EPTThe Rise of China and Fall of America - Page 3
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Retgery
Canada1229 Posts
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Insanious
Canada1251 Posts
On December 06 2010 10:44 Consolidate wrote: Because of two things...Of course it is in China's best interest for America to do well. Technically it is in everyone's best interest for everyone else to do well. The real issue is that China is less dependent on America than vice-versa. Why is it that China is among the least affected by the failure of America's financial sector? 1) The Chinese artificially devaluate their own dollar, as such during a recession they can stop doing this and will keep their dollar at the same value. As such, this will simply result in the gaining money as they will not have to spend money to create new currency to devaluate the Yuan. 2) The Chinease purchased American dept, and as it currently stands, purchasing dept from someone else is purchasing an asset, as someone has to pay off the dept. This means that the Chinease just got a HUGE boost to the value of their country (well as a whole, who ever purchased the dept (the banks) get a huge boost which reflects on China as a whole). simply because the value of the dept is higher than the value of the dollars they spent to purchase it. These two things means that: The Chinease dollar didn't change in value compared to anyone else, and they look a lot better as they purchased trillions of dollars in dept (which even at a 1% interest rate is worth a STUPIDLY large amount of money...) Not to mention, even during the recession consumers did not spend that much less than they normally do, simply because China was keeping their dollar valued higher (by buying the dept). This means that China still gets payed because American consumers are still buying things. - - - - Sorry, but just as a side note... here's the 2008 recession in a nut shell 1) Banks bought a tonne of securities made up of parts of mortgages (from USA) 2) People in USE defaulted on mortgages 3) Securities SEVERELY devalued 4) Banks suddenly lost a TONNE of money, which they lend out 90%+ of the money they get in (they only need ~10% cash in their vaults in most countries). Now like 70% of the money they lended out was worth nothing 5) Banks were asking the other banks to pay them back, even though no one had money, so a round of defaulting on loans happend (Bank A let to bank B, Bank B lent to Bank C, Bank C lent to Bank D, etc... Bank D cant pay Bank C, Bank C cant pay Bank B because of C, etc, etc...) 6) Banks died 7) With banks dead, no one started lending 8) Businesses could not get funds 9) Businesses started to default on purchases 10) Businesses started to cut costs to pay back creditors 11) People got laid off This is basically what happened (very simplified). The only problem, is in the USA, what happened, is some where around part 5, the USA started to give money to Banks, and other countries (like China, Canada, UK, etc...) purchased the Dept the USA brought on to pay their banks to keep them alive. This means unlike in Ireland and Iceland, the US dollar did not devaluate as much as it should have. So less people get laid off in USA, less businesses close, and this means people keep borrowing and lending, and paying companies (this is why a lot of companies are not better off than they ever were...) and this is why China can afford to buy trillions of dollars of dept they will never get repayed for... simply because Americans buy so much stuff and just keep on paying China. | ||
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Consolidate
United States829 Posts
On December 06 2010 10:59 kataa wrote: I don't really see how America's decline somehow proves Nietzsche's views on the decline of the west. Heck, most of those have been overhyped. I don't really think Nietzsche was too concerned with GPD in regards to a nations progress. While no doubt there are cultural faults which Nietzsche is perfectly correct on, the whole 'liberalism is the death of mankind' stuff is too easy to misrepresent to simple brutal nationalism. In the end I believe that cultural change is subservient to the greater economic and political forces. In the end culture, and the subject aren't really that important. I know this is somewhat couner intuitive, but I've never been convinced by any argument to contrary. All this talk of laziness, 'cultural decline' ect. is largely sociological fluff. In the end the economics will be the deciding factor. Marx might have been wrong about alot, but he understood something that cultural elitists like Nietzsche didn't, the value of bread. There are million different forces at work in a society, while American exceptionalism will play a role in it's decline, it also played a role in it's rise. The situation is complex, and the OPs predictions are probably correct, but there's more to America's problems than it's exceptionalism. The Nietzsche aside was just a cute reference to the adoption of 'new values'. | ||
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kataa
United Kingdom384 Posts
On December 06 2010 11:01 Consolidate wrote: The Nietzsche aside was just a cute reference to the adoption of 'new values'. Yes, but new values in this case is the West's obsession with liberal humanism, which (according to him) ultimately leads to nihilism. Thus you end up with a society that supposedly, looks an awful lot like your feelings towards your fellow Ivy leagues students (or my fellow students for that matter). The quote was spot on imo, I just like to warn people off going down that road of thought, as I don't think there's anything productive down it. | ||
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lowercase
Canada1047 Posts
Similarly, 4-year political terms also prioritize short-term gains over long-term strategy. It's asinine. China has been growing more powerful because they look long-term. They can't hold a stick to the US militarily... yet. But despite the failings of the USA, I still prefer corrupt "freedom" over hive-mind, environmentally careless expansionism any day. Get a piece of land in the mountains and learn to live as self-sufficiently as possible, kiddos. | ||
