Is China Weak or Threatening?
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David congratulations. This presentation is probably the best you've ever done. I would also say that China and the US economies are more closely linked than some believe. US will continue to demand Chinese products and China will continue to export them to the US for the foreseeable future. China will continue to be used by certain politicians as a threat that scares people into voting for higher defense spending in US.
Singapore is a model of central planning. I believe Japan and South Korea also intervened in economic development. We are conditioned by Western education to believe the market system is better than central planners, but perhaps we confuse that with corruption. Historically, central decision making might be more vulnerable to corruption and special interests. A central plan mechanism that pays only a small toll to corruption might function reasonably well. That said, operating in China does involve a corruption surcharge - the question is how much.
There has been a lot of focus recently on China versus the US, and weakness in China due to housing bubble and economic slowdown. I think we lose sight that when the US emerged…
David, not sure if this is the right place to ask, but its your most recent post:
https://www.kansascityfed.org/Jackson%20Hole/documents/9037/JH_Paper_Bianchi.pdf
This paper was distributed this morning and is all over the news. Was your macro research in fiscal/monetary interactions at all? I would love to hear your opinion and thoughts, and what is most meaningful about the paper for you!
Jeff
Great insight David. thanks.
David - while no one is afraid of fair competition, it’s the unfair aspect of that competition that you didn’t mention in your video that I find disturbing in China’s behavior. The forced technology transfers, widespread industrial espionage combined with high interest loans to poor countries under the belt and road initiative, that make these countries lose control of critical infrastructure overtime is very disturbing. For the longest time, weak Chinese currency has wreaked havoc with the developing world’s industrial competitiveness, as it has made investments in US and Europe less competitive. It is good to see supply chain problems force these economies and companies to move production closer to home.