China scaling and efficiency is really something else. it seems they've latched on to something that works better than even democracy and capitalism
They’re certainly good at building.
Actually utilizing that capacity is something else entirely; there are factories less than ten years old shuttering due to overcapacity. https://www.nytimes.com/2024/04/23/business/china-auto-facto...
And the rush to subsidize more capacity is a big contributor to local government debt burdens in China, which is estimated to leave Chinese debt to GDP at 117%.
You are never going to get exactly the right amount of capacity, so the question is whether you want to err on the side of too much or too little. Too little might often be more efficient, but there are undeniable strategic benefits to having too much. The events of the last few years have taught us all some painful lessons about the hidden costs of JIT and lean. China might have got the balance wrong, but they aren't prima facie wrong.
They are prima facie wrong, their overcapacity is bad and actively harmful, this isn't a sign of it succeeding, its a sign of desperation from it failing.
There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago.
Dazzled by the spectacle, this misses that their economy is characterized by deflationary headwinds due to a massive, massive over-investment in property, and this just squeezes the toothpaste (debt taken on to goose GDP) to another side of the tube. (housing to batteries)
> There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago
Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?!
There's also a type of western mind that automatically dismisses the odds of a different country succeeding, based on nothing but the fact that they are using a different approach (on the surface). It's a kind if circular reasoning: our system is the best because we're the best, because of the system we have. To subvert the Simpsons - "the best so far"
Edit: I'm far from a Sinophile, but there's a certain willful blindness, concerning an almost religious belief that the west will prevail because it's the west, regardless of all the systemic weaknesses that show up again and again. It would suck for a dictator-for-life leading the biggest economy in the world, but healthy minds would introspect to see how we can do better, like we should, right? I have no doubt out leaders will pick the wrong lessons, like social credit scores and pervasive surveillance
Asking why we don't have a high speed cross country railroad in a nation that had most of its airports build out 60 years ago is an excellent pattern match for odd complaints.*
Thinking whether you're a Sinophile is a subject of discussion, and then most damningly, your closing thought being whether other people think "the west will prevail" shows there's a lot more going on here than the idea that maybe overcapacity is good. Way more than I expected, so I'll leave it at "overcapacity is bad". :)
* n.b. for future arguments I'd avoid this, a map shows china's is cross country in that you can piece together, exactly one route that is high speed only, requires multiple transfers, and leaves you about 20% short of a full horizontal trip cross country while taking a winding route that wasn't designed for it.
If you're going to disagree, can you do us all a favor by not misrepresenting my words?
> Asking why we don't have a high speed cross country railroad
I asked where the high speed rail is, because parent claimed China is building out infrastructure "we built a 100 years ago" - which is patently untrue. I even quoted parent, so you can't have missed that.
> damningly, your closing thought being whether other people think "the west will prevail"
Bravo! That's a tabloid-worthy recontextualization hit-job - you cut off the part I considered so important I originally added emphasis to it, and added your commentary to give my surviving words an unflattering meaning of your choosing that was never there. I said "...an almost religious belief that the west will prevail because it's the west"
A good day to you.
"cross country" doesn't mean east-west. china doesn't have a straight east-west high speed line that goes across the entire country because the population is overwhelmingly concentrated in the east, and there are routes that cross north-south and all through all the major population centers.
china also had many airports before they built the high speed system.
This is a systemic issue with the Western way of thinking. The West always consider itself to be the most evolved culture in history. First, by way of Christianity, later, by way of markets, democracy, and science. This way of thinking is self-deceiving because they cannot understand that other cultures can offer something equal or better. So, when faced with the advance of other cultures they necessarily have to dismiss them as inferior.
This isn't really unique to any particular culture. China spent a good couple millenia referring to anyone outside its borders as 'barbarians.'
Well, they clearly don't have that issue anymore. Maybe that's why they're now where they are.
For those old enough to remember, we heard it all before in the 1980's about Japan so experience has made us circumspect.
But even more so, markets enforce discipline on capital that state directed firms don't have. Everyone decries executives who "only look as far as next quarter's profits", and while admittedly at the margins that can have perverse incentives, in the large it demands that management put capital to work at profitable enterprises selling goods and services the public actually want.
Japan was different in that it never became the world's factory, and then, manufacturing skills hadn't atrophied in the west, so it's a little different now. Even so, past performance is no guarantee for future results.
