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China is winning the global tech race

ft.com

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Re: China is winning the global tech race

#51

Post by Latteland »

bottomhollow wrote: post #15

According to the article, China is winning because it has more unicorns than others in > 10 billion: 11 are Chinese vs 6 are American. This is just VC pumping its own game. Massively overvalued Chinese startups fueled by unsustainable shadow debt taking isn't a recipe for success. "China’s campaign against its US$10 trillion shadow banking industry has choked off refinancing for the weaker borrowers". let that sink i…

There has been this little discussed massive debt overhang in China. But for comparison, I wish I could find something that compares the US debt overhang. What's the total corporate debt of the US, it must be massive. I guess "Shadow banking" debt is just a part of the debt China has, because cities and regions have large loans too.

This article says for the US, $8.7 trillion, 45% of GDP https://www.cnbc.com/2017/11/20/the-debt-time-bomb-that-keep.... Compare to 168% in China above.

Re: China is winning the global tech race

#52

Post by marklgr »

rayiner wrote: post #48
marklgr wrote: post #44

Earlier quoted context omitted.

No need to call others' opinions ignorant when you have another one. Here's a good book dealing with foreign aids, among other things: https://www.amazon.com/Dictators-Handbook-Behavior-Almost-Po...

I use "ignorant" quite deliberately; the opinion of U.S. foreign aid as having strings attached to benefit the U.S. is literally ignorant of what U.S. foreign aid projects and funding look like. I haven't read the book, but de Mesquita is addressing something different, the fact that foreign aid can enable bad leaders to stay in power by giving them a flow of benefits they can use to reward cronies and placate the po…

IIRC, he claims that foreign aids directly help autocratic rulers stay in place, by giving them means to pay off their vital support. So he says that it clearly prevents uplifting people or teaching them democracy, since they are the first victims of dictatorship.

Re: China is winning the global tech race

#53

Post by Latteland »

Fricken wrote: post #27
j7ake wrote: post #23

Earlier quoted context omitted.

Yeah but I guess what is remarkable is the trajectory from 1990 to 2018

It's been a very predictable trajectory. I recall reading in the mid 90s, as a high school student an op-ed that anticipated China's GDP to exceed America's sometime in the early 2020s. They're right on course to do that.

Okay, but the debt to GDP ratio is much higher in china. See my previous article, China 168% of gdp, us 45% of gdp.

Re: China is winning the global tech race

#54

Post by rm_-rf_slash »

chii wrote: post #34
bottomhollow wrote: post #15

According to the article, China is winning because it has more unicorns than others in > 10 billion: 11 are Chinese vs 6 are American. This is just VC pumping its own game. Massively overvalued Chinese startups fueled by unsustainable shadow debt taking isn't a recipe for success. "China’s campaign against its US$10 trillion shadow banking industry has choked off refinancing for the weaker borrowers". let that sink i…

> unsustainable shadow debt i keep hearing this term, but what does shadow debt mean?

Unregulated unofficial loans. They have played a major role in developing China’s economy outside of the rigidly regulated financial sector. However their total value and creditworthiness is not entirely known. The Chinese government doesn’t want to shut down the shadow debt markets wholesale, because of their outsize influence on the economy, but for the same reason they don’t want shadow lending to get too out of hand either. If there is a credit crunch or economic contraction, it will be harder to manage the consequences of unofficial debt than official debt.

Re: China is winning the global tech race

#55

Post by coldtea »

mistermann wrote: post #25
coldtea wrote: post #18

Earlier quoted context omitted.

So like most other countries that are now pointing their fingers? http://theconversation.com/trumps-protectionism-continues-lo... http://foreignpolicy.com/2012/12/06/we-were-pirates-too/ http://www.spiegel.de/international/zeitgeist/no-copyright-l...

Do these other countries continue to enjoy WTO Developing Nation Status, which enables a lot of the unfair advantages China enjoys as pointed out by the grandparent comment? https://www.wto.org/english/tratop_e/devel_e/dev_special_dif... Pointing out the historic cheating of now first world countries is fair if questionably relevant, pointing out Donald Trump's raising of tariffs as hypocrisy (I assume) is down right…

>Do these other countries continue to enjoy WTO Developing Nation Status, which enables a lot of the unfair advantages China enjoys as pointed out by the grandparent comment?

No -- they don't need it as much, as they already climbed the lax-IP/protectionism ladder for centuries to get high.

Now they insist nobody currently lower than them should use the ladder.

Re: China is winning the global tech race

#56

Post by anonymous5133 »

corporateslaver wrote: post #10

This is propaganda. China is mostly an uneducated factory nation who will be crushed by automation. Articles like this are great for clicks on a website. Edit: which Chinese tech companies are actually dominant? All of them are copies of American tech companies propped up by their government. Where is the market penetration into the USA? Where is the competition? There is none.

