[jemmyw]

China's leadership seem fairly intent recently on destroying the areas where China's economy was picking up. Tech companies, software developers, and now anything innovative that would benefit from external investment to get off the ground.

[nirui]

That's what I always say. Contrary to popular belief, the current ruling party of China poses a much bigger threat to China than any external factor such as the US, Taiwan or India would ever achieve.

There is an meme online titled "When China made a decision", followed by a picture of the Prime Minister of Singapore laughing (see link 0 for sample), hinting the fact that due to many mistakes made under Xi's administration, companies/economic entities (including Chinese founded ones) are moving away from China to Singapore, often citing social control and economic reasons.

[0]: https://www.reddit.com/r/real_China_irl/comments/162oc8g/%E6...

However, I don't really think that's all Xi's fault. There are so many things you just simply don't know if you're a child of nepotism. The party highleaders created their own social class, and as result, they and their offspring became disconnected from the reality more and more generation by generation. Most of them has so little experience of real people and so many experience of nepotism, it is already a miracle if they can still maintain a healthy mental condition, let alone the capabilities needed to do things right.

The same kind of disconnection can also explain why the highleaders believed that the Wolf Warrior Tactic was a smart move: they simply don't understand how politics work, so the most primitive solution became the most obvious to them.

[ethbr1]

I thought of this as why authoritarian regimes are so so bad at propaganda -- they have no experience in interacting with a normal, sometimes adversarial media landscape.

At home, they say the sky is red, everyone says "Yes" or gets a visit from the secret police.

So they do the same thing elsewhere, and there's criticism, memes, humor, apologism, etc... all the features of a more open information space with diverse opinions.

But they have little basis for how to interact with that, because they didn't need any of the nuanced soft power skills at home.

And so you get Russia endlessly repeating 'Everything is proceeding as planned in the special military operation' and China saying the Philippines "deliberately stirred up trouble" by navigating and claiming Philippine UNCLOS-EEZ waters in the Spratlys.

[0dayz]

Propaganda works really well in distraught countries with no hopes or dreams and that has historical qualms with certain nations.

Such as in Africa where Chinese and Russian propaganda along side homegrown Propaganda is actually pretty convincing for the citizens there.

[throw0101a]

> At home, they say the sky is red, everyone says "Yes" or gets a visit from the secret police.

That is the old(er) (outdated?) view of propaganda. The/A new view is to generally not necessarily care about about any particular message:

> We characterize the contemporary Russian model for propaganda as “the firehose of falsehood” because of two of its distinctive features: high numbers of channels and messages and a shameless willingness to disseminate partial truths or outright fictions. In the words of one observer, “[N]ew Russian propaganda entertains, confuses and overwhelms the audience.”

* https://www.rand.org/pubs/perspectives/PE198.html

* https://www.vox.com/policy-and-politics/2020/1/16/20991816/i...

(Of course you can do both.)

[mytailorisrich]

China does not need external (as in 'foreign') investment. They have huge amounts of cash.

The strategy seems more about decoupling and independence from foreign interference and potential sanctions. Likewise, when foreign investors leave it is also because they've seen what was done to Russia and thus don't want to repeat that with China, which would be massively more costly.

Edit with data:

In 2022 Chinese households accumulated $1tn in savings, just over that year (this is something typical in China because of lack of safety net and lack of investments avenues, hence also why everyone wants to buy property to invest their cash): https://www.crugroup.com/knowledge-and-insights/spotlights-b...

China also has $3.2tn in foreign cash reserves: https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_C...

They also use that cash as a tool of foreign policy with loans to foreign countries in excess of $240bn: https://www.reuters.com/markets/china-spent-240-bln-bailing-...

[jemmyw]

They have massive amounts of debt and it's becoming a problem which is likely one of the reasons they're trying to hide the data. It's provincial debt and state company debt which is mainly internal so I don't really understand the implications of it.

[berserk1010]

They do? Probably should tell the average citizens in China who are having trouble withdrawing cash out then https://www.youtube.com/watch?v=s9odXNPldCI. I think some banks were kind enough to tell their customers to withdraw in a few months. Other banks just zeroed out their customer's bank account.

[vbezhenar]

Potential? China is under heavy sanctions right now. They need to surrender or to fight. For now they chose the latter.

[cronin101]

$1tn in savings is $660 per person over an entire year? I know purchasing power is a big thing but I’m not sure whether to interpret this as a large amount or not.

[mytailorisrich]

Yeah, I wasn't clear. They talk about "excess savings", which, as far as I understand, are additional savings relative to baseline, so total amount of money saved should be much higher.

[caidehen]

I came from China. I can provide some context for people to understand what $660 mean in China:

1. It's about 2 month's salary for low to low-medium level, in most big cities.

3. Rent for one room, about 120 square foot is about $100 per month, in big cities.

2. It costs 2 to 3 us dollars for one-person's meal, with 4 to 5 dollars you can get a good meal. Tax included.

[justinclift]

China's debt to GDP ratio seems to be worrying plenty of people though:

https://www.youtube.com/watch?v=EgeV0n9L2es

[inglor_cz]

China has a long history of closing itself away against foreigners and their disruptive ideas, yes. It also has a long history of stagnation caused by the same.