> But even more so, markets enforce discipline on capital that state directed firms don't have
I struggle to reconcile this with stock buy-backs.
Also, China seems to have deployed a hybrid strategy: the national and regional governments provide incentives to industries, but the individual companies compete against each other. Product-wise, US defense contractors have done surprisingly well under a more extreme version of this regime (cost-plus contracts) for decades.
> I struggle to reconcile this with stock buy-backs.
Would it offend your sensibilities less if they paid dividends with that money?
Buybacks are simply a more tax advantageous means of returning profits to share holders.
Similarly debt financed buybacks are a morally neutral way to change the capital structure of the firm by replacing equity with debt.
This "market discipline" also requires that companies only look for their immediate future and next quarter profits. This makes it hard to do anything long term, which is exactly what China is doing. Even companies like Google, that expressly said to make decisions based on a long term view, are pushed by the markets to consider only their current profits, which reflects in the changes we see in the company.
Most Chinese firms are also very short term focused as the Chinese would regularly lament. But somehow as a system they show persistence. A good example is the solar industry with many bankruptcies of the earlier giants, yet the baton gets passed on and they keep at it. I think because of the sky high savings rate they can afford (or even prefer) to have asset heavy industries. Even with financial failures the hard assets get passed on (as opposed to financial firms). Large projects are funded by loans. Banks prefer hard assets because they have collateral. Equity holders contribute through intangibles, i.e. operating expertise. If they fail banks foreclose and find new operators. US used to be like that. Railroads, airlines, factories etc routinely go through bankruptcies. But the equity markets learned their lessons and now hate hard assets. With heavy asset you need leverage to get decent ROE which makes you vulnerable to the business cycle and puts you in a weak position bargaining with third parties like unions, class action lawyers or debt holders.
I agree and see it all the time just the general attitude towards China is disdain when they’re arguably way ahead of us and we just don’t want to admit it. They are full speed EV and we are attempting to roll it back.
You don’t have to apologize, man. I was on a Pullman train once but it wasn’t quite a bullet train. I also rode a Western train named Orient Express.
> Where in the US can one find the secret, cross-country high-speed rail built in the roaring twenties?!
Nowhere because the USA has an excellent internal flight and interstate highway system instead. Railways were already becoming uncompetitive by the 1920s and now live on mostly in parts of the world where they already exist, where land is at a premium.
The reason people think China will crash is that their system isn't unique, has been tried many times before and eventually always fails. That isn't circular reasoning, it's reasoning based on prior experience. China is still a communist country: we know how that story ends and why. Remember that for much of the history of the USSR people in the west were dazzled by its rapid industrialization and apparent achievements. First country to put a man in space! Many people in that era genuinely wondered if central planning was just a superior way to do things. In hindsight we can say that it wasn't: with enormous focus such economies were able to pull off heavy engineering projects at scale, but at the cost of ignoring consumer goods and with a dysfunctional economy that was brittle to its core.
End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away. He was shaken to his core and cried on the flight home, asking himself what they had done to Russia's poor people. The USSR collapsed just a few years later, Yeltsin became president and moved Russia in the direction of a market economy.
Warren Buffet (as Berkshire Hathaway) bought Burlington Northern Santa Fe (BNSF) for a reason - it is very profitable.
The merger of Canadian Pacific with Kansas City Southern is even larger, and is now a railway that spans North America from Vancouver to Veracruz.
The freight railway system in North America is massive.
Yes but we're not talking about freight. HSR is never used for that.
Amtrack mostly runs on freight lines. BNSF actually controls a Metra line in Chicago out of their headquarters.
> Nowhere because the USA has an excellent internal flight and interstate highway system instead
Both being impossible to decouple from fossil fuels consumption at current scale, essentially.
> End result: when Yeltsin visited NASA in the 1980s he demanded a surprise inspection of a local supermarket. NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away
I have no idea whether this anecdote is true, but it wouldn't be surprise me one bit for an always-drank dude who made the army shell the parliament of his own country.
Yeltsin was trying to reform the Soviet system. He was a party higher up, surely he knew what he’d find in a supermarket. He’d had a long political career by the. My guy says the supermarket tour was “staged” in the sense that he knew what he was going to find and he knew what reaction would be politically helpful for his project.
