comprehensive national strength:China ranks 7th, India 9th

[badguy2000]

People like to portray China as some kind of market economy, there is nothing capitalist about it really. It is still centrally planned. Everything is tightly controlled by the CCP. The positive side is, they can react quickly to developing issues. The negative is a huge misallocation of resources because it is not determined by the demand curve. If the government wants to sell 10 million autos a year, they make it happen by stealing peoples motorbikes, banning old cars, and subsidising sales of new ones whether people can afford it or not. If people want to get around, they don't have any choice but to comply. If they want to increase real-estate values, they kick people out of their homes to build what they want. The excess waste in overcapacity is mind-boggling... 25% from real-estate to steel. China built itself up on the basic economic principles of the USSR, massive construction and infrastructure investment, factory style education, urbanisation and exports. Instead of exporting raw materials, they export cheap finished goods but the principle is the same. Communism has lasted longer in China because they did not have the raw materials they could sell without forging trade ties to the West. They had to play ball so to speak in order to keep their factories open which has added stability and adaptability to changes in the global economy. The lack of an arms race prolongs the system by propping up its unprofitable SOEs that maintain employment. Not to mention China is largely a one-culture society that has far less diversity and foreign nationalism than the former Soviet Empire. Also a huge population leads to decades of easily tapped growth when the base was little more than rice paddies. China has exhausted the economic system that saw its rise, demand for exports is not coming back. People say how developed Chinese cities are, and it is largely true... where is China to go from there? The only answer is to increase domestic consumption. You can't rely on exports and construction for markets that are already 25% over capacity.

oh my god.....
go

People like to portray China as some kind of market economy, there is nothing capitalist about it really. It is still centrally planned. Everything is tightly controlled by the CCP. The positive side is, they can react quickly to developing issues. The negative is a huge misallocation of resources because it is not determined by the demand curve. If the government wants to sell 10 million autos a year, they make it happen by stealing peoples motorbikes, banning old cars, and subsidising sales of new ones whether people can afford it or not. If people want to get around, they don't have any choice but to comply. If they want to increase real-estate values, they kick people out of their homes to build what they want. The excess waste in overcapacity is mind-boggling... 25% from real-estate to steel. China built itself up on the basic economic principles of the USSR, massive construction and infrastructure investment, factory style education, urbanisation and exports. Instead of exporting raw materials, they export cheap finished goods but the principle is the same. Communism has lasted longer in China because they did not have the raw materials they could sell without forging trade ties to the West. They had to play ball so to speak in order to keep their factories open which has added stability and adaptability to changes in the global economy. The lack of an arms race prolongs the system by propping up its unprofitable SOEs that maintain employment. Not to mention China is largely a one-culture society that has far less diversity and foreign nationalism than the former Soviet Empire. Also a huge population leads to decades of easily tapped growth when the base was little more than rice paddies. China has exhausted the economic system that saw its rise, demand for exports is not coming back. People say how developed Chinese cities are, and it is largely true... where is China to go from there? The only answer is to increase domestic consumption. You can't rely on exports and construction for markets that are already 25% over capacity.

oh my god....I really never know that CCP is gifting CHinese common a auto....haha

guy, if there were a government who can afford to gifting commons autos, the government would be the most popular government in the world. hahah...

After reading you comments, I would believe that you were a guy who had come back from Mars just now and knew nothing about the case on the Earth.

 

[pmaitra]

oh my god.....
go

oh my god....I really never know that CCP is gifting CHinese common a auto....haha

guy, if there were a government who can afford to gifting commons autos, the government would be the most popular government in the world. hahah...

After reading you comments, I would believe that you were a guy who had come back from Mars just now and knew nothing about the case on the Earth.

The CCP or PRC government probably is not gifting away autos, but they are sure doing a lot of things that tantamount to gifts. There is heavy subsidisation as a result of which the true value of goods have dropped to such levels that free market economies have started to suffer.

Prices cannot be controlled in free societies because slavery is outlawed in such places and people cannot be forced to work for a fixed amount of pay. Yet, China can afford to manufacture products at much lesser cost than the rest of the world simply because Chin keeps undervaluing it's currency, thus ensuring job don't migrate out of China. The downside is that Chinese workers have no option but to work for less pay. Typical logic would say 'water finds it's own level', i.e., unequal economies in a free market will eventually come to an equilibrium. China is artificially maintaining a FOREX gradient in it's favour to prevent jobs from migrating out of China back to other countries by keeping it's Yuan undervalued.

Simple explanation:

• US worker: willing to paint a fence for a bottle of wine.
• Chinese worker: willing to paint a fence for a bottle of water as there is no wine available.
• Result: Job goes to the Chinese worker. The Chinese workers keeps the job, the US worker remains unemployed and the Chinese worker realises that he has no option but to be exploited; the good thing being he's got someone else's job.

In other words, I'll work even for free and to my own detriment, but I will not let you have the job.

This had yielded good results so far. Question is, for how long?

 

[amoy]

Questions:

There is heavy subsidisation as a result of which the true value of goods have dropped to such levels that free market economies have started to suffer.

1) pls enlighten where the money for subsidies comes from
2) are u aware the US or Japan subsidize their farmers heavily? for example the US govnmt subsidizes exports of agricultural products to China heavily. and Jpan's rice is the most expensive in the world
3) based on (2) is the US or JP economy still 'free market' economy? why?

Simple explanation:
US worker: willing to paint a fence for a bottle of wine.
Chinese worker: willing to paint a fence for a bottle of water as there is no wine available.

1) what not replace 'Chinse worker' with "Indian workers" (like in back-office outsourcing)?
2) why do Westerners (such as Americans) flood to India for medical operations instead of in their home country?
3) are US workers willing to get back to old days when they were paid with a bttle of water too?

 

[SHASH2K2]

1) what not replace 'Chinse worker' with "Indian workers" (like in back-office outsourcing)?
2) why do Westerners (such as Americans) flood to India for medical operations instead of in their home country?
3) are US workers willing to get back to old days when they were paid with a bttle of water too?

Indians get outsourcing offer not because they are cheap. they get it because our English is much better than chinese both in pronunciation as well as grammatically . We are not at all cheap and an guy in technical support can afford a good living in costly city like mumbai or bangalore. If you know about affluence of software developers you will die due to heart attack.
India is destination for medical tourism not because its only cheap its because of skills of doctors. I hope you understand between acquiring a skill and making something cheap. Medical industry is skill intensive not labour intensive like your manufacturing industry .