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samoan62's avatar

If you go through the American "education" system your thought process will basically be:

China = Communist = USSR = Evil Dictatorship.

Everything is absolute, there's no room for nuance. Of course every country's economy has some degree of state ownership vs private ownership of various industries and each has to work within their own parameters of demographics, geography, natural resources, etc. There is no silver bullet of how to govern. "Communist" is then just a label that you can't form judgements on alone. Hitler named his party "National Socialist German Workers' Party", but was he was not a socialist or a communist as that name would suggest.

"Democracy" is just a label too. For westerners it just mean "voting in elections". However Chinese people overwhelmingly report feeling satisfied with the level of democracy (meaning "does our voice matter?") in their country as opposed to westerners who do not.

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Keshler Thibert's avatar

My guess is that it's the word communism and the lack of knowledge regarding the history of each country causing the confusion.

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Combaticus Wombaticus III's avatar

I recognise that I may be preempting your next post, but my understanding of assessments of Chinese collapse is that they are less about making a statement about communism, and more about the fact that China suffers from a chronic lack of demand and a propensity to under-consume, and that the government has repeatedly failed to find anywhere productive to put the relevant savings?

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Yaw's avatar

Yea I'll try to address that the incredible savings rate of China.

But when I look at China doomerism I do notice two things:

1. I do think the fact that they say "China will collapse" does implicitly refer to the Western idea that only communist/authoritarian states fall. States don't usually "collapse", but they assume China will. No one is saying Japan will collapse because it has 30 years no growth. The "collapse" part must come from the fact that we have multiple communist regimes that have fallen or split into separate countries.

2. I don't think its common knowledge about China's "Mayor Economy" and the extreme decentralization and leeway that polities have to try their own experiments to produce growth.

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Combaticus Wombaticus III's avatar

2. I agree with, and I definitely learnt a lot from from your excellent post. However, regarding 1., the argument as I see it is that there is an implicit resource bargain in place in the Chinese economy - you give us prosperity, we don’t hold a revolution against you (arguably similar to states like Singapore, Brunei etc). Insofar as Chinese failures in management are currently disrupting prosperity (as has arguably happened with the infrastructure crash, and with the fact the attempt to pursue another export boom will likely fail), this is a sign that public opinion may turn against the regime.

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Jeff E's avatar

Look forward to the next installment! I share some of those "China doomer" concerns you articulate at the end but I am open to other perspectives on that.

You mention Robert Wu and Carl Zha. Not familiar with Zha but I have started to follow Wu. For independent media that centers Chinese voices on China, I would also recommend Drum Tower podcast.

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Kinsen's avatar

While the abstract says that Chinese eat more calories than North American, this was self reported. I have to say as an American Chinese living in China the past year, that feels way off. However, your point about starvation wages and hunger is still true. Food is plentiful because it is cheap.

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Inverteum Capital's avatar

1) "The private sector in China provides 50% of China’s government revenue, 60% of economic output, 70% of technological innovation, and 80% of urban employment."

"Industrial production stagnated in the 70s and 80s in the Soviet Union, turning the state to a glorified gas station, dependent by oil & gas exports by the 1980s."

Unlike USSR (and Russia), China isn't a petrostate. It relies heavily on the innovation and ingenuity of its people for its prosperity.

2) "While people like Bernie Sanders says “China pays their people starvation wages”, the average Chinese, although they are much poorer than the average American, still consume more calories than Americans."

It's astonishing how little Westerners understand about Chinese living standards. It's like their worldview hasn't been updated in 10-20 years.

3) "China has political semi-centralization and economic decentralization. The central government sets strategic direction, but local officials deliver results on the ground in the 23 provinces, 4 municipalities, 5 autonomous regions, and 2 special administrative regions. These “mayors” basically have to take head initiatives, and build industrial clusters, thriving economies, more GDP, jobs, and real estate prices. With more GDP, they collect tax revenue, and climb the political ladder."

