Niall Ferguson’s Chimerica didn’t last long!
In this session, Professor Michael Beckley will provide a compelling analysis of China’s economic slowdown and its far-reaching consequences for global stability. He will explore critical questions, including the severity of China’s economic decline, the potential strategies Beijing might employ in response, and the looming threat of military conflict over Taiwan and the South China Sea.
The Captain
Yes, an excellent and balanced summary of the big picture.
I keep an ear on this guy, althought the titling given his reports are often absurdly hysterical, his data and reporting are superb. He is fluent in Madarin and Cantonese, often translates crux but unreported Chinese scholars and CCP organs, and has correctly called out multiple turnings of policy well before Western commentators.
d fb
None of this is China’s choice.
The US can with mixed results work on the ascent into the position of manufacturing power exporting forces of deflation.
The ascent will happen at the same pace either way.
In that regard the negotiations about to occur are barely necessary.
China is forgoing being the financial power behind supply side economics in the new order. Instead Frankfurt is taking that title.
The UK Labour party is well out ahead in forging the island as a manufacturing power. The US could learn a lot from the UK right now. Instead we risk a lot and possibly bumble the exchange of economic power.
China can not finance a war on Taiwan. Their military budget is at risk. Not the nominal amount but the value of the budget.
BEIJING, March 5 (Reuters) - China will boost its defence spending by 7.2% this year, fuelling a military budget that has more than doubled under President Xi Jinping’s 11 years in office as Beijing hardens its stance on Taiwan, according to official reports on Tuesday.
Google AI result on China’s verging very often on deflation within their economy.
Deflation can negatively impact government budgets in several ways, including:
Deflation can also have a negative impact on the economy as a whole, including:
Deflation is the opposite of inflation, which transfers wealth from savers to borrowers. With deflation, the value of money increases, making it more expensive to service existing debt.
“The threat of China rising”. The wishful thinking that “China is declining”.
Those are two story lines commonly adopted by western think tanks at more or less different times.
China has been declining for almost 2 decades some say. Others say since 2012 or 2017, and some others more recently. Different stories for different folks but all stories.
The truth is that China has been catching up for several decades, and is continuing to catch up. It will use whatever system it needs to do so.
India and SE Asia will also come to proeminence. Why? Because despite population decline that is affecting the world except Africa, China and India have always been where most people were.
The West had their industrial revolutions first but the rest is (finally) learning and catching up, and they want it back. They want to tell their own stories and write their own histories.
WWI and WWII, and the cold war were western wars, and western narratives. The rest wants to make their own, and to stop playing indians in a Hollywood cowboy movie.
That will be the future of the world.
tj
That is not how financial events are playing out.
Economic cycles occur, and the GFC was not the end of Capitalism as trumped by some.
But we are in a time of re-assessment. The American Empire is in relative decline but it is hoped that the decline is not going to be as quick as China’s in absolute terms. The believers think they know that since they must be on the right side of western history, or more accurately they think they have the better societal system as far as they know.
tj
Follow the dollars. You need to.
Indeed! Elsewhere I commented, “Evolution tries everything and the kitchen sink. It kills off what does not work.” Not too long ago I found the state of the world terribly depressing. Lately I’m more hopeful but the transition is not going to be easy or peaceful.
My current personal issue is getting the permanent residence permit in Portugal. Their immigration bureaucracy is overwhelmed and it is very difficult to get the required appointment.
The two responses from the AIMA number:
The good news, the 8AM queue at the AIMA office is getting shorter.
The Captain
I was referring to more than just current events in the United States—they are symptomatic of broader trends. From a purely numerical perspective, the U.S. economy is performing quite well, especially in comparison to many other nations. However, the distribution of these economic benefits has been uneven, leaving a significant portion of the population feeling excluded. This disparity has contributed to a pervasive sense of malaise despite the country’s overall economic strength.
We speak of autocracy as an undesirable thing yet we don’t realize that a small group of elites are advising and making the decisions for the US. There is no bakclash as long as the sacred private lives of citizens are going well. It is not hence the reaction.
tj
I realize that. That’s why I wrote
Not too long ago I found the state of the world terribly depressing. Lately I’m more hopeful but the transition is not going to be easy or peaceful.