This isn’t to say the Soviet Union was, like, a good pleasant place to live. But we shouldn’t accept Soviet propaganda just because it happens to align with our priors.
He didn't according to his biographer, and it definitely wasn't staged. The bafflement of his hosts is well recorded, as were his questions and his expressions as he explored the shop, see the photo on this page:
https://www.cato.org/blog/happy-yeltsin-supermarket-day
Soviet supermarkets were drastically more impoverished at that time. No comparison.
Censorship is a problem because it affects everyone, especially the higher ups. That's why he'd got into the habit of demanding surprise inspections. As a factory manager he'd accepted that everyone was always hiding the truth from him. In systems like that there isn't any point in the hierarchy where you your boss takes you to one side and says Boris, listen, there's a vault with all our secrets and truths, let me show you. It never happens. The people at the top have to believe in the system the most of all.
> The bafflement of his hosts is well recorded, as were his questions and his expressions as he explored the shop,
This isn’t really evidence that it wasn’t staged by him though. That is, he doesn’t need to tell the host that he’s going to react strongly. He was a political operator, I’m sure he’d be happy to dupe some supermarket owner.
> Soviet supermarkets were drastically more impoverished at that time. No comparison.
> Censorship is a problem because it affects everyone, especially the higher ups. That's why he'd got into the habit of demanding surprise inspections. As a factory manager he'd accepted that everyone was always hiding the truth from him. In systems like that there isn't any point in the hierarchy where you your boss takes you to one side and says Boris, listen, there's a vault with all our secrets and truths, let me show you. It never happens. The people at the top have to believe in the system the most of all.
Sure, but this wasn’t secret information. America was broadcasting information about our wealth around the world. I guess we probably have people on this site who were in the Soviet Union during the 80’s. Maybe they can recall what they thought was going on over here.
Even if the information about our wealth was available; it was likely discounted and ignored; even North Korea can make charade supermarkets as necessary.
There's a difference between hearing something and seeing it everywhere.
North Koreans watch smuggled South Korean videos. These show cars, shops and so on, and the northerners assume the videos are showing the best of South Korea, not normal life.
> Sure, but this wasn’t secret information
Of course it was! All information about the true state of the west was censored and controlled. Today North Korea does the same thing for the same reason.
"Censorship in the Soviet Union was pervasive and strictly enforced":
https://en.wikipedia.org/wiki/Censorship_in_the_Soviet_Union
"Due to the appearance of foreign radio stations broadcasting in Russian territory and their immunity from censorship, as well as the appearance of a large number of shortwave receivers, massive jamming of these stations was applied in the USSR using high-power radio-electronic equipment. It continued for almost 60 years until the end of the Cold War. The Soviet radio censorship network was the most extensive in the world."
> Censorship in the Soviet Union was pervasive and strictly enforced
Do you suppose Yeltsin didn't have access to the uncensored information before his visit? Or that Soviet spies who sent in hyper-accurate maps of US city infrastructure wouldn't be asked to report on the booming economic success of American retail?
Russian intelligence hiding bad news entirely from Russian leadership is a long standing tradition.
It's how we get three-day special operations in Ukraine.
Case in point: https://www.nbcnews.com/news/world/ukraine-war-russia-genera...
I think that is a different issue. There’s an incentive to not report problems upwards if there’s a tradition of shooting the messenger.
Yeltsin was purged from the party because he gave a "secret speech" calling for more aggressive economic reforms, and then placed under so much pressure he tried to commit suicide. The tradition of shooting messengers was alive and well in the USSR.
> Do you suppose Yeltsin didn't have access to the uncensored information before his visit?
That was the case yes. I don't understand this insistence that he was faking anything. Why would he do that? The whole episode just made him and his delegation look stupid to the Americans, would not have been reported in the USSR itself, and he stated clearly that he was shocked by what he saw.
The way all far left regimes work whether the USSR, North Korea, Cuba or China is that due to pervasive censorship information can only flow top down, not organically as it does in societies with freedom of speech. But information is also progressively hidden and distorted as it gets passed up the chain from the underlings who discover it originally. The result is that people at the top aren't really more informed than people at the bottom. They think they are because they have access to secret reports, but they're being fed whatever they want to hear. This is why nobody trusts Chinese GDP numbers.
