China's Zombie Economy

Thank you, I was understanding the difference just not why it was worth pointing out. That makes some sense now.

The more that China holds in foreign currency, mainly USD, the more that it can do RMB to USD conversions, which means the more RMB that it can print locally.

The tie to RMB is critical for the Chinese economy because of its dependence on foreign investment

> unmet expectations

TBH PRC "growth rate" is roughly in line with expectations, including PRC will overtake US projections from years ago, caveate being many of those projections assumed PRC would strengthen rmb to iirc 4-6 vs 7 to 1 USD to put PRC at ~25T economy. Regardless, GDP not particularly useful for comparisons of comprehensive national power.

> Lower growth and - maybe - some form of stagnation are more likely

The distinction is PRC doomers think PRC has peaked and will be declining soon. PRC collapcists narrative is about wanking at the notion PRC stagnating and never eclipsing US. VS relevant indicators suggest PRC is where JP is in 80s, where JP grew 400-500% until post 00s stagnation. PRC "stagnanting" at 3-4x the size of US is a much different geopolitical scenario than narrativet tha PRC doomers/collapcist want to push. Even PRC @2x larger is TBH in the "unmet expectations" column, but that's still relatively the largest country in the world by 2050 and more than enough to compete against US/west.

TLDR PRC is at 25% skilled workforce, and moving to 60/70/80% of advanced economies by generating 50-100m STEM + other high skilled labour in next 30 years. FOr reference US on trend to add 40m people total. PRC in process of reaping literally the greatest high skill demographic divident in human history, and why other East Asian countries continued to grow with shit TFR - they replaced unproductive talent with skilled talent. Stagnation comes when TFR can't replace productive workforce at parity, PRC has decades of headroom. Past 25 years = 250M births already baked into future workforce with system that disproportionatlly filters talent towards S&E.

The fundmental problem with PRC peak/stagnate narrratives, especially peak/stagnate below US, is deliberately presenting using very questionable suppositions (real estate, demographics, authoritarianism etc) to suggest it will happen soon instead of decades from now, with a PRC larger than it is now, and likely larger than US. Folks over indexing on PRC being good at overbuilding in real estate, tend to a turn a blind eye to that state overcapacity also applying to everything else - like PRC moving up science and innovation indexes, value chain etc - all of which is rapidly building PRC comprehensive national power.

My impression has been that this looks simply like the result of an extemely rapidly changing economy and economic framework and government. The rules change frequently. In an ad-hoc manner. Even when it seems there are a lot of people working behind all these rule changes - both on the theory and the applicability. So yes of course there is a lot of waste and randomly propped up systems and temporary fixes. And then that's even if we want to argue that say US systems are really built for the long term... which is problematic also with a total willingness to change the rules from one day to the next but nowhere near to the level of China.

Good luck running long term businesses (but some people seem to manage pretty well - survivor bias?) and long term personal or family investments (scary just a bit? - I mean beyond US-style investing?)

>rationalization that withstands any cursory scrutiny

I mean yeah, that's the rationalisation, that useful idiots deliberately try not to see. PRC currently @65% urbanzation, with goal of 75-80% by 2035, aka 140-200M people. PRC "only" has 50M empty flats. Having excess housing inventory is fine, it's inefficient, but no more inefficient that US health sector at 20% GDP with medicore life expectancy. Which is only a light dig as US, but mostly to show that it's not big deal in the grand scheme of things.

>who will work the 10% of China's land that's arable to feed 1.4B people

PRC has 200M farming housholds when it really only needs 10M farmers using advanced ag equipment. There's stupid oversupply of agriculture labour, by design because it's a nice make job program for rural poor and consolidating agriculture is touchy subject because land reforms central to CCP founding mythos. Like out of all the concerns, lack of ag labour is most trivial.

>paying for any of this

With modest debt. PRC national debt is ~75% of GDP vs US ~120%, total aggregate debt PRC ~270% vs US ~760%. Basically +40-50% in the last 10 years to fund the largest infra expansion in human history. Pretty cheap all things considered.

>a zombie economy

1. @5% growth, if PRC is where JP is in 80s, that's 500% larger economy by 00s. If PRC is zombie economy, everyone else is stone dead.

> dependent on a crumbling world order,

2. PRC's is globalizing, see PRC increasing trade by 1T in last 4 years, more than previous 10, greatest increase in globalism in human history.

> surrounded by countries that hold millennia-old grudges against it.

3. Small countries where even with US basing, military force balance is trending towards PRC favor with each passing year.

>Plus Russia.

4. Guaranteed cheap gas and agri.

TLDR if PRC last few years is zombie, than momentum of PRC zombie horde will win like in most zombie media.