Is China's growth the product of free market , state owned enterprises or both?

[CultureCitizen]

what's doubly stupid and 100% liberal is that delays take place when govt spending occurs too. In my town a "shovel ready" project from the stimulus is just getting started now after years of standard liberal bureaucratic monopoly delays.

yes, so we wait years for a liberal bureaucratic monopoly to build a bridge to nowhere to stimulate the economy and we tax venture capitalists to get the money for it!! It makes perfect sense.... if you want to destimulate an economy as the soviets did!!

Wow Ed, that's a new development, even by your standards. Arguing with yourself.

 

[kaz]

Spend it overseas: Nope, they increased the wealth of the owners of the company. And the economy is global, it's like saying a healthy Minnesota economy doesn't help Ohio. Sure it does.

Ridiculous. Why then has China been growing at an average of +8% rate during the last fifteen years and its foreign reserves skyrocketed to 3.9 trillion while the US growth rate has been 3.9% during the same period of time and both public debt and household debt have increased in the same period of time?
Reallity doesn't seem to check with your "theory".

1) Who are you quoting?

2) So me using basic economics is a "theory" while you quoting liberal lawyers who taught you they are all knowing about economics is dubious. I'm curious how liberal lawyers know that the field of economics is wrong and the communist manifesto is dead on. I keep asking you that, no answer has been forthcoming. As an aside on that, did you know that lawyers went to ... law school? When I got my MBA in finance (a branch of economics) there were no lawyers in my econ classes. I haven't noticed any economics courses in law school curriculums. Very odd, no? So what is the inside scoop on economics truth that liberal lawyers econ wizards and economists know zero about economics come from? I do note a trend of know it all arrogance in lawyers though. And apparently you have sucker written on your forehead.

3) "China" and "U.S." and random facts is not a well formed argument. It's not even a semi formed argument. You need to first make cause and effect clear on what you are referring to . Then you need to show why we can exlude all other factors besides those in comparing the US and China. Then you need to show why we can generalize that to the rest of time and the world. I'm not going to chase you down the rabbit hole of guessing what your argument is.

 

[CultureCitizen]

Spend it overseas: Nope, they increased the wealth of the owners of the company. And the economy is global, it's like saying a healthy Minnesota economy doesn't help Ohio. Sure it does.

Ridiculous. Why then has China been growing at an average of +8% rate during the last fifteen years and its foreign reserves skyrocketed to 3.9 trillion while the US growth rate has been 3.9% during the same period of time and both public debt and household debt have increased in the same period of time?
Reallity doesn't seem to check with your "theory".

1) Who are you quoting?

2) So me using basic economics is a "theory" while you quoting liberal lawyers who taught you they are all knowing about economics is dubious. I'm curious how liberal lawyers know that the field of economics is wrong and the communist manifesto is dead on. I keep asking you that, no answer has been forthcoming. As an aside on that, did you know that lawyers went to ... law school? When I got my MBA in finance (a branch of economics) there were no lawyers in my econ classes. I haven't noticed any economics courses in law school curriculums. Very odd, no? So what is the inside scoop on economics truth that liberal lawyers econ wizards and economists know zero about economics come from? I do note a trend of know it all arrogance in lawyers though. And apparently you have sucker written on your forehead.

3) "China" and "U.S." and random facts is not a well formed argument. It's not even a semi formed argument. You need to first make cause and effect clear on what you are referring to . Then you need to show why we can exlude all other factors besides those in comparing the US and China. Then you need to show why we can generalize that to the rest of time and the world. I'm not going to chase you down the rabbit hole of guessing what your argument is.

Ok Kaz i'll keep it as simple as I can.

Imagine a world with three hypothetical countries which will call US, China , Europe.
Now a big manufacturing firm gets some extra cash and decides to offshore its production to China because its cheaper.
As a result the net output of China increases and the export to both the US and Europe increase, as well of the net income of the firm.
But, since some of the employments in US were lost, US finances its trade balance, part of it is financed by debt.
Now , where exactly is the part where the US economy gets a spillover from the company that moved to China?

 

[kaz]

Ok Kaz i'll keep it as simple as I can.

Imagine a world with three hypothetical countries which will call US, China , Europe.
Now a big manufacturing firm gets some extra cash and decides to offshore its production to China because its cheaper.
As a result the net output of China increases and the export to both the US and Europe increase, as well of the net income of the firm.
But, since some of the employments in US were lost, US finances its trade balance, part of it is financed by debt.
Now , where exactly is the part where the US economy gets a spillover from the company that moved to China?

