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Soviet Collapse Echoes in China’s Belt and Road

bloomberg.com

151–160 of 187 posts

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

#151

I don't see any justification for the Soviet analogy other than wanting to conjure up the image of the impending collapse of China. This sounds like the infrastructure version of the 'financial bubble' prediction that crops up every other year. If one wanted to pick a positive story there would be the example of the American progressive era, the creation of the interstate system, the railway system during the 19th ce…

> This sounds like the infrastructure version of the 'financial bubble' prediction that crops up every other year.

My favorite is the yearly "end of china" report by gordon chang. I remember the guy talking about china's collapse in the 90s and he's been wrong since.

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

#152

Earlier quoted context omitted.

So what? The trade route only just opened up. The numbers started at zero and started only recently, so of course they are small. By how much the trade is going to increase and at what rate is what everyone is arguing about. People underestimate how large Eurasia is along its east-west axis and how underdeveloped it is in parts. I predict the naysayers and doomsayers will be eating their hats. In nominal terms the US…

> The trade route only just opened up This is about the fundamental capacity constraints and costs of rail versus maritime transport. The former will always be more expensive than the other, and always be further capacity constrained. The only thing that could change that is a quantum leap in several technologies, in which case the current investments become useless. > “Rail services are considerably cheaper than air…

In this comparative study from New Zealand: https://www.nzta.govt.nz/assets/resources/research/reports/4... you can find a Comparative evaluation of transport modes where maritime shipping is cheaper than train, but this depends on the number of containers (you can put much more on a vessel). If we can increase the number of containers on trains, this could change. Also right now the China-Belgium trip can take 20 days by train (cf. https://www.train-chain.com/) and usually around 30 days by sea.

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

#153
post #152

Earlier quoted context omitted.

> The trade route only just opened up This is about the fundamental capacity constraints and costs of rail versus maritime transport. The former will always be more expensive than the other, and always be further capacity constrained. The only thing that could change that is a quantum leap in several technologies, in which case the current investments become useless. > “Rail services are considerably cheaper than air…

In this comparative study from New Zealand: https://www.nzta.govt.nz/assets/resources/research/reports/4... you can find a Comparative evaluation of transport modes where maritime shipping is cheaper than train, but this depends on the number of containers (you can put much more on a vessel). If we can increase the number of containers on trains, this could change. Also right now the China-Belgium trip can take 20 da…

> If we can increase the number of containers on trains, this could change

This increases wear on the train and tracks. We might have materials breakthroughs that change the balance. But such materials would make (a) shipping more efficient and (b) large fractions of the existing Belt and Road obsolete.

> right now the China-Belgium trip can take 20 days by train (cf. https://www.train-chain.com/) and usually around 30 days by sea

Emphasis on can. In any case, there is a reason the world's commercial shippers are all focussing on Arctic maritime routes.

Rail is a neat way of controlling territory. It's better than trucking or flying, when it comes to cost. But water beats it at scale.

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

#154
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.

The issue is the China's corporate debt and off book debt to government owned / backed companies. They have $3.12T coming due in the next year. For example: https://www.bloomberg.com/news/articles/2018-07-18/a-china-b...

> Designed to handle 320 trains a day, the Lanzhou-Xinjiang HSR currently has only eight daily services. “Because of this large amount of idle capacity, [the line’s] annual revenues are not enough to pay for its electricity costs,” said Prof Zhao.

https://www.ft.com/content/ca28f58a-955d-11e8-b747-fb1e803ee... [Paywall]

> China’s huge leveraged bet on HSR has also generated many other benefits as it dramatically shrinks distances, transforms lives and boosts regional economies. The now three-hour, 1,100km train ride between Guangzhou and Wuhan used to take 11 hours, and tickets are now priced at just Rmb464.

Annual travel on China’s HSR lines — 1.7bn trips — exceeds travel on conventional rail services. And about half of all HSR trips are, like Mr Liu’s, business-related.

“When you think about that, a staggering 850m people are travelling [on HSR] to meet customers, get to their job, visit research centres and so on,” said Mr Ollivier.

If China Railway’s HSR network is ultimately able to pay for itself, it will be a testament to the miracles that can happen when the Chinese Communist party marshals the vast financial resources at its disposal to serve a common good. But if it cannot, there is little doubt who will have to make up the difference.

“China Railway’s debt is government-backed,” said Prof Li. “It won’t default.”

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

#155

Earlier quoted context omitted.

