Sorry but I highly doubt this is accurate. Authoritarianism combined with poor geography and a host of other problems means China is a poor investment. Even if it doesn’t collapse in a month it’s on borrowed time regardless
@@kazeryu4834 It seems to just be going into a recession. Authoritarian societies go into recessions sometimes and it doesn't mean complete collapse is coming.
@@DianaCHewitt possibly, if the host of other problems don’t materialize. Which at the moment seems unlikely. I highly doubt China will collapse in a month, I also highly doubt it will survive the decade
*First red flag.* *Who started a video says "No China's economy would not collapse.* *That’s without giving an a real explanation.* *How much did the Chinese government paid you.* *For making this video you and the Chinese regime are trying to divide the people and blaming America 🇺🇸 assume the america is the bad guy here and claiming that authorities countries like China are better way off.* *Secondly red flag *How do you know exactly that Chinese economy wouldn’t collapse, my guy hear yourself for once you don’t know most of these part you are talking about, do you really think that China would ever telling or shows us the truth no they wouldn’t, and yes Chinese economy would collapse rather you like it or not.* *Thirdly red flag.* *People assume that chinese people adore the government they really aren’t that happy because the government have control over the people if a you was a dictator would do exactly the same thing no free traveling no free speech no question about the government not thing, deleted these comments you don’t like is facts and truth my boi, truth does hurt doesn’t it.* *Fourthly red flag.* If something doesn’t goes what China excepted they blame others and they never admitting themself never I have heard that Chinese government have failed the people never think they would, China are buying leaders around Africa and forced these citizen rather you like it or not to China for work to them, you do not have right if authorities government selling their citizen to another country.* *The five red flag.* *Russia & China are destroying America itself every election they trying to divide the American 🇺🇸 people there is an old Japanese 🇯🇵 word saying { If a country are divide soon they would United but if a country is United much longer they would be separated } so people would seek leader and have different ideologies and that is what China really hopes for.*
People just wanted to be assured that China is collapsing. And content creators just gave them what they want and monetize their views. It's purely business.
RU-vid is full of doomsday videos period. Same with the stock market, the US economy, the EU, etc. We live in an age of stupidity where it pays to make sensationalist, fearful, clickbait thumbnails without any sense of intellectual integrity.
@@kalleschonberg9296 the high probability of the invasion was identified by reputable intelligence agencies back then, but I'm not familiar with China's imminent collapse being corroborated by similar bodies. That said, I do hope we're wrong, because the weaker China is (with that savage regime in control), the better off we are in terms of world security and stability.
That describes so many channels. I like how this video mentions those specific channels that I'm subscribed to unfortunately. I'm going to be more skeptical because more and more channels are going toward this clickbaity doomsday bs intentionally misleading viewers to get likes and subs.
I don’t think it will happen in a month but I doubt China will survive the decade. The other RU-vidrs just want “I called it” points and got carried away
@roro I’m not saying it will collapse in a month, but the Chinese government isn’t nearly as in control as you seem to think. However I have been looking for another perspective, do you know of any counters to these points: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-91IF_1DAuUs.html I feel like there has to be another take but nobody really counters this guy
@roro if china wants to move to developed country status like taiwan, singapore, south korea then it probably needs to do political reforms which is a conflict of intrerest to ccp. Currently china is moving towards autocracy and a new mao era. We know how the original mao era ended.
Essentially, a lot of people don't like China. So, there's a lot of demand for news and narratives that the country is about to collapse. Whether its true or not isn't really important to the people who seek out that kind of content.
People u dislike are the people in power lol. A man without enemy is a man without character. If u want everyone to like you then, you will always be a pushover.
True for a bit, but i see the main reason for most people to say china will be bankrupt is clickbait. China economy will get hit, but also will recover from it. We just don't know in which state it will recover too. I do concern more about the chinese people not trusting their banks and governments, which is showing these last months and will make the blow heavier for china.
Simple. They are in no way as interconnected to the global financial system as the largest Western banks. This is in part related to the strict capital controls (mentioned the video) and other government controls in China.
Definitely agree with this. The long-run issues are more interesting in my opinion. Some of them (e.g. population decline, rising dependency ratios) are faced by many developed countries as well.
I don’t think it’s the same, it’s projected they are losing 300 million people due to the population collapse, that’s 20-25% of its structure. Comparing it to a country like japan doesn’t compare.
This video is nonsense. I don't think China is going to descend into chaos any time soon. But nobody knows. Secondly their problems are way worse than 2008. I lived in America in 2008. It wasn't that bad. It didn't affect me at all. There are actual catastrophic problems in China that dwarf 2008. Could the CCP keep kicking their problems down the road? Maybe. Will it lead to a collapse like the Soviet Union? Probably not. Did some bad things happen in 2008? Sure. But we were hardly eating rats. Some people got evicted out of houses they never should have bought in the first place. Some people lost their jobs. It happens. It wasn't Armageddon. Some very rich people lost a lot of money. Not sad about that. Sorry. 2008 was mostly a rich person problem. Wall Street lost money. Oh no.
True, however western nations are far better at immigration and integration than China and its repressive regime. China will has an up hill battle attracting immigrants who will fill the productive gap.
For the people who don't like doing the math, he's put the probability of a full collapse at 2.7%, the probability of effective full recovery at 8.3%, and the slow decline of China's economy at 88.8%. Note: I seriously doubt he'd stand behind those exact numbers, but I thought some people might want the percentages rather than the abstracted die rolls.
