economy, although no one serious does that, because they don't have one policy. Germany tried to introduce one, called Austerity measures, but they were dropped by many, like Spain and Hungary for example.

 

[Tail Gunner]

Yuri Gagarin disagrees.

You are mixing apples and oranges. The Soviet Union was a third-world nation that had a first world military and space program because the centralized command economy diverted tremendous resources towards those goals at the expense of the remainder of the economy, at the cost of the extreme pain and suffering of its people, and at the guaranteed collapse of its economy. So, that example actually proves that a command economy does not work. Brazil could place a man in space if it subjugated its people and devoted half of its wealth to that sole mission. That proves nothing.

No, they used to be behind when Mao ruled with iron fist. Now they changed, and evolved. Today, they are worlds no 1 economy. Are you denying the obvious ? Newspapers around the world are writing about Chinese imminent overtake, yet, people are still stubbornly denying it.

You forget a key point: the Chinese economy evolved for a single reason -- so that the communist leadership could maintain control over the country. That is important, because the true goal is not a market economy, it is rather the continued subjugation of its people. The very same goal as Mao. So, the need to achieve that primary goal at all costs will cause serious market distortions, as happened in the Soviet Union.

 

[Orion]

You are mixing apples and oranges. The Soviet Union was a third-world nation

It was a second world nation.

that had a first world military and space program because the centralized command economy diverted tremendous resources towards those goals at the expense of the remainder of the economy

Lol, so does USA. Only difference is, USA budget doesn't give people jack shit, so it can accommodate for insane expenses in military. People give tax money to government without expecting return, like people in northern Europe expect for example. Actually, tax money is usually spent on spying citizens.

Tho, that models is waaaay better than Soviet i agree. But principle is same - plunder citizens of tax money and invest it in bullying mechanisms.

, and at the guaranteed collapse of its economy. So, that example actually proves that a command economy does not work. Brazil could place a man in space if it subjugated its people and devoted half of its wealth to that sole mission. That proves nothing.

People are already doing that around the world. And there are no results. Because not everyone can. You need to invest money where it is really needed and where it will really bring results. Take Iran for example. Obama admitted that if they were let to enrich uranium, they could make atomic bomb in a year. Then take Saudi Arabia for example - they have insane amounts of cash, yet they can't do shit. They invest money into buying western stuff, instead in education, science etc... Because according to them, western education is sin.

Espionage is one also very important activity for being globally competitive, and that is a field where USSR excelled back then, and Russia still does now.

You forget a key point: the Chinese economy evolved for a single reason: so that the communist leadership could maintain control over the country. The very same goal as Mao.

Does that change the point ?

 

[Pepini]

"There's no such thing as perfect collectivism. Our own bodies are examples of inherently programmed collectivism on the cellular scale, but we still get cancer and infections. We may be complex multicellular organisms stomping around thinking we've won at natural selection, but individual bacteria vastly outnumber us in both quantity and mass, and we can never ever eliminate them all. They're buried deep in the earth, cover every surface in the environment, fill our assholes and mouths, and evolve faster than we can devise ways of sterilizing them.

Culture works the same way, no empire has lasted with a monolithic culture forever. The Chinese took the best shot at it and hundreds of years later they were left being forced to import drugs by the British through their superior technology. Superior technology that existed because Europeans had been fractured into competing innovating nations all that time China was creating their harmonious society.

Although the apparent trends in society suggest an increase in uniformity of thought, the reality is that enforcing such a thing is inherently unstable in the long run. Hell, just over a decade ago the Soviets collapsed after trying the same shit. We use twitter racism crusades to silence people instead of secret police, but you can see the same effects as people stop expressing themselves in public. Look at how paranoid people on this forum tend to be about being found out and losing their job, reluctant to express their ideas to blue pillers. This manifests on the larger scale as lack of drive or innovation, and it hamstrings the society as they lose the capacity to compete with other societies beyond direct militarism, which only hastens the collapse due to the economic drain of directing resources to solely destructive purposes.

The US may eventually kill itself by trying to make sure everyone only thinks happy thoughts, but rest assured it will be rapidly overtaken and replaced by a free society in so doing."

By BortimusPrime