RU-vidrs talk about the collapse of the Chinese economy and the end of the Chinese economic era. However, as a historical research economist, I make a different claims about the China of tomorrow.
The one fly in the ointment is politics. China has been the largest population for the 20th Century and they went from economic disaster to economic disaster because of politics until the 1990s. You are right if they embrace a free society however they are heading in the opposite direction.
Can't agree about China. Copy & pasting the Japanese experience to the Chinese, their marked to market wealth/% of world exports should be only 40% of their present wealth and income. As a confirmation, their electricity production whether measures by satellite or on the ground data, also suggests their real GDP is only 40% of stated GDP. Of course, this means their debt to GDP is actually is at least 750% of GDP! I agree if they suddenly discovered private property rights and the institutions to protect those rights, then their economy would skyrocket. Fat Chance.
Japan got rich and then old. China is getting old because of the one child policy, urbanization, zero immigration and other foibles. They lost a good chunk of money on useless homes (shoddily constructed) that were bought as "investment". Some of them are still unfinished.
Ludicrous. You keep using the US as a yardstick. This is exactly what the CCP wants you to do, underestimate its economy. There is even an article of how China is actively trying to undervalue its Trade surplus, to stop scaring the whole world, especially the G7. For all intents and purposes, your erroneous analytics is exactly what the CCP want to see more. 🤣🤣
I worked with a highly educated Chinese person that when to a US university and chose to stay. The education system is organized to make memorization the most important. Now most of the worlds education system do the same thing, however; those system do reward thinking more and more as a person moves into higher education. The Chinese system rewards thinking less then most. The people that think also are rewarded to work for the CCP or the military. Education is a filter to move forward people that will be minions for the CCP. Communism is a ideological religion that places humans as the ultimate arbitrator. Moral, ethical, or honor are discouraged requirements for CCP members. I could see that he was not CCP material. History has centuries of examples the result of nations that put a person as the ultimate arbitrator. CCP china will not thrive. It may hang on.
"Those system do reward thinking more and more as a person moves into higher education." Even at the PhD level the education system puts a lot of emphasis on memorizing past research that has nothing to do with your area of research and suspiciously a lot to do with your professor's coauthors. It's sad, really. The best thinkers probably go out and do things rather than collect pieces of paper from ivory towers.
I have heard people from people who have worked with the Chinese military and seen drills in action that their military is nothing to fear because there is no independent thought, no creativity in strategy, and once a command structure falls apart, the underlings are paralyzed. Also, apparently they have terrible aim with firearms.
The main thing that makes me skeptical about China is central planning, with a huge emphasis on infrastructure investment. This may have worked immediately post Mao, because they were coming off such a low base in terms of infrastructure. But eventually, you reach a point where more rail and buildings are not helpful, but are rather a malinvestment. My hope is that the people of China throw reject central planning and authoritarian government. They are some of the hardest working and most responsible people i have ever met.
1. China’s economy has the most competitive markets in the world. 60% of its businesses are private. Huawei BYD DJI Alibaba Tencent and many others are private enterprises! China’s planning is just providing guidance for its economy! 2. China is not only investing in infrastructure but it is investing more and more on science technology education healthcare culture sports defense technology… China and US are the only two countries that are far far ahead of any other countries in developing new technologies and will be the leaders of industry revolution!
The Communist party of China is well aware that it can only stay in power as long as it provides prosperity to its people. China is one of the very few countries in the world where I see the government actively trying to do this. It certainly isn't the case here in the United States.
@@bzhu3233 "Just providing guidance". AKA.. Central Planning. I think Chinese don't really understand what private property and a private sector is. It requires rule of law. China doesn't have that.. and never will. There is one rule for the man on the street, and the CCP is above the law.
@@dirremoire thats actually a fair point. I have heard a few people that i respect say that they would prefer a monarchy of democracy for similar reasons. I monarch would know that they are one revolution away from being discarded. Furthermore, because they would want to hand down the best possible country to their progeny, they would be forced to take the longterm view on all issues. Is this preferable to the lying, short -termist, election cycle driven politics of democracy? Maybe, but im not sure.