Many influencers and media companies received instructions and payment by proxies of the CIA to denigrate targets like China and Russia recently. This type of misinformation campaigns were recently exposed by Meta/Facebook (Aug 2022) - go check it out. The key here is to have a critical mind - a rarity in most human societies, particularly here in the USA
This sums up too ... the facts look bad - but I know this guy cares about stability ... at some point the writing is on the way. You can call it sensationalism if you want - but they are backed up by real events, there is no auditing ... you dont hide from auditors if you have good news
Again... Easier to Macro BS than to Micro BS Of course, their situation won't be like USA or Sri Lanka. That argument can be used to ALL countries. Specifically not talking about the main concerns of the issue. (Real Estate, Debt boycotts, Lockdowns, and Environmental hazards) Sure, giving a date to a "collapse" is BS, but misdirecting the topic doesn't make your opinion less BS compared to them
@@davidcrosthwaite he isn't. And that's the difference, that's why M&M is so good. He can leave his personal opinion behind the doors and provide us only facts while hiding nothing. EE can't do that. I've stopped watching them when M&M have demonstrated how poorly their research was.
As someone who watched many of those videos I was allways asking myself, "How does this representa colapse" like they described a crises but talked about it like it was the end of China. Some even said "China will colapse in 1 month" 3 months ago
@@ptrgr72 it would be more realistic to say 100 years from now if they do not have a plan they will, but they have more than enough time for that... as for USA, they got problems that would take at least 100 years to reset, fix or stabilize due to similar reasons as others, greed or hunger for power and money over progress as a whole
I feel sad that even though I am investing, I don't have the brain power to dig through how each company is doing, is this a good time to buy stocks or not, my reserve of $450K is laying waste to inflation and I don't know what to do at this point tbh, I need solid data on market trajectory
well the top players and pros have exclusive information and data trajectory that isn't disclosed to the public, knowing the strategies to apply in this time is one thing and having the right info to successfully pull it off is just another.
I agree, that's the more reason I prefer my day to day invt decisions being guided by a invt-coach, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using a invt-coach for over 2years+ and I've netted over 1.5million.
I've been thinking of going that route, been holding on to a bunch of stocks that keeps tanking and I don't know if to keep holding or just dump them, think you inv-coach could guide me with portfolio-restructuring
I also felt that something was off when I saw in a few finance channels that "China's economy is going to collapse" and I was like; WHAT!? CHINA'S ECONOMY IS GOING TO COLLAPSE!? IN LESS THAN 30 DAYS!?
All the self proclaimed YT experts somehow precisely predict how long China will last day by day while academics level economists can't even predict in time scale of decades.
@@atb8660 A channel call basic economic claimed that China has 27 days before collapse 3 weeks ago. Guess the name described exactly where they belong to, basic level.
I was laughing at those thumbnails as well, such as "Collapsing in 29 days" I was like, ok we shall see 😂 like it is so obvious that they've unrealistic expectations or predictions. Also, people will literally call you China's paid puppet when literally you're a true professional speaking the truth. They rather listen to fake news just to satisfy themselves.
A Japan style decline and stagnation isn’t that good of a scenario either, but whatever. Even Huawei’s founder is saying there is going to be pain in the next decade. Most people in China are blaming the U.S. because it could never be the fault of an overinflated property market. If China invaded Taiwan though, that would lead to something much worse.
This is probably one of the very few serious economics channels that is informed & truth seeking and without ideological blinkers. Which is why im a paid sub!! You also seem somewhat humble about what you don't know. Thank you I appreciate your work a lot, Joeri.
@@secretname4190 SLOWDOWN is temporary. COVID lockdown will end shortly after National People’s Congress. Demographic effects are largely offset by massive increase in skilled workers and agricultural automation. In the near future, China will be focused on sectors currently dominated by Germany and Japan.
M&M isn’t without bias, none are. He is very left leaning with a strong preference for his home country of Netherlands. In one video he compare us vs Dutch meddelclass, and concludes Netherlands is cheaper when she lived in a small apartment in the city with no car, while the us citizen lived in a large home with a car. Still useful perspective though.
There is a 1/36th probability of any double number on a 2 dice roll, so your analogy about a double 4 more likely than a double 6 is wrong, aside from that, great video!
What is missing here is a discussion of the fact that around 30% of the GDP is connected to the housing market, in contrast in the US where it was around 15-18% [edit: had to correct this number] I think and further that there was a ponzi scheme on building houses, where people gave money without receiving their houses yet and now all that money is gone.
Thank you for this. I've viewed the underline to see what's going on in the Chinese economy. And while bad, it was never enough to collapse the second biggest economy in the world.
I've always saw those videos that China's economy was about to collapse in my recommendations but I was always sceptical but I didn't know why. So thank you for making this video
I actually like those videos as they are pretty silly but occasionally hit points I haven't seen before. And I totally agree with you that this video is helpful.
Oh, look, someone who didn’t feel the need to try to get me to click with a doom and gloom click bait title. I’ve been watchin “China will collapse in 30 days” videos for 6 months. Kinda funny actually.
LOL I laughed so hard at your reaction Doctor. It’s the best response an economists can show to all these wild predictions. It’s weird like how many recessions the US had survived but for some reason people are convinced that China on the contrary will definitely collapse in a recession or a depression.
It's a recognizable pattern in ultra-nationalist ideologies. In propaganda, the enemy is depicted as simultaneously both strong and weak, so that the people will both fear them yet still feel superior to them. So china is both a menacing threat and yet somehow will disappear in 25 days. I'm not claiming that the west has completely fallen to fascism, but there is definitely a certain strain of shitty nationalism where this is coming from. And of course the other side is probably even worse; Russia totally bought into that "the West is in decline" bullshit and thought Ukraine would be easy pickings. China probably would have similar delusions about the west if not for that wake-up call.
I'm East Asian and my family has factories in China. I can confirm that things are apocalyptic over there, the Chinese are dealing with a crisis the likes of which Americans have never experienced. When has billions of dollars vanished from American personal savings accounts? When has America built a housing bubble on unfinished and worthless properties? That is only the tip of the iceberg. Sure, America survived recessions and the Great Depression, but what did America look like during and immediately after the Great Depression? Things were a mess for years, and if it weren't for WW2 restarting the American economy, the bad times would have lasted longer.
The Problem is Not the Economy, its that the people are restricted, live a bad Life and have nothing More to lose, so when china‘s economy will collaps then because of an Revolution.