Yeltsin especially wouldn't have known anything. In the 1980s he wasn't the leader of the USSR, that was Gorbachev. Gorbachev did understand the weakness in abstract terms, but probably didn't realize the true extent of the differences for people on the ground. Yeltsin was a member of the nomenklatura in Moscow in charge of city construction projects, so high ranking but not high enough to be given foreign intelligence. Moreover just a year before his trip to Randalls (the supermarket) he was in a bitter fight with the party and had just been purged. The pressure was so intense he resigned from the Politburo - something nobody had ever done before - and then tried to kill himself.
But Yeltsin recovered and his criticism of the party was popular. In May 1989 he was elected to a seat on the Supreme Soviet, the fake Soviet parliament. He still didn't matter and still wouldn't have had any exemption from censorship, or access to sensitive foreign intelligence. He visited NASA in September 1989, just a few months later. At no point in his career up to that point would he have ever been trusted with sensitive information.
Leon Aron, quoting a Yeltsin associate, wrote in his 2000 biography, Yeltsin, A Revolutionary Life (St. Martin's Press): "For a long time, on the plane to Miami, he sat motionless, his head in his hands. 'What have they done to our poor people?' he said after a long silence." He added, "On his return to Moscow, Yeltsin would confess the pain he had felt after the Houston excursion: the 'pain for all of us, for our country so rich, so talented and so exhausted by incessant experiments'." He wrote that Mr. Yeltsin added, "I think we have committed a crime against our people by making their standard of living so incomparably lower than that of the Americans." An aide, Lev Sukhanov, was reported to have said that it was at that moment that "the last vestige of Bolshevism collapsed" inside his boss.[95]
> Nowhere because the USA has an excellent internal flight and interstate highway system instead. Railways were already becoming uncompetitive by the 1920s and now live on mostly in parts of the world where they already exist, where land is at a premium.
The fact that railways were becoming uncompetitive in the mid-1900s is why high-speed rail was developed. The Japanese pioneered high-speed rail in the 1960s, dramatically increasing the speed that passenger trains could run. That not only made trains competitive again, but hands-down the best mode of transportation for distances of a few hundred kilometers. The result is that new high-speed rail networks are being built around the world, not just in places where rail is already prominent.
In places where high-speed rail exists, it has taken most of the market share away from short-haul flights. If you want to get from Paris to Brussels (300 km), or from Beijing to Shanghai (1200 km), you take the train. This is despite the fact that Western Europe and China have excellent highway networks (China's highway network is now superior to the US interstate system) and plenty of airports.
> China is still a communist country: we know how that story ends and why.
China is not at all like the USSR.
> NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away.
China has an absolutely crazy abundance of consumer products. These days, Americans turn to Ali Express to get random widgets or knick-knacks of any kind. China is the place where you can pull out your smartphone, order pretty much anything, and have it arrive by courier 15 minutes later (okay, that's a slight exaggeration, but not much of one).
People take HSR sometimes because it's heavily subsidized, especially in China. Without government intervention rail can't compete against airports and roads. China's railway is in a staggering amount of debt due to mass overbuilding of the sort that would have bankrupted any normal company in a market economy long ago:
https://www.reddit.com/r/China/comments/vt7jrz/a_whopping_90...
> China is not at all like the USSR ... China has an absolutely crazy abundance of consumer products
Products for export, yes. It doesn't have a particularly strong consumer economy because its model is to keep Chinese labour poor whilst building up huge foreign reserves and gutting foreign competitors. That's why Chinese consumption is still far below the US:
https://capx.co/xi-jinpings-coercion-is-destroying-his-own-e...
"private consumption accounts for just 39% of the economy – extremely low by world standards (the figure in the US is 68%). But there is no consumer confidence, with 80% of family wealth tied up in property and no meaningful social safety net."
The TGV in France makes a profit. As does the Shinkansen in Japan. Intercity routes in the UK aren't high speed but are all profitable. Rural rail lines are not profitable and commuter lines are about break-even, depending on the fares charged. E.g. the tube in London is break even as it receives no operating subsidy, but it's quite expensive compared to e.g. the Paris / Madrid / Berlin metros. If you want to lubricate congestion in your city an easy way to do it is to encourage people to take a more space efficient form of transport by subsidising this. As a business proposition it probably makes sense for the overall region in the same way that it makes sense for a factory to move stuff around on conveyer belts rather than having everyone carry stuff from one station to the next. Britain has low productivity compared to the western EU average. It is posited that one of the big reasons for this is that our infrastructure is a bit shit.
