China has been taking steps to keep it’s AI industry in check. They’ll be fine. Their bubble pop is essentially a market adjustment. We all just get bent out of shape because of how big these numbers have gotten over the last few decades. The important thing is that the Chinese government took steps to protect it’s other sectors which is why we likely saw their bubble pop before ours.
I believe what I said, but I’m not following the Chinese market in any serious way. One of my comment edits was to disclose that but I choose the more basic statement. I’m fully willing to be wrong when presented with data. I felt that removing my own hedge allowed comments like yours to more directly challenge the statement.
I’m in the middle of studying for a mid term. I don’t want to use the energy to dig into it. I got my stance mostly from articles I’ve read in passing on how they have regulated their AI market to protect workers and manage circular investing. It could easily have been propaganda.
They don’t have a handful of companies financing each other in a giant game of venture-capital-human centipede that will topple the entire market when it goes belly up.
This is an odd distinction to draw. What do you mean by done in this case?
The CPC much more closely controls their internal markets so the fact that companies are not doing the whole “circular investment” game is a direct result of policy decisions made by the CPC rather than companies in China just sort of “deciding” not to hop on the band wagon.
The CPC didn’t send a task force to fight the money demons but they did implement policy that led to this state of affairs, which is what they’re supposed to do.
Honest to god, the entire first world might feel the shockwave of the AI bubble bursting. This is not only being shoved everywhere, international commerce runs on the petrodollar and, with the American continent being the biggest importer of Chinese goods, it’s hard to see that not affecting China as well.
Also, there’s a war happening on Iran, so… You will definitively feel if it all happens all at once, with the fuel crisis too I mean.
their real estates have been “popping” for several years now. i still remember finance bros making videos titled “is china going to collapse in 30 days??!?!!?” a couple of years ago.
in reality it’s just the government managing risk and taper speculation in the real estate market.
It looks like every news article about China’s real estate says their prices are lowering continuously. That means in America that their loans would be under water. Honest question, isn’t that the case for China too?
First thing, property prices going down is not necessarily a bad thing, but people don’t usually see it that way.
Simple truth: if you own a house, you would want house prices to go up, forever. This is true anywhere on Earth, and it’s true in China too. But as a society, you can’t allow house prices to go up forever. Because that means getting onto the housing ladder becomes harder and harder, young people would have to rent forever. Their income thus funneled into the property owning class, inequality goes up, stability goes down, and so on. Everyone can see the problem, but not all governments can do something about it. This is where China, an oppressive authoritarian government, has its advantage. They doesn’t have to worry about if the voters are going to elect them again. So they are afford to make some people unhappy.
But it’s not that simple actually, lowering property prices is almost uniquely bad for China. Because property is universally seen as the vehicle to preserve wealth in China. In fact a majority of China’s household wealth is stored in the property market [1]. Another compounding factor: China has a large pre-sale housing system. In other words, people are borrowing money to buy houses that aren’t even built yet, and that accounts for 90% (!!) of house sales [2]. I’m sure you can imagine, when property prices go down in this kind of system, people are gonna get really really mad. In fact people got so mad they got onto the street! If you know anything about China, you know how big of a deal this is. This sort of thing just doesn’t happen in China. Last time this happened, people died and that particular event even became a freaking internet meme.
And all that plus the fact property developers in China are often choose to take a lot of risk and are highly leveraged 3. This is almost reminiscent of the subprime mortgage crisis, yet a catastrophe similar to the 2008 crash hasn’t hit. Why? Because China’s government has a much stronger hold of the economy, and they are much more willing to intervene than any western capitalist country. Being authoritarian also helps. They have a lot more policy lever they can pull, so they can allow the property prices to gradually fall, without taking the entire economy with it. Which is kind of unimaginable in the US.
This is not to say their system is perfect - and that’s without talking about their horrible human rights records. Their policy makers are human too, and make mistake. Their stock market will rise and fall, the point is you shouldn’t try to fit what happens in China into the typical western economy boom-and-bust narrative. That’s not how it works in China.
[1]: The portfolio of the average household in China is more highly concentrated in real estate than elsewhere. For instance, 62 percent of its assets are in real estate, compared with 38 percent in Japan and 28 percent in the United States. (2020) Source
[2]: Developers have responded to restrictions on accessing other sources of funds by increasing their use of presale funding (Graph 5). While presales have long accounted for the bulk of new residential property sales in China, their share has increased from around 80 per cent to almost 90 per cent since 2016. (2020) Source
you can’t allow house prices to go up forever. Because that means getting onto the housing ladder becomes harder and harder, young people would have to rent forever. Their income thus funneled into the property owning class, inequality goes up, stability goes down, and so on. Everyone can see the problem, but not all governments can do something about it.
Here in hyper-capitalist dystopia, our property owning class is placing their bets on being able to deter that ‘stability goes down’ part with all-pervasive surveillance and authoritarianism.
The important thing is that the Chinese government took steps to protect it’s other sectors
But At What Cost?!
Also, so much of this seems to undersell the global common denominator: skyrocketing energy prices.
