Chinese Economics Thread

Discussion in 'Members' Club Room' started by Norfolk, Jan 10, 2008.

  1. Anlsvrthng
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    Anlsvrthng Junior Member
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    You mean ohm and kirchof works in small city sized distribution network, but it doesn't work in big , like on a GVA country big electrical network?

    So, why the rules followed by USA, Brasil , Hungary , Poland , Kazakhstan, cccp doesn't relevant for China?

    You can argue about that it is not valid for PARTS of China, but why it is not valid fo WHOLE China?
     
  2. manqiangrexue
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    manqiangrexue Senior Member

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    1. Because these aren't rules that anybody follows; it is a chain of events that occurred in a specific time and place. They are not laws dictated by nature; they are reliant on people doing the exact same things under the exact same circumstances to recreate those events. Economics is a pseudo-science; it cannot be treated like calculable physics. Economic assumptions depend on people reacting in the same way they have in the past. Thus, those who are educated in history may learn from these lessons and do things differently to achieve a different outcome.

    2. China's economy, and every economy, is unique. China's economy is oftentimes described as even farther from Western conventional wisdom than thought possible for a powerful economy. When so many factors are different, you cannot point out small similarities and deduce similar outcome. For example, every fighter who went up against Connor MacGregor lost. Then, Nurmagomedov beat him. What is the difference between this man and MacGregor's other opponents? They are all men, similar age, similar weight and height! According to your prediction, he must lose as well. But when they fought, outcome was different, because there are so many variables in one man that it cannot be calculated. An economy is more complicated and made of many more variables than one man.

    3. In economic history, does every country react the same way when faced with these pressures? No! You are selecting the few that fit a specific model, saying that China will go down this path as well. But there are many instances in economic history in which the outcome was not correctly predicted by these theories and these economies took a different path. You cannot discount them. If you wanted to do some study, you can say, "in these past 200 instances in which an economy around the world was subjected to this pressure, 163 of them resulted in this... 24 of them resulted in this... and the other 13 resulted in this... So statistically speaking, China may have an 81.5% of falling into this trap." This is actual work, not you picking some country whose story you like/are familiar with and saying that some small similarity will cause China to go that route as well.

    4. China has already proven time and time again that it can succeed while defying all Western conventional wisdom or "models". The models that you use to predict China already cannot explain how China's economy became so big and powerful or how it grew so fast. According to Western dogma, Chinese technology cannot advance because the people have no freedom of thought. This is all stupidity that China has already defeated and put in the past, and now you wish to use them to predict China's future? You are trying to use tool that was already proven to be broken to do a job.
     
    #9362 manqiangrexue, Oct 10, 2018
    Last edited: Oct 10, 2018
  3. Jura
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  4. Franklin
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    A Chinese phone company headquartered in Shenzhen that only sells in Africa but not a single phone in China itself.

    https://edition.cnn.com/2018/10/10/tech/tecno-phones-africa/index.html
     
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  5. Jura
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    Jura Lieutenant General

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    now I read
    China unveils plan to further tap consumption potential
    Xinhua| 2018-10-11 18:17:55 http://www.xinhuanet.com/english/2018-10/11/c_137525877.htm

     
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  6. AndrewS
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    AndrewS Senior Member
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    On point 3 and 4, even though that study shows the vast majority of countries don't make it past the middle income trap, remember that China's peer group are the East Asian Economic Tigers. The authors of the study certainly didn't do that.

    But if one compares China to these models, China's future looks promising.
     
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  7. Jura
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  8. Anlsvrthng
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    Anlsvrthng Junior Member
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    All "natural law" actually result of repeated observation, and if an observation has the same expected result (by the theory) again and again, then after six sigma confidence it become "natural law".
    But even if there is a new experiment that deliver result NOT predicted by the theory it will not falsify it, but rather restrict it.

    Anyway, the way as the current economic/legal system has been developed used by EVERY Country on earth happened by lot of trial and error experiments in Europe , and actually the successful ones was copied over by the other European countries.

    When the US has been made they just copied over the best parts of economical/legal system from Europe, and China done the same.

