Post: #1

http://www.telegraph.co.uk/finance/comme...r-all.html

Overinvestment in useless projects, pollution, underinvestment in human capital.

Also, all the PRC econ stats are bull, manufactured by the Party.

Anyone who's been there will tell you the standard of living is low outside of a few coastal areas.

On the positive side they're trying to overtake the US in R&D and innovation.

Post: #2

Same song and story as Japan. Fact is, the Chinese aren't producing any sort of innovation like the US is. US has the brains and that's the #1 reason the USA wins in the long haul.

That said, a big recession in the Chinese economy may make things quite attractive for the foreign investor.

Post: #3

Demographic decline also.

What happens when their banks have to write off nonperforming loans for projects that aren't needed?

I think one thing that happens is more data sheets from the PRC on RVF.

Post: #4

(05-08-2013 08:06 PM)JimNortonFan Wrote:  Overinvestment in useless projects, pollution, underinvestment in human capital.

The U.S. also has over-investment in useless projects, and, in contrast, has over-investment in human capital (welfare, student loan/college-for-everyone bubble, etc.), and misallocation and mis-development of human capital via the racial and gender spoils system that is affirmative action.

I agree that the China-as-the-next-Superpower meme over the past decade has been overblown. I am too young to remember the Japan-as-the-next-superpower meme firsthand, so Michael Crichton's Rising Sun was certainly interesting.

However, this may not so much be about China catching up as America catching down.

All China needs to do is standstill while America keeps shooting its foot on the way down.

Post: #5

(05-08-2013 08:19 PM)Kabal Wrote:  

(05-08-2013 08:06 PM)JimNortonFan Wrote:  Overinvestment in useless projects, pollution, underinvestment in human capital.

The U.S. also has over-investment in useless projects, and, in contrast, has over-investment in human capital (welfare, student loan/college-for-everyone bubble, etc.), and misallocation and mis-development of human capital via the racial and gender spoils system that is affirmative action.

I agree that the China-as-the-next-Superpower meme over the past decade has been overblown. I am too young to remember the Japan-as-the-next-superpower meme firsthand, so Michael Crichton's Rising Sun was certainly interesting.

However, this may not so much be about China catching up as America catching down.

All China needs to do is standstill while America keeps shooting its foot on the way down.

Possible, but from what I've gathered is that China has fucked itself even more than the USA has.

Even if the USA goes totally under, you have to remember that there are around 95 million high quality males here who can do a whole lotta work and innovation.

What does China have? Even out of a billion people they'll be lucky to have 50 million high quality males to do the intellectual work. China suffers from having wiped out their intelligentsia with the 1970's cultural revolution, and the ongoing suppression of dissent and free thinking since then. Most intelligent Chinese get the hell out of China.

Post: #6

The US is growing at 2% and I don't see that changing for a long long time.

If China grows at 3% they catch the US within 20 years.

Who knows, there could be a war a drought, an asteroid hit. The Chinese should invite US betas to go invigorate the economy.

First country that taps US and Euro beta talent will grow their economy in a big way. Low taxes, low regs, feminine women, that will get them.

Post: #7

China has another problem: how to escape the middle income trap. Their growth model is based on exports and that can only take you so far. Once an economy hits a certain level of development, the competitive advantage of selling things cheaply to more developed countries becomes eroded. At some point a country has to go from export led growth to growth based on domestic consumption and high value-added manufacturing.

Post: #8

I don't know what will happen in China but it seems pretty obvious to me that the US is sinking. But maybe we can just change the math we use to get the GDP and things will suddenly get better.

Post: #9

China will get old before it can get rich. If you've been watching the demographic trends, you knew not to be too bullish on China. I'm still not as optimistic about Chinese prospects for world domination as some others are.

The rising costs of labor are a particularly big concern. Without the cheap labor pool to lean on anymore (thanks to the demographic decline mentioned earlier), China will have to innovate at an American level to compete and ultimately get to the same superpower status, and I don't know if that will happen.

Post: #10

(05-08-2013 08:23 PM)Samseau Wrote:  Same song and story as Japan. Fact is, the Chinese aren't producing any sort of innovation like the US is. US has the brains and that's the #1 reason the USA wins in the long haul.

(05-08-2013 08:23 PM)Samseau Wrote:  Even if the USA goes totally under, you have to remember that there are around 95 million high quality males here who can do a whole lotta work and innovation.

What does China have? Even out of a billion people they'll be lucky to have 50 million high quality males to do the intellectual work. China suffers from having wiped out their intelligentsia with the 1970's cultural revolution, and the ongoing suppression of dissent and free thinking since then. Most intelligent Chinese get the hell out of China.

