- 14 Mar 2024 19:21
#15307780
A quick run by Zeihan of why China is in deep doo doo:
His take on the Chinese economy can be found elsewhere. Basically, it's a weird system. Individuals have little choice in what they can invest in. Most of that is in real estate. Which is why they have empty cities, and shoddy construction. It's a massive bubble that burst, and China is trying to hide how bad things got.
The state is deeply involved in the economy, and they see investment as a way to create jobs, not profit. The result of that is overinvestment in infrastructure. So they have as much in high speed trains as the rest of the world combined. But some of the routes won't attract enough riders to keep the business going. Meaning it will siphon money off the state. Infrastructure investment is supposed to help the economy, not be a drag on it.
Let me close with this, the USSR was also a top down system. But when there was a crisis, they couldn't adapt fast enough, and it all came apart. The same thing is happening in China. They are in a crisis, and they are having trouble dealing with it.
His take on the Chinese economy can be found elsewhere. Basically, it's a weird system. Individuals have little choice in what they can invest in. Most of that is in real estate. Which is why they have empty cities, and shoddy construction. It's a massive bubble that burst, and China is trying to hide how bad things got.
The state is deeply involved in the economy, and they see investment as a way to create jobs, not profit. The result of that is overinvestment in infrastructure. So they have as much in high speed trains as the rest of the world combined. But some of the routes won't attract enough riders to keep the business going. Meaning it will siphon money off the state. Infrastructure investment is supposed to help the economy, not be a drag on it.
Let me close with this, the USSR was also a top down system. But when there was a crisis, they couldn't adapt fast enough, and it all came apart. The same thing is happening in China. They are in a crisis, and they are having trouble dealing with it.
Facts have a well known liberal bias