Not true. Look at places like shenzhen which is like the silicon valley of china. Theyre inventing new technologies just like here in the usa. It isnt the same in terms of amount but theyre on their way for sure.

Re: China is winning the global tech race

#57

Post by portpecos »

mistermann wrote: post #47
KKKKkkkk1 wrote: post #43

Earlier quoted context omitted.

So China is winning by giving out loans that will never be paid back?

Yes, because they take assets in lieu of payment. You don't get from 3rd world country to challenging the world super power in 20 years by being dumb. On a related tangent, if you don't mind - I'm trying to test my "tone detector" - it indicated sarcasm in your comment, as if the comment to which you were replying was not just wrong but dumb - how accurate was I?

This is exactly what happened with the Hambantota Port. Sri Lanka asked for billions in loans from China to build a second port in Hambantota, Sri Lanka. After it was built, the naval port didn’t get any shipping/cargo traffic so Sri Lanka couldn’t pay back the Billions. China offered to refinance the loan, how? Sri Lanka turned over control of the port to the Chinese Government under a lease of 100 years and Sri Lanka gets to pay a lower amount on the loan.

Now US Intelligence are seeing an uptick in Chinese Navy Warships patrolling the Indian Ocean and fears about Hambantota turning into a Chinese Military Port.

This is being called the String of Pearls Theory: https://en.wikipedia.org/wiki/String_of_Pearls_(Indian_Ocean...

The model has already happened in Djibouti, where a Chinese Military Port is currently operational. US Generals have voiced their concern: https://www.reuters.com/article/us-usa-china-djibouti/signif...

Re: China is winning the global tech race

#58

Post by rayiner »

marklgr wrote: post #52
rayiner wrote: post #48

Earlier quoted context omitted.

I use "ignorant" quite deliberately; the opinion of U.S. foreign aid as having strings attached to benefit the U.S. is literally ignorant of what U.S. foreign aid projects and funding look like. I haven't read the book, but de Mesquita is addressing something different, the fact that foreign aid can enable bad leaders to stay in power by giving them a flow of benefits they can use to reward cronies and placate the po…

IIRC, he claims that foreign aids directly help autocratic rulers stay in place, by giving them means to pay off their vital support. So he says that it clearly prevents uplifting people or teaching them democracy, since they are the first victims of dictatorship.

I'd go even further than that and say that foreign aid helps keep badly-run democratic governments stay in place (e.g. in Bangladesh). Being skeptical about whether foreign aid achieves the desired effect is very different than saying that the U.S. provides foreign aid for purposes of "empire building."

Re: China is winning the global tech race

#59

Post by mistermann »

portpecos wrote: post #57
mistermann wrote: post #47

Earlier quoted context omitted.

Yes, because they take assets in lieu of payment. You don't get from 3rd world country to challenging the world super power in 20 years by being dumb. On a related tangent, if you don't mind - I'm trying to test my "tone detector" - it indicated sarcasm in your comment, as if the comment to which you were replying was not just wrong but dumb - how accurate was I?

This is exactly what happened with the Hambantota Port. Sri Lanka asked for billions in loans from China to build a second port in Hambantota, Sri Lanka. After it was built, the naval port didn’t get any shipping/cargo traffic so Sri Lanka couldn’t pay back the Billions. China offered to refinance the loan, how? Sri Lanka turned over control of the port to the Chinese Government under a lease of 100 years and Sri Lan…

Exactly.

It's odd how some people can clearly see (and acknowledge) these things, while others seem literally unable to see them, almost as if they have some sort of a psychological filter hiding portions of the full spectrum of reality. I wonder if I suffer from the same thing, but different portions of the spectrum. I find it an interesting and useful way in which to observe the world and disagreements between people.

Re: China is winning the global tech race

#60

Post by mistermann »

bottomhollow wrote: post #15

According to the article, China is winning because it has more unicorns than others in > 10 billion: 11 are Chinese vs 6 are American. This is just VC pumping its own game. Massively overvalued Chinese startups fueled by unsustainable shadow debt taking isn't a recipe for success. "China’s campaign against its US$10 trillion shadow banking industry has choked off refinancing for the weaker borrowers". let that sink i…

> Massively overvalued Chinese startups fueled by unsustainable shadow debt taking isn't a recipe for success.

It may not be the cleanest or most efficient recipe for success, but whether it is or is not "a" recipe for success remains to be seen. There is more than one way to skin a cat as they say.

As for their massive debt, again that could be a problem, maybe even completely derail China and throw them back into chaos, but there's little reason to think that it must be a problem. As long as sufficient confidence can be maintained in the system and everyone keeps showing up to work each day, and trade continues flowing, how the results are divvied up at the end of the day in the short run is secondary to the longer term functionality of the overall system.

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