Comment by api

Never underestimate the power of American spite.

China is undergoing a 2008 style financial crisis due to real estate speculation and deflation due to very weak domestic spending.

They have drowned their municipalities in debt cumulatively equivalent to the US federal and state debt as a percentage of GDP. Localities aren’t allowed to tax but are responsible for local services and industry. Local governments borrowed heavily to hit GDP growth targets and compete with each other for investment and talent.

There is now a backwards migration of the working class back to rural towns from the cities because the incentives China gives is towards technologies that only benefit their already upper-middle class workers. About 500 million Chinese live in rural areas and over 20% of their workforce toils in the fields. That’s not changing anytime soon. Youth unemployment has been 15-20+ percent for some time.

Up to 40% unemployment or very low employment.

Not is but the obvious one was COVID policy during 2020-2022. It triggered the closest thing to a domestic unrest you can get in China after 1989, a large exodus of middle class, and an almost 50% crash in their real estate market. The last one is very deadly and still ongoing because that is how China financed its growth for decades.

At this point they can use the Gaben strategy and easily win.

> Take AI for instance. The US grid is struggling to keep up with demand, while Chinese one has a lot of headway [1]. Usually, this could be solved by an increase in spending lasting a few years which would make the debt tick up, but that would've been an absolutely fine use of debt since it buys some shiny new infra that will pay dividends for the next 20ish years.

I object. The CCP is much more deeply indebted than the US when taking into account provincial and local governments as well as state-owned enterprises.[0] And of course the US debt is financed in its own currency while Chinese foreign debt is financed in dollars or other currencies.

The problem in the US is regulation. An environmental impact study takes 54 months in the US.[1] The CCP, which has no problem poisoning its people or even launching rockets over inhabited villages, doesn't delay itself at all.[2] I'm glad we don't poison our people or place dangerous industry in places that could harm populated areas, or even perform some prophylactic measures to protect nature, but I'm confident that we could do this in less then a year (less than six months?) and make much faster progress. Even for something like nuclear, the ten years (mostly caused by red tape) are really onerous.

> China is the only one that can run if it comes down to it (unless of course the numbers coming out of China are mega bogus, but for that I don't know enough to have an opinion).

Yes, the common opinion among China watchers is that any number the CCP touches is "mega bogus." They're actually in the midst of something of a financial crisis at the moment because of the high debt.

[0]https://www.statista.com/topics/11662/debt-in-china/

[1]https://www.rff.org/publications/reports/how-long-does-it-ta...

[2]https://arstechnica.com/science/2019/11/china-keeps-dropping...

The US has DOUBLE its current power production in proposed expansions, mostly solar and batteries. In 2004 it had like 20%. The US grid is set to grow.

It is absolutely a Chinese century. Even the comment above isn’t wrong per se - great power competition is normal during the interregnum, ie as Arrighi described it - one hegemon is rising while another is declining. But eventually one of them does rise and the world conforms to that - ie America in post WW2.

The US can just hyperinflate to pay its debts.

Maybe AI is not a good example. It is extremely efficient as money burning machine, but for everything else...

> Europe is fucked by both high debt, and lack of innovation

Spoken like somebody who has no idea what they are talking about.

Apart from the large share of fundamental science which Europe has always been bigger in and better at (I mean, there's a huge tunnel in Texas to show that Americans at some point understood this and tried to compete), Europe is funding the military tools of the next generation in Ukraine.

Americans used to be excellent executors, then China took that role. What's left?

The irony is that the people who screamed the most that Rome was on fire aggressively pushed for what you brilliantly call Moron Power.

They thought we were crashing, rushed the cockpit, and pushed forward as hard as they could on the stick. Forward is up, right?

That was debunked: https://econjwatch.org/articles/mckinsey-s-diversity-matters...

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