All of these mayors compete rigorously with each other to attract investment and create jobs and economic growth, just like the CEOs of private companies.

4) "Deng Xiaoping even called Gorbachev an “idiot”. The Soviet Union was dead on Christmas 1991."

Yet despite his failures, Gorbachev is the one who got the Nobel Peace Prize even though Deng had a much larger positive impact. This shows that Western elites often care more about virtue signaling than about policies and governance that actually improve people's lives.

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China Story's avatar

China's greatest challenge lies in bureaucratic monopoly capitalism, which is the fundamental reason why Xi Jinping's administration has spent years combating corruption. Bureaucratic monopoly capitalism was also a major concern for Mao Zedong, and it was one of the primary reasons he launched the Cultural Revolution—though, of course, the methods used during the Cultural Revolution proved to be flawed. China aims to achieve a balance among state capital, social capital, and foreign capital. Bureaucrats are meant to serve by guiding investment directions and controlling the uncontrolled proliferation of capital. They must never collude with, let alone control, capital, as such collusion would severely disrupt the balance among these various types of capital and hinder China's long-term development.

A significant problem in the United States, in my view, is financial monopoly capitalism, and as of now, there seems to be no effective counterbalance to this financial dominance. If you wish to delve deeper into understanding China, I suggest studying the issue of bureaucratic monopoly capitalism. Xi Jinping has made considerable efforts in this area, but the problem still persists in a level.

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Yaw's avatar

Haha,;I am reading about "bureaucratic monopoly capitalism" right now! But the way you explained it was excellent.

As for "financial monopoly capitalism" being a problem in U.S., I am not sure if that's true anymore post 2008 great financial crisis. I would have to dig in more to public sentiment and certsin metrics to see if I agree.

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Robert Wu's avatar

Remarkable piece! And thanks for the shoutout. Looking forward to your answers to the challenge at the end.

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Kyle's avatar

Nice write up. You should read Vincent Bevin’s “The Jakarta Method”.

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Daniel Helkenn's avatar

Thanks for taking on this challenge. Seems like there’s so many misconceptions about what both China and the Soviet Union are, as well as Russia now.

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kartheek's avatar

1. Thank you

2. No.this has nothing to do with economy.(Besides there were no numbers from Soviet side .those are all CIA guess estimates including using their concepts.)it is just insult.u can see now Ursula vonder leyen talking about chips taken from washing machines. No difference between calling gas station with nukes or upper volta with missiles except the times ( before 1991 and 2014 )

4.sure not rich because that is not the standard.( West has rich people and others) Also communist countries have HDI as high as west europe& USA. ( See UN HDI https://hdr.undp.org/system/files/documents/hdr1990encompletenostats.pdf ). They were sanctioned to hilt and they were not part of bretten woods( rotten woods)

I feel ,after seeing dedollarisation talks, all countries should have currencies of equal value instead of current system.

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kartheek's avatar

As you mentioned ,japan didn't collapse after no growth, Fukushima or the EU or US after 2008 no growth scenario which makes gorby more responsible Soviet collapse and the traditional explanation for the collapse suspect. - imo

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Wannabe Historian's avatar

As an ethnic Southeast Asian, I feel that China's power and influence is overhyped. China is basically trying to replicate what the USSR did in the 20th century. What sucks for them even harder is that unlike the Soviets, the Chinese are East Asians and tend to have an ethocentric view of themselves (i.e. not viewing other races in equal standing; a similar problem persists with Indians and Arabs). The Chinese are not even part of Western civilization (the Soviets were).

I believe that intelligence is correlated with liberalism, therefore intelligent Chinese people do not like authoritarianism and will rather flee to the liberal West, like the Eastern bloc Soviet dissidents did in the 80s. When you look what's happening in the youth protests in Iran, Hong Kong, or Thailand, I think this will happen everywhere (I do not believe Western right-wing explanations of Chinese genes being the reason why China is the way it is).