Not in FIAT money printing world. In real terms and what the working middle class will feel, yes there will be inflation. But there is no alternative for the citizens. Capital controls and the general control means that citizens can't do anything to avoid money printing to bail out the banks. (No human in the world can currently do anything to stop the money printing). They are not able to convert their wealth into hard money that does not inflate easily like bitcoin, gold or real estate abroad. So because a bank run is not actually possible, the printing of money will be framed as something absolutely necessary and without anyone calling out the insanity (because everyone is printing money) the strong manufacturing sector (as mentioned in this video) will eat up the inflation internally gradually with tweaks. Meaning products from China will become slightly more expensive (the world will easily accept this, as all the money printing governments will say it is because of the China lockdowns and global issues in general) and the exploding growth will be toned down, so it will just take a bit longer for the Chinese lower class to become middle class due to growth compared to the last decade (during which it was very fast). That is why all the stability and the policy changes are happening in China. China is educating engineers to actually make stuff and innovate to keep the manufacturing sector strong and even more competitive. They are not educating influencers and "the next killer app" and "platform" developers because that is volatile economic growth and not stable as actual innovation in manufacturing and engineering.
@@Dramaican88 well, except this is China, whose renminbi is massively undervalued by its own government to make its exports more competitive and not allowed to be traded abroad. If anything, this recession will make this currency closer to market equilibrium .
My RU-vid has been under absolute assault of these videos in the past month. Started checking their other videos - seems like US and EU economies are just fine. Looks like a collective hit piece now, but what do I know
@Watcher They don't need to be. This is easily explainable by simple clickbait marketing. There's a large market for bad news, even larger for bad news about places people dislike.
this is all an illusion created by these youtuber/influencers paid by NGOs to spread American propaganda, when in fact what happens is the opposite, USA is falling, polarization growing, angry and anxious citizens, and a lot of dumb people with a terrible education system, who can't avoid a 16/18 year old mass shooting an school.
100% agree. A 3rd factor is most of China's debt is held in it's own currency, not foreign denominated. The only plausible 'collapse' would be political, but, my thesisfor years has been that they have been ramping up totalitarian measuresand anti foreign sentiment precisely to prepare for the deleveraging of the property bubble as it steps on so many toes. The mortgage strikes are big but not enough to rattle authorities, they will cautiously stimulate and restructure debts. Big question is how do they drive up productivity again without feeding back into a housing bubble? They need to follow through with the promise of a property tax, a land value tax would be even better.
The other huge issue is the population pyramid. Are the CCP hardcore enough to just kill off the old population? They don't have much time to radically reform attitudes and laws on immigration.
I wonder if they may attempt to shift their production efforts from housing to oil and gas infrastructure to connect to new Russian outlets. I do not know if the Chinese investors would be interested in buying bonds for infrastructure projects instead of speculative houses to rent. Just a thought.
You mean 20 years ago when Chinas economy was booming compared to now where its economy is no longer booming? Im sure many people were saying "The US economy will collapse" during the booming years post WW2 and it never did pan out to their expectations, but guess what? They eventually were right in 2009. An economy has to collapse at some point. And this very well may be Chinas time.
@@FrostbitexP 20 years ago. a westerner published a book called "the collapse of china's economy".....since then.....i frequently heard people, media or politician said "china's economy is collapsing"
I think China will have a period of relatively slowed growth but unlike Japan, the Chinese economy isn't close to maxed out in development. There is still plenty of China that has yet to reach first world conditions or even close. Given China's control over its own growth, I think it's likely that the rest of the country can still develop.
One fundamental difference between China and Japan is geography. The entirity of Japan is coastal, most of China is inland. If the Chinese coastline declared indepdence it will be a developed nation. I mean you see this in the US, yes, California and Washington are highly developed states, but Alabama is never going to be nearly as developed. Same thing in China, the coast has already been developed the inland provinces are still going to be poor and underdeveloped. The Chinese government currently takes money from the coast and redistrubute it to the inland provinces. If you look at a government revenue map, the only provinces that actually make contributions to the government budget are on the coast the rest of the regions are always in the red. If China fractures, which it has in the past, many of the inland provinces will iterally become Afgan levels of poor, which happened in the warlord era.
Exactly Joeri, there are too many click-bait title on youtube with people that pretend to know what they are talking about. You have credibility, as an academic and published scholar. Thanks, and keep going. - Barry
Love the positioning of scenarios with relative probabilities. Makes a more nuanced case while helping non-PhD in economics viewers understand how to think like an economist. Appreciate this great episode.
I believe that all of this comes from people who are listening to Peter Zeihan And not understanding the process of collapse that he is describing which is not economic at all but really political
I think I should explain more. Zeihan has two thoughts about China. The one that gets everyone excited is that IF they were to invade Taiwan and IF that got them Russian-style sanctions, they'd collapse in a matter of months (not one month, like these youtubers say). But it's probably more accurate to say that given this, and the fact that everyone knows this, Taiwan is not going to be attacked. Wait, I just spoiled another fave youtube doom scenario! To put this into Joeri's terms, China would lose its economic independence quickly through a political process and that changes everything. The other thing Zeihan says is that in the long run, say the next 7-8 years, there will be political instability resulting from and feeding back from economic instability. This also relies on China losing its economic independence, but much more slowly. It's also something we can watch in real time and place our bets on as we wish. Last point on China: there is one other important crisis that the government is not managing well, and that is water. This is much more serious and could be coming to a head this year due to a severe drought. It could also dramatically increase China's need to import food in coming years, among many other issues.
@@ErikHare And affect it's energy, already blackouts in shanghai due to Yangzee drying up and affecting the 3 gorges dam. And this is the rainy season, the drought could continue into the dry season. And with Russia affecting the food prices the Chinese could have issues sourcing food.
i would have appreciated a definition of the difference between "China is in big trouble" and "not collapse" is. I do agree with you, but then it ends up in a position of "china can't collapse" which also doesnt fit.
