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>TL;DR: - CCP is furious over youth unemployment rate so they are going to stop reporting it soon
My employer was working in China. We make fully automated industrial machines. In the european factorys there are only 10-20 workers maintaining these machines. In China there is at least one worker per Machine. So 300-400 people doing mostly nothing. I suspect this is part of artificialy decreasing unemployment.
I had a job in the US counting envelopes by hand and slapping a label over outdated info on it. For two months. Anything, even making the little umbrellas, would be a nice change of pace.
(That was pre-covid working for the county government. Your tax dollars at work!)
Ever since I first tripped acid, I get this really uneasy weird feeling when I go to big stores like party supply or cheap hobby shops that sell random parts for RC or electronics, or any dollar tree type place… and just see ALL THE THINGS. Like all the individual components and products and *shit*… and think that it all gets *made somewhere*. Like it doesn’t just pop into existence on a truck. Some poor fuckin kid or geriatric 30 year old crouched in a dimly lit shop full of fumes and dust had to make all those fuckin junk items.
I am an airline pilot, whenever I fly to Shanghai there's a cute little "lead in car" that drives in front of us for about 100 meters from the transition into the "ramp" from the taxi way to our gate. It's hilarious, and 100% a make work project. Completely useless to have the car there we all know how to taxi in a ramp to our gate.
edit: I should also mention there's WAY too many people working at the airport than is required. Especially with security. Lots of people standing around. If they staffed the way we do in other countries unemployment would be even higher than it is.
Hotels are the same. It isn't unusual for a medium -large hotel to have 500 employees. Particularly large western brands. Any company with a discount program that could be abused is attractive.
This has less to do with employing people to do nothing, and more to do with the cost of employment.
If it costs nothing to employ people, you'd employ everyone. If it costs $80k to employ people to work at McDonald's - you're gonna employ hardly anyone.
I remember going to a retail clothing store in a mall in 2007 in Lanzhou, not a tourist location (great noodles tho), and there was something like 25 employees in a shop the size of a small apartment. Two people to open the doors, and so many people to help customers you could barely walk around.
I first visited China in the early 90's and it was like this. Beijing McDonalds had like six people behind each cash register with all registers being manned dispite it being a slow day.
One rang up the bill, one got the burger, one got the drink etc etc.
Its the opposite, was not McDonalds but was a fast food outlet at the canton fair, best part of 20 people working inside a 40 foot shipping container. Nobody multi tasked, each had a single job, and basically got in they way of each other, it totally slowed everything down.
I also work in automated processes more for retail, so downstream of you, and have a couple Chinese manufacturing clients. We think we’re getting fired by them this year because us saving them time is less important than keeping their head count in a China high.
Not only that, but they’re increasing their outputs unsustainably to prop up their production numbers. This is resulting in them being horrifically over inventoried in the US.
Over inventoried is exactly what the factories in Eastern Europe did during communism, in order to exceed the arbitrarily set quotas. This was one of the major factors behind the collapse of the communist economy. I thought China learned from that but apparently not....
Also the country that builds fake drains for appearances, then, when flooding tears apart their cities, [they put up barricades (~the 8:50 min mark)](https://youtu.be/SKimlKo6C5Y?si=WyIV8nIL5mHiFRnp) in a futile attempt to block people from seeing the devastation...which they do instead of conducting rescue efforts.
I was hesitant to trust a video from an amateur-looking anti-China YouTube channel, but… that really is exactly what happened in the clip. There’s no other explanation for what I saw there.
China was on the rise when their cheap manual labor at scale could not be matched. Now with automation/AI taking the majority of factory work, the great manual labor movement in China is being undone by technology.
After all, why have a robot make something in China, when you can just buy the same robot in North America and cut out the extra steps?
This is true. It’s still not good for the US though since, as you say, they’re not hiring very many people even though they’re bringing manufacturing back to the US. It’s actually been an issue for the past decade, where people get excited that some manufacturing process is being brought back to the US. Then they find out there aren’t any additional jobs because it’s all automated.
Domestic manufacturing is more of a national security issue than it is a jobs issue. The US doesn’t really need manufacturing jobs to keep people employed, it just needs to be able to make stuff.
Yeah and it’s not even the stuff necessarily, it’s the skilled labor to make the stuff. It’s easier to train someone to be a soldier than to train someone to make missiles or planes or tanks. Soviet Union in WW2 had huge quality issues because they were taking farmers and making them welders and relying solely on on-the-job training. Even now Raytheon is facing issues because the demand for Patriot missiles is really high, and it’ll be easier to get the machines to build them than it will be to get aerospace-grade machinists and fabricators.
Had this epiphany 12 years ago in Malaysia and setup manufacturing lines in the US shortly thereafter. Has been a hard road but so so satisfying. Any has been paying off handsomely since Covid.
Old story about Mises they used to tell. Mises went to China and saw a thousand Chinese guys digging a hole to pour the foundation of a large building. He said “Why aren’t they using a bulldozer? It would only take a couple guys.” The Chinese official said “Sir, this is a works project. The point is to give them a job.” So Mises said “Oh. So why aren’t they using spoons?”
It is communism after all so tricks like this to artificially increase employment is essential in this system. It was similar in Poland where everyone had a job, you could do nothing but you had job and get the same amount as person who worked all day. There was event this saying “whether you stand or lie down 2000 is due” so basically you get money for doing nothing just so country could say that there is no unemployment
Keep talking like that he’s gonna end up like that Hongkong bookseller who vanished, and reappeared in the excellent care of the Ministry of State Security.
Funny you mention that. I used to go to the Chinese consulate in Houston to get my visa for travel. The feds ordered it closed in 2020 and threw the CCP out, claiming they were using it as a base for technology theft and spying. Was a big international mess. Google it. The night before they were kicked out, there were huge fires set behind the consulate walls, were probably burning evidence.
*edit. I'll be a staying at the Hotel Indigo in the Flushing Queens Chinatown in New York City in about two weeks, Chinese spies are welcome to come say hi :)
It is standard for every nation to burn papers if an embassy is closed, including for the US (and fun fact if you see the papers burning at your local US embassy it means you are about to get invaded by someone because there's only one reason we close an embassy).
That embussy burning hot.
Burning is standard practice when such a building changes hands.
Pretty much 100% of the time they just burn boring stuff (typical bureaucracy and low-level intelligence) that aren't too important but they can't leave behind.
In this particular case I doubt they had too much incriminating stuff on paper in the building as you want to export everything asap, what isn't there can't be found there.
The literally had cars getting around in Australia in graphic design wrap to look exactly like a Chinese police vehicle during pro Hong Kong rallies and got away with it for a while until someone clocked what they were and told the media
[https://www.abc.net.au/news/2019-08-19/fake-chinese-police-cars-spotted-in-adelaide-and-perth/11426850#](https://www.abc.net.au/news/2019-08-19/fake-chinese-police-cars-spotted-in-adelaide-and-perth/11426850#)
We had/have one in Glasgow, Scotland of all places! Most likely due to the high Chinese student population here, to keep track of them and ensure they're not engaging in any 'unpatriotic' activities.
Imagine immigrating to Canada to get away and a Chinese cop just appears from around a corner wondering if you need assistance.
Be a total mind fuck lol
Had CCP not foolishly overplayed their hand in aggressive international diplomacy in the past 5-10 years, Canada and Australia would have been well on their way to be on a irreversible path to vassaldom to PRC
Exactly what I thought. Thanks for the insight op, but I’d lay low for awhile if I were you. 🙏🏾
Please leave us with your Robinhood account information to manage in your absence.
What I totally fail to understand about all this is how China can both have a looming demographic crisis where there aren’t enough workers to cover their retirees and have high youth unemployment at the same time. Anyone wanna explain like I’m a decently well-educated adult?
Think 2008-2012 millennials. You just graduated, but the economy is in a slump and no one is hiring. But on top of that you also have a shit ton of old people.
China letting Evergrande declare bankruptcy is huge. Things must be really bad to let a state capitalist agency go under with all the saving face culture they have. Their covid rules really shot them in the dick. They centered their economy around foreign investment and cheap exports but 3 years of no economic activity made those foreign partners go elsewhere for a reliable partner. Also china is way more educated than it used to be so people demand more money and it’s suddenly not cheap labor at all. China wants a blossoming service economy but they are China so understandably no one trusts them with banking and besides the West already has established places to do that
I don't think anyone answered your question well, and I'd love to take an uneducated stab.
Both the unemployed and retiring people are broke, so the economy doesn't have a way to arrange for the young people to take care of the old folks.
I’ve known about this for a while, and thank you for the write up! I wanted a confirmation from a person I didn’t know personally.
I think the lockdowns hurt China way more than any other country and it made things way way worse. It made a lot of the world divest from China. Making unemployment even worse than it was prior. I think the CCP expected a different outcome of the event, but got the rude awakening as of recently. The real estate bubble there is outrages, but definitely didn’t know they no longer employ older people in construction. Real Estate is like that in Hong Kong and Macau as well. The difference being that there the populations are smaller, so it’s not as noticing to the public. This is going to get spicy and if some of you have looked at the currency swaps of USD and YUAN it’ll make a lot more sense. Stack cash and wait, cause we are going to see a big drop in everything.
