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Thresholds Of Prc Military Power

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#61 Yama

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Posted 03 August 2018 - 0206 AM

If you believe those numbers, sure.

What do you think is wrong with these ?


Well, US debt is too small, for starters...
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#62 Josh

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Posted 03 August 2018 - 0733 AM

They point to the exact opposite conclusion of what is going to happen than what Josh hopes, is the problem with those numbers.


I don't tend to believe economic numbers put forth by the CCP. Their defense budget is routinely low balled and their measurements of debt tends to ignore a lot of shadow banking. As to 'what I want', I don't think a massive economic dislocation will be good for anyone and I suspect it would probably lead to a military conflict with the US or a US ally. So it isn't 'what I want'. I just think their current growth is unsustainable, if only because no other asian nation maintained it historically, and also there is small but real chance that they suffer some sort of economic calamity in the next decade.

The private debt might be understated, but there is no real way to cook the books on public debt, nor is there a good reason as it is not high, and there is near zero chance of sovereign default.


My understanding is that there is very little accounting of local banks and how leveraged they are. I'm not insinuated that PBOC will fail or that the country will have an Argentina like default, just possibly a severe recession that cause them to potentially curtail their defense budget. You saw this in Russia when the price of oil crashed a couple years ago.
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#63 KV7

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Posted 03 August 2018 - 0805 AM

 

 

 

They point to the exact opposite conclusion of what is going to happen than what Josh hopes, is the problem with those numbers.


I don't tend to believe economic numbers put forth by the CCP. Their defense budget is routinely low balled and their measurements of debt tends to ignore a lot of shadow banking. As to 'what I want', I don't think a massive economic dislocation will be good for anyone and I suspect it would probably lead to a military conflict with the US or a US ally. So it isn't 'what I want'. I just think their current growth is unsustainable, if only because no other asian nation maintained it historically, and also there is small but real chance that they suffer some sort of economic calamity in the next decade.

 

The private debt might be understated, but there is no real way to cook the books on public debt, nor is there a good reason as it is not high, and there is near zero chance of sovereign default.

 


My understanding is that there is very little accounting of local banks and how leveraged they are. I'm not insinuated that PBOC will fail or that the country will have an Argentina like default, just possibly a severe recession that cause them to potentially curtail their defense budget. You saw this in Russia when the price of oil crashed a couple years ago.

 

Private debt is a separate issue, and there is a chance of it causing an issue, unlike for sovereign debt.

China issues RMB, so it can never run out of RMB, and can cover all liabilities in RMB at will.

Even is a mild recession happens, it will only be via choice, as again the levers are there to prevent one.:

If private lending stalls, then the government banks can maintain lending

If private expenditure stalls, the government can engage in fiscal policy

If private firms fail, the government can order the banks to write down their debts

 . . . 

The only downside of a really big stimulus program or debt write down is a potential spike in inflation (though this is hardly a big worry as inflation is low) which might annoy some savers relying on low return deposits etc. but again if you cannot keep some middle class self-funded retirees in line- well that also counts as monumental stupidity.

Workers might also panic over inflation but workers should prefer full employment to stable prices and mass unemployment, but again . .

If private firms won't raise wages enough to keep up with inflation, the government can order (vie the existing central wage norm arrangements) wage rises.

We may well see a mild recession, but if we do it will be:

because the leadership want to let a fair few firms go bust in order to discourage rampant borrowing and for some idiotic reason decided not to sensibly offset this with stimulus
 

because they listened to some neoliberal bullshit about how stimulus is bad and building railways is 'miss-allocating resources' etc. and failed to therefore respond to some external or internal shock

because they idiotically decided to start operating their SO banks like private banks, and therefore force them to bankrupt firms by insisting on harsher terms etc.


because some other stupid reason

 

The important thing to remember is that China is not Russia and not the USSR - the underlying supply side fundamentals are very strong, so if the leadership wants to see growth continue, all they need to do is keep investment high (which hardly takes much effort as the savings rate is naturally very high), and keep deploying their existing powerful recession fighting mechanism in order to maintain stability.

China will face a problem of growth slowdown when it approaches the productivity frontier (and some firms and regions are getting close to it) but by then it will be a massive economy - maybe close to 1/3 of world GDP. I think betting on 'China cannot innovate' to motivate the case for a very sharp or premature slowdown is a pretty bad idea too. 




