China's Economic Rise

Lyth · Post by **Lyth** » Mon, 6. Dec 10, 12:43

Study hard at school, keep your head down, mouth shut, make the right connections and pay your taxes. Pretty much the same working environment as any country in the world except a few that have no place being mentioned in this thread.

I'm neither pro nor anti communist just for the record. Any political/social model can be abused as history has shown, sadly communism has brought out some real nut jobs so had you used North Korea as an example for your argument I'd have agreed completely, that is everything that is horrifically wrong with core communism when it allows such blatant abuse after the populace willingly hands over their rights for the greater good.

...and China is not North Korea by any run of the imagination.

amtct · Post by **amtct** » Mon, 6. Dec 10, 12:47

I've tried to avoid posts like "I'd love to live in NK" because I don't want to read that .I know one thing about internet and that is : If you show a flower to 100 people ,90 of them will say its nice , 9 will say its ugly and 1 will say he owns that flower

X2-Eliah wrote:Read this line: "If you even dare to imply that we are communistic because of what the average person gets, I'll have full grounds to claim you know nearly nothing on the subject. "

Now, let me say it in another way:

"If you consider a country communistic just because it's workers get extremely low wages, then you have a very skewed idea of what communism itself is."

Better? I did get rather personal in that post, so the intention might have gone awol. But don't assume that you're the only one with a personal communistic experience here, and that it somehow makes you more qualified to tell what communism (or, in fact, nor communism) is or isn't.

You talk about the drawbacks of capitalism and inflation not the people's economy .
The wonders of internet.... now everyone lives in the soviet Russia

Lyth · Post by **Lyth** » Mon, 6. Dec 10, 12:53

I wouldn't want to live in China either but not for economic reasons.
Comparing European or Chinese or North Korean Communism is something you should do carefully and not with a big brush.

p.s. Is the flower tax deductable?

Getting back on point, to OP - check out the Texan/Chinese business models for good practical info.

Dragoongfa · Post by **Dragoongfa** » Mon, 6. Dec 10, 13:04

@ Silenced

Lets compare with Greece for a minute:

Energy Sector: 1 company which state owned (it has private shareholders but they can't do shit without an ok from the government).

The electricity bill comes once every two months, average cost for a 4 person family: 250 euros, that's 125 euros per month.

The electricity union is what keeps things as they are, they have ridiculously high wages and they DO NOT want any form of privatization, EU/IMF demands privatization for the bailout (Which as a Greek without a stake into the electricity company I thing that it is a good thing).

Most of the Successful supermarkets here are German or French, Media Market, Lidl and Carrefour being the most prominent ones, hell most of the stuff we buy is German (cheaper and better too WTF?), this has forced prices down by their Greek competitors.

Deutche Telekom: Actually things went better when Deutche Telekom became the prime stock holder of OTE (Greek Telekoms, OTE is also the prime stockholder of the Bulgarian and Romanian Telecoms), prices are stable and quality has gone up; the competitors are marginalized due to superior quality of service with decent prices.

I don't know anything about a Milk cartel legalization by the brussels but we had a milk Cartel here, the government found out about it (or they didn't get their cut), fined them and nothing changed.

In short: WTH are you talking about? The only 'good' corporations in Greece are German owned

You pain quite a grimm prospect of the EU (which I agree that it has lost its way), the 'plan' that the EU proposed and works for is a mixture of Capitalism and Socialism, combine the two while trying to keep the negative aspects out.

Economics is an imprecise and quite anomalous science, cartels and monopolies are illegal because they destroy growth but even in a free market monopolies are rare; the only true monopoly nowadays would be with Microsoft but they are about to lose it. The reason is that in order for someone to establish a monopoly he must have a ridiculous advantage over his competitors, which is extremely rare.

France and Spain are not as protective as China, they don't even come close; Chinese protectionism goes beyond legal means and it goes well into the political and corruption arenas. It is quite normal for governments of any country to oversee the selling of a big corporation to a foreign one, in order to at least appease the public opinion.

For your mention of the public services being in public sector hands: In theory it sounds good but in practice...

Suffice to say that 2 billions of the Greek deficit are there because of the national railway service alone. I don't even want to know how much the rest amount to.

In short: I disagree completely

RegisterMe · Post by **RegisterMe** » Mon, 6. Dec 10, 13:57

silenced wrote:The main problem for 'our' part of the world is, we said goodbye to the 'real' industry, the 'producing' one and concentrate more and more on rendering of services while outsourcing the revenue creating industry. All the good old 'made in Germany'....