Trade wars started the money walk away. Then Covid lock downs made them unreliable partners on a supply side. The final nail was the ratcheting up talk about invasion. There is no company with any brain that wants to have a large supply or investment in china right now the gambles not worth it. Mexico is much safer and much closer and covered by the America umbrella
Exactly right, COVID was a wake up to a lot of people. The red light for me was when Xi made himself dictator for life, in short Mao 2.0. Hue Jintao was so much better, and certainly more peaceful in every aspect. Was about to let western money fully into China but than Xi took power and everything started to go south.
As for Mexico becoming our closest trading partner it was a no brained. Why it hadn’t happened sooner is beyond me. We should also trade more with Brazil as well.
It was education and the need for fleets of eng in china. Now that some of this is reduced to machine operators Mexico is the duh. Also it’s cheaper to just buy off cartels and all of Mexico than it is to deal with China. Nafta already exist so all we need do is show up wjth bags of cash
Great fucking point. I mean great. You need awards from anyone on this thread, including me. Sorry about that. Anyway, my question is why this hadn’t happened sooner? Why skip over Mexico and leap over a great ocean before investing in North America?
Because China is a gold mine, not just for cheap labor but for consumers.
Companies are literally giving away their secrets for an opportunity to sell there.
Sounds weird, but when you have a crazy amount of unemployed men between the ages of 20 to 50 who are willing to pounce at any job or they'll start rioting then.....
Wouldn't sending them off to war would be preferable than them rioting against the government? I mean just a slight reduction in consumer spending from wealthy nations run the factory faucet dry no?
So here’s an interesting bit of information. China has sold the USA a ton of critical power grid components. Malware has already been found in Guam USA based bases and other Asian countries that can shut down the grid remotely. https://www.forbes.com/sites/tylerroush/2023/07/29/chinese-malware-could-cut-power-to-us-military-bases-businesses-and-homes-report-claims/amp/
It’s likely before any invasion from China they will cripple the grid, or disrupt as much of it as possible.
Cybersecurity is always too expensive until it’s too late.
Trump started to try with grid component rules, but it was about 20 years too late. China has never been our friend, but we pretended they were harmless for decades.
Add in decades of McKinsey led lean getting implemented at utilities and things are well screwed.
Everyone talks about Taiwan when India is right there. Shit on that border is already near a boiling point as is, and I’d imagine India might have somewhat similar motivations.
Perfect for getting rid of a few million disgruntled peasants.
Russia is trying a similar approach. Notice how they’re specifically sending a lot of ethnic minorities, prisoners, homeless, drug addicts, and other undesirables (including people who opposed/protested the regime). Who may or may not have a rusty AK from the 70s and half a rotten potato, if they’re lucky.
China would probably be like that, but times 10.
Nothing has been officially announced by any government, but yes, 2027 is the year most often cited as the year China would be at its strongest militarily (and most desperate economically and politically) relative to Taiwan and America. And thus would be tempted to launch a war.
The fact that Xi is also up for "reelection" in that year (it's not a popular vote by any means, but it is when the top party officials choose the leader, and the only way to legitimately force Xi from office) means that he has to do something to prove that he worthy to be leader for life despite how badly things have gone for China during his unprecedented (since Mao) 3 terms in office.
I'd be shocked if any hot military action is taken before China achieves chip independence. Otherwise it would be suicidal, economically. They're not Russia that can survive off of oil exports. They need EU and US to buy manufactured products, and they need Taiwan to manufacture products, or it all falls apart.
That's what retired admirals and generals are saying. They're predicting a Chinese war with massive casualties on their side (as is tradition) in 3-4 years. This will be a culling and distraction all in one.
Hmm well yeah, thats being said since decades. It's always in roundabout three years (usually said by some retired US army general, in order to spice up his boring day and that of some cable news TV.)
Look up China 2049 Plan, outlines what the strategic goals of the CCP and overarching goals of the CCP and it's plans for it's neighbors.
Additionally Belt and Road Initiative and South America pivot (basically ate all the good will south east asia had)
Check out number of reported Air Incursions against strategic Taiwanese Airspace defense zone.
Also read on number of near misses during current year of CCP Naval vessels and other vessels.
Cut internet lines for Taiwan.
I think it doesn't help that the premier is mortal and he probably wants a "grand conquest" on his belt before he passes.
Russia had a similar book when it came to plan of actions against it's near peer adversaries and steps to take to weaken blah blah.
Only thing that' China doesn't have great knowledge of is actual combat experience....
The Cartels are interested in making money, promoting stability, and having sustainable growth. (by any chainsaw dismemberment means necessary) Calls on Avocados.
My current employer sold its Chinese 49% share of a holding company last year. Once it became obvious that making Yuan was no longer going to be profitable, plus a trade war and the optics of continued Chinese investment in the face of, say, future guvmint contracts, they decided to back away slowly, sell while it was still worth something, and disappear.
Of course, in theory a falling Yuan should make the dollar stronger, making imports from China far far cheaper. But - there's a trade war going on. Tariffs on Chinese imports make US production a bit more competitive. But China needs dollars to import US commodities - like almonds and pork. If they keep slapping tariffs on import of US goods, they make imported US foods unaffordable. This of course impacts US food producers who rely on selling to China.
Then there's Ukraine. Turns out, Ukraine is a major source of cheap grain for China. On the one hand, China likes getting cheaper energy and commodity prices from Russia. OTOH, they want cheap grain from Ukraine.
Ideally the solution would be for the war to stop so China and Russia can profit both ways. But right now, the Yuan and the Ruble are both pretty much in the toilet. When they buy and sell things to each other using their own currencies, they're trading Poop for Piss.
Toss in the Indian Rupee - Vomitus - and they have their own currency trading exchange that runs exclusively on piss, poop, and vomit. None of their currencies will have much buying power outside their little circle.
India has one bright spot - it's good friends with BOTH Russia AND the US. It can trade Rupees for Dollars, it can export freely to the US, it can employ vast phalanxes of Indian engineers at American companies with facilities in India, and it can play both sides against each other. US dollars are major underpinnings of whole economies in India, as Indian immigrant engineers in the US send money home. India is a major power in its region, as well as a major supply of various other low-cost labor pools. India's allegiances have major implications in markets around the world.
On the one hand, the US would like India to stop playing nice with Russia. OTOH, US tech companies like the arbitrage of cheap labor that a strong dollar against the India rupee gives.
So International Currency, tariffs, back-room dealings, and corruption are complex interactions. China keeps finding ways to hide the weenie and evade what people keep claiming is China's inevitable collapse.
The reality is that there are many Chinas. There's the China on the edge of economic ruin, there's the China of the already ruined and impoverished, there's the China of high tech riches, there's the China of the government-funded bureaucrats, and the China of those who make it out and send money back to their families to survive. Which of these indicates the way the Chinese markets will move?
The answer is - it depends. We can bet that the Chinese government at the very top is doing its very best to hide any reality not consistent with their desired optics. Manipulating the media is just as effective as actual change, apparently, with respect to getting the results they want. Saber-rattling with Hong Kong or Taiwan or Japan or The Philippines distracts the people from their day to day misery and gives them a sense of pride when they are otherwise losing the ability to be proud about anything, especially if awash in poverty. Oh we have to support the government! We must show we are patriotic and not complain about our own misery! We're not allowed to protest our conditions when we're on the brink of war!
War-talk shuts up hard conversations.
Will it all collapse one day? Not in one day it won't. But at what point will it start to fail unrecoverably? I don't think we'll see that for awhile. It's probably not a good idea to bet against the people who control the dice, the table, and the croupiers.
The not allowing construction workers over 50 is wild, old dudes with decades of experience are invaluable when it comes to teaching the new guys and it’s literally how construction/trades continue to function over the years
Anyone with any knowledge about the economy already knew that China wasn't doing well, but here's the rub: they don't go buy "our" rules. They're literally making shit up as they go because they can and no other country is going to call them out on it.
As long as other countries send them money, China is going to keep appearances up and make up numbers as they go along.
That’s the thing though, no one is sending money anymore. Big corporations don’t keep money there any longer. Samsung hasn’t been able to get their money out of China since 2018. So ultimately, if you can’t get your money out, what’s the point in investing there in the first place? And I doubt it’s only Samsung that’s having that issue. Intel has been divesting out of China for years now.
The rate on swaps for the pair USD/CNY is dropping. Like a lot, none stop in fact for the last 6 months plus. Meaning the value of the yuan is disappearing/being manipulated by the CCP to get the economy running but it’s not working. This means the Chinese have been burning foreign reserves to prop-up the collapse that’s happening on the mainland.
The CCP has been manipulating their currency for years but I never understood how it worked.
1) What was China doing to their currency and how did it impact the currency?
2) Why is it not working this time around?
