Which type of Hegemony will China follow

[Marcin2 + 725]

 

An interesting observation

Edited May 15, 2020 by Marcin2
typo

[Rob Plant + 2,756]

Marcin thats all well and good but there comes a point when an ageing population just cannot maintain or grow the economy due to the strain the elderly put on the working population

[Marcin2 + 725]

Look up my posts about Japan and Germany, I think automation is the solution.

Edited May 15, 2020 by Marcin2
typo

[Rob Plant + 2,756]

5 minutes ago, Marcin2 said:

There was this futuristic short story by Kurt Vonnegut, about world that cannot find jobs for everyone due to automation.

I tend to agree but surely that makes the whole ageing population issue worse 

I also think its a much easier problem to deal with when the population is 80 million rather than 1.4 billion, i guess we'll find out.

[Marcin2 + 725]

An interesting observation

Edited May 15, 2020 by Marcin2
typo

[Marcin2 + 725]

An interesting observation.

Edited May 15, 2020 by Marcin2
typo

[Rob Plant + 2,756]

8 minutes ago, Marcin2 said:

Actually the larger population is an asset, because every negative tendencies take much longer to develop.

I'm not sure I agree with you in China's case to be honest.

Following on from the 1 child policy from 1979-2015 we are only just starting to see the effects of a massively ageing population. 400 million births were "prevented", a lot of those wouldn't have got to working age yet so the effects arent yet fully realised. The population has still increased by 400 million in that time which means people are living longer than previously as the Chinese come out of poverty into prosperity. I hear what you say about technology etc and this will mitigate some of it, but there will still be an enormous strain on the state to look after their elderly IMO. 

You may be correct in general terms but this 36 year policy may be the biggest problem China has to overcome.

[Marcin2 + 725]

An intesting observation

Edited May 15, 2020 by Marcin2
typo

[Douglas Buckland + 6,308]

Locusts are a direct result of climate change!

Just wait, this will come out eventually...😂

[footeab@yahoo.com + 2,190]

Old people doing nothing are not a burden in an Oligarchy.  The Oligarch power structure does not give a Shit as they can't vote and whatever promises were made previously can be eliminated overnight.  Old people are only a problem in a Democracy. 

Frankly, voting laws need to be changed: If you take more in benefits than you put into the system in a given year, you only get half a vote.  This would stop the pandering to the geriatric society who all vote for their benefits in previous decades, but continually refuse to pay for them.

[Marcin2 + 725]

Geriatriocracy is a problem in modern world, cause people live much longer, new services and products are developed to cater for the needs of this large part of society.

 

Edited May 15, 2020 by Marcin2
typo

[Douglas Buckland + 6,308]

5 hours ago, footeab@yahoo.com said:

Old people doing nothing are not a burden in an Oligarchy.  The Oligarch power structure does not give a Shit as they can't vote and whatever promises were made previously can be eliminated overnight.  Old people are only a problem in a Democracy. 

Frankly, voting laws need to be changed: If you take more in benefits than you put into the system in a given year, you only get half a vote.  This would stop the pandering to the geriatric society who all vote for their benefits in previous decades, but continually refuse to pay for them.

I seriously hope that you remembee this post when you retire and are on a fixed income, after you have paid into the system your entire adult life.

[Rob Plant + 2,756]

6 hours ago, footeab@yahoo.com said:

Old people doing nothing are not a burden in an Oligarchy.  The Oligarch power structure does not give a Shit as they can't vote and whatever promises were made previously can be eliminated overnight.  Old people are only a problem in a Democracy. 

Frankly, voting laws need to be changed: If you take more in benefits than you put into the system in a given year, you only get half a vote.  This would stop the pandering to the geriatric society who all vote for their benefits in previous decades, but continually refuse to pay for them.

Haha lets see how you feel when you are old

Surely the elderly have paid their dues during their working life?

(Sorry I see Douglas has made the exact same point above.)

Edited January 30, 2020 by Rob Plant

[footeab@yahoo.com + 2,190]

8 hours ago, Douglas Buckland said:

I seriously hope that you remembee this post when you retire and are on a fixed income, after you have paid into the system your entire adult life.

They didn't pay is the problem... $22T in debt(its actually closer to $50T)in USA and equivalent in other western countries. 

The Baby Boomers never paid yet expect their benefits.  No, the Generation before the boomers never paid either(but also never truly got the benefits) so if we truly want to blame someone, then the post WWII generation with their utopian glasses screwed the next several generations with their geriatric policies of assuming 100% population growth rate per ~2 or 3 generations. 

 

[footeab@yahoo.com + 2,190]

8 hours ago, Marcin2 said:

yeah, but there are also societal norms, like this filial piety in China. I do not know how modern life style will change this, but the norm is to show respect and provide for their elders, not dump them.

