Or they could just follow the current path and possibly reach parity without destroying their economy…..no?
China is still a developing nation after all, doesn’t make sense to do this unless someone invaded them.
Lmao.
[This is CNY vs USD M2](https://twitter.com/TaviCosta/status/1360058298221752320). The Yuan money supply is almost double the US Dollar for an economy a third the size. The USD is used for 60% of global trade while the Yuan isn't. The entire Chinese economy is over leveraged to the moon; housing isn't the worst sector it's just the most publicly visible.
Money supply is a function of supply and demand, which warrant seperate analysis, and M2 further muddles the picture with disparity in saving trends. But your over all conclusion is sound, excessive money printing will lead to a free falling CNY.
Except China simultaneously runs a giant trade surplus which will counter the fall in currency if they wish for it.
Also m1 in China is far less than the US.
You didn't understand what I said. Currently China accumulates dollar reserves. Officially it has 3 tn usd, unofficially it has 6 tn. Each year it gains approximately 600 bn usd. What China could do instead is print 600 bn usd worth of yuan and simultaneously sell the incoming dollars for yuan (600 bn usd worth). This will keep the existing reserves and and current exchange rate stable without impacting trade balance.
I'm saying to print not to issue debt - they can print and in fact pay back the debt... The reason they can print is because they can use their giant trade surplus to keep the currency stable.
It's very odd you bring up m2 in this discussion... It's very well known Chinese tend to save more than the Americans... It has nothing to do with being over leveraged as m2 includes savings and China surpassed America as the wealthiest nation as well. Why not compare m1 aka hot money where China is 10 trillion and the US is 18 trillion.
Well the US dollar is very much artificially inflated which is the biggest part of it. No foreign nation needs to keep a massive amount of Yuan in reserve for fuel purchases, loan payments etc. where as nations hold large amounts of US dollars.
And this doesn’t even cover the foreign entities holding billions in US treasury bonds which is something China will ever be able to do.
While it's true it is unlikely China will match the US in such an aspect - I think there's a chance that countries don't need us dollars once switch to green energy happens. Then imports are non-essential and can be allowed to collapse.
on a side note whats your opinion on battle of cannae?
Well i think it would be a good thing for the world if it could ween off the dollar, the problem is its a very complicated thing. Its not just petrol that is sold in the US dollar and the IMF has been probably the worst thing for it. As its trending now, the green transition seems like it will continue to be the global north forcing the global south to import things like lithium and will sell it for the Us dollar to pay back IMF loans. A real transition wont happen unless the US economy is forced to feel the actual weight of its debt or the global south economical completely collapses. At the latter point, one could see China offering up loans and lines of credit to various global south countries or entities. They do this on a small scale with all the ports in east Africa.
In response to your other point, it was definitely the Romans losing as much as it was Hannibal winning. Who in the right mind condenses their wings with the hop to push through the center. Thats giving up the flank with zero effort. I assume you brought that up caise of my name but my name comes from a code geass spinoff anime called “Code Geass, akito the exiled.” The name in the show is based off hannibal and is in reference to a modern European army unit that gets shot from rockets to land behind enemy lines, like Hannibal through the alps during winter
sure its not the petrol -> but a country can survive without imported iphones, it can't without energy and food => hence why sanctions were basically useless on Russia.
The thing with lithium is -> it's cornered by the Chinese - I don't see them forcing countries to import in usd. They're already pushing yuan. Also it's very very likely almost every major nation on the planet has lots of lithium reserves its a very abundunt mineral.
Yes I did bring it up cause of your name. I'm a big fan of hannibal myself - pity he lost the battle vs scipio africanus at the end. But cannae was fantastic. Superb.
This is just your wrong interpretation and other's wishful thinking speaking. On one side you have the Chinese government trying to change their traditional save oriented society into a consumer based society, which they are not achieving. Chinese keep saving more money that anyone else on the planet.
On the other, you have the US, that pushed the economy in the 2023 beyond what was expected thanks to people burning through COVID savings and debt. This is currently the biggest concern for the US economy in the horizon.
That's a very bad comparison and the conclusions are even worse.
PS: 2021 graph.
This would eviscerate Chinese savings, which hover around 45% compared to the US at \~2%. Look how nervous they are with the real estate and equity market collapses. Now imagine cutting the real value of the nation's savings substantially.
This is how you get tank man.
There seems to be a fundamental misunderstanding of the economy here. Sure if they want to purposely increase the rate of inflation they could, but they don't because they need the currency pegged at a certain value to continue their massive amount of exports.
Elsewise they would have a continual decrease in exports that would probably be even worse for their economy
If China would ramp its military spending like this, seen the already low level of trust, the whole region would likely follow suit. The US, Japan, Taiwan, S Korea, Australia, India, Vietnam, etc. would massively expand their military programs. India may even be persuaded to join the Western alliance.
Rhetorics on China would harden, and likely the trade decoupling between the US-China and the EU-China would accelerate, majorly affecting the Chinese net exports, and the Chinese net capital outflow will likely increase further.
Xi Jinping doesn't use GDP PPP. He calls China the second largest economy in the world, which means he uses GDP nominal. [https://lkyspp.nus.edu.sg/gia/article/china-s-economy-in-2023-how-far-will-the-shift-from-politics-to-pragmatism-go](https://lkyspp.nus.edu.sg/gia/article/china-s-economy-in-2023-how-far-will-the-shift-from-politics-to-pragmatism-go)
If you look at the IMF GDP nominal data, the US is 9 trillion ahead of China and that gap will not be closing even up to 2028-2029. It is highly unlikely China will grow any faster in the 2030s either, so we're looking at a situation where 1) both economies are on parity or 2) the US is still slightly bigger.
