Chinese Economics Thread

Ultra

Junior Member
The crutial difference between China and the rest of the world is that it is only in China that the central government is actually actively working hard to counter this, whereas in most other major countries, it's quite the opposit, with central government passing laws and taxes that increase the advantages enjoyed by the wealthy and powerful.


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.
 

solarz

Brigadier
What do you mean Chinese are adverse to change ? China has changed more in the past 37 years than any other country in the world or in history.

Some people don't care about facts, they're only interested in ranting about their preconceptions.

People believe what they want to believe, and many westerners want to believe that their culture is superior to the Chinese culture despite China's ascending trend. Thus they choose to believe that China has a copycat economy and bases its technology on IP theft, and exaggerate China's albeit serious social problems into doomsday scenarios.
 
That's a question most sinologists have been asking for a long time - how did China, the world's richest, most innovative, technologically advanced civilization for thousands of years falls so far behind the west?

Why wasn't there a Chinese industrial revolution back then?

One of the most convincing theory I have read so far is the "High-level equilibrium trap" theory:

"The high-level equilibrium trap is a concept developed by environmental historian
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to explain why
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never underwent an indigenous
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, despite its wealth, stability, and high level of scientific achievement. Essentially, he claims that the Chinese pre-industrial economy had reached an equilibrium point where
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were well balanced. Late imperial production methods and trade networks were so efficient and labor was so cheap that investment in capital to improve efficiency would not be profitable.

At the same time, an intellectual
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from
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to
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among the intelligentsia moved the focus of academic inquiry from
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and
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, which were conceived of under Taoism as investigations into the mystical nature of the universe, to studies of
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and
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under Confucianism. According to Elvin, this produced an intellectual climate that was not conducive to technical innovation.


By comparison, the economy of
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at the time of the Industrial Revolution was vastly smaller and less efficient than the late imperial Chinese economy. Labor was comparatively more expensive, and internal trade far less efficient than in China. This produced large imbalances in the forces of
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, leading to economic problems which provided a large financial incentive for the creation of
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and
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advances designed to address them. At the same time, the
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had shifted the focus of academic inquiry towards
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, providing the basis for many technical innovations."



An example he gave was the spinning wheel:

"According to Elvin, Chinese knowledge of
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,
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, and
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in the 14th century was far more advanced than anywhere else in the world. He presents the case study of the
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, a device used to assist in the production of
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from plant
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which increased the efficiency of a worker by orders of magnitude. An automatic, water-powered spinning wheel for
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fiber was described in Chinese scientific manuals by the early 14th century; comparable devices would not be invented in Europe until the 18th century.


Despite providing an enormous gain in worker productivity, the Chinese spinning wheel fell into disuse over the subsequent centuries and was completely unknown by the 17th century, whereas the mechanical automation of spinning in Europe in the 18th century (from manual
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precursors of the 13th century ultimately sourced from Asia Minor) led directly to a process of technical refinement and engineering improvements that resulted in the
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and widespread mechanization of production of goods beyond yarn."



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.

Don't forget that China has the largest population in the world which compounds every problem that has to do with managing and leading a society and country, couple this with nowhere near the most natural resources per capita relative to others. Population size directly makes it more difficult to maintain such basics of a social contract as equality and opportunity, in addition to simple subsistence. I disagree with the PRC's population control policies but they correctly identified the single basic factor that complicates China's development the most and did something directly about it. Many of China's societal traits limiting growth and development are side effects of behavior instituted over the course of history to compensate for the negative effects of overpopulation mostly without directly addressing the issue. No simple single silver bullet will solve the problem including capitalism or democracy which have their own side effects to be compounded by overpopulation.
 

Hendrik_2000

Lieutenant General
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
Please, Log in or Register to view URLs content!
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 guess you are reading too much of western press that find every fault in PRC attributed to lack of democrazy

Well a cursory look of the list most corrupt country in the world show most of them too be nominal democracy.
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Any country in the stage of economic development like China, will experience corruption to some degree. That is why they call developing and NOT developed country

When money slosh around and the law and norm,regulation is not yet established, you will always have people who take advantage of it

But having said that compare to other country, at least in China school teacher is come to teach, bus and train run on time and thing get build and the income growing year by year.So far from desperation and need for regime change.In fact survey after survey show people support the way they run the government

Corruption and pollution will normally abated as the country developed the norm,regulation and people are better educated. And has legitimate way to prosper . It always been the case thru history.

I guess you never read about robber baron period of even the US economic development. Google Mellon, Carnegie,
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Last edited:

AndrewS

Brigadier
Registered Member
@ Ultra

Yes, China's long-term competitor is the USA.

But Korea and Japan are benchmarks as they have become wealthy high-tech nations - despite these countries being less innovative than China which has a far higher tolerance for change and risk-taking, along with more innate diversity and internal competition.