 


Edited by KV7, 03 August 2018 - 2343 PM.

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#64 Nobu

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Posted 03 August 2018 - 1741 PM

It was not that long ago that people did not have to wonder what kind of intervention it would take to slow down the economic growth activity of China and Chinese because there was no economic growth activity of China and Chinese by any relative measure. A PLAN "fleet" operating with impunity anywhere in the world was unthinkable in the 80s, nevermind the insanity of Chinese carrier task forces or the existence of a consumerist middle class larger than the entire Japanese population.

 

This level of growth, however accurately numerated or not, is thankfully not sustainable, lest the Chinese be testing warp drive by the time Japan and Japanese are able to actually look the world in the eye and call a capital ship a capital ship.

 

The conversation itself is illustrative of an achievement of some kind, unfortunately.


Edited by Nobu, 03 August 2018 - 1755 PM.

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#65 Nobu

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Posted 03 August 2018 - 1749 PM

The worry is that if China and Chinese have been overstating the numbers, and they very well may have been, this implies the existence of more untapped room for economic expansion before the reaching of economic stationarity, not less.


Edited by Nobu, 03 August 2018 - 1757 PM.

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#66 Josh

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Posted 04 August 2018 - 0049 AM

While I generally disagree with Nobu on almost everything, I will say current Chinese growth is unquestionably unsustainable. The question is what happens next. Even if there isn't a huge debt problem, which I personally thing there is, they have some troubled water to navigate. This isn't to say that some downfall will happen, this is only to note that continued economic growth at the levels previously considered acceptable is unlikely and also their current numbers are not trustworthy. They are trying to make the jump to a domestic consumer economy. There are a lot of economic and political reasons why that jump will be hard for them and despite their wealth, on the books, I do not consider it a forgone conclusion. Your mileage may differ.
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#67 RETAC21

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Posted 04 August 2018 - 0257 AM

While I generally disagree with Nobu on almost everything, I will say current Chinese growth is unquestionably unsustainable. The question is what happens next. Even if there isn't a huge debt problem, which I personally thing there is, they have some troubled water to navigate. This isn't to say that some downfall will happen, this is only to note that continued economic growth at the levels previously considered acceptable is unlikely and also their current numbers are not trustworthy. They are trying to make the jump to a domestic consumer economy. There are a lot of economic and political reasons why that jump will be hard for them and despite their wealth, on the books, I do not consider it a forgone conclusion. Your mileage may differ.

 

It's sustainable only as far as the rest of the World is willing to make China the factory of the World. Looking at a very specific sector, shipbuilding, you can see how the US and European yards were progressively priced out by the Japanese and the Japanese by the Koreans and these, by the Chinese. At some point it will reach a plateau (if it's not reached already) in which the CCP will try to keep on going by fomenting internal demand. At the end of the day, the strength of an economy is its consumer base and China should be well positioned. What was atypical was its position in the 60-80s due to Mao's madness.

 

Militarily they can go on with the current build-up for some time, but at some point they won't need more destroyers and corvettes and some years down the road obsolescence will rear its head and if they have disbanded their production base they would be in a bad spot. See the Royal Navy of the 30s.


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#68 Colin

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Posted 04 August 2018 - 1120 AM

China has massive internal issues to deal with, terrible pollution, large State industries producing little and sucking up money. A lot of money spent on projects with little return. A growing standard of living and a mobility of capital and people not ever seen before. A large disparity between the haves and the have nots. Not to mention about 25 million surplus males. A potentiel for a large population shift as a die off of the population caused by a gender imbalance, which will ease some problems for government and create new ones as certain areas become unpopulated. I think their colonial adventures is going to expose them to all the problems other colonial powers had to deal with post WWII.   


Edited by Colin, 04 August 2018 - 1121 AM.

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#69 Nobu

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Posted 04 August 2018 - 1240 PM

Being able to operate with impunity within the first island chain impresses me, in spite of myself.

 

What worries me is the very distinct possibility that China and Chinese may not care about overextending themselves beyond it.


