Minxin Pei on Why China Will Not Surpass the United States(economist.com)
economist.com
Minxin Pei on Why China Will Not Surpass the United States
https://www.economist.com/by-invitation/2021/08/30/minxin-pei-on-why-china-will-not-surpass-the-united-states
14 comments
Mirror : https://archive.ph/nYUht
Pei mentions in passing that China's median age will rise significantly, but he spends no time on the causes, and so kind of misses the point.
China's working age population will decline by about 250M people, about a quarter, by 2040.[1] (Aside, its elderly population will rise by about 200M in the same period.)
GDP is produced by working age people, so this decline is the headwind that China faces. It's also why the Chinese state is trying to boost fertility,[2] in a heavy-handed, state-ish way.[3] GDP is consumed in raising children.
1. This is known, because nearly everyone who will be of working age in 2040 is alive today, and immigration and emigration are negligible for China.
Working age pop: https://www.aei.org/research-products/report/chinas-demograp...
2. Xi's new emphasis on "common prosperity".
3. Seeing Like a State, worth reading. https://yalebooks.yale.edu/book/9780300078152/seeing-state
China's working age population will decline by about 250M people, about a quarter, by 2040.[1] (Aside, its elderly population will rise by about 200M in the same period.)
GDP is produced by working age people, so this decline is the headwind that China faces. It's also why the Chinese state is trying to boost fertility,[2] in a heavy-handed, state-ish way.[3] GDP is consumed in raising children.
1. This is known, because nearly everyone who will be of working age in 2040 is alive today, and immigration and emigration are negligible for China.
Working age pop: https://www.aei.org/research-products/report/chinas-demograp...
2. Xi's new emphasis on "common prosperity".
3. Seeing Like a State, worth reading. https://yalebooks.yale.edu/book/9780300078152/seeing-state
there is a Youtuber - Kraut that had a video out on China "Trump's biggest failure". In the video, he makes the point that the Chinese view 1900 - 2000 as the century of humiliation. The takeaway I think is to look for Chine to expand and assert itself more on the global stage.
How original, another expert commentary that says China will eventually stop growing because it's not a liberal democracy :')
Did you even read the article? The author doesn't say anything like that all.
Yes it does. It does it by handwaving relative weakeness without proof or argument by asserting the superiority of "our system", which is liberal democracy.
"Ironically, the ruling Chinese Communist Party (CCP) will be China’s biggest obstacle in its race with America. The party’s existential fear of losing control will impel it to maintain a tight grip on the economy, making it less efficient. Giant but ossified state-owned enterprises will continue to waste resources. The CCP’s arbitrary exercise of power—as exemplified by its sweeping crackdown on China’s most successful tech companies, such as Didi and Alibaba—will stifle the innovation and growth of its tech sector more effectively than America’s sanctions."
Doesn't say anything about growth, but does imply the govt structure is inefficient, which doesn't make sense to me. It's certainly MORE efficient.
"China should be able to narrow the gap with America in the 2020s, but its growth will probably slow down in the 2030s, and the prospect of China overtaking America will look increasingly dim. If this is the case, the coming decade might be the most volatile because China’s continuing ascent might make its leaders more reckless and Washington less secure."
Yeah, it doesnt say anything like: "China will eventually stop growing because it's not a liberal democracy". There's some hand-waving that the CCP (individuals) will be reckless...which is a random claim.
Doesn't say anything about growth, but does imply the govt structure is inefficient, which doesn't make sense to me. It's certainly MORE efficient.
"China should be able to narrow the gap with America in the 2020s, but its growth will probably slow down in the 2030s, and the prospect of China overtaking America will look increasingly dim. If this is the case, the coming decade might be the most volatile because China’s continuing ascent might make its leaders more reckless and Washington less secure."
Yeah, it doesnt say anything like: "China will eventually stop growing because it's not a liberal democracy". There's some hand-waving that the CCP (individuals) will be reckless...which is a random claim.
Ossification in name of keeping control is a real threat. For the society to thrive, it needs a bit of breathing space. In the past, even authoritarian states could not control their population too tightly. With contemporary tech, it is all too possible to keep tight tabs on everyone.
I am mostly afraid of Western governments adapting the same attitude in order to (suppress disinformation, eradicate terrorism, punish child porn, choose one or more...)
In that case, China could still win, because Western societies will work even worse under authoritarian yoke. We are not used to muddling through in such conditions. The Chinese are.
I am mostly afraid of Western governments adapting the same attitude in order to (suppress disinformation, eradicate terrorism, punish child porn, choose one or more...)
In that case, China could still win, because Western societies will work even worse under authoritarian yoke. We are not used to muddling through in such conditions. The Chinese are.
We, the US, have fumbled all our opportunities to stop the rise of Nazi China and are now an observer from the sidelines waiting to see if it implodes before it casts half the world in shadow.
Just a note here that using loaded adjectives like "Nazi" makes your writing look thoughtless, uncritical and unperceptive.
TLDR: "Nazi" gets you ignored.
TLDR: "Nazi" gets you ignored.
"China will continue its rapid growth for a time, but it faces big obstacles"
China "experts" have been saying the same thing since the mid-2000s and China's growth has continued to rocket. There seems to be a widespread desire on the part of the mainstream media and Big Tech (including HN) to downplay China being a capable adversary and perpetuate the narrative that the US has nothing to fear about China's rising geopolitical dominance.
China "experts" have been saying the same thing since the mid-2000s and China's growth has continued to rocket. There seems to be a widespread desire on the part of the mainstream media and Big Tech (including HN) to downplay China being a capable adversary and perpetuate the narrative that the US has nothing to fear about China's rising geopolitical dominance.