    So, by arguing about that the Chinese system is different you making the next mistakes:
    1. The Chinese system wasn't made in China, but it is a copy/past from different countries legal/economics system.
    2. The observations/ developed rules works, otherwise the Chinese economy can not growth using the copied ideas from Europe/USA/Russia.
    3. The rules that made possible for China to growth was copied over from way smaller countries ( example Netherlands) and still works.
    You argue about the non-predictability of the future. It is true on every scale ( example in QM it is not possible to know the outcome of an experiment), but we can make probability sets, sum up to 1. Example Pettis doing it.

    Second, this is the way as the decision makers works. Xi is not more clever than me or you, and has to make decisions considering more variables.
    Means they re absolutely aware of the problems as well, but they try to satisfy lot of high power person in the country to let anything happens.
    And at the same time they doing wack-a-mole , faster and faster as the freedom of movement decrease.

    Sum: IF using general rules based on previous observation by different countries does not works THEN how can Xi , the president of PBC and so on can make decisions? I

    What is in these graphs are not simple "observations", but rather political decisions.
    Every graph in Lithuania, Estonia, Hungary,USA, China or Poland is reflecting POLITICAL decision about how to form the economy , which group of people to prefer and so on.
    Example when it come to make decision in Hungary about that to move the wealth to the workers, OR load them with debt, and keep the wealth in the hand of preferred//politically connected ones guess what was the decisions?

    So, it is not like "whop, I forgot to check the shape of consumer debt to GDP curve", but rather " I had to load up the consumers with debt, or my best friends will loose they wealth".
    It is NOT Chinese made , it is a copy from different places around the world ( mainly from Europe/ USA)
    The original Chinese system was the one abolished around 1900. Since that it is a copy/past to catch up with everyone else.

    And actually the political system of China put higher requirements onto the persons on the top, and by history they are rarely up to the job.
    Check Gorbachev, Stalin and so on.
    The USA political system is robust and has low entropy, the Russian weak and has high entropy -change one person in the system can cause dramatic changes in Russia, in USA it can cause minor changes ( see Trump).

    I mean, example in China the "graphs" showing that the politically connected/wealthy has priority over the everyday person.
    Check the consumption ratio, investment ratio, consumer debt and so on.
    It showing that the increase in consumption doesn't happens BECAUSE of the wealth transfer, but because of debt.
    It means that the wealthy become more wealthy, and the general population become poorer, transfer to the wealthy not only current savings, but future saving as well.

    This is not what the Chinese top leaders wants, but this is the best that they can achieved.

    So, checking the graphs doesn't gives the future, but it showing the current status/direction of the country.

    Like knowing the viscosity over the temperature range of an engine oil will not tell when the time the engine will fail, only the operation conditions when it can fail.
    By mapping out the edge conditions it is possible to asses the probabilities of the future events.

    Example, if the viscosity is low, then we know that the car will be able to work only for a limited time with full power in high temperature environment, before fail. So , the owner has to drive slow , even if he wants to go fast, or risk engine failure.
     
  9. manqiangrexue
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    manqiangrexue Senior Member

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    Whenever you refer to economic principles as "rules" you show again that you don't understand what economics is. "Natural law" cannot be broken. E=MC^2 is a natural law. Every economic principal can be broken, even the most basic supply and demand curve, and usually they are broken as often as they are followed. And also, you are wrong on the experimentation; an experiment that delivers evidence to disprove a theory will completely nullify the theory, NOT simply restrict it, unless by restricting, you mean that a new theory must be made with new caveats. Economics is just theories and predictions. When you use "rule" or "law" to describe them, you disqualify yourself as an economist. For your 3:

    1. The Chinese system is completely unique; parts are taken from China and parts from historical lessons of other countries. Combined, they are not the same as any other country.
    2. This unique system works, but it does not work in the same way as the original components did by themselves.
    3. Once again, the system is a unique and very complex hybrid; it cannot be judged as though it were pure of any part.

    One of the most obvious differences between China's system and that of Western economies is that the government exerts far more control over the economy. This factor, even when taken alone, can defeat economic principles as those principles usually assume a free market economy without strong government manipulation. If you analyze a highly regulated economy by the principles of a free market one, you are bound to make huge mistakes, as you have.
    It is not that historical lessons have no value; it is that they can be used to change the way that things happen this time by avoiding the same mistakes. Therefore, predicting the same outcome when there is an active learning force to avoid it is futile. Just like in the fight as I mentioned, Nurmagamedov watched MacGregor's old fights and didn't use them to predict his own defeat; he used them to make sure he didn't make any of the mistakes that other fighters made so he could beat MacGregor. That's how the CCP makes decisions too.
    And political decisions can be different, same, partly changed or, almost the same but different at a crucial step to reap the rewards while avoiding the shortfalls of the historical cases. Or they can even be exactly the same but achieve different effects because of differences noted in the circumstances between the current vs historical case.All of this, you don't know.
    See response to first paragraph. China's economy copied parts form others and added its unique features so that it it completely unique now.

