Things must be going downhill in China:
China, the world’s second-largest economy, announced without explanation on Monday that it was delaying indefinitely the release of economic data that had been scheduled for Tuesday morning, including closely watched numbers for economic growth from July through September, which had been expected to show continued lackluster performance.
....In addition to deferring the release of gross domestic product data for the third quarter, the government agency also postponed the release of September data for retail sales, industrial production, fixed asset investment and other categories.
This week marks Xi Jinping's triumphant appearance at China's 20th Party Congress and his humble willingness to accept an unprecedented third term as leader of the Communist Party—and we can't have this ruined by a bunch of foreigners and malcontents nitpicking over growth rates and industrial production. Xi is a goddam hero of the Chinese people, OK?
Next Monday should be quite soon enough to release the latest economic figures. Maybe even the week after. Or maybe the fourth of infinity. What matters is that Xi is a great man. Let's not allow anything to overshadow that this week.
I'm no international economist or anything, but isn't it a little tough to attract capital and engage in trade with the rest of the world if nobody can see into your economy and your markets, (un)employment, sector growth, etc.?
Apparently not. China has been successfully attracting capital and engaging in trade for decades even though the type of information you describe has often been either late or unreliable or both.
Just openly hiding the data is something new, although they did the same thing last year when some official released data showing that the demographic collapse in China is worse than expected (IE at current trends their population will crash to 600-700 million by later this century).
This is unequivocally good news. Almost half a billion fewer people on the planet will help with the climate. Assuming the estimate is accurate.
I don't understand why a shrinking population should be such an insurmountable problem. If labor shortages occur: Raise the retirement age. Most of us could work several years longer than we do now. Right now we have to retire people to keep the labor market in balance; we can not afford people working longer. But if required there would some bitching and then everybody would get on with their lives. Besides there is always the option to attract immigrants--from South Asia in the case of China.
From what I've read on the topic, from a humanitarian POV, it could be a major disaster. There's going to be a massive overhang of elderly people without the personnel to take care of them, and that can't be solved by raising the retirement age. Immigration would certainly help, though.
The CCP is probably more concerned about the economic implications--again, the humanitarian worry is that they might not mind another little "leap forward" to get over the demographic hump. But also, unless they can get the birthrate up, it's going to be a permanent rolling problem as 2 people ---->1 Person repeats generation after generation.
That massive overhang of elderly people should not be that big a problem. These days, most of the elderly remain independent until shortly before their deaths, so the elderly just don't need that much care. Also, as technology progresses, probably most elder care can be automated.
Where in the heck did you get that crazy idea? There's a nationwide shortage of workers and beds in facilities. My sis went to a class reunion and every single classmate was either dealing with elderly parents in need of care or had recently deceased parents who did need care.
Anecdotes mainly. My mother, who was born a couple of months before Queen Elizabeth, died in her sleep in her own bed in her own house at age 93 having never needed "elder care". The aforementioned Queen died at age 96 having never needed elder care. My father needed a few weeks of hospice care before dying of pancreatic cancer at age 78. Just generally, I've known an awful lot of people who died at a ripe old age without needing more than a couple of months of "elder care" and in many case, like my mother, having never needed any elder care at all.
Capitalism and economies have to continuously grow to be viable long term. Planet be dam*ned as far as capitalists are concerned.
This isn't actually a function of capitalism. It's a function of human beings.
Capitalism and economies have to continuously grow to be viable long term.
There's no rule of physics that prevents an economy from growing simply because the population and workforce are shrinking (although sure, that's a headwind).
Japan's economy continues to see growth most years even though its population has been shrinking for about a decade.
Obviously, though, you need to increase productivity.
Capitalism is quite capable of functioning without growth, although it could be expected to get even more vicious than it is now. When the pie is steadily getting bigger, bigger slices can be had without taking from someone else's slice. If the size of the pie was static, the competition for bigger pieces could be expected to be nasty indeed.
If labor shortages occur, raise wages and accelerate automation. There should be no need to raise the retirement age.
The Chinese are quite racist. I believe you will find they are not interested in importing Caucasians from India, Pakistan, etc. Southeast Asia is dominated by the same racial type as the Chinese but there is a dividing line (zone) roughly at Myanmar, and to the west of that dark skinned Caucasians are the dominant racial type in South Asia
I am torn between rooting for an authoritarian leader leading a country that is promoting a new world order that will make life in the West worse to fail horribly and the idea that too hard of a landing by the Chinese economy might have negative ripple effects for the global economy.
But lets be real, I am rooting for the hard fall
Democratic liberals revere Xi as much as they do Biden.
So, how much is the RNC paying for this one? Doesn't Putin have enough trouble on his hands without pwning the American libs?
Hence the rhetoric over Taiwan...
It's not as though their official data was an honest report.
Nonetheless, it may have more to do with a new reality with the recent US ban on parts, materials, and support for advanced microchips to China.
If they can't import chips and their capacity to manufacture them will slowly degrade, their economy will slow down rapidly. Very soon, they won't be able to make iPhones in Shenzhen. Manufacturing of most high tech electronics will have to be outsourced to India, Vietnam, etc.
That is probably why the delay is indefinite, as opposed to a few days or weeks.
it may have more to do with a new reality with the recent US ban on parts, materials, and support for advanced microchips to China.
It's not feasible that a ban announced last week would have affected the Chinese economy over the course of the summer. Also, Biden's executive order only affects advanced chip manufacturing. It doesn't harm China's capacity to make ordinary chips for use in things like cars and phones.
