Comment by edot
2 months ago
Yeah, I have never seen something like that in America in my life. Always plenty of machines sitting around, and every few weeks some guys will hop on them for the day, but other than that they just sit there. It almost looks AI generated how densely packed those are - though I assume that this is real footage.
With China's real estate sector stagnating (because they've built enough housing for future demand to an excess, broadly speaking), all of that capacity is moving towards clean energy manufacturing.
https://en.wikipedia.org/wiki/Made_in_China_2025
https://thediplomat.com/2024/04/how-china-became-the-worlds-...
The doubts about the size of the investment in that Wikipedia article are funny. It's a bit like "We cannot afford to invest in education", but the Chinese are saying "We cannot afford not to invest in education" (Famous quotes, it's more about R&D here). China's leadership is probably terrified of falling into the middle-income trap. It might be the biggest issue on their minds right now. At least I am watching from the sidelines, wondering "Are they gonna make it?".
Education has always been important in Chinese culture.
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> terrified of falling into the middle-income trap
Not really, there's 2 middle income traps:
1) the ACTUAL trap / thesis - countries fail to educate / upgrade workforce enough to move up supply chains to generate high income employment to bring up income, the TRAP is lack of advancement, to which PRC is basically the LEAST trapped country in the world, pursuing industrial development in all high end sectors. Issues is PRC being highly developed in every sector = still not enough high end jobs for 1.4B people.
2) the economic middle income trap, for last few years, PRC consisitly a foreskin (low single %) below world bank definition/revision of upper income, people need to ask why that is? IMO it's because PRC DOESN'T WANT to be definitionally upper income to play up developing status, and lose related perks. It would be absolutely trivial for PRC to revaluate FX by a few % and cross nominal USD high income and take a huge victory lap, but they don't.
The reality is "hiding strength" is going ot be increasingly hard with time - PRC per capita is being brought down by 600m low income. The TLDR is bottom 4-5 quantiles, i.e. 40% very undereducated population who got left behind during modernization and generates about only ~5% of GDP. They skew old and will eventually phase out of stats (die) in next couple decades, and numerator is going to be increasingly high educated new cohorts working high income. Low/high income divide is largely generational, the future educated populations are going to be in disproportionately high income high skill jobs i.e. PRC is replacing 200m subsistent farmers with 200m tertiary workforce. If most of the 2 bottom quantile dies by 2050, PRC per capita will nearly double to medium high income simply doing nothing, with PPP to rival upper-high income if they hold on to production. Short of unforseen catastrophe, it's statistic inevitability.
That's without mentioning FX, i.e. PRC securing enough economic clout = eventually ability to flex the FX lever to multiply nominal GDP faster than actual growth.
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Me too! My guess is 2031, but it'll feel hollow
- Definition of this is 12,000 2011 USD, BLS says thats 17,600 2024 USD. Looking like 2024 closes at a little under 13,000 24 USD. If we calculate out the 6% CCP standard GDP growth rate, it'd take 5 years
- GDP is not very likely to grow at the formerly-real 6% per year moving forward. Population peaked, trade is now a tailwind instead of a headwind, GDP per capita at 13,000 is 0.5x Russia and 2.5x India, and we're in year 2 of a deflationary crisis that's barely being held off, if it is, and is characterized by an significant oversupply in housing stock that'll take years to run down. So I'll tack on 2 years, make it 7 years, 2031.
https://news.ycombinator.com/item?id=41664312
Pretty sure clean manafacturing is still part of that middle income job.
Those millions of unemployed youth didn't go through the gaokao to work in a BYD factory, it's the "useless" white collar jobs that everyone wants but there is short supply of. And the often unpredictable clampdowns on those industries don't help.
> China's leadership is probably terrified of falling into the middle-income trap
I feel like it's more of a case of how do they get out of it, rather than avoid falling into it, at this point. The demographics are shit and the country isn't particularly attractive to immigrants, nor (unlike, America and Canada, and honestly most of Europe, despite what the right wing say) do they really have room for more immigrants.
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China scaling and efficiency is really something else. it seems they've latched on to something that works better than even democracy and capitalism
They’re certainly good at building.
Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-facto...
And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%.
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Efficient yes, generates good quality of life for the average citizen? Not as much. Plenty the west can learn from China on how to do large public works though.
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> it seems they've latched on to something that works better than even democracy and capitalism
Wouldn’t this just be plain old fashioned authoritarianism? America can latch on to this too, and we might based on how the Trump admin turns out.
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They're building a large carwash facility near me and have taken over a year to get to the point of putting the roofs onto some steel framed sheds. I constantly think of the time when we were able to build the Empire State Building in 13 months.
The other really impressive part is that they also treated the workers really well during the construction. Cautionary Tales did an episode on this: https://timharford.com/2024/09/cautionary-tales-steel-and-ki...
They paid good wages but also kept a high bar on quality and performance. The workers in turn were incentivized to do a good job and gave feedback like ideas on how to improve efficiency, e.g. build an internal railroad to carry bricks up as they got higher and higher in height.
You can't do something like the Empire State Building in an year without treating your workers well. (And the suppliers, and investing in machines quality, and safety...)
You can build it in a decade or two, and get something close to what you designed. But you can't build it in an year.
They just built a car wash near me, just a few months from start to finish. I don't know what is going on with the one near you, but it isn't a US thing.
Of course car washes are a case where I could see someone building one to keep their crews busy between other better paying jobs. Thus have lots of stops as other projects come in. there isn't much investment sitting and there is value to a contractor to keep their crews busy (read paid!) even when there is no other work. I could see a car wash company agreeing to a build this over 2 years for a discount even though there are only a few months of work - for both it could be financially beneficial.
And what blows my mind is that if I want to rent a tractor with a front loader for some landscaping work it’s hundreds a day. Yet even larger commercial earth moving equipment sits around unused for weeks.
Some of that may be due to the owner transporting it from job to job instead of storing it in their own yard.
Nonetheless, there's a lot of idle people/equipment in construction because things have to be done in the right order and sometimes it's more economical to over-provision than risk delaying the whole project because something wasn't available when it was needed.
Those hundreds per day will partly pay for all the sitting around unused in the hiring company's yard! You can see this in the pricing which is usually a lower rate if you hire it for a longer period.
It's about usable time and cost of capital - if it's cheaper to rent the unit, they'll rent one, if it's cheaper to buy one and let it sit idle most of the time, they'll do that.
The rent/buy calculus can be incredibly shunted towards "buy" once you're using it even somewhat. It's even more so when you realize that labor costs is the main issue, and not having a skilled worker waiting around for an item to be delivered (by another slightly less skilled worker, perhaps) is a huge savings in its own part. Five guys on a site might have 15 machines total; even though they obviously can't use all 15 at the same time.
I have, happens around 6 AM. They get all the generators started up, power tools and full power. All the heavy machinery at full throttle. A cacaphonous 6AM salute to the internal combustion engine. Old Zeke fills his truckbed full of rusty nails and drives aggressively around the neighborhood dropping this way and that. Well, not old Zeke nowadays, more like Senor Ramirez Carloz Gonzalez.
Question is, if it's 6 AM at a construction site, and nobody is around to hear it, do they make any noise?
It does seem to have an AI look to it. The resolution is pretty poor.