TGV doesn't make a profit by any normal accounting standards. As far as I know every line except Paris-Lyon has received large subsidies. The Bordeaux-Toulouse line requires a subsidy of 35 EUR per year per passenger for the next 50 years. Nor are tickets even cheap as a consequence. Supposedly it's cheaper to drive the moment you have at least two people in the car (I haven't checked that claim, probably there are routes where it's not true).
Rail in the UK requires subsidies. Once again you can play games with non-standard accounting, like by excluding the cost of track and stations, but those are the bulk of the costs. If rail subsidies were zeroed tomorrow every single railway in the UK would go bankrupt the day after. This is also true for the Tube which certainly isn't break even - where on earth did you read that? They were once able to cover daily operating costs from ticket fares, but Sadiq Khan put an end to that and now they can't even cover operational expenditure without subsidies from central government. Even back when they were able to balance the daily books they only achieved that by starving capital expenditure and not building up any kind of profit margin, meaning that any kind of upgrades or repairs have to come out of additional subsidies.
https://tfl.gov.uk/corporate/about-tfl/how-we-work/how-we-ar...
The Shinkansen has a long history of building unprofitable lines which led to JR's eventual "bankruptcy" in 1987, ending up 28 trillion yen in debt. After being semi-privatized they were given a lot more leeway to shut down their unprofitable lines, but even so, it's viable mostly due to the government ensuring they have access to nearly unlimited risk free and repayment-schedule free money (ZIRP).
Passenger railways are fundamentally not possible to run as ordinary free market companies. They were run that way once, but the railways were built out on the back of huge private sector investments in infrastructure. Governments the world over then nationalized them and redirected funds towards staff/union pay settlements or reducing ticket fares, cutting infrastructure spending to compensate. The result is a massive overhang of tech debt that now can't be paid off without unrealistically high ticket price rises.
British productivity is low because it has cheap labour due to effectively unlimited immigration. Companies invest in productivity improvements when labour becomes expensive, otherwise they don't bother, it's easier to just throw more people at a problem. None of that is really a secret, it just doesn't get talked about much because the British ruling classes don't like to criticize immigration lest they be called racist - however, this is a purely economic issue. Railways hardly matter for productivity and commuting may even harm it for many people, as evidenced by the popularity of working from home.
Citations please. I believe the opposite of much of what you said is true. Here are my references.
SNCF is profitable: https://www.lemonde.fr/en/economy/article/2023/02/24/sncf-re...
Pre-pandemic the main intercity routes were all private operated. The operators had to pay track access charges to cover maintenance costs but they also had to bid to the government to buy the rights to operate the franchise. I.e they had to say how much profit per train service they were willing to pay to the government for the right to operate. The privatised rail sector collapsed because these companies overbid for these rights not because the routes themselves were fundamentally unprofitable.
TFL operating surplus: https://tfl.gov.uk/info-for/media/press-releases/2023/march/...
Japan has never closed a shinkansen route. They have closed many rural branch lines though.
Britain has a low immigration rate compared to Europe. E.g net gain ~750k compared to 1.9m to Germany last year. Germany also has high rates of unemployment for unskilled labour yet they have a sophisticated and highly automated high tech manufacturing economy.
https://en.m.wikipedia.org/wiki/Immigration#/media/File%3ANe...
Air travel is also heavily subsidized, and road travel even more so. One of the real reasons for the interstate highway system (not the purported reason -- defense -- that got the bill through Congress) was to break the back of the rail monopolists (and, importantly, the rail unions). The American state chose to literally invent a whole new kind of socialized transport (marketed as a form of consumer individualism) than just nationalize and upgrade the railroads like every other civilized country.
Air travel is taxed not subsidized. As far as I know there are no subsidies to the airline industry, unless you get into very ideological arguments by claiming the US military is a form of subsidy to anything that depends on fossil fuels. Double checking Wikipedia confirms this. After a huge page listing all the taxes, there's one unsourced paragraph claiming that "some" governments subsidise air travel with a "who?" dispute filed against the claim:
https://en.wikipedia.org/wiki/Aviation_taxation_and_subsidie...