Probably about the same as a very sick man does not always dies because of his sickness. China's economy is crippled or in a more technical term; In a sharp decline but it will not completely collapse the whole economy or the country itself like USSR because it is very likely that they will regain control over their declining economy. If they did collapse however, the whole world will also have to suffer because of it. It is true that china can collapse just like every other country. In fact China has collapsed so many time in the past mostly because of internal conflict but there was also opium and the war with Japan combined with internal conflict with the warlords and the communist party of Mao Zedong. The current China however, will probably not going to collapse so easily.
1. China has the largest savings in the world, Chinese people like to save money. 2. The Chinese government can control all bank capital, loans and stop loans in any crisis will not be transmitted to other industries. 3. China has almost no foreign debt denominated in US dollars. All domestic loans are denominated in RMB. The Chinese government has $3 trillion in assets. 4. The Chinese people have special trust in the government 5. China is still the fastest growing country in the world. 6. Provides the country's development to drain domestic debt ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-rDg8vu3R0Ok.html
@@2kidsnosleep Please make a video that has counter arguments to those videos. I fail to understand why your video should be trusted over their videos. The countdown of days was not just a randomly chosen number. I believe it's because something happens on that day.
Huh. What in the H E double hockey sticks are you talking about? My comment was that uTube video makers make sensationalist click bait titles that are BS to attract views and thus money. I have no video that needs to be trusted and you need to relax a smidgen. Maybe you are a Chinese bot🤔wouldn’t surprise me these days🙄
Please tell me when they had a housing bubble and population decline as serious as this. No one can predict what will happen, but with literally a HUGE amount of investors leaving China, it will easily put them into a recession even outside of their real estate market.
@@crematedable The clickbait is there for sure, but recessions can lead to a depression if this future recession lingers longer than expected. Also by decreasing interest rates they are only hurting themselves further similar to what the US did before. Doing this can and will drive a recession further especially if their debtors can’t pay their loans. Their Ponzi scheme style only last as long as they have investors. Once that’s gone, there can be a collapse like some click bait titles suggest.
I think the key difference between China and Japan when it comes to encountering “stagnation” is that Japan was completely demilitarized and bound by US political influence. There aren’t any US military bases and governmental restriction treaties with China, so I’d be curious as to see what they do to keep growing again.
i disagree for one main reason china is a socialist state, its goal is not to grow infinitely, but to reach an economy with adequate living conditions for all, and to work within the limits of the environment that contradicts the childish idea of infinite growth, Hence china is trying to produce what it needs, if population decline is happening they will be the first country to purposefully degrow and only meet their needs. that's the main mistake liberal economists do.
@@DLore-ew3bt Taiwan is already apart of china and they have had the same position on it since the 40s. They also have said they support peaceful unification sometime in the 2040s, anything sooner and by other means is due to American aggression on what pretty much every country including the US considers part of China.
@@DLore-ew3bt taiwan has very different historical conditions, imperial japan ceased that island once, and ended up invading and facilitating british colonisation in china via the island, comiting war crimes and genocides, so china absolutly do not want a US military ally in that island, its an emotional subjects for the chinese.also taiwan is claiming all territories of mainland china which is simply not true as the Republic of china(current taiwanese gov)was overthrown by the people in the 40's and fled to taiwan .so if an island has been used to commit genocide in your country and invasion, claims you as theirs, and have military alliance with the world's most imperialist anti socialist state in the world, u will do anything in your power to stop that from happening
@@DLore-ew3bt history as tought in schools is not nuanced, i advise you to learn about historical materialism, and then use it to critically analyse modern geopolitical isssues
@@moonlaid2689 you asked me about the U.S debt, which I do know about. But you asked "what about the u.s debt". It was a open ended ass question that you didnt elaborate on.
The amount of misinformation regarding China that is spread these days is insane. Thank you for making this video to inform people on what is really happening.
Idk man if you scrap the obv clickbait from other channels he said the same things. The clickbait is normal in private media if anyone wants to change this you have to pay. And mandatory pay like tax so that the media does not have to be afraid of losing customers. So imo thats not misibformation, its just the logical outcome when you privatise media.
@Caw Yarson you mean the paid promoters? i know the exact vids you are talking about mate. you must have loved listening to the uyghurs singing and dancing at the directions of the chinese officials to give content to some foreign sellouts in china. bra-fucking-vo. lets get to actual economics without talking about paid advertising
Yes, China is going to take a beating with its housing, banking and superspeed railway debt problems. No it's not going to fully collapse, and yes an eventual Japanese stagnation scenario is the most likely ending scenario, although there might be a bit more chaos in the short term.
I mean China can sort off afford stagnation since Japan did stagnate but they took as much income they had before in china's case it can easily do the same
@@FuvkingLoser regime is grown out from a barrel of guns, not money. As long as the military and the sources of military such as peasants are supporting the party, citizens have no chance to overthrow the government.
@@FuvkingLoser Well okay you are right at some extent china's growth has stagnated ever since the early 2000s but again China still has a very rich economy ever since so it can still do the same
So many factors are left out. Expecting the government to bail out all the banks puts the country in a lot of debt which has further impacts on the economy of China.
Banks will not be "bailed out" with debt, they are state banks and they will simply provide new currency. Probably will be far less then anything the US had to do in order to prevent collapse in 2008 in terms of printing as well.
Well to be fair they are both kinda evil in their own little way. Human rights issues on both countries. The US only complained about the actual human rights issues as far from what I've heard. I haven't heard anything relating it to their economy unless I missed something.
@@agentpaper8130 It's hard to tell because of how there are hardly ever any actual reliable reports on China. I have seen too many pictures of Guantanamo Bay with the faces covered up and claiming it to be in Xinjiang to trust that anymore. I definitely trust the videos of American police brutalizing Native Americans because the government is stealing their land and rights yet again for the trillionth time. That and the US brutalizing all the populations that aren't white is constantly caught on video. That and the US slave prison system is pretty blatantly evil. It all seems to be deflection from American Nationalists trying to appeal to decent folk of the US.
