[kitschshrine]

China won't be able to afford this; China's pretty broke already in 2016. It's approaching 300% debt ratio in combined corporate + government + individual. Its gross reserve is down to 3T (IMF believes China needs at least 2.5T to operate). Its net reserve (gross - debt) is down to 1.7T. It had a capital outflow of 1T again in 2016. Yuan fell the most in 2016, since 1994. Next year, Japan/US/EU is going to impose import tariff on China, and further crash China's economy.

[anton_tarasenko]

China's saving rate remains at 45% of GDP. Most other countries have it around 10-15%. Savings have to go somewhere, and this is why China accumulates debt. Every yuan of savings turns into one-plus yuan of debt. The current debt ratio adjusted for savings is comparable to the US's, for example. Unlike US, they put it into infrastructure because people don't spend growing income on consumption.

To put it simply, the US worker gets a salary and buys a car, while the Chinese worker makes a deposit in a bank for a construction firm to borrow and build a railroad. Both cases describe transportation services, but they look very different in national accounts.

As for the exchange rate, it's not that relevant for local investments since China's going to pay in yuans anyway.

[seanmcdirmid]

That is a very old number and anyways only comes from consumers who are not consuming but saving for emergency health care, or increasingly unaffordable housing. China desperately needs for its consumers to actually consume to move away from an export oriented economy, which is especially sensitive to trade friction.

So yes, you are talking about China's biggest problem (inability to consume what they produce) that even the Chinese leadership has acknowledged is a huge problem.

Whether china can afford this or not is less relevant than "bang for the buck", china has already built out lots of HSR, some of it very lightly utilized (my own trip from Beijing to a city in south Hunan, the train was mostly empty most of the time). China builds mostly as a stimulus program, because if consumers aren't consuming its one of the only tools they have, but also focuses on flashy projects that they can brag about in articles like this. However, much of this infrastructure is going to be underutilized for decades, while really needed infrastructure, like adequate flooding drainage, doesn't provide enough "face" to be considered instead. So every year, we see pictures of flooded out cities...but at least you can get to them quickly on empty trains!

[onlyrealcuzzo]

I've always wondered about that oft cited savings rate. How is it even calculated? I worked at a startup trying to generate credit scores for a significant portion of Chinese citizens. Unless our company was completely incompetent, it was pretty ingrained in us that the majority of people in China either don't have access to banking or choose not to bank. Also, it seemed like the vast majority of Chinese citizens lived paycheque to paycheque. So how does one calculate this savings rate figure? Is it just the difference between earnings and expenditures of the entire country?

[crdoconnor]

>That is a very old number and anyways only comes from consumers who are not consuming but saving for emergency health care, or increasingly unaffordable housing.

They're still saving and those savings keep a lid on Chinese inflation which makes projects like this affordable.

>China desperately needs for its consumers to actually consume to move away from an export oriented economy, which is especially sensitive to trade friction.

There's a lot of talk in the CCP about shifting China's economy to becoming more consumer driven but there isn't a lot of appetite to actually do the things which would make that happen - namely some sort of social security/nationalized health insurance system.

The Chinese will thus continue to be terrified of getting old and sick and will and save accordingly, and those savings will no doubt continue to get recycled into projects like this as well as subsidizing state run SMEs with cheap loans.

[seanmcdirmid]

I agree with this. Savings keep a lid on inflation but also distort money supply and demand, just like the real estate bubble distorts supply and demand for housing. A lot of distortions with temporary fixes to keep things going.

2017 will be very interesting. Can't wait to see what happens in Tuesday.

[AJ007]

Is that infrastructure going to still be standing in decades?

[seanmcdirmid]

Good question. The right aways are important and quite persistent, but the bridges and tack will need to be maintained/rebuilt/upgraded periodically no matter how much they are used.

[soperj]

How is very lightly used? There were 1.1 billion trips made on High Speed Rail in China in 2015.