Road travel is usually profitable for the government as fuel taxes cover more than the costs of building and maintaining the roads. Drivers end up subsidizing rail in every country that I know of. It's possible EV cars will start to change this.
US passenger rail is nationalized. Amtrak is majority owned by the federal government, for example.
There's not really a way to have this discussion without being ideological but military contracts, fossil fuel production subsidies (yes there is a tax on the fuel, but also a subsidy to the people pumping and refining it), and municipally-financed airports (including the tax subsidy on muni bonds) all seem to be pretty direct subsidies that the air travel industry would not exist without. Air traffic control is also a 100% governmental function that is necessary for the industry to exist.
On what you would probably term the more ideological side, there is noise pollution, environmental costs (this one is admittedly likely a wash -- it's not as if our airports would be nature reserves if they weren't used for aviation), and presumably a major hit to revenue and quality in major metro areas -- is O'Hare really the best possible use of that extremely extremely valuable piece of Chicago real estate, or could it generate more revenue for the city and happiness for citizens as housing, shops, commercial and industrial space, and parks?
Anyway have a good day. I'm glad you're a fan of motoring and aviation and hope it brings you great joy.
I don't get much joy from long distance travel in any form tbh ;) I keep posting in this thread because people keep making untrue claims about transport economics, and it's important to be realistic here.
So we go unto the breach once more: in the USA the government run parts of the air system are funded by taxes on fliers, not direct subsidies. ATS is a part of the FAA which is funded by such taxes:
https://usafacts.org/articles/who-funds-the-faa-you-whenever...
Airports usually fund themselves via fees charged to airlines, which are then ultimately charged to the flier. You can see them in the fare breakdowns sometimes. I'm sure there are tiny airports in the US that are subsidized because governments love subsidizing uneconomic things for prestige reasons, but it isn't structurally needed.
In the US, fuel taxes and tolls combined only cover about 35% of the cost of building and maintaining roads. The rest of the cost is covered by the federal, state and local governments.
That's because gas taxes are an unusually live wire in US politics, not because roads are fundamentally uneconomic. Until 2008 gas taxes did cover highway spending, and they now require general transfers because gas taxes weren't indexed to inflation. According to this website the taxes weren't increased since 1993, so in practice the US system has been deliberately starved of sustainable revenue.
https://taxpolicycenter.org/briefing-book/what-highway-trust...
"Congress could pay for projected highway and mass transit spending by simply raising the federal tax rate on gasoline and diesel fuel. Increasing those rates by 15 cents per gallon along with indexing the rates for inflation would increase federal revenues by $240 billion over ten years (CBO 2022)."
Balancing the highway books in the USA would be easy, and it's done already in most other parts of the world.
You've now admitted that most of the cost of maintaining and building roads in the US is borne by government subsidies.
I just looked up how Germany funds its road network. It turns out that 2/3rds of the funding comes from taxes (subsidies, in other words).[0]
0. https://bmdv.bund.de/DE/Themen/Mobilitaet/Infrastrukturplanu...
Funding is a subsidy only if it comes from tax/borrowing sources that aren't related to the thing being subsidized. If taxes levied on driving fund driving, that's not a subsidy. Also that page seems to be talking about all transport including railways, but we're only interested in roads here.
Germany spends ~16B EUR per year on roads at the federal level:
https://www.statista.com/statistics/1293915/federal-expendit...
The amount it gets from motor taxes is vastly in excess of that:
https://www.destatis.de/EN/Themes/Society-Environment/Enviro...
That's not surprising because Germany has the highest motor taxes in Europe:
https://www.acea.auto/press-release/motor-vehicle-taxation-b...
The US does subsidize roads but it doesn't have to, hasn't done so in the recent past and arguably shouldn't be doing so.
Germany is highly federal. The federal government only covers a portion of the cost of road construction and maintenance, with state and local governments carrying much (a majority, I think) of costs.
From what I see in your 2nd link, motor taxes do not even cover the federal government's contribution to road construction and maintenance, not to even mention what state and local governments pay.
You're saying the US doesn't have to subsidize roads, but removing that subsidy would require the US to raise fuel taxes and tolls by 200%. Rail can also break even if prices are increased. The reason governments subsidize HSR is because it has positive externalities.
