> everyone arguing the point that china cant overtake U.S. in economy

Surely nobody halfway serious is arguing that. The faction about to take power in the USA is tilting at the "woke ideology" windmill, talks openly of deporting a big chunk of the workforce and does not seem to understand how tariffs work.

Even if you ignore all that, China has 4-5x the population (for now!) and is by all measures has a highly developed, productive and growing economy. What argument can there possibly be in favour of China falling back, other than maybe the aforementioned demographic issues.

The demographic issue is the big one.

But there are several others that show up in serious financial circles. Particularly the domestic fiscal policy around debt and investment, currency liberalization and entrepreneurial risk vs reward.

The Chinese government is walking a very fine line with their private enterprise policies and it’s not one that is well understood. But there is quite a bit of concern that if China gets more autocratic it may hinder further productivity and growth (right as the demographic issue hits in earnest).

Chinas total population isn’t really that relevant for what their economy will end up looking like. China is essentially a handful of moderately wealthy coastal areas (perhaps comparable to USA in population but still far behind in GDP/capita) and a huge inland area of very poor people. There’s not much reason to think all those 100s of millions of people will become as wealthy as the average American or European any time soon. It’s not just demographics. Geography is a huge challenge as well. I don’t know if China will “fall back”. But stagnation seems very likely. If they backslide it’ll probably be due to some political turmoil, like what happened in when the Soviet Union collapsed. Nearly impossible to predict. If you look at what’s happening with regular people inside China, there does seem to be a sense that things are getting worse, not better. I have friends with family in China that said exactly that this New Year’s Eve.. There’s a lot of incidents with people driving their cars into crowds of people as a revenge against society, and other similarly worrying signs. Many factories are being moved out of China. It might not be enough to show up on statistics yet, but it’s a process that has undeniably started and will probably accelerate. China has a huge bet on batteries, EVs and solar panels to make up for what they’re loosing. That’s going really well right now. But I don’t think it’s a winning strategy long term. USA and EU seems to be wanting to protect their industries and on-shore or near-shore a lot of that stuff. The manufacturing of those things are highly automated. Eventually most of the materials will come from local recycling. China could get a very strong and balanced economy if they had a good strategy based on self sustainable local consumption, rather can just export. But I just don’t see that they’re taking that seriously. Most of the policies are still geared towards supporting/subsidising higher exports.

This will balance its self out. One thing they have we don't is monopoly control they allow you to have monopoly if it serves well. we have that but we turn on monopolies when they get too big, they were already too big when they attached the name monopoly to the big players. i suspect if we look at data going back thirty years you will see the gap far bigger and now the gap is rather widening or growing with each end of the gap getting thicker. what i mean is, the poor were really really poor and now we can look at data and say that they are just poor with avenues of fixing that issues. They do have the economies within their country to fix poverty as its far more fruitful versus the U.S.. you either work in fast food or have a masters degree making $70,000. this isn't great considering the U.S. is a rich country

This so much. If America was serious about fighting China they would be signing free trade agreements with Asian countries and investing money into Africa.

Instead Trump is angrily tweeting about how he's going to make everyone pay. The racist isolationists are back in the halls of power.

I don't understand those that argue this point. What are the facts you have and evidence that U.S. has the capabilities to match growth that of China. Its so beyond explaining that i would just agree and walk away. China is a modern marvel the growth within thirties to date is remarkable does not matter if you don't agree with their government. They mean business right now!!

I don’t think it’s necessarily so clear that Chinese foreign policy has really paid off yet.

Chinese loanmaking to foreign countries has mostly gone bust, with many loans basically in default. While it’s true that Western development agencies were not lending to these projects, they mostly weren’t doing so because they were doubtful of the business cases of said projects and the likelihood that the government could actually pay off the loan, and so now China is dealing with that.

One of the most direct Chinese relationships is with Myanmar, which has not only gone to hell in a handbasket but now is a hotbed of criminal activity by Chinese organized crime abducting Chinese nationals to work in Myanmar. So that’s not great either.