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happyness
United States2400 Posts
On December 06 2010 10:44 Consolidate wrote: I understand economics perfectly well. Well enough to say that during a global recession, economics is worse than zero-sum - it is negative sum. Of course it is in China's best interest for America to do well. Technically it is in everyone's best interest for everyone else to do well. The real issue is that China is less dependent on America than vice-versa. Why is it that China is among the least affected by the failure of America's financial sector? When I allude to the Fall of America I'm speaking in relative terms - I'm not speaking about it's collapse. Ok. From the OP it sounded like you were saying America is screwed because China's rising. I am in agreement that China's rise is a good thing. No human being deserves the burden of poverty. China is not a threat, nor should it be viewed as a threat. If anything, it's a nation governed by certain sensibilities American should learn from. China has risen because of adapting U.S. sensibilities (i.e. free market). As I said, China has so many more people than the U.S. they should surpass the U.S. eventually. About the original question, the U.S. for the most part shouldn't follow china's way of doing things. It may be true that we have a lazy and complacent public. But I think that is often exaggerated. Americans still work more than many other industrialized nations and do effective work. But my question to you is: what exactly are you suggesting should be done about this? Should the government get involved, like the chinese govt does with their people? Because I would definately say no to that. I believe that to change a nation culturally it has to come from the individuals and not through government force. One thing I feel the U.S. should adapt from china though is their lack of debt. The financial crisis was caused by an inflated market due to creditors and such. Again it has to be a cultural change that I'm sure will happen. At the very least the U.S. govt should get rid of the national debt, but I don't think thats going to happen. | ||
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Insanious
Canada1251 Posts
On December 06 2010 10:59 Consolidate wrote: + Show Spoiler + On December 06 2010 10:46 Aurdon wrote: Japan was also supposed to be the downfall of America in the 80's their economy soared and the doom of America was on the horizon. America's business model is that of long term success through innovation. China is growing fast because they are cutting a few corners to show short term growth. Let's see where they are in 30 years. Japan is limited by land and resources. They have done remarkable well with what they have. As for innovation...have you any idea now difficult it is to obtain research grants in the US? Innovation is not an innate property of the American people. It is a concept which needs support and encouragement, neither of which the US is willing to provide given the fact that its money is tied up elsewhere. Free-market is not enough, I can make 10 times the salary of an engineer as a banker. On December 06 2010 10:47 Insanious wrote: If the US dollar crumbles, the dept china has purchased also devalues into nothing, wasting their money... China already knows they will NEVER get any money back from the USA, what they purchased is a cost to keep the USA alive and kicking. When China purchases trillions of dollars of US dept only to see it evaporate, they lose a lot of their spending power... since well purchased dept is an asset, which makes China's economy look better than it actually is. (Basically every dollar China has purchased in US dept shows up as a purchased asset, and then is subsequently written off as a bad dept as time goes on, this is allowed as the USA buys so much stuff that it is a major factor in the Chinease economy.) Hell, even hypothetically, china starts to produce high tech expensive goods... they still need consumers, and those consumers are the USA. Chine NEEDS the USA. Without the USA they lose a TONNE of customers and as such a TONNE of income. People seem to miss this point when talking about China surpassing the USA. Sure China may end up with an overall Economy larger than the USA, but China will forever continue to spend money to keep the USA buying things from China... the USA will never fall, simply because they are tied to too many economies (Canada, China, EU, etc...). Everyone pays to keep the USA buying, its just what we do. This is why the American dollar is not worth absolutely nothing with trillions of dollars in dept... simply because other countries are keeping the US dollar artificially inflated. - - - - As well, the USA will never lose its power for two major reasons: 1) Buying power... the amount of stuff the USA buys in a year is staggering, this means people pay to keep the beast buying. The USA will always be a beast with a hunger and people will keep feeding it. 2) Military power... even in this day and age, the USA has military personnel in most countries in the world, in some countries the American soldiers based there outnumber the countries own military. Even beyond that, the technology the American military brings to bear out matches everyone else in the world... To put this into perspective, the American airforce can kill every single airforce of all other countries combined alone, simply because of the number of pilots and how advanced their planes are compared to those in other countries. This is also true of naval warfare and armored warfare, and missile warfare... The only point in which the US military cannot kill every other military in the world is on foot, with soldiers, where their numbers pale in comparison to those in other countries, the only problem is when you have air and sea superiority it makes land superiority worth MUCH MUCH