China watch
November 21, 2021 8:12 PM   Subscribe

Is China's catch-up growth over? "All things come to an end. Every other spurt of rapid development has eventually slowed to the stately pace of a mature economy. There are basically two reasons this happens. First, as you build more physical capital — more buildings, roads, railways, machine tools, vehicles — the added output of each new piece of capital goes down, while the upkeep costs just keep rising. This is the basis of the famous Solow growth model, and we’ve seen this happen again and again to fast-developing countries. The second reason rapid growth peters out is that it’s easier to copy existing technologies from other countries than to invent new ones yourself." By Noah Smith.

Unfortunately if China faces the prospect of slowing economic growth and thus declining relative power, this may increase the risk of conflict between China and the US. Hal Brands and Michael Beckley, China Is a Declining Power—and That’s the Problem. "The United States needs to prepare for a major war, not because its rival is rising but because of the opposite."
The Thucydides Trap [rising power seeks to displace existing hegemon] doesn’t really explain what caused the Peloponnesian War. It doesn’t capture the dynamics that have often driven revisionist powers — whether Germany in 1914 or Japan in 1941 — to start some of history’s most devastating conflicts. And it doesn’t explain why war is a very real possibility in U.S.-China relations today because it fundamentally misdiagnoses where China now finds itself on its arc of development — the point at which its relative power is peaking and will soon start to fade.

There’s indeed a deadly trap that could ensnare the United States and China. But it’s not the product of a power transition the Thucydidean cliché says it is. It’s best thought of instead as a "peaking power trap."
A closer look at the distribution of power in East Asia, from 1999: The Geography of the Peace, by Robert S. Ross.

Finally, a couple critical assessments of Xi Jinping's leadership. Noah Smith. Perry Link (paywalled, unfortunately).
posted by russilwvong (36 comments total) 18 users marked this as a favorite
 
This idea really struck me on a personal / visceral level when I lived in Korea and (very briefly) visited Japan, and it has been reinforced now having spent a lot of time in China.

So Korea is full of stuff from the 1990s / 2000s, and Japan is full of stuff from the 1970s-80s. Both very "modern" and developed, but Japan for sure had an older feel to it. All that shit is now 40 years old (in Japan) and maybe 25-30 years old (in Korea). Infrastructure needs mainteneance, gets old, crowds out cities and precludes easy installation of new stuff.

China is behind that curve but it has an order of magnitude more new stuff, most of it less than 30 years old, but they also generally build much shittier and do not do proper maintenance. What happens when all that shit starst falling apart, all at once? At least in mature economies the infrastructure is not all running the same counter to obsolescence, stuff is staggerred.

You see it in Central Asia too, but in this case we are all mostly still squatting in ancient Soviet apartments powered by ancient Soviet infrastructure, which is now well past its sell-by date.
posted by Meatbomb at 8:25 PM on November 21 [16 favorites]


*reads article first*

...well, that was evidence-free.

First-up, every nations' economic statistics this year and last are dominated by COVID. You can't say shit about the fundamentals of any economy when we're in the middle of such turbulence.

Second, "we’re seeing China resort to increasingly desperate measures to contain a virus that seems to have evolved past the point of containment." Lol wat? Delta has pushed China from less about ten new cases per day to nearly a hundred. The USA, with a third the population, is at 100,000 new cases per day.

Honestly, I keep talking to American's who are praising New Zealand for kicking COVID's arse (and I'm in NZ). We have a population of 5 million and more new infections right now than China.

Third, ho noes! China's annual economic growth rate may drop from 7% to 5%. That's hardly cause for conflict.

Noah Smith is usually better than this.
posted by happyinmotion at 8:46 PM on November 21 [26 favorites]


China is looking at an extremely rough demographic cliff due to the one-child policy. There’s really no likely way around it.
posted by Slinga at 8:56 PM on November 21 [1 favorite]


I'm not currently so equipped to comment but let me just say, I'm experiencing the sensation of being skeptical of a writeup over an observation i myself share.
posted by cendawanita at 9:00 PM on November 21 [11 favorites]


Bleccch. Another economic assessment based on a few decades. Maybe as I become grey-haired, I appreciate a longer-term view.

Bit of background - the historical record shows that between 1700 and 1800, the population of China roughly doubled from 100m to 200m due to improvements in rice crop production. In 1800 the combined population of Great Britain (England, Wales, Scotland) was 10.5m, less than 6% of China. The industrial revolution came along and the population of Great Britain tripled to 30.5 m in 1901 but China doubled again, so Great Britain was now less than 8% of the Chinese population.