My gut-reaction is that you are way over-estimating the number of high quality males in America capable of innovation, even for some very lax definition of "high-quality" and "innovation." The average American male is pretty dumb--materially dumber than the average Chinese. And half of people are dumber than this.

The innovation provided by a country's people can be described by its underlying talent (e.g., IQ), and to the extent the political/economic/legal situation rewards hard work (e.g., capitalism).

Adjusted for the incentives provided by the political economy situation, the Chinese may have the edge on the Americans in this department (the "Smart Fraction", a bit more about this below), and the political economy advantage the U.S. enjoys is probably closing.

I agree with you that the U.S. has been numero uno because the U.S. has the brains on the right tail, as the mean IQ of the U.S. has never been exemplary.

However, that's also because the U.S. has been able to skim and siphon off talent from other countries (a big one of which is China) from its status as the global hegemon over the past few decades, like how championship NBA teams pick up even more free agents in the next off-season.

What happens if the brain drain slows (which if I recall correctly, it already has been), or worse, reverses?

I'm not a huge fan of the Smart Fraction Hypothesis for some arbitrarily picked number for the fraction, but I do think the generalized concept has legs. As the political economy improves in China, this will probably be increasingly a game of higher average IQ in China versus a higher variance in America in terms of determining a Smart Fraction.

Both countries are suffering from dysgenic breeding, IQ-wise. However, the U.S., with greater variance and a lower mean, has much greater downside.

Post: #11

So if China and the US both implode, who becomes the next superpower?

Post: #12

A lot of big talk on here on American "innovation" when it's entirely dependent on its monetization in being viable. The capital fund those ideas is in short supply, do how can one expect that to remain stable long term. Plus America cooks its books too so no need to single China out. America 2% in growth is heavily flawed and America had similar pending demographic issues.

Both place are flawed but I'd bet my last dollar on China then America.

Japan and the UK are the time bombs. Media likes to dump on the USA and China when the two are barley as messed up structurally as the two island giants.

Post: #13

(05-08-2013 09:20 PM)beta_plus Wrote:  So if China and the US both implode, who becomes the next superpower?

There won't necessarily be "a" superpower.

We will just slide back into multipolarity. In many respects, we are already there, or at least tripolarity--with the U.S., EU, and China as the triumvirate.

In the 20th Century, the first half was marked by multipolarity. After World War II, the international scene shifted into bipolarity with the U.S. and the USSR as the two superpowers. The fall of the USSR left the US as the unipolar hegemon.

Post: #14

(05-08-2013 09:28 PM)Kabal Wrote:  

(05-08-2013 09:20 PM)beta_plus Wrote:  So if China and the US both implode, who becomes the next superpower?

There won't necessarily be "a" superpower.

We will just slide back into multipolarity. In many respects, we are already there, or at least tripolarity--with the U.S., EU, and China as the triumvirate.

In the 20th Century, the first half was marked by multipolarity. After World War II, the international scene shifted into bipolarity with the U.S. and the USSR as the two superpowers. The fall of the USSR left the US as the unipolar hegemon.

There was the British Empire. They were nothing to sneeze at, especially their navy. Though they tended to play other countries against each in order to maintain their dominance.

Post: #15

China's so much bigger than the U.S. in terms of population - about *four* times as large - that it does not need to match America's per capita GDP levels or even closely approach them to effectively dominate the global economy. That's the mistake people make when they flippantly say that China won't become rich. South Korea isn't as rich as the U.S. either, but if it was a nation of 300 million people... or hell 1.3 billion people like China, it'd be the world's preeminent economic power.

Post: #16

(05-08-2013 10:09 PM)Therapsid Wrote:  China's so much bigger than the U.S. in terms of population - about *four* times as large - that it does not need to match America's per capita GDP levels or even closely approach them to effectively dominate the global economy. That's the mistake people make when they flippantly say that China won't become rich. South Korea isn't as rich as the U.S. either, but if it was a nation of 300 million people... or hell 1.3 billion people like China, it'd be the world's preeminent economic power.

Indeed. We are already seeing that effect now.

Quantity has a quality of its own.

Post: #17

If anyone subscribes to the Motley Fool's newsletter, they would know about a huge potential game-changer that will put Chinese manufacturing out of business and all overseas manufacturing out of business for that matter: 3-D Printing. Why ship from China and wait for products when this can be done inexpensively and from home? Imagine 3-D Printing factories all across America "printing" products. I don't see this having any immediate impact but in 7-10 years from now, look out.