In fact, I think a lot of the African countries and the countries in BRICS are just using China for their own good, like a girl being with a rich guy because of his money. Or that these countries are allying with China because they wanna just piss off the West.

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Yaw's avatar

If I analyzed a dataset with IQ as one axis and affinity for liberalism or liberal values on another, I bet the R^2 wouldn't even be 40%, there's probably a lot of noise. There's plenty of intelligent people in China right now who believe in the CPC. In addition, Singapore isn't exactly a liberal country yet it is a very high IQ society.

Over half of all lending in Africa has been six countries (Angola, South Africa, Ethiopia, Sudan, Zambia, and Ghana). I'm Ghanaian-American and go to Ghana a lot, Ghana just takes money from anywhere but and most of its loans are still eurobonds. It's not piss off the West, Ghana literally can't raise enough funds domestically and it is just a capital poor country.

Zambia has a lot of copper and Zambia is also capital poor, so just working with China was a good deal for both of them.

Angola raises money from China because China doesn't ask for changes in political systems or asks for more transparency. When Angola was borrowing from China under Jose, his family was stealing billions and he didn't want to do transparency measures from the West.

Here's my article on Angola if you'd like to see:

https://yawboadu.substack.com/p/angola?utm_source=publication-search

Ethiopia is trying to emulate China because it sees itself as a similar country to it. (A non colonized civilizational state that's over 3K years old).

South Africa is also just a neutral country.

Sudan was locked out of Western finance for the longest time since Omar Al Bashir provided shelter to Bin Laden for some time, so he had to go to China.

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Wannabe Historian's avatar

I see where you're coming from, although the stuff about Africa getting help from China sounds a lot like an entrepreneur going to a rival company. Perhaps those African countries do not want democracy so they go to China instead of the US. I know I'm exaggerating a bit there but you get my point.

In my opinion, a lot of things can screw over China too. A war over Taiwan will be determent to China and will only foster discontent among the Chinese people. Maybe after Xi, you might get more crazier Chinese leaders since it's so autocratic. I would have been much more bullish on Western influences being pretty unlikely to influence Chinese youth, except for the fact that Japan and South Korea are just right next door and are shining examples of what an East Asian Western liberal society looks like. The Yellow Sea is an East Asian version of the Iron Curtain in a way.

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Yaw's avatar

Interesting viewpoint, I don't think I am overhyping China, just explaining things some people didn't get. I agree that China can be perceived as ethnocentric sometimes and that some Chinese don't like living in China. I have a Chinese friend who hates China, so he moved to America and is now buying property in Canada (he plans to move there in a few years). I also have other Chinese friends who hate Western liberalism and China equally, and they think Singapore is the best of both worlds.

But I also disagree on a lot of fronts.

Soviet Union was exporting ideology and Mao did export ideology by supporting groups in Southeast Asia that you probably know all too well about with CPT in Thailand, MNLA & MCP in Malaysia and the PKI in Indonesia. China doesn't care to support communist rebels or communist parties anymore.

Even though Marxism is literally from a German and Russians are white, Soviets are not really considered part of Western Civilization. Western Civilization usually refers to a specific set of Western values like the government protecting free speech, separation of powers, constitutional republican democracy, property rights and etc meanwhile the Soviet Union had a mass censorship apparatus, the Politburo was basically all powerful, and the country was a "people's democracy", and all property was owned by the state. Even now, even though the Russians aren't communist anymore ever since the USSR collapsed, they don't see themselves as part of the West because they aren't in "the clubs of the civilized world" like NATO and the EU.

