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China’s Gonna Take Our Lunch Money December 29, 2013

Posted by geoff in News.

I read Anne Applebaum’s article on China and Russia in the WaPo the other day. She titled it: China and Russie bring back Cold War tactics

Having written some 40-odd posts on our new Cold War back in 2006-2008, it was nice to see yet another person from the mainstream finally starting to notice the realignment of the geopolitical turf. Sadly, though, she stopped short of calling it a Cold War.

“Is this a new Cold War?”

Every time I say anything to anyone anywhere about Russia nowadays, that’s what I’m asked. And there is a clear answer: No. This is not a new Cold War. Neither the United States nor Europe is locked in a deadly, apocalyptic competition with Russia, China or anyone else. We are not fighting proxy wars. The world has not been divided into two Orwellian halves, democrats vs. communists.

I would note that our adversaries certainly are fighting proxy wars, and that while the world may not be quite halved (nor was Orwell’s), it’s quite apparent that the Russia-China alliance is focused on displacing the United States as the world’s only superpower. It’s also true that the economic battleground has intensified compared to the old days, when the commies didn’t have a competitive GDP.

That reminded me that I hadn’t compared the GDPs of China and the US for several years. So I hopped online and updated the numbers:


That’s a little worrisome. China has huge problems in their GDP reporting, but so do we. And while we’ve been sitting on our thumbs, waiting idly for their demographic and/or economic collapse, they just keep coming.

When I last plotted that graph, economic pundits predicted that China would become the world’s largest economy by 2025. Looks like they’ll beat that by about 5 years.


1. punk - December 29, 2013

Yeah, but China is building entire cities that nobody can afford to live in. The blight of large cities with 99% availability of places to live (that nobody can afford) should be a wake up to anyone worrying about the rising GDP. China’s economy is tied inexorably with the US’s. China is subsidiary of Walmart at this point.

Doesn’t mean we’re free and clear of the threat of nuclear war with them. It’s just that they will be rebelling against their chief source of income.

2. geoff - December 29, 2013

The ghost cities are oft-cited examples of the impending collapse of the Chinese economy. I think their existence shows another facet of the difference between the Chinese economy and ours – the Chinese can do things by governmental fiat that the US cannot (yet, anyway). Meanwhile their economy just keeps growing*, giving them more influence around the world.

We’re an important trading partner with China, but we only represent 20% of their exports. In 10 years we’ll be expendable. They also have a population of 400 million people who have still not joined their economy in a significant way – that’s an entire US they can “export” to.

*When I last plotted those numbers their GDP was 20% of ours and I was freaking out. Everyone said, “Don’t freak out – they’re going to collapse.” Now it’s 6 years later and their GDP is more than 50% of ours. They may collapse someday, but I like a more proactive approach to success than waiting for somebody else to fail.

3. punk - December 29, 2013

And the inflation of the GDP numbers comes from building whole cities. If they were to do an adjustment, to let the economy catch up with the labor force’s ability to consume things, GDP goes down and people get to act all haughty and say things like, “I told you that economy was going to collapse”.

But it won’t collapse, just like the US economy didn’t collapse during the 70s. Just went flat, and a little backward. The government is doing what good Communist governments do and keep the money out of the hands of the people and in the hands of the politburo. With a burgeoning middle class, you would see basically three times what the US could do, because they have three times as much of everything to do it with.

I have a soft spot for China, I should say. We (Southern Baptists) are making some big inroads inside the country. And not just in the spiritual sense. We are showing people the wonders of BACON by setting up pig farms. Pigs eat basically whatever you give them, so they can be fed a pretty terrible diet and still be made into DELICIOUS BACON.

It’s cheap to set these up, and the pigs are bought from American donations. So this is the kindling of that middle class. They are working in places where there isn’t the strong hand of governmental control, places that have a lot less military interaction. But that ‘herbal layer’ of the economy only gets to grow when left alone for a long time.

So, basically, those 400 million are the ones the SBC is specifically targeting. The ones that China can’t export to, because they have no friggin’ money. Apple needs somebody to build their iPads, GM needs somebody to assemble their engines, and Walmart needs somebody to make everything that Walmart sells. If China nukes the US, Red Dawn style, where do the workers go? Cuz they ain’t working for AmeriCo. any more.