Respect is feeding them and not much else and they are NOT independent.  Western geriatrics demand independence from children and pretend they paid for their pensions... and they get to vote for politicians who will tell them they paid when they clearly did not. 

[Marcin2 + 725]

An interesting observation.

Edited May 15, 2020 by Marcin2
typo

[0R0 + 6,251]

https://threadreaderapp.com/thread/1192735913123762182.html

A thread summarizing ALL of our analysis on #China .

I think this is required as there are still misconceptions what's going on in the world #economy at the moment.

Everything starts with the notion that China (not the #Fed or the #ECB) has been driving the global cycle. 1/

This was revealed to us, when we were making an in-depth analysis on the world economy in early 2017 to understand, why it had recovered with a break-neck speed from the deep slump of 2015.

The 'culprit' for this mystery turned out to be the shadow banks of China. 2/

Their size to GDP three-folded in just one year, meaning that in 2016 China launched what was probably the biggest debt-stimulus operation ever seen.

It was no surprise that the world economy made a miraculous recovery.

But, China had been on a perilous path much longer. 3/

After the 2008 crisis, China had launched a far-reaching stimulus operation that carried the world economy into a recovery.

Whoppingly, China accounted for over 50 percent of all capital investments in major economies between 2009 and 2017. 4/

Moreover, more than 60% of all the new money (debt) created globally had come from China, mostly created by it's commercial banks.

This was naturally totally unsustainable, but more troubles were on the horizon of the "Chinese Miracle". 5/

The massive debt stimulus, enacted mostly through the government own enterprises, was turning growingly unproductive.

In 2011, China slipped into a productivity stagnation from which it has never recovered. 6/

With the help of the major central banks over-resuscitating the global economy, this pushed the whole world economy into a productivity stagnation.

Effectively, the global economy "zombified". 7/

China started to scale back it's lending spree in late summer 2017, which started to slow the global economy.

The tax-breaks of President Trump carried to world economy in 2018, but the engine of global growth (China) was already sputtering. 8/ 

The end of 2018 brought a shock to the world economy.

The decline of global central bank balance sheet had started in August 2018, and two months later the asset markets were in trouble.

The #Fed and the PBoC panicked, and "pivoted" pushing liquidity into the markets. 9/

The Chinese economy was also in serious trouble causing Chinese leaders to panic and issue massive additional stimulus in Q1 2019, including around $320 billion for infrastructure projects, and over $300 billion worth of tax-cuts.

Explained here. 👇10/
gnseconomics.com/en_US/2019/06/… 

Probably due to the approaching 70th anniversary of the People's republic, China, again, enacted massive additional debt stimulus through both the commercial and shadow banking sectors in August and September.

China's "deleveraging-story" was effectively dead. 11/

But, despite of massive debt and fiscal stimulus, China's econ. growth kept on falling. China has, thus, very likely reached "debt saturation", on which we warned in January. 👇

China simply cannot reflate its (or global) economy anymore. 12/
gnseconomics.com/en_US/2019/01/… 

This was recently "confirmed" in a very informative piece on the ability of China to increase debt to create growth. 👇/13
ft.com/content/8cb854… 

Alas, it's useless to think that the #centralbanks, with their additional mon. easing and QE, could turn the global cycle around.

We are currently experiencing a 'bounce' from China's massive early fall stimulus, which is unlikely to continue and/or to be effective. 14/ 

The rather mediocre "stabilization" seen in econ. indicators across the globe is thus a 'red herring'.

Markets will gain a boost from the artificial liquidity central banks are currently conjuring, but the world #economy is still heading down.

Brace.

---------------------------------------------------------------------------------------------------------------------

China has no hope for its current financial structure, and will have to go through a violent economic adjustment. They have collectively (government institutional and household) about 20k Tonnes of gold which is intended to be the foundation for an "emergency" substitute monetary system. That can guarantee them good terms of trade after the collapse. It is also a very hard regime to live with if you don't have substantial competitive advantages. Particularly a large excess food supply and cheap local energy, cheap extensive transportation infrastructure, and naval reach to protect your shipping.  China and Russia together would definitely have most of that but for the infrastructure and the naval reach. But only if Russia takes over Ukraine to provide the excess food. 

 

China's STEM talent, on which so much of your imagined Tech driven Chinese hegemony depends, fetches Western market values at the intermediate and senior levels. With a deep Chinese economic contraction of perhaps over 50% as predicated by their debt structure, many of these will not remain Chinese. China can't "throw" a million people at each problem, at least not these people. Even at 75% juniors and 20% senior, and 5% top talent, that would be $70-80 Billion just in labor costs. They would also need to be diverted from current activities of commercial value. Meaning a cost of ~$150 Billion.