If you look at American textbooks or Niel Ferguson on the Cold War they'll say "The West vs. the Soviet Bolshevism". Even now Western commentators will say "The West vs. Russia"

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Chris's avatar

"Western civilization" does not refer to the government protecting free speech etc., none of which existed in the West, which is about 1500 years old, until quite recently. What it refers to is the cultural unity in Western/Southern/Northern Europe created by the Catholic Church and Latin as an international language as a replacement for the fallen Western Roman Empire, which was carried by colonists with them to other places. Which Russia is not part of and does not claim to be -- Russia is part of the Orthodox world created on the basis of the paradigms of the Eastern Roman Empire (with heavy influences from the Mongols/Tatars).

The idea that "Western civilization" is somehow coterminous with political or social liberalism is quite strange -- 200 years ago, the UK had the death penalty for pickpocketing. The penalty for sodomy was death in Britain until the 1840s. Political absolutism in the modern era was invented by France. The political movement that most explicitly identified itself as the defender of the West was National Socialism.

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Eöl's avatar

“This is not a puff piece for China.”

You protest too much. This entire piece takes the premises of the Chinese government as true. You trust polls of Chinese people about their satisfaction with the level of ‘democracy’ in their country? Excuse me while I die laughing.

China still has enormous slack in its economy, and it is presently at least failing to take advantage of that. Its growth engine, the real estate industry, is essentially gone. Its growth has slowed so substantially and so far from the ‘target,’ which would be Korean, Japanese, or Taiwanese levels that it may never achieve it. Every projection of China exceeding the US as the world’s largest economy has been missed, and the date keeps getting pushed back and back. I think now it’s at 2050? And despite having quadruple the population.

Other states obviously have stagnated economically without collapsing, but that usually happens once they’ve achieved a high level of development/Westernization, and usually by then are strong partners of the US, which helps shore them up.

China has no allies worth the name, they have active territorial disputes with every one of their neighbors except possibly North Korea, and their one client state is a suppurating wound that can’t put away a country a third its size and a quarter the economy.

And on top of that, China is literally dying of old age, which is a big part of why they may never complete the path blazed by the other high development Asian economies. India is larger by population and far younger, though its own growth has not been incredibly impressive.

China may very well avoid collapse. At minimum, over 90% of its population are Han, which is a shocking level of homogeneity considering the size of the country. East Asians are also unusually conformist, which is another deep well of stability.

But it may simply become irrelevant. And don’t forget that historically China has mostly had long-ish periods of great stability, punctuated by the most savage violence imaginable.

The world clearly and correctly prefers American hegemony. I, being American, think it is good of itself. But even the most impartial observer would be forced to conclude that it is the least bad option available.

I don’t see that changing, which will only worsen China’s isolation and make its recovery from the current crisis much more difficult.

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Yaw's avatar

There's a lot in this comment I agree and disagree with. But like I said, I barely scratched the surface.

1. I took the premises of the Chinese government as true because I wanted to come in epistemically humble without employing Western norms. Since most of my audience is American, I wanted to give my audience a lens to look at China without a liberal democratic lens.

2. You are right about the issues with the real estate industry, the missed projects of China taking over US, and that China is aging.

3. I don't think that makes China "screwed" though. Maybe more automation of services will lead to more growth, there's still hundreds of millions of Chinese that can move into cities, and there's still so many "low hanging" fruit that China can deal with like reducing the internal passport system - hukou.

4. I find their old history of "longish stability, brutal violence" to be irrelevant. That was when China was a pre-industrial state, before China achieved universal literacy, had mass sanitation, and there wasn't a sense of nationalism.

China certainly was a coherent entity, politically and culturally, but there were a lot of regional, local, and clan loyalties that people felt a stronger allegiance to as seen in the Warlord era

5. I agree with you that American hegemony isn't going anyway anytime soon. I even said "I am not a China or BRICS supremacist" and that the BRICS/Global South Rising talks underestimate America's power. America is also fiscally sustainable (debt service is on track to make up 17% of American government revenue for 2024, which is very high for America, but America could course correct).

