Comments by "yop yop" (@yopyop3241) on "Can China Save Itself From the Mounting Debt Crisis? || Peter Zeihan" video.

On the Japan/China demographic point raised at the end: both countries have large numbers of 50-somethings. However, the Japanese are skewed towards the lower 50s while the Chinese are skewed to the upper 50s. Much more important, however is the types of work that these groups of Japanese and Chinese have spent their lives on. The Japanese have been doing work similar to those age groups in the rest of the advanced world. They’re highly educated with lots of white collar desk jockeys and service job workers, some high skilled machinists/technicians, and relatively few blue collar manual laborers. In contrast, the 50-something-year-old Chinese are the kids who weren’t in school because the teachers were being re-educated during the Cultural Revolution. Very poorly educated. They have spent their entire working life doing repetitive, often back-breaking manual labor. As a result, on average, the Japanese are capable of many more years of work. They’re a few years younger, but more importantly, they’re desk workers instead of construction laborers or assembly line worker bees, and that makes it much more likely that they will be able to continue working into their 70s rather than being forced by physical breakdown to retire at around 60.
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@Crtteng-n4x Japan has more very old people. In China, many of the people who would be very old today were offed back in 1958-61 by the Great Chinese Famine. That skews Japan’s median age higher than China’s. But our focus here isn’t on the median age. It’s on the proportion of the population that is working. That’s about the proportion who has crossed the threshold into retirement. Over the next few years, China is going to have a much larger fraction of its population cross that threshold than Japan.
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@nunyabidness3075 The Japanese have had a lot of advantages that the Chinese aren’t going to benefit from. For starters, Japan’s current retirees hit retirement during a time of global peace and prosperity. I hope the world moves in that direction over the rest of China’s Boomers’ retirement transition period, but so far at least, that has not been the case. During Japan’s transition period, Japan spent less than 1% of GDP on defense and less than 1% of GDP on internal security. China’s marks so far are much higher. Japan was not hit by limits to tech access or major trade restrictions by the major tech powers or consumer markets. Opposite for China. Japan didn’t rise as high as it could have because it allowed/encouraged its women to leave the workforce upon getting married. Bringing those out-of-the-workforce women back allowed Japan to cushion the effect of its shrinking working age population. Former Japanese Prime Minister Shinzo Abe famously declared that increasing the women’s workforce participation rate was his the greatest accomplishment of his career. Japan is far and away the world leader in robotics and automation. As of 2019 (the last year of normal data when I looked this up during a bored weekend evening at home during the height of the pandemic), Japan contributed 47% of the value-added to the global robotics and automation sector. In contrast, China’s contribution weighed in at less than 1%. ~50x the contribution via ~1/10th the population.
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@chenyuyufc The birth cohort under consideration is the people born from 1963-1970. 1963 is the start of China’s Baby Boom— the Great Chinese Famine ended in 1961, and it takes a couple of years for a woman to recover enough from famine to become pregnant and then carry a pregnancy to term. The Baby Boom ended abruptly during the 1970s with the 1970 start of Mao’s population control measures (the “longer, later, fewer” campaign). Those population control measures were ratcheted up over the 1970s to eventually become the One Child Policy under Deng. The One Child Policy was in place for the entirety of China’s Baby Boomer cohort’s child bearing years. The Chinese Boomers had substantial parts of their formative education year fall after the end of the Cultural Revolution, but the disruption to the Chinese education system didn’t end instantly when the Cultural Revolution ended. The disruptions affected the system for many years afterwards. The Chinese Boomers’ education was stunted by the combination of the Cultural Revolution and the post-Cultural Revolution disruption.
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Total US debt-to-GDP is basically unchanged over the last 40 years. More national government debt but correspondingly less personal and corporate debt. Since national government debt in a country’s own currency is less risky than personal or corporate debt, the US is actually in an improving debt position overall. Meanwhile, China’s debt portfolio is the opposite with much of it hidden from view and relatively little of it safely with the national government backstopped by the national government’s ability to print as much money as it needs. Much riskier and much harder to deal with. And then there’s China’s implicit debt. The CCP probably can’t afford to allow the Chinese real estate sector to fall as much as it should. If they allow that to happen, the public dissatisfaction will likely reach a point where the public overthrows the CCP. The CCP is therefore implicitly beholden to prevent home prices from falling too far, too fast. That’s an implicit debt of many dozens of trillions of dollars.
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Biden’s debt will likely pay for itself. Investments into infrastructure, semiconductors, and green tech— those are likely to be highly profitable as well as essential to US security over the coming decades. (Can’t let the Chinese get away with cheating their way to dominance over the industries of the future.) In contrast the debt from the last several Republican Presidential Administrations has failed to produce the economic growth that was promised. Instead of investing in America, the rich have taken their Republican tax break dollars and used them for conspicuous consumption. Trump’s tax break was especially poorly conceived— around a quarter of the money went to foreign investors.
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Total US debt-to-GDP has been remarkably stable for 40+ years. The debt burden has shifted from individuals’ balance sheets to the federal balance sheet, but the overall number on a per capita basis has remained largely unchanged. Do you have a theory to explain why federal debt is worse than other forms of debt? If you don’t, your position is grounded on nothing.
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If the capital borrowed is used productively, debt is a good thing. Earlier in the economic opening up process, China was able to accomplish that. The earlier waves of infrastructure construction were very good investments. Recent Chinese debt looks much less promising. On the US side, the debt build up from funding the occupations of Iraq and Afghanistan was clearly disastrous. Not as bad but still not good, the debt buildup from tax cuts for the wealthy has also been largely unproductive. On the other hand, the debt from paying for Obamacare has more than paid for itself. We have saved a lot of money by giving people access to preventative and primary care rather than leaving them to struggle until they end up in the emergency room. And the financial payoff is there even before the benefits of improved health are considered. Those benefits are nebulous and hard to nail down, but they are undoubtedly large. Biden’s debt has been to pay for infrastructure and to boost manufacturing. We’ll see if that debt turns out to be productive, but it definitely seems promising.
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@brandenbailey6384 Yup, even today, the US is still the world’s #2 manufacturing power by value added. Instead of manufacturing products, these days the US produces manufacturing methods. For most of the products out there, it is hyper-skilled US engineers who have worked out every last tiny little detail of how to make them. Then, once the process has been perfected, that process is dropped into whichever location around the globe is optimal, and the hyper-skilled US engineers move on to developing the manufacturing method for the next product.
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