this post was submitted on 05 Feb 2024
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[–] Gradually_Adjusting 49 points 9 months ago (4 children)

They're trying to authoritarian their way out of a massive speculation bubble.

I don't think it will work, unless you can will away a black hole. Debt is a kind of gravity.

[–] [email protected] 10 points 9 months ago (1 children)

You mean if you can pick up enough speed in the transverse direction you can circle around it and never hit it?

[–] GreenEnigma 6 points 9 months ago

Use the debt’s gravity well to slingshot into the stratosphere!

[–] [email protected] 6 points 9 months ago (2 children)

If they're external creditors, it makes it a lot easier for them to go "nope, not paying that, what are you going to do?" when they're one massive state-backed monolith.

[–] Gradually_Adjusting 4 points 9 months ago (1 children)

"Give Taiwan nukes", if the Dark Brandon memes are any indication.

[–] [email protected] 3 points 9 months ago (1 children)

Taiwan could develop nukes on their own, if necessary. They had a secret nuclear weapons program until the late 1980s:

https://en.wikipedia.org/wiki/Taiwan_and_weapons_of_mass_destruction

They are in the same club as countries like Japan, South Korea, Germany, Italy, etc. - highly developed nations that are fully capable of developing nuclear weapons, but chose not to (or were forced not to).

[–] Gradually_Adjusting 1 points 9 months ago (1 children)

I think if they started working towards it, China would feel forced to step up their reunification efforts. If a nuclear deterrent is going to be a viable path back to a stable status quo, it will have to be a fait accompli with external help.

[–] [email protected] 1 points 9 months ago (1 children)

I could imagine a return to what Taiwan had until the early '70s, American tactical nuclear bombs stored on the island, in a similar nuclear sharing arrangement like several European nations that don't have nuclear weapons of their own, but train pilots to drop them.

[–] Gradually_Adjusting 1 points 9 months ago (1 children)

It would have to be done very carefully and quickly, so that there is no chance for brinkmanship.

[–] [email protected] 3 points 9 months ago

Sovereign default is a thing. It’s a short term solution that can get a country out of immediate danger, but has very negative long term effects.

[–] [email protected] 5 points 9 months ago (1 children)

that depends on who the creditors are and how they demand payment. a pound of flesh or a dove feather. evergrande went bust at the same time china became the world biggest auto exporter. i think china participation in the global economy demands new economic theories, considering the promiscuity between the public sector and the "private" sector.

[–] Dead_or_Alive 9 points 9 months ago (1 children)

China became one of the world’s largest exporters of electric cars because their domestic market for vehicles has crashed. Now their industry is dumping cars in foreign markets to try and stay solvent.

The US has closed its markets to Chinese cars with high tariffs. That has left the EU as a dumping ground for Chinese high end EVs and the rest of the 3rd world for everything else. This is not sustainable, the EU will eventually block Chinese imports to protect their own industry. The third world can only absorb so much inventory especially with flagging economies.

[–] [email protected] 5 points 9 months ago* (last edited 9 months ago) (1 children)

of course adjustments will be made. but one can't really say that chinese economy is going to crash when no examples of a 1.5 billion people economic power existed before.

and lets not forget that when demand rises for ev's in western economies, considering the production capacity of the chinese market even high tariffs won't make a dent on their exports. the eu is not ready to supply demand of ev's by 2035. unless the state invests directly into car manufacturers just like the chinese gov is doing.

also another thing no one expects is the opening of the 1.5 billion consumer market as a bargaining chip by the chinese gov as a way to consolidate their position on the global market.

imho, the chinese gov has a lot of market solutions they haven't used but that can be activated and negotiated in record time.

edit: just to add their increased car exports are to russia, which is not that good of a consumer market with everything going on there, but it could teach them a lesson on how to corner non western markets. the complexity of the global economy favours the chinese at this point in time. they have more options than the western world.

[–] Dead_or_Alive 7 points 9 months ago (1 children)

China has been dangling their consumer market to Western companies for the last 20 years as a way to encourage investment. It hasn’t turned out well for them and many companies are leaving China. Suddenly reopening already “open markets” is not something the West is going to buy. You only get to pull that trick once.

The Demographics in China are also terrible. They are no longer the most populous nation on Earth. They are also the fastest aging due to the effects of the 1 child policy. The problem today isn’t that they aren’t running out of babies, they did that 20years ago. The problem is they are running out of 20 something’s to replace the older generations.

Add this to the issues with debt and the property market implosion and I don’t see China making it through the 2030s without some kind of fundamental government change.

https://en.wikipedia.org/wiki/Demographics_of_China

[–] [email protected] 1 points 9 months ago (1 children)

oh we'll buy it. we'll buy it because we are desperate for good consumer markets and china is that. also demographics is way worse in the west.

see this post about raising the retirement age to 71 in the uk. https://slrpnk.net/post/6418235

[–] [email protected] 1 points 9 months ago (1 children)

also demographics is way worse in the west

No. China has a fertility rate of 1.2 right now. That's worse than the West. EU sits at 1.53, USA 1.64. What's worse is that this rate has been low for a very long time due to Mao's One Child Policy.

[–] [email protected] 1 points 9 months ago (1 children)

yeah but our demographics is helped by immigration theirs isn't. they still have that window open to use. we don't.

[–] [email protected] 2 points 9 months ago (2 children)

They won't use it. China is going full-on ethnonationalist right now and is considerably less open to immigration than even in the past.

[–] acceptable_pumpkin 3 points 9 months ago

Exactly. China is extremely unfriendly to immigrants.

[–] [email protected] 0 points 9 months ago (1 children)

being a autocratic state, the party will enact whatever policies it deems necessary. see the one child policy for an example. state propaganda will do what is needed. in fact, a huge class of people without citizenship, some class to be opressed, could even be a boon to maintain the party in power.

like i said before, china has options. the west doesn't. and because china has options they can maneuver better the chaotic future that awaits all of us.

[–] [email protected] 2 points 9 months ago (1 children)

You are operating under the assumption that the party is rational. The grotesquely inept reaction to COVID-19 however has shown that it's anything but. Not to mention, even if the state suddenly decides to reverse decades of Han-supremacy policies, which is extremely unlikely, this does not mean that immigrants will suddenly flock into China in anywhere close to sufficient numbers. I doubt this is even possible, given how huge China still is. Where are these people supposed to come from?

[–] [email protected] 1 points 9 months ago

indeed you are correct. i'm giving the party way too much credit. but i do that for every gov in power.

mostly bordering countries, just like the us. laos, cambodia, vietnam would be the origins of said immigrants.

[–] maness300 1 points 9 months ago (2 children)

Debt is a kind of gravity.

Uh... no. If you pay attention to history, debt can and is wiped away without repercussion.

Debt is more of a threat, than anything else. If China fails to pay their debts, does the world just stop doing business with China?

The reason why there's so much unpaid debt is because the ruling class has convinced workers to sell themselves out. That's all. It doesn't actually need to be paid just like college loans. The world would in fact be a better place if it wasn't paid. The only people who get screwed are investors with more money than you.

[–] Gradually_Adjusting 2 points 9 months ago

Sure, to some of that - but China's real estate market is simply vast, at one estimate over 50 trillion dollars' worth - and individual wealth in China is heavily tied to RE. If that bubble pops, it's not just the investors who will be up in arms.

[–] [email protected] 1 points 9 months ago

Can you provide some examples where debt was waived away without repercussions?