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Soviet Collapse Echoes in China’s Belt and Road

bloomberg.com

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Re: Soviet Collapse Echoes in China’s Belt and Road

#71

Post by duxup »

yostrovs wrote: post #49
duxup wrote: post #38

>In the 1950s, the Soviet economy grew faster than that of any other major country barring Japan. I'd like to read more about what was happening then, was it largely military investment?

So much destruction post 1940s coupled with slave labor (local political prisoners and German prisoners of war) leads to roads and steel plants being built quickly. The population though lived on near nothing till the 60s.

Yeah, also I wonder how you compare something purely state run like Russia with something more along market lines in the short term .... they operate so differently. State run can often create a pretty big economic short term bump if they wish... not sure that means much.

Re: Soviet Collapse Echoes in China’s Belt and Road

#72

Post by dnomad »

mr_toad wrote: post #65
Gibbon1 wrote: post #48

Earlier quoted context omitted.

> Chinese fabricated financials can be papered over with any kind of magic the state wants to apply to it - so long as the economy continues to move forward the numbers will say anything they want them to say. My feeling is business people and economists are upset that China utterly refuses to follow neoliberal economic polices. Preferring instead to follow old school Keynesian policies. Policy makers thus view China…

China’s external debt to GDP is one of the lowest in the world, as is their debt per capita. They aren’t going to be ‘punished’ by creditors because they don’t have significant debt. In fact, it’s more likely that China will be the one doing the punishing down the road.

This is what really irks the West. China did not allow themselves to be controlled by external debt like the Soviet Union. The Chinese have not only avoided debt slavery they have actually begun to weaponize their own debt power and such that they are now the world's largest sovereign lender.

Re: Soviet Collapse Echoes in China’s Belt and Road

#73

Post by socrates1998 »

Some interesting points in here that I had not considered in a while. Definitely one of the big advantages of the western economies is the cutthroat nature in which they think about ROI.

If something won't return a profit to a high probability, then it's not built.

Japan has seen problems with the same Soviet top-down style, where there are a lot of excess infrastructure projects throughout Japan, particularly in rural areas.

Japan avoided the Soviet implosion, but it has still gone through a large period of flat growth since the early 90's.

Deflation has been a major problem since 1991 and still is.

China could be the exception to this top-down style and find a way to high growth despite it's inefficiencies, but I am betting that it all catches up to them suddenly. Maybe not for a few years, but it will most definitely happen like it has happened to every country that has adopted the top-down Japanese style modernization.

Re: Soviet Collapse Echoes in China’s Belt and Road

#74

Post by justicezyx »

seanmcdirmid wrote: post #61
sct202 wrote: post #59

Earlier quoted context omitted.

Yeah, people keep saying China is a house of cards, but they're spending their money on things you can see and use. The train I take to work is 40 years old, and the tracks are over a 100. I'm envious of all the new things they're building with all their 'fake' growth.

> Yeah, people keep saying China is a house of cards No they don't, that is completely a red herring. > I'm envious of all the new things they're building with all their 'fake' growth. We could have HSR also if we were willing to pay for it...if we thought it made sense to our economic growth. And the Chinese have taken out a lot of debt to pay for it, it wasn't free, and the only profitable line ATM is the one betwe…

The profitable model does not always work everywhere. For these high speed railroad, I see no reason they should be profitable as a whole.

I mean, better is better. Let's not pretend that USA can still build the infrastructure as it needs, better than China.

On the other hand, China's infrastructure project are funded by cheap labors. That's maybe more relevant than financial models. Also they have little resistance from the locals affected by the projects. Here we cannot even build apartments higher than certain number...

Re: Soviet Collapse Echoes in China’s Belt and Road

#75

Post by consumer451 »

duxup wrote: post #38

>In the 1950s, the Soviet economy grew faster than that of any other major country barring Japan. I'd like to read more about what was happening then, was it largely military investment?