MUCH less. Where am I going with this? The USA will never LET its self fall from grace... when a country is in desperation it does desperate things... now take a country that can take over the whole world with its military and then take the money the country has... it will lash out and force people to pay them, even if that means they have to conquer countries to do so. Do not kid your self... if the USA was to fall (even though it never will), that would most likely be the catalyst to WW3... and well... no one wants to see how that ends. First point. The US dollar IS is danger of losing it's status as the world's reserve currency. The fact that America has never defaulted on its debt will mean nothing if it continues to devalue the dollar. Second point. I have no idea where you are going with this military nonsense. Both nations understand that war will never break out between them. Consequently, the idea of the US leveraging any military threat is preposterous. Never mind the fact that it is already stretched too thin. Sigh... how do you people get off with writing tripe like "don't kid yourself". It's honestly staggering. 1) Yes the Chinease have suggested that they will start using the Yuan instead of USD for international exchange, but this could just be talk, and I think it is... China depends too much on the US economy doing very well to be able to do something that will so significantly hurt the USD. As well, the USD isn't really falling, its being propped up... look at the exchanged rates for the USD for the last like year and a half. They have been hovering at the same value despite the US taking on more and more dept... simply because other countries are keeping the value of the USD high, similar to how China keeps the value of the Yuan low. If they didn't do this... the USD would plummet into being worth nothing, and the Yuan would skyrocket into being worth so much companies would move their factories out of China (and no, I'm not saying all factories, but many companies would as it would then be cheaper to manufacture goods else where...) China needs the USD being at a reasonable rate right now simply due to the amount of trade that is being done, and the amount of American Companies that operate their manufacturing in China. - - - - The military point was more towards the people that think the USA will suddenly fall into having the worst economy ever. If that ever happens, the USA will use its military power to become a super power again... if you have a country with a military that is stronger than everyone elses combined and then make those people so poor they cannot live a decent life... terrible things will happen. This will never happen, but just close your eyes and think for a second, take the USA, with its huge military... and now make it so that it has an economy similar to that of Africa (yes i know Africa is not a country its a continent but the countries there are so poor that picking one would make my example even more stupid). Do you really think they will go "oh mans, we're poor now..." or will they go "well lets see we can be poor, or we can take over the world..." | ||
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AJ-
United States316 Posts
China had a rough 150 years from 1800 to independence in 1949. You're talking opium wars to being sliced up by every imperialistic power to being ripped apart by Japan up until the very end of WWII. Even then they have to pick up the pieces and they go down again after the The Great Leap Forward. It's really only been in the last 50 years that they've been able to successfully grow and really invest in themselves. Before 1800, China exists as a huge economic force, and has a very large trade surplus with Europe. The West as we know it only rises on the back of imperial conquest and control of other countries' resources and surges ahead of the rest of the world in the modern era. What is happening now is just China's massive resurgence back to the top of the world, again with a huge trade surplus with the US especially and this time, its own people and resources behind it. The supposed weakness of the yuan is only the result of that massive trade influx that I mentioned: China exports a massive amount to western countries (especially the US) because its cheaper and that results in the dollar appreciating towards the yuan - a cycle which only results modern companies unable to keep up with their chinese counterparts. US growth is keeping pace with the rest of the world; you're just watching China's 50 year meteoric progression back from rock bottom. | ||
Manifesto7
Osaka27149 Posts
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haduken
Australia8267 Posts
On December 06 2010 10:25 Consolidate wrote: You forget the state China was in following the Cultural Revolution. Among those even slightly informed of the country's history, you will not find a single individual who will deny the immense progress the country has made. China is currently investing more in alternative energy than any other nation. They have recently put forth ~$500 billion for the construction of 200 modern nuclear reactors. (just google for the source). I have little regard for your knee-jerk reactions. But thank you for contributing to the discussion a misguided view which is partially representative of the ignorant population. I didn't forget the culture revolution thank you very much but I can't say it left an impression on me as I wasn't born then and I would wager that you weren't either. Also I failed to see how its relevant to the topic of today. We are afterall talking about the future of Chinese rise not its past. Being informed about one's history doesn't equate with turning a blind eye to history's negatives, I challenge you to take a lesson in this and then come back and actually address the points I've made as your *informed* opinion evidently do not go past Chinese egoism. | ||
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iloahz
United States964 Posts
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Hatsu