> People take HSR sometimes because it's heavily subsidized, especially in China.
Most forms of transportation are subsidized. Good transportation infrastructure benefits the entire economy, so governments subsidize it. The fact that people can travel between cities easily and quickly facilitates business.
> China's railway is in a staggering amount of debt due to mass overbuilding
HSR is heavily utilized in China. A lot of the continued rail construction is because existing lines are butting up against capacity constraints.
> Products for export, yes.
I'm talking about products in their own shops. Chinese consumers have access to a much wider array of consumer products than Americans have.
> private consumption accounts for just 39% of the economy
Now, you're mixing completely different topics. Lower spending on consumption isn't because there aren't products on the shelves. It has to do with things like Chinese people's propensity to save, China directing more of its GDP into investment, and on the flipside, the United States' trade deficit.
Most forms of transport aren't subsidized. Air travel and road travel isn't. Cargo shipping isn't.
> The fact that people can travel between cities easily and quickly facilitates business.
Governments like claiming this but dig in and you'll find they have no robust evidence for it. It also just fails a quick reality check: if it were true then passenger railways would be profitable in their own right, as businesses would be happy to buy tickets for employees at their true costs. Yet passenger rail is never profitable and what we see in reality is lots of workers preferring to work from home than take even the subsidized railways into the cities.
You can argue for trains as a lifestyle thing, maybe even an environmental thing although EV are changing that. But you can't argue for them economically.
> HSR is heavily utilized in China.
HSR is famously mostly empty in China. Go read accounts of anyone who has travelled on the newer lines.
> Lower spending on consumption isn't because there aren't products on the shelves
Nobody stacks shelves with products that will never be sold. Lower spending on consumption means the goods are being exported, and Chinese people aren't buying what they make because they don't have enough trust in the system to do so. Hence so much money being ploughed into real estate bubbles (an attempt to save money in something that's hard to confiscate).
> Air travel and road travel isn't. Cargo shipping isn't.
I don't know about cargo shipping, but both air and road travel are subsidized (and I strongly suspect the same is the case for cargo shipping).
> It also just fails a quick reality check: if it were true then passenger railways would be profitable in their own right, as businesses would be happy to buy tickets for employees at their true costs.
What you're effectively arguing is that the only way to measure whether basic infrastructure has positive externalities is to ask whether it turns a profit. By that argument, all government spending on infrastructure is wasteful - a position that I think is obviously wrong.
> HSR is famously mostly empty in China. Go read accounts of anyone who has travelled on the newer lines.
I've traveled on Chinese HSR many times. It is extremely heavily used. Trains are usually packed. I've had to buy first-class tickets before, simply because the regular carriages were completely sold out (luckily, first class is not too expensive on Chinese HSR, and the upgrade is definitely worth it).
What are you basing your impression of HSR being empty on? Are you basing that on newspaper articles in Western press, on first-hand experience, on data, or on something else?
> Nobody stacks shelves with products that will never be sold.
You began by comparing China to the USSR, and talking about Yeltsin was shaken by the abundance of consumer products in the US. This comparison just completely fails when it comes to China. The China of today has a crazy abundance of consumer goods for sale. The malls are full of every type of shop with full shelves. There are packed markets with stalls selling everything. You can buy pretty much any consumer product you can imagine on your smartphone. There are endless numbers of couriers driving on electric scooters throughout every Chinese city, delivering people's online orders. Your image of what China is like is just completely out of date.
the low consumption as part of GDP also has to do with different ways of reporting GDP. they dont include some government funded services in the consumption share of GDP, when similar services are included in other countries consumption shares.
china consumes 30% of cars, 20% of mobile phones, 40% of televisions, 25% of furniture, etc. in basically every consumer category they exceed 20%. how can that be true and at the same time they have an abnormally low "true" consumption rate?
https://www.project-syndicate.org/commentary/china-household...
https://asiatimes.com/2023/11/consumption-in-china-is-it-rea...
From an East Asian perspective what China is doing really isn't anything new and with the same pitfalls as the former Asian tigers.
>our system is the best because we're the best, because of the system we have.
This isn't what's happening at all. The causes and reasons why infrastructure and Western cities are so bad have been studied for decades and are well known, just as we've been studying what makes Tokyo or Hong Kong work so well. People are constantly critiquing the underlying system of incentives and entangled interests, you can hundreds of popular threads on HN, Reddit, MSM, hell even with Elon Musk's DOGE.