Most of the gold the Spanish looted from South America ended up in China - paying for imported luxuries such as silks, spices, "china", etc. because it was the largest producer of crafted quality goods

After the Roman Empire fractured, China was the largest global economy, and after the first millennium represented probably about a third of the global economy - BECAUSE it was a third of the global population and most of the population were subsistence, with only a few pockets of fabrication expertise, most of which were in China.

Unsurprisingly, as it is still has more than a quarter of the global population, China's economy is going to be the major global economy, until and unless India starts getting some traction.

The article is annoying as it mentions demographics as an afterthought - whereas my assessment would be that demographics are the prime directive of Chinese policy. They look to Japan's offshore economic diversification which has underpinned the domestic economy, and are following the same playbook. If China does not have supportive supply chains in place by 2030, it will be in a dire position, as by then India will be in competition.

Sitting here in Australia - the proverb "when elephants fight, the grass suffers" - feels like the 21st century.
posted by Barbara Spitzer at 10:59 PM on November 21 [14 favorites]


Noah Smith has really jumped the shark. He occasionally has some interesting observations, but said observations are smothered by his deep ignorance of the actual details of anything having to do with China. People I follow who actually are experts in things related to China and Taiwan are constantly dunking on his terrible takes.

That said, I do think China is at an inflection point right now, and that this will define the rest of the century for it. It's unclear how things will go, there are simply too many variables, and the CCP's decision making is too opaque. But the era of easy catch-up is definitely over, and the demographic crisis is very real (I agree with the person above that demographics are the driver of Chinese policy atm).
posted by wooh at 11:04 PM on November 21 [11 favorites]


There is a very real bubble in China that is in the process of popping at the moment. What remains to be seen is whether or not that ends up being a trigger to push China to less explosive growth or whether the former trajectory will reassert itself after a short period of disruption. I think the latter is more likely because there's still a lot of growth to be had in the interior and their road and rail building campaign will enable that increase in economic output in the coming decade or two.

Noah clearly sees things differently, but it's not out of ignorance or stupidity. It's a disagreement about the actual utility of all that newly built infrastructure. It's entirely possible that it won't be the engine of economic growth that it was hoped to be. There have been plenty of places in the rest of the world that looked like prime candidates for growth due to better transportation but ended up fizzling out anyway. We've just mostly forgotten that's a possibility because it all happened over a century ago.
posted by wierdo at 1:11 AM on November 22 [2 favorites]


Noah Smith is usually better than this.

Not really
posted by moorooka at 1:34 AM on November 22 [6 favorites]


This is trash. Pure, unadulterated, racist, warmongering trash.
posted by smithsmith at 2:16 AM on November 22 [8 favorites]


What remains to be seen is whether or not that ends up being a trigger to push China to less explosive growth or whether the former trajectory will reassert itself after a short period of disruption.

And with regards to how it matters to other countries, I'm of the opinion it's too early to establish if we can conclude China's decline in geopolitical influence as it relates to its economic might, is on the cards. And even so, do they care? Receding from the international stage might be something that's welcomed in some circles. But ah, I'm just speculating.
posted by cendawanita at 2:48 AM on November 22


I don't think Xi would let domestic economic issues force any kind of lesser role on the world stage. If anything, I'd expect more belligerence to distract from the domestic issues. What I don't know is how far he is willing to go and whether those with the collective power to constrain his action would limit him further.

For obvious reasons, I don't think anybody is the least bit interested in war, but there does seem to be some appetite for hard talk and these things do sometimes get out of hand. I can only hope that everybody involved can see how destructive that would be for everybody even if it were a relatively minor spot of bother. China and the US are so deeply intertwined economically that significant disruptions will leave us both quite fucked. One thing globalist capital has done quite effectively is create economic MAD between the world's largest economies.
posted by wierdo at 3:32 AM on November 22 [7 favorites]


I'm not currently so equipped to comment but let me just say, I'm experiencing the sensation of being skeptical of a writeup over an observation i myself share.

That's how I felt about the Noah Smith article.

Yes, you would logically expect that growth slows as easy gains from deploying already understood technologies run out but the article itself notes that in GDP terms, China is still well below the level where that is expected. I also get the feeling that he might not be that familiar with China. Maybe that is unfair? He certainly seems to write about it a lot. It would seem strange for this to happen when there are still a very large number of low productivity industrial operations in China which can climb the ladder through partial or full mechanisation.

The demographic aspect is something he's also under-selling a bit. The truth is we just don't know that kind of demographic transition does because it's literally never been seen before at that scale and speed.