The PRC economy has weakened for reasons we know about: a cratering property sector and the ongoing effects of Xi's zero covid policy.
(I was going to write "Xi's braindead zero covid policy" but it's not necessarily a stupid way to go if one' prioritizes cementing one's rule over economic vigor.)
If they can't import chips, presumably they will develop the ability to produce them domestically as quickly as possible.
This is not easily done. Just as Russia cannot develop its own industry, nor can China develop its own expertise and capacity to produce the necessary inputs and development tools to create advanced fabs, let alone maintain existing fabs.
Russia is a different case. If the necessary funds were provided to develop a domestic cutting edge chip industry in Russia, those funds would be stolen and the project left half-completed. On the other hand, from hydrogen bombs to jet fighters to super computers, China has repeatedly demonstrated the ability to match Western technology.
When I was a young man and Japan was still recovering from WWII, Japanese industry was derided as essentially imitative and incapable of originality. Nobody thinks that any more. China is now where Japan was about 50 years ago; mostly playing catch up, but with increasing amounts of very high-tech originality. I think that China could build cutting edge fabs in at most a few years.
Most of that "tech" was stolen from the US, w/ re to Russia and China. China's super computers may be assembled in China off Chinese processor designs, but the fabs are in South Korea and Taiwan, just as any "Chinese" CPU/GPU.
This was said decades ago. You're proposing that they'll somehow reach parity w/ Intel, TSMC, and Samsung overnight? How? Steal? Not enough. You have to have access to the expertise, mechanical engineering capacity and precursors to the fab before you can even manufacture a single chip. For reference: https://bityl.co/F8F5
Japan was no longer a geopolitical foe, and it still took over 3 decades for Japan to reach parity with US manufacturing, and we're not talking about a rarified process as 3nm process.
"It's not as though their official data was an honest report."
China does fudge their economic numbers, but not as much as most people think. The rest of the world has too many ways to check and verify what China reports.
We have satellite views that tell us how much shipping activity is really going on in China's ports and rail hubs. We have businesses from all over the world that deal in China and tell us how active things are. Foreign journalists living in China give snapshots of how many people show up to local job fairs and the like.
China's economic reports are far more accurate than they used to be, simply because China is limited nowadays in how much they can fudge things before everyone else starts yelling "BS!"
That's why they chose to delay these reports, rather than just faking them.
That's not the point of an indefinite pause on the release of data. This is not a rescheduling of a release. An indefinite pause suggests a fundamental change that needs to first be addressed, whether it means figuring out a new way to alter the data or create a pathway to work around the ban.
China does not manufacture the core chips that go into cars and phones. Those that appear to come from China (because Foxconn assembles iPhones) actually come from Taiwan or South Korea. The iPhone's CPU is manufactured by TSMC and Samsung. The same applies to Huawei's HiSilicon CPU/GPU which is actually manufactured by TSMC.
The slowdown of auto production around the world occurred primarily due to a lack of production and inventory of chips from TSMC, not from Chinese manufacturing.
There is no Chinese domestic market manufacturing of AMD and Intel CPUs and GPUs. China may be able to produce ingots and slice wafers, but they do not have the capacity to build the advanced UV lithography to build chips.
Whatever you think of China's high-tech industry, the reality is that most of the chips used in the IOT and smart objects come from outside of China. China has spent 3 decades trying to build a domestic tech autarky, and still hasn't achieved this.
That's not the point of an indefinite pause on the release of data. This is not a rescheduling of a release.
Indefinite simply means they haven't announced a release date. Could be six weeks. Could be in 2047 after Xi's death. And I make no claims about what the "point" of the release delay is. The most likely reason is they don't want to release negative news during Xi's coronation.
China does not manufacture the core chips that go into cars and phones.
Not all, but some: China's self-sufficiency rate is about 17%, but appears to be rising rapidly.
https://thediplomat.com/2022/08/chinas-semiconductor-breakthrough/
In any event, I'm not exactly sure what you're contending here: pretty clearly the Biden administration's concern isn''t the strength of the Chinese economy but its military prowess. The hope is that, by hobbling the PRC semiconductor sector, China's capacity to wage war will be weakened.
Aware that this is dicing semantics, "indefinitely" means they've removed it from the calendar that had been previously scheduled. There are many possible reasons. If this were simply to get around Xi's parade, they could have just as easily rescheduled as opposed to removing it from the calendar and no one would blink an eye or think twice.
All this push back on the effects of the chip/tech transfer ban is interesting. Even if SMIC had a 7nm "breakthrough", it does not imply that it has produced a fab for that process. It takes years to go from breakthrough to fab. As The Diplomat noted, SMIC's process requires several more steps than TSMC's and likely has a higher rejection rate. This represents multiple generations behind what is currently being produced in cutting edge fab and it's not simply just a matter of shrinking the lithography beam.
There's an interesting, potential nexus with a report just out of Russia, that as much as 40% of tech components imported from the black market through China are defective -- https://bityl.co/F8IG -- which highlights a problem w/ Chinese manufacturing. What would normally be discarded is instead recycled, even if defective.
Biden's EO may be directed at China's military capabilities, but it has very wide effects on the Chinese economy. If you can't import CPUs, you can't build many smartphones or thousands of different IOTs. For example, Foxconn is moving its iPhone manufacturing entirely out of China. This will stagnate the growth of the Chinese middle class, which in turn, will stagnate the Chinese economy.