@@bzhu3233 Your first point is absolutely wrong. During the pandemic, China Xi has cracked down on Chinese capitalism, freedom of speech and overthrew Hong Kong while the rest of the Western world was arguing about wearing masks and the benefits of vaccine.
I can't find the words I want to say Mark, but I want to convey how incredible your videos are. This one on China is truly thought-provoking & fascinating, outrageously fantastic & insanely informative, I agree with how you mention Peter & Joe's Blogs, yet, I love how you explain & clarify, why China is not collapsing anytime soon, It Amazing topic & content Mark, I can listen to you all day long, we can learn so much from you as an economist.
I would take exception to his claim of the percentage of people getting higher education. It is my understanding that roughly half the people in China are peasants still living in the countryside who get a very minimal education. And I would also caution against taking Chinese claims of GDP with a grain of salt. And a large portion of the GDP that is real is generated by relatively nonproductive government in things like unnecessary infrastructure projects that are only funded to provide jobs. I don't see China collapsing anytime soon but I do think it is economically weaker than most people think.
The official GDP figures are absolutely not reliable, this has been understood in the West for a while now. The central government tells the provincial governments, "Give us X% of growth" and the provincial governments do what they have to do to tell the higher-ups in Beijing what they want to hear. That explains a lot of the malinvestment in useless infrastructure projects.
I have just stumbled across your videos... and I love them!!! Maybe that's because I graduated with a degree in Finance from Texas Tech in '94. I agree with your theory about Chinese people working hard... but then how do we explain 20+% of highly skilled and educated professionals who can't find a job? Thanks, David
Yeah that is pretty naive - just found this guy and it's an immediate turn off. I can't possibly take him seriously now. If there was ever *one* Country in the world that you can't trust the "official numbers" for it's China.
I agree with you in principle. China has a highly trained workforce and technological clusters. I still believe that in the short term we are experiencing a severe demand shock in real time. The middle class is losing too much confidence, too many people are affected by the triple debt crisis: employers, the public sector and private citizens.
I say this guy is wrong. Convince me that China isn't the next Japan. Long work weeks? Japan does that, too. Sustained growth comes from technological progress, not working more hours, and little has been invented in China for the past 400 years. From a 48 hour work week, it might be physically possible to increase that to about 70 or 80 hours a week before you hit up against the fact that you are only awake 15 hours a day and need to eat, commute, etc. So you can grow the economy by about 50% by working more and after that, you need to innovate to continue growing.
An interesting video. However, two questions I have in mind: 1) What percentage of those graduates of tertiary education programs are actually finding jobs, or at least jobs other than those for which no advanced education is required (i.e., underemployment)? 2) We hear and read about "lying flat" and "letting it rot"--does this mean that a substantial percentage of younger people either aren't interested in pursuing an education or employment, or perhaps aren't able to find jobs in spite of their best efforts?
Personally I prefer the term "decline of the Chinese economy". This is much more realistic than "collapse of China" as China or similar size countries cannot collapse like a commercial enterprise that goes bankrupt. When comparing numbers regarding China it helps to only use figures they cannot fake: 1. The currency became weaker during the last 20 years. 2. The stockmarkets are among the worst performers on planet earth. 3. Same as in the EU, the arrival of actual exports to the USA goes down in volume and value. 4. China has to sell US treasury bonds month after month because they need that money. 5. Some 10 years ago, Chinese companies did buy several large western companies every year. No more during the last 5 years. 6. Chinese car sales have reached it's peak in 2017. 7. Chinese total exports in value and according to Chinese statistics reached its peak in 2017. 8. The number of foreclosed homes in China rose 43% year-on-year in 2023. 9. SWIFT data suggest RMB share in international payments rose from 1.1% by the end of 2013 to 2.5% in May 2023. USD remains the dominant currency in international payments - 43% of international payments were denominated in USD, 32% in EUR, 7% in GBP, and 3.2% in JPY. The currency of the "second largest" economy is in real international trade very unpopular. When someone can get real money, why would we take Chinese money?
