Soviet Collapse Echoes in China’s Belt and Road • Hacker News Board

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

#111

Post by diminish » Tue, Aug 14, 2018, 7:46 AM UTC

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…

Finding a neutral in-depth analysis of the project is not easy. In a Google search, I find Japanese, Indian and European opinions . Yet best is the Wikipedia article IMHO. https://en.wikipedia.org/wiki/Belt_and_Road_Initiative

You won't find a neutral in-depth analysis of the project in Bloomberg (or FT, Economist,etc) as a substantial amount of stories about China are "wishful thinking" meant to be "self fulfilling prophecies" by influencing investors [1]. I mean mostly against China.

[1] David Fickling stories - see the ones about China. https://www.bloomberg.com/authors/AQrSL0m_2u4/david-fickling

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

#112

Post by TangoTrotFox » Tue, Aug 14, 2018, 7:51 AM UTC

User23 wrote: post #104

sonnyblarney wrote: post #100

Earlier quoted context omitted.

Yes, I get it - but the mechanism does not matter: TBills and TBonds US government debt. US dollars are a form of debt to the US economy. So If you hold TBills/TBonds, the US government owes you money. If you hold USD, then the US economy owes you 'stuff' that you can exchange those dollars for. Anyone who holds TBills/TBonds is lending to the US Government. China holds a lot of both, ergo the US is indebted to them…

"the mechanism does not matter" only if you have no interest in understanding how the system actually works. China isn't the US's lender and they do not make any loans. They can't foreclose, because no loan exists. All they can do is take their coupons or sell the security to someone else who will do the same. China can't starve the Treasury of money because the Treasury exclusively borrows reserves from the Federal…

While everything you've said is accurate, I think you're intentionally skirting around the meat of the issue and that is the value of currency. That we can we can 'print' (colloquially speaking) as much money as we like is not in dispute. However, the consequences of choosing to do so are the heart of the matter. In the past our money was implicitly backed by oil thanks to our petro dollar arrangements, but those times are coming to an end. In the relatively near future our economic decisions will be left to stand, or fall, on their own merit - and substantial outstanding debt owned by foreign not-creditor-creditors will play a role in this.

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

#113

Post by doombolt » Tue, Aug 14, 2018, 7:51 AM UTC

consumer451 wrote: post #109

doombolt wrote: post #105

Earlier quoted context omitted.

No, it does. Manufactured goods are not "resources". Those are made for selling, and in modern world markets for goods are considered more of a gift than goods themselves. Are they not? Does USA drain resources from China?

With all due respect, the comparison between the relations of USA/China and Russia/Poland for example does pass the sniff test. The USA did not appoint the Chinese government, the USA does not have its military across China. USSR/satellite state relationships were nothing like a normal economic relationship. They were more like colonial era relations such as England/India prior to Indian independence.

Unfortunally we have diverged from economic arguments to purely political ones.

And politically, you've got what you've got, especially as a small country. Things could go massively worse. The USSR had complete freedom of action and it was pretty benign for several reasons. Maybe you have feeling that it sucked big time, but the reference point should be 1984 in real life.

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

#114

Post by robocat » Tue, Aug 14, 2018, 7:53 AM UTC

nabla9 wrote: post #27

When you compare the cost of Belt and Road to wars that cost trillions of dollars, the money spent is peanuts. The belt and road is already working. China-Finland train link connects Nordic countries with China in 10-12 days. They carry heavy and expensive machinery and machine parts between China and EU. Too heavy for air-travel economically and needs to arrive relatively fast.

I don't think your example shows that, and the article disagrees with you:

"The value of freight between Europe and Yiwu, a much-touted overland rail hub near Shanghai, came to 2.27 billion yuan ($330 million) in the first four months of this year [snip] China’s top four ports alone process about the same value of cargo every three hours."

Also see this graph from the article: https://www.bloomberg.com/toaster/v2/charts/e6c45ea06db24277...

