Chinese Economics Thread

[magmunta]

China has 1.4 billion people. If the US hasn't collapsed from a population of 300M, how long will it take China to get there?

what matters is how old the population is. china gets old rapidly; fertility rate is getting close to 1. the number of workforce reduces, while the number of retirees increases. Didn't world bank predict chinese population to be less than that of the usa by 2100? the chinese demographic problem is that the population ages rapidly with fertility rate close to 1.

What hindered? You flatter yourself. China's exports are growing regardless of what those 2

how rapidly exports grow? apparently, not fast enough to generate positive PMI. PMI has been negative for monts in china.

2030's doesn't even make sense;

with fertility around 1 and downward trend continuing, 30s sound logical for the peak. the trend has been that chinese GDP/world_gdp increases, but in the 2030s it will likely decrease. I didnt say china will collapse, I said it will likely peak at that time.

 

[fishrubber99]

how rapidly exports grow? apparently, not fast enough to generate positive PMI. PMI has been negative for monts in china.

I don't think you understand how PMI works, PMI is just a survey of purchasing managers from a select few firms in a particular industry so it's dependent on which firms and which parts of the economy you survey. It doesn't necessarily have a causal link to GDP or export growth. It's also a month-on-month reading, so if they have a very good performance at the start of the year that peters out throughout the rest of the year then it doesn't mean that the year-to-date metrics of export growth or manufacturing value-add growth is impacted the same way. That's why export growth in China has grown 5.2% from January-October despite a year-on-year drop of 1.1% in October.

 

[manqiangrexue]

what matters is how old the population is. china gets old rapidly; fertility rate is getting close to 1. the number of workforce reduces, while the number of retirees increases.

Old way to think about things. Traditionally, workers in their 20's and 30's are the most productive because physical labor was the backbone of the economy. Now, professors/scientists/engineers in thier 50's and 60's are the most productive because the world is increasingly about science and technology.

Didn't world bank predict chinese population to be less than that of the usa by 2100? the chinese demographic problem is that the population ages rapidly with fertility rate close to 1.

1. Who takes 75 year predictions seriously?
2. As we all know, smaller technologically elite populations can be much stronger than larger less advanced populations; China and the US seem to be passing each other very quickly technologically but very slowing in population.
3. America's lead in tech is measured in months and years, not decades. 2100 is way too long for the US to hang onto.
4. What is America's population made of? Is it made of well-to-do scientists and engineers with high fertility or do those people exhibit low fertility with the high fertility rates seen in poor, lower class, crime-laden communities, the exact communities that burden a society and Trump wishes to remove?

how rapidly exports grow?

Read the article.

apparently, not fast enough to generate positive PMI. PMI has been negative for monts in china.

PMI hasn't been negative for months; it is mostly positive this year with negative spots.

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And also, GDP rises strongly, indicating that China is shifting more towards high tech and services rather than bulk manufacturing. That is the mark of a country entering high income.

with fertility around 1 and downward trend continuing, 30s sound logical for the peak.

Just saying it's logical doesn't mean anything. I have shown why it is not logical but you failed to rebut:

"2030's doesn't even make sense; the first generation of low fertility people working thier hardest on thier careers, hyper-accelerating China's development at the expense of children will mostly be in their 40's. These are scientists, not physical laborers; scientists don't peak in their 40's, maybe in their 60's and up to their 80's sometimes. Don't get your hopes up."

the trend has been that chinese GDP/world_gdp increases, but in the 2030s it will likely decrease.

Who said it will decrease? There is faster growth and slower growth in China; this is not Europe where GDP contracts casually.

I didnt say china will collapse, I said it will likely peak at that time.

I know what you said and I said there is no logic except Western wishful thinking to a 2030's peak for China. Reread above.

 

[Wrought]

PMI hasn't been negative for months; it is mostly positive this year with negative spots.

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Don't compare RatingDog (formerly Caixin) PMI with the official index. They are separate measures which are weighted towards smaller private companies vs larger SOE ones, respectively.

 

[In4ser]

what matters is how old the population is. china gets old rapidly; fertility rate is getting close to 1. the number of workforce reduces, while the number of retirees increases. Didn't world bank predict chinese population to be less than that of the usa by 2100? the chinese demographic problem is that the population ages rapidly with fertility rate close to 1.

how rapidly exports grow? apparently, not fast enough to generate positive PMI. PMI has been negative for monts in china.

with fertility around 1 and downward trend continuing, 30s sound logical for the peak. the trend has been that chinese GDP/world_gdp increases, but in the 2030s it will likely decrease. I didnt say china will collapse, I said it will likely peak at that time.

Generally during economic recessions, people tend to be price more conscious so they will gravitate towards getting the best value your money which often is Chinese made goods.

Or for a more personal anecdote, my friend recently got a medium cake from a Korean bakery for Friendsgiving that costed $55 but said he saved money because he didn't pay $70 for a 10" cheese cake from Cheesecake Factory. However for the same price, I bought myself a $20 mandolin slicer and a $35 bathroom de-humidifer from Amazon. Which do you think people will be spending their money on? Affordable goods made in China or expensive foods b/c they require American labor costs. There's a reason why Starbucks, Chipotle and even McDonald's are having financial trouble this past year.

