Chinese Economics Thread

Quickie

Colonel
Anyone here owns Bitcoins? A Chinese version of it is coming soon.

China to issue digital currency "as soon as possible"

Source: Xinhua 2016-01-20 22:11:42
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BEIJING, Jan. 20 (Xinhua) -- China's central bank on Wednesday announced that it will try to issue digital currency "as soon as possible."

A team in the central bank is examining domestic and global experiences. Digital currency costs less in circulation than traditional paper, facilitates trade, boosts transparency, and cuts money laundering and tax evasion, according to the People's Bank of China at a conference on digital currency.

They will improve the central bank's control of currency to better support development, and bolster new financial infrastructure and complete payment systems, it added.

The team was set up in 2014 and has made progress on technology, legal issues, and the impact on financial systems.

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plawolf

Lieutenant General
I think history will remember democracy alongside communism as great ideas that proved disastrous when it was attempted to be implemented on a national scale.

Western countries are rich and powerful in spite of democracy, not because of it. The reason every single western backed attempt to "transplant' democracy elsewhere has failed and always will fail is because democracy is simply too flawed to work.

It is a burden and hinderence western nations can bear, because they are already rich and powerful to start with, but one that almost always cripples developing economies and make the, destined to be victims of the middle income trap.

The problems and shortcomings of democracy are myriad and server, but for the sake of keeping things brief and vaguely on point, the most crutial ones are:
- legalised corrupt at every level of government. Normally businessmen and/or companies handing over obscene amounts of cash to politicians for their support is corruption of the worst kind, but call it campaign contributions and it's suddenly all cosier? Who are we kidding in thinking all that money comes with no strings attached and/or promises made?
- broken and empty election promises are not only not pushed, but is pretty much par for the course. Hard to single out and punish politicians for this when literally every last one of them is guilty of this to some degree.
- evolutionary dead end. Democratic nations cannot and will not change. Any hint of a suggestion that democracy isn't the best thing since baby Jesus is treated like heresy in democratic nations and societies. The concept of democracy has not advanced much since the Greeks first suggested it other than to dilute it. Almost no thought have been applied to post-democracy forms of government.

No government or society is perfect and never will be. The best we can hope to achieve is to do better. Democracy puts a hard brake on any free thought about other forms of governance.

Rather than think about how to make a better system to serve the nation and people better, the best and brightest minds in social sciences in democratic countries instead waste their time and talent look at how to game the system and/or change it to get their guy elected into office.

The question is no longer about how to get the best person for the job, but how to sell somebody as the best person. There is a massive fundemantal difference between those two positions.

It's little wonder that western governments are plagued by inept leaders who make terrible calls, because those guys and gals are far from the best people for the job. Most of them have little to no real world experience with a real job, never mind possess any useful leadership skills like problem solving and management. Hell, listening to the comments and positions of many of them would have most rational people highly sceptical of their general intelligence and even sanity.

As things stand, it is mathematically certain that China will surpass the west economically and socially for one reason and one reason alone - evolution.

China knows it's system isn't perfect, and it's best and brightest minds are devoting considerable time and thought towards how to make things better.

Through nothing more than sheer random chance, they will one day come up with a better system than democracy, while the intellectual class in democracies ridicule and blacklist anyone who dares to even suggest such blasphemy.

While western analysts on,y see differences as a means to try and elevate themselves and their society above China's, all I see are similarities.

For example, how westerners, especially Americans, venerate and attribute all their successes to the gods of democracy, freedom, liberty and the constitution, well that looks very much like how people where crediting the Party for everything good under the sun during the worst days of the cultural revolution to me.

It's exactly the same thing when it comes to management of the economy, only it's the gods of market forces and deregulation and reign supreme in that church.

It is a cosmic irony that the most admirable values and qualities of western societies, that of free and critical thinking, is so systematically and ruthlessly purged and suppressed when it comes of these two areas most crutial to a nation's success and prosperity.

The near instinctive hatred and loathing one inspires in westerners when one dares to criticise democracy or free markets is breathtaking to behold, and is something the best communist brain washers would not even dare dream of achieving.
 

Blitzo

Lieutenant General
Staff member
Super Moderator
Registered Member
My own explanation is this - it is like why people don't upgrade to the latest operating system, a large percentage of people in the world (30%!) are still on Windows XP! :D It is because they are so used to the way it works, and people have refined and became so efficient at operating it, there is little incentive to upgrade to a costly new operating system that may perform worse than Windows XP (Vista remember? Windows 8 remember?). So people stopped upgrading and stucked at the old operating system.

And China is like that for a while.

I strongly disagree with the last sentence - China may have been like that for its existence prior to the mid 19th century, but during most of the 20th century (which was chaos and then initial reform) and the last couple of decades (early 21st century and very late 20th century) the need to innovate and reform has been well accepted by most of the population. Simply knowing that there are better ways of doing things (such as seeing developed countries of the world with high tech industries and efficient methods of production) has been enough to instill the fact in for the majority of the populace.