Just to pick up on this particular point, because it is factually wrong.

The Euro and Germany - http://www.economist.com/node/17632957? ... d=17632957. Check the last paragraph, "an economy overly dependent on exports".

Mittlestand - http://www.economist.com/node/17572160? ... d=17572160. Third last paragraph, "So the Mittlestand is likely to keep powering Germany's export machine for years to come".

German in Europe - http://www.economist.com/node/17493297? ... d=17493297. "Germany’s export-oriented companies have penetrated fast-growing Asia and Latin America. China and Brazil are valued clients of big firms that supply kit for power plants and other infrastructure projects. The wares of Germany’s small and specialist capital-goods makers will remain in heavy demand. Newly rich consumers in emerging markets will covet German-made luxury cars".

I could go on. The short version is that a) Germany is thriving, b) much of this is because of the strength of its exports (it's the third or fourth largest exporter globally, I think being roughly in line with Japan) and c) there are "Made in Germany" stickers and stamps on a massive amount of what constitutes global trade.

If I can find the time I might come back to this thread later....

silenced · Post by **silenced** » Mon, 6. Dec 10, 14:58

Made in Germany ... yes, sure. Made in Vietnam -> sent back to Germany, relabeled & repacked -> Made in Germany, congrats!

And yes, we got a steady growth in Germany, especially the number of people requiring social help from the state is growing, number of immigrants living off social help is growing (while they never paid a cent for), the profits of companies are growing, the number of unemployed people is growing. Of course, we got parts where no growth is too, for example net income -> it's becoming less each year, while the brut income is growing, nice, isn't it, the number of jobs that are paying into the social net is shrinking for example. We got nice stuff like 'Hartz 4' or '1€ jobs', which are used to get people out of the statistic for unemployment. That's why the official number is somewhere ~ 3 million people (7%!), while reality is somewhere close to 8 million. I personally call someone unemployed even if he has a job but is unable to make a living out of that income and requiring help from the state.

We got a nice shine that's surrounding Germany, that's true, but don't look underneath ... really, don't!

RegisterMe · Post by **RegisterMe** » Mon, 6. Dec 10, 23:45

@ the op (sorry, I got sidetracked, I really haven't read much of the thread, I'll go back and do that now).

To what extent has there been a genuine transition from a planned to a market economy in China?

The answer is to some extent.

To what extent will the current rapid growth in the Chinese economy be sustainable in the future?

The answer is to some extent.

OK, on to the proper answers

.

1. At one extreme we have Stalinist Russia with "all means of production in the hands of the people". Only they weren't, they were in the hands of the "state". The direct result of this was the state deciding what to invest in, what to produce, how much of it to produce, where to sell it, and how much to sell it for.

It simply didn't work. Read "Red Plenty" by Francis Spufford for more insight. A wonderful book even if you have no interest in economics

.

At the other extreme we have the USA, with an almost institutionalised abhorence for state directed anything (and for my American friends, even your Democrats are considered quite the free market liberal economists elsewhere in the world).

Less extreme than the USA we have France. A country integrated into the global economy, with several industrial / commercial global super-powers. It truly benefits from said global market based economy. And yet at the same time it insists on nakedly protectionist measures - denoting casinos and yoghurt producers as "strategic industries", resisting foreign takeovers, commanding domestic mergers to create "national champions", preventing the "export of jobs to low cost producing countries" and so on and so fourth.

As France is to the USA, China is, sort of, to Stalinist Russia.

At a micro level it really is a market economy. You can sell your ducks or your labour time for whatever the market can stomach. At least until that market might jeopardise the position of the people who run the state, at which point your prices will be set, who you can sell to will be set and so on and so fourth. At a macro level the state decides what industries will be invested in, and for what reason.

Exporting cheap bras for sale in Algi? Go for your life. At least until it becomes an international trade issue and Europe squares up for a fight, and then whimpers in defeat (the thought is still laughable).

Importing oil and wanting to invest in foreign oil discovery ventures or takeover opportunities? The state will be watching over your shoulder, if it's not actually telling you what to do.

Exporting rare earths (China is the largest producer in the world, and will be for another decade) and your country has a diplomatic spat with a neighbouring country because a fishing boat crashed into a patrol boat (Japan, which has to import them for mobile phones, batteries, laptops and the like) next to some disputed islands? Oh dear, sorry, those rare earths are stuck in a warehouse in Timbuktoo and they'll be held up for some time.....

