I have my doubts on both scores. India may have some things going for it, but it is too politically sclerotic and economically dysfunctional to leap forward, in my view. And while it’s possible that China will decline, I think it likely they will not. “Manpower” is becoming less and less important, and “think power” more and more. China is on the second road, while India is on the first.
Absolutely. They screwed up. By frame of reference, where would you put our adventure in Iraq and Afghanistan (and Vietnam), our “houses for strippers” debacle in the 2000’s, our decade long flirtation with Prohibition, the Japanese internment in World War II, the War on Drugs, the refusal to address the financial overlords in 2008, and … well, you get the idea. Anyone can point to failures, even huge failures. Everybody has them. That doesn’t mean that a country can’t still prosper - as we have done.
Why not? There are people alive in China who struggled through a subsistence agrarian economy. I suspect they can have some patience if things slow down.
Now that doesn’t mean I believe China is a lock, either. They have problems, just as we have problems. Youth unemployment, for instance. Increasing resistance to their manufacturing hegemony. Promises not kept to belt-and-road partners. But I don’t see the demographic problem as insurmountable, since up until now “more labor” has been important to “more productivity.” As you yourself champion, intelligence and robotics could make that of diminishing importance. It couldn’t when Japan hit the wall. It could now.
I see China’s problem as the classic problems of single party government: obsolescence of vision, corruption, malfeasance of party members, closed loop thinking, corruption, nepotism in governance, and uhm did I mention corruption?
And here we are kicking off the Low Moronic Period with this dozy.
If we unleash this economy, through tax cuts, deregulation, smart energy policies, and at the same time, bend the curve on mandatory spending by trillions of dollars, that’s more than we’ve ever done to restore the fiscal health of this nation in the history of this nation,
My two cents demographics mean nothing. Yeah, we saw baby boomer sales. The massive Demand Side period last time was more than supplying baby bottles and the first paper diapers. It was heavy industry.
The US is now in the demand side period. China is trying not to be in their supply-side period. Sucks to be them. We have first-hand experience.
Translation: take Trillions away from the vast majority of the US population, and give it to those who already have the most.
Anyone else see a couple clips of Jamie Dimon’s interview? He was asked about why is it the thousand or so Billionairs in the US get richer and richer, while the distance between them and the vast majority of the population grows larger and larger, Dimon talked about poor government and immigrants.
Oh I think it is pretty difficult, particularly for China. To oversimplify I think China has two really big problems. The first is that because of the one child policy, each Chinese worker typically has to take care of two parents who probably retired at 60 and will live to 80. That’s a big drag on the economy that is only going to worsen for the foreseeable future.
No surprise that China is experiencing prolonged deflation when its workers are saving money to support their parents and also worried about their own retirement since a growing number don’t have kids to take care of them.
The second is that when the central government projects future economic growth, that is more a mandate than an aspiration. The local governments do what they must to reach that target, which for the past decade or two is to build roads, housing, and coal plants no one needs. Same with the banks who make whatever loans are necessary to get the required economic activity.
This is why a big chunk of that impressive economic growth over the past 20 years is a mirage. China has far more factories and businesses than is justified by market demand. It’s called a bubble. When that happens in the West, we let the bubble burst to clear out the excess, which means dealing with a recession that returns us to a more sustainable economic footing.
China can’t do this. Xi can’t let that happen. It would be too threatening to the narrative that Xi’s China is superior to the West. Plus I think that bubble is huge and its bursting will be destabilizing. Tough situation.