China is getting hit earlier because they’ve relied so heavily on the Persian Gulf and Russia to date. By contrast, the US - a major energy exporter - can remain insulated (and even reap a fat dividend) as their energy export values balloon.
AI is voracious for energy, so Chinese data centers got hit faster and harder than their American peers. I would not assume this rebounds the same way in the States, because the US is willing to subsidize AI development AND fossil fuel consumption in a way China is not.
I think this is just blatantly wrong. China has vastly more energy capacity that the US and, 3-4x what the USA has. China has the entire USAs energy capacity purely as renewables. The entire time, the competition around energy has been a moot point for China. They don’t need more efficient or powerful chips because they had the energy spare to just use more. NVIDIA CEO Jensen Huang made a good statement on this point. The reason for this, whatever it is, could be entirely unrelated to energy.
I think it’s partially innacurate to compare per capita energy consumption for the two nations.
The average American lives a vastly different lifestyle to someone in china, consider that per capita consumption of China is now higher than that of the EU. It’s not the whole picture. An average American uses almost four times as much energy as a Chinese or European person at home.
If you’re talking about standard of living, sure, per capita makes sense. There’s no argument that for the majority of people in the US their standard of living is probably objectively higher.
China built a lot of solar and wind projects, so they’ve been divesting from oil and gas
They’ve been building wind/solar because they’ve exhausted oil/gas supplies.
But when Russia started opening up trade, they were happily drinking from the fire hose of cheap fossil fuels. And they’re still some of the biggest coal power consumers.
They’ve been rapidly rolling out Solar/Wind to meet a voracious demand for Wattage that fossil fuels can’t meet alone. But they’ve also been rolling out new fossil fuel plants. And for the same reasons.
The US frequently exports light crude oil at a premium while purchasing heavy crude for less. The refineries in the US are largely set up for heavy crude, so it works out and nets a high profit for oil companies.
China has been taking steps to keep it’s AI industry in check. They’ll be fine. Their bubble pop is essentially a market adjustment. We all just get bent out of shape because of how big these numbers have gotten over the last few decades. The important thing is that the Chinese government took steps to protect it’s other sectors which is why we likely saw their bubble pop before ours.
It’s less that they protect companies, and more that they don’t care when they end.
That protects the industry.
Compared to America where specific companies lobby to limit competition, and end up just charging more for shitty products.
It’s pretty much why we keep losing.
Because if the big companies never end, they buy up everyone else. Too big to fail means it’s too big to even exist.
What? Their real estate is popping too. Could you be more specific as to what “steps to protect its other sectors” means?
I can’t.
I believe what I said, but I’m not following the Chinese market in any serious way. One of my comment edits was to disclose that but I choose the more basic statement. I’m fully willing to be wrong when presented with data. I felt that removing my own hedge allowed comments like yours to more directly challenge the statement.
I’m in the middle of studying for a mid term. I don’t want to use the energy to dig into it. I got my stance mostly from articles I’ve read in passing on how they have regulated their AI market to protect workers and manage circular investing. It could easily have been propaganda.
Refreshingly honest social media comment!
Good luck on your mid term. no /s
They don’t have a handful of companies financing each other in a giant game of venture-capital-human centipede that will topple the entire market when it goes belly up.
That’s not what steps they’ve taken. I’d like to know what they’ve done.
This is an odd distinction to draw. What do you mean by done in this case?
The CPC much more closely controls their internal markets so the fact that companies are not doing the whole “circular investment” game is a direct result of policy decisions made by the CPC rather than companies in China just sort of “deciding” not to hop on the band wagon.
The CPC didn’t send a task force to fight the money demons but they did implement policy that led to this state of affairs, which is what they’re supposed to do.
So you think china is going to be fine or have a minor hiccup? What about when the us bubble pops?
Honest to god, the entire first world might feel the shockwave of the AI bubble bursting. This is not only being shoved everywhere, international commerce runs on the petrodollar and, with the American continent being the biggest importer of Chinese goods, it’s hard to see that not affecting China as well.
Also, there’s a war happening on Iran, so… You will definitively feel if it all happens all at once, with the fuel crisis too I mean.
Centralized management of your economy allows you to respond to, and plan for, situations like this better than a pure market can.
I think the CPC will end up in a better international position because the US did not more responsibly deploy this technology.
their real estates have been “popping” for several years now. i still remember finance bros making videos titled “is china going to collapse in 30 days??!?!!?” a couple of years ago.
in reality it’s just the government managing risk and taper speculation in the real estate market.
It looks like every news article about China’s real estate says their prices are lowering continuously. That means in America that their loans would be under water. Honest question, isn’t that the case for China too?
And the honest answer is: it’s complicated.
First thing, property prices going down is not necessarily a bad thing, but people don’t usually see it that way.
Simple truth: if you own a house, you would want house prices to go up, forever. This is true anywhere on Earth, and it’s true in China too. But as a society, you can’t allow house prices to go up forever. Because that means getting onto the housing ladder becomes harder and harder, young people would have to rent forever. Their income thus funneled into the property owning class, inequality goes up, stability goes down, and so on. Everyone can see the problem, but not all governments can do something about it. This is where China, an oppressive authoritarian government, has its advantage. They doesn’t have to worry about if the voters are going to elect them again. So they are afford to make some people unhappy.