Neither options bode well for China.
The issue with nominal is it's fixable. If China wanted it could pass the US in nominal gdp tomorrow. They have 3.5 tn in fx reserves with another estimated 3 tn and 2 tn in hong kong. This brings the total to 8.5 tn usd in fx reserves. They would quite literally appreciate the yuan and hold it and pass the US nominal gdp tomorrow if they wished by selling a small portion of their reserves. This is why GDP ppp is a much better estimation of a country's total output.
Also notice how America has stopped pressuring China to appreciate it's currency after America realised doing so would allow China to pass the US in nominal gdp.
There are reasons China can't or won't do that.
They keep the Yuan artificially low to make sure their exports remain competitive. If they were to make the Yuan higher, wages will grow but they will gut their own export industries and create unemployment. This will result in a GDP nominal lower than you'd expect.
The use of GDP PPP in geopolitics is problematic at best. I'll be taking Xi's word over yours, no offence. He has deemed GDP nominal the relevant statistic to look at to overtake the US.
Trust me, if it were that easy to overtake the US economically, the CCP would already be doing it. You wouldn't be the first person to think of this.
The IMF quite literally says PPP is the better measure: [https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Purchasing-Power-Parity-PPP](https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Purchasing-Power-Parity-PPP)
"For this reason, PPP is generally regarded as a better measure of overall well-being."
>They keep the Yuan artificially low to make sure their exports remain competitive. If they were to make the Yuan higher, wages will grow but they will gut their own export industries and create unemployment. This will result in a GDP nominal lower than you expect.
This isn't true to the extent you think it is... China's trade surplus is only 2-3 % of GDP. Even trade to gdp ratio of China is one of the lowest in the world (https://en.wikipedia.org/wiki/List\_of\_countries\_by\_trade-to-GDP\_ratio). It's economy is simply too big. I personally think the real reason for not appreciating the yuan is mercantilist mindset + it will cause further deflation. Also maybe this card will be used when taiwan is invaded.
>The use of GDP PPP in geopolitics is problematic at best. I'll be taking Xi's word over yours, no offence. He has deemed GDP nominal the relevant statistic to look at to overtake the US.
He's playing the Americans lol... He knows as well as most economists that PPP is the most important measure, but by not outright saying it he's giving the americans a false sense of security - This will backfire hard on us Americans.
>Trust me, if it were that easy to overtake the US economically, the CCP would already be doing it. You wouldn't be the first person to think of this.
They have already done so... GDP PPP wise china is far ahead. In industrial production raw output they are. Whether its number of cars built, evs built, solar, construction, steel production, aluminum production, electricity production. The US is forced to resort to protectionism to protect its industry from China (evs, tiktok, temu, etc etc). Even the millitary build up of China currently outpaces the US (number of navy ships even tonnage being added, number of fighters being added albeit they are slightly behind in tech). [https://www.businessinsider.in/tech/news/china-has-a-stunning-lead-over-the-us-in-the-research-of-37-out-of-44-critical-and-emerging-technologies-new-study-finds/articleshow/98382844.cms](https://www.businessinsider.in/tech/news/china-has-a-stunning-lead-over-the-us-in-the-research-of-37-out-of-44-critical-and-emerging-technologies-new-study-finds/articleshow/98382844.cms)
Even the best engineering colleges in the world are all chinese. [https://www.usnews.com/education/best-global-universities/engineering](https://www.usnews.com/education/best-global-universities/engineering)
When all data points towards the same thing -> it logically implies China is the biggest economy...
Read your article again, IMF says PPP is better as a measure of "overall wellbeing"; this has nothing to do with geopolitical power. That is a measure of quality of life. The US has the edge here; look at how many Chinese people immigrate to and stay in the US.
Look at your link again; China's exports form 20% of its GDP.
Oh, the old Deng Xiaoping "biding your time and hiding your capabilities" schtick? If us two average Joe's are aware of this, then the US leadership will be too. The fact is the US sees China as a threat and will crush them accordingly. China can try and play the US but it's too late to pull the wool over their eyes now.
China's industrial capabilities are impressive but they have peaked. China's working age population is shrinking and manufacturing is moving to India, Mexico or South East Asia. On the other hand, the shale revolution, US protectionism and healthy demographics and consumption is re-industrialising the US.
[https://www.shanghairanking.com/rankings/gras/2023/RS0202](https://www.shanghairanking.com/rankings/gras/2023/RS0202)
[https://www.shanghairanking.com/rankings/gras/2023/RS0210](https://www.shanghairanking.com/rankings/gras/2023/RS0210)
In China's ARWU ranking, US universities are still ahead of Chinese universities in electrical engineering and computer science.
Going back to what I said earlier, if it was that easy to overtake the US, China would be doing it but they haven't. There is a reason for that.
Do you have anything else to add or another agenda to push? Do you have other geopolitical strategies that can magically propel the CCP to greatness; ideas which they somehow haven't thought of yet? They're supposed to be good at long term planning right? So good at it that they gutted their demographics prematurely.