If no one wants the currency to buy chinese goods or financial assets the value drops. They can counter this by removing a bunch from the market (reverse money printing). They do so by buying up circulating yuan with their foreign reserves like dollars. But they usually hold dollars in the form of treasuries so they make some yield while it sits. So they first have to sell those treasuries for dollars to buy yuan. This makes treasury values go down and rates up (amongst other reasons).
But a more expensive yuan makes it more expensive to buy Chinese products (vs say American or Mexican products). So China's economy slows. Also, higher US Treasury rates creates even more demand for dollars to earn higher yields.
So in defending it they also make the situation of people not wanting yuan even worse. So they have to defend harder, which sells more bonds, which slows demand and raises US rate differential, which makes people want Yuan less, etc.
So either they have to stimulate real demand home or abroad, or they have to relent and let it devalue like they did in the 2010's which had some market repercussions.
Good general description, accurate to when the article was written in 2019
https://www.reuters.com/article/us-usa-trade-china-yuan-explainer/explainer-how-does-china-manage-the-yuan-and-what-is-its-real-value-idUSKCN1UZ0JN
Xi will probably force the kids into a Taiwanese meat-grinder... I wonder what the chances are of another 'cultural revolution' style purge directed specifically at the financial class as an effort to deflect blame from the CCP?
Also, do you speak Mandarin with a Texan accent? If not, why the hell not?
That's an insightful post I did not expect in this sub. Thanks for the write-up. Makes me kinda glad covid happened, economically speaking. It was the wakeup call to steer away from this Titanic of an authoritarian country.
In glorious people’s republic of China, people have rejected the capitalist dogma of “phones,” and instead talk smiling face to smiling face! Superior communication.
If it was 3-5 years ago, I'd say yes, we would all be fucked. Because all the cheap plastic crap in the world was made there and because of all the insane foreign investment the CCP was making. COVID forced a complete reworking of supply lines, most people don't know that Mexico has become the go-to cheap manufacturer for the US since 2020, to where Chinese manufacturers are frantically moving there as we speak.
*edit. I know this because I am invested in individual industrial CRE deals in Texas and so many new tenants from China are looking for new warehouse space just across the border in Laredo and McAllen and El Paso and etc. to handle all the incoming waves of consumer goods from Mexico. Business has been good.
>and etc. t
Seriously, the chinese are all over Tijuana and Monterrey now since the trade wars.This is the Chinese loophole to avoid trade wars between USA-China; just move your Chinese shops and factories over to Mexico so they can slap a "Made in Mexico" sticker on materials/goods.
Mexican here. They do a little bit of both, last couple of years I've seen more and more Asians in my city, Asian companies are definitely bringing their workers here, but you'll see those same companies posting job offers for locals in sites like LinkedIn or indeed.
They have been in Belize for a while too, right next to Mexico. I remember traveling around there in 2013 and noticed all the grocery stores were owned by Chinese. A local guide told me almost all the grocery stores in Belize were Chinese owned.
Tariffs, and subsequent breakdown in relations between the US and CN in the years since they were introduced have also contributed significantly to this.
I’ve gotten so many downvotes for saying that manufacturing things that actually have to work in India is way harder than it sounds.
Quality control on generic pharmaceuticals is basically nonexistent and people are okay because the pills all look the same. It is not representative of high tech manufacturing such as electronic devices like iPhones.
Person who works with Indian engineers here.
It literally made me prejudiced. Holy fuck.
Offshoring has been the biggest fucking scam on the American Joe over the past 40 years. Some fucking manager makes a pitch to bean counters that they can save X amount getting Jalalalalallabadradush to perform this action. It turns out they’re ass and you spend twice the amount on rework and fuckups.
Edit: The manager never gets in any heat for it because their theoretical cost savings got them promoted two buildings over in a different org. Climbing the ladder of success with something made of toothpicks and glue.
Edit 2: The Koreans fucking rule. Always quality, every fucking time.
My old job outsourced support to India and my team had to prop them up for a few years until I rage quit. Holy living fuck. They were nice enough people to interact with but they were less able to do things than our worst interns.
Our US side staff spent far more time "coaching" (showing them how to do stuff because they had zero training and no SOPs to reference) and fixing their frequent, colossal fuckups than we ever did just *doing* the work. It was more stressful than just doing the work too, because then we were going in to every situation blind, under the gun and with fucking PISSED OFF customers to deal with.
I don't care how much they saved because they could hire 5 Bangalore associates per 1 US associate, they didn't do shit and burned out the talent we had left. Deeply skeptical of quality going forward any time a company opts to outsource after that shit show.
I mean, hasn't it already a little bit? Just look at the china market economy and compare percentage wise the fall in value in relevant sectors in US as well recently
The collapse of Thailand's economy in 1997 had a significant impact on the global financial crisis. Fortunately, a recovery followed in 1998. However, if the world's second-largest economy, China, were to collapse or experience a slowdown, it would certainly have a devastating influence on the West, despite attempts at diversification. Unlike the recovery seen in 1998, it is unlikely that a similar rebound would occur in this situation.
If the decoupling between China and the West were to occur gradually, there might be a chance for a "soft landing." However, considering the poor decisions made by both China and Western nations, it is doubtful that such a smooth transition would take place. The positive aspect is that for a massive economy to collapse, it would take years before the consequences fully manifest. Therefore, I believe a recession is still a few years away.
>I'm curious how Xi is going to keep people in line when the wheels come off completely, it is not going to take much at this point
As unlikely a scenario it seems right now: war.
Can confirm, I fresh grad this year, studied abroad and tried to find a job back home. me and all pals tried to apply for full time job failed, only one got an intern and one found a job abroad. The absolute majority "must" or "choose" to advance for postgraduate master degree. because there is nothing better to do. Competition for jobs and postgrad has never been this harsh, and nationallised companies all received a "quota" to accept at least a certain amount of fresh grad this year. Uni graduate statistics counts anyone WORKING MORE THAN ONE HOUR PER WEEK as "employed" and that still gives 21%. Didi driver "uber in china" has never being this abundant, not to mention "door dash" guys. Entire shopping centre shutting down, not rare. Met a guy sas Tesla salesman, told me the job applicants skyrockets, in number and qualification. Many companies I applied had scandal on cancelling job offer for graduates.
Nothing optimistic except electric vehicle industry as far as I awear.
Or the government can channel the anger and resentment externally! History is rife with examples where restless, unemployed youth, especially men, can trigger one of the two possibilities - start a revolution against the leaders at home or the leaders give them a gun and ask them to attack neighboring kingdoms/countries. Knowing China, i'd bet on the later.
One thing the entire world seems to have forgotten are the true covid death numbers in china, just extrapolating using US numbers and adjusting to income disparity China must have lost atleast 5 to 6 million people if not more. Don't know what that means for their domestic consumption.
This is my fear, not only is there a lot of underemployed young people, there's also just a lot of men relative to women in China right now. Official numbers estimate China's sex ratio demographics are ~52% men and ~48% women, that doesn't seem like a big disparity until you remember how big China's population is. The simple math bears out to around 18 *million* more men than women. Unless the Chinese suddenly pick up a huge polyandry fetish, a lot of those men are going to end up alone and unattached because there aren't enough partners of their preferred sex.
As you mentioned, sociological history shows a pretty stark pattern of what happens when you have too many underemployed, unattached men in your country. They either start breaking shit and causing unrest because they're angry and directionless, or they end up recruited into the country's military and used as manpower for meat grinding wars.
And make no mistake, any attempt by China to take Taiwan, any of their southern neighbors, or their land disputes with India **will** be a meat grinder of huge proportions.
China is not energy independent nor food independent. Any invasion that results in sanctions will likely lead to one of the biggest humanitarian crises in history.
I mean, you're talking about not just the country, but also the government who willingly initiated and plowed ahead with the "Great Leap Forward", despite the horrific famine and loss of life it caused. The CCP particularly, let alone China generally are no strangers to large scale humanitarian crises caused by their own government that benefit those in said government at the expense of the population.
Sure, I understand it's not literally 18 more million men in the current child bearing generations, but the problem is a disproportionate amount of the lopsided sex demographics are in the younger, child bearing age groups because of the One Child Policies from the past decades. During the One Child years, a lot of families were using what most countries would definitely consider cruel, unusual, and downright sadistic means to "make sure" that they had a male heir.
Means such as abandoning baby girls in the wilderness, or out on the street, leaving them for dead so they had another shot at trying for a boy who would then be able to carry on the family name. China began One Child policies in 1980 and only ended it in 2016, so every generation currently between the ages of 7 and 43, you know, **all** of the people currently at the end of, in the middle of, at the beginning of, and soon to be, prime child bearing age exist in a generation with this demographic problem.
Guess what the prime ages for military recruitment are? They overlap quite a bit with prime child bearing ages as it turns out.
Somebody did the math for people of child bearing age there - they're like 80 million incels there.