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

#115

Post by close04 » Tue, Aug 14, 2018, 7:57 AM UTC

diminish wrote: post #111

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…

Finding a neutral in-depth analysis of the project is not easy. In a Google search, I find Japanese, Indian and European opinions . Yet best is the Wikipedia article IMHO. https://en.wikipedia.org/wiki/Belt_and_Road_Initiative You won't find a neutral in-depth analysis of the project in Bloomberg (or FT, Economist,etc) as a substantial amount of stories about China are "wishful thinking" meant to be "self fulfilling…

What was Bloomberg's (FT, Economist, the general economists' consensus, whichever) position in the year before the 2008 crisis? How many times did they flag the impending burst?

Every media outlet has an undisclosed interest somewhere or at the very least a heavy bias sometimes. And it's highlighted more than ever when those trusted pillars of reporting like Bloomberg, FT, or the Economist come up with conflicting information.

Right now CCTV in China or RT in Russia are saying the same thing about the US, or the EU, or Japan, or Korea. And the people reading and listening are having the same discussion we're having just with different conclusions based on that trusted information.

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

#116

Post by danmaz74 » Tue, Aug 14, 2018, 7:58 AM UTC

sonnyblarney wrote: post #66

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…

I think both your assertions are not correct. Economists just want 'real' numbers from China, numbers that reflect some kind of reality. That's before any ideology sits in. If there were at least transparency there, we'd all be better off, that said if there were, the 'fudges' necessary to make things worse would be more obviously lies. As far as 2008 - this was a failure of integrity from the bottom to the top: thos…

> Were actual, material numbers to have been objectively published, we wouldn't have had a crisis in 2008, because nobody would have bought bundles of crap, and the market would have needed no correction because it wouldn't have gotten out of hand.

This is circular reasoning. The market works on the information that is available at a given time, which includes all the fudging of numbers that salespeople and marketers do as part of their quest for maximising their individual interest - being handsomely rewarded by the market for this.

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

#117

Post by sonnyblarney » Tue, Aug 14, 2018, 8:11 AM UTC

User23 wrote: post #104

sonnyblarney wrote: post #100

Earlier quoted context omitted.

Yes, I get it - but the mechanism does not matter: TBills and TBonds US government debt. US dollars are a form of debt to the US economy. So If you hold TBills/TBonds, the US government owes you money. If you hold USD, then the US economy owes you 'stuff' that you can exchange those dollars for. Anyone who holds TBills/TBonds is lending to the US Government. China holds a lot of both, ergo the US is indebted to them…

"the mechanism does not matter" only if you have no interest in understanding how the system actually works. China isn't the US's lender and they do not make any loans. They can't foreclose, because no loan exists. All they can do is take their coupons or sell the security to someone else who will do the same. China can't starve the Treasury of money because the Treasury exclusively borrows reserves from the Federal…

You're confusing mechanism with economics.

"China isn't the US's lender and they do not make any loans."

Yes, China is a lender to the US, in fact the largest lender [1]. Treasures are loans/bonds. Whoever owns them is a lender to the United States. It's economically the same thing as any other nation selling bonds.

"They can't foreclose, because no loan exists. All they can do is take their coupons or sell the security to someone else who will do the same."

It's the same thing as government debt in all other nations. If you loan money to Greece, you can sell that Greek debt to someone else. The economics of government debt are the same in the US, Canada, and US even if 'how it gets sold' is different.

"China can't starve the Treasury of money "

China can 'starve' any nation to the extent they are a lender to that nation. China's demand for Treasuries makes up part of the demand curve for Treasuries, along with all the the demand. In just the same way as there is demand for Greek, UK and Canadian bonds. Or stocks. Or corn, or whatever.

If China was the only buyer of US Treasuries you can dam well be sure they can 'starve the Treasury' - because if nobody is buying Treasuries, then the government is printing money.

"Also worth noting is that with the stroke of a pen Congress and the President acting in concert could restore the Treasury's power to spend money into existence directly."

Every nation on Earth can do this. It's called 'printing money'. It's not a new idea, and it has dramatic consequences including hyperinflation.

Summary:

China is the #1 lender to the US both in Treasuries (and by holding US dollars.)