@@gunterxvoices4101 Hard to tell? I mean yea the stuff you said about the US is fair but pretending China doesn't have human rights issues just because you don't like the US is a wrong stance. The reports are there.
@@agentpaper8130 It's just that there's never any reliable reporting. They only ever use one source, and it's a BBC article from years ago that didn't even have any evidence. It seems like it's just obligation the stuff the US does consistently for the past few decades.
@@gunterxvoices4101 I've seen a video of a official threatening a Chinese woman's father because she wrote an anti CCP social media post. She was out of the country but they still tracked her internet usage. What do you mean no evidence? There are videos for a lot of different claims.
I think you're right that China's economy won't collapse, but it remains to be seen if China can bail out the developers/banks without devaluing it's currency.
Devalueing CNY will create more trade surplus which helps with the debt situation, only problem is people will suffer a hyper inflation, which they already did
The Chinese government are not looking to bailout any of these companies. But they are working to make sure the homes get built for the homebuyers. A much different scenario than what Obama chose.
@@Starwarrior9831 You should check out the book named The Collapsing of China, the author 'predict' China will collapsed in 2008, When that's not happened, he predict it will collapsed in 2009, 2010, 2011 , 2012 , 2013 , 2014 and so on.
I think China will avoid Japanese stagnation through global investments like 1B1R. While it may have a demographic problem in 2040, China’s elderly of 2040 will likely be more economically productive than Japan’s elderly of 2000 due advances in technology that allows them to shoulder the load and the scale of China’s population over that of Japan’s in general. But even assuming these populations have the same characteristics, China’s investments via 1B1R are tapping into younger populations in the Global South for increased growth externally. The saying “Africa is China’s China” could very well be the case. Japan never had that much international pull (possibly because the US didn’t want them to) and thus wasn’t able to pull out of its stagnation. Also, as mentioned in this video, China has achieved monetary independence which Japan wasn’t able to have in the 1990s and 2000s which gives it more financial optionality. China may eventually collapse but I’ll likely be dead before that happens (and no, I don’t plan to collapse anytime soon)
China is investing hard into automation and methods to keep the elderly productive. Even billions into anti aging biotech research that can slow and reverse aging for its population.
The world is advancing rapidly and robotics become cheaper than cheap labor. So its starting to reverse, where manufacturers went to cheap labor countries to build fabrics and in upcoming decades, we will see Manufacturing return to parent countries. AI breakthroughs will speed it up as well. As long as countries can get cheap energy and resources, it very soon wont matter the average wage of the country. That's the big next question. What do we deal with population, where robot is the cheapest resource.
Americans desperately want so believe that the entire rest of the world will collapse. Sadly that is their only hope at this point. It's less than inspiring, in fact it's profoundly negative. It strikes me as raw naked desperation. Deep down, I think everybody knows how things are really going to go. Denial can be very strong, after all.
I do agree with your analysis that the combination of demographic issues, and mismanagement around real estate + heavy handed policies is setting up for a Japan style decline. The big question will to answer is whether Xi and the CPC can sustain the inevitable social pressures which will build. Moving from an expansionary outlook to a stagnant one is not easy to manage politically
Did we actually casually forget how millions of people usually die in China when this stuff happens? Cos millions will most likely die again. Perhaps even hundreds of millions.
The other problem with the Japan comparison is the relative decline. China is funded by growth. It doesn’t have the wealth to sustain a large unproductive population wallowing in stagnation.
to me, it's just whether _xi_ personally can stand the social pressure, or will he be just changed to the next guy. the system itself won't go anywhere. xi´s 100% covid prevention is starting to get old, even to the elites. it is the number 1 thing hurting the economy. if changed, the new dude is more pro-capitalist, gets rid of covid-restrictions, favors more free trade inside and outside, economy starts to rise again.
@@Redmanticore Not sure if you're aware of history, but China is the kind of place where systems most definitely break. If hundreds of millions die there, which they may yet, this will happen. Theres no magical "and the economy simply rises like a feather under a new guy" moment. They're done.
Adding to it the amount of debt it has provided to other nations, along with the West, many nations now have agendas for fall of CCP. The crisis, which is following the public frustration after the 0 covid policy makes China suitable for a social disturbance given the rising dissent against Xi and the West maybe desperate to destabilize the China and now would be their time.
Agree, clickbait sensationalism is just that. Also: the problem is that stability and capital controls depend on POLITICAL continuity. And stagnation would void the contract between the chinese population and their political caste.
Thanks for covering this. I've also seen those thumbnails all over RU-vid and even had a friend declare the same presumably based on one of these clickbaity videos. I'll send him this.
Your analysis is very superficial because you assume that the rest of the CCP economy (outside the central government and the central bank) is the same in the PRC as it is in the rest of the world, and that the entire CCP economy is transparent. It is neither of those. The local government units have several $trillion worth of off-balance-sheet debt and the CCP's real estate developers have vast amounts of "commercial paper" that they have used to extend their debt-bubble scheme. Neither of those is considered by Western economists, like you, and that blindness causes you to make rosy assumptions of health in the CCP system that simply isn't there.
I went through with finding some sources that Business Basics used for his "China Doom" video series and most often the sources are dubious or he purposefully altered the information a little bit to spice up his content. It also doesn't help that there are both pro- and anti-China commenters just pumping in what little bit they think they know to be true.