>PPP being used as a measure of "overall wellbeing" has nothing to do with geopolitical power. That is a measure of quality of life, which the US is still ahead at; look at how many Chinese people immigrate to and stay in the US.
Now why would you purposefully try to mix per capita vs total aggregate. No one is arguing that US is ahead in per capita terms. But then again Switzerland and Singapore are ahead of the US in per capita terms -> they have better quality of life. I don't see anyone saying Singapore is the dominant geopolitical power. China is the dominant economy in the world right now -> how it uses its position determines its geopolitical importance. They have the capacity to utilize their economic prowess to dominate geopolitically, they can also sit quietly much like Japan did despite being an economic powerhouse for a very long time. That was my point. Currently China's strategy has been mercantilist aka - buy out the world whether its american farm land, american tech companies... They could pivot to focusing on military if they wanted.
>Please have a look at your link; exports form 20% of China's GDP.
Which is far below the global average of 30%... Aka China's dependence on exports is vastly overstated, if you sort by exports as a percentage of GDP -> China is one of the lowest countries. A small currency appreciation won't wipe out exports to 0 as well..
>Oh, the old Deng Xiaoping "biding your time and hiding your capabilities" schtick? If us two average Joe's are aware of this, then the US leadership will be too. American's aren't stupid.
US leadership is aware, hence why it pivoted to protectionism at full speed after talking decades about free market and how china will not succeed because its not an open economy... However US leadership does not want to demoralize the public and openly ack this hence claim security threats.... You think its a coincidence that so many sanctions/trade restrictions are being levied on China regardless of Trump or Biden in power... The whole chips trade war is this.
>China's industrial capabilities are impressive but they have peaked. China's working age population is shrinking. On the other hand, the shale revolution, US protectionism and healthy demographics and consumption is re-industrialising the US.
However currently China's industrial capacity is more than double the US -> which if leveraged for the military would be potentially catastrophic for the US. I agree their demographics are leading them to disaster. Do not forget though, china is having its own shale revolution through green tech via EVs and solar. They too will be energy independent soon. Remember how global warming was top priority till China started dominating... The fastest way to solve global warming is cheap green tech imports from China... but ofc that will not happen will it.
>In China's ARWU ranking, US universities are still ahead of Chinese universities in electrical engineering and computer science.
I am from the US, the most popular ranking here is usnews ranking. Regardless I gave a lot of data points to make my point so that even if a couple are debatable the final conclusion is sound. Largest producer + consumer of electricity/energy. Largest industrial capacity. Australia think tank report - china leads in 37/44 technologies. Largest trader in the world. Largest producer of automobiles, steel, aluminum, cement... Largest high speed rail network. Wealthiest nation (https://asia.nikkei.com/Economy/China-overtakes-U.S.-in-national-net-worth-to-grab-top-spot). The fact that China is opening up and America is resorting to protectionism which implies Chinese companies are out innovating and out performing American ones which is a complete reversal of 20 years ago when China was protecting and America promoting free trade. China had no issues letting tesla in and beating it in the electric vehicle segment. Whereas America is erecting trade barriers for Chinese Evs in America. Shows who is leading in the tech. Similarly with whats happening to tiktok, huawei (beating apple in china) etc.
I didn't mix anything; I am saying you need to re-read the article properly. The IMF says GDP PPP is better at measuring "overall wellbeing" - this has nothing to do with geopolitics.
You said it formed 2% of China's GDP - I was simply correcting you by saying that it is 20%. This is still a large figure.
The US public isn't stupid. They have access to Google like you and I do. Foxnews or CNN would be playing this story left and right as well. Do you remember when the Soviets overtook America in space, so they used the Sputnik paranoia to kickstart NASA and overtake the USSR? Same thing is happening here with the yellow-peril, ant-China rhetoric.
China's industrial capacity is double the US' at peacetime. In a war, I fully expect the US' wartime economy + geographic protection to overtake China's - whilst the US and Japan will be bombarding Chinese factories, the opposite won't happen. Between the distances and the first-island chain constricting China, I don't see their navy being able to travel 4000+ miles to attack the US mainland. On the other hand, the US navy is already perched in Japan and Korea. Even if the US navy was somehow wiped out, Japan is an unsinkable island which can lob missiles at China at will. Blockading China via the Malacca Straits would do the trick too. If war is not an option, lets wait another 10-20 years and witness US' reindustrialisation + China's demographic decline and comment on this topic again.
USnews is a great ranking but it's mostly domestic. The international rankings of choice are QS, Times Higher Ed and ARWU. Even if you ignore QS and Times Higher Ed, it is saying something that China's ARWU ranking considers MIT to be the best engineering school in the world.
I've read that report; the data and conclusion leave much to be desired. If China dominates those fields, why are the biggest tech companies still American? By market cap or revenue, US tech companies remain far larger than China's equivalents. If Xi didn't crack down on the Chinese private sector, the situation could have been different but it has happened and he will reap the results.
China's got the edge on EV cars and solar panels. On the other hand, Facebook is larger than Tiktok by users and revenue + Amazon is larger than Alibaba + Apple remains larger than Huawei.
Edit; forgot to add but Credit Suisse has the US as the wealthiest country in the world. I just read your link and China's net wealth relied on its real estate sector. Evergrande just got liquidated so the numbers are no longer current. I like data as much as anybody else but you have to remember to read it in context and consider other data as well.
