Key Insights:
The Chinese Communist Party is very like an aristocracy—or maybe it isn’t…
If it is, it will in the long run have the same strong growth-retarding effects on the economy that aristocracies traditionally have…
Or maybe it won’t: China today is not Europe in the 1600s…
We probably will not be able to get Noah to read Franklin Ford: Robe & Sword: The Regrouping of the French Nobility After Louis XIV <https://archive.org/details/robesword0000unse_g7d2> to dive more deeply into analogies & contrasts…
Southeast Asia’s future is very bright because of friendshoring…
India’s future is likely to be rather bright too—it looks like a much better economic partner for the rest of the world over the next two generations than does China…
You can get pretty far by just massively forcing your society to build lots and lots and lots of capital…
Especially if you have an outside country you can point to and say “give me one—or five—of those!”…
But quantity of investment has a quality of its own only so far…
We think of technology as the hard stuff…
But actually the hard stuff is institutions, property rights, government—people actually doing what they said they would do, rather than exerting their social power to welsh on their commitments…
We are surprised and amazed at China's technological excellence in electric vehicles, in battery and solar technology, in high-speed rail, and so forth…
But those are relatively small slices of what a truly prosperous economy needs…
For everything else, we have reason to fear that the logics of soft budget constraints and authoritarian systems are not things China will be able to evade indefinitely…
Is that a middle-income trap? It certainly functions like one…
Hexapodia!
References:
Brad DeLong: DRAFT: What Is Going on wiþ China’s Economy?:
Daniel W. Drezner: The End of the Rise of China?
Daniel W. Drezner: The Rising Dangers of a Falling China
Daniel W. Drezner: Can U.S. Domestic Politics Cope With a Falling China?
Arpit Gupta: What's Going on with China's Stagnation?
János Kornai, Eric Maskin, & Gérard Roland: Understanding the Soft Budget Constraint <https://www.jstor.org/stable/3217457>
Adam S. Posen: The End of China’s Economic Miracle <https://www.foreignaffairs.com/china/end-china-economic-miracle-beijing-washington>
Kenneth Rogoff: The Debt Supercycle Comes to China <https://www.project-syndicate.org/commentary/country-garden-shows-debt-supercycle-comes-to-china-by-kenneth-rogoff-2023-08>
Noah Smith: Real estate is China's economic Achilles heel
Noah Smith: Why is China smashing its tech industry?
Adam Tooze: Whither China? Part I - Authoritarian impasse?
Adam Tooze: Whither China? Part II - Posen v. Pettis or "authoritarian impasse" v. "structural dead-end”
Adam Tooze: Whither China? Part III: Policy hubris and the end of infallibility
Lingling Wei & Stella Yifan Xie: China’s 40-Year Boom Is Over. What Comes Next? <https://www.wsj.com/world/china/china-economy-debt-slowdown-recession-622a3be4>
+, of course:
Vernor Vinge: A Fire Upon the Deep <https://archive.org/details/fireupondeep00ving_0/mode/1up>
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