United Kingdom474 Posts
On December 06 2010 10:44 Consolidate wrote: I understand economics perfectly well. Well enough to say that during a global recession, economics is worse than zero-sum - it is negative sum. Of course it is in China's best interest for America to do well. Technically it is in everyone's best interest for everyone else to do well. The real issue is that China is less dependent on America than vice-versa. Why is it that China is among the least affected by the failure of America's financial sector? When I allude to the Fall of America I'm speaking in relative terms - I'm not speaking about it's collapse. I am in agreement that China's rise is a good thing. No human being deserves the burden of poverty. China is not a threat, nor should it be viewed as a threat. If anything, it's a nation governed by certain sensibilities American should learn from. That recession is negative-sum is arguable. I personally do not agree with that, and neither does Krugman (http://www.nytimes.com/2010/11/01/opinion/01krugman.html). Also, to say that China was "among the least affected by the failure of America's financial sector?" is just wrong. The impact on China was massive for a few of reasons: - they rely strongly on American consumers - the vast majority of China's fx reserves are in USD - the US owes shitloads to China Hence, they had to deploy one of the largest stimulus plans in history (http://en.wikipedia.org/wiki/China_economic_stimulus_program) to cope. China and USA are dependent on each other, its as simple as that. Back in the day (well, like 7 years ago) I wrote a paper on Chinese economy and from the data I gathered (access to Bloomberg ftw) it became clear that the only way China can really become the dominant force is by developing a strong domestic market. But they are still so very far from achieving it - the difference in wealth between urban and rural populations is absolutely huge. And then you have to take into account possible political trouble - if you study Chinese history, you will see that it is not to discard. Bottom line: in terms of GDP China will keep growing and eventually will obviosly be the biggest economy. However, it will take a massive amount of change and some luck for it to become the dominant power. PS: if you are planning to work in an IB, I wish you good luck. Remember to have a life  | ||
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clementdudu
France819 Posts
On December 06 2010 11:21 iloahz wrote: I wouldn't call it the "rise" of China. China has been the most advanced nation for the past few millennia except for maybe the last 300 years. hihi there are two people(+me) in this thread that understand that China is not the biggest world power,by western standards. I see people saying that Uk dominated the world for three centuries before US.Try China dominated the world for two and a half millennia(yep Rome was nothing compared to China;)). The same way western people are convinced ancient Egypt was the beacon of civilization,when mayans were as if not more advanced. | ||
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Fdragon
United States96 Posts
User was temp banned for this post. | ||
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Consolidate
United States829 Posts
On December 06 2010 11:09 happyness wrote: Ok. From the OP it sounded like you were saying America is screwed because China's rising. China has risen because of adapting U.S. sensibilities (i.e. free market). As I said, China has so many more people than the U.S. they should surpass the U.S. eventually. About the original question, the U.S. for the most part shouldn't follow china's way of doing things. It may be true that we have a lazy and complacent public. But I think that is often exaggerated. Americans still work more than many other industrialized nations and do effective work. But my question to you is: what exactly are you suggesting should be done about this? Should the government get involved, like the chinese govt does with their people? Because I would definately say no to that. I believe that to change a nation culturally it has to come from the individuals and not through government force. One thing I feel the U.S. should adapt from china though is their lack of debt. The financial crisis was caused by an inflated market due to creditors and such. Again it has to be a cultural change that I'm sure will happen. At the very least the U.S. govt should get rid of the national debt, but I don't think thats going to happen. The direct method is through government subsidies. But the two-party system is a mess. I expect nothing from Congress. Americans need to learn how to be industrious again. College graduates need to feel compelled toward productive careers, but they find themselves without adequate incentive. | ||
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Lowkin
Canada232 Posts
On December 06 2010 11:00 Insanious wrote: Because of two things... 1) The Chinese artificially devaluate their own dollar, as such during a recession they can stop doing this and will keep their dollar at the same value. As such, this will simply result in the gaining money as they will not have to spend money to create new currency to devaluate the Yuan. 2) The Chinease purchased American dept, and as it currently stands, purchasing dept from someone else is purchasing an asset, as someone has to pay off the dept. This means that the Chinease just got a HUGE boost to the value of their country (well as a whole, who ever purchased the dept (the banks) get a huge boost which reflects on China as a whole). simply because the value of the dept is higher than the value of the dollars they spent to purchase it. These two things means that: The Chinease dollar didn't change in value compared to anyone else, and they look a lot better as they purchased trillions of dollars in dept (which even at a 1% interest rate is worth a STUPIDLY large amount of money...) Not to mention, even during the recession consumers did not spend that much less than they normally