It's been argued that if you observe actions and not words, default has always been the point of IMF loans. Have you read Confessions of an Economic Hitman?

If you can't tell Confessions of an Economic Hitman is a work of fiction I don't know what to tell you.

You don't need to read the book to see the role the world bank plays in preserving worldwide power structures. The entire world can talk to each other outside the american media sphere, you know!

I think that generally if you read the internal documents, most of the people behind IMF and other global development loans are operating in good faith and not simply puppets of the political agenda of the west. I think they showed clear overconfidence in their policy prescriptions, but not out of malice

The IMF is by definition the lender of last resort, when banks and investors find a country so fiscally irresponsible that they cannot access reasonable funding. It is not exactly surprising that those kinds of basket case economies also fail when given IMF loans given that people predicted they were going to do that and stopped lending.

> Chinese loanmaking to foreign countries has mostly gone bust, with many loans basically in default.

As America (or the world bank/imf as a proxy for american capital) can attest, calling in these loans is a great way to make a lot of enemies.

The problem in China's case, is that there's a lot of evidence that China doesn't even care whether or not it's paid back. One, the loans were given often in dollars. Which China found itself with a surplus of the past few decades. With no convenient way of ridding themselves of those dollars without significant pain, Chinese strategists hit on the brilliant plan of "loans". Two, and more importantly, the loans were used to finance Chinese influenced infrastructure projects.

So for instance, most of the African loans financed things like ports, and roads, and bridges, and trains, etc. Well when you look at the map of the "where" and the "what", it's easy to see the "why". All these bridges, roads and trains lead to the ports. Sure, this allows African countries to move their resources, and sometimes even finished products manufactured in these nations, to ports for delivery to "international clients". (Read, "China"). But tell me this, will the Africans own the freighters? No. The Africans will move massive amounts of products and resources to their ports, likely in the EAC, then China will pick up all that bounty and move it to China.

Sounds a lot like "harvesting" doesn't it?

There's one case where the Chinese definitely don't care whether the loan is repaid or not. They only care that all the bridges, roads and trains financed by the loan go to the ports. In fact, I don't know if the Africans realize it, but they'll be paying the Chinese more than the value of the loan just by using the rail and roads. The entire infrastructure system they've built only facilitates one thing, moving resources and products to the ports.

Is it good for Africans? Absolutely. A much better deal than they used to get when the West and Russia used assassinations and proxy wars to ravage the place. But let's not pretend it's about helping Africa. It's, at root, about an extremely low risk method of helping China by "loaning" money to others.

roads and bridges to ports are exactly what imf and world bank loan do too, for obvious reasons

frankly this whole comment reads as historically less informed

And how many world bank loans are given to, well, let’s call them “less than stellar” African governments?

All the Chinese needed for the infra loan projects to work were nations who couldn’t access financing via other means. Now they’ve been doing it a while, even the nations that can access the financing have been dipping into that well. Sometimes it’s just better terms.

most countries want to feel respected and included in the world. They don't just want you to take their resources and leave them in the dust. Even if the thought is " hey we'll fix your stuff in return then so be it". U.S. lets you know that the moment you don't go as planned and disagree with their view then bye bye to all of he efforts your country put in and momentum. Lets not forget economical momentum is just the thing a less developed country needs. One strategy doesn't work for all. This is clear from whats happening right now before us. Brics initiative, Brics plus and so on. you literally have the worlds biggest countries aligned for a parallel agenda. Brazil, Russia, India, China, and South Africa and even more are joining like turkey and some European countries. This is not small matter to overlook and be arrogant about.

This would have been my response to the this ^ reply. They have capital to spare and also, what they're gaining from these countries in return more than justifies there loss in capital. the gain exclusive rights to ports and military presence. recently they made a an effort to include African countries as their allies. Concluding that they will allow African countries to retain control over there capital wand profits while allowing china to export their natural resources. this is attractive for African nations.

It’s worth noting that while some of the dud Chinese loans are for resources and whatever there are also plenty of nonperforming loans for projects that couldn’t possibly be useful to China, like the Montenegrin highway to nowhere: https://www.rferl.org/a/montenegro-billion-dollar-chinese-hi...