If you look at one of my comments with a person who seems to be a leftist/anti-Westerner, he spoke de-dollarization and "all countries should have currencies of equal value". It was a comment so ridiculous and required so much speaking that I didn't even want to respond to it. I'll just address it in another article.

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China Story's avatar

Now, right now, a large number of investors from Europe, America, and the Middle East are pouring into China. Don't just look at what the media is broadcasting every day; observe the actual actions of the investors around you.

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Viel's avatar

Somewhat unrelated to the content of this post but after listening to the linked Silk and Steel podcast I can't help but feel it's a bit sensationalist. Calling the Tiananmen Square Massacre a "protest", titles like "How the US Lost Economic War on China", claiming the United States hates Ukraine(!) — all of these come off as less than reliable to me. Is there something I'm missing?

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Yaw's avatar

Yea I think he has cultivated a "Global South/Anti-West" audience so he is becoming more sensationalist. His old podcasts are much better and I enjoyed his interview with Noah Smith.

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Kaleberg's avatar

In general, China has had an autocratic government and allowed a degree of free enterprise for centuries. The central autocrats were happy as long as the business people focused on business and stayed out of politics. Not all that long ago, we saw a number of business people and wealthy celebrities given various types of warnings about getting too big for their britches. Just about all of them stepped back, and many of them are doing quite well though maintaining a lower profile. Inner members of the CCP may be extremely wealthy, but they don't let it interfere with their politics.

All of this seems consistent with Chinese history. One would expect some kind of emperor to embody state power and rings of technocrats managing things. The state would maintain an interest in various critical businesses, much like its historical salt monopoly, but it would allow an otherwise freewheeling economy as long as no one got too big. In some ways, that's good. It's implicit antitrust enforcement.

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kartheek's avatar

Now do the same comparison with USA as British emperor ruled over them before they left UK

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Kaleberg's avatar

I'd love to, but neither Britain nor the USA has the level of cultural continuity to do that. For at least 2000 years, China has gone through its cycles of dynastic rise and fall, unification and chaos. It has long had a dominant culture covering a geographically defined and well bounded region.

I suppose I could look back at the Western tradition starting with the Romans, but Europe and the USA, which is culturally, economically and politically European, doesn't have a consistent pattern the way China does. The Roman Empire died with Byzantium and has never been reconstituted. The British Empire may have borrowed ideas and forms from Roman antiquity, but its society was much different.

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kartheek's avatar

Well look it up. US was fighting WW-1 under UK guidance.so, there is lot of continuity.

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Kaleberg's avatar

That was barely more than a century ago. A thousand years ago the English were fighting Vikings and the USA didn’t exist. China was in its Liao or Song dynasty. There isn’t much of a useful pattern.

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kartheek's avatar

Well people are same.isn't that what you are arguing?

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Kaleberg's avatar

Nope. I'm arguing that China has a long, well documented history that offers some insight into its past and future situation. European and American history don't show the same regularity.

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Jericho's avatar

I don’t think China (or Russia) are ideological. They just have ruling classes that want to hold onto power and spread influence pragmatically

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Yaw's avatar

Hi Jericho!

I am not sure if this was a comment towards the article or just a comment for comment sake. I think this is the former, so apologies in advance if I am wrong haha.

1. I never suggested that China was ideological. My whole point is that post-Mao, they are ruthlessly pragmatic - hence the economic decentralization and political centralization.

2. The Soviet Union and the post 1991 Russian Federation are different beasts.

Soviet Union was ideological and exported ideology and tried to go for pragmatism economic wise when it was too late. The Boris Yeltsin and Putin Russia after 1991 does not care about ideology. Its just an empire that pretends to be a nation-state.

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Jericho's avatar

No i wasn’t arguing with the article but I think that arguably China not being as Ideological as the USSR is one of the reasons they took the path they did—leading to the divergences you pointed out in your article

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Jericho's avatar

Sorry if it came off as argumentative

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Yaw's avatar

no worries! appreciate the comment regardless!

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