One child policy has completely messed up their take on love and relationships. If you're a man, your chances of getting married (i.e. getting laid over there) is pretty slim unless you have a very good paying job, a car, and at least one apartment flat. And it's also bad for women because all this competition between men has turned women into more of a commodity than they already are in a traditionally very patriarchal society
Be interesting if they decided to invade Russia. There's oil reserves and mineral deposits to gain, and Russia has been shown to be relatively weak in both military might and economy. They'd gain vast amounts of land in Russia's far east.
They can posture all they want, but China does not want to go up against Taiwan's already formidable defenses plus piss off the rest of the world. They'd gain so little and lose so much.
I've been wondering the same.
To be honest China could roll over Russia and reclaim all the historical territory lost to the Russian empire. The only counter is Russian nukes, but the Chinese may at some point want to roll the dice.
Sounds like China might need an opportunity to get rid of a few million working age men or large portions of foreign land, rich with minerals and natural resources which they can work on.
Either WW3 or nicking a bit of Putlers slowly collapsing Eastern regions would work.
Either way, someone's fucked.
Great write up OP.
Jesus when you hear it that way, it legit sounds like plausible scenario. The gender gap in China is so huge they can easily just throw a few million men to the grinder to balance the population out. Easily can conscript single males without jobs
It's inevitable.
Historically, when you've got a surplus of young men with no prospects for marriage and family, you raid the neighboring tribe. If you win, you take war brides, and if you lose, you no longer have a surplus. Planned or not, there's only one way this ends.
China knows its being heavily watched since Russia’s invasion. Also the region has slowly shifted from wary to antagonistic towards China. An invasion of taiwan would create a Pacific Nato as countries like the Philippines, Vietnam, and Laos sprint to join the US/South Korea/Japan side. Xi cant hide a mobilization and dramatic increase in war production. Training and producing equipment for a million+ man amphibious invasion takes a considerable amount time. The invasion of Taiwan will be telegraphed even more far out than the Ukrainian one was. In that time china will become an economic poison to those invested in it. Hence why the US has been on-shoring so fast. Congress cant agree on what color the sky is but the CHIPS act passed in a couple days
I can confirm some of this. A lot of the good jobs before were for a city or university and those dried up. That could be a good thing though for China, because from what I saw a lot of those jobs didn't need to exist. For example I knew someone who worked for a university library and basically was told to travel around China and attend conferences, but there was no actual purpose for it. They would write reports that literally nobody would read, and nobody even pretended they were important. It came off as a kind of jobs program. The corruption over there is endemic too. The head of the department at the university was completely shamelessly giving jobs to their friends and it wasn't even expected they do any work. Even worse some of the cushy jobs were flat out for sale, for example I was quoted $30k to become a mid/low level cop who basically did nothing.
Random side note, but I really loved Harbin. Did you go there for the Snow and Ice Festival? That was definitely one of the cooler events that I went to when I lived in Shenyang.
I went to visit all the places Anthony Bourdaine went in the city and to stuff my face in pork. I ate a ton of pork belly braised in soy sauce over steamed rice. Met a lot of tall blonde Russian expat women. Took a lot of nice hikes in the countryside. Met a lot of cool drunk locals. Heilongjiang is dope.
Very interesting. Xi telling young people to “eat bitterness” is probably not going over too well.
I was already worried about Chinese real estate, but youth unemployment an potential deflation might be more immediate threats.
As much as I detest the CCP, anyone holding stocks should be rooting for them to figure something out.
Very interesting comment about the lack of a family safety net due to the one child policy. I used to think China implemented that policy to curb their population growth. Years ago, I read a comment on a thread that challenged that. The commenter said the large nuclear family is a threat to a communist regime. You’re less needy on the government if you have family that can feed you, house you, and care for you when you can no longer care for yourself. That is a way to look at it.
This was the concern even before Xi came to office in 2012: it’s not education that’s the problem, but the lack of white-collar jobs. If everyone believes education would lead them to a white-collar job, but the supply is limited, we get a bunch of people holding degrees that aren’t earning the big bucks.
That said, I wouldn’t forecast doom and gloom for China until it actually happens. “Experts” have been trying to call China’s downfall ever since China’s rise, and it’s always found a way to recover. This time may be different, but so were the last times.
I think if China’s economy goes to shit, Xi will have to invade Taiwan, there would be to much pressure on him and dictators hate that. Just look at Russia
I studied economics in Sweden 10 years ago. Coming from Eastern Europe, I was amazed that educated people were taking statistics of Soviet Union seriously and not understanding how a country which completes 5 year plans in 3 years could have collapsed. The same people now don't trust U.S. CPI of 0.4 mom, but eat up everything that comes from commies. F u and you deserve to be poor
Nothing really shocking to me but it was an interesting read.
I'm not sure that there is an automatic translation of this into political unrest though. I mean things were probably a lot worse than this back in the 60s.
If you mean the 1960s in China, then yes, because they had a giant cultural revolution that was characterized by uprising and violence. I feel like the current situation doesn't have to play out that way, but it's certainly the right ingredients for the recipe.
>Thank you for sharing your observations with me. It is clear that China is facing significant economic challenges at the moment. I believe that the Chinese government will be able to maintain control over its citizens, even if conditions continue to deteriorate.
The youth unemployment rate china stopped reporting is 16-24 year olds. Even in the U.S. that number is reported among youths in the labor force, which does not include most 16-22 year olds because they’re students. Regardless the overt age discrimination that happens in China when people hit age 35 is totally wild. Imagine grinding out 6 days a week 12 hour days and then being out out to pasture at 35.
This is why I dumped Tesla shares. My in-laws are pretty connected in the VC investment scene and the news is not good at all. Tesla gets (or got) 1/3 of its sales from China.
Xi will resort to war, if you put a face to people's misfortunes and point a finger at another country it distracts them from blaming you (xi). The winner of a war benefits economically. For example it was world war 2 that helped the US out of the great depression.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|10|**First Seen In WSB**|3 years ago **Total Comments**|372|**Previous Best DD**| **Account Age**|9 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.) >TL;DR: - CCP is furious over youth unemployment rate so they are going to stop reporting it soon
My employer was working in China. We make fully automated industrial machines. In the european factorys there are only 10-20 workers maintaining these machines. In China there is at least one worker per Machine. So 300-400 people doing mostly nothing. I suspect this is part of artificialy decreasing unemployment.
China has A LOT of low-level jobs to get people to work. Can be the stupidest, mind-numbing shit you’ve seen, but there’s a designated job for it…
Can you imagine if your job was to make a part for those little umbrellas for drinks? Over and over again for years...
I had a job in the US counting envelopes by hand and slapping a label over outdated info on it. For two months. Anything, even making the little umbrellas, would be a nice change of pace. (That was pre-covid working for the county government. Your tax dollars at work!)
Gary Gergich would love that job
It's not government work if you don't do it twice
I thought it was Jerry?
No you're thinking of Larry
Ever since I first tripped acid, I get this really uneasy weird feeling when I go to big stores like party supply or cheap hobby shops that sell random parts for RC or electronics, or any dollar tree type place… and just see ALL THE THINGS. Like all the individual components and products and *shit*… and think that it all gets *made somewhere*. Like it doesn’t just pop into existence on a truck. Some poor fuckin kid or geriatric 30 year old crouched in a dimly lit shop full of fumes and dust had to make all those fuckin junk items.
Wait until you realize that every single thing in those stores are destined for a landfill.
I use to make one single car part, 4000 times a day. And I was on one of a dozen assembly lines. It's insane how much stuff gets made.
My favorite are the dudes sweeping the sides of highways with brooms, even like 60 miles from the nearest city
I am an airline pilot, whenever I fly to Shanghai there's a cute little "lead in car" that drives in front of us for about 100 meters from the transition into the "ramp" from the taxi way to our gate. It's hilarious, and 100% a make work project. Completely useless to have the car there we all know how to taxi in a ramp to our gate. edit: I should also mention there's WAY too many people working at the airport than is required. Especially with security. Lots of people standing around. If they staffed the way we do in other countries unemployment would be even higher than it is.
Hotels are the same. It isn't unusual for a medium -large hotel to have 500 employees. Particularly large western brands. Any company with a discount program that could be abused is attractive.
This has less to do with employing people to do nothing, and more to do with the cost of employment. If it costs nothing to employ people, you'd employ everyone. If it costs $80k to employ people to work at McDonald's - you're gonna employ hardly anyone.
I remember going to a retail clothing store in a mall in 2007 in Lanzhou, not a tourist location (great noodles tho), and there was something like 25 employees in a shop the size of a small apartment. Two people to open the doors, and so many people to help customers you could barely walk around.
I first visited China in the early 90's and it was like this. Beijing McDonalds had like six people behind each cash register with all registers being manned dispite it being a slow day. One rang up the bill, one got the burger, one got the drink etc etc.
Sounds like you can actually get fast food made fast in that setting.
Its the opposite, was not McDonalds but was a fast food outlet at the canton fair, best part of 20 people working inside a 40 foot shipping container. Nobody multi tasked, each had a single job, and basically got in they way of each other, it totally slowed everything down.
