China’s Fundamental Economic Problem

Audio editing by Eric Schneider
Motion graphics by Vincent de Langen
Thumbnail by Simon Buckmaster
Writing & Direction by Evan

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Select footage from the AP Archive

[PolyMatter]

Also, if you already have Nebula with a CuriosityStream bundle, I highly recommend that you switch to a direct subscription to Nebula. Doing so (with the link above) is the best way to support channels like PolyMatter

[posthocprior]

Not mentioned: the easiest way to raise the rate of consumption is to raise wages, especially for its approximately 200 million factory workers. The reason this isn't possible: 1) exports are declining 2) China produces products that are dependent upon a low price structure. In other words, they compete with other low wage manufacturing countries.

[Riggsnic_co]

Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.

[tengchen]

As a native chinese, I agree with most of contents here. Thanks for the detailed investigation.
China is expanding its infrastructure mainly in two directions:
1. building housings, roads and railways like what it's been doing in the past two decades. Many thing has proved that these kinds of infrastructure has reached a saturation.
2. building large innovative infrastructures like molten salt power plants and nuclear power plants. These constructions make more sense to me as it's still in need in the long term. However the short-term return of investment is questionable.

[bruceburns]

I remember years ago when Japan was at it peak, some Japanese person who I can't remember, saying, what has happened to Britain, (deindustrialised, industries stolen, lack of investment, stagnant growth ) will not happen to Japan, it did and is still happening, and so the Chinese thought that what happened to Japan will not happen to us, it is and worse, worse property speculation and over-investment, worse debt, so going by the experience of Japan one can only assume that the beginning of the stagnation of China has begun.

[Davethreshold]

@6:13 That bridge is GORGEOUS. I Love modern architecture. Thank you for this. I have had Nebula for a long time and do not watch it enough. I will stop by and watch your series on China and others.

[wisedonkey_]

I remember when Japan's economy was unstoppable and it's been stagnant for decades. This might be the beginning of China's Lost Decade.

[dolyharianto]

I hate it when juicy subject matter is kept behind a paywall so I simply googled why China kept the one-child policy for so long until it's too late for its reversal and it's because:

- Changes to phase out the policy have been delayed because of leaders who have made population control part of their political legitimacy and a bureaucracy that has grown increasingly entrenched in the course of policy enforcement.

- In addition, the Chinese public has been thoroughly indoctrinated by the Malthusian fear of unchecked population growth and by a social discourse that has erroneously blamed population growth for virtually all of the country’s social and economic problems.

Basically incompetent govt bureaucracy and political insecurity to new policy changes and the Chinese buying in their own propaganda. It doesn't help that massive forced urbanization are making childless marriage the more preferred choice.

[dancahill]

Of course, the problem with consumption is that Companies don't pay their workers enough to allow consumption to rise. Between an insecure safety net and rocky employment levels and low pay, you just can't count on consumption.

[hankmarks]

This video covers some pretty deep and complicated topics about world events. While I may not agree with everything said, it's always good to talk and think about these things. As an enthusiast In real estate, it's important to know what's happening globally to make smart choices.

[kortyEdna]

People try to predict the economy not realizing it is not a capitalistic market, its a command economy, central planning! my concern is, instead of having much dollar in bank that could lose value to inflation, do I save in gold to reserve and grow wealth for now, or just hang on?

[jwhite]

Gold bars are the standard go-to way in China to avoid accountability. Many high enough value bribes are paid in gold bars, criminal gangs also supposedly use them to trade between themselves, etc. Not sure why exactly,
Why gold bars (along with everything else from rice to cars) are used as a "bonus" when buying the property is that the value has dropped dramatically but the govenment is prohibiting sale at the actual marker price resulting in zero sales. Offering something (typically free car parking spots or similar) is an attempt to skirt that law. Offering gold bars straight up is an extremely brazen attempt at that, the company doing so clearly has support in high level officials who are willing to cover this.

[GhostOnTheHalfShell]

There is one element to the one child policy being held for so long, the party’s belief they can do anything. The policy has created generational changes in outlook, cultural “knowledge ” compounded with the effects of modernity (costs to raise a kid, time to raise them).

[danielkennedy]

Your take is probably the best case scenario for China. If Yi Fuxian's demographic data are correct, China's population has been shrinking for 5 years and has even fewer young people than thought. If the Brookings Institute's economic data are correct, the Chinese economy never grew as fast as claimed. If only one is correct, China is in for a world of hurt. If both are, it's facing an utter catastrophe.

[Seanmirrer]

In recent months, the world has faced significant challenges, encompassing economic adversities, widespread job losses, market instabilities, conflicts in diverse regions, and financial hardships. The prevailing situation might seem overwhelmingly negative. How can one navigate these difficult times and ensure financial stability?

[austinbar]

In light of the ongoing global economic crisis, it is crucial for everyone to prioritize investing in diverse sources of income that are not reliant on the government. This includes exploring opportunities in stocks, gold, silver, and digital currencies. Despite the challenging economic situation, it remains a favorable time to consider these investments.

[randmdd]

The most interesting challenge is on the youth, imo.

The most draconian covid policies caused many top firms to move manufacturing to other countries like India, resulting in less jobs for fresh graduates.
The first few batches of graduates are finding themselves in situations where there aren't enough meaningful jobs like they were conditioned to believe since childhood, despite working their entire lives to score high on the GaoKao and earn a uni degree, a situation that's probably only gonna get worse.
Real estate is still too damn expensive for any aspiring young person or couple.

[TastyPapaya]

South korea has a birth rate of 0.84 so china does not have the lowest in the world

[RB-fphn]

The core problem is that of our notions of economic prosperity. GDP cannot grow indefinitely, no matter what we do, unless consumption also grows indefinitely. I'd argue this is not a China-specific problem, but a global one. Imagine a car ... initially, it needs to accelerate, but at some point, it will be traveling at a good speed, and acceleration cannot continue. We need to stop looking at GDP growth rate, and simply look at GDP.

[mightyleo]

Seeing how glorious the growth was with my experience in childhood and seeing how it's pretty much ruining the establishment and going backwards in the recent years makes me sad. The difference between the rich and poor are becoming more ridiculous everyday. With all the economic growth on record, the minimum salary hasn't grown much. In fact if you take inflation to account (which is crazy high btw), most people earn "less" technically despite economy becomes stronger. Which ultimately result in younger generations not wanting to have kids - they simply can't afford it, or it's not worth to give birth just to live poorer themselves and also to see how the kids are going to suffer even more.