Chinese Economics Thread


spring2017

New Member
Registered Member
In the forty plus years of China's reform and opening era, China has withstood four severe system tests, about once a decade, and come out stronger each time:
  1. 1998 - Asia Financial Crisis. Chinese premier Zhu Rongji held the rmb exchange rate steady and launched domestic stimulus program to arrest the slide of the economy and countervail the negative external shocks.
  2. 2008 - Global Financial Crisis. China launched an aggressive economic stimulus program and accelerated the large-scale infrastructure build-out. China became the global growth engine to help support world economy.
  3. 2020 - COVID-19, the pandemic. China controlled the COVID-19 domestically with aggressive measures within a few months and emerged to be the only major economy to have positive economic growth in 2020.
In fact, the most important reason that China can overcome these crisis is its socialist economic system based on public ownership of key industries.

First, public socialist economic system will not degenerate into periodic financial and economic crisis, which are inevitable in capitalist economies. There is true for all socialist economies, for example USSR never had periodic economic crisis, while USA had 15 in the past 100 years (the most recent ones being 2001 and 2008).

Second, public socialist economic system may effectively mobilize resources to overcome the shock of external economic crisis. For example in the 2008 crisis, the U.S. government gave U.S. private banks trillions of dollars, but they refused to lend to support economy fearing bad loans, while the Chinese state owned banks lent trillions of RMB to support the economy. Of course the state owned banks took hit because of bad loans, but the economy was roaring back.

Even in a non-economic crisis such as Covid19, the Chinese SOEs have played critical roles. For example, state construction companies were building the hospitals, a giant warship builder was developing and manufacturing mask making machines, and huge state chemical companies were producing mask materials, and state hospitals sent thousands of medical staffs to Wuhan and Hubei province.

As the capitalist private sector getting bigger in China, China has become more financially and economically unstable. The private sector hospitals were also infamously refused to send doctors to Wuhan during Covid19 emergency last year... The public sector is a foundation for PRC's future development, and that's why weakening Chinese SOEs is a key objective of the trade war.
 

AssassinsMace

Brigadier
I watch those YouTube videos of Chinese cities. I hear people say modern Chinese cities should more be like Japan. When I watch videos of Tokyo of their most famous districts, it seems cramped and not just with people something you expect Chinese cities to be but Chinese cities are grand. There are more open spaces. Still a lot of people but looks more open. I guess buildings in Tokyo look cramped together which gives that feeling. Now tourist attractions in China... that's overly crowded.
 

Hendrik_2000

Brigadier
I watch those YouTube videos of Chinese cities. I hear people say modern Chinese cities should more be like Japan. When I watch videos of Tokyo of their most famous districts, it seems cramped and not just with people something you expect Chinese cities to be but Chinese cities are grand. There are more open spaces. Still a lot of people but looks more open. I guess buildings in Tokyo look cramped together which gives that feeling. Now tourist attractions in China... that's overly crowded.
Correct I am not impress with Japanese cities because the land is so expensive they crowd the cities with building upon building. Green space is rare I guess the land is too valuable for green space. People are always in hurry. They never smile everybody look so serious. I can understand it if you have to commute 1 to 2 hr each way in cramp subway, I will get grumpy too. Even back then coffee is $3 and fruit is so expensive. But the countryside is beautiful. My relative apartment is so cramp and basic yet so expensive. Everybody work their *&^% off 8 pm office light are still on. Definitely not my favorite place.

yes Beijing is grand with broad boulevard, Plaza, a lot of park and historic site, open market. at that time there are still one story dwelling where people mingle on the street . More human I would say
 
Last edited:

horse

Junior Member
Registered Member
In fact, the most important reason that China can overcome these crisis is its socialist economic system based on public ownership of key industries.

First, public socialist economic system will not degenerate into periodic financial and economic crisis, which are inevitable in capitalist economies. There is true for all socialist economies, for example USSR never had periodic economic crisis, while USA had 15 in the past 100 years (the most recent ones being 2001 and 2008).

Second, public socialist economic system may effectively mobilize resources to overcome the shock of external economic crisis. For example in the 2008 crisis, the U.S. government gave U.S. private banks trillions of dollars, but they refused to lend to support economy fearing bad loans, while the Chinese state owned banks lent trillions of RMB to support the economy. Of course the state owned banks took hit because of bad loans, but the economy was roaring back.

Even in a non-economic crisis such as Covid19, the Chinese SOEs have played critical roles. For example, state construction companies were building the hospitals, a giant warship builder was developing and manufacturing mask making machines, and huge state chemical companies were producing mask materials, and state hospitals sent thousands of medical staffs to Wuhan and Hubei province.

As the capitalist private sector getting bigger in China, China has become more financially and economically unstable. The private sector hospitals were also infamously refused to send doctors to Wuhan during Covid19 emergency last year... The public sector is a foundation for PRC's future development, and that's why weakening Chinese SOEs is a key objective of the trade war.
Here is an old article.

Apparently Prof. Hudson advised or still advises the upper management of the CCP. Details are not easy to find.
------------------------------------------

Financial Capitalism v. Industrial Capitalism

By Michael Hudson

Thursday, September 3, 1998

Please, Log in or Register to view URLs content!
 

AssassinsMace

Brigadier
More Western columnist wringing their hands over china's digital currency. The article itself isn't as bad as others I guess


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Yes if you look on the Bloomberg Twitter thread, it's story after story of alarm over China delving into digital currency. Of course everything China does the US is paranoid but for some reason this has gotten a lot of attention. One of the common themes is how countries will be able to bypass US sanctions.
 

B.I.B.

Captain
Here is an old article.

Apparently Prof. Hudson advised or still advises the upper management of the CCP. Details are not easy to find.
------------------------------------------

Financial Capitalism v. Industrial Capitalism

By Michael Hudson

Thursday, September 3, 1998

Please, Log in or Register to view URLs content!
I thought the downfall of the USSR was brought about by an economic crisis..... they were broke.
 

spring2017

New Member
Registered Member
I thought the downfall of the USSR was brought about by an economic crisis..... they were broke.
No, that was a lie manufactured by the capitalists and their professors.

USSR was not broke, nor there was a economic crisis, and its GDP growth was similar to that of the U.S. Until this day, China's GDP per capita still has not surpassed that of the USSR.

The disintegration of USSR was brought about by the sold-out (counter-revolution) of the ruling elites, who wanted to turn themselves to billionaires and presidents by privatizing public properties of USSR.

The consequence for the people , however, was devastating. 10 years after the counter revolution, Russia‘s GDP was only half as before, with male life expectancy 10 years shorter.
 

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