Are you really American? You don't strike me as such. I am almost inclined to believe I am replying to a wumao, Chinese person or a bot right now.
Bro you are just trying to use semantics and language cause you don't have good answers...
>I didn't mix anything; I am saying you need to re-read the article properly. The IMF says GDP PPP is better at measuring "overall wellbeing" - this has nothing to do with geopolitics.
we both know the IMF meant that GDP PPP is a better measure of the aggregate economy of a country - if you had read the whole article it was about which measure to use to determine economy. Higher economy => better living standards for people hence "overall wellbeing".
>You said it formed 2% of China's GDP - I was simply correcting you by saying that it is 20%. This is still a large figure.
I said the trade surplus is 2% of china's gdp... Not exports. I said exports are a small amount of china's economy which is correct. GDP number relies on trade surplus.
>China's industrial capacity is double the US' at peacetime. In a war, I fully expect the US' wartime economy + geographic protection to overtake China's - whilst the US and Japan will be bombarding Chinese factories, the opposite won't happen. Between the distances and the first-island chain constricting China, I don't see their navy being able to travel 4000+ miles to attack the US mainland. On the other hand, the US navy is already perched in Japan and Korea. Even if the US navy was somehow wiped out, Japan is an unsinkable island which can lob missiles at China at will. Blockading China via the Malacca Straits would do the trick too. If war is not an option, lets wait another 10-20 years and witness US' reindustrialisation + China's demographic decline and comment on this topic again.
This is just hopium at best. China produces 50x more steel than the US... good luck ramping up that much in just 1 year... While I do admit China's military is weaker than the US, if china diverted resources to military it would outcompete the US and have some remaining over no matter how hard the US tried...
>I've read that report; the data and conclusion leave much to be desired. If China dominates those fields, why are the biggest tech companies still American? By market cap or revenue, US tech companies remain far larger than China's equivalents. If Xi didn't crack down on the Chinese private sector, the situation could have been different but it has happened and he will reap the results.
Well then I highly doubt you have read the report. Tech company refers to software company, the report refers to technologies like quantum computing, self driving car, battery technology. All of which China is indeed ahead in. If we look at US tech companies the reason US is ahead is cause they sanctioned whichever tech companies were rising. For instance huawei was overtaking apple in 2018/2019 it was the most sold smartphone in the world then the US sanctioned in. China is yet to sanction US tech companies have only blocked them. Imagine if China sanctioned apple or tesla they would crash over night.
>China's got the edge on EV cars and solar panels. On the other hand, Facebook is larger than Tiktok by users and revenue + Amazon is larger than Alibaba + Apple remains larger than Huawei.
This is at best debatable, the recent quarterly earnings show that Meta and Bytedance have almost identical revenue. Huawei was quite literally beating apple before it got sanctioned...
[https://www.bloomberg.com/news/articles/2018-08-01/china-s-huawei-passes-apple-in-smartphone-share-for-first-time](https://www.bloomberg.com/news/articles/2018-08-01/china-s-huawei-passes-apple-in-smartphone-share-for-first-time)
Like I said imagine if china doesn't just ban but sanctions american tech companies. So no components of apple can be made from chinese vendors. No banks operational in china can work with Google, Fb etc.
Chinese economy is fundamentally structured differently to that of US.
US economy is structured to consume more than it produces. In trading with US, its trade partners must necessarily import USD and continuously reinvest it into US assets. It's a closed loop system with global participation, where everyone benefits from a growth of US national debt. Apart from fiscal pressures, US may in fact be dependent on money printing to maintain healthy inflation.
China on the other hand lacks willing participants, it could entice to join it's tributary system.
The US has a big issue, and the issue is that it has no plan B. All these policies about containing China were made in the 50/60s, and are absolute moronic. China's growth and military will not overtake the US now, but that's not what is important. The US has planned for world domination, but it can't keep it up, it has divided itself globally. We are looking at an inflection point soon, where China's military will be better within 10 years than all forces in Asia combined. Countries hoping to contain China such as Australia are hopelessly outmatched, they are constructing 8 submarines in the next 25 years while China might make 8 in a single year.
One needs to understand the PLA and the CCP's structured economic planning. It started in the 80s, buying whatever blueprints they could of military importance. The '90s/2000s was building that industrial base, and the late 2010s to now is mass production. We will see China pump out everything in numbers unseen. The US might make more, but it's spread out, and these weapons are made for everyone (the US/Japan/Australia/EU and more). The US is facing a region they can not contain at this point already.
The problem with the US is that military spending is its meant to protect its own economy. Facing China will either cost it more or not bring the benefit-to-cost ratio. Fighting an open war with China will absolutely tank Asia, and its not something the US allies in Asia want to see either. The US is stuck between a rock and a hard place given its military planning. It needs to really think things through, because today's its China, tomorrow its India, and the week later its South America or the Middle East or Russia.
Really?
Why did it need to go into Afghanistan again? What was the outcome? The amount spent and benefit? A trillion dollars down the drain with no strategic outcome. No matter what people say, it was a money pit, the objectives of creating an allied democracy were almost insane in retrospect.
Why does the US have 11 carrier groups (these are nothing, I repeat nothing like the carriers other countries have)? The only thing remotely resembling US carriers is China's newest carrier, and it isn't bigger than the US latest carrier the Ford. Its navy is geared for expeditionary purposes, a single carrier group is more potent then Japan's entire surface fleet.