Comparing the demographic issues in China to the plague in Europe Is kinda misplaced. I think It is relevant to address the specific structure of both events and why one might spur productivity increases and the other stagnation. The early medieval system was feudal and agrarian with massive population growth that outstripped domestic food production, causing famines, and the rise of wealthy commoners due to cheap exploitable labor, leading to massive political instability and wars exploiting this instability( the hundred years war). The Black Death killing 1/3 of Europe, brought the population down to a sustainable level such that political stability and trade increased enough to allow countries to spec into more enlightened projects like science and improving efficiency. The population didn't bounce back until the 1750s and after the agrarian revolution began leveraging the advances of the Renaissance era to avoid famine The current demographic Issue throughout most of the world is rapid aging. This is very different than the great plague because the head of the distribution of people dying out are young productive people, not the elderly and frail. There also isn’t currently a massive issue of resource scarcity where a population decrease would improve stability. The thesis is that: less young, healthy, and educated workers entering the workforce, with updated knowledge and adaptability, In comparison to old people with costly medical issues and lower productivity will be a drag on any system. An aging export-driven country, that hasn’t made the transition to high value-added labour like China, will have a lot of difficulty remaining competitive. I think directly addressing the point by fully following, then refuting, its logic would be more compelling than saying population problems in the modern age, of a different manner, that were directly addressed by globalization and free trade, have not come true.
Aging, so what. Older people are wiser, less wasteful, and reckless, do not commit crimes, and tend not to be addicted like many youths. I live in Florida, and tons of peaceful, productive old people are upgrading their homes and passing wisdom to their families, in contrast with the addictive young on the street. They are filling jobs the young do not want to do. Employers love them as youth are often flighty with work and the older take it serious. We all age but continue to be productive and contribute, and assets/capital are passed on to the next generation. Medical is just a redistribution effect from the old to the caretakers, the young. So when old need care assets and wealth is transferred. Most important, why would this slow the economy when technology provides a passive boast continual boast.
@@EconLessonsYou're talking about the United States. In China, the retirement age is 60 for men and 50 for women, so people expect to draw their equivalent of Social Security (which isn't much to begin with) at a much earlier age. It sounds like they're talking about raising the retirement age, but very sharply - to 65 in one go - and that is bound to cause social unrest, as well as worsen the unemployment problem. Old people in China don't seem to be as healthy as old Americans, either; diabetes and cancer are more prevalent there than here. Besides, it's not just the aging, but the shrinking population that is caused by it. China is expected to lose 1/3 of its people by the end of the century - and that's if you go by the official population figures, which are almost certainly exaggerated. Where will the economic activity come from? China needs domestic consumption to make up for loss of exports and to buy up all those vacant condos, but the number of domestic consumers will drop over the next 70 years.
The Black Death killed one half of all English boroughs, resulting in the “rotten boroughs” of the 17th and 18th centuries. The odds are that the death rates in the rest of Europe were as high, if not higher. It took a century for the population to recover. Only then do we get the Renaissance.
I think their culture and language gives them advantages in some respects. They are a very industrious and an aged, traditional culture; they are very hard to be influenced from the outside due to these barriers so everything stays intact. They are a homogenous and collectivist which gives them many strengths as well, they are not divided like more liberal societies are. They also want to enjoy the standard of living that we enjoy in the west and that makes them very hungry and competitive.
If they could every be democratic and transparent and a real capitalist economy they would take off. Until then they will have to accept a less than optimal growth path. People always do better when they are not left to their own choices and free will.
@@EconLessons Really? No country on earth has achieved the growth that China has over the last four decades and that is due to direct government intervention. It is the world's manufacturing power house. Yes they invited Milton Friedman to advise on economic growth but have pursued a path that still follows socialist, not capitalist principles to their benefit. The USA is fighting a losing battle in trying to constantly attack China. They would do well to learn from China, which incidentally is more democratic than the USA if you actually study their system of government and not listen to the endless anti China propaganda on You Tube
The CCP is also a formal adversary that hates freedom, hates democracy, is constantly threatening our allies with war, and flys spy balloons over our country. I care more about de-coupling on ethical grounds than how their economy does. I don’t care if they invent flying ai supercars and harness fusion power or if they revert to subsistence farming. I just care we put our money where our mouths are and stop trading with them on moral grounds.