At the end of the day, "wanting to be a superpower on par with the US or greater" and "isolating yourself from barbarians" are two incompatible goals. Superpowers need to build coalitions and attract allies; this cannot be done without some mixing of the involved nations, even if it just concerned students, businesspeople, investors, soldiers and diplomats.

[grey-area]

They’re trying to cover up a massive crash, in real estate especially. They’re also preparing for war over Taiwan amidst tightening US sanctions.

Long term for the country it is terrible strategy, unfortunately short term for the dictator and his cronies it is profitable.

[kyleyeats]

The China and the US are both doing this in some kind of twisted PR standoff. The only way anything the US is doing makes any sense is through this lens.

[grey-area]

This is not just PR, it's real and the current trade war is likely to lead to real war in the next few years.

[powerapple]

there are people thinking government should leave economy alone, there are people thinking central banks should use financial tools to control inflation and other things. China is not covering up, it is trying to control a crash.

[grey-area]

The lack of any reliable data specifically is a cover up, that is what the article is about.

[roenxi]

If they are trying to cover up a crash, it'll be a typical example of why centralised control fails so hard at economics. A crash isn't like a storm or something where a new force appears; it is a recognition that past decisions were not as effective as people at the time thought. Trying to fight a crash just keeps people doing destructive work for longer instead of moving on and finding some other activity.

[grey-area]

Yes I agree, but in a dictatorship the interests of the country and the interests of those at the top are not aligned.

Another example of this recently - imprisoning your top entrepreneurs is a great way to ensure that your tech industry completely dies, but only over a long time frame as nobody comes up to replace the current companies (they all leave if they can). In the short term it offers great opportunities to enrich the leadership at the expense of all that wealth generated in previous decades, and at the expense of course of the country's future wealth.

So long term a disastrous decision for the country, short term it pays out for the current leaders if their cover up domestically is sufficiently thorough and there are other events to distract the populace (e.g. expansion through war).

[gwervc]

> in a dictatorship the interests of the country and the interests of those at the top are not aligned

It isn't either in a democracy.

In a way it's even more insidious in a democracy because the corruption is hidden better by one or a few layers of indirection. In the end however corruption and interests of the powerful is king.

[natmaka]

AFAIK in China there is no real 'dictatorship' related to economics, companies...

The government listens carefully to top bosses describing in which way it can help them. The major challenge is for them to align their various plans.

The government also acts as a referee, crushing quarrels they cannot tackle themselves, in a brutal way (this may be an approach adopted in order to entice them into rather solving it by themselves, letting the referee act as a last resort).

As a Chinese (entrepreneur or not) if you stay away from politics and, as a big fish boss, play by those "let's cooperate in order for the gov to help all of us" rules I doubt the gov will annoy you.

> imprisoning your top entrepreneurs

Jack Ma (Alibaba) was AFAIK playing at best solo, and at worse against most other entrepreneurs in his sector, and didn't abide to numerous warnings. Then he directly publicly and harshly criticized the financial sector, and announced that his company will become more and more of a direct competitor for banks. The gov then took care of his case.

I like J. Ma, however it seems to me that his style, probably forged through his personal history, isn't compatible with the way things are done in China.

Was another top entrepreneur imprisoned?

This approach is way more efficient than my own government (the European Union and France's government) way: acting as the boss of bosses by devising its own strategy with at best vague (and often neglected) inputs from experts (most chosen among friends or lobbyists) then burning huge amounts of money into void projects (often nurturing cronies), taxing everything in sight, promulgating laws framing any new thing...

[RandomLensman]

The CCP has some pretty direct influence on and role in large corporations. They idea of them as just some referee or planner is in error.

[grey-area]

See the recent very public humiliation of formerly very prominent ex-president Hu Jintao, the flip-flopping on Covid, or the fixation with Taiwan for how much power one man wields. This is a dictatorship.

As to unofficial disappearances, here's a short list of the most prominent, imprisoned and threatened for becoming popular and/or critical of the regime:

https://www.theguardian.com/world/2021/nov/19/china-disappea...

Many foreign companies have been threatened too - leading to Google for example leaving the country, Apple's supplier is currently under threat:

https://www.ft.com/content/e6abcb86-1c80-4914-ae54-c7df94d7a...

Finally, they also insert CCP members at board level in companies to control their direction directly: https://www.theguardian.com/world/2019/jul/25/china-business...

As to saying China is more efficient than France, France is a terrible example for efficiency, so that's a very low bar, but at least France isn't a dictatorship and has rule of law, I know where I'd feel safe investing.

[natmaka]

> prominent ex-president Hu Jintao > Covid > Taiwan

My point was only about business (relationship between companies and the gov).

