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Several years ago, I was on a long trip in China to meet with various people in industry and academia. It was easily the most interesting travel experience I've ever had.
Here are a few of the takeaways I had from my first-hand impression:
  1. Chinese people are more entrepreneurial than Americans;
  2. A lot of the macro growth was from pulling back Mao's restrictive policies, not from clever modern policies:
  3. Most of the politically feasible policy improvements have been made, anything more will have serious tradeoffs;
  4. Much of the apparent development is very superficial. When you look closely at the shiny new stuff, you start to see all the seams.
Here are a couple of Mises Wire articles related to China: China’s Inefficient and Unsustainable Central Planning By Antonio Graceffo "China's so-called economic miracle is running into the ground as the reality of central planning becomes increasingly obvious and an economic reckoning looms."
No Monetary or Political Bailouts for Belt-and-Road Initiative Debtors By Jeremy Powell "The countries have changed, but the story remains the same. Wealthier countries try to 'invest' by lending money to African regimes, where the money disappears. This time, China is the big lender."
And another article by an active Bitcoiner and Nostrich: The Specter of Hyperinflation Looms over the Economy By Michael Matulef "While the White House claims that inflation is losing steam, the truth is that unless the government changes its reckless monetary course, hyperinflation could be in our economic future."
I think central planning has the same feature as fiat money (makes sense since they go hand in hand) where it allows you to pull a lot of progress forward but creates bloat, perverse incentives and eventually topples under its own weight.
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it allows you to pull a lot of progress forward
It's a great example of how thinking in terms of one dimension (forward vs backward) misses the important fact that economies are enormously multidimensional. Pushing forward in one dimension comes at the expense of progress in many others.
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100%
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Good topic. I'll need a while to gather my thoughts.
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In a comment you made in another discussion, you said:
It's reminiscent of "The market can stay irrational longer than you can stay solvent."
It strikes me that your points about China are in the same territory. Just as the Soviet Union stayed solvent longer than you expected, do you think whatever the structural issues are afoot in China will stick around longer than it seems like they should?
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I think China's fundamentally different than the Soviet Union.
One of the things we were told while visiting is that their conception of "communism" is whatever most benefits the poor and if that happens to be market capitalism, so be it. Now, I think that's self-serving bs rhetoric from the CCP, but it's relevant to them not being ideologically wedded to Maoism.
My perception of China was more that a lot of the "growth" is fake, in the sense that it's cosmetic rather than substantive. However, people's standard of living has unquestionably risen dramatically since Mao died. The fact that China is allowing genuine market processes means that their structural issues can last for a very long time. As long as those problems don't overwhelm the real economic growth, the market can work around them.
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