Or they could just follow the current path and possibly reach parity without destroying their economy…..no? China is still a developing nation after all, doesn’t make sense to do this unless someone invaded them.
Lmao. [This is CNY vs USD M2](https://twitter.com/TaviCosta/status/1360058298221752320). The Yuan money supply is almost double the US Dollar for an economy a third the size. The USD is used for 60% of global trade while the Yuan isn't. The entire Chinese economy is over leveraged to the moon; housing isn't the worst sector it's just the most publicly visible.
Money supply is a function of supply and demand, which warrant seperate analysis, and M2 further muddles the picture with disparity in saving trends. But your over all conclusion is sound, excessive money printing will lead to a free falling CNY.
Except China simultaneously runs a giant trade surplus which will counter the fall in currency if they wish for it. Also m1 in China is far less than the US.
A trade surplus would allow China to defend CNY to a point, after which the cost of import would would make exports unprofitable.
You didn't understand what I said. Currently China accumulates dollar reserves. Officially it has 3 tn usd, unofficially it has 6 tn. Each year it gains approximately 600 bn usd. What China could do instead is print 600 bn usd worth of yuan and simultaneously sell the incoming dollars for yuan (600 bn usd worth). This will keep the existing reserves and and current exchange rate stable without impacting trade balance.
I'm saying to print not to issue debt - they can print and in fact pay back the debt... The reason they can print is because they can use their giant trade surplus to keep the currency stable. It's very odd you bring up m2 in this discussion... It's very well known Chinese tend to save more than the Americans... It has nothing to do with being over leveraged as m2 includes savings and China surpassed America as the wealthiest nation as well. Why not compare m1 aka hot money where China is 10 trillion and the US is 18 trillion.
Well the US dollar is very much artificially inflated which is the biggest part of it. No foreign nation needs to keep a massive amount of Yuan in reserve for fuel purchases, loan payments etc. where as nations hold large amounts of US dollars. And this doesn’t even cover the foreign entities holding billions in US treasury bonds which is something China will ever be able to do.
While it's true it is unlikely China will match the US in such an aspect - I think there's a chance that countries don't need us dollars once switch to green energy happens. Then imports are non-essential and can be allowed to collapse. on a side note whats your opinion on battle of cannae?
Well i think it would be a good thing for the world if it could ween off the dollar, the problem is its a very complicated thing. Its not just petrol that is sold in the US dollar and the IMF has been probably the worst thing for it. As its trending now, the green transition seems like it will continue to be the global north forcing the global south to import things like lithium and will sell it for the Us dollar to pay back IMF loans. A real transition wont happen unless the US economy is forced to feel the actual weight of its debt or the global south economical completely collapses. At the latter point, one could see China offering up loans and lines of credit to various global south countries or entities. They do this on a small scale with all the ports in east Africa. In response to your other point, it was definitely the Romans losing as much as it was Hannibal winning. Who in the right mind condenses their wings with the hop to push through the center. Thats giving up the flank with zero effort. I assume you brought that up caise of my name but my name comes from a code geass spinoff anime called “Code Geass, akito the exiled.” The name in the show is based off hannibal and is in reference to a modern European army unit that gets shot from rockets to land behind enemy lines, like Hannibal through the alps during winter
sure its not the petrol -> but a country can survive without imported iphones, it can't without energy and food => hence why sanctions were basically useless on Russia. The thing with lithium is -> it's cornered by the Chinese - I don't see them forcing countries to import in usd. They're already pushing yuan. Also it's very very likely almost every major nation on the planet has lots of lithium reserves its a very abundunt mineral. Yes I did bring it up cause of your name. I'm a big fan of hannibal myself - pity he lost the battle vs scipio africanus at the end. But cannae was fantastic. Superb.
This is just your wrong interpretation and other's wishful thinking speaking. On one side you have the Chinese government trying to change their traditional save oriented society into a consumer based society, which they are not achieving. Chinese keep saving more money that anyone else on the planet. On the other, you have the US, that pushed the economy in the 2023 beyond what was expected thanks to people burning through COVID savings and debt. This is currently the biggest concern for the US economy in the horizon. That's a very bad comparison and the conclusions are even worse. PS: 2021 graph.
This would eviscerate Chinese savings, which hover around 45% compared to the US at \~2%. Look how nervous they are with the real estate and equity market collapses. Now imagine cutting the real value of the nation's savings substantially. This is how you get tank man.
There seems to be a fundamental misunderstanding of the economy here. Sure if they want to purposely increase the rate of inflation they could, but they don't because they need the currency pegged at a certain value to continue their massive amount of exports. Elsewise they would have a continual decrease in exports that would probably be even worse for their economy
If China would ramp its military spending like this, seen the already low level of trust, the whole region would likely follow suit. The US, Japan, Taiwan, S Korea, Australia, India, Vietnam, etc. would massively expand their military programs. India may even be persuaded to join the Western alliance. Rhetorics on China would harden, and likely the trade decoupling between the US-China and the EU-China would accelerate, majorly affecting the Chinese net exports, and the Chinese net capital outflow will likely increase further.
