China

[Luke]

1 hour ago, zippy1 said:

Is it really true that China has a more "equal" income distribution than US has?
I can't really see that from the data...
https://en.wikipedia.org/wiki/List_of_countries_by_income_equality

Not for now but they want it

[Dinar]

@Luca, the difference between those who have money and those who do not mostly comes from personal choices - some people are hard working, some are not, some are diligent savers and some are spendrifts.  I know plenty of people who have accumulated millions of dollars in wealth while never making more than $100K per annum, and I know plenty of people with $200k+ annual salaries and zero savings.  The difference is: one vacation per year vs four, treadmill at home vs personal trainer at the gym, new car every three years vs driving a car for ten years, having a dog and not having one, bringing breakfast and lunch to work and cooking dinner at home vs buying breakfast, lunch, dinner & getting coffee at Starbucks in the afternoon.

[RichardGibbons]

5 hours ago, RedLion said:

I have a hard time wrapping my head around this china as a utopia idea.

 

Yeah, I think that's largely because China is the country that today seems most likely to become an Orwellian dystopia, when you account for the social credit stuff.

 

"If you want a picture of the future, imagine a boot stamping on a human face— forever."

[Xerxes]

3 hours ago, Dinar said:

@Luca The difference is: one vacation per year vs four, treadmill at home vs personal trainer at the gym, new car every three years vs driving a car for ten years, having a dog and not having one, ….

 

somethings are worth it. 
others not 

[james22]

12 hours ago, Luca said:

Not for now but they want it

 

[Spekulatius]

10 hours ago, Xerxes said:

 

somethings are worth it. 
others not 

A dog is worth it and does not cost a fortune, if you treat them like dogs not like substitute children.

Edited December 20, 2023 by Spekulatius

[zippy1]

3 hours ago, james22 said:

 

Reading about this some, I can understand why they would think the inequality is an issue... It appears to be not only worse than Canada, Germany and Sweden, but also US. 
https://www.csis.org/analysis/how-inequality-undermining-chinas-prosperity

[Dinar]

@Luca, Chinese do not seem to agree with you.  https://www.bloomberg.com/features/2023-chinese-migrants-us-border/?srnd=premium

[Luke]

2 minutes ago, Dinar said:

@Luca, Chinese do not seem to agree with you.  https://www.bloomberg.com/features/2023-chinese-migrants-us-border/?srnd=premium

Agree with me on what, the CCP is working on exactly these problems

[Dinar]

13 minutes ago, Luca said:

Agree with me on what, the CCP is working on exactly these problems

As opposed to you, the masses have zero faith that CCP is either working or will solve these problems.  Man, I wish you had spent thirteen years of your life living under communism, like I did.  You'd have a different perspective on CCP.  

[Luke]

Just now, Dinar said:

As opposed to you, the masses have zero faith that CCP is either working or will solve these problems.  Man, I wish you had spent thirteen years of your life living under communism, like I did.  You'd have a different perspective on CCP.  

They are talking about a few thousand refugees, i agree that there are problems of course but as it was with covid, when the masses start complaining they will shift, and we saw some of these policy shifts already

[Luke]

Also dont get why you would say they live under communism there, they have as much capitalism as other developed countries like germany etc

[Dinar]

1 minute ago, Luca said:

Also dont get why you would say they live under communism there, they have as much capitalism as other developed countries like germany etc

You do not understand a very simple concept.  Capitalism cannot function without  rule of law.  You do not have a rule of law in China.  Oh, and the article is talking about tens of thousands.  When I mentioned it to my friends from high school who are Chinese and live in an area with a lot of Chinese people, they stated that there has been a flood of people recently out of China in their neighborhood.  

[Luke]

1 minute ago, Dinar said:

You do not understand a very simple concept.  Capitalism cannot function without  rule of law.  You do not have a rule of law in China.  Oh, and the article is talking about tens of thousands.  When I mentioned it to my friends from high school who are Chinese and live in an area with a lot of Chinese people, they stated that there has been a flood of people recently out of China in their neighborhood.  

24k, thats like 0.00002% of their population, i accept your opinion and the picture you sketch, "a country falling back into communism, planed economy, total control, decoupling of global markets" but i dont think this is reality or will happen. 

[crs223]

The irony is:  Screaming about "China will fail" would only happen if there was a clear path for China to succeed.  If China were clearly going to fail (e.g. North Korea or Zimbabwe) there would be no discussion.

 

Remember in the early 80s when Japanese cars came onto the market -- GM was screaming the whole way about unfair trade practices, currency manipulation, and low quality.  Soon Toyota became number 1.  Screaming only happens when there is a threat.

 

[Red Lion]

21 hours ago, Luca said:

Agree with me on what, the CCP is working on exactly these problems

I’m not an expert and I’m not trying to troll you because I think you probably have spent a lot more time researching this issue and I’m probably not seeing things from your side as well as I should, BUT how are they working on these problems? 
 

It seems every socialist solution to income equality has just brought down the successful members of society, done nothing for the poor, and been the best thing ever for unproductive government workers. I’m not a historian, so maybe I’m missing some great examples. 
 

Also, a side point, a lot of these countries that have bigger social safety nets than the USA also have a more fair distribution of wealth. For example different countries use value added taxes and/or national resource revenues to help fund healthcare and other social safety nets. VAT is a “regressive” tax, but also provides a buyin by everyone using the services.