1) US consumers benefit from lower costs, that means they have more money to spend on other things since the price of products are cheaper
2) The company is more profitable. That profit is used in one of three ways, it is spent on further projects creating more jobs growing the company, it is held and invested where someone else gets the cash and uses it to grow the economy. Or it is returned to investors who either spend it (in the economy) or re-invest it (in the economy)
3) US employees benefit because if American companies don't then they have a cost disadvantage to European companies who are doing it which harms their sales and in term harms the company costing jobs.

so...

4) So in fact there was no further debt borrowed, in fact the government made more money and paid down debt. There is a stipulation to 4. The company has to do it for economic efficiency or it does not help the economy. If they do it to escape belligerent government tax and regulatory policy as many are doing today, it's the rational decision by the company, but it does not help the overall economy positively, it only prevents it from being a negative impact if the company had stayed.

Yes, the specific workers who lost their jobs in the outsource were harmed, but overall the economy was improved. The ideal to any citizen is that they get government so called protection, but everyone else doesn't. But we all do the best if we all forgo government controlled markets entirely and operate in a free market. Liberalism is a death spiral where everyone agrees to get their benefit and together they are net harmed because no one is willing to pay the price for a free market so they all destroy it.

And again. Seriously, this post and everything I am arguing are basic econ you would learn in the first couple of courses you took. It is vanilla econ.

 

[EdwardBaiamonte]

Now , where exactly is the part where the US economy gets a spillover from the company that moved to China?

1) stockholders make more and so have more to spend and invest in US
2) consumers, in effect , get a raise thanks to the lower prices.
3) American companies stay competitive on the world market rather than fade away
4) consumers get to shop for best products in world rather than in USA
5) world economy and standards of living expand faster due to international competition
6) world peace is more likey thanks to economic dependence and integration.
7) life itself become more fun, interesting, educational and cosmopolitan
8) 100% of American dollars spent on imports come back to American and stimulate economy so no net loss is possible unless the Chinese burn the dollars.

 

[CultureCitizen]

1) US consumers benefit from lower costs, that means they have more money to spend on other things since the price of products are cheaper
2) The company is more profitable. That profit is used in one of three ways, it is spent on further projects creating more jobs growing the company, it is held and invested where someone else gets the cash and uses it to grow the economy. Or it is returned to investors who either spend it (in the economy) or re-invest it (in the economy)
3) US employees benefit because if American companies don't then they have a cost disadvantage to European companies who are doing it which harms their sales and in term harms the company costing jobs.

so...

4) So in fact there was no further debt borrowed, in fact the government made more money and paid down debt. There is a stipulation to 4. The company has to do it for economic efficiency or it does not help the economy. If they do it to escape belligerent government tax and regulatory policy as many are doing today, it's the rational decision by the company, but it does not help the overall economy positively, it only prevents it from being a negative impact if the company had stayed.

1) Yes of course , lower costs. Agreed.
2) The company is more profitable. Totaly irrelevant unless the profit is re-invested again in the US. Not of much use if it is re-invested in China.
3) No. US employees do not benefit , because they have already been laid off in my example.
4) Actually yes. there is a further debt necesarily due to the foreign trade imbalance. And this is the most common mistake that junior economists make. Textbooks will tell you that this trade imbalance is not sustainable in the long run. Eventually all those dollars from debt must come back, else the economy with the trade deficit will suffer harming the economy with the trade excess (China) as the market shrinks.
But then , there is a catch in that too: A smart trading partner will use all those savings to acquire land, assets and capital goods.

 

[EdwardBaiamonte]

A smart trading partner will use all those savings to acquire land, assets and capital goods.

you mean land assets in the USA??? and lose money as they depreciate when prices decline thanks to a liberal non-competitive economy. Get it? they don't want to buy and lose money like the Japanese did if economy is protected and non-competitive and so declining.

 

[CultureCitizen]

1) stockholders make more and so have more to spend and invest in US
2) consumers, in effect , get a raise thanks to the lower prices.
3) American companies stay competitive on the world market rather than fade away
4) consumers get to shop for best products in world rather than in USA
5) world economy and standards of living expand faster due to international competition
6) world peace is more likey thanks to economic dependence and integration.
7) life itself become more fun, interesting, educational and cosmopolitan

Wow , finally you are engaging in a discussion with constructive arguments +1 informative.