> unofficial disappearances

Apart from Jack Ma (I proposed an explanation), this list isn't about business: artist, actor, Interpol chief, and "A Hong Kong-based publisher who specialised in sometimes gossipy books about China’s political elite".

> foreign companies have been threatened

Indeed, my point was only about Chinese entrepreneurs and bosses, sorry for having neglected to state it.

> they also insert CCP members at board level in companies to control their direction

"The party doesn’t habitually micromanage their day-to-day operations. The firms are largely still in charge of their basic business decisions"

Also: "But pressure from party committees to have a seat at the table when executives are making big calls on investment" may be in line with my hypothesis: the gov enforces respect of a strategy defined by all (AFAIK the Japanese MITI also acted this way).

My point isn't about the Party's ways to enforce the strategy of a sector but about the method used to define this strategy: it seems to me that it mainly is defined by companies' bosses.

There also is a real will to strictly control the political side of things, which may explain some actions, which aren't the usual way.

[graemep]

> in a dictatorship the interests of the country and the interests of those at the top are not aligned.

I wish that was a problem only in dictatorships.

> long term a disastrous decision for the country, short term it pays out for the current leaders if their cover up

Dictators will remain in charge long term. To that extent their interests are better aligned with those of the country. I decision that will be bad in the medium term can be quite good for the ruling party in a democracy if they lose the next election and can persuade the electorate to blame whoever is in charge at the time.

[RandomLensman]

No, not how dictatorships work. They usually work by keeping the supporting 2nd layer below the dictor happy and under control, which has nothing to do with country as such.

Coincidentally, things could align, but they often don't.

[natmaka]

Isn't Chinese history the elephant in the room here?

IMHO most Chinese citizens remember that whenever they fight each other (civil war...) disasters happen, and therefore the most important mission of the government is to squash any growing quarrel. Everything else is ancillary.

[gdc8]

For who is that innovation?

Tech companies are examples of runaway mindlessness. Their scale has lost purpose long ago. They are over valued and over rated from a social cost stand point.

Their capabilities don't translate to real world reduction in health costs, education costs, housing costs, energy costs, defense costs etc. They infact increase those cost for everyone with time.

It's pseudo innovation from con men or the clueless. Natural that govts are reacting and overreacting. Good times are over world over. Jurassic Park is out of control.

[dsab]

Interesting opinion, could you please elaborate how tech companies increases cost of housing?

[justinclift]

You've heard of San Francisco yeah? ;)

[inglor_cz]

On the other hand, a widespread capability of WfH, which wouldn't be possible without tech, or at least not in contemporary volume, is likely putting a downward pressure on housing in attractive areas.

If a well-earning programmer settles somewhere in a rural place, it means a) more money spent in a small community, b) one fewer affluent person seeking housing in an urban hotspot.

I would guess that the aggregated effect worldwide is an order of magnitude higher than whatever passes in Portland and SF.

[justinclift]

> ... likely putting a downward pressure on housing in attractive areas.

The theory is good. Unfortunately, that downward pressure doesn't seem to be having any effect for cities in many western nations. Pretty close to runaway house pricing these days. :(

[inglor_cz]

I am one such case, I moved away from Prague (insane real estate prices, some of the worst in the EU) to Ostrava (city where I was born, rust belt, real estate prices around 40 per cent of those in Prague), while being able to earn the same money at a distance.

Ofc I had to lower my expectations with regard to good restaurants etc., but the resulting slack in our monthly household budget is enjoyable.

[spacebanana7]

> For who is that innovation?

The CCP answer is that it's for the state. Policing benefits from enhanced data collection. Social media allows them to control and monitor domestic discourse. Consumer electronics exports create vast amounts of foreign exchange and very sticky attachments to international supply chains.

[russli1993]

not really. Chinese government was regulating specific behaviors of companies, all are legit concerns, not against the companies themselves. Example: companies fighting each other using monopolistic tactics that doesn't bring benefit for anyone (Tencent music locking exclusive rights, Taobao forcing sellers for exclusivity, Taobao can only use Alipay). Online lending coupled with financial instruments (Alipay giving out loans to anyone without credit checks and using asset-backed security scheme to massively increase amount they can lend out (ABS is cause of US 08 financial crisis, controlling this in 2020 might have avoided a systematic crash this year due to housing problems).

All other activities are fine, and specific areas basically are real tech are very much supported, eg, semi, semi equipment, chip design, EDA, etc. Chinese gov are saying instead of thousands of smartest phds trying to figure out how to play financial games, get them to build the lithography machine, cuz the latter creates real economic value.

[peoplefromibiza]

FWIW between Blue Orca Capital LLC and China I would choose China all the time.

They are simply trying to short China to profit, like they did before so many times.

This is not even news: in "Regulation of platform market access by the United States and China: Neo-mercantilism in digital services" published in 2022 you can read

Since 2009, both countries have progressively restricted access to each other's domestic information services markets. In both cases, the primary stated rationale involved national security claims rather than trade policy concerns

It's happening both ways.