One other interesting note is that the way the financing is structured, the loans are not coming from the Chinese state but state owned banks, which seems like a mostly pedantic distinction, except the state owned banks also do much of the normal lending activity within China itself. Those banks now face the double whammy of dud property loans domestically and these dud loans to other countries, which is not helping the Chinese economic slowdown.

The World Bank and IMF generally don't (and can't) call in loans so I don't know what you're trying to say there. Sometimes what happens is shithole countries default on their debts and then whine about injustice when lenders refuse to extend the terms.

It is injustice. Loans are not just social mechanisms to begin with. There's nothing "just" about the west's domination of the globe; and in fact, justice would look like the west paying out to the rest of the world and expecting nothing back.

Not that the west ever gave a fuck about justice beyond intraclass squabbling

Also don't forget U.S. debt to China. the picture is painted clear of who depends on who.

China has $774B of US debt. The US total debt is $36T. 2% is not control of anything. That is smaller than the daily trading volume. China used to hold more but sold it recently.

My apologies I meant the other way. like what you said.

Trump reminds me of a Star Wars quote

"The more you tighten your grip, Tarkin, the more star systems will slip through your fingers"

The reality is that China will not magically disappear and they have integrated themselves into the world economy.

>attacking the top tech firms and industries with regulation will only push them out to more favorable grounds give new room for industries to form in more favorable grounds other than U.S

Let them go, someone else will step in. Yes it will be inefficient as someone else ramps up, but companies that are only here to repeatedly hold the country hostage to get out of sensible regulations are a threat to the population's security. China will eventually abuse its population to the breaking point.

What do you mean, Chinese foreign policy is an utter train wreck. All of their neighbors hate them.

Yes, China engages diplomatically and financially with countries that the U.S. fought and then leaves. Since the withdrawal from Afghanistan of course China appeared instantly:

https://www.wilsoncenter.org/blog-post/mining-influence-chin...

Now the U.S. is fighting for minerals in Ukraine. Rare moment of truth by Senator Graham:

https://responsiblestatecraft.org/lindsey-graham-ukraine/

This of course could have been achieved diplomatically by cooling down the NATO tensions. But no, another proxy war must be fought that likely will be lost like Korea, Vietnam, Afghanistan, etc. The Chinese do not fight and profit from all of this.

Pretty sure the parent is talking about overlooked nations. Nations no one even fights a war over. Probably referring to things like China going "all in" on under-developed African nations.

It's a very "Eastern" strategy. Avoidance and Trade.

Korea is not the best example to prove your point. SK is per capita equivalent to Japan[1]. The Korean War was a tie and in the long run it’s clear which side is better off.

[1] https://www.economist.com/graphic-detail/2022/02/01/by-one-m...

and now Russia (Russia takes step towards recognizing Afghanistan's Taliban government) https://www.reuters.com/world/russia-takes-step-towards-reco...

You're showcasing the "false equivalence" fallacy - you're comparing apples to oranges.

1) Autocracies are fundamentally unstable and need extreme violence to prevent dissent and dissolution. Autocrats basically steal from people at the bottom who in turn are less incentivized to give their best performance. Democracies are much more stable due to acceptance by most people who live in them and much more fair sharing of profits.

2) Due to their inherent instability, autocracies have a very high incentive to fake numbers.

With this background, I think your arguments are for the trash can.

I generally agree, but “China is doomed because autocracy” has been on the media since 2000s. There’s been literally two new generations of people that have been born. The country seems fairly stable as of now.

China had everything going for it for couple of decades. Other countries were happy to outsource manufacturing and invest for the sake of access to the the Chinese market and under the assumption that great power conflict with China was very unlikely. None of those things, broadly is true any more.

China has more than 3X the population of the US, so it only needs a bit over 1/3 the GDP per capita to overtake the US. I can’t imagine that not happening unless China really screws up.

Overtaking the US on GDP per capita is much further away.