[JohnRawls]

I see, but even then those government run services are valued (usually at cost).

OTOH, if the real estate prices have gone up in China then this would be reflected in other measures of real estate activity.

@Rugoz indeed, but @JohnRawls is doing cross country comparisons in levels (absolute differences, but the same hold for ratios). I agree though that if you want to compare growth rates you are better off using a real GDP measure.

Problem with real GDP is that it is nominal GDP adjusted by deflator, it is still the same nominal gdp though. Deflator in this case is basically USD or EUR from 2010 or whatever year. And this creates problems since nobody really buys and sells in 2010 Euros or Dollars.

[late]

In case that was too crazy, a quicker simpler version;

Because of the quality of leadership. West is led by corrupt scum pushing useless self defeating policies, China is led by somewhat competent technocrats pushing actually beneficial policies. That's all you need to know really.

What you need to know is that omni-competent autocrats are one in a million, and Xi isn't one of them.

China has had the benefit of being a young economy, we also had double digit growth a hundred years ago. The transition to a mature economy is like the transition to adolescence, awkward and painful. China is no different.

While I would be, let's say more informed and less reactionary, about the West.. you're not all that far from the truth. Problem is, Xi is making some of those same mistakes...

[late]

@late

Damn, I thought my reply was short enough.

Yeah, but yours was better.

[Crantag]

What you need to know is that omni-competent autocrats are one in a million, and Xi isn't one of them.

China has had the benefit of being a young economy, we also had double digit growth a hundred years ago. The transition to a mature economy is like the transition to adolescence, awkward and painful. China is no different.

While I would be, let's say more informed and less reactionary, about the West.. you're not all that far from the truth. Problem is, Xi is making some of those same mistakes...

Wishful thinking.

You know the saying. Hope in one hand, shit in the other, and see which fills up first.

No matter, the following is a genuine question and not posed as loaded.

What mistakes specifically is Xi making?

Curious to know if you have an answer or not.

[Igor Antunov]

What you need to know is that omni-competent autocrats are one in a million, and Xi isn't one of them.

China has had the benefit of being a young economy, we also had double digit growth a hundred years ago. The transition to a mature economy is like the transition to adolescence, awkward and painful. China is no different.

While I would be, let's say more informed and less reactionary, about the West.. you're not all that far from the truth. Problem is, Xi is making some of those same mistakes...

Xi has so many policy victories under his belt I don't know where to start, perhaps I'll mention some very broad ones encompassing multiple areas, eg his reaction to US trade war on China (the war has benefited China-surplus is at record highs, trade volume with europe and africa has grown 20%), his covid response, his aggressive push investing and forging trade links abroad as part of belt and road has led to china dominating world trade and garnering so many new allies (he poached core US allies into his global development bank), and his aggressive anti poverty measures have led to the eradication of extreme poverty in thousands of china's remote villages. His fintech regulatory push has wrestled monetary control and thus political control away from giant corporates back to the Chinese state, rapid construction of satellite cities to take pressure of housing prices in big cities; his intense overall infrastructure development at home is the envy of the planet, etc.

I'm struggling to think of any notable policy failures...

[Russianbear]

He is indeed telling the truth, but those who refuse to listen to this will one day remember.
World hegemony rots from within and creates desolation all over the world.
The signs are all there. The fall of an empire is happening in front of our eyes.

[Russianbear]

[Russianbear]

[Patrickov]

Yeah, but yours was better.

Probably the biggest honor I have been bestowed this year. Thank you.

[late]

Curious to know if you have an answer or not.

It's a good question, one I have been trying to wrap my head around, for some time.

While China has backed away from the command economy (that brought down the USSR); they still have too much involvement in the economy. Their real estate bubble is a good example of that. They didn't want a free economy, so they manipulated real estate investment to fill the gap. One of the things you see in any developed economy is they have problems caused by their success. In China, real estate investment is not real. Which is ironic, the government dumps billions each year to cover the losses. The result is construction is often shoddy. But the big problem is that when China lets the bubble pop, the single largest investment sector will go poof, wiping out the most common investment the Chinese have. That could easily become a economic depression...