1) Or not... I mean it is up to the stockholders how and where they spend their money.
2) Or not. The company might decide to keep the prices at the same level , specially if the prices have already reached market equilibrium.
3) Indeed !!
4) Interesting , but not relevant to our discussion, there is no spill over from international shopping per se.
5) I am not really sure. It is not a rule that this kind of activity brings development automatically. But to be more specific, the pattern you describe happens when the foreign companies invest in capital goods. A big nuclear generator will surely create a biger improvement to economy than a set of Wallmart stores.
6) In this point I agree absolutely. Trade is more constructive than colonialism or war.
7) Agreed, but again irrelevant regarding the spill over.

 

[CultureCitizen]

you mean land assets in the USA??? and lose money as they depreciate when prices decline thanks to a liberal non-competitive economy. Get it? they don't want to buy and lose money like the Japanese did if economy is protected and non-competitive and so declining.

I was refering to "Land" as the production factor. A gold mine is considered "land", as well as rivers and forests.


Factors of Production Land Labour Capital and Entrepreneur National Income

 

[EdwardBaiamonte]

you mean land assets in the USA??? and lose money as they depreciate when prices decline thanks to a liberal non-competitive economy. Get it? they don't want to buy and lose money like the Japanese did if economy is protected and non-competitive and so declining.

I was refering to "Land" as the production factor. A gold mine is considered "land", as well as rivers and forests.


Factors of Production Land Labour Capital and Entrepreneur National Income

dear, if economy is declining they don't want to invest here

 

[EdwardBaiamonte]

you mean land assets in the USA??? and lose money as they depreciate when prices decline thanks to a liberal non-competitive economy. Get it? they don't want to buy and lose money like the Japanese did if economy is protected and non-competitive and so declining.

I was refering to "Land" as the production factor. A gold mine is considered "land", as well as rivers and forests.


Factors of Production Land Labour Capital and Entrepreneur National Income

dear, if economy is declining they don't want to invest here

Liberal protected economies:

The USSR, and East Germany, for example, did not produce one single consumer innovation during their existence! Do you know why?


In 1980 you paid 10 years salary in Hungary for a car without a gas gage (dip stick instead) that had to be backed up a hill because of a gravity fed carburetor. They employed engineers by the 1000's all of whom swore that was the best they could do.

It is not until you have had years and years of free Republican capitalist competition that you have any idea how many engineers are needed, at what salary, to produce what quality.

Can you understand the analogy?

 

[CultureCitizen]

you mean land assets in the USA??? and lose money as they depreciate when prices decline thanks to a liberal non-competitive economy. Get it? they don't want to buy and lose money like the Japanese did if economy is protected and non-competitive and so declining.

I was refering to "Land" as the production factor. A gold mine is considered "land", as well as rivers and forests.


Factors of Production Land Labour Capital and Entrepreneur National Income

dear, if economy is declining they don't want to invest here

LOL , why not ?
Maybe qualified labour will be cheaper or some resource will be cheaper.Hell , even real state, there's plenty of free space in the US and China is quite crowded.

 

[EdwardBaiamonte]

you mean land assets in the USA??? and lose money as they depreciate when prices decline thanks to a liberal non-competitive economy. Get it? they don't want to buy and lose money like the Japanese did if economy is protected and non-competitive and so declining.

I was refering to "Land" as the production factor. A gold mine is considered "land", as well as rivers and forests.


Factors of Production Land Labour Capital and Entrepreneur National Income

dear, if economy is declining they don't want to invest here

LOL , why not ?
Maybe qualified labour will be cheaper.

dear, labor is far cheaper in China

 

[Syriusly]

If you want to see both the good and the bad of rather unfettered Capitalism go to China....

too stupid what could be bad when it saved another 60 million from slowly starving to death under liberalism and eliminated 40% of the world's poverty!!!

Sigh- why am I not surprised you are just interested in sound bites rather than a real discussion.

KApitalism GOOd! GOvernMent Bad!

There was never anything 'liberal' about China, and little that is 'liberal' about China now.

China's growth is due to capitalism and huge amounts of government support for that capitalism

Besides the huge infrastructure projects(look at the brand new Port in Shanghai), China's totalitarian regime ensures that there will not be unexpected work stopages.