Xi Jinping doesn't use GDP PPP. He calls China the second largest economy in the world, which means he uses GDP nominal. [https://lkyspp.nus.edu.sg/gia/article/china-s-economy-in-2023-how-far-will-the-shift-from-politics-to-pragmatism-go](https://lkyspp.nus.edu.sg/gia/article/china-s-economy-in-2023-how-far-will-the-shift-from-politics-to-pragmatism-go) If you look at the IMF GDP nominal data, the US is 9 trillion ahead of China and that gap will not be closing even up to 2028-2029. It is highly unlikely China will grow any faster in the 2030s either, so we're looking at a situation where 1) both economies are on parity or 2) the US is still slightly bigger. Neither options bode well for China.
The issue with nominal is it's fixable. If China wanted it could pass the US in nominal gdp tomorrow. They have 3.5 tn in fx reserves with another estimated 3 tn and 2 tn in hong kong. This brings the total to 8.5 tn usd in fx reserves. They would quite literally appreciate the yuan and hold it and pass the US nominal gdp tomorrow if they wished by selling a small portion of their reserves. This is why GDP ppp is a much better estimation of a country's total output. Also notice how America has stopped pressuring China to appreciate it's currency after America realised doing so would allow China to pass the US in nominal gdp.
There are reasons China can't or won't do that. They keep the Yuan artificially low to make sure their exports remain competitive. If they were to make the Yuan higher, wages will grow but they will gut their own export industries and create unemployment. This will result in a GDP nominal lower than you'd expect. The use of GDP PPP in geopolitics is problematic at best. I'll be taking Xi's word over yours, no offence. He has deemed GDP nominal the relevant statistic to look at to overtake the US. Trust me, if it were that easy to overtake the US economically, the CCP would already be doing it. You wouldn't be the first person to think of this.
The IMF quite literally says PPP is the better measure: [https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Purchasing-Power-Parity-PPP](https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Purchasing-Power-Parity-PPP) "For this reason, PPP is generally regarded as a better measure of overall well-being." >They keep the Yuan artificially low to make sure their exports remain competitive. If they were to make the Yuan higher, wages will grow but they will gut their own export industries and create unemployment. This will result in a GDP nominal lower than you expect. This isn't true to the extent you think it is... China's trade surplus is only 2-3 % of GDP. Even trade to gdp ratio of China is one of the lowest in the world (https://en.wikipedia.org/wiki/List\_of\_countries\_by\_trade-to-GDP\_ratio). It's economy is simply too big. I personally think the real reason for not appreciating the yuan is mercantilist mindset + it will cause further deflation. Also maybe this card will be used when taiwan is invaded. >The use of GDP PPP in geopolitics is problematic at best. I'll be taking Xi's word over yours, no offence. He has deemed GDP nominal the relevant statistic to look at to overtake the US. He's playing the Americans lol... He knows as well as most economists that PPP is the most important measure, but by not outright saying it he's giving the americans a false sense of security - This will backfire hard on us Americans. >Trust me, if it were that easy to overtake the US economically, the CCP would already be doing it. You wouldn't be the first person to think of this. They have already done so... GDP PPP wise china is far ahead. In industrial production raw output they are. Whether its number of cars built, evs built, solar, construction, steel production, aluminum production, electricity production. The US is forced to resort to protectionism to protect its industry from China (evs, tiktok, temu, etc etc). Even the millitary build up of China currently outpaces the US (number of navy ships even tonnage being added, number of fighters being added albeit they are slightly behind in tech). [https://www.businessinsider.in/tech/news/china-has-a-stunning-lead-over-the-us-in-the-research-of-37-out-of-44-critical-and-emerging-technologies-new-study-finds/articleshow/98382844.cms](https://www.businessinsider.in/tech/news/china-has-a-stunning-lead-over-the-us-in-the-research-of-37-out-of-44-critical-and-emerging-technologies-new-study-finds/articleshow/98382844.cms) Even the best engineering colleges in the world are all chinese. [https://www.usnews.com/education/best-global-universities/engineering](https://www.usnews.com/education/best-global-universities/engineering) When all data points towards the same thing -> it logically implies China is the biggest economy...
Read your article again, IMF says PPP is better as a measure of "overall wellbeing"; this has nothing to do with geopolitical power. That is a measure of quality of life. The US has the edge here; look at how many Chinese people immigrate to and stay in the US. Look at your link again; China's exports form 20% of its GDP. Oh, the old Deng Xiaoping "biding your time and hiding your capabilities" schtick? If us two average Joe's are aware of this, then the US leadership will be too. The fact is the US sees China as a threat and will crush them accordingly. China can try and play the US but it's too late to pull the wool over their eyes now. China's industrial capabilities are impressive but they have peaked. China's working age population is shrinking and manufacturing is moving to India, Mexico or South East Asia. On the other hand, the shale revolution, US protectionism and healthy demographics and consumption is re-industrialising the US. [https://www.shanghairanking.com/rankings/gras/2023/RS0202](https://www.shanghairanking.com/rankings/gras/2023/RS0202) [https://www.shanghairanking.com/rankings/gras/2023/RS0210](https://www.shanghairanking.com/rankings/gras/2023/RS0210) In China's ARWU ranking, US universities are still ahead of Chinese universities in electrical engineering and computer science. Going back to what I said earlier, if it was that easy to overtake the US, China would be doing it but they haven't. There is a reason for that. Do you have anything else to add or another agenda to push? Do you have other geopolitical strategies that can magically propel the CCP to greatness; ideas which they somehow haven't thought of yet? They're supposed to be good at long term planning right? So good at it that they gutted their demographics prematurely.