Ok I'm going have to disagree with you. 1. currently china is facing down a massive default due to the chinese people refusing to pay on uncompleted projects. This isn't something money can fix. It's a requirement of labor and materials to complete those projects. Due to the pyramid scheme type of practice done by the builders there's a massive amount of real estate left unfinished and under funded. 2. China is and has been closing its manufacturing due to pandemic risks that's been occurring in the most industrial areas of China. Leaving large gaps of manufacturing loses as China attempts to do its zero covid/pandemic policy. With this plus other countries moving to become more independent due to these shortages. Is now leaving what you have considered china's get out of jail free card on a cliff hanging scenario. 3. Environmental issues have started plaguing China. Several rivers have dried up. Record heat has caused their own consumption of power to increase making manufacturing factories have trouble getting power the need to operate. 4. Food scarcity is slowly coming up as a major concern. China has killed most of its off shore fishing locations and crops are not producing enough. China may soon be facing a dust bowl scenario that will cripple its ability to produce for the world. 5. The young generation is unmotivated to continue helping the CCP. The term "laying flat" or "let it rot" movement has been growing large since shutdowns started. It's a matter of time till another government vs students incident occurs.
You literally get the first thing wrong… “Chinese refuses…” 🤧 “Oh gee I have to disagree with you.” 🙄 Folks bought homes with mortgage money from commercial banks, who only pays the developers once the home is completed and delivered as it fulfills the contract. Developers therefore use that money to pay off loans. The rest, omg, you learn every shit by only looking at clickbaity tittles on social media???
Man it’s like your know all China related terms from most circulated western media reporting but failing to even find out the broader context or anything else.
Recently, Honda announced that it will produce all its products outside of China, except for those destined for China. This is just one example of the recent trend of companies moving factories out of China to diversify risk. I think Corona was one of the reasons. There appears to be no doubt that the Chinese economy is headed for a slow decline.
Yeah I think this video doesn't address some of the other challenges facing China right now. Examples are population decline, food & water security and sanctions on technology/chips. Along with the trend of companies moving their supply chains away from China it's going to make things very tough there.
Apple leaving to India. Australia cutting coal access (on top of their hydro power being at a low). Mnf power lost during the Olympics. Countries not being able to pay back their debt. Mortgages (loans) not being paid. Tofu building. Sure it won’t collapse but this channel should address why people think it will collapse.
Thank you for the great video. Aside from having informative videos that explain all this stuff in an accessible manner, you've also helped me avoid sensational "DISASTER INCOMING EVERYBODY PANIC NOW" videos about economics on youtube. Once again, thanks for the great videos, and please keep them coming.
Just a quick clarification comment about the dice example. I meant: Scenario collapse = throw 6,6 Scenario growth= throw 5,5 OR 4,4 OR 3,3 Scenario recession, intervention, stagnation= rest of the combinations.
As a former spook who lived through the collapse of Japan's Bubble Keizai, I agree with your criticism of the hysterical Doom and Gloom "China Collapse" crowd for the reasons you give and think that we will see a repeat of Japan's lost decades muddle through scenario. Keep up the good work.
@@electrified0 hmm. Helping you out b/c almost no one refers to a government agent, let alone themselves as a government agent, with that term. At least with the other word it's somewhat used to describe mud/grime. But sure, have it. I'm needlessly using racial slurs even though in the context of helping one's blindspot.
In fact, China's economy has experienced three crises that are bigger than the present. Especially in the 1990-1995, the key to solving these crises is two points. First, China is a real sovereign state. Second, the government is completely above capital
@@fallencrow6718 that's not possible even if what u said we're to be true the politicians would need money and capital to hold on to their power , without capital they can't sustain their political power
@@oreki8707 You can see that the 124 Chinese enterprises in the Fortune 500 are almost all state-owned enterprises, involving energy, transportation, banking, communications, infrastructure, etc. The whole country is firmly controlled by the central government, and government decisions will not be affected by any capital. For some private giant companies involved in the Internet and manufacturing industry, although the government's control is weak, China is a one party country, and they dare not and cannot penetrate politics, nor can they affect government decision-making
@@TheBillaro You can see that the 124 Chinese enterprises in the Fortune 500 are almost all state-owned enterprises, involving energy, transportation, banking, communications, infrastructure, etc. The whole country is firmly controlled by the central government, and government decisions will not be affected by any capital. For some private giant companies involved in the Internet and manufacturing industry real estate agency. although the government's control is weak, China is a one party country, and they dare not and cannot penetrate politics, nor can they affect government decision-making
I agree with your assessment,, In Argentina, and Latin America, we’ve had crashes because we’re at the mercy of bankers and have no capital flow controls. Add the fact that we’re not net exporters, we have been thru some ugly crashes. That ain’t gonna happen in China
You are right it is not fair to let the banks get away with blowing up the financial system. That's why they should have been legally removed from control of that system, and replaced. Don't just let them get away with market manipulation.
So... RU-vid (like the internet as a whole) has alot of young people who personally haven't lived all that much, but have managed to develop many nuance-free, strong opinions without doing legitimate research in support of said opinions. Who knew?
@@anon746912 "One should respect public opinion insofar as is necessary to avoid starvation and keep out of prison, but anything that goes beyond this is voluntary submission to an unnecessary tyranny." -Bertrand Russell A lesson that popular level information rarely means correct or useful.
Maybe not the most popular opinion of my here, but I’m really think that this wave of videos about China’s collapse in several weeks is one big propaganda campaign.
Not a finance person, but it's refreshing to watch a different viewpoint on this. Chinese economy going bust will affect everyone negatively since the global economy is so wrapped up around it.
The problem with most of these videos analysing the fiscal policies of the CCP fail to look at the social impact. The hyperinflation that comes from continuous money printing will affect everyone like you say. The middle class will have their savings wiped out (as we are seeing in the property bubble), but the poor will just starve. Add into this mix, the Zero-Covid policy and energy problems that means manufacturing levels can not be maintained. Also the food production in the country has taken a hit from extreme climate patterns - with droughts and floods affecting many crop-producing regions. I think a holistic full recovery will be years in the making.
I keep up to date with macro economics since I'm starting an e-commerce business but hearing all this got me worried for awhile lol people don't realize how bad a Chinese collapse would hurt the supply chain
lol ecommerce is mostly parasites that drop ship cheaply produced chinese goods under horrible labor conditions to better markets. The middle class trash
In a sense, the collapse is already beginning. Under their very strict Covid rule any supply chain can be shut down without any warning. In the long term people will tend to find a way to avoid this country. lower cost is good, but stability is more important.