So what about "Western" companies, and Chinese markets? Well, you're welcome as long as you import technical and / or managerial know-how. You'll be faced with an opaque and corrupt legal system, one that doesn't pay enough respect to intellectual or property rights, and from which you may find it difficult to retain any profits (capital controls).

China is all about control by the state. China is trying to both bootstrap itself, and manage itself, from a pre-industrial Communist starving country with 800 million people to feed to a post-industrial not-Communist country with 1.4 billion people to feed. With the State still in control.

Oh, and most of the "Western" world is up to its neck in debt to you. And, you know, Greece had its time (China was a superpower that Greece didn't know about), Rome had its time (China was a superpower that Rome didn't know about), in fact, anything pre-Ghengis, and China could have whooped their arses. They might even have discovered America before Columbus (or that pesky Scandinavian). The Ottoman Empire had its time. The French had a good crack at it but never really pulled it off. The British did. Both. But they're well past it. And they got us hooked on drugs. And as for those Americans.......

And now you're back.

2. A much more difficult, and much more interesting question. Absent a war and the Chinese state's main interest is the maintenance of the Chinese state (perhaps not, perhaps the "management" of what is now to what might be.... without revolution and bloodshed and starvation. Still, a big ask). To do this they have to ensure continued economic growth.

Over the last decade this has been achieved by massive "privatisations", massive export led growth (but with no appreciation of the Yuan / Renmimbi against the US dollar), significant movement of the population from the countryside to the cities, huge soakup operations for export earnings, limited domestic spending by comparison, lots of bubbles waiting to take off and pop, significant ethnic, regional, international and religious tensions etc etc etc. I've written more in this thread http://forum.egosoft.com/viewtopic.php? ... 555ff8628a.

And you know what? Jump back to my answer to question one for a second. Because it has a huge bearing on question two. I'll say one thing. None of it can work absent the rule of law. If you get there then the law might threaten the power of the state.

That is probably the largest internal tension I can foresee. But China is trying to do something. I talked about domestic investment / spending in the thread I linked above. Twenty out of China's twenty two provinces have provided 20% pay rises to their people this year. The other two have it in planning. That's a domestic spend right there. What they might be able to spend it on though is quite another matter.

Lastly your question cannot be divorced from future diplomatic, military, cultural and environmental considerations. Resources? You want to ignore them? Think oil. Think iron ore. Think Japan. Think World War II.

Just how far into the future do you want to look?

RM

PS. I might speak nonsense, but I like to think I am pretty good at it, send me a copy of whichever project you end up doing, I'd like to have a read

.

silenced · Post by **silenced** » Mon, 6. Dec 10, 23:53

How much did you drink before writing that?

Elucca · Post by **Elucca** » Tue, 7. Dec 10, 00:14

Amtct, could you please stop purposefully missing points? It's impossible to discuss anything with you when you don't even consider what others are saying. You didn't address a single one of my (or others') points, you just keep stubbornly repeating the same things.

amtct · Post by **amtct** » Tue, 7. Dec 10, 00:28

Elucca wrote:Amtct, could you please stop purposefully missing points? It's impossible to discuss anything with you when you don't even consider what others are saying. You didn't address a single one of my (or others') points, you just keep stubbornly repeating the same things.

No I talked with Lyth on the page 2 and 3 and you woke up on page 4

When you say "purposefully" can you proove that.Oh and the answer is no ,I won't stop .

P.S.How many anime fans are here and don't tell those are not made in China

Patholos · Post by **Patholos** » Tue, 7. Dec 10, 19:24

@ Registerme

Very good post and somewhat coincides with my view on China.

The eastern communistic states fell because they strictly adhered to planned economy even when they knew they were outproduced and outcompeted by the west.

China on the other hand have shown to be much more pragmatic, reaping the benefits of the capitalistic system while using the socialistic to surpress any opposition that the State may encounter.

Viewed objectively, China have done a superb job in building its nation.

Viewed subjectively, it's a disaster for the rest of us.

amtct · Post by **amtct** » Tue, 7. Dec 10, 19:30

Patholos wrote: Viewed objectively, China have done a superb job in building its nation.

So you can have a nation without people....mmm,cheap workforce ,poor people but good job with the nation.For my primitive brain that is a paradox.