You mentioned investing in an Asian fund years ago with poor results. That was probably driven by Japan's "lost decades". Japan was the dominant Asian economy back then. Now think of Japan's 1990 problems on steroids in today's China. Debt levels and excessive real estate valuations dwarfing those of Japan in 1990. Also, Japan's workforce and population were still growing in 1990; China's are declining. If China only has "lost decades", it would be a major triumph. Most likely it will be much worse.
I’ve become interested in Geopolitics since retirement gaining knowledge from a couple of the specialists you mentioned. You bring a different perspective that I’m enjoying. What I’ve learned is that China is dependent on imports to fuel their economy. Right or wrong, the future inability to obtain a sufficient amount of imports could hamper China’s future economic growth.
I love your channel and I love Ziehan , so idk, but until some other country learns to make a bunch of shit real cheap for the world, in my mind China will remain relevant, who else is going to assemble cheap shit that the world craves ?
The GDP figures don’t tell the whole story. A lot of that is coming from government investment in infrastructure projects and government subsidizing the current industry they want to monopolize. Not holding my breath for regime change in China either. I am not as optimistic as you are about China.
China the country vs China the people. China the People Got Old before they Got Rich. That has affected their development of a Middle Class and a middle tier manufacturing to more complex manufacturing competitive edge.
I think you could make the same argument about the USSR. It also had great potential, but failed. Russian tried capitalism with a political system with contradicting interests. I don't think China will take off with it's present political system, even if they go even more capitalist in the future.
What about money printing US GDP. Ever since Obama each job created costs $250000 for a $35000 job. US 😄🤣 not producing any assets proof produces homeless people and human waste.
And China has been doing that itself but on a order of magnitude greater level. Every criticism of the U.S. financial models is far worse in China.@@edwardpi9852
@@edwardpi9852 Most of what you own have US origin and they still hold patents and get revenue from those patents. Let's not pretend your smartphone isn't USA in origin. Let's not pretend your PC doesn't have US programs such as Windows Operating Systems, video games, movies, and music. Let's not pretend you don't drool over Made-in-US high-quality products and that you'd buy them as soon as you can afford them. Let's not pretend you prefer to watch Chinese movies over US Hollywood movies. No, the US Dollar is not toilet paper, it's backed by all the things you want from the US. Do you want them? You have to have US dollars. Nobody forces you to purchase the US dollars but you have to if you want all the goodness coming from the US.
China will not go away but their impact on world will be far less significant in the future then the most analytics were and some are still predicting. All what you said is is O.K. but the problem with China is their political system. They are getting close to the point when their political system cannot neither govern or even support their economy. Soon they will reach the point, some said that they are already reach it, when they will need to chose between protecting their current political system or economic stability and growth. Current political systems emphasize the political will of the ruling elite concentrate in single political organization (Chinese Communist Party) above the rule of law. The law for today s what head of CCP is saying that the law is. Tomorrow the law may be something completely different, depending only on the will of single man. And that is not environment in which the modern business and economy based on long term R&D investments, sophisticated and complex working organizations can work and in the same time not become burden for the rest of the society. That is the main problem with China.
I think you're wrong. In 5 - 10 years they try to resurrect the economy, then factories and money will have gone to India. I've been noticing quite a lot many more things are being made there.
Yeah, I work in wholesale and we've already moved away from buying from China as much in favour of India. In our case though we also buy a lot of specialty products made in Europe, and a few in the USA (we're in Canada).
China has more 1.4 billion people, no matter how big the GDP it has, it is always poorer than other countries, like the U S, Canada, Singapore, Japan, South Korea and EU.