@@deadlock-4337 Ukrine genocide apologist, yea thats right I know what you support the shelling of innocents that did not follow the nasiz take over of ukrine for 8 years. The real government of ukrin fell 8 years ago fool how about you read some real history and not lies.
As a Taiwanese, seeing those kind of videos really is frustrating. There's no way China collapse like other countries: there is no way CCP can't or won't intervene. If China "collapse", officials will be literally eat clean by the people. Guns and bullets won't stop desperation and despair.
The PLA is one to two million strong. There are 1.4 billion chinese. If the government wasn’t popular stable and successful it wouldn’t be in power. Delusion doesn’t help anyone. Especially not enemies of China.
You left out one key point in your analysis. While the Great Depression resulted from asset bubble collapse, the situation in China is the unraveling of a giant Ponzi scheme. Essentially, once the raw land was acquired, units were sold to the Chinese public before they are even started with 70% of the funds coming from Chinese banks. Rather than completing the units as promised, the payments for the units was used to buy even more land, which was in turn sold to the public, rinse, lather, repeat. Amazingly, the main victim of the Ponzi scheme were the Chinese banks that issued the loans, so we will probably never know the full extent of the damage. It will also forever be unknown how much of the profits were taken by Chinese corruption, but I wouldn’t be surprised if it is in the ballpark 40%. THE CHINESE GOVERNMENT CAN’T BUY IT’S WAY OUT OF A PONZI SCHEME. I don’t know to what extent the collapse will be and of course no one can ever guess when it will happen, but I think your idea of a soft recession followed by stagnation is also a highly unlikely scenario. Collapsing Ponzi schemes always lead to anger and loss of faith in government, so I expect a much harsher result in China.
Short summary: China will not face total collapse because: - CHINA is similar to USA in 1930 and 2008 because banks overleveraged and invested too much in assets which caused asset price bubble - USA didnt do enough to save its banks which harmed economic system. CHINA learned from those mistakes and owns banks and will not make that mistake. - CHINA is unlike SRI LANKA because they can protect their currency: get dollars from manufacturing internation goods and capital control CHINA will stagnate however most likely because of ONE CHILD POLICY, CORONA LOCKDOWNS, CRACKDOWNS ON PRIVATE SECTOR. Longer version: China will not face a total economic collapse like USA in 1930 and Sri Lanka today - Because while China is facing similar problems, it is not the same as USA or Sri Lanka. 1. Chinese similarities to the great depression and 2008 crisis - Great amount of lending - Asset prices skyrocketing (stocks and property) - rising credit growth --> cities like Shangai became 4x more expensive to live in relative to wages - asset prices cannot rise relative to income forever --> prices need to come down --> banks that made loans backed by asset prices start to fail --> bank run (people want to withdraw their money incase banks collapse --> banks lose all their money and fail because people withdraw) - in 1930 USA government allowed banks to collapse but in 2008 they did not because when banks collapsed in 1930 the economic system went with it and it caused alot of harm. - CHINA: will not allow their banks to collapse --> stop withdrawals etc. --> wont face 1930 USA great depression. - lowered interest rates - rescuing banks and property developers OTHER DIFFERENCES CHINA AND USA: - Chinas banksystem mostly stateowned - China can print money and give to people trying to withdraw and thus avoid bank collapse - China popped its bubble - USA allowed bubble to pop on its own but China popped it itself by introducing the three red lines policy: - Forced property developers to deleverage (reduce debt ratio) Summary: - Disproportionate rise in asset prices relative to income leads to bubble - Banks cause bubble and go down in bubble unless they get saved - In CHINA the state controls the economy unlike USA and therefore they can and will put more effort into saving banks for the sake of statbility. --> wont face economic recession like USA in 1930 and 2008. Counterargument: USA controls Dollar which is world currency, China doesnt - Dollar is important for trade, having too little harms economy - international investors are pulling out of CHINA leaving it with less dollars --> It could be better to compare CHINA with SRI LANKA instead of USA. 2. CHINA is not SRI LANKA - SRI LANKA faced economic collapse because of Covid, Ukraine war, overspending and being reliant on imports that required dollars they didn't have because of previous reasons. - CHINA does not face those problems to same degree: they are manufacturing hub, people need to give them dollars to produce products --> steady supply of dollars. (trade surplus) --> can defend its currency (inflation) using dollars - Possible problem for CHINA: in Russia and Turkey they defended their currency using dollars, but didnt work because people brought out dollars into the West. - CHINA controls money flow (CAPITAL CONTROLS) and can stop citizens more easily from sending away dollars. Can therefore protect their currency. (RUSSIA Implemented same system after sanctions which helped them) 3. Is CHINA saved? No. - CHINA will face slow constant recession in style of JAPAN because of 3 reasons Reason 1: One child policy - population decline Reason 2: Corona lockdowns to the extreme Reason 3: Cracking down on productive Tech and Education industry (private industry in general).
The Chinese economy is MASSIVE and very diverse and this might come as a shocker but...DECENTRALIZED. Not decentralized in the western narrative sense but I'm the sense that China is structured into sections and the government can pretty much make temporary fiscal shift between those various sections, that's how they approached the poverty elevation. Sections which are successful are then used to support those that are not and it's the same with their fiscal policies. Then again people have been jizzing to the fall of China for decades
For many, economic stagnation = fall of China, which is the more likely scenario here. Aka, people are happy it doesnt become this communist, authoritarian regime with an wealthy average gdp per capita and become so powerful even the USA looks like pushovers. Such a scenario looks near impossible now, which means many are in fact, "jizzing".
I never understood how anyone could have claimed that.. It seems nonsensual to me that a countries who produces literally everything would collapse anytime soon.