US government debt operates differently, but economically is the same thing as government debt to basically any other nation.

The US does have the advantage of 'seignorage' which is to say that because so many people need US dollars to do so many things, that there is a nice bit of 'cushion' in demand for USD, but that's only worth so much.

Otherwise it's just like anywhere else: governments loan at a certain rate, or they can tax, or they can print money and see confidence lost in their currency.

[1] https://en.wikipedia.org/wiki/National_debt_of_the_United_St...

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

#118

Post by sonnyblarney » Tue, Aug 14, 2018, 8:16 AM UTC

danmaz74 wrote: post #116

sonnyblarney wrote: post #66

Earlier quoted context omitted.

I think both your assertions are not correct. Economists just want 'real' numbers from China, numbers that reflect some kind of reality. That's before any ideology sits in. If there were at least transparency there, we'd all be better off, that said if there were, the 'fudges' necessary to make things worse would be more obviously lies. As far as 2008 - this was a failure of integrity from the bottom to the top: thos…

> Were actual, material numbers to have been objectively published, we wouldn't have had a crisis in 2008, because nobody would have bought bundles of crap, and the market would have needed no correction because it wouldn't have gotten out of hand. This is circular reasoning. The market works on the information that is available at a given time, which includes all the fudging of numbers that salespeople and marketers…

No, it's not circular logic. Lying to the public, to the government, false reporting is illegal, and against a lot of other controls and regulations that are in place to support a healthy free market.

There is a lot of information that does not have to be made public and people can do as they please with it - but this was not the cause of 2008, for the most part.

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

#119

Post by tobias3 » Tue, Aug 14, 2018, 8:24 AM UTC

close04 wrote: post #115

diminish wrote: post #111

Earlier quoted context omitted.

Finding a neutral in-depth analysis of the project is not easy. In a Google search, I find Japanese, Indian and European opinions . Yet best is the Wikipedia article IMHO. https://en.wikipedia.org/wiki/Belt_and_Road_Initiative You won't find a neutral in-depth analysis of the project in Bloomberg (or FT, Economist,etc) as a substantial amount of stories about China are "wishful thinking" meant to be "self fulfilling…

What was Bloomberg's (FT, Economist, the general economists' consensus, whichever) position in the year before the 2008 crisis? How many times did they flag the impending burst? Every media outlet has an undisclosed interest somewhere or at the very least a heavy bias sometimes. And it's highlighted more than ever when those trusted pillars of reporting like Bloomberg, FT, or the Economist come up with conflicting in…

The economist had e.g. a leader like this: https://www.economist.com/leaders/2005/06/16/after-the-fall

It is possible to call bubbles, especially if they are as large and data is transparently available. It is really hard to tell the moment when it will pop, especially if it is connected with the government like in the soviet union or in China.

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

#120

Post by consumer451 » Tue, Aug 14, 2018, 8:42 AM UTC

doombolt wrote: post #113

consumer451 wrote: post #109

Earlier quoted context omitted.

With all due respect, the comparison between the relations of USA/China and Russia/Poland for example does pass the sniff test. The USA did not appoint the Chinese government, the USA does not have its military across China. USSR/satellite state relationships were nothing like a normal economic relationship. They were more like colonial era relations such as England/India prior to Indian independence.

Unfortunally we have diverged from economic arguments to purely political ones. And politically, you've got what you've got, especially as a small country. Things could go massively worse. The USSR had complete freedom of action and it was pretty benign for several reasons. Maybe you have feeling that it sucked big time, but the reference point should be 1984 in real life.

From my last comment: > USSR/satellite state relationships were nothing like a normal economic relationship.

How am I bringing up politics?

From your last reply: >The USSR had complete freedom of action and it was pretty benign for several reasons. Maybe you have feeling that it sucked big time, but the reference point should be 1984 in real life.

I don't understand what you are saying here in any way. But, relating the USSR to "benign" is so far from the historic truth that I have no idea how to respond.

This conversation is likely no longer appropriate for HN, so have a nice day comrade?