We should be honest that shifting China’s economy away from exports toward consumption may not be a win-win proposition: better for China’s trading partners, perhaps, but for its own people?
Excellent write up. I totally agree on emphasizing the fact that births are now lower than college entrance numbers. This will lead to competition among universities and cities funding universities, because any city without a university will decline as talented youth move out, and any university without enough students will get closed in China.
Just one note: the often repeated claim, China's GDP would be lower than stated, is entirely dependent on what even gets measured in GDP. China still does include less financial "services" into its GDP count than Western countries, nor does it add estimates for black market transactions. On that side GDP would actually be quite a bit higher, if measured the European way.
oh, and one more thing about the "export juggernaut". While indeed, absolute exports are massive, and that is relevant for developing countries, which may have to close their borders like China did before being ready for international competition, from a Chinese longitudinal perspective it's always good to remember, that both exports and imports in percent of GDP have gone down substantially compared to 10-20 years ago. Absolute trade surplus has gone up, but relative trade dependency has been reduced substantially. So, no, China's growth doesn't rely on export
I like this piece and you're making a good, broad point with some interesting (and clever) analysis and comparison. Of course, China's past growth and distribution is no guarantee of the future and there's a credible argument that maintaining China's growth in the future might require turning toward more domestic consumption and services.
On the question of welfare systems and safety nets I was really shocked by a poster I saw recently advertising American social/public benefits including "unemployment insurance, workers compensation, disability....food stamps, low cost or free school meals, home energy assistance...medicaid, at-home care...." This was targeted toward investors interested in EB-5 visas. I'm not actually sure if visa holders are eligible for those benefits, but it was quite striking that that was a big selling point for, presumably, rich Chinese.
That could be saying a lot about the sense of insecurity, even among relatively wealthy Chinese.
Excellent write up. I totally agree on emphasizing the fact that births are now lower than college entrance numbers. This will lead to competition among universities and cities funding universities, because any city without a university will decline as talented youth move out, and any university without enough students will get closed in China.
Just one note: the often repeated claim, China's GDP would be lower than stated, is entirely dependent on what even gets measured in GDP. China still does include less financial "services" into its GDP count than Western countries, nor does it add estimates for black market transactions. On that side GDP would actually be quite a bit higher, if measured the European way.
oh, and one more thing about the "export juggernaut". While indeed, absolute exports are massive, and that is relevant for developing countries, which may have to close their borders like China did before being ready for international competition, from a Chinese longitudinal perspective it's always good to remember, that both exports and imports in percent of GDP have gone down substantially compared to 10-20 years ago. Absolute trade surplus has gone up, but relative trade dependency has been reduced substantially. So, no, China's growth doesn't rely on export
I like this piece and you're making a good, broad point with some interesting (and clever) analysis and comparison. Of course, China's past growth and distribution is no guarantee of the future and there's a credible argument that maintaining China's growth in the future might require turning toward more domestic consumption and services.
On the question of welfare systems and safety nets I was really shocked by a poster I saw recently advertising American social/public benefits including "unemployment insurance, workers compensation, disability....food stamps, low cost or free school meals, home energy assistance...medicaid, at-home care...." This was targeted toward investors interested in EB-5 visas. I'm not actually sure if visa holders are eligible for those benefits, but it was quite striking that that was a big selling point for, presumably, rich Chinese.
That could be saying a lot about the sense of insecurity, even among relatively wealthy Chinese.
See here: https://popular.info/p/trump-labor-secretary-nominee-pitched