I reached peak china last year, when I threw out a bunch of old, scratched-up dinnerware. Bought a smaller, much better set. Solved my china crisis. Sometimes less is more.
Mr Fukuyama, at 5:11 the guest says that China is a bank driven financial system and that growth will stall because of the debt rollovers, why is this the case? Thank you!
My guess is that growth is in a great proportion dependent on investment (not consumers) and investment depends largely on bank lending. Other means to raise and concentrate capital are underdeveloped in China.
The US should be happy what China is achieve because of many Chinese learned from the US and the west. There are no countries in the world can lift up 800 poor people to mid class level society enough food, clothes and shelter.
Sounds more like a mod to slow grow China not a peak China like it's going downward from now on. As long as China is still maintain bigger growth rate than US, it's still on the track. Higher than 2% doesn't seems like an unrealistic goal for China for a long time.
Not really because of its demographics and the still large proportion of the population living in quite poor conditions in the countryside and that are asking to join the low middle class, China needs a high growth rate otherwise social instability is a serious risk. Unemployment, especially among youth, is a problem.
when you say all of this, somehow it does not click in my mind. their population is 8 times that of japan, and by PPP their gdp is already the biggest in the world. It would take for the usd to lose predominance for china to the the top one. I somehow don't see 14 billion people working the way chinese work and not generating growth.
@@mikelis106 Vast majority of Chinese Debt are internal and RMB denominated. So the worse it gets is the Inflation, printing money to pay the debt. And China has not have an inflation issue for almost 4 decades now. So it still has huge room to grow. This is very similar to Japan, who has more debt per GDP than China with deflation in past few decades. Eventually inflation will catch up, just like US now. But no one know when.
@@qingzhou9983 According to google: As of 2022, about 38% of China's external debt is denominated in renminbi (RMB), while the remaining 62% is denominated in foreign currencies, mostly U.S. dollars. This means that China's external debt is not fully hedged against exchange rate risk. If the value of the RMB were to fall against the U.S. dollar, it would increase the cost of repaying China's foreign currency debt. The Chinese government has been trying to reduce the share of its external debt that is denominated in foreign currencies. In 2021, the government issued a new regulation that requires all new foreign currency loans to be converted into RMB within three years. This regulation is designed to reduce the country's exposure to exchange rate risk.
1. China’s reporting is nothing like the reporting in the US. Chinas gdp is closer to 6T, no where near the 19T they claim 2. Their population is under 1B 3. Their debts are closer to 100T The problem is the centralization of their government incentivizes the inflation of positive numbers and the underreporting of negative numbers. Compound those numbers over decades and even Li Kechang said that the numbers from China are all “man made” Don’t believe numbers coming from China The reason why they haven’t collapsed yet is because it’s a dictatorship communist system, meaning banks are owned by the state and the state has access to the populace’s deposits. There’s a reason why the people are having problems and restrictions on withdrawing cash….
These guys are making fun of China is struggling to grow at 6 percent and debt for infrastructure. If 6 or 5 percent growth is bad, how about 1 percent? Even the debt for infrastructure is bad, least least you got something at your home and it is still better than trillions of dollars national debt for nothing, isn’t it? Maybe the stanford scholar can use his one course economy knowledge to tell me if the 1-2 trillion dollar yearly budget deficits is sustainable?
Kinda. The idea that the cold war could heat up and the dominant effect is amount of screentime devoted to military strategy in Bakhmut kinda proves. We are all consumers now.
I reached peak china last year, when I threw out a bunch of old, scratched-up dinnerware. Bought a smaller, much better set. Solved my china crisis. Sometimes less is more.
Very interesting conversation especially in this geopolitical context around China, US, and Taiwan. Thank you professor.
Very interesting conversation
Mr Fukuyama, at 5:11 the guest says that China is a bank driven financial system and that growth will stall because of the debt rollovers, why is this the case? Thank you!
My guess is that growth is in a great proportion dependent on investment (not consumers) and investment depends largely on bank lending. Other means to raise and concentrate capital are underdeveloped in China.
The US should be happy what China is achieve because of many Chinese learned from the US and the west. There are no countries in the world can lift up 800 poor people to mid class level society enough food, clothes and shelter.
Thank you professor.
Sounds more like a mod to slow grow China not a peak China like it's going downward from now on. As long as China is still maintain bigger growth rate than US, it's still on the track. Higher than 2% doesn't seems like an unrealistic goal for China for a long time.
Not really because of its demographics and the still large proportion of the population living in quite poor conditions in the countryside and that are asking to join the low middle class, China needs a high growth rate otherwise social instability is a serious risk. Unemployment, especially among youth, is a problem.
when you say all of this, somehow it does not click in my mind. their population is 8 times that of japan, and by PPP their gdp is already the biggest in the world. It would take for the usd to lose predominance for china to the the top one. I somehow don't see 14 billion people working the way chinese work and not generating growth.
of course, let's see how their debts play out.
@@mikelis106
Vast majority of Chinese Debt are internal and RMB denominated. So the worse it gets is the Inflation, printing money to pay the debt. And China has not have an inflation issue for almost 4 decades now. So it still has huge room to grow. This is very similar to Japan, who has more debt per GDP than China with deflation in past few decades.
Eventually inflation will catch up, just like US now. But no one know when.
@@qingzhou9983 very wellreasoned
@@qingzhou9983 According to google: As of 2022, about 38% of China's external debt is denominated in renminbi (RMB), while the remaining 62% is denominated in foreign currencies, mostly U.S. dollars. This means that China's external debt is not fully hedged against exchange rate risk. If the value of the RMB were to fall against the U.S. dollar, it would increase the cost of repaying China's foreign currency debt.
The Chinese government has been trying to reduce the share of its external debt that is denominated in foreign currencies. In 2021, the government issued a new regulation that requires all new foreign currency loans to be converted into RMB within three years. This regulation is designed to reduce the country's exposure to exchange rate risk.
1. China’s reporting is nothing like the reporting in the US. Chinas gdp is closer to 6T, no where near the 19T they claim
2. Their population is under 1B
3. Their debts are closer to 100T
The problem is the centralization of their government incentivizes the inflation of positive numbers and the underreporting of negative numbers. Compound those numbers over decades and even Li Kechang said that the numbers from China are all “man made”
Don’t believe numbers coming from China
The reason why they haven’t collapsed yet is because it’s a dictatorship communist system, meaning banks are owned by the state and the state has access to the populace’s deposits.
There’s a reason why the people are having problems and restrictions on withdrawing cash….
These guys are making fun of China is struggling to grow at 6 percent and debt for infrastructure. If 6 or 5 percent growth is bad, how about 1 percent? Even the debt for infrastructure is bad, least least you got something at your home and it is still better than trillions of dollars national debt for nothing, isn’t it? Maybe the stanford scholar can use his one course economy knowledge to tell me if the 1-2 trillion dollar yearly budget deficits is sustainable?
Mhm
Is it the end of history yet?
That only happens when the liberals stop time itself
inshallah
The real history did not end as predicted, So now, They try to create a parallels history.
Mhm
Kinda. The idea that the cold war could heat up and the dominant effect is amount of screentime devoted to military strategy in Bakhmut kinda proves. We are all consumers now.