 

In the USA we still spend a ton on healthcare, and  the rich shoulder almost the entire burden. Yet we are also forced to compete for insurance policies in the “free market” against other high income earners for our own private policies. 
 

I think the USA needs a more regressive tax system. I think even the poor should be paying some money in taxes, especially for things like VAT. 
 

I for one would feel less pissed off about the insane amount of tax dollars I personally pay towards every old, disabled, poor, and middle class person’s healthcare, if i actually got healthcare out of the deal as well. The USA’s entire system is built around leaching off of the most successful members of society while encouraging waste. 
 

Anyway, it still seems in my humble non-professional opinion that the USA’s system of “working on the problem” of income inequality has created perverse incentives and made things worse, but at least we still get due process and a strong rule of law, and there is the ability to create a great business out of nothing WITHOUT the implicit approval of the CCP, so I’ll take it over the CCP (or do we just mean Xi?) 

[RichardGibbons]

6 hours ago, RedLion said:

It seems every socialist solution to income equality has just brought down the successful members of society, done nothing for the poor, and been the best thing ever for unproductive government workers.

 

I think the reason for this is the impact of incentives on growth.  If you have, say, 3% growth, then over the course of 25 years, then your economy will growth by 109%, and your poor are likely to be better off by 55% if they get even half the growth of the economy.

 

If you punish the more intelligent, hard-working, and creative members of your society, then you disincentivize them, which impacts growth.

 

So, suppose you disincentivize the successful, hurting your growth by 2 percentage points, but in return are able to boost the incomes of the poorest by 20%.  Then your economy grows by only 28%, and even if the wages of the poorest grow at the same rate, they still only make it to 48%.

 

Therefore, you basically screw over everyone, including the poor, when you create onerous regulations and taxes that impact your country's growth.

But that doesn't stop governments from doing it, I think largely because people aren't very thoughtful or proficient at math, and envy is a powerful emotion.

[Spekulatius]

Prosus and Tencent are down a mid teens percentage in European trading due to CCP cracking down on online gaming again. It is not the first time and probably not the last time.

https://finance.yahoo.com/news/3-china-curb-gaming-spend-041159548.html

Edited December 22, 2023 by Spekulatius

[Castanza]

20 hours ago, RedLion said:

I think the USA needs a more regressive tax system. I think even the poor should be paying some money in taxes, especially for things like VAT. 
 

I for one would feel less pissed off about the insane amount of tax dollars I personally pay towards every old, disabled, poor, and middle class person’s healthcare, if i actually got healthcare out of the deal as well. The USA’s entire system is built around leaching off of the most successful members of society while encouraging waste. 

 

Yup a quick look at the Federal tax brackets shows just how poor the incentives are to earn more at the lower brackets. Especially when you stack it against what jobs and wages are actually available/attainable out there for the average person. That jump from 44k/yr to say a job at 55-60k a year is not worth it in many cases. Especially if you take into account education costs/requirements which is probably required for most jobs in that 50k+ income bracket. Most people probably don't see north of 80k for at least 5-10 years in their jobs if ever...So when you add in those 8-9% student loans on 40-50k, general cost of living, housing, vehicles....it's almost like it makes sense to just be poor and go after handouts in those lower ranges lol

 

12% bracket after tax at 45k a year is: ~40k

22% bracket after tax at 55k a year is: ~47k

22% bracket after tax at 65k a year is: ~59k

 

And the IRS wonders why there are so many people doing under the table work in those lower brackets...

Edited December 22, 2023 by Castanza

[Whensthepaintdry?]

I don’t think that’s how it works. 

[Castanza]

1 minute ago, Whensthepaintdry? said:

I don’t think that’s how it works. 

Well I didn’t feel like doing the math on tax after certain amount lol but it’s not that far off. Tax incentives are bad either way imo.

[Whensthepaintdry?]

Ha, ya I guess the good news related to China and taxes is my tax loss is just getting bigger! 

[Spekulatius]

Nikes profit warning could be a secular problem rather than a temporary or cyclical one. From what I read and hear, the Chinese consumer increasingly prefers domestic brands rather than foreign ones.  Japanese (Fukushima water resales) and US brands (geopolitical tension) could be harder hit than Europeans ones.

https://finance.yahoo.com/news/nikes-warnings-china-scare-other-025856754.html

[Luke]

https://www.nytimes.com/2023/12/26/us/politics/trump-2025-trade-china.html#:~:text=Mr. Trump has said he,like electronics%2C steel and pharmaceuticals

 

Mr. Trump has said he would “enact aggressive new restrictions on Chinese ownership” of a broad range of assets in the United States, bar Americans from investing in China and phase in a complete ban on imports of key categories of Chinese-made goods like electronics, steel and pharmaceuticals.

 

 

 

 

 

In 2018, the Trump administration set tariffs on more than $360 billion in goods, in an effort to encourage Americans to purchase domestic products. In response, China set its own tariffs on more than $110 billion worth of U.S. goods.

 

The conflict is still ongoing, and so far, there’s no clear winner in sight. The tariffs and trade barriers have hurt both countries, and with bilateral trade sputtering, many are left wondering if the peak of globalization is well behind us.

 

https://www.visualcapitalist.com/cp/biggest-trade-partner-of-each-country-1960-2020/

[Luke]

Would be bearish for Chinese equities initially if Trump gets reelected...