The FP article I completely disagree with. It simply is not the case that there is a closing window of opportunity for China to make territorial moves (which in their theory triggers precipitous and unfortunate action on a use it or lose it basis). First, relative to its regional rivals, China's military and naval capabilities have been growing rather than shrinking. It actually is not remotely certain that the US would use military force to defend Taiwan, no other power would do so without Americans doing so first.

Taiwan has extremely challenging domestic politics around defence spending and the role of the military which shouldn't be underestimated.

Since the late 2000s, however, the drivers of China’s rise have either stalled or turned around entirely. For example, China is running out of resources: Water has become scarce, and the country is importing more energy and food than any other nation, having ravaged its own natural resources

This is a strange way of putting it. China is importing energy and food because of a growing population with increased needs and desires, not because they've gone full Spaceballs and eaten all their soil or something. It's a very big country on a map but very large parts of it aren't viable for agriculture.

To make matters worse, China is turning away from the package of policies that promoted rapid growth. Under Xi, Beijing has slid back toward totalitarianism.

Well, that's a matter of opinion. I've seen little evidence that the economic package is that closely related to the social control elements. The policies that promoted rapid growth are still very much there, with a lot of extra (and understandable) caution around real estate.
posted by atrazine at 3:51 AM on November 22 [3 favorites]


atrazine: Yes, you would logically expect that growth slows as easy gains from deploying already understood technologies run out but the article itself notes that in GDP terms, China is still well below the level where that is expected.

There have been a large number of countries which have run out of growth around the point where China is at now, and a small number of countries which have been able to break through to another level.

Here [PDF] is an analysis the Chinese did themselves in 2013 which found that only 13 of 101 middle-income countries in 1960 became rich countries by 2008. (See if you can see any commonalities between most of the countries in their list on the inset on page 12.) Hitting that "middle ceiling" is something they're worried about themselves, and it's something that might conflict with the desire of the Party to maintain control.

It's perfectly possible for a country which isn't rich to become powerful - witness the Soviet Union - but it's hard to tell at this point whether China will become rich and powerful or just powerful.
posted by clawsoon at 5:37 AM on November 22 [6 favorites]


I think someone on Metafilter posted a link to "The forgotten ancestors of East Asian developmentalism" a while back, in which Ernest Ming-Tak Leung traces the influence of Hamiltonian "American School" protectionism and Bismarckian "State Socialism" on the economic and industrial development of China and Japan in the late 19th and 20th centuries. He writes, in closing:
It has often been argued that China, since the reforms of the 1980s, has abandoned revolutionary socialism. There is consequently little consensus as to what China has now really embraced in its place. What the history of planning in the region suggests is that China’s model owes much to this older ideology of State Socialism. Even today, the legacy of State Socialism and the Saint-Simonian spirit can still be felt in the 14th Five Year Plan, now under execution in China, and its “Belt and Road Initiative,” which aims to link up the world with rapid infrastructural development. It is also instructive to note that Japan’s late-1980s economic bubble and the subsequent “lost decades” coincided with the dismantling of economic planning and controls, whilst South Korea after the 1997 financial crisis has strengthened economic controls.
When Noah Smith argues the Chinese system may/will/must fail because its markets/economic policies are not sufficiently "free", I guess from an economic perspective that's axiomatically true, but, as such, also trivial. If you look at how economies actually develop over time, how nations actually develop the infrastructure, industry, and intelligentsia that afford growth, and how they capitalize on it, it seems the answer is never (just) "more market that's more free". That is, unless "free" means "gratis", i.e. ransacking the place.
posted by dmh at 6:50 AM on November 22 [14 favorites]


Would those commenters who are criticizing Noah Smith (I've never heard of him) specifically and the various analyses of China in general, please tell me what sources (preferably free) you think provide quality information on China and the issues raised in this posting? Thanks!
posted by Jackson at 8:01 AM on November 22 [3 favorites]


Is this the "neo-"neoconservatism?
posted by eustatic at 8:04 AM on November 22 [2 favorites]


Lol wat? Delta has pushed China from less about ten new cases per day to nearly a hundred.

The published stats from China are not trustworthy.
Our World in Data does not include China in its statistics. The New York Times, in an extensive review comparing excess deaths to official statistics, did not include China. The Economist, in a similar extensive review comparing excess deaths to official statistics, did not include China.

The closest we have to some true data for China is via The Economist and only for Jan-March 2020 The data suggest that total excess deaths in Wuhan between January 1st 2020 and March 31st 2020 numbered 13,400. That is more than triple the official count, and more than double the estimate in the BMJ paper. There were no excess-death statistics for the period from April 2020 onwards.