I’m saying that the Chinese economy is still way too dependent on the US economy (and Russia and the EU and others) to just lose their biggest cash-cow.

4. punk - December 29, 2013

And I saw a fascinating special on Venice. I think it would be neat to someday go there. Why? Because Johnny Depp was messing around with Angelina Jolie there. Shut up.

Seems that Venice was once the world leader in money because of their salt trade. They were the US economy of their time. Then, after about 200 years of being the go-to money, somebody else got their shot. Portugal, I think.

The upshot is that I agree with you that China is going to be the next big thing. I think it’s inevitable. But the Communist government is slowing down this inevitability with their idiotic policies. Them, or India. And the problem is that with China’s idiotic leadership, they are terrible leaders of the world.

Could be bad times coming. Like another Dark Ages. I still have hope,, though, as I stated in the last comment.

5. Michael - December 29, 2013

Them, or India.


China, like Russia, Japan, the leading EU economies, etc., is inexorably going to deal with the crushing burden of an aging and shrinking labor force. Resources stretched to the breaking point to support their elders will not also be able to support global pretensions. India is not on that demographic death spiral.

6. Retired Geezer - December 29, 2013

I get the feeling that China doesn’t give a rat’s patootie about their aging population. I doubt that they are going to expend much effort or cash towards their comfort/care/happiness.

7. geoff - December 30, 2013

What Geezer said.

About the inflation of China’s GDP: it’s certainly inflated, but so is ours. If you take out deficit spending and the QEs we don’t look so hot.

8. Michael - December 30, 2013

Are you kidding? Are you assuming those evil little Chinese commies don’t care about the elderly? Let’s put aside your parochial blinders and recall the Pearl Buck books about China that we read in high school. By all accounts, Chinese culture and tradition make the veneration of and care for the elderly a priority. This has been a distinctive feature of China for many centuries, even to the point of ancestor worship. Certainly they value the elderly far more than we in the West. Seeking to buttress the continuation of this tradition despite increasing urbanization and labor force mobility, China recently passed a law requiring children to visit their parents over 60.

The burden of caring for elders is pricipally borne by families rather than the government. Regardless of how the cost is incurred, the economic burden is real. Thus, the one-child policy infamously resulted in the selective abortion of millions of females, because old-age security in China depends heavily on having a son. Now they have an acute shortage of marriageable women, leading to both male discontent and sexual frustration (bad news in an inherently unstable political system) and not enough children in the pipeline to maintain their population, their economy and their superpower aspirations in the coming years.

My point being, the increasingly aged population in China will be a humongous economic drag in the coming decades. Your glib assumptions about their lack of concern for the elderly are, so far as I know, completely unfounded. They are less likely to throw grandma under the bus than we are.

9. geoff - December 30, 2013

Their government doesn’t have a problem with throwing a large portion of their population under the bus, elderly or not.

10. Michael - December 30, 2013

That was demonstrably true during the Cultural Revolution. But the days of Maoist fervor are long gone, and the communist true believers are extinct. America also has a history of throwing large portions of its population under the bus. So what? I don’t think there is any reason to believe that historical misdeeds predict the willingness of a culture now to starve it’s parents.

11. daveintexas - December 30, 2013

The top 50 wealthiest US politicians in congress have about $1.9B added up.

Top 50 in China have almost $100B.

These are excellent commies.

12. Cathy - December 30, 2013

Interesting and lively discussion. Thanks.

I love debates between Michael and Geoff about China about as much as I enjoy listening to Wiserbud and Andy argue about musical entertainers who do covers, just sayin’

13. Retired Geezer - December 30, 2013

I enjoy listening to Wiserbud and Andy argue about musical entertainers who do covers,

*Geezer tries to fit in*
Recently we had a guy at my theater that did pretty good covers of lots of people:
Buddy Holly, Roy Orbison, Big Bopper, Ricky Nelson, Elvis, Del Shannon, Chuck Berry, Richie Valens, Beatles, Johnny Cash, Billy Joel, Willie Nelson…

He did a 2-hour show and had the sold-out crowd jumping. He took the time backstage to talk to Mrs. Geezer and Flyin’ Brian’s wife.

Here’s his video promo… beware, it’s 12 minutes long.

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