Post: #18

(05-08-2013 10:09 PM)Therapsid Wrote:  China's so much bigger than the U.S. in terms of population - about *four* times as large - that it does not need to match America's per capita GDP levels or even closely approach them to effectively dominate the global economy. That's the mistake people make when they flippantly say that China won't become rich. South Korea isn't as rich as the U.S. either, but if it was a nation of 300 million people... or hell 1.3 billion people like China, it'd be the world's preeminent economic power.

Yeah, China can have a larger economy than the US and at the same time be one of the poorest and most backwards countries in the world due to its huge population. On a per capita basis, it will be surprising if the Chinese can get as wealthy as the Mexicans in our lifetime. Not much solace in being a world power if your people are living in squalor.

Post: #19

thing about china is that it is much less static than the us. by and largw, we will mot change culturally or politically until we implode financially.
in 10 years or so, when the chinese younger generations ascend, expect serious reform: environmental improvements, freedom of expression, ect

Post: #20

(05-08-2013 11:18 PM)Lemmo Wrote:  

(05-08-2013 10:09 PM)Therapsid Wrote:  China's so much bigger than the U.S. in terms of population - about *four* times as large - that it does not need to match America's per capita GDP levels or even closely approach them to effectively dominate the global economy. That's the mistake people make when they flippantly say that China won't become rich. South Korea isn't as rich as the U.S. either, but if it was a nation of 300 million people... or hell 1.3 billion people like China, it'd be the world's preeminent economic power.

Yeah, China can have a larger economy than the US and at the same time be one of the poorest and most backwards countries in the world due to its huge population. On a per capita basis, it will be surprising if the Chinese can get as wealthy as the Mexicans in our lifetime. Not much solace in being a world power if your people are living in squalor.

Just what I was thinking. Not to mention those 1.3 billion people are really fucking up China. Air quality levels in China reach above hazardous some days. http://www.nytimes.com/2013/01/13/scienc....html?_r=0

Even if they do surpass us economically, do you want to live there?

Post: #21

Anyone here much of a Jim Rogers fan? Guy is so sure China is the next big thing that he took his family to Sinapore so his daughters could learn perfect Mandarin.

Post: #22

(05-08-2013 11:18 PM)clever alias Wrote:  thing about china is that it is much less static than the us. by and largw, we will mot change culturally or politically until we implode financially.
in 10 years or so, when the chinese younger generations ascend, expect serious reform: environmental improvements, freedom of expression, ect

But wouldn't that lead to political instability as people demand change? Further slowing everything down.

Major social changes aren't always a good thing, and can often lead a country backwards for a decade or generation.

Post: #23

(05-09-2013 01:25 AM)Emancipator Wrote:  

(05-08-2013 11:18 PM)clever alias Wrote:  thing about china is that it is much less static than the us. by and largw, we will mot change culturally or politically until we implode financially.
in 10 years or so, when the chinese younger generations ascend, expect serious reform: environmental improvements, freedom of expression, ect

But wouldn't that lead to political instability as people demand change? Further slowing everything down.

Major social changes aren't always a good thing, and can often lead a country backwards for a decade or generation.

I don't think there is any doubt that china will have major hiccups. Every rising power has them. America had plenty.

Post: #24

(05-09-2013 01:25 AM)Emancipator Wrote:  

(05-08-2013 11:18 PM)clever alias Wrote:  thing about china is that it is much less static than the us. by and largw, we will mot change culturally or politically until we implode financially.
in 10 years or so, when the chinese younger generations ascend, expect serious reform: environmental improvements, freedom of expression, ect

But wouldn't that lead to political instability as people demand change? Further slowing everything down.

Major social changes aren't always a good thing, and can often lead a country backwards for a decade or generation.

sometimes, yes. but these changes will help bring china into the modern world. a few jobs mogjt.get sacrificed, but jave you ever seen pictures of beijing air? opening up of markets for foreign businesses (already happening extremely fast), freedom of information via twitter and facebook.
china is in a unique position to take only what it wants from the west, while still maintaining indepdent culture.
take debt. everyone says china has a spending problem. the us does too. the difference is that in the us the government AND the people are.spending out of control. in china, the people save almost 35% of their yearly income

Post: #25

(05-09-2013 02:01 AM)clever alias Wrote:  sometimes, yes. but these changes will help bring china into the modern world. a few jobs mogjt.get sacrificed, but jave you ever seen pictures of beijing air? opening up of markets for foreign businesses (already happening extremely fast), freedom of information via twitter and facebook.
china is in a unique position to take only what it wants from the west, while still maintaining indepdent culture.
take debt. everyone says china has a spending problem. the us does too. the difference is that in the us the government AND the people are.spending out of control. in china, the people save almost 35% of their yearly income

A threat China poses on the west that few have accounted is that they know a LOT about us - we know very little about them. It's like a trade imbalance, but in cultural understanding.