[seanmcdirmid]

If you only know the top number but not the bottom one, you can't really compute utilization. Also, spring festival (Chinese new year) means much of the utilization comes "all at once", so the trains are packed for a few weeks each year, but can be much more empty the rest of the year. Anyways, it isn't as simple as laying more tracks between cities.

[_coldfire]

A solid overview of Chinese HSR:

http://www.railjournal.com/index.php/high-speed/chinese-high...

>In 2013, Chinese high-speed traffic reached 214 billion passenger-km, slightly more traffic than the rest of the world's high-speed networks combined

>the CRC network is already one of the most densely used in the world, with robust growth between 2009 and 2013. Overall passenger traffic grew by 5.5% per year during this period reaching 2.1 billion passengers or 1060 billion passenger-km in 2013. Railfreight grew by 6% per year to 3.6 billion tonnes, or 2633 billion tonne-km in 2013. These are large volumes compared with the size of the network (103,100km in 2013).

[seanmcdirmid]

http://www.rediff.com/business/report/pix-beijing-shanghai-b...

> Although the railway authority has said that the Beijing- Shanghai high-speed railway was the only profitable high-speed rail in China in the past five years, some believe that other lines in densely-populated and developed regions will likely become profitable soon.

Only Beijing to Shanghai is making a profit ATM (flying is still cheaper on that route, but airport delays are way too bad).

[soperj]

All I'm hearing is anecdotes, which is fine if there's no data, but when it doesn't jive with what other data says, I'm not really going to trust the anecdotes over what the data says.

[seanmcdirmid]

So what is your bottom number? Don't trust data from the central government, they aren't known for being very honest with their numbers.

[slv77]

Every RMB in someone's savings is offset by another RMB of someone else's debt. The savings rate isn't really as relevant as how productively that savings is utilized by the debtor on the other side of that balance sheet.

For example I can save 50% of my income but if i lend to a 90 year old who uses it to fund an elaborate funeral my savings means little.

Other metrics in China suggest that a lot of investment in China since 2008 hasn't been productive. This pattern isn't limited to China but is common in every country who has gone through rapid debt expansion including the US. Finding productive investments takes work and talent and economies have natural limits on investment opportunities that aren't purely monetary.

[vadym909]

<the Chinese worker makes a deposit in a bank > From what I've heard, banks make loans to friends and politically connected to invest in projects who also siphon a lot of the money away- and when the project fails, the loans are written off. Which is why the public doesn't trust their money with the banks anymore.

[fennecfoxen]

This is the sad thing about China's boom: it's paid for by the common worker, but it all ends up owned by the richest of the rich. It's a plutocrat's dream.

[caminante]

You'll "love" this [0].

  Another top official in the Railways Ministry, Zhang Shuguang, was 
  also sacked for corruption. Zhang was estimated to have misappropriated 
  to his personal overseas accounts the equivalent of $2.8 billion.

[0] https://en.wikipedia.org/wiki/High-speed_rail_in_China#Corru...

[seanmcdirmid]

Ya, lending is very biased in china, especially from the big banks. Not just to connected peoples, but to zombie SOEs.

[hourislate]

> Savings have to go somewhere

They sure do and you only have to look at Australia, US, and Canada where it ends up. The Chinese keep most of their money in either cash or real estate. They don't trust banks.

[bogomipz]

>"To put it simply, the US worker gets a salary and buys a car, while the Chinese worker makes a deposit in a bank for a construction firm to borrow and build a railroad."

Have you been to Beijing recently? I can assure you the Chinese worker is also buying a car. China has the highest automative sales of anywhere on the planet.

Here is some data:

https://www.bloomberg.com/news/articles/2016-12-08/china-wra...

http://www.chinadaily.com.cn/business/motoring/2016-01/26/co...

http://www.accessmagazine.org/articles/fall-2012/will-chinas...

[dmoy]

> Have you been to Beijing recently?

Yes, and if you talk to most people, they can't dream of affording a car, let alone in Beijing. It's insanely expensive, not even including the permit[1]. Maybe if you're in Beijing talking to rich people or just looking at the traffic in abject horror, it looks like everyone is buying cars.