Take away cheap Chinese imports and well there's a reason why Trump backed down. China is EVEN MORE important as a immediate goods provider for domestic manufacturers and is usually the dominant supplier for B2Bs than B2Cs i.e. labels, boxes and tape for warehouses, gloves, syringes and bandages for hospitals and pens, papers and ink for offices. America just cannot quit China even with a trade war and tariffs ongoing.

 

[vincent]

PMI still below 50.

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[horse]

China's technological capabilities will reach the world's highest standards within the next decade. Even under the worst-case scenario of losing its grip on low-to-mid-tier manufacturing, China will still command control over the world's most profitable high-tech industries. Per capita GDP holds limited significance; excessively high per capita GDP provides only marginal boosts to economic growth while incurring additional social costs. What truly matters is technological advancement itself and the redistribution of wealth.

I take a very different view from what you are saying, on two counts basically.

China manufacturing has already arrived. No one is going to beat it for as long as I will be alive. The scale has reduced costs that no one can match, and the technical sophistication cannot be match either for probably 90% of all industries, especially the new frontier industries and weapons. That is why China runs a $1 trillion dollar trade surplus.

Given the nature of the game, which is changing because of China's outsized influence, those profitable high tech industries may not be that profitable anymore! Kind of funny, but China can afford it. They can still build things.

 

[manqiangrexue]

You know, I haven't really looked into the middle income trap thing; I always thought it was a long term problem that China would overcome sometime maybe in the 2030's. I didn't put much stock into it though because obviously Chinese people live in the most modern cities in the world while some countries with "high income" live in broken old dumps in comparison. But @magmunta 's very very stupid post about how hard it would be for China to break out of the middle income trap made me do some research and realize that China's basically months away from doing it if it hasn't been done already! China is the highest country in terms of GNI per capita on the middle-high income list.

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According to this, Palau has a GNI per capita of $14,070 and China is right below it at $13,660 (2024 data) and in between them is the line that separates mid-high to high at $13,935! And China's per capita GNI was $13,390 in 2023, $12,860 in 2022, $11,950 in 2021 and $10,520 in 2020.

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So that basically means that China will have broken out of the middle income trap either already, just pending 2025 data release, or in 2026 at the latest!

And also, that list really does show that GNI per capita doesn't mean anything at all. Palau is above China... People wear grass underwear over there and fish for a living if they're not serving tourists at a resort.

 

[Randomuser]

You know, I haven't really looked into the middle income trap thing; I always thought it was a long term problem that China would overcome sometime maybe in the 2030's. I didn't put much stock into it though because obviously Chinese people live in the most modern cities in the world while some countries with "high income" live in broken old dumps in comparison. But @magmunta 's very very stupid post about how hard it would be for China to break out of the middle income trap made me do some research and realize that China's basically a year away from doing it! China is the highest country in terms of GNI per capita on the middle-high income list.

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According to this, Palau has a GNI per capita of $14,070 and China is right below it at $13,660 (2024 data) and in between them is the line that separates mid-high to high at $13,935! And China's per capita GNI was $13,390 in 2023, $12,860 in 2022, $11,950 in 2021 and $10,520 in 2020.

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So that basically means that China will have broken out of the middle income trap either already, just pending 2025 data release, or in 2026 at the latest!

And also, that list really does show that GNI per capita doesn't mean anything at all. Palau is above China... People wear grass underwear over there and fish for a living if they're not serving tourists at a resort.

When you look at country that can't avoid the middle income trap, you see ones like Brazil, South Africa, Malaysia and Turkey.

I mean straight away we can tell whats the problem. Despite having stuff like resources, they are kinda limited to that and don't really have a large high tech scene or whatever to take them the next level. They dont have very well diversified economies either.

Yet China despite having a similar level of wealth per capita, is now rivaling the US in stuff like AI models, has the world's manufacturing base and is even one of the most updated in terms of automating it. You don't see any of the other countries caught in that trap having anything close.

So its already not a good comparison and is rather lacking in due diligence. I mean every other east asian country managed to make it into high income. Its harder and will take longer since China is so big and has a lot of catchup but there's no structural reason it cannot achieve something like that.

 

[henrik]

When you look at country that can't avoid the middle income trap, you see ones like Brazil, South Africa, Malaysia and Turkey.

I mean straight away we can tell whats the problem. Despite having stuff like resources, they are kinda limited to that and don't really have a large high tech scene or whatever to take them the next level. They dont have very well diversified economies either.

Yet China despite having a similar level of wealth per capita, is now rivaling the US in stuff like AI models, has the world's manufacturing base and is even one of the most updated in terms of automating it. You don't see any of the other countries caught in that trap having anything close.

So its already not a good comparison and is rather lacking in due diligence. I mean every other east asian country managed to make it into high income. Its harder and will take longer since China is so big and has a lot of catchup but there's no structural reason it cannot achieve something like that.

These east Asian countries will soon see their gdp shrink, as China takes over most of their strongest industries. The definition of high income will have to be readjusted.