 

Note the decline in Total Factor Productivity (TFP) in China since 2011. If you factor in the increasing overstatement trend in GDP numbers, apparently about 4% overstated in 2018 according to Prof. Xiang, about 2% annually for the rest of the decade then TFP would have been -3.5%/yr on average since 2011, those are crisis levels. 

https://www.scmp.com/economy/china-economy/article/2189052/china-exaggerated-gdp-data-2-percentage-points-least-nine

 

 

 

 

 

 

 

[Enthalpic + 1,496]

On 1/29/2020 at 6:30 AM, Tom Kirkman said:

The new Coronavirus may be a slight hiccup to that supposition.

https://www.biorxiv.org/content/10.1101/2020.01.26.919985v1.full

... To further understand the special population of ACE2-expressing AT2, we performed gene ontology enrichment analysis to study which biological processes are involved with this cell population by comparing them with the AT2 cells not expressing ACE2. Surprisingly, we found that multiple viral process-related GO are significantly over-presented, including “positive regulation of viral process” (P value=0.001), “viral life cycle” (P value=0.005), “virion assembly” (P value=0.03) and “positive regulation of viral genome replication” (P value=0.04). These highly expressed viral process-related genes in ACE2-expressing AT2 include: SLC1A5, CXADR, CAV2, NUP98, CTBP2, GSN,HSPA1B,STOM, RAB1B, HACD3, ITGB6, IST1,NUCKS1,TRIM27, APOE, SMARCB1,UBP1,CHMP1A,NUP160,HSPA8,DAG1,STAU1,ICAM1,CHMP5,D EK, VPS37B, EGFR, CCNK, PPIA, IFITM3, PPIB, TMPRSS2, UBC, LAMP1 and CHMP3. Therefore, it seems that the 2019-nCov has cleverly evolved to hijack this population of AT2 cells for its reproduction and transmission.

We further compared the characteristics of the donors and their ACE2 expressing patterns. No association was detected between the ACE2-expressing cell number and the age or smoking status of donors. Of note, the 2 male donors have a higher ACE2-expressing cell ratio than all other 6 female donors (1.66% vs. 0.41% of all cells, P value=0.07, Mann Whitney Test). In addition, the distribution of ACE2 is also more widespread in male donors than females: at least 5 different types of cells in male lung express this receptor, while only 2~4 types of cells in female lung express the receptor. This result is highly consistent with the epidemic investigation showing that most of the confirmed 2019-nCov infected patients were men (30 vs. 11, by Jan 2, 2020).

We also noticed that the only Asian donor (male) has a much higher ACE2-expressing cell ratio than white and African American donors (2.50% vs. 0.47% of all cells). This might explain the observation that the new Coronavirus pandemic and previous SARS-Cov pandemic are concentrated in the Asian area.

...

Try not to rejoice in their suffering.  If you praise trump for the economic impact China suffers you have completely lost it.

[0R0 + 6,251]

I should add a reference to the China bubble effect in the US, As Prof. Malinen pointed out in my quote of his tweeter thread, the same effect was observed for EMU and the world as a whole. 

 

[Ward Smith + 6,615]

On 1/29/2020 at 7:53 AM, Marcin2 said:

There was this futuristic short story by Kurt Vonnegut, about world that cannot find jobs for everyone due to automation.

Player Piano

[Ward Smith + 6,615]

On 1/29/2020 at 6:31 PM, Douglas Buckland said:

Locusts are a direct result of climate change!

Just wait, this will come out eventually...😂

Not to mention self sustaining because of locust farts

[0R0 + 6,251]

https://www.wsj.com/articles/chinas-funding-of-u-s-researchers-raises-red-flags-11580428915

"by China’s own account. A decade ago the Chinese government pledged to spend what would amount to more than $2 trillion today to reverse a longstanding brain drain to the developed world in a quest to dominate the technologies of the future."

Their program is the result of the CCP's dominance of China. It serves to urge people out of the country. That perennial brain drain has been joined by an entrepreneurial drain and a capital flight. People do not do well in forward thinking creative activity and discovery when they can't discuss facts and social consequences openly.  As soon as China has its financial crisis, the remaining leading entrepreneurs, the top STEM talent and whatever fungible capital is still around, will move from a stream of about 5% of GDP exiting the country, to a torrent. Chinese researchers and tech developers with an alternative option as to where to work and live may well be convinced by the Wuhan virus scare to leave China for their family's physical safety. 

Their ambitious dedication of a potential 15% of GDP going into transferring the leading minds of the world to China is going to be a problem as its non-construction economy has been stagnant so the size of the economy from which that 15% is to be obtained keeps falling against the cost of those highly sought after researchers. But the main point is that they will be diverting more resources to other more immediately necessary expenditures long before they reach their goals.

As the Wuhan coronavirus escape and spread and the inept response shows, the Xi focused hierarchy is incompetent shoddy and oblivious. They are all about face, and little about substance. That does not buy you hegemony, but it can lead you into oblivion. 

