[AnIrishDuck]

What other system of value are you using here? Bottle caps? Nostalgia?

While the dollar remains the global reserve currency, this is just a wild theory of trade. If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie?

(they clearly already do this everywhere they can)

[chabska]

> What other system of value are you using here? Bottle caps? Nostalgia?

A common proxy is "metric tonnes of steel produced" and "metric tonnes of sulfuric acid produced". For China, these have been going up in-line with their GDP growth, whereas for USA they have flatlined since 1980 despite the increase in manufacturing dollar-value output.

[chii]

And how do you compare metric tonnes of steel produced, with metric tonnes of plastic produced? What about metric tonnes (hours?) of entertainment on films?

The metric to measure value using quantity of goods must use a common denominator unit, otherwise, comparison becomes subjective (one might want to value tangible goods more than intangibles for example).

So making comparison using a price makes a lot of sense.

[AnIrishDuck]

You, of course, can choose these as your units of value.

I think it is telling that the rest of the world (particularly the central banks of most countries) have instead chosen USD (well, more specifically US treasuries) as their preferred store of value.

Well, at least, for now...

[biorach]

(Not the person you were replying to)

You asked a question, they answered in good faith, and now you've dismissed their answer. I would also point out that you're dismissal is actually about a related, but separate issue - you've suddenly started talking about preferred store of value, when your original question was about how to value production.

I don't think you're arguing in good faith.

[AnIrishDuck]

I pointed out they were providing ridiculous answers to the question of "how do you measure value" and they doubled down on the ridiculous.

You are correct, there are many ways to measure value.

However, I don't think picking various commodities as the "true" measure of what is "valuable" is a useful exercise.

You may disagree. That's fine! I suggest you put your wisdom to use on the various markets that are set up for this purpose instead of arguing with me.

EDIT: they ultimately never reached my main point anyway, which is: regardless of if you measure value in tons of steel or crushed coconut shells, if China could easily obtain that value by assembling this stuff themselves, why export all the inputs to us instead?

[biorach]

> I don't think picking various commodities as the "true" measure of what is "valuable" is a useful exercise.

No one said that a commodity is a "true" measure of value. A commenter simply said that it is often a useful proxy. It is something that is useful to do to understand specific trade patterns.

> I suggest you put your wisdom to use on the various markets that are set up for this purpose instead of arguing with me.

I did not claim any wisdom on the subject. And I suspect you are deflecting attention from the fact that you are not arguing in good faith

[AnIrishDuck]

> No one said that a commodity is a "true" measure of value. A commenter simply said that it is often a useful proxy. It is something that is useful to do to understand specific trade patterns.

Ok, if it helps replace "true measure" with "useful proxy". My argument remains the same.

Continue to accuse me of whatever you want, I still do not feel you are engaging with the substance of what I'm saying.

[StackRanker3000]

I feel like it’s pretty clear that chabska was saying that China does more manufacturing per capita, creates more stuff, whereas the US captures more value.

If a paralegal at a fancy law firm works 9 billable hours at $200/h, and a senior partner then spends one hour adding some finishing touches for which he bills $2000, the paralegal has likely produced more work, but the partner’s output is more valuable (and sometimes it might not even be that useful, maybe the paralegal could’ve done the whole thing himself, but the oversight is part of the package and that’s what a senior partner costs).

Which metric is more useful probably depends on what you’re trying to find out.

[chabska]

I didn't "choose" these, they are standard metrics used by industrial analysts. You know, the people who plan port expansions and cargo ship purchases, they need to deal with the actual tonnes of goods moved, not the dollar value of those goods.

[p_j_w]

Why should tonnage matter more than value? Would you rather have 10 tons of dung or 1 ton of smartphones?

[motorest]

> If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie?

If you pay attention, you'll notice that's what China is doing. For decades, China's GDP growth towered over the US's. Around 2015, China's GDP PPP overtook the US's.

[AnIrishDuck]

Growth is trivial to achieve when you are starting from zero. My footnote very much alludes to this. This is incidentally what the US did to powers like Britain a century and a half ago.

I just find it amusing that in this theory of trade China has found a way to do all the work while the US does nothing and takes all the value. Perhaps all that extra money is not as easy to claim as the OP suggests.

Maybe economies are changing and purely physical goods are becoming less valuable...

[motorest]

> Growth is trivial to achieve when you are starting from zero.

China currently reports the second highest GDP in the world.

[AnIrishDuck]

> For decades, China's GDP growth towered over the US's.

It's much easier to 100x $1k than to 10x $1m.

This is not to take away from the achievements of the Chinese economy, which are gargantuan. You just can't linearly extrapolate growth rates.

[oblio]

> It's much easier to 100x $1k than to 10x $1m.

That's kind of goes against the conventional wisdom, which largely feels true in my experience, that "the rich get richer". Countries are a bit different, but China looks poised to avoid the middle income trap up to a point, and even if they don't, their "middle income" is a lot more likely to fall somewhere near the Japanese levels, which would make the Chinese economy massively bigger than the US one, by 2050.

[motorest]

> It's much easier to 100x $1k than to 10x $1m.