On the subject of uneven distribution, that is the normal state as dictated by the Pareto or power law distribution. Making everyone average or even near average is a pipe dream but it’s a good dogma for grabbing power in the name of the people. The problem is not the poor at the bottom but the excess of the top that creates the sense of discontent. Keeping up with the Joneses is a bad mantra. I know this will not be a popular view but it is the realistic view. Portugal is supposed to be one of the poor countries of the EU yet it seems to be more peaceful than Germany and France. I saw more beggars and homeless in Madrid and Berlin than in Porto.
The Captain
yes I think the problems in the US is not only economic perceptions (inequality is a problem) but also cultural. There are very different views of how the US should go forward.
Portugal? I heard that was somewhat a popular destination. You want to live retirement there? How do you go about with communicating with the locals? You speak Portuguese or Spanish?
tj
Of course it is. Nobody wants that however. You keep raising this straw man argument. What people want, though, is for the excess not to be excessive. And that is what we have now, an amount of inequity that is not sustainable because the lower-end of the curve simply does not have enough to get by. The general feeling is, and they are not wrong, that the rich simply have too much of the pie. The rich don’t seem to understand this, or they simply don’t care.
She miscalculated being responsible with making promises as targets to get votes. She dropped reaching for targets down the road. She offered all of us very little to keep it honest. But that is not honesty. Demand side econ does offer more over time to those workers who need it.
Great place to retire! Porto’s climate is like San Francisco. Portugal has an alliance with Britain since 1386 and English is a bit of a second language.The announcements on public transport are in both Portuguese and English as are the telephone contact with AIMA. I speak fluent Spanish but Portuguese is quite different. Also the pronunciation is totally different. Walking around in Porto I would hear what sounded like Russian but turned out to be Portuguese. This mystery was solved when I discovered that Portugal (and Galicia) was settled by Visigoths from what is now Poland. Portuguese is hard to learn for Spanish speakers while Spanish is easy to learn for Portuguese speakers. Then there is “Portunhol” a mixture like Spanglish.
I have absolutely no problem reading that but spoken is difficult to understand.
The Captain
Prove me wrong and I’ll change my mind. Calling it straw man argument won’t do the trick.
I was in Silicon Valley from 1985 to 1990 when the first racial quotas were introduced in the name of Civil Rights. I figured it would lead to problems as it has. Bring back meritocracy. The rest of the Americas have gotten over slavery.
The Captain
Não falo mais entendo
Portuguese is a beautiful language: shoe shoe shoe
LanguageSlob
Yes, the very same 10% which sits atop every sector in the entire economy, from finance to the media. If we strip away the cultural / political differences in the top 10%–all the hot-button elephants in the room they’re noisily pointing out to the rest of us–we find a foundation of unanimity / consensus that crosses all cultural-political divides: our wealth should continue increasing because we’re so smart / valuable / worthy, and there is no reason for us to sacrifice our wealth to rebalance extreme wealth inequality.
The top 10% is united by their belief that their rocket-launched wealth is earned and deserved , and the “solution” to extreme wealth inequality is to toss a few crumbs at the 90% who have been bled dry / left behind: a handful of subsidized “affordable housing” units, a tax cut of which 95% of the gains goes to the top 10%, and so on: feel-good virtue-signaling that changes nothing in the financial system that generates extreme wealth inequality.
What would you consider not excessive?
An easy exercise would be to simply fill in numbers for each decile as you would prefer. I’ll start with providing the current deciles as they exist today (well in 2022), and you can change them to what you think would be ideal in your view.
highest - $89,258
8 - 66,565
7 - 54,571
6 - 46,054
5 - 39,054 (median)
4 - 32,768
3 - 26,807
2 - 21,108
lowest - 14,910
Since these are deciles, each one has the same number of people in it, so make sure the numbers you choose add up to the same amount.
Errr, 9 deciles does not a whole make. More to the point, the current distribution is sufficiently extreme that a small number of individuals has greater wealth than a very large chunk of the rest of the population. Ah, I see, I was wondering if those numbers were supposed to be the mean or median for the decile, but actually they are the threshold to get into the next decile. So, the only representation of the top decile is the very smallest number to get in that group with no hint of how high the median is above that, not to mention frequently cited number like top 1% or top 0.1%.
Not to mention this is income when more often the big issue in discrepancy is wealth.
Why would the threshold cutoffs for 10 categories add up to the same number?
A piece I saw floating across the wire today: a town in Italy is offering homes for $1, to USians that want to bail out of Shiny-land. The current Italian government is proto-fascist, so I’m not sure that is a good destination for “liberals” tho.