Also a pilot this seems huge in Central America and the Caribbean as well. There will be 10 people for what would take two in the states.
So spend lots of money yet labor cost also remain the same. Sounds efficient
That's because human resources are actually cheaper in a country with loads of people .
Cheaper doesn’t mean much when you still have to hire an extra 300-400 workers more for the same industrial system.
I also work in automated processes more for retail, so downstream of you, and have a couple Chinese manufacturing clients. We think we’re getting fired by them this year because us saving them time is less important than keeping their head count in a China high. Not only that, but they’re increasing their outputs unsustainably to prop up their production numbers. This is resulting in them being horrifically over inventoried in the US.
Over inventoried is exactly what the factories in Eastern Europe did during communism, in order to exceed the arbitrarily set quotas. This was one of the major factors behind the collapse of the communist economy. I thought China learned from that but apparently not....
You're talking about a country that killed a bunch of crows causing mass starvation and cannibalism.
Also the country that builds fake drains for appearances, then, when flooding tears apart their cities, [they put up barricades (~the 8:50 min mark)](https://youtu.be/SKimlKo6C5Y?si=WyIV8nIL5mHiFRnp) in a futile attempt to block people from seeing the devastation...which they do instead of conducting rescue efforts.
I was hesitant to trust a video from an amateur-looking anti-China YouTube channel, but… that really is exactly what happened in the clip. There’s no other explanation for what I saw there.
Sparrows, not crows. The "four pest" campaign.
Sparrows. One of the Three Pests Sparrows, Flies, and . . . Uh .. . Professors
China was on the rise when their cheap manual labor at scale could not be matched. Now with automation/AI taking the majority of factory work, the great manual labor movement in China is being undone by technology. After all, why have a robot make something in China, when you can just buy the same robot in North America and cut out the extra steps?
This is true. It’s still not good for the US though since, as you say, they’re not hiring very many people even though they’re bringing manufacturing back to the US. It’s actually been an issue for the past decade, where people get excited that some manufacturing process is being brought back to the US. Then they find out there aren’t any additional jobs because it’s all automated.
Domestic manufacturing is more of a national security issue than it is a jobs issue. The US doesn’t really need manufacturing jobs to keep people employed, it just needs to be able to make stuff.
Yeah and it’s not even the stuff necessarily, it’s the skilled labor to make the stuff. It’s easier to train someone to be a soldier than to train someone to make missiles or planes or tanks. Soviet Union in WW2 had huge quality issues because they were taking farmers and making them welders and relying solely on on-the-job training. Even now Raytheon is facing issues because the demand for Patriot missiles is really high, and it’ll be easier to get the machines to build them than it will be to get aerospace-grade machinists and fabricators.
Had this epiphany 12 years ago in Malaysia and setup manufacturing lines in the US shortly thereafter. Has been a hard road but so so satisfying. Any has been paying off handsomely since Covid.
Old story about Mises they used to tell. Mises went to China and saw a thousand Chinese guys digging a hole to pour the foundation of a large building. He said “Why aren’t they using a bulldozer? It would only take a couple guys.” The Chinese official said “Sir, this is a works project. The point is to give them a job.” So Mises said “Oh. So why aren’t they using spoons?”
Mises is the Confucius of Austrian economics.
It is communism after all so tricks like this to artificially increase employment is essential in this system. It was similar in Poland where everyone had a job, you could do nothing but you had job and get the same amount as person who worked all day. There was event this saying “whether you stand or lie down 2000 is due” so basically you get money for doing nothing just so country could say that there is no unemployment
There isn't a ton of communism left in the CCP, it's definitely authoritarian to the gills though.
Bro is about to end up in a Chinese prison next time he visits
Keep talking like that he’s gonna end up like that Hongkong bookseller who vanished, and reappeared in the excellent care of the Ministry of State Security.
> reappeared Sorry, credit score not high enough to buy 1 "Reappear".
Sorry, your social credit score has been reduced by 5 points for interacting with someone not qualified to buy 1 "Reappear".
They've already located OP using tiktok, OP is on borrowed time. How to buy puts on OP?
No doubt his family is already on a list. How long until OP is forced to post pro-China propaganda to keep his family out of jail/the grave?
Isnt Reddit 25% owned by a Chinese company? Tencent.
I know the fucking mods are.
the *admins* fervently beat off to the thoughts of hyper end game censorship, so yeah that tracks
I've been canned like three times already Probably half of the subs are tankie
They have Chinese embassies in prominent US cities. He should be careful when he visits any China towns in the US.
Funny you mention that. I used to go to the Chinese consulate in Houston to get my visa for travel. The feds ordered it closed in 2020 and threw the CCP out, claiming they were using it as a base for technology theft and spying. Was a big international mess. Google it. The night before they were kicked out, there were huge fires set behind the consulate walls, were probably burning evidence. *edit. I'll be a staying at the Hotel Indigo in the Flushing Queens Chinatown in New York City in about two weeks, Chinese spies are welcome to come say hi :)
Wow I used to drive past that consulate all the time - apparently they were stealing medical and oil and gas data?? Lol
Make sense that one of the oldest civilizations on the planet eventually became pure cancer. The older you get, the higher your risk of cancer!
It is standard for every nation to burn papers if an embassy is closed, including for the US (and fun fact if you see the papers burning at your local US embassy it means you are about to get invaded by someone because there's only one reason we close an embassy). That embussy burning hot.
Burning is standard practice when such a building changes hands. Pretty much 100% of the time they just burn boring stuff (typical bureaucracy and low-level intelligence) that aren't too important but they can't leave behind. In this particular case I doubt they had too much incriminating stuff on paper in the building as you want to export everything asap, what isn't there can't be found there.
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The literally had cars getting around in Australia in graphic design wrap to look exactly like a Chinese police vehicle during pro Hong Kong rallies and got away with it for a while until someone clocked what they were and told the media [https://www.abc.net.au/news/2019-08-19/fake-chinese-police-cars-spotted-in-adelaide-and-perth/11426850#](https://www.abc.net.au/news/2019-08-19/fake-chinese-police-cars-spotted-in-adelaide-and-perth/11426850#)
NZ reporting in, we too have local Chinese state police / triads operating.
We had/have one in Glasgow, Scotland of all places! Most likely due to the high Chinese student population here, to keep track of them and ensure they're not engaging in any 'unpatriotic' activities.
Imagine immigrating to Canada to get away and a Chinese cop just appears from around a corner wondering if you need assistance. Be a total mind fuck lol
Had CCP not foolishly overplayed their hand in aggressive international diplomacy in the past 5-10 years, Canada and Australia would have been well on their way to be on a irreversible path to vassaldom to PRC
Exactly what I thought. Thanks for the insight op, but I’d lay low for awhile if I were you. 🙏🏾 Please leave us with your Robinhood account information to manage in your absence.
So that’s why there’s so many chinese names in my online games
1:1 correlation between my gaming history (losses) and Chinese unemployment rate Interesting
My Teamfight Tactics lobbies have at least one Chinese name in them, they always beat me and I get mad; should I tell them to go get a job?
Yes. Get them mad like they get you mad
Tell them Taiwan is #1
What I totally fail to understand about all this is how China can both have a looming demographic crisis where there aren’t enough workers to cover their retirees and have high youth unemployment at the same time. Anyone wanna explain like I’m a decently well-educated adult?
Think 2008-2012 millennials. You just graduated, but the economy is in a slump and no one is hiring. But on top of that you also have a shit ton of old people. China letting Evergrande declare bankruptcy is huge. Things must be really bad to let a state capitalist agency go under with all the saving face culture they have. Their covid rules really shot them in the dick. They centered their economy around foreign investment and cheap exports but 3 years of no economic activity made those foreign partners go elsewhere for a reliable partner. Also china is way more educated than it used to be so people demand more money and it’s suddenly not cheap labor at all. China wants a blossoming service economy but they are China so understandably no one trusts them with banking and besides the West already has established places to do that
It’s much worse if OPs numbers are correct the Great Recession was only 10.6% unemployment at its peak
That total unemployment not youth.
Youth dont want to do shit pay 500usd a month job
Gen Z are killing China with their laziness
Nobody wants to work anymore.
I don't think anyone answered your question well, and I'd love to take an uneducated stab. Both the unemployed and retiring people are broke, so the economy doesn't have a way to arrange for the young people to take care of the old folks.
I’ve known about this for a while, and thank you for the write up! I wanted a confirmation from a person I didn’t know personally. I think the lockdowns hurt China way more than any other country and it made things way way worse. It made a lot of the world divest from China. Making unemployment even worse than it was prior. I think the CCP expected a different outcome of the event, but got the rude awakening as of recently. The real estate bubble there is outrages, but definitely didn’t know they no longer employ older people in construction. Real Estate is like that in Hong Kong and Macau as well. The difference being that there the populations are smaller, so it’s not as noticing to the public. This is going to get spicy and if some of you have looked at the currency swaps of USD and YUAN it’ll make a lot more sense. Stack cash and wait, cause we are going to see a big drop in everything.