China's GDP is the second largest in the world, and is around two thirds of US's. China's economy is growing continuously over 5% whereas the US already discussed facing a recession.

In some metrics, such as PPP GDP, China already towers over the US.

I think you're trying ver hard to diminish the second largest economy of the world at a moment where it's expected to be a few years until it's the single largest.

[jorts]

China’s GDP growth is great but they will face a huge pain now that they face an unsustainable population decline. They have more people aged over 52 than younger. I empathize with their youth.

[NhanH]

You are claiming that the median age in China is 52 or did I read this wrong? That would be beyond fake news level of statement (for my reading of the meaning)

The current median age of China is about 40, which is not great for their context, but a world apart from 52.

[aylmao]

China is automating at an impressive rate. Isn’t automation easier to face with population decline than with population increase? I’d imagine young people mind getting replaced by machines more than old people.

[Ray20]

>Isn’t automation easier to face with population decline than with population increase?

No? These things do not seem to be connected in any way.

[gambiting]

I mean, of course they are. If you have a population increase you have plenty of young people who will complain that automation is taking their jobs. But with a population decrease you eventually end up with just old people and not enough working people to sweep the streets or wash cars or whatever - so automation is welcome because it doesn't "steal" jobs.

[germinalphrase]

I do not think that labor sentiment has a strong impact on whether or not jobs are automated away. Go watch an old movie from the 40’s or 50’s that features a hotel. The number of small, niche jobs that existed are surprisingly numerous by modern standards: porters, elevator operators, switchboard attendants, and so on. Busy places employing a lot of people. This was undoubtably true across industries, and we have automated away almost all those jobs one way or another without much fanfare. Sure - someone might have complained in the moment, but it’s death by a thousand cuts.

[pbhjpbhj]

Please explain your position here?

[Ray20]

By population decline we mean a depopulation scenario, when the birth rate falls, the number of young people decreases, while the proportion of elderly people increases?

Automation can create a dynamically changing labor market. Today you had a job, tomorrow it is automated, you need to find another job, learn new skills required for it, and all of this.

Not a problem for the young (especially since automation increases the general standard of living, so young people will often find that their new job pays better).

But older people find it more difficult to adapt, learn new skills and find their place in a changed world.

And then there is career growth. Imagine an elderly gentleman who has spent 30 years building a career, accumulating valuable experience, and is USED to receiving a huge salary for his qualifications... And he is told that he has been replaced by a video card, his skills are now worth nothing on the market, and in the job available to him he will now be paid the same as a snotty 20-year-old yesterday's schoolboy. Do you think this won't become a point of social tension in a situation where there aren't many young workers?

There is also a solidarity pension system, which creates a greater burden on workers the smaller the proportion of young people and the greater the proportion of old people.

And in the scenario of a population decline with a simultaneous increase in living standards - this will create enormous social tension, when the shrinking working class will ask itself: why should we give more and more of the money we earned with our sweat and blood to old people who were unable to save for their old age when were younger?

Even if no one voices this as an official slogan, it will still be implied in political decisions and will boil down to at least the fact that old people will be denied an increase in their standard of living ("because we are already giving them more and more, but look at what a terrible world they left us, and now they want to live in luxury at the expense of our sweat and blood?").

But with the aging of the population, the proportion of old people will increase very much, and, if we are talking about democratic regimes, their political influence will be increased.

And the situation, when we have a confrontation between a shrinking productive minority and people who do not produce anything, but have power over them and live at their expense - can end badly. It will definitely end badly. Like, really badly

[ReptileMan]

The good thing about being authoritarian is that you can easily solve the births issue. The same way there was one child policy, there could be 3 or 4 with penalties for non compliance.

[jampekka]

Highly unlikely CCP would pursue coercive birth policy, or even could do it if it wanted. CCP is extremely powerful but it still has to rely on the consent of the governed. It has to frequently roll back policies due to public outcry.

Current birth rate increase policies in China are based mostly on rewarding for births and subsidizing parenting costs.

[wqaatwt]

> GDP PPP

That’s not a particularly meaningful metric.

[psalaun]

No more no less than GDP. They outline different realities, which are all interesting to analyse as a whole.

[wqaatwt]

PPP on its own is a relatively poor metric and only covers a subset of the economy.

Then when you have semi closed economy like Russia with unclear currency rates (due to external capital inflow/outflow barriers) and convert the figures to USD you can end up with all sorts of wacky numbers

[amilios]

but not GDP per capita in purchasing power, in that the US is still far ahead. China's GDP PPP is greater, but with 4 times the population.

[NobodytheHobbit]

They do. If you just scroll the ubiquitous online market, that doesn't need to be named, and look for odd brand names. Intentionally odd. Like "sxrpgh" as the brand as a made up placeholder. These brands are named to quickly start a business.

Why? It's an aliexpress model. Create as many legal entities as you can and let an economic Darwinism kill the ones you do poorly at and cherry pick your successful businesses.

The actual labor is outsourced to the market itself with products produced in southeast Asia by a wholesaler, sent to the market by said contracted wholesaler, and sales handled by the market's fairly much only retailer. It's so automated you really only have to be lucky that consumers pick your product and luck can be bent to will at times.