I have been to China many times- and its fascinating to watch it happening. If you want to see both the good and the bad of rather unfettered Capitalism go to China. I have never experienced air pollution like that in China- not anywhere in the world- not even Mexico City.

If you want to compare China to a country that is more politically 'free'- compare it to India.

Both China and India have rip-roaring capitalism- the big difference is that the Chinese government does not allow its people to impede Capitalism- no strikes, no protests, little concern for the environment.

Then we can get into Chinese government financial support for industry.....

 

[Syriusly]

2) As I mentioned earlier China had a downturn during the last 150 years. For the rest of the past millenium China was the largest economy.

large but still subsistence it was only Republican capitalism that made them instantly rich after 10,000 years of idiotic deductive liberalism

So 'Republican Capitalism' is that hugely government subsidized industry- with government restricting the rights of workers to provide advantages to elite in positions of power who were given permissions and special subsidized government financing to create industry?

 

[Syriusly]

What is completely false is that China's model has any resemblance with the Jeffersonian model.

too stupid, Jefferson stood for freedom and capitalism and Adam Smith just like the Chinese and Wen Jiaboa do.

Baiamonte,
Sory, to hear that. If you think that after reading both links, I can only conclude you are a functional illiterate.

"They do not fully comprehend the information and ideas being received, studied, or applied and are not aware they do not understand. Their actions, feelings and beliefs are founded on their unknown wrong suppositions, ideas and understandings. The problems and results of being a hidden illiterate can range from humorous to disastrous."

Hidden Illiteracy Semi and Functionally Illiterate Definition Applied Scholastics International

personal attack from typical liberal who lacks IQ for substance!!
Jefferson stood for freedom and capitalism and Adam Smith just like the Chinese and Wen Jiaboa do.

Is this guy brain impaired or just is stupid and has problems with the English language?

 

[EdwardBaiamonte]

What is completely false is that China's model has any resemblance with the Jeffersonian model.

too stupid, Jefferson stood for freedom and capitalism and Adam Smith just like the Chinese and Wen Jiaboa do.

Baiamonte,
Sory, to hear that. If you think that after reading both links, I can only conclude you are a functional illiterate.

"They do not fully comprehend the information and ideas being received, studied, or applied and are not aware they do not understand. Their actions, feelings and beliefs are founded on their unknown wrong suppositions, ideas and understandings. The problems and results of being a hidden illiterate can range from humorous to disastrous."

Hidden Illiteracy Semi and Functionally Illiterate Definition Applied Scholastics International

personal attack from typical liberal who lacks IQ for substance!!
Jefferson stood for freedom and capitalism and Adam Smith just like the Chinese and Wen Jiaboa do.

Is this guy brain impaired or just is stupid and has problems with the English language?

Jefferson stood for freedom,capitalism and Adam Smith's economic principles just like the Chinese and Wen Jiaboa stand for them.

 

[EdwardBaiamonte]

So 'Republican Capitalism' is that hugely government subsidized industry-

of course thats stupid given the Chinese govt could not possible afford to subsidize all the millions of new businesses that compete successfully all around the world. That is exactly what they are moving aways from. Why not start your education?? Here are 3 best books on topic:


"Capitalism With Chinese Characteristics"


"How China Became Capitalist"

In his new book titled Markets over Mao: The rise of private businesses in China, Lardy argues that even though SOEs still enjoy monopoly positions in some key sectors in China, such as energy and telecommunications, their role in the overall economy has diminished significantly over the years. Here are some of the facts he presents to back his thesis: in 2011, China’s state-controlled firms only accounted for about a quarter of the country’s industrial output; and their share in exports has dropped to about 11% today; in 2012, state firms were only responsible for about one-tenth of fixed investment in manufacturing. And in terms of employment, SOEs employed about 13% of China’s labor force in 2011, a dramatic decline compared with the 60% figure recorded in 1999.

 

[EdwardBaiamonte]

There was never anything 'liberal' about China, and little that is 'liberal' about China now.

...

dear, our liberals spied for Stalin and Hitler. It might have just as easily been Mao's big govt!. Do you understand??

 

[EdwardBaiamonte]

China's growth is due to capitalism and huge amounts of government support for that capitalism

....

too stupid as if some communist soviet bureaucrat would know how to support capitalism?? It was precisely their support of industry that slowly starved 60 million to death. Do you understand capitalism is when millions of people compete and a few succeed in the end, not when soviets monopolists guess at how an economy should develop. Still over the liberal's head??