Comments on: China’s commitment to growth will drive the global economy Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Oro_Invictus Sun, 15 Sep 2013 06:15:53 +0000 @Pete_Murphy

Thank you for the reminder that it is not simply sociologists and ecologists who understand the concept of negative density dependence. It is astonishing the sheer lack of understanding so many have of this most basic precept; it is a simple rule that once species exceed a certain limit their sustainability, resource efficiency, and productivity drop precipitously.

In this, the PRC is but the most egregious example of a nation-state whose government fails to recognize this “law”. That the PRC has not seen any major improvement in personnel or resource efficiency in decades (as can be most notably seen by the utter lack of improvement in matters such as per capita innovation rates and the like) hardly surprises in this. Even with the increased resource draw meant to offset these inefficiencies, it is telling that (even if the world manages to support it) the PRC is expected to level off at a per capita income around 44% that of nations like the US by 2050.

As noted, however, it is unlikely the world will be unable to sustain such a draw. In this, it is not only the PRC, but the majority of nation-states which are utterly unsustainable. Even the US, with its vast natural resources, would have to decrease its population to 200 million maximum to achieve long-term sustainability; this isn’t even getting into ideal population, which would put it around 30-50 million. Expanded globally, this would put the world population at around five-hundred million to one billion individuals.

What makes this all the more infuriating is that, if we acted soon, we could actually achieve such a drop in global populations humanely; by creating global resource pools to support aging populations while implementing restricted growth plans, we could achieve such a drop before the end of the century (theoretically). But no, it is virtually inconceivable that the nation-states of the world will ever cooperate as such or be willing to undertake the short term drops in GDP and the like to achieve long-term sustainability and unimaginable prosperity. For proof of this, we need only return to the PRC, and look upon the graves of those cut down by pollution, whose number grows by more than a million each year.

By: Tiu Sat, 14 Sep 2013 00:12:18 +0000 Given Gordon Browns position while the economy was driven over a cliff (UK Chancellor of the Exchequer, then Prime Minister) his analysis is probably not one to put too much stock on.
There is no good reason why the “west” couldn’t have been in a good position to compete better… if it was for politicians like Gordon Brown.

By: UauS Fri, 13 Sep 2013 21:18:36 +0000 Unfortunately, China makes millions of inferior quality products that end up in the land fields worldwide after just a few weeks or months of use.
Yes, we all need growth and stability, but first and foremost, we need sustainability. Otherwise, 50 years from now our children and grandchildren will be walking outside in the gas masks…

By: tmc Fri, 13 Sep 2013 20:48:20 +0000 @Pete_Murphy, Your own theory on the global economy states that the way the Americans are going about it is self destructive and will eventually destroy our economy (as it has been doing). I agree with you completely that the United States of Corporate America is handling global economics completely wrong for the American middle class. If it had one single spokes person, I’m sure it would agree too. It would also say that that’s not it’s job, not its “Mission Statement”. A considerable amount of the rest of the world also knows that and are not doing the same thing. Just because China has played the game, does not mean that it is now hooked on it and will try to continue it. Your book and posted arguments are about the need for a different view of economics, one that takes into account population much more than the current theories do. Can you not consider that the Chinese, who have the largest population and have felt the affects more than anyone, have already thought of that and are following their own economic theory? Most westerners actually can’t. The USCA and much of the EU are hell bent on growth and short term profits. They absolutely and flat out refuse to plan past the next year, or at best five years. And none of that planning is for the people, only for the corporation. The Chinese have show through their one child policy that they indeed have though of the future of their people. And not just the current generation of them, but also for their children and grandchildren’s futures. And they are willing to make huge personnel sacrifices to ensure that future. So perhaps we should be less presumptuous about how they should handle their future. For the last fifty years they have shown one hell of a track record. One comparable to even to the once mighty United States at the height of its glory. I think if we just wait and see, we’ll find that they have a very good handle on how their society will go forward. It will become the largest economy, of this there is little doubt. But I think it will also show that, as you sometimes eluded to, the American way has lost it’s way, and that there are better ways to manage a society in the 21st century.

By: SaveRMiddle Fri, 13 Sep 2013 19:42:53 +0000 What a fascinating topic. Great comments too. One can almost feel the hand off of the American Dream to the Chinese Dream as our inequality gap grows wider.

What vision Chinese leaders have! A financially healthy middle class will perpetuate more consumption within.

Our leaders say we can’t do that because We’re Broke.

By: ptiffany Fri, 13 Sep 2013 18:45:30 +0000 Forever the optimist. Are we all to suppose that the trillions invested in Chinese real estate that now sits idle will have no effect on China’s near-term economic prospects? And, Chinese debt – Wow! Are we also to believe that these profligate investments around the globe – unique in human history – can continue forever?

It must be great to be a wild-eyed optimist who envisions utopia.

By: tmc Fri, 13 Sep 2013 12:56:47 +0000 Excellent article. It amazes me that so many of the western leaders and economists still don’t believe that China can and will do things that we can’t due to our form of government and markets. 20th century thinking will not prevail and the Chinese know that. They are well suited to become the new 21st century leaders of the world.

By: Pete_Murphy Fri, 13 Sep 2013 12:14:00 +0000 China’s best hope for the future is that economists never discover the inverse relationship between population density and per capita consumption and, consequently, that the U.S. never wakes up to the reality that it is the unwitting participant on the wrong side of a parasitic trade relationship.

Like other badly overpopulated nations, China’s economy will be forever plagued by the low per capita consumption that is the product of severe over-crowding. Almost without exception, badly overpopulated nations either exist in abject poverty or they are heavily dependent on manufacturing for export to less densely populated nations – primarily the U.S. – to sustain even a modest standard of living. Such nations come to the trade table with badly bloated labor forces and markets emaciated by over-crowding.

The result is a massive global trade imbalance that nearly collapsed the global economy five years ago. Only a coordinated program of massive deficit spending by central governments and an unprecedented campaign of money-printing by central banks has been able to sustain the illusion of a recovering economy.

As the world’s population continues to grow at a rate of 70 million people per year, its biggest challenge will be rising unemployment and poverty as per capita consumption inevitably declines.

Pete Murphy
Author, “Five Short Blasts”

By: GrahamLovell Fri, 13 Sep 2013 11:16:59 +0000 The (missing) element in this exposition of China’s future transition is the structural changes in international trade that are necessity to enable developing countries to move from cheap exporter to fully diverse and rich self-supporting economies.

Worldwide absolute free trade rhetoric is the greatest hindrance to this kind of successful transition. The world doesn’t need more super-competitive trade, we need stability, and so does China. A little less churn, leading to jobs moving from country to country finding the cheapest way forward, and little more local production and sales.

Each country should be allowed / encouraged to support its own industries, without needing the artificial support of hidden barriers to free trade, such as the USA’s banning of coal seam gas exports, and all the structures that Japan, in particular, has put in place.

The simplest way to do this is have an internationally agreed 15% tariff on all imports of both goods and services. The EU can then give up on its pointless and fruitless attempt to crush Chinese trading aggression through dumping enquiries and duties.

In regard to services, a “tariff” is easily organised via the kind of self-reporting GST system that applies in Australia – a 5 minute task once a month once the correct systems are put in place.