China built a massive water project from the north to the south. Which is great, such things are common. But they need dozens more, and that isn't happening. The shortage is extreme in some cities, and getting worse.

Xi has been so aggressive other countries are banding together. In the recent Freedom of the Seas event, only the USA got publicity, but there were about a dozen other countries involved.
The game of Go is to China what baseball is to America: huge. There is an old Go proverb: "Rich men don't pick fights." Strong countries don't need to keep a boot on their own people. Repression is a sign of weakness, not strength. China is building their military, I don't have a problem with that. But they keep importing more and more food, and their economy depends on the global economy. That puts a real limit on Xi's revanchist ambitions.

Despite the success of China, it's in a race to avoid collapse.
From where I sit, it's losing that race. Yes, it's strong, for now.

[AFAIK]

China faces major challenges. Water shortages and real estate bubbles are familiar phenomena. I think her biggest challenge is demographics. Her's will be the first society to grow old before it grows rich, which is unprecedented.

There are major imbalances in China but it is also capable of making rapid maneuvers that would tear other societies apart- the response to covid is a good example.

[late]

China faces major challenges. Water shortages and real estate bubbles are familiar phenomena. I think her biggest challenge is demographics. Her's will be the first society to grow old before it grows rich, which is unprecedented.

There are major imbalances in China but it is also capable of making rapid maneuvers that would tear other societies apart- the response to covid is a good example.

Good post.

I disagree, of course, but you make a good point.

[JohnRawls]

China faces major challenges. Water shortages and real estate bubbles are familiar phenomena. I think her biggest challenge is demographics. Her's will be the first society to grow old before it grows rich, which is unprecedented.

There are major imbalances in China but it is also capable of making rapid maneuvers that would tear other societies apart- the response to covid is a good example.

China response was hiding the numbers and not reporting so how did you measure the success?

This decade the middle income trap is going to kick in hard. China was already growing 6-7 percent on average which is nothing for GDP per capita nominal of 8k. In absolute terms Europe in US grew 2-3x faster.

It is going to get worse when China will try to transition out of middle income trap. Socially and political problems will take first row.

[AFAIK]

I don't trust their numbers but it's clear that having a full lock down and thorough track and trace systems shut down transmissions in neighbouring countries. I don't trust India's numbers either (due to their inability to keep count). You don't need a bean counter to recognise daily realities and when Chinese streets are full of people living their lives you can draw your own conclusions.

I'm not arguing that it will be easy and I expect the CCP will get it's teeth kicked in. This is a country that recorded 180,000 mass public incidents (strikes, protests, riots) during Hu Jiantao's leadership (they've since stopped counting). The interesting question isn't what will happen to China but what will happen to the CCP.

[JohnRawls]

I don't trust their numbers but it's clear that having a full lock down and thorough track and trace systems shut down transmissions in neighbouring countries. I don't trust India's numbers either (due to their inability to keep count). You don't need a bean counter to recognise daily realities and when Chinese streets are full of people living their lives you can draw your own conclusions.

I'm not arguing that it will be easy and I expect the CCP will get it's teeth kicked in. This is a country that recorded 180,000 mass public incidents (strikes, protests, riots) during Hu Jiantao's leadership (they've since stopped counting). The interesting question isn't what will happen to China but what will happen to the CCP.

As an example I can show you Russia who has the highest per capita excessive deaths in the world because of Covid. This can be counted because they still post data compared to China. Plus the lockdowns semi continue because no people will want to die. Both countries tried to lie about vaccinations. Not good both socially and economically. But I'll do a bigger post after I am back to Estonia. Hard to post from phone.

As for fate of CCP, well yes but realistically there is no answer without things happening.

[AFAIK]

The CCP learnt from the Soviet Union's collapse and made the reforms necessary to avoid that fate. I was hopeful they'd do the same regarding bubbles since Japan is right on their doorstep but they've been kicking that can down the road for years.

I look forward to your future post.