I think you got this very very wrong. The crucial difference is that China is not a democracy, no matter how you may think Chinese government is "working hard to rid of the inequality" and corruption, it is still not a democracy. Power that are not elected by the people, being centralized to just a few people with no check or balance and no one to question them breeds corruption. It is a reason why there are so many "tigers" (corrupt officials) in China, many stolen billions from the country and moved oversea.

China's current political system breeds people like
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t
here is no way for common people to dispose of a corrupt leader whose power is absolute.

On the other hand, democracy enable the system to have change, a system where people can change the course and direction of the whole country, dispose and prosecute corrupt politicans when courts (appointed by the said politican) can't; and get rid of incompetent public servants.

There will come a time very soon that China will face critical problem it can't solve because the power that be does not want to change, and there is no one who can challenge that.

I have a few issues with what you said.

First of all, it seems to me that you are equating inequality with corruption, which isn't necessarily true. Inequality is the cause of many things, including specific social policies, specific taxation policies, the economic structure of a nation, and yes, government corruption. The point here, is that corruption is only one contributor to inequality.

Second of all, corruption comes in different forms in different types of political systems, where some may be tolerated and some may not. In many liberal democracies corporate lobbying is accepted as a way of life and not considered corruption, whereas in China many forms of such lobbying may be considered corruption. The point here, is that corruption also exists in democratic political systems and it would be naive to believe that if China were democratic then everything would be much better in this regard. Someof the world's most corrupt countries (some of which may also be very unequal) are democratic.

Third of all, you are assuming that a democracy means a government would always be more responsive to its populace than a government which in an autocracy, and that a democratic government will naturally be able to "change" to match the needs of its populace in a more effective way than an autocracy. This is also not necessarily true.


So what do these three points mean in regards to China?

Well point one relates to China in the sense that yes, corruption has definitely been a contributing factor to the current inequality in the country but other policies and the rapid economic growth of the past few decades have enabled corruption to exist. Therefore, I think it is incorrect to assume that simply removing "corruption" (depending on what definition one uses) will somehow make inequality go away.

Point two relates to China in the sense that simply dismissing China's "inability" to truly tackle corruption is false, because corruption is not a dichotomy, rather it is a continuum. Corruption always exists, the question is how much it can be reduced by.

Point three relates to China in the sense that simply assuming that if China were a democracy then inequality would go away is also incorrect, because as I said, some of the most unequal nations on the planet are indeed run by democratic political systems. There is also a question as to how corruption and lobbying, lack of education of a populace, private control of government through media manipulation, and public engagement with politics due to existing social institutions, could hamper the optimal the democratic process which could reduce its responsiveness to what the people may desire.
What plawolf seems to be suggesting in regards to the central government's willingness to tackle inequality is that the central government knows if inequality rises to unacceptably high levels then there will be a risk of significant discontent and thus the government has a strong motivation to expend substantial political capital to do its best to reduce inequality.

Now, I'm not saying that an autocracy is necessarily better or as good as a democracy in responding to certain issues -- far from it.
However, what I am saying is that your broad strokes in using absolutes to describe the ability for China (or any other autocratic or democratic government for a nation) to deal with certain issues is not well reasoned, because you are using words like "can" and "cannot" which suggests a dichotomous ability in achieving something, instead of portraying something in the context of a continuum which would be a far more accurate method of describing it.
For instance, it would be incorrect to say if a government "can" remove inequality, it is about "how much" can a government reduce inequality by.
In the same way, it would be incorrect to say if a government "can" remove to corruption, it is about "how much" can a government reduce corruption by.

Finally, you ultimately seem to be implying the government would be unable to reduce inequality, corruption, or respond to people's needs to such a degree that would present a threat to the population's acceptance of the government, and that is something which we simply cannot know.
 

Blitzo

Lieutenant General
Staff member
Super Moderator
Registered Member
I think history will remember democracy alongside communism as great ideas that proved disastrous when it was attempted to be implemented on a national scale.

Western countries are rich and powerful in spite of democracy, not because of it. The reason every single western backed attempt to "transplant' democracy elsewhere has failed and always will fail is because democracy is simply too flawed to work.

-snip-

It is a cosmic irony that the most admirable values and qualities of western societies, that of free and critical thinking, is so systematically and ruthlessly purged and suppressed when it comes of these two areas most crutial to a nation's success and prosperity.

The near instinctive hatred and loathing one inspires in westerners when one dares to criticise democracy or free markets is breathtaking to behold, and is something the best communist brain washers would not even dare dream of achieving.

There are some ideas which you describe that I agree with and some I do not, and some ideas which could use some nuance which may not be true in every circumstance. But overall I think it's best we try to keep the discussion of political systems within the scope of Chinese economics -- such as in regards to economic policies or inequality or what not -- rather than discussing the absolute potential merits of faults of different systems.

