| ▲ | bobthepanda 16 hours ago |
| They’re certainly good at building. Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-facto... And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%. |
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| ▲ | jdietrich 12 hours ago | parent | next [-] |
| You are never going to get exactly the right amount of capacity, so the question is whether you want to err on the side of too much or too little. Too little might often be more efficient, but there are undeniable strategic benefits to having too much. The events of the last few years have taught us all some painful lessons about the hidden costs of JIT and lean. China might have got the balance wrong, but they aren't prima facie wrong. |
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| ▲ | refulgentis 9 hours ago | parent [-] | | They are prima facie wrong, their overcapacity is bad and actively harmful, this isn't a sign of it succeeding, its a sign of desperation from it failing. There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago. Dazzled by the spectacle, this misses that their economy is characterized by deflationary headwinds due to a massive, massive over-investment in property, and this just squeezes the toothpaste (debt taken on to goose GDP) to another side of the tube. (housing to batteries) | | |
| ▲ | sangnoir 9 hours ago | parent [-] | | > There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?! There's also a type of western mind that automatically dismisses the odds of a different country succeeding, based on nothing but the fact that they are using a different approach (on the surface). It's a kind if circular reasoning: our system is the best because we're the best, because of the system we have. To subvert the Simpsons - "the best so far" Edit: I'm far from a Sinophile, but there's a certain willful blindness, concerning an almost religious belief that the west will prevail because it's the west, regardless of all the systemic weaknesses that show up again and again. It would suck for a dictator-for-life leading the biggest economy in the world, but healthy minds would introspect to see how we can do better, like we should, right? I have no doubt out leaders will pick the wrong lessons, like social credit scores and pervasive surveillance | | |
| ▲ | mike_hearn 2 hours ago | parent | next [-] | | > Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?! Nowhere because the USA has an excellent internal flight and interstate highway system instead. Railways were already becoming uncompetitive by the 1920s and now live on mostly in parts of the world where they already exist, where land is at a premium. The reason people think China will crash is that their system isn't unique, has been tried many times before and eventually always fails. That isn't circular reasoning, it's reasoning based on prior experience. China is still a communist country: we know how that story ends and why. Remember that for much of the history of the USSR people in the west were dazzled by its rapid industrialization and apparent achievements. First country to put a man in space! Many people in that era genuinely wondered if central planning was just a superior way to do things. In hindsight we can say that it wasn't: with enormous focus such economies were able to pull off heavy engineering projects at scale, but at the cost of ignoring consumer goods and with a dysfunctional economy that was brittle to its core. End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away. He was shaken to his core and cried on the flight home, asking himself what they had done to Russia's poor people. The USSR collapsed just a few years later, Yeltsin became president and moved Russia in the direction of a market economy. | | |
| ▲ | simgt an hour ago | parent [-] | | > Nowhere because the USA has an excellent internal flight and interstate highway system instead Both being impossible to decouple from fossil fuels consumption at current scale, essentially. > End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away I have no idea whether this anecdote is true, but it wouldn't be surprise me one bit for an always-drank dude who made the army shell the parliament of his own country. |
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| ▲ | corimaith 2 hours ago | parent | prev | next [-] | | From an East Asian perspective what China is doing really isn't anything new and with the same pitfalls as the former Asian tigers. >our system is the best because we're the best, because of the system we have. This isn't what's happening at all. The causes and reasons why infrastructure and Western cities are so bad have been studied for decades and are well known, just as we've been studying what makes Tokyo or Hong Kong work so well. People are constantly critiquing the underlying system of incentives and entangled interests, you can hundreds of popular threads on HN, Reddit, MSM, hell even with Elon Musk's DOGE. The only time when I see the mythical self-convinced westerner evoked is precisely when critique of other cultures come in, often from cultures that feel a need to constantly defend themselves. | |
| ▲ | hbarka 7 hours ago | parent | prev | next [-] | | You don’t have to apologize, man. I was on a Pullman train once but it wasn’t quite a bullet train. I also rode a Western train named Orient Express. | |
| ▲ | Yeul 2 hours ago | parent | prev [-] | | People forget that China existed before communism.
Hell only Mao's idiotic experiment only lasted a few decades. China has always been capitalist. It's why you can find a store run by Chinese expats in the middle of the Suriname jungle. |
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| ▲ | seanmcdirmid 15 hours ago | parent | prev | next [-] |
| China’s debt load fluctuates if you consider just the central government, local governments, and SOEs owned by either the central or local governments. Then you have private sector debt. SOEs are where a lot of china’s shadow debt comes from (localities ask SOEs they control to fund public projects of their own books), this is what pushes China’s debt load over 100%. |
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| ▲ | bobthepanda 14 hours ago | parent [-] | | There’s that and the LGFVs financed by land sales which are all off official balance sheets. |
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| ▲ | ZeroGravitas 3 hours ago | parent | prev | next [-] |
| 10-year old ICE car factories idling is a sign of success in their transition to NEV. > China has more than 100 factories with the capacity to build close to 40 million internal combustion engine cars a year. That is roughly twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular. |
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| ▲ | nl 8 hours ago | parent | prev [-] |
| In the US this model is called venture capital - build lots of things knowing lots will fail. It's a model that creates big winners and lots of losers. Ironically of course the other alternative is central planning which is a hallmark of communist economic systems. > estimated to leave Chinese debt to GDP at 117% Japan is 264%, Singapore 168%, the US 129%, France 112%, Canada is 107%, UK 97%, Germany 66%, Australia 22%, Afghanistan 7.4%, Kuwait 2.1%. A debt ratio isn't particularly useful to know on it's own. |