Hello! Though it must be admitted that China's GDP is more like terroruzzia's GDP, - more on paper as it done in some companies to increase their value. We could say that my native Ukraine is also in high ranks as it has so many deposits of everything and people, who could sell their intellectual property. It could be said about a lot of countries. Considering secretative tendencies of China's economy, politics and so on, and projecting it on terroruzzia's (with some corrections to more effective economy and politics), there could have been made an assumption that China will go down the drain without its expansion to anywhere: Taiwan, terroruzzia's territories or some other countries. There are no growth without a fall to 70% or sometimes 30% and more.
Yeah, and you would be right, if their demography hadn't dropped off the side of a cliff. You are an old school economist. Or as most people call it. One step behind the curve.
You rightly reject the numbers published by the Russian government but seem to be fine with the numbers published by the CCP. You might give that some further consideration.
Will the population around the world plays a factor, expert? East Europe & Asia & middle east, Africa represent more than 3/4 of wold population. And we know most countries are exchanging with China: South America/Africa...
The deal with Red China is that they are a homogeneous ethnicity or society with an entrenched communist way of life but with opportunities for individual wealth formation. Presumably nobody immigrates to Red China, unlike the USA just easily let in 10 million people from around the world, most of whom are uneducated, lack labor skills, and are very impoverished. Red China doesn’t need to be concerned with new arrivals like America. Red China has greatly modernized with way more potential. Red China doesn’t mind leaving millions impoverished in rural China and the slums in its cities. It doesn’t mind that they over built housing that people didn’t move into. Red China doesn’t mind its toxic environment and smoggy cities. Red China smartly invested overseas in the third world nations. It has plenty of oil and gas and resources arriving now from Russia. Agreed, Red China is successful with its overall game plan to dominate the world with commerce and military growth, prowess, and expansion. Nobody is going to stop or impede Red Chinas ambitions and game plan.
How on earth can you claim that Chinese GDP is increasing, from what to where? Their housing sector has collapsed that is 33% of GDP and add the 11% for suppliers and supporting industries that is close to a total of 45%. Then there is the question of the companies who have left China (for good) some owned and run by native Chinese who also relocated that is estimated to be another 15%. Then you have the subsidised sector who have continued production with no demand, over capacity, that is an unknown figure but must be close to 10% !!!!!!! Now lets add in the exaggerated figures since we all know there about 20% over what the real figures are in all aspects of Chinese "official " figures. So that is about 80% hit of GDP and I ain't covered everything yet. And you claim there GDP is still increasing? China is screwed
He takes Chinese government numbers at face value. Population, GDP growth, currency conversion to get percentage of world GDP. All probably fake. He lost my respect.
This guy is way too optimistic about China. With ghost cities and empty apartments available to house over 100% of the population, and with massive over-investment in public works which are chronically under-used, China is history's number one example of malinvestment. Badly-invested loans which can't be repaid are no route to long-term prosperity. It's all the world's biggest Ponzi scheme. Add to that the shoddy quality of much of the construction, the chronic corruption at many levels, the rapidly-aging population and a government intent on bullying its neighbors while alienating its trading partners, and while doubling down on interference with normal business decisions... well, the outlook is alarming. Here's hoping the Chinese avoid a deep depression that would drag down the rest of the world. And here's hoping Beijing resists starting a war to distract its impoverished population while creating a temporary patriotic surge in order to provide the CCP with a little more time to look for a way out.
Perspective ??? You dont propose any legit perspective. All of your perspective is opinion and unsubstantiated allegations ... I would LOVE to read ANYTHING that you have written or at the very least posted online for others to review...
can someone point me to an economist who are not very biased? this guy is very biased agaisnt former ussr and kark marx meanwhile zeihan ia hell bent agaisnt china 😂
Go to china, state workers are getting paid 1/3 of their duo salary as the government has no money, I was working in the construction industry and we built a lot of buildings but not a single house got sold despite 80% discounts, this is worse than what happened in Greece. China sure has a functio7gov compared to Greece, but still the situation is very ugly