The supply chain bottlenecks evident in a number of industries are a good indication that China is still a long way from being back to normal.
posted by Lanark at 8:10 AM on November 22 [1 favorite]


Noah Smith is usually better than this.

Is he, though?
posted by sjswitzer at 8:16 AM on November 22 [1 favorite]


The consent manufacturing machine is phoning it in today lol.
posted by Space Coyote at 9:04 AM on November 22 [5 favorites]


These articles reflect the general failure of pundits to understand that climate change is going to be the dominant problem of the next 100 years. We are entering the era of extreme weather instability drive by AGW. The current pattern of human settlement is built on weather patterns and climates that are no longer stable.

China and US competition for global influence is a sideshow to the main event.
posted by interogative mood at 9:11 AM on November 22 [4 favorites]


When Noah Smith argues the Chinese system may/will/must fail because its markets/economic policies are not sufficiently "free", I guess from an economic perspective that's axiomatically true, but, as such, also trivial. If you look at how economies actually develop over time, how nations actually develop the infrastructure, industry, and intelligentsia that afford growth, and how they capitalize on it, it seems the answer is never (just) "more market that's more free". That is, unless "free" means "gratis", i.e. ransacking the place.

I think relevant as well here is Isabella Weber's recent work about the study of Warsaw pact countries and their economic liberalisation and how Chinese economists in the 1980s studied the lessons from those events (and how everyone studied the end of the Soviet Union). The most fascinating part of that story is that the economic school which lost the argument ended up taking credit for Chinese prosperity anyway because the "winning" school aligned themselves with the student's movement that ended at Tiananmen Square and therefore could hardly be held up in the official histories as having been correct.

Also. something I head from Wolfgang Streeck on a recent podcast which is that people systematically underestimate the role of improvisation and contingency in economic history and post-hoc justify it as ideologically obvious. Everything from early Soviet NEP, to neoliberalism itself, to the end of the neoliberal macro consensus in the last decade or two, really have to be understood not just as ideological projects but as improvisational responses to crises by local or international elites. Similarly, China has approached economic development with much more trial and error than is commonly assumed.
posted by atrazine at 10:18 AM on November 22 [10 favorites]


Kissinger-funded Grand Strategy proponent Hal Brands has opinions on China? Let's all gather round.
posted by aspersioncast at 10:26 AM on November 22 [2 favorites]


Our World in Data does not include China in its statistics.

Yes they do. Here's China vs US for cases, relative to population. Admittedly, China is hard to see on that graph. They look like a flat line on the x-axis coz their cases are so close to zero.

Let's steel-man this argument. Let's say China is flat out lying about cases. Let's say the number of cases in China is a thousand times what they report.

They'd still be doing better than the US.
posted by happyinmotion at 10:54 AM on November 22 [5 favorites]


Try changing the graph to show Excess mortality and China will be greyed out. The number of deaths in China is likely in the millions but without the data we just don't know.
posted by Lanark at 11:16 AM on November 22


The number of deaths in China is likely in the millions but without the data we just don't know.

Millions? If one in every 400 individuals in China had died over the last 20 months above the normal rate, it'd be noticeable. It's an insular society, but it isn't a black box, especially in the urban centers where the highest concentration of mortality would be expected and contact with the outside world is frequent.

Could they be lying about the death figures? Sure. But that only goes so far before it would be impossible to avoid being visible. It's far more reasonable to assume that Covid is, in fact, under control in China, because it is fully capable of using the mechanisms of its totalitarian government to surveil and limit the mobility of its citizens down to a high degree of precision. Which is the exact playbook for how to control a pandemic in the absence of widespread, effective vaccination.
posted by Room 101 at 1:13 PM on November 22 [5 favorites]


If one in every 400 individuals in China had died over the last 20 months above the normal rate, it'd be noticeable.

How noticeable has an excess death rate of 1 in 400 been in the US? Do you think if you were walking down the street in Orlando you'd say to yourself "Boy, this sure looks like a place that's been through lots of excess death!"
posted by GCU Sweet and Full of Grace at 2:06 PM on November 22 [3 favorites]


People living there know and will comment - even in China.

The thing is that China (and Asia in general) were sen sitised about how bad a covid outbreak could be by SARs a decade or so ago. It's why for years whenever you cross an Asian border chances are there's someone at a table with an IR camera scanning everyone as they approach (Hong Kong is a great example, also Taiwan, China).