It's a very botnet approach to business.

This does expand the approach from flooding the market with cheap goods, to making cheap goods and competing with prices from the middlemen, making less efforted profits using the same approach, but exports the profits out of the US economy. I know this is a unusual framing but that's exactly what is happening.

Before a middleman within the economy would extract the wealth from that labor in this way. Why not cut out the middleman if the formula can be followed by anyone? And in the current belligerent state of trade it would politically expedient to do so or at the very least encourage this model if you are adversarial to the US because it works well. Our businesses already proved that.

[usrbinbash]

> What other system of value are you using here? Bottle caps? Nostalgia?

The system where "production" means "where has item XYZ actually been made".

And for more than 1/3rd of all items, the answer to that question is: China.

https://cepr.org/voxeu/columns/china-worlds-sole-manufacturi...

[aylmao]

China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity.

Say a bottle of wine costs $20 in the USA, and in total one bottle is produced and sold for a total of $20 GDP. France makes 10 bottles at $2 each, for a similar GDP of $20. It's cool that the USA manages to "extract more value" from its smaller wine production, but at the end of the day, France has the stronger economy.

There's more wine to go around, more resilience to the loss of a bottle, arguably this higher production means more export capacity, more employment, more generation of wine expertise, supply chains, etc.

The nominal GDPs might be the same, but the GDP (PPP) of France in this case would be $200 to the USA's $20.

[1]: https://www.cia.gov/the-world-factbook/field/real-gdp-purcha...

[deaddodo]

> China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity.

Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).

[oblio]

> Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).

Are they, though? China has its own huge software stacks, cloud providers, car manufacturers, etc? Is China really starving for anything not made in China, except for luxury goods? To which, I would point at Lexus (the archetypal example from Japan, a comparable country) and say that if you're a luxury good manufacturer in the Western world, I would not rest on my laurels, it's just a matter of time: either by development or acquisition, China will be making its own luxury goods and even exporting them, soon.

[ggandv]

If China embraces capitalism more tightly that will be a good thing for the world. The problem with China is not its wonderful people or culture, nor its prosperity, the glaring problem with China is Communism and the morality of authoritarian style central planning and the Xi/Putin axis of evil.

[oblio]

What China is not do Communism in any shape or form. It used to be back in Mao's days. Now it's just capitalist authoritarianism.

What you are mistakingly calling "capitalism" that China should adopt is... democracy.

[ggandv]

I’d argue. The CCP isn’t ideologically opposed to democracy but rather capitalism. Capitalism is an inherent feature of democracy. They despise capitalism (the Communist Party) even though they will play the long march and use it to subvert and destroy non-Communist ways of life.

Edit to add link: https://en.m.wikipedia.org/wiki/Ideology_of_the_Chinese_Comm... (“views on Capitalism”)

[aylmao]

> Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).

Is there data that backs up this claim? Is this broadly the case? Cause I do know that local brands have been taking over foreign brands recently. Take for example Apple— sales in China plunged 50%, and reports are pointing at Huawei [1], which amongst other things has been making some impressive high-end phones. Tesla is falling to Chinese brands too [2].

Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc.

But regardless of specific examples, I'd imagine the vast majority of consumption in China isn't products of foreign origin given its massive trade surplus [3] and just how much of what it imports are materials, rather than finished consumer goods [4].

[1]: https://www.asiafinancial.com/apple-sales-in-china-plunge-50...

[2]: https://carnewschina.com/2025/05/12/teslas-sales-in-china-do...

[3]: https://tradingeconomics.com/china/balance-of-trade

[4]: https://oec.world/en/profile/country/chn?selector343id=Impor...

[deaddodo]

> Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc.

This has nothing to do with PPP, and the fact that you are making this argument means you have no idea what it consists of at all.

If Chinese citizens purchase those products, they don't get them at an adjusted price because they are manufactured in China. They pay the same base price as worldwide, else they buy them secondhand (or, more frequently, bootleg).

Your questions reinforce, rather than dismiss, why PPP is a useless metric outside of base domestic purchase economics (primarily rent and food).

[seanmcdirmid]

That bottle of wine is going to be at least 400 RMB in China, so I’m not sure how PPP can be argued here. You would need to focus on things that are less expensive in China than the UsA (services mostly, low end goods and food), but things get more expensive quickly if you go for something nice outside of a restaurant. PPP is oddly calculated given that services in china’s case are mostly what is driving its higher value, and that simply means people are paid less (and increasingly they aren’t, which means PPP will shrink closer to GDP unless their automation investments really pay off).

[ozgrakkurt]

The he issue with this is the dependency direction, if the supplier learns to do the assembly then they don’t need US anymore and can sell the same thing for a fraction of the price.

Or if you go to war then all those base manufacturing can be used to manufacture for military

[pjmorris]

> If the $450 of value was so easy to extract, why wouldn't China simply assemble it in their own country and take the whole pie?

As someone else pointed out, they do, under various odd brand names.

You make what seems like an obvious point. However, The iPhone is assembled in China for the ballpark cost you mention, and sells for double the $450 price you mention... so they must have reasons to not take the whole pie.