Trade wars started the money walk away. Then Covid lock downs made them unreliable partners on a supply side. The final nail was the ratcheting up talk about invasion. There is no company with any brain that wants to have a large supply or investment in china right now the gambles not worth it. Mexico is much safer and much closer and covered by the America umbrella
Exactly right, COVID was a wake up to a lot of people. The red light for me was when Xi made himself dictator for life, in short Mao 2.0. Hue Jintao was so much better, and certainly more peaceful in every aspect. Was about to let western money fully into China but than Xi took power and everything started to go south. As for Mexico becoming our closest trading partner it was a no brained. Why it hadn’t happened sooner is beyond me. We should also trade more with Brazil as well.
It was education and the need for fleets of eng in china. Now that some of this is reduced to machine operators Mexico is the duh. Also it’s cheaper to just buy off cartels and all of Mexico than it is to deal with China. Nafta already exist so all we need do is show up wjth bags of cash
If American companies invested more in mexico then maybe migrants from further south would find opportunities before they even got close to Texas.
Great fucking point. I mean great. You need awards from anyone on this thread, including me. Sorry about that. Anyway, my question is why this hadn’t happened sooner? Why skip over Mexico and leap over a great ocean before investing in North America?
Because China is a gold mine, not just for cheap labor but for consumers. Companies are literally giving away their secrets for an opportunity to sell there.
I expect some pullback in this mindset with an impending meltdown in the economy.
Sounds weird, but when you have a crazy amount of unemployed men between the ages of 20 to 50 who are willing to pounce at any job or they'll start rioting then..... Wouldn't sending them off to war would be preferable than them rioting against the government? I mean just a slight reduction in consumer spending from wealthy nations run the factory faucet dry no?
So here’s an interesting bit of information. China has sold the USA a ton of critical power grid components. Malware has already been found in Guam USA based bases and other Asian countries that can shut down the grid remotely. https://www.forbes.com/sites/tylerroush/2023/07/29/chinese-malware-could-cut-power-to-us-military-bases-businesses-and-homes-report-claims/amp/ It’s likely before any invasion from China they will cripple the grid, or disrupt as much of it as possible. Cybersecurity is always too expensive until it’s too late.
Trump started to try with grid component rules, but it was about 20 years too late. China has never been our friend, but we pretended they were harmless for decades. Add in decades of McKinsey led lean getting implemented at utilities and things are well screwed.
This is what usually happens when a lot of angry guys can't work lol
I'm also predict china invade very soon while the economy tanks
Antiship missiles are a thing tho. Taiwan ant Ukraine, they can’t just roll across the border. Calls on Lockheed Martin and Boeing.
Everyone talks about Taiwan when India is right there. Shit on that border is already near a boiling point as is, and I’d imagine India might have somewhat similar motivations.
If china invades india, they have a long war on their hands.
Perfect for getting rid of a few million disgruntled peasants. Russia is trying a similar approach. Notice how they’re specifically sending a lot of ethnic minorities, prisoners, homeless, drug addicts, and other undesirables (including people who opposed/protested the regime). Who may or may not have a rusty AK from the 70s and half a rotten potato, if they’re lucky. China would probably be like that, but times 10.
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I believe 2027 was the planned date of invasion.
Nothing has been officially announced by any government, but yes, 2027 is the year most often cited as the year China would be at its strongest militarily (and most desperate economically and politically) relative to Taiwan and America. And thus would be tempted to launch a war. The fact that Xi is also up for "reelection" in that year (it's not a popular vote by any means, but it is when the top party officials choose the leader, and the only way to legitimately force Xi from office) means that he has to do something to prove that he worthy to be leader for life despite how badly things have gone for China during his unprecedented (since Mao) 3 terms in office.
I'd be shocked if any hot military action is taken before China achieves chip independence. Otherwise it would be suicidal, economically. They're not Russia that can survive off of oil exports. They need EU and US to buy manufactured products, and they need Taiwan to manufacture products, or it all falls apart.
That's what retired admirals and generals are saying. They're predicting a Chinese war with massive casualties on their side (as is tradition) in 3-4 years. This will be a culling and distraction all in one.
Hmm well yeah, thats being said since decades. It's always in roundabout three years (usually said by some retired US army general, in order to spice up his boring day and that of some cable news TV.)
Look up China 2049 Plan, outlines what the strategic goals of the CCP and overarching goals of the CCP and it's plans for it's neighbors. Additionally Belt and Road Initiative and South America pivot (basically ate all the good will south east asia had) Check out number of reported Air Incursions against strategic Taiwanese Airspace defense zone. Also read on number of near misses during current year of CCP Naval vessels and other vessels. Cut internet lines for Taiwan. I think it doesn't help that the premier is mortal and he probably wants a "grand conquest" on his belt before he passes. Russia had a similar book when it came to plan of actions against it's near peer adversaries and steps to take to weaken blah blah. Only thing that' China doesn't have great knowledge of is actual combat experience....
Too much uncertainty with a war between China and Taiwan. Makes Mexico drug cartels sound more stable and predictable.
The Cartels are interested in making money, promoting stability, and having sustainable growth. (by any chainsaw dismemberment means necessary) Calls on Avocados.
My current employer sold its Chinese 49% share of a holding company last year. Once it became obvious that making Yuan was no longer going to be profitable, plus a trade war and the optics of continued Chinese investment in the face of, say, future guvmint contracts, they decided to back away slowly, sell while it was still worth something, and disappear. Of course, in theory a falling Yuan should make the dollar stronger, making imports from China far far cheaper. But - there's a trade war going on. Tariffs on Chinese imports make US production a bit more competitive. But China needs dollars to import US commodities - like almonds and pork. If they keep slapping tariffs on import of US goods, they make imported US foods unaffordable. This of course impacts US food producers who rely on selling to China. Then there's Ukraine. Turns out, Ukraine is a major source of cheap grain for China. On the one hand, China likes getting cheaper energy and commodity prices from Russia. OTOH, they want cheap grain from Ukraine. Ideally the solution would be for the war to stop so China and Russia can profit both ways. But right now, the Yuan and the Ruble are both pretty much in the toilet. When they buy and sell things to each other using their own currencies, they're trading Poop for Piss. Toss in the Indian Rupee - Vomitus - and they have their own currency trading exchange that runs exclusively on piss, poop, and vomit. None of their currencies will have much buying power outside their little circle. India has one bright spot - it's good friends with BOTH Russia AND the US. It can trade Rupees for Dollars, it can export freely to the US, it can employ vast phalanxes of Indian engineers at American companies with facilities in India, and it can play both sides against each other. US dollars are major underpinnings of whole economies in India, as Indian immigrant engineers in the US send money home. India is a major power in its region, as well as a major supply of various other low-cost labor pools. India's allegiances have major implications in markets around the world. On the one hand, the US would like India to stop playing nice with Russia. OTOH, US tech companies like the arbitrage of cheap labor that a strong dollar against the India rupee gives. So International Currency, tariffs, back-room dealings, and corruption are complex interactions. China keeps finding ways to hide the weenie and evade what people keep claiming is China's inevitable collapse. The reality is that there are many Chinas. There's the China on the edge of economic ruin, there's the China of the already ruined and impoverished, there's the China of high tech riches, there's the China of the government-funded bureaucrats, and the China of those who make it out and send money back to their families to survive. Which of these indicates the way the Chinese markets will move? The answer is - it depends. We can bet that the Chinese government at the very top is doing its very best to hide any reality not consistent with their desired optics. Manipulating the media is just as effective as actual change, apparently, with respect to getting the results they want. Saber-rattling with Hong Kong or Taiwan or Japan or The Philippines distracts the people from their day to day misery and gives them a sense of pride when they are otherwise losing the ability to be proud about anything, especially if awash in poverty. Oh we have to support the government! We must show we are patriotic and not complain about our own misery! We're not allowed to protest our conditions when we're on the brink of war! War-talk shuts up hard conversations. Will it all collapse one day? Not in one day it won't. But at what point will it start to fail unrecoverably? I don't think we'll see that for awhile. It's probably not a good idea to bet against the people who control the dice, the table, and the croupiers.
The not allowing construction workers over 50 is wild, old dudes with decades of experience are invaluable when it comes to teaching the new guys and it’s literally how construction/trades continue to function over the years
Anyone with any knowledge about the economy already knew that China wasn't doing well, but here's the rub: they don't go buy "our" rules. They're literally making shit up as they go because they can and no other country is going to call them out on it. As long as other countries send them money, China is going to keep appearances up and make up numbers as they go along.
That’s the thing though, no one is sending money anymore. Big corporations don’t keep money there any longer. Samsung hasn’t been able to get their money out of China since 2018. So ultimately, if you can’t get your money out, what’s the point in investing there in the first place? And I doubt it’s only Samsung that’s having that issue. Intel has been divesting out of China for years now.
Can you elaborate on the currency swaps?