China, per capita, has like one fifth or one sixth as many cars as the US. There's like one car per 10 people.

[1] and by permit I don't mean the actual cost of getting a Beijing plate through normal channels (which has like a <0.2% chance of actually working due to the lottery). I mean if you actually want to guarantee that you get a car, be prepared to grease the wheels with lots of money. Shit idk how that even works with Xi Jinpings rampage against corruption, I don't think they've gotten that low of a level yet (still going after higher-ups).

[seanmcdirmid]

Per capita is correct. There are really two Chinas, a richer china that consumes a lot and saves comparatively little, and a commoner class that has no choice but to keep saving.

If you want to get a permit in Beijing and have money, buy a Tesla. The quota for elctric vehicles is higher than for gas, so you see a lot of rich people in Teslas these days, something unthinkable only a couple of years ago.

[bogomipz]

>"... or just looking at the traffic in abject horror"

Yes, it would be this :)

[melling]

People have been saying China is going to crash for a couple of years now. I suppose if you say it every year, you'll eventually be right. All economies have downturns.

However, they already have 12,000 miles (20,000 km) of hsr that carries over 1 billion passengers a year. Most of this was built in a little over a decade. So, it's not a stretch for them to continue at this pace. According to the WSJ, they've spent $120 billion in 2015 and 2016 on hsr. That means that spending is about the same until 2020.

http://blogs.wsj.com/chinarealtime/2016/07/20/chinas-busiest...

The 1.5 miles first stage of the 2nd Avenue Subway opens tomorrow. That took 9 years and $4 billion. My bet is that China will have 10,000 more miles of hsr before the rest of the 8.5 mile 2nd Ave Subway is finished

[ithinkinstereo]

> People have been saying China is going to crash for a couple of years now. I suppose if you say it every year, you'll eventually be right. All economies have downturns.

Actually people (especially those in the west) have been saying China is going to crash for a couple of _decades_

>The 1.5 miles first stage of the 2nd Avenue Subway opens tomorrow. That took 9 years and $4 billion. My bet is that China will have 10,000 more miles of hsr before the rest of the 8.5 mile 2nd Ave Subway is finished

And this is exactly why it won't!

[caminante]

  China won't be able to afford this;

It doesn't need to. FTA:

  "The Chinese government will invite private investment to participate in funding 
  intercity and regional rail lines"

This is how Europe has been doing it despite heavy public debt. In this plan, China will setup public-private partnerships to raise capital. Also, the article also mentions functional privatization efforts, a new precedent for Chinese rail, which opens the door for more investor capital:

  "Earlier this year, China turned to a private company for first time to operate an 
  inter-city rail service on the mainland"

[drawkbox]

True but it is better to go broke investing in creating and fixing internal systems and improvements than external or some war where you will be in debt for decades.

[seanmcdirmid]

Diminishing returns on infrastructure investment is a thing. Eventually you are just moving dirt between holes.

[JoeAltmaier]

Oh America at least has an immense infrastructure backlog. Roads, bridges, water systems. Especially water systems! They get neglected until they break, then its a five-alarm emergency to get the pumps going before everybody has a living room full of sewage.

My relative worked at Crane Pumps for years; every order was a fix-on-failure emergency order. For pumps designs that went back 50 years - they were commonly pulling plans on paper out of drawers in storage rooms to match exactly the specs for some ancient pump in Pocatella or Poughkeepsie.

When Obama had that shovel-ready infrastructure effort, they expected a big upswing in business. But nope; nothing. Probably because water systems are underground and invisible. They wanted splashey visible activity like road-building. Which IMHO accomplished exactly the opposite of what was intended - they built MORE infrastructure to support.

[seanmcdirmid]

But remember the US has first world problems. Chinese were absolutely baffled by the Flint water crisis....why would stupid Americans think tap water was safe to drink even after boiling?