To be honest, I think Ultra shouldn't have brought up the issue of political systems in such an inflammatory and bold manner to begin with, but the best we can do is not take the bait and not cause the thread to be shut down again.
 

solarz

Brigadier
Anyone here owns Bitcoins? A Chinese version of it is coming soon.

China to issue digital currency "as soon as possible"

Source: Xinhua 2016-01-20 22:11:42
Please, Log in or Register to view URLs content!




BEIJING, Jan. 20 (Xinhua) -- China's central bank on Wednesday announced that it will try to issue digital currency "as soon as possible."

A team in the central bank is examining domestic and global experiences. Digital currency costs less in circulation than traditional paper, facilitates trade, boosts transparency, and cuts money laundering and tax evasion, according to the People's Bank of China at a conference on digital currency.

They will improve the central bank's control of currency to better support development, and bolster new financial infrastructure and complete payment systems, it added.

The team was set up in 2014 and has made progress on technology, legal issues, and the impact on financial systems.

Please, Log in or Register to view URLs content!

Bitcoin is not just "digital" currency, otherwise it's easier to use credit cards.

The point of bitcoin is that it's a decentralized currency. There is no central authority issuing bitcoins, and thus the currency is not subject to manipulation by those in authority.

For any government to issue a "digital currency" automatically means it's nothing like Bitcoin.
 

B.I.B.

Captain
Anyone here owns Bitcoins? A Chinese version of it is coming soon.

China to issue digital currency "as soon as possible"

Source: Xinhua 2016-01-20 22:11:42
Please, Log in or Register to view URLs content!




BEIJING, Jan. 20 (Xinhua) -- China's central bank on Wednesday announced that it will try to issue digital currency "as soon as possible."

A team in the central bank is examining domestic and global experiences. Digital currency costs less in circulation than traditional paper, facilitates trade, boosts transparency, and cuts money laundering and tax evasion, according to the People's Bank of China at a conference on digital currency.

They will improve the central bank's control of currency to better support development, and bolster new financial infrastructure and complete payment systems, it added.

The team was set up in 2014 and has made progress on technology, legal issues, and the impact on financial systems.

Please, Log in or Register to view URLs content!

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The negatives (you need to read the full article to get a more detailed explanation

1. The parameters of the currency could be changed.

2 There could be an attack on the network.
3. Transaction volume moves off the Bitcoin blockchain into side chains or permissioned chains.
4 4. The system does not successfully transition from being subsidized by the block reward to being paid for by transaction fees.

5 5. The Chinese firewall or another Internet issue causes the global Bitcoin network to be split for a few days.

6. The lack of a central authority prevents the protocol from progressing.
7. A competing protocol could overtake it.
8 World events prompt a crackdown.
9 . Government regulations in one part of the world put the whole network at risk.
10 10. People get burned by it as an investment.
 

B.I.B.

Captain
Arguments for bitcoin

1/The supply is fixed.
2/ Assuming Bitcoin is adopted for number of practical applications, the value will rise significantly.
3/More and more people and businesses seem to be using Bitcoin.
4/A higher price could increase transaction volume, which would then further boost the price.
5. Bitcoin has a first-mover advantage among the other digital currencies.
6 So far, the attitude of most government regulation toward digital currencies has been, on the whole, cautiously positive.
7 A comparison to gold suggests Bitcoin could be undervalued.
8 Comparing Bitcoin with a technology company also suggests it could someday be quite valuable.
9 On pure trading metrics alone, it looks like a buy.
10 More investors are taking it seriously and using it as a portfolio diversifier.

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Jeff Head

General
Registered Member
Once again, this thread descends into the political/ideological depths.

Listen, all of this talk about democracy, autocracy, communism, one party rule, etc, are things that are prohibited on SD for one simple reason.

We have people here who live under all of them, and people tend to identify with and support their way of life and what their country does. And they react badly to those who run it down for whatever reason.

So...once again, this thread is closed.

One input...most western nations are not democracies. It is a misnomer and an important mis-characterization. They are representative republics...those can work. True democracies rarely, if ever do.

I will wait a while before opening this thread back up. I will also look at the other economics threads and the moment they head in this path, they too will be closed.

For a little while, take your economic discussions some place else.

At some point we will open this thread (and perhaps others) back up. But only if the members can stay away from such political ramblings and infighting.

DO NOT RESPOND TO THIS MODERATION.
 

Jeff Head

General
Registered Member
Reopened.

This has had to be closed several times because pof politics, flame bait, Chest Thumping, arguments etc.

If it happens again...it will be closed for good.

SD is a military/defense forum. Threads like this are a privilege here. Please, posters, do not abuse that privilege.

THREAD REOPEN[/b[]
 
now I was just curious how the Shanghai Stock Exchange had been doing while this Thread was closed, so I post this chart:
6XfK.jpg

pretty much within 2650-3000 range
 
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