    That is your interpretation on a small set of data. But is the per capita GDP is rising and the middle class is increasing, that's direct evidence that the quality of life is increasing. Even if the wealth gap rises, as long as the per capita GDP rises as well, it means improvement for everyone, but that the wealthy are improving their businesses even faster. I have never seen any argument by a credible economist that China's standards of living are not rising.

    Yeah no, physics of engines is a hard science; economics is a fickle pseudoscience. As long as you always get those 2 confused, you will always be wrong. So from this post, I can summarize 2 critical misconceptions that you have the completely disqualify you on analyzing the Chinese economy:

    1. You don't understand what economics is; you think it is a hard science with "natural law" and "rules" when it is only theory and observation that is oftentimes broken in real life.
    2. You think that China's economy is a copy of Western economies, therefore they are the same and can be judged by the same principles. This mistake is really very low level; every career economist knows that China's system is unique even if parts of it were taken from other economies. Even if China added nothing, a hybrid of many things cannot be the considered the same as any one, and China did add much of its own derivations into its economy. The high level of control being the most obvious difference, China's economy has already proven itself to defy Western principles through its historical rise and yet you still pretend that these principles apply to China just the same. This is not an intelligent mistake.

    So you don't understand what economics is and you don't understand what the Chinese economy is; how can you use economic principles to analyze the Chinese economy? LOLOL
     
    #9369 manqiangrexue, Oct 12, 2018
    Last edited: Oct 12, 2018
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  10. Anlsvrthng
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    Anlsvrthng Junior Member
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    Can you please point out where I said that the economics laws are like natural laws?
    Further, can you point out when I said that there are real natural laws, and not just simply theories supported by six sigma observational evidence, and generating falsifiable experiments?

    Further, I think it is easy to recognise that it is not possible to collect six sigma evidence for anything that happens in economy on macro level, simply because you can not make experiment that falsify it, and the supporting ones has too small number to give even low sigma values.

    I thought that it is easy to make this connections, but looks like it is not : P

    So, practically you saying that China is an unicorn , born from the dirt of Europe and the hermetic magic of ancients, and because she is an Unicorn the rules that govern other countries are not bonding her : P

    Maybe it an be interesting how the magicians of the CPC made it : P

    Anyway, it is a cargo cult like mentality, making a " magical elder leader" who can solve everything : P



    Alan Greenspan was exactly like this, Gandalf with the Wisdom of Elders, until he supervised the second biggest meltdown of the USA economy in the past hundred years, after spending his life as "economical scientist" in his amber tower, surrounded by his apprentices in the hermetic science : D

    Since no one talk about him like "maestro" or the artist of interest rate : D

    anyway, there are few things that works in the economy like magic :) :
    1. basic accounting . No one can escape it : D. If A+B=C then C-A=B. the consumption vs gdp works exactly like this. Falsify it require fight against few thousand years of basic math.
    2. Politics. The macro economy steered by politics, not made up rules by the Greenspan kinds of paper makers. Reason why we see the explosion of debt of the Chinese households. Falsify it require proving the saint like mentality of politicians/business owners : )

    The leftover of your post has no real analysable text,beyond the rainbow of Unicorn.

    Generally about "natural laws", by the current standing of QE there are only simplified rules / patterns that we can use to predict the outcome of certain experiments/ processes, thank for the very low temperature and gravitational curve of our universe.
    So, if we steering away a bit from this "island of stability" that is our small and narrow universe, the nature become absolutely unpredictable, and the "laws" that govern her become fractal like, practically random functions, with small changes making completely different, unpredictable outcomes.
    Sadly.
    C'mon, there is no "natural law" that describe the motion of 3 object in the gravitational field of each other .
    Or the QM can make good equations for 2d events, the marginal problem is our universe is not flat : P
     
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