Also remember that China has a population and therefore talent pool some 4x larger than the USA.
So each society only needs to produce one Steve Jobs or Elon Musk to change the entire country.
 

solarz

Brigadier
I guess you are reading too much of western press that find every fault in PRC attributed to lack of democrazy

Well a cursory look of the list most corrupt country in the world show most of them too be nominal democracy.
Please, Log in or Register to view URLs content!

Any country in the stage of economic development like China, will experience corruption to some degree. That is why they call developing and NOT developed country

When money slosh around and the law and norm,regulation is not yet established, you will always have people who take advantage of it

But having said that compare to other country, at least in China school teacher is come to teach, bus and train run on time and thing get build and the income growing year by year.So far from desperation and need for regime change.In fact survey after survey show people support the way they run the government

Corruption and pollution will normally abated as the country developed the norm,regulation and people are better educated. And has legitimate way to prosper . It always been the case thru history.

I guess you never read about robber baron period of even the US economic development. Google Mellon, Carnegie,
Please, Log in or Register to view URLs content!

The fact is, no one really understands how a country's economy works. Plenty of people *claim* to understand it, right before asking you to hand them your money.

It's like Deng Xiaoping wisely said, we are all trying to cross a river by feeling the stones. As such, we keep seeing similar patterns develop, even if we really don't want the negative consequences to happen.

For example, nobody want pollution, but how do you jump start a manufacturing economy without building and operating factories? And if you don't start with a manufcaturing economy, where do you get the money to build a service economy?
 

Blackstone

Brigadier
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.
Well said, and supportable by facts and not just opinions.


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.

Wrong. Philippines has a classical form of corruption where officials and elites take or demand bribes for actions, even if the actions go against the nation’s interests. Examples are public projects designed to fail, with officials and elites pocketing money while the public foot the debt.

China’s corruption, on the other hand, is overwhelmingly graft. It means Communist officials (what other kind of officials are there in China, hum…?) take tips/gifts/bribes to do their job. Wealth is transferred from the public to the plutocrats and economic rent seekers, but the city/province/nation get completed projects that are in line with what the nation needs. Examples are good schools, roads, rails, airports, harbors, condos, shopping centers, business districts, and so on.


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.

Empirical evidence show the world’s most economically successful nations (US, Japan, ROK, EU, UK, Canada, Australia…) completed or very close to completing their national development (economic, education, fair social/economic access for women and minorities) before embarking on full democracy (i.e., universal suffrage with open, multiparty elections). It’s a proven formula for success.

On the other hand, nations that democratized or attempted democracy before completing their national development are all basket cases. Examples are India, Philippines, Mexico, Iraq, Egypt, Afghanistan, Republic of China from 1912-1949, Ukraine, and many more.


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.

It’s my firm believe China will democratize some day, but it will be democracy with Chinese characteristics. It means “liberal democracy” is out; it wouldn’t work for China, and frankly, it isn’t clear if it works for the West either.

I see China transforming to some kind of democratic-meritocracy in about 50 years or so. It will still be an empire in that Taiwan, Tibet, and Xinjiang can never leave. Democratic China will have a strong presidency (kind of like King Obama) and some degree of autocracy. It will also have an elected legislature that presides over a mostly independent judiciary. By mostly independent, I mean the legislature can overturn court rulings on super majority vote, just like the way Canada does.
 

solarz

Brigadier
@ Ultra

Yes, China's long-term competitor is the USA.

But Korea and Japan are benchmarks as they have become wealthy high-tech nations - despite these countries being less innovative than China which has a far higher tolerance for change and risk-taking, along with more innate diversity and internal competition.

Also remember that China has a population and therefore talent pool some 4x larger than the USA.
So each society only needs to produce one Steve Jobs or Elon Musk to change the entire country.

The individual is highly overrated.

Steve Jobs would never have amounted to anything without Steve Wozniak. The iPod, which was the product that jumpstarted Apple's modern success, would never have been as successful without Napster paving the way.

Besides, while Western MSM oohs and ahhs over consumer electronics and twitter, China builds things like the Three Gorges Dam, High Speed Rail, and hundreds of brand new cities.
 

Brumby

Major
I just saw a headline yesterday ... do you have link(s) to article(s) worth reading in the pub in the middle of Europe?

now I glanced at the Shanghai Stock Exchange and to my untrained eye it looks unaffected:
08HSG.jpg

Is it?

(at the time of Brumby's post I quoted
Jan 11, 2016
that Index was also about 3000)
Sorry I am not into economics. I just look at the technical picture. In investing, there is a common phrase "buy the rumour sell the fact" or the reversal i.e. "sell the rumour buy the fact". In other words, the big moves are generally prior to the fact.
 
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