Drainage in the USA is also a magnitude better than in china. I'm sure hey could use upgrades, and I'm sure there is a bias to showy projects, but it is nothing compared to what happens in the guo.

[HillaryBriss]

> ... they were commonly pulling plans on paper out of drawers in storage rooms to match exactly the specs for some ancient pump in Pocatella or Poughkeepsie.

That is awesome. Thank you for the info.

When a company like Crane Pumps goes out of business because cheaper imports take over its market, all that information (the paper plans from past pump designs) probably gets lost forever. Once the company folds, these small cities all over the country cannot replace their old pumps and instead have to upgrade the system to make it compatible with a new pump model.

I wonder if global trade economists account for that additional cost to the customers when the old domestic supplier goes away.

[chiph]

The cynic in me is thinking that for the shovel-ready projects, they looked no further than the government's own facilities backlog.

[tw04]

I think the US has proven that numbers on a spreadsheet mean literally nothing if you've got a strong enough military and control enough of the economic power of the globe. What are we going to do if they decide they're done being the US's manufacturing state? Like, if they literally halted all shipments to the US overnight. It would take us YEARS to rebuild in the US, and in the meantime people would be screaming bloody murder over here (I'm sure Walmart and Target would be thrilled to have bare shelves). It would collapse our economy as well.

[kirse]

if they decide they're done being the US's manufacturing state?

What you're suggesting is essentially reverse-sanctions, and that would be a foolish move.

The economic "essentials" based on innate human needs are water, food, shelter (housing and clothes), and - in today's world - energy. The US has plenty of resources, space, and people to produce all four of those at home.

If China decided to shut down all manufacturing such that we would stop receiving all of our consumptive goods, electronics, etc... The US would take a hard look at what it really needs as a people and then decide to load balance its needs across both itself and other countries.

What would need rebuilt is all the infrastructure for automating supply chains, and such an aggressive economic move would be highly likely to unite the American people in a singular cause against their new economic foe.

[davidmr]

I agree with you in every paragraph but the last and maybe even then. While the economy is obviously different than it was 70 years ago, what made the US so dominant in WWII was our ability to design and build things. In four years, we built something like 300,000 airplanes, 10,000 ships, an atomic bomb, etc.

I'm reading A World at Arms (https://www.amazon.com/World-Arms-Global-History-War/dp/0521...) at the moment, and what has struck me most so far is what a mistake the Axis made underestimating American manufacturing mobilization.

Today, I'm not sure if we could ramp up actual production as quickly.

[chiph]

An interesting story from that time period - German intelligence was reporting that the US had a locomotive that weighed 1.2 million pounds (including the tender) and could pull a 3,600 ton (US) consist of railcars up a 1.14% grade, and also run at 80 mph on flat land. This was the Union Pacific articulated Big Boy. And Hitler didn't believe such an engine was possible, much less that the UP had 25 of them in service. So he directed that the forecasts of American transportation exclude these "absurd" numbers.

http://www.steamlocomotive.com/bigboy/

[throwaway729]

The US has plenty of resources, space, and people to produce all three of those at home.

Eventually. Not immediately. Factories and supply chains and aren't built over night.

The US would take a hard look at what it really needs as a people

Or, much more likely, its people would flood the streets in anger and demand a return to normalcy.

In the mean time, black markets and therefore crime would explode.

Huge swaths of the economy, depending on Chinese imports in their supply chain, would cease to function. Unemployment would surge, throwing even more angry bodies onto the streets and even more desperate bellies into the Jail cells.

Fringe political movements would capitalize and the US would face an existential threat to its democratic heritage.

Skilled workers and those with large amounts of capital would quietly leave for greener pastures in the EU and stable parts of South America and Asia, making recovery that much more difficult.

At least, that's what typically happens when trade wars create extreme shortages of key goods and services (we have a lot of data points on this). Perhaps the USA is exceptional, but I wouldn't count on it...

[fennecfoxen]

> Factories and supply chains and aren't built over night.