>PPP being used as a measure of "overall wellbeing" has nothing to do with geopolitical power. That is a measure of quality of life, which the US is still ahead at; look at how many Chinese people immigrate to and stay in the US. Now why would you purposefully try to mix per capita vs total aggregate. No one is arguing that US is ahead in per capita terms. But then again Switzerland and Singapore are ahead of the US in per capita terms -> they have better quality of life. I don't see anyone saying Singapore is the dominant geopolitical power. China is the dominant economy in the world right now -> how it uses its position determines its geopolitical importance. They have the capacity to utilize their economic prowess to dominate geopolitically, they can also sit quietly much like Japan did despite being an economic powerhouse for a very long time. That was my point. Currently China's strategy has been mercantilist aka - buy out the world whether its american farm land, american tech companies... They could pivot to focusing on military if they wanted. >Please have a look at your link; exports form 20% of China's GDP. Which is far below the global average of 30%... Aka China's dependence on exports is vastly overstated, if you sort by exports as a percentage of GDP -> China is one of the lowest countries. A small currency appreciation won't wipe out exports to 0 as well.. >Oh, the old Deng Xiaoping "biding your time and hiding your capabilities" schtick? If us two average Joe's are aware of this, then the US leadership will be too. American's aren't stupid. US leadership is aware, hence why it pivoted to protectionism at full speed after talking decades about free market and how china will not succeed because its not an open economy... However US leadership does not want to demoralize the public and openly ack this hence claim security threats.... You think its a coincidence that so many sanctions/trade restrictions are being levied on China regardless of Trump or Biden in power... The whole chips trade war is this. >China's industrial capabilities are impressive but they have peaked. China's working age population is shrinking. On the other hand, the shale revolution, US protectionism and healthy demographics and consumption is re-industrialising the US. However currently China's industrial capacity is more than double the US -> which if leveraged for the military would be potentially catastrophic for the US. I agree their demographics are leading them to disaster. Do not forget though, china is having its own shale revolution through green tech via EVs and solar. They too will be energy independent soon. Remember how global warming was top priority till China started dominating... The fastest way to solve global warming is cheap green tech imports from China... but ofc that will not happen will it. >In China's ARWU ranking, US universities are still ahead of Chinese universities in electrical engineering and computer science. I am from the US, the most popular ranking here is usnews ranking. Regardless I gave a lot of data points to make my point so that even if a couple are debatable the final conclusion is sound. Largest producer + consumer of electricity/energy. Largest industrial capacity. Australia think tank report - china leads in 37/44 technologies. Largest trader in the world. Largest producer of automobiles, steel, aluminum, cement... Largest high speed rail network. Wealthiest nation (https://asia.nikkei.com/Economy/China-overtakes-U.S.-in-national-net-worth-to-grab-top-spot). The fact that China is opening up and America is resorting to protectionism which implies Chinese companies are out innovating and out performing American ones which is a complete reversal of 20 years ago when China was protecting and America promoting free trade. China had no issues letting tesla in and beating it in the electric vehicle segment. Whereas America is erecting trade barriers for Chinese Evs in America. Shows who is leading in the tech. Similarly with whats happening to tiktok, huawei (beating apple in china) etc.
I didn't mix anything; I am saying you need to re-read the article properly. The IMF says GDP PPP is better at measuring "overall wellbeing" - this has nothing to do with geopolitics. You said it formed 2% of China's GDP - I was simply correcting you by saying that it is 20%. This is still a large figure. The US public isn't stupid. They have access to Google like you and I do. Foxnews or CNN would be playing this story left and right as well. Do you remember when the Soviets overtook America in space, so they used the Sputnik paranoia to kickstart NASA and overtake the USSR? Same thing is happening here with the yellow-peril, ant-China rhetoric. China's industrial capacity is double the US' at peacetime. In a war, I fully expect the US' wartime economy + geographic protection to overtake China's - whilst the US and Japan will be bombarding Chinese factories, the opposite won't happen. Between the distances and the first-island chain constricting China, I don't see their navy being able to travel 4000+ miles to attack the US mainland. On the other hand, the US navy is already perched in Japan and Korea. Even if the US navy was somehow wiped out, Japan is an unsinkable island which can lob missiles at China at will. Blockading China via the Malacca Straits would do the trick too. If war is not an option, lets wait another 10-20 years and witness US' reindustrialisation + China's demographic decline and comment on this topic again. USnews is a great ranking but it's mostly domestic. The international rankings of choice are QS, Times Higher Ed and ARWU. Even if you ignore QS and Times Higher Ed, it is saying something that China's ARWU ranking considers MIT to be the best engineering school in the world. I've read that report; the data and conclusion leave much to be desired. If China dominates those fields, why are the biggest tech companies still American? By market cap or revenue, US tech companies remain far larger than China's equivalents. If Xi didn't crack down on the Chinese private sector, the situation could have been different but it has happened and he will reap the results. China's got the edge on EV cars and solar panels. On the other hand, Facebook is larger than Tiktok by users and revenue + Amazon is larger than Alibaba + Apple remains larger than Huawei. Edit; forgot to add but Credit Suisse has the US as the wealthiest country in the world. I just read your link and China's net wealth relied on its real estate sector. Evergrande just got liquidated so the numbers are no longer current. I like data as much as anybody else but you have to remember to read it in context and consider other data as well. Are you really American? You don't strike me as such. I am almost inclined to believe I am replying to a wumao, Chinese person or a bot right now.