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#70 JasonJ

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Posted 18 November 2018 - 0101 AM

What is currently and generally known now (November) about the number of surface fleet vessels in comparison to April 2018. Clicking in the links in that April post will show updated info on the progress of the ships in various stages of status in their respective classes.

 

Aircraft carriers

April: 1 sky jump type in service, 1 sky jump type in sea trials, word of a 3rd in initial fabrication.

November: 1 sky jump type in service, 1 sky jump type in sea trials, likely modules for a 3rd in construction (e.g. here and here).

 

Type 55 destroyers

April: 1 fitting out, 3 under assembly, 2 at making parts, word of two more to start.

November:1 Sea trials, 3 fitting out, 3 at making parts.

 

Type 52D destroyers

April: 6 commissioned, 3 to enter service, 2 at sea trials, 2 fitting out, 5 at making parts.

November: 10 commissioned, 3 sea trials, 2 fitting out, 3 in dock construction, 4 out of dock construction

 

Type 52C destroyers

April: 6 commissioned

November: 6 commissioned

 

Type 54A frigates

April: 26 commissioned, 1 to enter service, 2 outfitting, 1 being made.

November: 28 commissioned, 2 fitting out.

 

Type 56 covettes

April: 38 commissioned, 7 fitting out.

November: 42 commissioned, 10 fitting out.

 

With power projection for the PLAN in mind, worth considering the Type 901 AOE.

In June 2017: 1 sea trials.

November 2018: 1 commissioned, 1 sea trials, 1 being segmented, 1 just starting construction.

 

Segmented probably means cancelled. Articles about the 3rd (likely cancelled) and 4th (just starting construction).

Spoiler
http://slide.mil.new..._60471.html#p=1

 

Spoiler
http://mil.news.sina...ip7511155.shtml


Edited by JasonJ, 18 November 2018 - 0103 AM.

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#71 KV7

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Posted 18 November 2018 - 0207 AM

China has massive internal issues to deal with, terrible pollution, large State industries producing little and sucking up money. A lot of money spent on projects with little return. A growing standard of living and a mobility of capital and people not ever seen before. A large disparity between the haves and the have nots. Not to mention about 25 million surplus males. A potentiel for a large population shift as a die off of the population caused by a gender imbalance, which will ease some problems for government and create new ones as certain areas become unpopulated. I think their colonial adventures is going to expose them to all the problems other colonial powers had to deal with post WWII.   

They have a far sighted, non-venal, smart and pragmatic leadership with a clear goal of national development, which is in ideology and in practice put ahead of anyone's desire to get rich. The problems you identify (but overstate) are likely to be and already are being dealt with acceptably.

Your data on excess males is perhaps a bit out of date, given that recent statistics have identified a large number of missing females. And even if the estimate is correct, there is no severe demographic implications. And even if there were, the government has the mechanisms at its disposal to rectify them - small payments to poorer families with children is a huge incentive for more children, and China could if needed implement gender based migration. There is a bit of an official push against the racism that would make this sort of solution difficult already - there have been a few instances of positive fluff pieces about Chinese men with African wives etc.


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#72 a77

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Posted 22 November 2018 - 1518 PM

They have a far sighted, non-venal, smart and pragmatic leadership with a clear goal of national development, which is in ideology and in practice put ahead of anyone's desire to get rich.

 

You are wrong, they dicatorship may want to be non-venal, smart and pragmatic, but to ensure its power it must do the the opposite, like play out various goverment fraction against each other to prevent one grow to strong, install incompetent (but loyal) local leaders to prevent a local leader can grow to strong etc silence all criticism hence louse sight of the real problem. The military promotion (to higher rank) is based one lojalty to the party and not miltary competence.


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#73 KV7

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Posted 22 November 2018 - 1545 PM

 

They have a far sighted, non-venal, smart and pragmatic leadership with a clear goal of national development, which is in ideology and in practice put ahead of anyone's desire to get rich.

 

You are wrong, they dicatorship may want to be non-venal, smart and pragmatic, but to ensure its power it must do the the opposite, like play out various goverment fraction against each other to prevent one grow to strong, install incompetent (but loyal) local leaders to prevent a local leader can grow to strong etc silence all criticism hence louse sight of the real problem. The military promotion (to higher rank) is based one lojalty to the party and not miltary competence.