> In fifteen to twenty years, China will have a much bigger economy, more advanced technology and more capable armed forces. It will also remain America’s most formidable rival, and will be able to constrain the exercise of American power globally.
There's plenty said about the ascension of China, but not much said about the simultaneous decline of America, particularly the loss of the dollar as the world's reserve currency. I think an argument could be made that China doesn't have to do anything to surpass the United States in the coming decades.
There's plenty said about the ascension of China, but not much said about the simultaneous decline of America, particularly the loss of the dollar as the world's reserve currency. I think an argument could be made that China doesn't have to do anything to surpass the United States in the coming decades.
The reason people aren't talking about the decline of the dollar is because the dollar is only strengthening in its reserve currency role, which is something that requires a basic awareness of how international trade works to understand. Sadly, there are many who lack this understanding and view the role of the dollar as a type of popularity contest or measuring of a nation's economic "strength", which is not the case at all. Rather, the international adoption of a a reserve currency is determined by the nation's
* tradition of property rights and rule of law (will your money be more likely to be seized by the host nation if it is parked in nation A or nation B)
* openness of the economy to absorb foreign capital inflows -- are you able to buy as many dollars as you want whenever you want?
* openness of the economy to allow foreign capital outflows -- can you withdraw your money whenever you want?
* Overall size of the nation's capital (e.g. debt) markets -- are there deep, liquid capital markets that can absorb large investments with little friction and at a high speed. How developed are the debt markets in that country?
* Are the debt markets relatively free of domestic regulation?
Obviously no nation receives perfect marks in all categories, but the US is at the top of this list overall, and no nation is even trying to unseat the US in these categories. Not at all.
Note that the strength of the dollar has nothing to do with whether our economy is growing or shrinking, or whether we are producing more or less, have high or low unemployment. What matters is rule of law and openness to letting foreigners purchase US assets. Basically it is the exact opposite of China's economic policy. In fact one can say that China's strategic priorities are to not do well on any of these scores.
Therefore only absolute fools believe that China can ever be a global reserve currency, when its own strategic agenda is to be the opposite of a reserve currency issuer. China wants to be a reserve currency accumulator! It wants to buy reserve currencies of others, not sell its own. If the RMB ever became a reserve currency, it would be a massive defeat for all of its top economic priorities, as it would be required to run massive trade deficits, accept unlimited amounts of foreign ownership of its domestic capital markets, adopt a hands off policy for regulating capital flows, adopt an independent judiciary, and drop most of its currency controls. It would need to hand over control of large segments of its economy to foreigners. Now how likely is China to agree to do that? It would be a total defeat of their existing priorities and political leadership.
* tradition of property rights and rule of law (will your money be more likely to be seized by the host nation if it is parked in nation A or nation B)
* openness of the economy to absorb foreign capital inflows -- are you able to buy as many dollars as you want whenever you want?
* openness of the economy to allow foreign capital outflows -- can you withdraw your money whenever you want?
* Overall size of the nation's capital (e.g. debt) markets -- are there deep, liquid capital markets that can absorb large investments with little friction and at a high speed. How developed are the debt markets in that country?
* Are the debt markets relatively free of domestic regulation?
Obviously no nation receives perfect marks in all categories, but the US is at the top of this list overall, and no nation is even trying to unseat the US in these categories. Not at all.
Note that the strength of the dollar has nothing to do with whether our economy is growing or shrinking, or whether we are producing more or less, have high or low unemployment. What matters is rule of law and openness to letting foreigners purchase US assets. Basically it is the exact opposite of China's economic policy. In fact one can say that China's strategic priorities are to not do well on any of these scores.
Therefore only absolute fools believe that China can ever be a global reserve currency, when its own strategic agenda is to be the opposite of a reserve currency issuer. China wants to be a reserve currency accumulator! It wants to buy reserve currencies of others, not sell its own. If the RMB ever became a reserve currency, it would be a massive defeat for all of its top economic priorities, as it would be required to run massive trade deficits, accept unlimited amounts of foreign ownership of its domestic capital markets, adopt a hands off policy for regulating capital flows, adopt an independent judiciary, and drop most of its currency controls. It would need to hand over control of large segments of its economy to foreigners. Now how likely is China to agree to do that? It would be a total defeat of their existing priorities and political leadership.
People aren't talking about it?
How about the Congressional Research Service?
https://crsreports.congress.gov/product/pdf/IF/IF11885
Or from China, calls for a new reserve curency:
https://www.rt.com/news/stocks-economy-usa-asia/ https://abcnews.go.com/Business/story?id=7168919&page=1
Or independent reporting referring to historic government debt, massive trade deficit, decline in central bank dollar reserves, and a quote from the Bank of England Gov. Mark Carney: “Ultimately, we will have reserve currencies other than the U.S. dollar,”
https://www.truthdig.com/articles/goodbye-to-the-dollar/
How about the Congressional Research Service?
https://crsreports.congress.gov/product/pdf/IF/IF11885
Or from China, calls for a new reserve curency:
https://www.rt.com/news/stocks-economy-usa-asia/ https://abcnews.go.com/Business/story?id=7168919&page=1
Or independent reporting referring to historic government debt, massive trade deficit, decline in central bank dollar reserves, and a quote from the Bank of England Gov. Mark Carney: “Ultimately, we will have reserve currencies other than the U.S. dollar,”
https://www.truthdig.com/articles/goodbye-to-the-dollar/