do, simply because China was keeping their dollar valued higher (by buying the dept). This means that China still gets payed because American consumers are still buying things. - - - - Sorry, but just as a side note... here's the 2008 recession in a nut shell 1) Banks bought a tonne of securities made up of parts of mortgages (from USA) 2) People in USE defaulted on mortgages 3) Securities SEVERELY devalued 4) Banks suddenly lost a TONNE of money, which they lend out 90%+ of the money they get in (they only need ~10% cash in their vaults in most countries). Now like 70% of the money they lended out was worth nothing 5) Banks were asking the other banks to pay them back, even though no one had money, so a round of defaulting on loans happend (Bank A let to bank B, Bank B lent to Bank C, Bank C lent to Bank D, etc... Bank D cant pay Bank C, Bank C cant pay Bank B because of C, etc, etc...) 6) Banks died 7) With banks dead, no one started lending 8) Businesses could not get funds 9) Businesses started to default on purchases 10) Businesses started to cut costs to pay back creditors 11) People got laid off This is basically what happened (very simplified). The only problem, is in the USA, what happened, is some where around part 5, the USA started to give money to Banks, and other countries (like China, Canada, UK, etc...) purchased the Dept the USA brought on to pay their banks to keep them alive. This means unlike in Ireland and Iceland, the US dollar did not devaluate as much as it should have. So less people get laid off in USA, less businesses close, and this means people keep borrowing and lending, and paying companies (this is why a lot of companies are not better off than they ever were...) and this is why China can afford to buy trillions of dollars of dept they will never get repayed for... simply because Americans buy so much stuff and just keep on paying China. Very good right up however you say Dept alot.(unless I am an idiot thats not a word, unless you are abreviating Department and it still doesnt make sense) I assume you mean Debt, I noticed a few other people making this mistake. Does anyone know if learning Mandarin or Cantonese is a must for working in China/Hongkong or what languages you would want? | ||
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Manifesto7
Osaka27149 Posts
On December 06 2010 11:29 clementdudu wrote: hihi there are two people(+me) in this thread that understand that China is not the biggest world power,by western standards. I see people saying that Uk dominated the world for three centuries before US.Try China dominated the world for two and a half millennia(yep Rome was nothing compared to China;)). The same way western people are convinced ancient Egypt was the beacon of civilization,when mayans were as if not more advanced. I think it is fairly obvious from the opening post that the discussion revolves around the contemporary economic situation, and not some undefined time frame in the past. In addition, China has never "dominated the world". It has always been a regional power by any metric. This topic is to debate whether it can be a global power in the new economic climate, and whether that will come at the expense of America. Contribute to the discussion or don't post. | ||
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.Aar
2177 Posts
Well, their time. I'm moving to Korea once I'm done with school anyway. And yes, learning Mandarin will be of great help to you in the future. Good thing I've always wanted to do it anyway! | ||
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Consolidate
United States829 Posts
On December 06 2010 11:19 haduken wrote: I didn't forget the culture revolution thank you very much but I can't say it left an impression on me as I wasn't born then and I would wager that you weren't either. Also I failed to see how its relevant to the topic of today. We are afterall talking about the future of Chinese rise not its past. Being informed about one's history doesn't equate with turning a blind eye to history's negatives, I challenge you to take a lesson in this and then come back and actually address the points I've made as your *informed* opinion evidently do not go past Chinese egoism. Want me to show you China's current unemployment numbers vs. that of the 1970s? I believe I already addressed your points on pollution. Relative income disparity has shown to have been a by-product of free-market growth. As long as more and more Chinese get pulled out of poverty, the fact that a few people are also getting very rich doesn't bother me. The very point I'm making highlights China's historical negatives. I don't understand what you're getting at. | ||
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Thereisnosaurus
Australia1822 Posts
I wouldn't call it the "rise" of China. China has been the most advanced nation for the past few millennia except for maybe the last 300 years. sort of. China has not been a 'nation' any more than Europe is for more than a century. Historically, one might use china in exactly the same way one would use europe- it has been variously as divided and united as the European peninsula. However, you are correct that historically china has advanced alongside europe in terms of overall development in culture, technology and influence, up until the 19th century where europe hit the industrial revolution and china didn't follow. The communist revolution then united china for the first time ever in its modern form, though even so china is more like a european union than a single nation- many different provinces with their own dialects, cultures, specialisations, economies and levels of development, with one guiding body organising them. So china has been a kind of opposite to 'the west' as a collective entity. Now, with SK, Japan, Taiwan, singapore, Indonesia and vietnam they form a more cohesive 'east' that is rapidly catching up to the 'west' in terms of technological potential, industrial potential and military clout. | ||
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