The US also has multiple trade partners around the world. China does not hold a monopoly on US imports. If anything, it's more of a final assembly point for many things, and the US could do more business with southeast Asia.

On top of that, the usual workings of supply and demand would make it quite profitable to divert $STUFF from another economy to the US. Heck, if China still traded any goods the rest of the world at all, firms in the rest of the world could just sell us back many of the exact same goods, with a competitive markup for the indirection, unless and until China puts a complete stranglehold on all its trading partners' deals with the US.

It'd be bad, but at worst it'd be more like 2008 bad than 1930s bad. People did "flood the streets" a little back then, of course (our friends at Occupy Wall Street). It was pretty easy to ignore, though.

Now, if we want to talk of the disruptions associated with an outright war, that's another matter, but we'll also have to worry about the war, which will likely be far worse.

[_audakel]

This all is potential, but also seems to be based purely on your own opinion. Are you referencing a scenario that already happened in a different country?

[throwaway729]

Yes. Two give the two most relevant and potent examples:

ABCD in Japan prior to ww2.

Chile prior to Pinochet. Chile is agriculturally rich but suffered food shortages none the less.

Neither is exactly this scenario but there are enough similarities to suggest likely outcomes. People don't typically "toughen up and deal with" severe and abrupt changes to availability of common household items, and even countries with the potential for self sufficiency often have painful transitional periods.

[seanmcdirmid]

In many of our lifetimes, see the Oil crisis in the 1970s when the ME embargoed the west. Go read up on that, it worked out well for the west and bad for the ME. People were pissed about having to wait in line for gas...for awhile...and carter lost re-election, but there were no angry people in the streets.

So ya, we do toughen up, and no, china doesn't have much leverage over the west at all, even less than the Middle East.

[onlyrealcuzzo]

If China reverse-sanctioned the US, a significant portion of the Chinese population would fall into extreme poverty and starve. The Yuan would likely plummet, China would almost certainly face a national default, and it would risk a revolt against the current regime.

Meanwhile, within months, the US would have all its cheap shit imported from Thailand, Vietnam, Mexico--even Japan and Korea. We have enough retail reserves that aside from slight price increases on some inessential goods for a few months, likely nothing else would happen.

[zht]

How can the rest of the world just pick up China's manufacturing capacity in a few months?

[evgen]

Because a large portion of the important and high-value stuff is not actually made in China, is is just assembled there. Your iPhone might be "made in China", but most of the parts that make it an iPhone are made in other countries. If you were to consider the things that we think of as being essential then the fraction of things that are made in China becomes even smaller. Yes, we would need to do without cheap bras and Levis for a short while, and the strategic plastic shit stockpile would dwindle, but the nation would somehow get through these dark days.

China, OTOH, would likely never recover from having all of its revenue generating export goods evaporate to other countries in SE Asia and elsewhere.

[HillaryBriss]

> What would need rebuilt is all the infrastructure for automating supply chains, and such an aggressive economic move would be highly likely to unite the American people in a singular cause against their new economic foe

i want to argue the opposing side of this a little. i would argue that present-day America is actually extremely difficult to unite.

i don't believe the imagined "aggressive economic move" would unite the American people. "the American people" is just a diverse bunch of competing economic actors and political interest groups operating inside US geographical boundaries.

WWII is the last thing that really united "the American people" to the extent that you describe, and that was characterized by direct acts of war resulting in human fatalities (e.g. u-boats sinking ships in the Atlantic, Pearl Harbor, bombing raids on our British ally, etc).

a purely economic move like that is a lot less likely to unite the American people than an actual military attack. what's more, today, even real American human fatalities don't unite America. when the San Bernardino attacks happened, half the country was arguing for more gun control laws and the other half was screaming "Islamic fundamentalism." going to a larger event, did even 9/11 unite "the American people" in a way comparable to WWII? if it did, it didn't last long.

when i try to understand why, say, Apple, does its manufacturing in China, i read from various sources that it's not just cheaper labor, but also the availability of a very large number of engineers on short notice and the ability to build factories way, way faster -- no bureaucratic red tape and far fewer environmental reviews and roadblocks. i don't see a way to match that in the US system. a lot of people really love environmental protection laws.

i don't see where something as low-intensity and undramatic as "an aggressive economic move" by China would be enough to unite the people in an effort to repeal environmental laws and motivate sociology and psychology majors switch to EE and CS.

