Comment by torginus

People say this, but it’s also not the exact reality. You can verify a lot of things, like import/export data. Basically import stats from one country should match China’s export to that country stat and so on.

People just have trouble understanding the complexity of China, and assume nothing they say can be true. It has a lot of problems, but progress and ability to make money isn’t one.

A bottle of water in the desert and a bottle of water in your fridge don't have the same value.

Much of the difference in the BYD cost is accounted for by a 27% tariff on the cars, transport and increased costs for warranty and compliance certification costs, as well as likely subsidies in the domestic market.

Of those, you’ll see that only transport costs are a function of “capitalism” the rest is government.

Economists account for the divergence you're describing with a concept known as "purchasing power parity", which does indeed result in a 2x adjustment in Chinese wealth. The intuition is that market exchange rates combine a number of things beyond the purchasing power of comparable goods. For example, if you have a 30 year horizon it makes perfect sense to trade 1 car worth of RMB for 0.5 cars worth of GBP: with the GBP, you can buy a government bond at 5.29% instead of 2.26%, and even with no reinvestment you end up with 1.794 cars worth of GBP vs. 1.678 cars worth of RMB.

Thanks for posting this, but if we look at the World Bank's data, we see that outside of Covid, Chinese GDP growth has been in the 5%+ range consistently, something the US hasn't been managed to do even once, and Germany, the economic champion of the EU is in even more dire straits.

As for deflation - why is it bad anyways? We were taught in school the problem is that if I have $1 in the bank and that will buy me a loaf of bread today, but 2 loaves a week from now, I might want to hold on to it, so deflation destroys consumption.

But that makes no sense, because I can buy bonds or stocks from $1, and capitalize on the gains, so I get the same two loaves of bread - the effects are the same, I dont consume today, and I have money for tomorrow.

The difference is I have to trust my money to either a company or the government, and involve a lot of intermediaries and take on risk.

As for your link you posted, I feel like for finance people, a market they cant make money from is indistinguishable from one thats performing poorly, never mind what sort of lifestyle it supports for the everyman.

It seems to me there are two parts to the economy - physical stuff like like buildings, trains, factories, people working etc which you can see if you look around, and the financial side like bank balances, debt which are basically numbers in databases which you can only see on screens and paper.

If the financial side goes wrong the government can kind of fix it overnight but printing/lending money, nationalizing bust banks and so on. But the physical takes a long time - you can't suddenly have a lot of high speed rail or trained engineers overnight - it takes decades.

The Chinese seem to plan ahead on the physical stuff like houses factories universities and don't worry too much about the financial.

The west seems more to worry about regulating the financial side and leave what to build to the market but that seems to have some aspects that can be inefficient.

Not that it's just east - west. The US has built loads of infrastructure at times and socialists have had many screw ups. Still there may be something to be said for having some sort of long term plan on the physical side.

China is probably the among the best countries in the world to handle so-called "demographic collapse". Elders are relatively healthy and multigenerational households more common. Leader in robotics. News flash: you don't need a billion hard-working peasants in 2026 to be productive.

Roujin Z shows Japan saw what's coming over 20y ago, already.

The same can be argued for Russia. Many-- myself included --believe it's the #1 reason Putin decided to invade the Ukraine as its youth are seen by the Kremlin as "Russian enough".