The USSR also had many satellite nations, like the Eastern European block. Moscow was known to drain those countries' resources, with little local investment in return outside of military bases.

I only have personal anecdotes to back that up having grown up in one of those satellite countries.

Re: Soviet Collapse Echoes in China’s Belt and Road

#76

Post by taobility »

socrates1998 wrote: post #73

Some interesting points in here that I had not considered in a while. Definitely one of the big advantages of the western economies is the cutthroat nature in which they think about ROI. If something won't return a profit to a high probability, then it's not built. Japan has seen problems with the same Soviet top-down style, where there are a lot of excess infrastructure projects throughout Japan, particularly in rur…

I don't agree that's the big advantage of western economies, especially for infrastructure project. Actually that's the big disadvantage, and short term of capital economy, as everything is about ROI, in short term. Think about high speed trail in California, the project at that scale, no private company can do that, in additional, it may take several decades to make any profit. Only the government can make such plan and invest on this project, but every four years election make it also impossible.

Re: Soviet Collapse Echoes in China’s Belt and Road

#77

Post by slimed »

Barrin92 wrote: post #56
lainga wrote: post #31

Earlier quoted context omitted.

From 3rd paragraph TFA, and unlike 1910-1950s USA, Like the Soviet Union in the 1970s, China is coming to the end of a long labor-force boom, and hoping that an orgy of investment will keep the old magic going while stabilizing its fraying frontiers. Cornelius Vanderbilt wasn't trying to overcome a graying America or shore up the Monroe Doctrine by building railroads in Latin America and Africa. If anything, I fail t…

I wasn't trying to create any definite story, I'm just saying that it is easy to make a historical analogy depending on what you wantto take away from it. China is not the Soviet Union any more than it is the United States. Doing away with the belt and road initiative by painting it as a Soviet vanity project seems too simple, the country is communist only in name. For me, this narrative seems to be very typical of o…

Sri Lanka is off the coast of India. Your lack of attention to detail does not give one confidence in your argument.

Re: Soviet Collapse Echoes in China’s Belt and Road

#78

Post by User23 »

dnomad wrote: post #72
mr_toad wrote: post #65

Earlier quoted context omitted.

China’s external debt to GDP is one of the lowest in the world, as is their debt per capita. They aren’t going to be ‘punished’ by creditors because they don’t have significant debt. In fact, it’s more likely that China will be the one doing the punishing down the road.

This is what really irks the West. China did not allow themselves to be controlled by external debt like the Soviet Union. The Chinese have not only avoided debt slavery they have actually begun to weaponize their own debt power and such that they are now the world's largest sovereign lender.

The US doesn't borrow money from China. The US swaps treasuries for reserves with the Federal Reserve, which then sells those treasuries to primary dealers, who in turn sell them on the open market where anyone including foreign sovereigns like China, can buy them. In the unlikely event that the Federal Reserve failed to sell those instruments, they'd be left on their balance sheet and the interest would be remitted back to the US treasury. So long as there is any demand for US dollars though, there will always be a demand for interest bearing instruments that have near cash-like liquidity.

Of course if you're referring to China's African colonies and their use of debt to control the local governments, then yes that's accurate.

Re: Soviet Collapse Echoes in China’s Belt and Road

#80

Post by Barrin92 »

slimed wrote: post #77
Barrin92 wrote: post #56

Earlier quoted context omitted.

I wasn't trying to create any definite story, I'm just saying that it is easy to make a historical analogy depending on what you wantto take away from it. China is not the Soviet Union any more than it is the United States. Doing away with the belt and road initiative by painting it as a Soviet vanity project seems too simple, the country is communist only in name. For me, this narrative seems to be very typical of o…

Sri Lanka is off the coast of India. Your lack of attention to detail does not give one confidence in your argument.

Sorry did you respond to the wrong person? The harbour story that recently made headlines concerned the port in Djibouti, which to my knowledge is located in East Africa. I did not mention Sri Lanka.
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