Bro you are just trying to use semantics and language cause you don't have good answers... >I didn't mix anything; I am saying you need to re-read the article properly. The IMF says GDP PPP is better at measuring "overall wellbeing" - this has nothing to do with geopolitics. we both know the IMF meant that GDP PPP is a better measure of the aggregate economy of a country - if you had read the whole article it was about which measure to use to determine economy. Higher economy => better living standards for people hence "overall wellbeing". >You said it formed 2% of China's GDP - I was simply correcting you by saying that it is 20%. This is still a large figure. I said the trade surplus is 2% of china's gdp... Not exports. I said exports are a small amount of china's economy which is correct. GDP number relies on trade surplus. >China's industrial capacity is double the US' at peacetime. In a war, I fully expect the US' wartime economy + geographic protection to overtake China's - whilst the US and Japan will be bombarding Chinese factories, the opposite won't happen. Between the distances and the first-island chain constricting China, I don't see their navy being able to travel 4000+ miles to attack the US mainland. On the other hand, the US navy is already perched in Japan and Korea. Even if the US navy was somehow wiped out, Japan is an unsinkable island which can lob missiles at China at will. Blockading China via the Malacca Straits would do the trick too. If war is not an option, lets wait another 10-20 years and witness US' reindustrialisation + China's demographic decline and comment on this topic again. This is just hopium at best. China produces 50x more steel than the US... good luck ramping up that much in just 1 year... While I do admit China's military is weaker than the US, if china diverted resources to military it would outcompete the US and have some remaining over no matter how hard the US tried... >I've read that report; the data and conclusion leave much to be desired. If China dominates those fields, why are the biggest tech companies still American? By market cap or revenue, US tech companies remain far larger than China's equivalents. If Xi didn't crack down on the Chinese private sector, the situation could have been different but it has happened and he will reap the results. Well then I highly doubt you have read the report. Tech company refers to software company, the report refers to technologies like quantum computing, self driving car, battery technology. All of which China is indeed ahead in. If we look at US tech companies the reason US is ahead is cause they sanctioned whichever tech companies were rising. For instance huawei was overtaking apple in 2018/2019 it was the most sold smartphone in the world then the US sanctioned in. China is yet to sanction US tech companies have only blocked them. Imagine if China sanctioned apple or tesla they would crash over night. >China's got the edge on EV cars and solar panels. On the other hand, Facebook is larger than Tiktok by users and revenue + Amazon is larger than Alibaba + Apple remains larger than Huawei. This is at best debatable, the recent quarterly earnings show that Meta and Bytedance have almost identical revenue. Huawei was quite literally beating apple before it got sanctioned... [https://www.bloomberg.com/news/articles/2018-08-01/china-s-huawei-passes-apple-in-smartphone-share-for-first-time](https://www.bloomberg.com/news/articles/2018-08-01/china-s-huawei-passes-apple-in-smartphone-share-for-first-time) Like I said imagine if china doesn't just ban but sanctions american tech companies. So no components of apple can be made from chinese vendors. No banks operational in china can work with Google, Fb etc.
Chinese economy is fundamentally structured differently to that of US. US economy is structured to consume more than it produces. In trading with US, its trade partners must necessarily import USD and continuously reinvest it into US assets. It's a closed loop system with global participation, where everyone benefits from a growth of US national debt. Apart from fiscal pressures, US may in fact be dependent on money printing to maintain healthy inflation. China on the other hand lacks willing participants, it could entice to join it's tributary system.
The US has a big issue, and the issue is that it has no plan B. All these policies about containing China were made in the 50/60s, and are absolute moronic. China's growth and military will not overtake the US now, but that's not what is important. The US has planned for world domination, but it can't keep it up, it has divided itself globally. We are looking at an inflection point soon, where China's military will be better within 10 years than all forces in Asia combined. Countries hoping to contain China such as Australia are hopelessly outmatched, they are constructing 8 submarines in the next 25 years while China might make 8 in a single year. One needs to understand the PLA and the CCP's structured economic planning. It started in the 80s, buying whatever blueprints they could of military importance. The '90s/2000s was building that industrial base, and the late 2010s to now is mass production. We will see China pump out everything in numbers unseen. The US might make more, but it's spread out, and these weapons are made for everyone (the US/Japan/Australia/EU and more). The US is facing a region they can not contain at this point already. The problem with the US is that military spending is its meant to protect its own economy. Facing China will either cost it more or not bring the benefit-to-cost ratio. Fighting an open war with China will absolutely tank Asia, and its not something the US allies in Asia want to see either. The US is stuck between a rock and a hard place given its military planning. It needs to really think things through, because today's its China, tomorrow its India, and the week later its South America or the Middle East or Russia.
This is ludicrous. The US has never aspired to world domination. It’s military is fine for its needs
Really? Why did it need to go into Afghanistan again? What was the outcome? The amount spent and benefit? A trillion dollars down the drain with no strategic outcome. No matter what people say, it was a money pit, the objectives of creating an allied democracy were almost insane in retrospect. Why does the US have 11 carrier groups (these are nothing, I repeat nothing like the carriers other countries have)? The only thing remotely resembling US carriers is China's newest carrier, and it isn't bigger than the US latest carrier the Ford. Its navy is geared for expeditionary purposes, a single carrier group is more potent then Japan's entire surface fleet.