But it’s not that simple actually, lowering property prices is almost uniquely bad for China. Because property is universally seen as the vehicle to preserve wealth in China. In fact a majority of China’s household wealth is stored in the property market [1]. Another compounding factor: China has a large pre-sale housing system. In other words, people are borrowing money to buy houses that aren’t even built yet, and that accounts for 90% (!!) of house sales [2]. I’m sure you can imagine, when property prices go down in this kind of system, people are gonna get really really mad. In fact people got so mad they got onto the street! If you know anything about China, you know how big of a deal this is. This sort of thing just doesn’t happen in China. Last time this happened, people died and that particular event even became a freaking internet meme.
And all that plus the fact property developers in China are often choose to take a lot of risk and are highly leveraged 3. This is almost reminiscent of the subprime mortgage crisis, yet a catastrophe similar to the 2008 crash hasn’t hit. Why? Because China’s government has a much stronger hold of the economy, and they are much more willing to intervene than any western capitalist country. Being authoritarian also helps. They have a lot more policy lever they can pull, so they can allow the property prices to gradually fall, without taking the entire economy with it. Which is kind of unimaginable in the US.
This is not to say their system is perfect - and that’s without talking about their horrible human rights records. Their policy makers are human too, and make mistake. Their stock market will rise and fall, the point is you shouldn’t try to fit what happens in China into the typical western economy boom-and-bust narrative. That’s not how it works in China.
[1]: The portfolio of the average household in China is more highly concentrated in real estate than elsewhere. For instance, 62 percent of its assets are in real estate, compared with 38 percent in Japan and 28 percent in the United States. (2020) Source
[2]: Developers have responded to restrictions on accessing other sources of funds by increasing their use of presale funding (Graph 5). While presales have long accounted for the bulk of new residential property sales in China, their share has increased from around 80 per cent to almost 90 per cent since 2016. (2020) Source
thank you for the detailed comment!
Here in hyper-capitalist dystopia, our property owning class is placing their bets on being able to deter that ‘stability goes down’ part with all-pervasive surveillance and authoritarianism.
Their real estate has been popping for the last decade.
But At What Cost?!
Also, so much of this seems to undersell the global common denominator: skyrocketing energy prices.
China is getting hit earlier because they’ve relied so heavily on the Persian Gulf and Russia to date. By contrast, the US - a major energy exporter - can remain insulated (and even reap a fat dividend) as their energy export values balloon.
AI is voracious for energy, so Chinese data centers got hit faster and harder than their American peers. I would not assume this rebounds the same way in the States, because the US is willing to subsidize AI development AND fossil fuel consumption in a way China is not.
I think this is just blatantly wrong. China has vastly more energy capacity that the US and, 3-4x what the USA has. China has the entire USAs energy capacity purely as renewables. The entire time, the competition around energy has been a moot point for China. They don’t need more efficient or powerful chips because they had the energy spare to just use more. NVIDIA CEO Jensen Huang made a good statement on this point. The reason for this, whatever it is, could be entirely unrelated to energy.
Okay, now look at per capita energy.
That is extremely inaccurate
I think it’s partially innacurate to compare per capita energy consumption for the two nations.
The average American lives a vastly different lifestyle to someone in china, consider that per capita consumption of China is now higher than that of the EU. It’s not the whole picture. An average American uses almost four times as much energy as a Chinese or European person at home.
If you’re talking about standard of living, sure, per capita makes sense. There’s no argument that for the majority of people in the US their standard of living is probably objectively higher.
However, China’s industrial electricity usage per capita has overtaken that of the US long ago.
That hasn’t been true in decades.
What are you using to calculate standard of living?
Certainly not life expectancy, education, housing, or cost of living.
China built a lot of solar and wind projects, so they’ve been divesting from oil and gas, so a crash lets them stockpile oil for other purposes.
They’ve been building wind/solar because they’ve exhausted oil/gas supplies.
But when Russia started opening up trade, they were happily drinking from the fire hose of cheap fossil fuels. And they’re still some of the biggest coal power consumers.
They’ve been rapidly rolling out Solar/Wind to meet a voracious demand for Wattage that fossil fuels can’t meet alone. But they’ve also been rolling out new fossil fuel plants. And for the same reasons.
can you clarify what energy the US is exporting?
The US is the largest exporter of Natural Gas on earth. and Top 3 for oil, like other Lemmings mentioned.
despair
The US frequently exports light crude oil at a premium while purchasing heavy crude for less. The refineries in the US are largely set up for heavy crude, so it works out and nets a high profit for oil companies.
The United States is a major energy exporter and importer, especially for petroleum
Not sure about the person you responded to’s specific context but the US sells energy on energy markets. Primarily to neighbors.
Source, currently interviewing for a major ISO and have had to learn this shit
Colonialism and hate.
Debt
We’re damn good at it too.
Millionaires trade it like baseball cards.