>"India had the world's largest GDP under the Mughals and had continued positive growth." Do you have a citation for this? For the entire 300 years of the Mughal Empire? How accurate would that information even have been in say the early part of 16th century?

How exactly do you even measure the GDP of such an ancient empire? Economists can't accurately measure GDP of western economies today despite huge armies of statisticians, even China's true GDP is a mystery, so I'd have to assume any such claims about the GDP of the Mughal empire are nonsense.

Indeed, this was my point as well.

Additionally Mughal rule in South Asia stretched from what is modern Pakistan, to Kabul in Afghanistan and Bengal in the East. So the idea that there would been numbers specifically just India is kind of ridiculous.

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

#156

Earlier quoted context omitted.

He probably receives a hearing aid from the VA because he was in the military, irregardless of how he lost his hearing.

The point they are raising is whether that's a negative externality of the military - had he not been in the military, would that hearing aide not have been needed.

If he had not been in the military, the VA wouldn't have given him one.

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

#157

Earlier quoted context omitted.

>"India had the world's largest GDP under the Mughals and had continued positive growth." Do you have a citation for this? For the entire 300 years of the Mughal Empire? How accurate would that information even have been in say the early part of 16th century?

Something like this is a pretty standard and unsurprising result. Here is one quick google hit: http://www.visualcapitalist.com/2000-years-economic-history-... No one should be surprised that that India and China were the big dogs for most of history. Perhaps more surprising are that: a) This continued well into the 19th century, and b) India was bigger than China in medieval times. I'd say that (b) is not a fair com…

>"Something like this is a pretty standard and unsurprising result."

No there's actually nothing standard unsurprising about it. GDP before the industrial revolution meant something entirely different than after it.

That infographic was largely debunked when it came out. Most notably:

"Before the Industrial Revolution, there wasn't really any such thing as lasting income growth from productivity. In the thousands of years before the Industrial Revolution, civilization was stuck in the Malthusian Trap. If lots of people died, incomes tended to go up, as fewer workers benefited from a stable supply of crops. If lots of people were born, however, incomes would fall, which often led to more deaths. That explains the "trap," and it also explains why populations so closely approximated GDP around the world.

So, one way to read the graph, very broadly speaking, is that everything to the left of 1800 is an approximation of population distribution around the world and everything to the right of 1800 is a demonstration of productivity divergences around the world" [1]

>"a) This continued well into the 19th century, and"

No India's economy in 19th century is very much the British economy the is was the time of the Raj.

>"b) India was bigger than China in medieval times."

This is also untrue. The Medieval era some 900 years(end of the beginning of the 5th until the 14th century.) India was not bigger than China during this millennium. India in the Medieval Era was ruled by many regional dynasties[2], while China was unified by the 3rd century BC [3].

[1] https://www.theatlantic.com/business/archive/2012/06/the-eco...

[2] https://en.wikipedia.org/wiki/Medieval_India

[3] https://en.wikipedia.org/wiki/Qin%27s_wars_of_unification

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

#158
post #146
post #123

Earlier quoted context omitted.

Incorrect. Farmers were closer to slave labour and paid in "work-days", which could be accounted for handouts by administration. Farmers had no freedom of movement outside their farm territories. Life in Soviet villages was largely subsistence based. Slavery for farmers was abolished in 1974 when they were issued domestic passports (the primary ID in USSR) just like townspeople. As for countless prisoners, they were…

A strawman. Farmers alone could never account for the record Soviet rates of economic growth. And neither could they if combined with convicts/POWs. In late 20s this was the deal: - Poor peasantry cannot provide wheat due to very poor productivity. They use primitive and crude tools, because by definition they cannot afford anything better and can barely even feed themselves, let alone produce any meaningful surplus…

The motives behind collectivization weren't purely productivity. There was a substantial political impetus as well.

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

#159

Earlier quoted context omitted.

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.

Actually, all of those states had higher standards of living than core USSR and also access to this huge Soviet market. Didn't do much good since communism is so bad, but still. After the collapse of the Bloc most of those countries lost their industrial capacity, some have not yet recovered, some only recovered on outsource.

https://en.m.wikipedia.org/wiki/SovRom

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

#160

Earlier quoted context omitted.

> 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 US hasn't balanced a budget in decades. You would think that during an economic boom they would at least try. I am quite shocked nobody even seems to care- creditcard culture.

They tried under Clinton, the Republicans didn’t like it. There is a good point about takin on debt being good for USD liquidity, but the debt should be productively invested somehow so that it can pay off later.
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