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marianatom | 2 years ago

Meanwhile in China:

- exports plunge by 7.5% in May, far more than expected https://www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7po...

- profit tumbles 18% in April https://www.reuters.com/world/china/china-industrial-profits...

- chip progress stagnating. Oppo chip design unit completely shut down https://techcrunch.com/2023/05/12/oppo-chip-disbands-phone-c.... Japan stops shipping semiconductor equipments to China https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-c.... China is still stuck on 14nm chips.

- multinationals moving supply chains out of China faster than ever. Tesla asks Chinese suppliers to build plants in Mexico (June '23) https://cnevpost.com/2023/06/08/tesla-asks-chinese-suppliers.... BYD make EVs in Vietnam (May '23) https://www.reuters.com/business/autos-transportation/chines.... On top of older news this year that Apple wants Foxconn to move out 50% of its production lines from China by 2025. And Dell's production completely out of China by 2027.

China is no longer the "world's factory". It will stagnate for 10+ years, similar to Japan's lost decades, but with worser birth rate than Japan today. It reported 8M babies in 2022, low that was last reached in 1940s.

We've never seen a large portion (25%+) of a large modern economy vanish in a span of a few years. (factories moving out, which decreases downstream economic activities such as real estate and retail).

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mhuffman|2 years ago

> China is no longer the "world's factory". It will stagnate for 10+ years, similar to Japan's lost decades, but with worser birth rate than Japan today.

idk, Japan seems like it thought the party would go on forever, whereas China does seem to have clear eyes with it comes to world politics (eg. long-term investment in the rest of Asia and Africa).

> We've never seen a large portion (25%+) of a large modern economy vanish in a span of a few years.

Do you recall NAFTA? or the quick rise of China not long after? These are still studied as huge exogenous economic shocks in business schools!

marianatom|2 years ago

> China does seem to have clear eyes with it comes to world politics

You're hyping up Xi Jing Ping, who is considered an idiot in most elite circles including Putin, too much. One belt and one road is now considered a failure with Italy, the most prominent member, dropping out of it this year. Most of the countries that took on the debt are unable to pay it back, and China has had to forgive a lot of the loans recently. And no one has aligned US, Japan, South Korea, Taiwan, Philippines, India, Australia, Nato quite like China in recent years. The most recent focus in G7 was squarely on China.

> NAFTA

with respect to NAFTA, US manufacturing only consisted of 15% US economy in 1994 https://www.stlouisfed.org/en/on-the-economy/2017/april/us-m..., whereas Chinese manufacturing consisted 30% of China's economy today. Also, the difference is, the laborers in US manufacturing moved to other higher paying jobs, as a result, average income went from 25k to 30k in 2000. Whereas what we're seeing now with Chinese laborers is that they're moving back home to countryside to farm (< $1 a day)

euroderf|2 years ago

By your numbers and those of others, both Eastasia and Eurasia are taking it on the chin. Oceania suffers from sociopolitical rot but the economy is pretty lively.

AnimalMuppet|2 years ago

8 million babies for a population of 1.2 billion? Woah. Back of the envelope, that's something like half replacement rate.

marianatom|2 years ago

Yeah and that's not the crazy part. There's a 50% drop in marriage rate in 2023 compared to 2022.

pphysch|2 years ago

Despite all these cherry-picked numbers, China's economy will grow by 4-6% this year vs. USA's 0-2%.

https://www.barrons.com/articles/us-growth-gdp-china-economy...

marianatom|2 years ago

One government sponsored number, vs multiple numbers pointing to China's economic decline, which multinationals check in order to gauge the real health of China's economy. Multinationals know the real numbers, which is why they're all leaving.

What other numbers don't lie? 20.4% youth unemployment rate https://www.cnbc.com/2023/05/29/record-youth-unemployment-st.... 22% drop in daily home sales in 2023 vs 2022 https://financialpost.com/pmn/business-pmn/chinas-april-prop.... Yuan losing 7% value against dollar https://www.cnn.com/2022/05/13/investing/china-covid-yuan-us.... and on and on.

dirtyid|2 years ago

It's also fundementally omitting how much PRC has entrenched itself as global factory than ever.

PRC exports to US/west near record highs while trade with global south have exceeded western bloc. The only reason export decline notable is because PRC exports has increased so spectacularly in the past few years (export value grew from 2.5T in 2019 to 3.6T in 2022) that there's nowhere to go but down when global economy underperforms. Net export value is still up ~40% since 2019 - exports stats can be confirmed bilaterally. PRC exports grew as much in last 4 years (~1T) as it did in decade between 2008-2018 (1.4T-2.4T). Meanwhile US increased imports from "friendshore" countries mirrored PRC increased exports to those countries, i.e. it's tarrif engineering and US import dependence on PRC ultimately still increasing.