[seanmcdirmid]

As an example to back up what you are saying, when the Middle East decided to embargo the west on oil, the west focused heavily on fuel efficiency and developing new oil resources, to the point that oil went bust for the most of the 80s and the Middle East hurt badly.

There are always options if the country is rich enough. The USA could redevelop manufacturing relatively quickly or even lean more heavily on Bangladesh, India, and Vietnam. All china would get out of it are newly developed competitors.

[crdoconnor]

>What are we going to do if they decide they're done being the US's manufacturing state?

If China is done being the world's manufacturing state then inflation is going to go crazy and we'll experience something a bit like what we did with the 1973 oil crisis, except with manufactured goods. It would be a good time to set up a repairs shop.

If China is just done being "America's manufacturing state" then we'll see inflation but probably not as extreme - goods could still be shipped to "neutral" states and then shipped on.

In all likelihood if such a breakdown does occur it will form part of a tit-for-tat including shipping blockades, sanctions and proxy wars.

[witty_username]

But it would collapse China's economy too if it were done overnight.

[bilbo0s]

The number is 18%.

That's how much of China's GDP is dependent on exports to the US.

A significant paycut as it were, but hardly fatal.

(If they were to stop exporting to us, it would hardly be a fatal blow to us either. There is just not as much there in terms of percentage of GDP as everyone seems to think.)

[seanmcdirmid]

They would have to cut off trade to much of the west as well, otherwise exports would simply be redirected. They could do USA did with Iran, and refuse to trade with anyone hat trades with the USA, but that is a losing proposition for them.

Basically, china cuti off trade with the USA would be a North Korea style action.

[harigov]

Does that include all the value created locally in order to be able to make those exports? Like food that people eat, vehicles that they have to drive, etc., That much drop in economic activity will surely trigger much worse outlook than you are alluding to.

[witty_username]

No, not directly, but indirectly people would be afraid of further radical policy changes by China. Investors would move their money out of China. Or at least, that's what I'd do.

[coldtea]

The US is 4% of the world. With other countries developing rich consuming middle classes, that might not be that certain, especially in the future.

[davidmr]

4% by population of course, which is what you meant, but I think 40% of the world by wealth. While I understand what you mean by saying there are new middle classes being created from the other 96%, it seems like, absent another even more catastrophic economic screwup than we put ourselves through 8 years ago, American domination of the world market isn't going anywhere any time soon.

[eva1984]

In terms of GDP, US is about 20-25% of the globe. It is pretty significant, but I won't go too far to say it has domination.

[davidmr]

Well said. Domination isn't the right word; perhaps "importance to" rather than "domination of".

[coldtea]

Well, let's hope it does. Other people need to get rich too.

[maxerickson]

US debt to GDP is not really different than other developed economies:

http://www.tradingeconomics.com/country-list/government-debt...

The question of which country loses more if the US and China stop trading probably doesn't need to be answered; both countries would lose so much that it won't happen abruptly.

[tw04]

Right, which is why everyone let the US slip by when the economy collapsed. If it were some African nation that had their entire housing market collapse, you really think the rest of the world would've just let it slide?

It's no different with China. The world can't afford to let their economy collapse, and so they won't. This isn't Russia we're talking about here, who for all intents and purposes is completely isolated outside of providing arms to the world, space launching (although that reliance is quickly going away), and cheap natural gas to Europe. If/when their economy collapses again, it will have almost no effect on the western world. If China collapses, we're all in trouble.

[maxerickson]

What are some concrete examples of Right, which is why everyone let the US slip by when the economy collapsed. happening?

