China is emerging superpower with GDP = 70% of USA (130% in PPP), so understanding material underpinnings obv important. Plus, I have long-running interest in China: Studied the language for 2 semesters, read Naughton's book on the Chinese economy at university.
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Incidentally, the one thing I recall from Naughton was incredible inefficiency of Maoist economics: Greater chance of dying on job than getting fired; only country to have *negative* returns on higher education. Makes Gosplan seem like model of technocratic prowess.pic.twitter.com/hgbIIk6n8u
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But back to Kroeber. After Maoism, China followed the East Asian developmental state growth model: Land reform, export manufacturing, and financial repression (adaptation of Listian ideas on protectionism). With two main differences: Many more SOE's - and much more FDI.
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Heavy reliance on FDI - involving penetration of China by American companies - was a political precondition of access to the American market. Ironically, East Asian tigers' position within American alliance structure allowed them to forego that.pic.twitter.com/Y9cTmlXnQW
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While Japan's case is obvious, it's a good observation that the East Asian democratic transitions were to a significant forced by local elites' need to keep the US invested in their security after America's restoration of ties with the PRC. Would they have happened otherwise?pic.twitter.com/zXgAC2LAW7
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China's power system. Policy largely determined by "leading small groups" - ministries don't have much higher, are largely tasked with implementation.pic.twitter.com/HYA1q4rmKA
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While there's much waste and inefficiency in the Chinese economy, it's not currently such a big deal as there is still much room for catch up growth. But will become bigger issue once scope for growth by building another bridge or HSR branch maxes out.pic.twitter.com/Og3TNH03Yc
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Forget Russia's "sale of the century." The single largest transfer of wealth in world history was privatization of urban housing stock controlled by Chinese SOEs beginning in 1998. Furthermore, urban residents enjoy much greater property rights than rural dwellers.pic.twitter.com/ZsUYWzUlNd
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You can view Hong Kong as China's Cyprus - explains why CPC isn't rushing to run them over under tank treads.pic.twitter.com/pXYnXFr1l4
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Huge headline growth rates obscure paucity of successful Chinese brands in auto & even electronics (where large % of production is final stage assembly). Perhaps explains why US may think its not yet too late to sabotage China's ascent up the tech ladder (I'm skeptical).pic.twitter.com/HP18KsNhN8
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Doesn't bode well for China long-term - monthly wages in S. Korea, which has powerhouses like Samsung, are now almost twice higher than in Taiwan (which normie has heard of TSMC? Or of Foxconn in a context other than labor violations?). Ironically, trade war might actually help?pic.twitter.com/fLzNjHfzU1
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Not sure I buy this argument. Japan in mid-1970s was developed country - was ahead of UK in GDP per capita at that point! Meanwhile, brands like Huawei are already becoming better known. I think what was true when he was writing the book in 2014-15 is no longer so.pic.twitter.com/JdHD5kmi5h
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Kroeber rejects arguments that China's currency manipulation (consistently gained world export share regardless of yuan fluctuations) or energy subsidies (prices are higher than in USA itself; comparable to Germany) played significant role in its ascent.
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More from the Annals of Maoist Lunacy! That said, since rural TFRs are higher than urban ones, it got me thinking whether this could've cancelled out losses in actual and potential population from GLP & 1CP. Highly ironic if that's the case.
@Cicerone973?pic.twitter.com/CT56tmSQZ9
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Moreover, even in the freer post-Mao era, CPC has sought to channel rural emigration to small towns over the Tier 1 megalopolises. Small towns have higher TFRs than big cities - another way in which 1CP China was unintentionally pro-natalist?pic.twitter.com/FOcJd9aeuE
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Chinese housing privatization - (valued at $540 billion) --> massive urban vs. rural/migrant inequality. Tier 1 city professionals live on near-US salaries, in 2x cheaper country, with own housing vs. peasants with a shack that they don't even have full property rights over.pic.twitter.com/EDSn7ssl3s
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Kroeber doesn't make the analogy himself, but he confirms China can be viewed as a Leninist-NEPist state - many vigorous small companies, but "commanding heights" remain dominated by SOEs.
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TIL the finer distinctions between keiretsu, chaebols, and these Chinese "business groups."pic.twitter.com/exGsuw6UVw
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While state ownership in Russia is high relative to the West - even once dirigiste France - it's nothing out of the ordinary relative to BRICS, as well as S. Korea (Russia's closest analogue amongst the E. Asian states, as I have argued). China clearly most state-dominated.pic.twitter.com/8IxCtDGWLl
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This is not necessarily bad, as CPC has taken care to induce competition within the state sector. Opposite of Russian experience, where reforms led by US-worshipping market Bolsheviks just led to private monopolists replacing public ones (new class of oligarchs thrown in free).pic.twitter.com/kK01GFxh3e
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Whence thither for SEOs? Probably as before: Regulatory reform to promote greater efficiency, while private sector organically displaces it through winning greater market share over time ("growing out of the plan").pic.twitter.com/OwWlUejwSw
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Despite being a "bureaucratic-authoritarian" state (Kroeber's description), China is also one of the world's most decentralized economies. Ironically, this is a legacy of Maoist-era geostrategic concerns - though today's rationale is more purely political-economic.pic.twitter.com/VX1c5Hm4TJ
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Tax burdens on individuals are very low - as in many post-Commie countries of EE, China finds it easier to levy VAT on thousands of companies than income taxes (just 5% of total revenue) on millions of individuals.
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He also doesn't believe the renminbi will displace the greenback as the world's reserve currency anytime soon - or ever.pic.twitter.com/PGl341B28I
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As with tall claims about China's currency manipulation and supposed debt crises, its environmental problems also need to be kept in perspective.pic.twitter.com/bGmf6IX36N
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We don't actually know China's TFR - the SPFC claims ~1.6 children per woman, the Census hints at ~1.1. Amused to see Kroeber take a stab somewhere in the middle. https://twitter.com/akarlin88/status/1168607513274699777 …pic.twitter.com/wvPpSTjoQg
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China's 2030 will be the RSFSR's 1980 - the point at which urbanization passes 70% and largely maxes out. Another decade, and I suspect we'll see Central Asian Gastarbeiters rerouting to labor-starved Chinese cities (as they already are from Russia to South Korea).pic.twitter.com/FVsSQivGyc
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Life is getting better & happier: Consumer spending increased 7% per year in 19902-2013; buys most cars & sends most tourists since early 2010s; labor conditions better than in comparable income countries; social spending is going up as Hu Jintao rebuilds tattered safety net.pic.twitter.com/ygcbUMR3tJ
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Regional inequality is bad - but rapidly improving.
@egor_prosvirnin's fevered visions of desperate peasant armies from the interior looting the fat cats of the coastal cities unlikely to materialize.pic.twitter.com/dAo0eiTY0J
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