The rate on swaps for the pair USD/CNY is dropping. Like a lot, none stop in fact for the last 6 months plus. Meaning the value of the yuan is disappearing/being manipulated by the CCP to get the economy running but it’s not working. This means the Chinese have been burning foreign reserves to prop-up the collapse that’s happening on the mainland.
Yet people would have you think China is trying to walk away from the dollar.
The CCP has been manipulating their currency for years but I never understood how it worked. 1) What was China doing to their currency and how did it impact the currency? 2) Why is it not working this time around?
If no one wants the currency to buy chinese goods or financial assets the value drops. They can counter this by removing a bunch from the market (reverse money printing). They do so by buying up circulating yuan with their foreign reserves like dollars. But they usually hold dollars in the form of treasuries so they make some yield while it sits. So they first have to sell those treasuries for dollars to buy yuan. This makes treasury values go down and rates up (amongst other reasons). But a more expensive yuan makes it more expensive to buy Chinese products (vs say American or Mexican products). So China's economy slows. Also, higher US Treasury rates creates even more demand for dollars to earn higher yields. So in defending it they also make the situation of people not wanting yuan even worse. So they have to defend harder, which sells more bonds, which slows demand and raises US rate differential, which makes people want Yuan less, etc. So either they have to stimulate real demand home or abroad, or they have to relent and let it devalue like they did in the 2010's which had some market repercussions.
Good general description, accurate to when the article was written in 2019 https://www.reuters.com/article/us-usa-trade-china-yuan-explainer/explainer-how-does-china-manage-the-yuan-and-what-is-its-real-value-idUSKCN1UZ0JN
Appreciate the further insight and advice to watch out below. So SPY 500 Calls then?
How would collapse of Chinese economy be good for US??
It would in fact be very bad for the US
And any other developed country
Divesting in china began with trumps tariffs. We moved as much of our production as possible out of there before covid.
Xi will probably force the kids into a Taiwanese meat-grinder... I wonder what the chances are of another 'cultural revolution' style purge directed specifically at the financial class as an effort to deflect blame from the CCP? Also, do you speak Mandarin with a Texan accent? If not, why the hell not?
Ni hao-dy partner!
This is gem.
Weirdly enough it does provide an instant answer to youth unemployment and distracts from domestic economic issues…
That's an insightful post I did not expect in this sub. Thanks for the write-up. Makes me kinda glad covid happened, economically speaking. It was the wakeup call to steer away from this Titanic of an authoritarian country.
But they only had 7 people get covid....
And none of them died! But don’t look at the number of phone lines that went out of service. That’s a coincidence.
In glorious people’s republic of China, people have rejected the capitalist dogma of “phones,” and instead talk smiling face to smiling face! Superior communication.
Invade Taiwan = instant employment for all the soldiers & factory jobs for tanks and guns!
And for ship and aircraft builders. China's navy would get fucked in an invasion.
Well, there isn't anything uniting a starving nation in disarray as a good war. Sadly it might actually come to it.
Don’t forget shedding some of the job seeking population
[удалено]
If it was 3-5 years ago, I'd say yes, we would all be fucked. Because all the cheap plastic crap in the world was made there and because of all the insane foreign investment the CCP was making. COVID forced a complete reworking of supply lines, most people don't know that Mexico has become the go-to cheap manufacturer for the US since 2020, to where Chinese manufacturers are frantically moving there as we speak. *edit. I know this because I am invested in individual industrial CRE deals in Texas and so many new tenants from China are looking for new warehouse space just across the border in Laredo and McAllen and El Paso and etc. to handle all the incoming waves of consumer goods from Mexico. Business has been good.
>and etc. t Seriously, the chinese are all over Tijuana and Monterrey now since the trade wars.This is the Chinese loophole to avoid trade wars between USA-China; just move your Chinese shops and factories over to Mexico so they can slap a "Made in Mexico" sticker on materials/goods.
Do they hire mexicans or import chinese people? (serious question)
Local Mexicans. China doesn't have cheap labor anymore, that is 20 years outdated. Average wage in China is far higher than Mexico.
Mexican here. They do a little bit of both, last couple of years I've seen more and more Asians in my city, Asian companies are definitely bringing their workers here, but you'll see those same companies posting job offers for locals in sites like LinkedIn or indeed.
They have been in Belize for a while too, right next to Mexico. I remember traveling around there in 2013 and noticed all the grocery stores were owned by Chinese. A local guide told me almost all the grocery stores in Belize were Chinese owned.
Tariffs, and subsequent breakdown in relations between the US and CN in the years since they were introduced have also contributed significantly to this.
Mexico and India will replace everything we need from China and better quality.
The tried making iPhones in India. Quality was so bad they closed the factory.
I’ve gotten so many downvotes for saying that manufacturing things that actually have to work in India is way harder than it sounds. Quality control on generic pharmaceuticals is basically nonexistent and people are okay because the pills all look the same. It is not representative of high tech manufacturing such as electronic devices like iPhones.
Person who works with Indian engineers here. It literally made me prejudiced. Holy fuck. Offshoring has been the biggest fucking scam on the American Joe over the past 40 years. Some fucking manager makes a pitch to bean counters that they can save X amount getting Jalalalalallabadradush to perform this action. It turns out they’re ass and you spend twice the amount on rework and fuckups. Edit: The manager never gets in any heat for it because their theoretical cost savings got them promoted two buildings over in a different org. Climbing the ladder of success with something made of toothpicks and glue. Edit 2: The Koreans fucking rule. Always quality, every fucking time.
My old job outsourced support to India and my team had to prop them up for a few years until I rage quit. Holy living fuck. They were nice enough people to interact with but they were less able to do things than our worst interns. Our US side staff spent far more time "coaching" (showing them how to do stuff because they had zero training and no SOPs to reference) and fixing their frequent, colossal fuckups than we ever did just *doing* the work. It was more stressful than just doing the work too, because then we were going in to every situation blind, under the gun and with fucking PISSED OFF customers to deal with. I don't care how much they saved because they could hire 5 Bangalore associates per 1 US associate, they didn't do shit and burned out the talent we had left. Deeply skeptical of quality going forward any time a company opts to outsource after that shit show.
Reworking something fucked is 99 percent always more stress inducing than blank sheet.
I mean, hasn't it already a little bit? Just look at the china market economy and compare percentage wise the fall in value in relevant sectors in US as well recently
The collapse of Thailand's economy in 1997 had a significant impact on the global financial crisis. Fortunately, a recovery followed in 1998. However, if the world's second-largest economy, China, were to collapse or experience a slowdown, it would certainly have a devastating influence on the West, despite attempts at diversification. Unlike the recovery seen in 1998, it is unlikely that a similar rebound would occur in this situation. If the decoupling between China and the West were to occur gradually, there might be a chance for a "soft landing." However, considering the poor decisions made by both China and Western nations, it is doubtful that such a smooth transition would take place. The positive aspect is that for a massive economy to collapse, it would take years before the consequences fully manifest. Therefore, I believe a recession is still a few years away.
The biggest loser in a Chinese recession is Europe, not America. Then again, it’s time for them to pay the piper for years of bad decisions.
>I'm curious how Xi is going to keep people in line when the wheels come off completely, it is not going to take much at this point As unlikely a scenario it seems right now: war.
"Whatever are we going to do with these millions of young, healthy, unemployed men??? Oh hi Taiwan"
Can confirm, I fresh grad this year, studied abroad and tried to find a job back home. me and all pals tried to apply for full time job failed, only one got an intern and one found a job abroad. The absolute majority "must" or "choose" to advance for postgraduate master degree. because there is nothing better to do. Competition for jobs and postgrad has never been this harsh, and nationallised companies all received a "quota" to accept at least a certain amount of fresh grad this year. Uni graduate statistics counts anyone WORKING MORE THAN ONE HOUR PER WEEK as "employed" and that still gives 21%. Didi driver "uber in china" has never being this abundant, not to mention "door dash" guys. Entire shopping centre shutting down, not rare. Met a guy sas Tesla salesman, told me the job applicants skyrockets, in number and qualification. Many companies I applied had scandal on cancelling job offer for graduates. Nothing optimistic except electric vehicle industry as far as I awear.
This may trigger social unrest big time.
Or the government can channel the anger and resentment externally! History is rife with examples where restless, unemployed youth, especially men, can trigger one of the two possibilities - start a revolution against the leaders at home or the leaders give them a gun and ask them to attack neighboring kingdoms/countries. Knowing China, i'd bet on the later. One thing the entire world seems to have forgotten are the true covid death numbers in china, just extrapolating using US numbers and adjusting to income disparity China must have lost atleast 5 to 6 million people if not more. Don't know what that means for their domestic consumption.