My memory is that other parts of the world had their own economic problems at the same time as the US housing crisis and were paying the US government for the privilege of owning US treasury bonds (rates were 0 ish for quite a while).

On the other side of it, shrugging does seem to have been the standard external response to the currency crisis in Zimbabwe.

[tw04]

I dunno, the fact we literally manufactured a trillion dollars out of thin air and the dollar wasn't devalued? Can you cite any other nation doing similar with similar results? The mere SUGGESTION of financial instability as a result of Brexit has ruined the British pound.

*ruined is a bit strong, but it had a serious impact

[seanmcdirmid]

When we were doing QE, everyone else was as well, so the dollar didn't fall much, but is still worth less. It was probably the right course of action, however, as it was managed well.

[fennecfoxen]

> US debt to GDP is not really different than other developed economies

Yes, the other developed economies which have largely given up on developing and embraced stagnation instead. It's not the greatest situation, especially if you're unfortunate enough to be young.

[coldtea]

Don't hold your breath for al this "crash". US/EU are tied to China with very strong threads.

[djsumdog]

Exactly. When you owe the bank a million, the bank owns you. When you owe the bank several billion, you own the bank.

[beachstartup]

this is such a tired internet cliche.

in reality the bank will force you into bankruptcy, seize all your assets because they're at the top of the payback list, and blacklist you from ever running a business or borrowing money again.

in other words, you lose.

[djsumdog]

Collection of debt must be enforced by violence. Always. In developed countries we've scaled down the violence (we black list your credit, take your house and do not loan to you again instead of breaking your legs or killing your children), but there is still some level of violence.

It's not a cliche. It's reality. If you loan someone an insane amount of capital and are dependent on a return on that capital to keep your bank solvent, you are now dependent on them (e.g. "To Big to Fail") for your own business to not collapse. Interestingly enough, you can only extend credit to someone if you consider them an equal, at least at first. Removing this equality is how you can turn a person into property.

Debt and guilt are the same word in many languages (such as German) and debt has a large moral social construct attached to it (which is why people are hesitant to walk away from debt, even when the value of a house exceed what they'd pay on a load).

I highly recommend reading the book Debt the First 5,000 Years. It's the most comprehensive book I've read on the history of money, debt and slavery. They are all very closely related, and it will change the way you look at states, money and markets.

[evgen]

Except if you owe the bank a billion it is unlikely you actually have a billion in assets they can get their hands on. A bank that tried this to someone who owed them that much would soon find the auditors coming to visit and setting up shop for quite a while. The former management of this bank that went bust and was shut down by banking regulators is unlikely to have much leverage when it comes to blacklisting you...

[coldtea]

>in reality the bank will force you into bankruptcy, seize all your assets because they're at the top of the payback list, and blacklist you from ever running a business or borrowing money again.

You'd be surprised. People have recovered from such "bankcrupcies" time and again, including the current POTUS.

[stevenj]

Do you have sources for the above? I'd like to read about all of this.

[pjc50]

> Next year, Japan/US/EU is going to impose import tariff on China,

[citation needed]

[paganel]

By looking at their economies I can say with certainty that Japan and the EU are nowhere close to imposing trade tariffs on anyone, they can't afford to. Maybe the US is willing to play these games hoping it would win some (geo-)political points, but at the end of the day is a lose-lose situation for all those involved.

[kingkawn]

I think they're milking the western economic structure of as much resources as they can, and will re-pivot to an alternative economic model once they have exhausted the world's willingness to fund it all.

[coldtea]

Milking the western economic structure?

China doesn't operate as some charity receiver for the west.

In fact it's the opposite, the west uses china for its hard labor and manufacturing tasks, and gets back products at a cheaper rate than itself can produce.

There's no "world's willingless to fund it" involved, there's that the world pays China $20 and gets back goods it packages and resells to its people (e.g. from Apple to Lacoste) as $50 and $100 goods.

[djsumdog]

And at great cost. It's an easy way to offset environmental devastation. Granted it's localized in China to some specific areas, but those areas are polluted to the point of destruction.