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  • MrMakabar@slrpnk.nettoMemes@lemmy.mlSchrödinger’s China
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    4 days ago

    China is following the playbook of Japan, South Korea, Taiwan and similar countries. The all used window guidance to quickly grow targeted industries, which actually worked very well. All of them are wealthy countries today. However that dependence on how good the window guidance is. They take on a lot of debt to invest and it only works as long as the investment is actually smart. If not the debt increases and that causes massive problems down the line. So it creates a bubble and when it pops it hurts badly. After decades of growth those bubbles probably are nasty.









  • People are always born with the same age namely 0, but they do not all die at the same age. In fact getting older increases chances of death. Hence 2 babies per mother ends up in a pyramid too.

    Even if you presume people all die at the same age, things will be stable. If say people all get childten at 30 and only work between 30-60 and then all die at 90. If we then assume 1 child per couple and everybody has a child at 30, we would get a stable dependency ratio of 2.5 dependents per worker. Obviously those numbers are not realistic. Btw that also is not a pyramid, but a trapezoid.


  • It is not an inverse pyramid though. The older humans are the more likely they die. So you always and up with a pyramide at the top, at least somewhat. With low birth rates a society has to care for fewer children. That results in an actually fairly stable ratio of working age population to dependents.

    A shrinking population also means build infrastructure is already built. They just have to keep things running.




  • China uses debt differently. Local governments are not allowed to borrow money directly, so they use companies to borrow money for public works. The system is called local government financing vehicle(lgfv). They usually get land, which they sell or lease to get some money or to secure loans. It is usually understood that local governments would bail lgfv out. The issue with lgfv is that they owe more money then the GDP of China and it is secured with mostly real estate, which is somewhat on the edge of crashing. Chinese real estate is crazy overvalued, so popping that bubble can hurt China badly.

    The difference is that China is in a trade war with the US. The US is in a trade war with the rest of the world.