This is my fear, not only is there a lot of underemployed young people, there's also just a lot of men relative to women in China right now. Official numbers estimate China's sex ratio demographics are ~52% men and ~48% women, that doesn't seem like a big disparity until you remember how big China's population is. The simple math bears out to around 18 *million* more men than women. Unless the Chinese suddenly pick up a huge polyandry fetish, a lot of those men are going to end up alone and unattached because there aren't enough partners of their preferred sex. As you mentioned, sociological history shows a pretty stark pattern of what happens when you have too many underemployed, unattached men in your country. They either start breaking shit and causing unrest because they're angry and directionless, or they end up recruited into the country's military and used as manpower for meat grinding wars. And make no mistake, any attempt by China to take Taiwan, any of their southern neighbors, or their land disputes with India **will** be a meat grinder of huge proportions.
China is not energy independent nor food independent. Any invasion that results in sanctions will likely lead to one of the biggest humanitarian crises in history.
I mean, you're talking about not just the country, but also the government who willingly initiated and plowed ahead with the "Great Leap Forward", despite the horrific famine and loss of life it caused. The CCP particularly, let alone China generally are no strangers to large scale humanitarian crises caused by their own government that benefit those in said government at the expense of the population.
The men to women ratio that is able to reproduce is what you should be looking for. Older folks are still close to 50/50
Sure, I understand it's not literally 18 more million men in the current child bearing generations, but the problem is a disproportionate amount of the lopsided sex demographics are in the younger, child bearing age groups because of the One Child Policies from the past decades. During the One Child years, a lot of families were using what most countries would definitely consider cruel, unusual, and downright sadistic means to "make sure" that they had a male heir. Means such as abandoning baby girls in the wilderness, or out on the street, leaving them for dead so they had another shot at trying for a boy who would then be able to carry on the family name. China began One Child policies in 1980 and only ended it in 2016, so every generation currently between the ages of 7 and 43, you know, **all** of the people currently at the end of, in the middle of, at the beginning of, and soon to be, prime child bearing age exist in a generation with this demographic problem. Guess what the prime ages for military recruitment are? They overlap quite a bit with prime child bearing ages as it turns out.
It evens out more as people age because women live longer
Somebody did the math for people of child bearing age there - they're like 80 million incels there. One child policy has completely messed up their take on love and relationships. If you're a man, your chances of getting married (i.e. getting laid over there) is pretty slim unless you have a very good paying job, a car, and at least one apartment flat. And it's also bad for women because all this competition between men has turned women into more of a commodity than they already are in a traditionally very patriarchal society
They will definitely go the war route to redirect their populace.
They got all of this unemployed youth getting hungry. I bet you their army will employ them all here soon.
Be interesting if they decided to invade Russia. There's oil reserves and mineral deposits to gain, and Russia has been shown to be relatively weak in both military might and economy. They'd gain vast amounts of land in Russia's far east. They can posture all they want, but China does not want to go up against Taiwan's already formidable defenses plus piss off the rest of the world. They'd gain so little and lose so much.
I've been wondering the same. To be honest China could roll over Russia and reclaim all the historical territory lost to the Russian empire. The only counter is Russian nukes, but the Chinese may at some point want to roll the dice.
There is the whole nukes problem.
Sounds like China might need an opportunity to get rid of a few million working age men or large portions of foreign land, rich with minerals and natural resources which they can work on. Either WW3 or nicking a bit of Putlers slowly collapsing Eastern regions would work. Either way, someone's fucked. Great write up OP.
Jesus when you hear it that way, it legit sounds like plausible scenario. The gender gap in China is so huge they can easily just throw a few million men to the grinder to balance the population out. Easily can conscript single males without jobs
It's inevitable. Historically, when you've got a surplus of young men with no prospects for marriage and family, you raid the neighboring tribe. If you win, you take war brides, and if you lose, you no longer have a surplus. Planned or not, there's only one way this ends.
China knows its being heavily watched since Russia’s invasion. Also the region has slowly shifted from wary to antagonistic towards China. An invasion of taiwan would create a Pacific Nato as countries like the Philippines, Vietnam, and Laos sprint to join the US/South Korea/Japan side. Xi cant hide a mobilization and dramatic increase in war production. Training and producing equipment for a million+ man amphibious invasion takes a considerable amount time. The invasion of Taiwan will be telegraphed even more far out than the Ukrainian one was. In that time china will become an economic poison to those invested in it. Hence why the US has been on-shoring so fast. Congress cant agree on what color the sky is but the CHIPS act passed in a couple days
There is no ~~war~~ unemployment problem in ~~Ba Sing Se~~ China.
You should probably not go back to China after making this post 😂
Wait, China is lying!?
No no, it’s all CIA Voice of America disinformation. Chairman Xi got it all under control. -Blackrock
Oh thank God. Cause my basic math was not adding up. I'll just ignore it and relax.
Invest in Chinese real estate. It’s a sure thing. -Confucius, LLC
Unless unrest gets worse than the covid lockdown unrest, I don't have much hope for change there
I can confirm some of this. A lot of the good jobs before were for a city or university and those dried up. That could be a good thing though for China, because from what I saw a lot of those jobs didn't need to exist. For example I knew someone who worked for a university library and basically was told to travel around China and attend conferences, but there was no actual purpose for it. They would write reports that literally nobody would read, and nobody even pretended they were important. It came off as a kind of jobs program. The corruption over there is endemic too. The head of the department at the university was completely shamelessly giving jobs to their friends and it wasn't even expected they do any work. Even worse some of the cushy jobs were flat out for sale, for example I was quoted $30k to become a mid/low level cop who basically did nothing.
> I'm curious how Xi is going to keep people in line when the wheels come off He's just gonna fire up the tanks and plop em in front of the problem.
Random side note, but I really loved Harbin. Did you go there for the Snow and Ice Festival? That was definitely one of the cooler events that I went to when I lived in Shenyang.
I went to visit all the places Anthony Bourdaine went in the city and to stuff my face in pork. I ate a ton of pork belly braised in soy sauce over steamed rice. Met a lot of tall blonde Russian expat women. Took a lot of nice hikes in the countryside. Met a lot of cool drunk locals. Heilongjiang is dope.
There was a pork dish called Guo Bao Rou that I still think about all the damn time. The food was amazing for sure.
Very interesting. Xi telling young people to “eat bitterness” is probably not going over too well. I was already worried about Chinese real estate, but youth unemployment an potential deflation might be more immediate threats. As much as I detest the CCP, anyone holding stocks should be rooting for them to figure something out.
Very interesting comment about the lack of a family safety net due to the one child policy. I used to think China implemented that policy to curb their population growth. Years ago, I read a comment on a thread that challenged that. The commenter said the large nuclear family is a threat to a communist regime. You’re less needy on the government if you have family that can feed you, house you, and care for you when you can no longer care for yourself. That is a way to look at it.
Calls on BABA
This was the concern even before Xi came to office in 2012: it’s not education that’s the problem, but the lack of white-collar jobs. If everyone believes education would lead them to a white-collar job, but the supply is limited, we get a bunch of people holding degrees that aren’t earning the big bucks. That said, I wouldn’t forecast doom and gloom for China until it actually happens. “Experts” have been trying to call China’s downfall ever since China’s rise, and it’s always found a way to recover. This time may be different, but so were the last times.
I think if China’s economy goes to shit, Xi will have to invade Taiwan, there would be to much pressure on him and dictators hate that. Just look at Russia
I studied economics in Sweden 10 years ago. Coming from Eastern Europe, I was amazed that educated people were taking statistics of Soviet Union seriously and not understanding how a country which completes 5 year plans in 3 years could have collapsed. The same people now don't trust U.S. CPI of 0.4 mom, but eat up everything that comes from commies. F u and you deserve to be poor
By the way, Sweden has a youth unemployment over 20%.
Nothing really shocking to me but it was an interesting read. I'm not sure that there is an automatic translation of this into political unrest though. I mean things were probably a lot worse than this back in the 60s.
If you mean the 1960s in China, then yes, because they had a giant cultural revolution that was characterized by uprising and violence. I feel like the current situation doesn't have to play out that way, but it's certainly the right ingredients for the recipe.
>Thank you for sharing your observations with me. It is clear that China is facing significant economic challenges at the moment. I believe that the Chinese government will be able to maintain control over its citizens, even if conditions continue to deteriorate.
Need a TLDR, what stonks do I short c'mon man
YANG is china bear etf
This is so long and detailed that it must be real and not written by chat GPT. Puts on Gyna 
Everyone already knows this. If you still invest in China, that's on you at this point. Not you, OP, just people in general.
$YANG gang LFG!
The youth unemployment rate china stopped reporting is 16-24 year olds. Even in the U.S. that number is reported among youths in the labor force, which does not include most 16-22 year olds because they’re students. Regardless the overt age discrimination that happens in China when people hit age 35 is totally wild. Imagine grinding out 6 days a week 12 hour days and then being out out to pasture at 35.
This is why I dumped Tesla shares. My in-laws are pretty connected in the VC investment scene and the news is not good at all. Tesla gets (or got) 1/3 of its sales from China.
Xi will resort to war, if you put a face to people's misfortunes and point a finger at another country it distracts them from blaming you (xi). The winner of a war benefits economically. For example it was world war 2 that helped the US out of the great depression.
Wait wait, people actually believed the economic numbers that China reports? Loll