[0R0 + 6,251]

I should point out that the Municipal and Prefecture level governments have the tax collecting duty, yet get to keep only 40% of revenue. The rest goes up to the Provincial level and from there to the Central government. The bulk of their operating revenue today comes from land sales to developers. From 10% in 2010 to 70% in 2017 to possibly 75% now as the central government cut income taxes by 30%. As they let loose the shadow banking sector again, I am assuming their expectation is that the revenue deficit at the lower levels of government be filled in by additional land sales to developers funded by fresh lending from the shadow banking sector. As housing prices continue to stagnate or fall and occupancy outside Shanghai and Shenzhen continues dropping, it is not obvious that the scheme would work as it had in 2016-2017. 

 

 

[Ward Smith + 6,615]

1 hour ago, 0R0 said:

https://www.wsj.com/articles/chinas-funding-of-u-s-researchers-raises-red-flags-11580428915

"by China’s own account. A decade ago the Chinese government pledged to spend what would amount to more than $2 trillion today to reverse a longstanding brain drain to the developed world in a quest to dominate the technologies of the future."

Their program is the result of the CCP's dominance of China. It serves to urge people out of the country. That perennial brain drain has been joined by an entrepreneurial drain and a capital flight. People do not do well in forward thinking creative activity and discovery when they can't discuss facts and social consequences openly.  As soon as China has its financial crisis, the remaining leading entrepreneurs, the top STEM talent and whatever fungible capital is still around, will move from a stream of about 5% of GDP exiting the country, to a torrent. Chinese researchers and tech developers with an alternative option as to where to work and live may well be convinced by the Wuhan virus scare to leave China for their family's physical safety. 

Their ambitious dedication of a potential 15% of GDP going into transferring the leading minds of the world to China is going to be a problem as its non-construction economy has been stagnant so the size of the economy from which that 15% is to be obtained keeps falling against the cost of those highly sought after researchers. But the main point is that they will be diverting more resources to other more immediately necessary expenditures long before they reach their goals.

As the Wuhan coronavirus escape and spread and the inept response shows, the Xi focused hierarchy is incompetent shoddy and oblivious. They are all about face, and little about substance. That does not buy you hegemony, but it can lead you into oblivion. 

As usual I'm impressed with your perspicacity. 

Besides the new threat of viral infection, the old business of unbreathable air, questionable food (look up gutter oil sometime) and lax to non-existant food and drug administration in China. 

I "only" know about 2-300 Chinese PhD's personally and virtually all of them have told me the same story. Better opportunity here in the US: better pay, better health, better intellectual property protection, better upward mobility, better freedom. But yeah, Marcin says something different, good on him. 

Meanwhile I'm collecting masks to ship to my PhD in-laws in Silicon Valley, because they're completely sold out there. The Asians are having to buy masks here to ship to their families overseas, because China has none right now. Plus the usual hoarding…

[Marcin2 + 725]

16 hours ago, 0R0 said:

As the Wuhan coronavirus escape and spread and the inept response shows, the Xi focused hierarchy is incompetent shoddy and oblivious. They are all about face, and little about substance. That does not buy you hegemony, but it can lead you into oblivion. 

Most of people are not aware, how lucky we actually are, that it is China that was affected by this tragedy, and not any other of the densely populated Asian countries. (What if it happened in India, Indonesia or Bangladesh)

I have not written at oilprice.com yet about this event but I think I should.

- Gene sequenced the genome and made it public on 10 Jan 2020, about 10 days after outbreak was identified as epidemy on 30-31 December 2019,

- Quarantined 50 million people on 23 Jan 2020,

- Mobilized vast medical, material and economic resources to fight the disease.

- Closed schools, factories, public transportation etc.

Per WHO assessment it was the best and most aggressive counter-reaction to the virus outbreak EVER. It probably saved millions of lives.

The virus outbreak happened at the worst place and the worst time (at top global transportation hub at a time of largest global seasonal holiday travel). The worst scenario possible.

The coincidence of these "worsts" have even caused the rise of many conspiracy theories: United States spread the virus in Wuhan as a bioweapon against Chinese rise (Russian's favourite), Rouge virus escaped from Wuhan lab that worked on bioweapons (all others favourite).

The data we have at present show that virus is very difficult to fight for some human organisms, and at the moment isolation is unfortunately  the only viable solution. The very low numbers of people that recovered (they get all these antiviral medicines, yet they are not helping much) show that individual fight wih the virus is relatively long as for virus infection. It is worse than most flu types.

We are lucky that the virus is not as contagious as typical flu.

Recent data show that we are reaching peak of epidemy intensity. Fortunately everything stayed in a relatively low numbers.

Epidemy of this type is the most dangerous for densely populated, large urban centers, with high people mobility.

That is why Singapore, Hong Kong and Japan (apart from China) are taking so aggressive measures.