The comments here about Chinese semiconductor technology are just plain ignorant. The author has chosen to believe an unsubstantiated rumour which is almost certainly inaccurate. If he’d done further checking or understood this area, he would have realised this.
Such rumours may well shock “Western analysts” almost none of whom know what they are preaching about. Anyone who works in the industry knows just how hard producing 5nm chips in serious volumes with decent yield actually is and will not be fooled.
Apart from that, what is the author complaining about here ? The fact that we have a free press (remember, China does not) ? We know that the media tends to operate as a herd and opinion overshoots one way and then the other. It’s currently swung back from “China is booming” to “China is bust”. Credit the readers of business papers with the intelligence to filter through the noise here.
Low pass filtering all the noise here and looking at the medium and longer term, the US is in a far better position than China. The US has many problems, but not fundamental demographic and structural ones like China (an economy in which 30% is housing/construction and there are more flats than people is not sustainable).
Surely the most fundamental issue is, can we ever trust the validity of any information coming out of China, including economic data. There is no means of verifying it and every reason to believe it is as manipulated as the Chinese people themselves.
Agree. Any data that does not look good, China will hide it. For example, China has recently stopped reporting their youth unemployment rate, which was last reported to be pushing 21%. Some argued that even this data was heavily doctored and sugar coated – the actual unemployment rate is estimated by some to be around 40%.
As someone also in the electronics industry, I continue to be agog at Pilkington’s willful ignorance of how that industry even works. He’s really out over his skis here constantly.
Forgive me if this comes across as flippant, but an economy in which there are too many homes and not enough buyers probably sounds like paradise to the ears of many westerners under the age of 40.
“(an economy in which 30% is housing/construction and there are more flats than people is not sustainable).”
And neither are the banks sustainable which financed all that apartment building. The developers are being propped up for now, but something will have to be done with the banks too … it doesn’t look good.
I can understand the author being impressed with, say, the Chinese car industry, which is developing fast, but the property development/finance debacle, and the demographic trend, need to be considered too.
UnHerd Reader
5 months ago
Interesting article – I would be very interested to identify the financial and cultural connections of this writer who seems to be a cheerleader for China in his various articles.
What we might see with China is Japan style stagnation, but without the benefit democratic system to prop the country up in order to keep it afloat. The Regime’s power is based of an implicit agreement between the people and the party, that it would maintain prosperity and the people would obey in return, but what happens when that cant be kept up. Also, what the power struggles within the party, can Xi keep them in line? What happens when he is know longer around? A lot of knowns, China has strong leaders(The Party), but not a strong state, which how the whole thing is set up. Putin’s Russia has shown how flawed such set up can be.
R.I. Loquitur
5 months ago
The 800-pound gorilla in the room is China’s coming age inversion and population bust, unstoppable absent a few hundred million immigrants. For a nation that is built on cheap labor, rapidly transitioning to a high value-added economy seems very unlikely
UnHerd Reader
5 months ago
Even worse of a joke to project china can ever overtakr usa than chimese collapse
The comments here about Chinese semiconductor technology are just plain ignorant. The author has chosen to believe an unsubstantiated rumour which is almost certainly inaccurate. If he’d done further checking or understood this area, he would have realised this.
Such rumours may well shock “Western analysts” almost none of whom know what they are preaching about. Anyone who works in the industry knows just how hard producing 5nm chips in serious volumes with decent yield actually is and will not be fooled.
Apart from that, what is the author complaining about here ? The fact that we have a free press (remember, China does not) ? We know that the media tends to operate as a herd and opinion overshoots one way and then the other. It’s currently swung back from “China is booming” to “China is bust”. Credit the readers of business papers with the intelligence to filter through the noise here.
Low pass filtering all the noise here and looking at the medium and longer term, the US is in a far better position than China. The US has many problems, but not fundamental demographic and structural ones like China (an economy in which 30% is housing/construction and there are more flats than people is not sustainable).
Surely the most fundamental issue is, can we ever trust the validity of any information coming out of China, including economic data. There is no means of verifying it and every reason to believe it is as manipulated as the Chinese people themselves.
Agree. Any data that does not look good, China will hide it. For example, China has recently stopped reporting their youth unemployment rate, which was last reported to be pushing 21%. Some argued that even this data was heavily doctored and sugar coated – the actual unemployment rate is estimated by some to be around 40%.
As someone also in the electronics industry, I continue to be agog at Pilkington’s willful ignorance of how that industry even works. He’s really out over his skis here constantly.
Forgive me if this comes across as flippant, but an economy in which there are too many homes and not enough buyers probably sounds like paradise to the ears of many westerners under the age of 40.
“(an economy in which 30% is housing/construction and there are more flats than people is not sustainable).”
And neither are the banks sustainable which financed all that apartment building. The developers are being propped up for now, but something will have to be done with the banks too … it doesn’t look good.
I can understand the author being impressed with, say, the Chinese car industry, which is developing fast, but the property development/finance debacle, and the demographic trend, need to be considered too.
Interesting article – I would be very interested to identify the financial and cultural connections of this writer who seems to be a cheerleader for China in his various articles.
Every article of his implies the west is doomed while authoritarian regimes such as China and Russia are heading towards a financial Shangri La
Not just the West, but he himself. This article from January looks completely wrong:
https://unherd.com/thepost/life-after-zero-covid-markets-bet-big-on-china/
It appears his crystal ball is broken (or he is a well-paid shill).
What we might see with China is Japan style stagnation, but without the benefit democratic system to prop the country up in order to keep it afloat. The Regime’s power is based of an implicit agreement between the people and the party, that it would maintain prosperity and the people would obey in return, but what happens when that cant be kept up. Also, what the power struggles within the party, can Xi keep them in line? What happens when he is know longer around? A lot of knowns, China has strong leaders(The Party), but not a strong state, which how the whole thing is set up. Putin’s Russia has shown how flawed such set up can be.
The 800-pound gorilla in the room is China’s coming age inversion and population bust, unstoppable absent a few hundred million immigrants. For a nation that is built on cheap labor, rapidly transitioning to a high value-added economy seems very unlikely
Even worse of a joke to project china can ever overtakr usa than chimese collapse