Report: China will plateau in the 2030s

[joe00uk]

How much later? I could see 2040-2050 but much beyond that is untenable. The ecological crises will be preeminent globally in all countries by the 2060s to the effect that any nation not responding to it directly will completely and brutally perish shortly thereafter.

My random guess is that a Chinese plateau will probably come around the 2060s, with the situation possibly deteriorating quite rapidly after that. Climate change will likely play a huge part, you're right. I expect China to withdraw from places like Tibet, Xinjiang and Inner Mongolia before 2100 as they become too costly to prop up. I also expect much of the American West to be abandoned over the next century.

[caltrek]

I am reminded of past references to the "declining rate of profit." I am beginning to think that this is something that is not confined just to capitalist economies. That is to say, that perhaps there is a tendency under some circumstances for the rate of return on investment in new technology to drop. China may be approaching a period like that. If so, its economic system is well suited to handle the crisis. That is to say, government has appropriated to itself many tools that it needs to manage a slowing economy. These tools can help it maintain full employment and plan for obvious bumps in the road ahead. At the same time, it is not so totalitarian as to attempt to completely replace the marketplace as a planning and adjustment mechanism.

One thing that it will need to avoid is to fall into the trap Russia is in. To attempt to try and solve its problems through further military aggression. What Mao would call "adventurism." That is, the needless taking of risks on the military front.

[funkervogt]

"China is also out of "low-hanging fruit" infrastructure investments it can make to provide jobs while boosting longer-term GDP. Highways and railroads connect all of the cities, the country's ports are fully developed, its airports are fine, etc. In fact, as with the real estate sector, it's possible China has overinvested in its infrastructure, and the bubble will pop in the coming years once it becomes clear that things like the high-speed railways are money-losers."

There's no such thing as "overinvested" infrastructure in the sense presented. In economic systems that value efficiency and quality of life the raw monetary profit to be made from a given infrastructure project is a non-factor. The only economic calculations to be made are the energy/resource input/output and labor input/output. High speed rail is extremely efficient and will permit China robust infrastructure into degrowth scenarios of the 21st century even as the world will be forced to give up on automobiles as primary forms of transportation due to intensifying resource scarcity.

You're wrong.

Here's an example that illustrates my point: Turkey just built the first bridge over the Dardanelles Strait, linking Europe with Asia by road. It is named the "1915 Canakkale Bridge." Before it existed, vehicles had to take ferries across the Strait, or had to take massive detours up to Istanbul to cross one of the bridges there (the straight line distance from the new bridge to Istanbul is 220 km). Those alternatives added substantial time and fuel costs to vehicles traveling certain routes. But now:

The “1915 Canakkale Bridge” cost 2.5 billion euros ($2.7 billion) to build but Turkey will save 415 million euros ($458 million) per year from a reduction of fuel consumption and carbon emissions, Erdogan said. He announced the bridge’s toll will be 200 Turkish lira ($13.60)

https://www.marketwatch.com/story/turke ... 1647625757

Doing the math, the savings to the Turkish economy will pay for the Bridge's construction in only six years, and thereafter, it will boost the country's GDP for decades, perhaps a century. It was an intelligent investment made by the country's government.

So what happens if Turkey builds a second bridge next to the first? Let's call the former the "1915 Canakkale Bridge-2." Will the 1915 Canakkale Bridge-2 also add $458 million to the Turkish economy each year thanks to reducing fuel consumption and carbon emissions?

No. The first bridge has the capacity to handle all the Asia-Europe traffic that would have taken the route, so opening a second bridge would not benefit anyone, and no one would use it. It would be an overinvestment in infrastructure.

The Turkish economy would experience a short-term jolt as thousands of people got jobs building the 1915 Canakkale Bridge-2, but the project would damage the economy overall, starting in the medium term, as the bridge sat unused, but gobbling up money each year for maintenance.

This example illustrates China's problem. They've already built or are close to finishing every worthwhile infrastructure investment like the 1915 Canakkale Bridge. That means the strategy of increasing the size of China's economy by having the government pay its citizens to build infrastructure is near its end. If China keeps building infrastructure, it will actually damage its economy. In fact, they've probably already done this by building high-speed rail lines linking their less important cities to each other. Like the hypothetical 1915 Canakkale Bridge-2, not enough people are using them to even pay for their yearly upkeep.