Warenwolf · Post by **Warenwolf** » Tue, 7. Dec 10, 19:37

Elucca wrote:Amtct, could you please stop purposefully missing points?

He doesn't do it on purpose...

Patholos · Post by **Patholos** » Tue, 7. Dec 10, 19:54

amtct wrote:
Patholos wrote: Viewed objectively, China have done a superb job in building its nation.
So you can have a nation without people....mmm,cheap workforce ,poor people but good job with the nation.For my primitive brain that is a paradox.

Last I checked there was over 1,3 billion people in China.

And good job as in the average citizen are less repressed and more economically off than 20 years ago.

You keep missing the point, China dont do communism like the coldwar era. They've evolved, and the West still twumbles its thumbs and think we can control them since we think they are something they are not.

amtct · Post by **amtct** » Tue, 7. Dec 10, 20:12

Patholos wrote:You keep missing the point, China dont do communism like the coldwar era. They've evolved, and the West still twumbles its thumbs and think we can control them since we think they are something they are not.

Its called money heaven.I think I'll move my business there ...no wait ,I'll move with my family ,but not with the cat

Btw you've missed little Timmy ,so its 1,300,000,001 people

Patholos · Post by **Patholos** » Tue, 7. Dec 10, 21:36

amtct wrote:
Patholos wrote:You keep missing the point, China dont do communism like the coldwar era. They've evolved, and the West still twumbles its thumbs and think we can control them since we think they are something they are not.
Its called money heaven.I think I'll move my business there ...no wait ,I'll move with my family ,but not with the cat

Btw you've missed little Timmy ,so its 1,300,000,001 people

Can I have your cat then?

amtct · Post by **amtct** » Tue, 7. Dec 10, 21:38

Incubi · Post by **Incubi** » Tue, 7. Dec 10, 22:03

Just how is there an economy in a communist country? So are there some people who make more money than other people, and some people who own business and others who work for the business? And if so then those people screaming Down with capitalism, really has a heavy layer of wool thrown over their eyes.

Help me understand this as I am sure it is not that simple.

Oh and with common ownership, does that not indirectly mean the goverment owns everyones house?

Like I said this has allways confused me.

Dragoongfa · Post by **Dragoongfa** » Tue, 7. Dec 10, 22:15

In communism everything is run by the state, schools, markets, industry, farming, even a kid who would sell lemonades would probably have government oversight.

Communist economy is the so called planned economy where everything is being planned ahead by the state.

There is no one who owns a business, there are only 'workers' and communist party members.

Every house is government property, yes.

So yes those people who scream down with capitalism have a wool over their eyes (although they do have a point that certain rules have to be revised).

This is the main reason why true Communism and collective economy will not work, it simply does not take into account the human psyche.

Now China is 'communist' in name but truth be told it is crony capitalism with 'communist' laws that apply only to the ones who don't have connections to the communist party (i.e. the ruling class).

Patholos · Post by **Patholos** » Tue, 7. Dec 10, 22:23

Incubi wrote:Just how is there an economy in a communist country? So are there some people who make more money than other people, and some people who own business and others who work for the business? And if so then those people screaming Down with capitalism, really has a heavy layer of wool thrown over their eyes.

Help me understand this as I am sure it is not that simple.

Oh and with common ownership, does that not indirectly mean the goverment owns everyones house?

Like I said this has allways confused me.

In a truly communist country, there is no private ownership as you dont own your own house, farm, cow or business. All is provided by the state, and you lease it by working for the state.

Put it simply: You get security in form of that the state provides, in return you dont truly own anyhing.

Capitalism is so often misunderstood as democracy, they are not the same. Capitalism is a economic theory while democracy is a political one. Up till 1980's, most people have thought that those go hand in hand, which they dont as capitalism thrives where ever it get good soil.

Now we see more and more bananarepublics and dictatorships making capitalism thrive in their countries, while still retaining strict control over their populace.

I believe that every man is entitled to own what he has produced, bought or laboured for, while the more heavyhanded approaches of the autocratic state seems to provide a stable platform for reforms, IF there's a will behind it.

Those who scream Down with capitalism, are generally people who don't understand economic theory, freedom and the value of owning something (possibly, because they dont own jack squat). In my country, we have such people. They are a bunch of potsmoking, violent leftwingers with nothing better to do than create chaos, promote antisemittism and live off welfare checks.

Let such people live 1 day in their dreamsociety, and they would beg to be back in our countries to be able to mooch of productive citizens.