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China's Zombie Economy

newleftreview.org

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Re: China's Zombie Economy

#101

Post by ipnon »

bllguo wrote: post #96

you'd think Western economists and enlightened HN readers might have even a single moment of introspection after being consistently wrong about China for years but I suppose the perpetual condescending and underestimating is preferable to the typical violent modus operandi

China seems to have some serious structural problems that are impeding its rise. For instance it has been reported that negative outlooks by economists are now to be censored, and "deflation" is a bad word.[0] It would be better for everyone if China fixes the issues with its economy so we can go back to cooperatively creating wealth for the world.

"Information is antifragile; it feeds more on attempts to harm it than it does on efforts to promote it."[1]

[0] https://www.ft.com/content/b2e0ad77-3521-4da9-8120-1f0c1fdd9...

[1] https://libquotes.com/nassim-nicholas-taleb/works/antifragil...

Re: China's Zombie Economy

#102

Post by johnnyworker »

satvikpendem wrote: post #99
johnnyworker wrote: post #95

Earlier quoted context omitted.

Well, if you "don't count inflation", why stop there? Might as well count it in even more favorable ways. I wondered if there might be a good reason for it, but you just snarkily rephrasing what I quoted tells me there probably isn't -- so it's a loss. Because inflation is not something you can just ignore, when I buy something with money I don't get asked if I want the money to be counted as 1980 money or whatever,…

My point is that it doesn't matter if it's a profit or a small loss, because people think companies were simply given billions of dollars of free money. The fact that the US government was close to or did break even from bailouts dispels this notion. So there is no socialization of loss while keeping profits private, as the companies had to pay out what they took.

> My point is that it doesn't matter if it's a profit or a small loss, because people think companies were simply given billions of dollars of free money.

You stated "The US government made a profit". You claimed that, in direct contradiction to what you quoted. Now you're shifting goalposts.

Re: China's Zombie Economy

#103

Post by brabel »

zhdc1 wrote: post #31
Vt71fcAqt7 wrote: post #14

Clickbaity title. The article is not bad, but he doesn't explain why the declining growth rate is "the logical outcome of China’s uneven development and capital accumulation over the last four decades." I'm still not sold on the "China is dying" theory. China's GDP per capita is the same as Japan's when it entered single digit growth in 1970.[0][1] Those numbers surprised me, though, and may be too low wrt Japan. I t…

> I'm still not sold on the "China is dying" theory. I don't know if it's as much a story of decline as it is one of unmet expectations. China has a declining (and likely overstated) population. They have a very heterogeneous population. They also have an unsustainable growth model and an unwillingness to 'pull the plug', stop manufacturer subsidies, and tackle local governance issues. In other words, China looks a l…

> From what I've been told, the east and south coast cities are the most modern in the world. It's hard to imagine - decline.

I've been to Shanghai a couple of times, to Hong Kong once... also nearby Singapore... and I can confirm: it looks very much like a futuristic place compared to your average European or American city, though slightly dystopian due to all the surveillance/single-party.

But I think the reason for that is simple: almost all infrastructure you see around has been built in the last few decades, so it's all really modern... you go to London and it's the total opposite... the London Underground is like 150 years old!! It's not gonna look very modern no matter how much you improve it.

But of course, without a thriving economy you wouldn't build such colossal projects like China has been doing... anyway, if we start seeing all this beautiful, modern infrastructure starting to crumble, or places where infrastructure still hasn't been modernized not getting any improvement, then I think we can start to talk about decline - but China seems to be very, very far from that right now.

Re: China's Zombie Economy

#105

Post by satvikpendem »

johnnyworker wrote: post #102
satvikpendem wrote: post #99

Earlier quoted context omitted.

My point is that it doesn't matter if it's a profit or a small loss, because people think companies were simply given billions of dollars of free money. The fact that the US government was close to or did break even from bailouts dispels this notion. So there is no socialization of loss while keeping profits private, as the companies had to pay out what they took.

> My point is that it doesn't matter if it's a profit or a small loss, because people think companies were simply given billions of dollars of free money. You stated "The US government made a profit". You claimed that, in direct contradiction to what you quoted. Now you're shifting goalposts.

I just quoted the article. You're right, I should have quoted it fully but I didn't think it would get to this level of pedantry for a point that is not even necessarily related to the profit or loss of a bailout.

Re: China's Zombie Economy

#106

Post by noselasd »

xwdv wrote: post #2

It’s bad. Many debt slaves were created in the recent mortgage and housing crisis, and a lot of workers are furious and apathetic working these long hours for little to no pay.

And the same could be said for many countries.

Re: China's Zombie Economy

#107

Post by trailingComma »

FrustratedMonky wrote: post #9

Question. For 20 years I've been hearing China will takeover, and also that it is about to collapse. It seems like daily there is some story about how China will collapse, and then also stories of how it will still takeover. I did read it, but not seeing what this article brings new. What is the point being made here? Except, things are bad, and nobody realizes it. The term Zombie Economy has been used for a lot of y…

You have been hearing predictions about what might happen to China in the future for 20 years, if the nation grows too quickly in the wrong ways and doesn't solve it's impending demographic problems.

The article is saying 'China peaked in 2021 and the past two years have been a zombie economy'. It's not talking about what might happen, but about what has already happened and why the state has been hyper-focusing on security and military competition with the west for the last couple of years.

Re: China's Zombie Economy

#109

Post by peterfirefly »

ivalm wrote: post #65
worrycue wrote: post #48

Earlier quoted context omitted.

China is having quite a few problems on their hands though like the implosion of their real estate market that is tied to nearly everything else due its size. Their exports are down from companies decoupling somewhat with “China + 1”. In the long term, they have a bit of a population problem as their demographic dividend ends and their birth rate remains low.

These are things that can lead to stagnation, not really collapse. Even in the worst case of real estate bubble pop + massive unwind. Real estate loans and ownership are almost entirely domestic, and ccp has a lot of power to reshuffle however is advantageous to them.

China is not good at normal taxation. Local governments mostly get their money from property "sales" (long-term leases) and loans (mostly off-books these days). China has tried to enact property taxes but the push back was so big the government backed off.

It is gonna be real rough soon.

Re: China's Zombie Economy

#110

Post by seanmcdirmid »

peterfirefly wrote: post #109
ivalm wrote: post #65

Earlier quoted context omitted.

These are things that can lead to stagnation, not really collapse. Even in the worst case of real estate bubble pop + massive unwind. Real estate loans and ownership are almost entirely domestic, and ccp has a lot of power to reshuffle however is advantageous to them.

China is not good at normal taxation. Local governments mostly get their money from property "sales" (long-term leases) and loans (mostly off-books these days). China has tried to enact property taxes but the push back was so big the government backed off. It is gonna be real rough soon.

China has an income tax and VAT, but the central government takes most of that, leaving most local governments incredibly underfunded. Property taxes could solve that, land transfer taxes can only be collected when property is built (and so they build).
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