China has been aggressive about dealing with C19, more so than almost anywhere and it's payed off - more power to them, but they're pretty much closed at the moment. But eventually they'll have to let it in - as we are now in NZ, the result will be a stressful chaotic time - hopefully China can keep a lid on the conspiracy nutjobs
posted by mbo at 3:40 PM on November 22 [3 favorites]


The control of information by the Chinese government with regard to the severity of covid is a sign that the government is operating from a position of strength; not weakness; even if the epidemic is hitting the country harder than public reports suggest so far.
posted by interogative mood at 4:30 PM on November 22 [1 favorite]


Noah Smith is terrible, ignorant, and often outright racist. In this day and age we can read sources from inside China itself, and there's actually quite a lot of debate there.

https://www.readingthechinadream.com
https://dongshengnews.org/en/
posted by indica at 10:49 PM on November 22 [6 favorites]


Honestly, the crackdowns are arbitrary and troubling, but I don't understand how random authoritarianism proves that there's an economic slowdown.

The author's assertion that the Chinese real estate market has been less prone to speculation also just seems...off. While an apartment in my building would sell for almost half a million, it rents for about 800. The rent-to-buy calculation is pretty straightforward! Owning property isn't a financially reasonable decision, it's an investment vehicle.
posted by Trifling at 7:18 AM on November 23


The thing about epidemic spread is that it is exponential if people aren't doing anything about it. Either you have a reproduction rate below 1 in the general population and you have a case rate of pretty near zero, or it is above one and you have a problem that grows with exponential speed and will not stop until people get scared and change their behavior, or the virus starts running out of people to infect. Or a combination of both. There is "under control" and "ongoing mass casualty event" and the in between is entirely in how long it takes you to get the small outbreaks under control.

Now China may or may not be lying about the speed at which it gets things under control and the number of casualties that result, but hiding the results of not having it under control would be a near impossible task relative to, you know, actually controlling the virus.

And nevermind the conspiracy theory fantasy about some massive all-powerful hive mind perfectly controlling people's information regardless of costs and incentives. Real organizations, even oppressive, authoritarian governments, are not monoliths, they are massive bureaucracies. And at the end of the day, policies have to be implemented by local officials on the ground. And I have no trouble believing that a pandemic is the sort of situation that really incentives local officials to be honest.

Because it's not the average corrupt dealing that you can lie about and have no one find out. A fast spreading virus, if you lie about it don't deal with it, very quickly becomes everyone else's problem. And they will very quickly track it back to your local administration. And because you made it their problem, they will not like you. And the Chinese government seems to have a habit of disappearing people it doesn't like.

And back from the derail to the original subject. I can't help but wonder if part of the reason China's leaders are trying to consolidate political control now is because they know that the meteoric growth that has kept unrest low in their country can't last forever. I mean, the Soviet Union started to have troubles in the seventies when the oil crises caused economic growth to dip below 5% for the first time in forever, and my impression is that it never quite recovered from the dissatisfaction that caused.
posted by Zalzidrax at 7:53 AM on November 23 [9 favorites]


The admittedly maybe simplistic understanding I have is that the problem is the way our global economy works is a zero sum game, one nation has to be the top dog and everyone else in service of it. That's why I think statements like China and the US are intertwined omit that they are intertwined by a power relation due to global economic hierarchies. Which is why the nationalistic framing of questions like "Is China/Russia/Japan/etc. in decline" too narrow to capture the post-neoliberal, climate crisis state of technofeudalism of the world (idea in Varoufakis' recent talk, that I thought was interesting).

To paraphrase Chomsky, the moral way to get China to stop its authoritarian behavior is for the corporate-beholden West to stop breathing down its neck. That won't happen, but that is the moral standard by which to measure the actions of the West.
posted by polymodus at 6:26 PM on November 23


Noah Smith's been sliding in to people's DMs and saying the quiet part loud if that's of interest to anyone. A grifter things everyone is playing the same game as them.
posted by Space Coyote at 8:08 PM on November 23 [2 favorites]


Legit i only noticed him opining on china by the twitter responses from ppl i actually respect who'll then notice he's blocked them post-response, heh.
posted by cendawanita at 8:29 PM on November 23 [1 favorite]


The “coming war with China” neocons always manage to avoid really holding up a mirror to the outcomes of their own theories and policy suggestions in the US.
posted by aspersioncast at 6:10 AM on November 24 [1 favorite]


I don't always agree with Winston Sterzel's political opinions, but I do respect the many years of experience working, travelling, and generally grubbing about in China he bases his opinions on. (I was a Bodyguard for a Chinese Serial Rapist, for example, does a good job of showing how the unholy alliance of capitalism, patriarchy, and police corruption is working itself out in China right now.)

Anyway, here's what he has to say. "There is so much good to be experienced in China. The problem is that it's going backwards and it's being held back by this paranoid immature horrid government."
posted by clawsoon at 12:55 PM on November 26


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