Companies are leaving and prices are increasing, lying flat is becoming popular and homelessness is on the rise, zero-covid policy is hurting businesses and people can’t access their money anymore. I’m pretty sure that those are all reasons as to why they could be in trouble.
@@theatheistbear3117 these problems seem like minor setbacks for the Chinese and more western extravagations. It is easy for the western media to point fingers and make it seem like other countries are worse or get worse but nobody is talking about the massive single parent problem of the US which is defeanetely worse than anything you pointed out. Why would companies leave China china has cheap workers and a billion people that's like the most ideal place for any company.
According to the news and a few youtubers, it will collapse today...tomorrow...the next day...a year from now...5 years from now....Suddenly It's the next super power, lol
Thank you. I don't understand economics but I've listened to the YT China detractors. I was always skeptical so it was informative to hear why they are wrong.
Economic stagnation is absolutely the most likely scariest for China. If we look past the click-bait, most of these RU-vidrs are saying that this is the collapse of China’s record economic growth from the past few decades. The hope is that economic stagnation will bring political upheaval.
You and Patrick Boyle are THE best youtubers on economics and finance respectively. Unbiased, and you both do not cave into sensationalist possibilities
The biggest problem for China is most of the funding local governments get is from property. But I am sure when the local governments start to struggle the head of the government will just bail them out. America already does the same thing. They bail out most cities in the US because people expect all of these city features in rural areas. (Sewage being a big one). So every time infrastructure needs replaced the state/federal government steps up and bails out the city.
Sewage isn’t a city feature it’s a requirement for a 1st world country to have. Sewage systems being a thing was what allowed humanity to not have to worry about a host of various diseases that were caused from not haveing a proper way to dispose of the waste that people produce. Case and point look at parts of the world who don’t have access to said infrastructure.
@@dennisp8520 I am referring to sewage systems. Plenty of places in the world uses septic tanks. Some places in the US uses septic tanks. But the US loves infrastructure that is only economically feasible in cities and give it to sprawling suburbs. Which can't support the infrastructure that is "required". If you use septic that is not public infrastructure. So the government wouldn't have to bail out local governments (for that specific thing).
I think this policy only prevent real estate company being collapse. Problem is how to solve high property price and low demand on real estate in future?
Well I like your perspective, yeah it's pretty rare a full recovery or collapse in the current state with lock downs or Xi trying to fight for absolute power, but I'm interested in the Chinese weakening for 2 reasons: - first the easy, if their eco is bad they can't attack Taiwan. -Second my country would be fucked, while yeah a collapse affects all of the world with less products, Chile's economy would crash as we rely heavily on exporting raw resources mainly to China.
Thanks for covering this! I also got sucked into the clickbaity-ness of the other youtubers covering this, and it felt over done and sensatonalized, whilest also trying to extort subs and likes from views as a ploy to fight the "chinese bots". Thank you for being rational and realistic! :)
China faces some serious headwinds which could seriously affect its wider economy. The recent flooding has seriously affrected many older dams. The heat waves have damaged crops just the the time they are maturing. This could affect food security later in the year. The real estate crisis has hurt millions of small investors who are very likely to a change in leadership in the next election. International relations are hurting trade not with just the US but with many of its neighbouring countries that China has bullied in the Pacific with its navy. The big crisis with the Chinese economy this summer is a lack of power generation for its citizens and it industries. China needs to expand its power generation capacity significantly to keep it's economy from shrinking. It would be interesting to see how you view these headwinds and to see if you think their impact on the Chinese economy is significant.
How can one person say so much , but be wrong on so many fronts ? Food - you do realize unlike most countries in the world China has a national security storage system in place for catastrophes, on top of that with Chinese ingenuity / work force there is not much they cant over come , if that fails why do you think they invested so heavily in African belt and road project ? Also I'm disregarding EU, US, CAN, AUST , NZL, South American imports which all those countries rely on for their own GDP Heat waves have hit, certain parts of the country , maybe some small local produces are suffering no doubt , however China's main rice / wheat crops are fine with the later already in harvest . Real estate is certainly over priced in most tier 1/2 cities , however due to the 30% deposit for a loan I doubt there will be much fall out . And those speculative buyers which CCP actually doesn't like already have the capital to play the property game , though like all industries some smaller over leveraged companies are not doing so well. International relations and trade , where to start ? China is now EU's biggest trading partner , Australia which predominately relies on West Aust Iron ore / energy is healthy and China / US trade is on the up for 2022. Chip act is most likely about to backfire and BRICS is stronger than ever China has a Brown water navy ( defensive based navy ) and is only now in the process of building a blue water navy ( designed for long range deployments in the Pacific / Indian oceans ) and has a non interference policy , so your statement of "has bullied in the Pacific with its navy is ludicrous. China's power output is fine , in some parts of the country that are suffering heat wave and abnormal use of electricity due to air-conditioning , CCP which has a people first policy have asked certain sectors to limit power usage or be more power conscious to not over load the grid . China's GDP has been out performing for so long of course it can't stay at that level , that is not the indicator you should be looking at . You may want to to see if the Chinese has been out performing the closet rival , year to date , past decade then look at future projections .
You made a valid point. I don’t believe in collapse of Chinese banks. As you mentioned “capital control” is one of the most powerful tools they have. How ever by rescuing banks it will make middle class poorer. This might create serious social instabilities.
it would in the west. But the Chinese middle class only reallly existed for a single generation and they're highly brain washed with nationalism. they'll blame the west for their misfortunes and possibly isolate themselves further or double down in trying to create an alternative system.
Great video! Was desperate looking for another perspective on the China "collapse" story as I had also the feeling that this "crash" was overly propagated through mainly US channels and didn't take into consideration the different position china is in. Just looked at some of your other videos and Subscribed! ;)
Great video. The takeaway is Chinas economies won’t collapse like Great Depression of the 1930’s but they have serious issues and the policies they are taking to address the housing and banking crisis will lead to subpar economic growth for many years. The age of strong growth is over for China but a complete economic collapse is unlikely.