 

The military leadership is untested, so they may well be incompetent. But civilian leaders are largely assessed on their merits in respect to centrally defined criteria. This is why provincial governments scramble to promote development within their region, as hitting the expected targets (not just growth, but for example environmental and social targets) is necessary for carer advancement.

A similar model cannot really be rolled out in the military sphere - you cannot have a target of 'win 2 small wars a decade' or something like that. You can use Russian type targets like 'have 60% modern tanks in z formations' or something, but very few have the authority to make decisions which can move this, and the utility of the targets have to be assessed by military brass anyway, so the assessment system becomes self referential.


Edited by KV7, 22 November 2018 - 1546 PM.

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#74 Colin

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Posted 24 November 2018 - 1313 PM

 

China has massive internal issues to deal with, terrible pollution, large State industries producing little and sucking up money. A lot of money spent on projects with little return. A growing standard of living and a mobility of capital and people not ever seen before. A large disparity between the haves and the have nots. Not to mention about 25 million surplus males. A potentiel for a large population shift as a die off of the population caused by a gender imbalance, which will ease some problems for government and create new ones as certain areas become unpopulated. I think their colonial adventures is going to expose them to all the problems other colonial powers had to deal with post WWII.   

They have a far sighted, non-venal, smart and pragmatic leadership with a clear goal of national development, which is in ideology and in practice put ahead of anyone's desire to get rich. The problems you identify (but overstate) are likely to be and already are being dealt with acceptably.

Your data on excess males is perhaps a bit out of date, given that recent statistics have identified a large number of missing females. And even if the estimate is correct, there is no severe demographic implications. And even if there were, the government has the mechanisms at its disposal to rectify them - small payments to poorer families with children is a huge incentive for more children, and China could if needed implement gender based migration. There is a bit of an official push against the racism that would make this sort of solution difficult already - there have been a few instances of positive fluff pieces about Chinese men with African wives etc.

 

Using this chart I am guessing approximately 17-19 million males of breeding age and coming into breeding age more than women. Not that I really trust any numbers coming out of China.

 

Population_pyramid_of_China_2015.png​ 


Edited by Colin, 24 November 2018 - 1406 PM.

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#75 DB

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Posted 24 November 2018 - 1639 PM

I believe that the number of females in China is under-enumerated as not everyone aborted female foetuses and not everyone murdered infant girls, It is likely that they simply didn't register their births, particularly away from the cities..


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#76 Josh

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Posted 25 November 2018 - 1102 AM

I'm pretty sure recent research has proved that the overwhelming majority of females were simply not registered.

 

China's much bigger demographic problem is the aging population due to the one child policy. It's workforce is shrinking and will continue to do so in dramatic fashion in the next couple decades.


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#77 DB

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Posted 25 November 2018 - 1211 PM

Its competitive advantage will erode for the same reason - wages are already high enough in some of the industrial cities that they are moving business elsewhere.


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#78 KV7

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Posted 25 November 2018 - 1858 PM

China's competitive advantage is now from scale/network effects. You can set up shop there and get everything you would ever need, at short notive, including entirely new products.


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#79 JasonJ

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Posted 25 November 2018 - 2226 PM

Even if China's economic efficiency is weakened by things like aging population, the sheer scale of it all will still mean a big economy. Additionally, China doesn't have the same kind of worker entitlements so expectations on the government won't be so demanding. And Chinese people in general are quite adapt at toughen it out. Also, manh other countries have similiar age related demographic issues. So it won't be a disadvantage unique to China. I'd still expect their GDP to keep marching up for some time still. GDP numbers are often skewed and what not, but false GDP numbers get corrected after a number of years. In general, it should be expected that total nominal GDP (not PPP) can reach the same level as that of the US in 5-10 years. Of course it may not, but I think it is more likely than unlikely. In terms of PPP, they already are bigger than the US. I don't think they will reach the US on GDP per capita but with a population so big, even if with just half the GDP per capita as the US would result in their total national GDP exceeding the US.

Edited by JasonJ, 25 November 2018 - 2229 PM.

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#80 JasonJ

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Posted 03 January 2019 - 0813 AM

List of navy ships launched in 2018

planlaunchship2018.jpg


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