The only time when I see the mythical self-convinced westerner evoked is precisely when critique of other cultures come in, often from cultures that feel a need to constantly defend themselves.
People forget that China existed before communism. Hell only Mao's idiotic experiment only lasted a few decades. China has always been capitalist. It's why you can find a store run by Chinese expats in the middle of the Suriname jungle.
that cant possibly be true because capitalism has only existed for a small portion of the thousands of years of chinese history. capitalism doesn't just mean having stores, or having markets
> There's a type of Western mind that gets distracted by their scale, and getting to build things we built a century ago.
The thing is, overcapacity combined with the 996 week and labor exploitation can be used to outcompete any Western company - especially the old ones, who are spread around the country. Look at the supply chain of the established (i.e. everyone but Tesla) companies... dozens of manufacturing plants, thousands of suppliers, almost zero vertical integration because "manufacturing batteries, ECUs or windshield wipers is not our core competency, let Bosch do that".
The only car manufacturer in the Western world not following that is Tesla. They have only very few, but very large factories that vertically integrate as much as possible on site, which not only gives them the advantage of cutting out the middlemen and their profit margin but also allows for much, much faster iteration cycles when everything is done in-house with no bureaucratic bullshit associated with change requests.
Typically, a car model, its design and parts are fixed for around 2-5 years after the prototype manufacturing run, no changes are possible at all outside of maybe the software, unless the design change is necessary to meet regulatory compliance or if it's something horribly defective. Then the model gets a "rebrush" integrating a few changes, which lives on for another 2-3 years, and then a fully new iteration crops up. Tesla (and SpaceX) in contrast, they do iteration times of weeks.
The disadvantage of that model is of course spare parts logistics and repair training, because holding stock for hundreds of subvariants and iterations is all but impossible, and that shows in every statistic for Tesla's average body shop waiting time.
And to come back to China's automotive sector - they're copying that model of iterative speed just as well. We've seen them come from piles of junk barely roadworthy (or not road-legal in Europe at all) a few years ago to be able to fight heads-on with the European car giants.
Tesla may be better than traditional auto companies, however it is not the wonder people talk about. They take years to get a car ready, WHEN they can do it. Think about the Cyber Roadster and the long iterations to the Cyber Truck.
Vertical integration, or a company claiming to take ownership of its supply chain, needs the democratic miracle that is exclusive security of supplies and their logistical distribution. No American company is ever going to militarily secure natural resources or a nanostate territory for its profits. And that's why all American companies (or any traditional, humanist company) will fail to achieve profits which ensure business survival.
Don't ever go long on an investment in the democratic military-industrial complex, surely. Elon Musk's Tesla and SpaceX are like baby boomers disguising themselves as healthy young kids of the future. Don't be fooled or tempted by the likely spiked Kool-Aid drink. Partaking in the ideology of techno-commercialist futurism will yield a negative return on investment. As the conceptual dynamics of optimal manufacturing methods' soteriology, looked at through democratic aspirations, is nothing but booby trapped thinking. In other words, much more blunt words, Tesla's theoretical economics and strategy is a wannabe Mark Zuckerberg, especially when there's an impending giant rug pull in the investment arena.
thats a whole bunch of handwaving without any fact nor supported argument
Everything rationally dismissive of ineffective economics and technology always appears negligent in scientific duties. But I'm actually monitoring the situation with great attention and caution. Because this is a global context I'm referring to. Which the soteriological expectations of populist manufacturing science and also optimal operations research have botched, as part of a normally occurring natural selection that wants to purge away all unmotivated and unskilled students of economics at the Malthusian cliff limits that we're presently at.
As long as your side of the discussion hasn't loaded the debate with propaganda-rich religious expectations like the modern implementation of capitalism being on the road to perfection, some sort of leftist-progressive singularity possible with enough faith based endorsement and mere belief, then I'm willing to have an argument founded on facts. Otherwise, your sociopolitically biased school of economics will have to forever deal with me presenting grounds for arguments as thoughtless speculation, due to the skewed perspective your political incentives create. In other words, I have already given basic facts from which tentative socioeconomic engineering arguments can be made. Namely that liberal democracy's military-industrial complex is a poor attempt at satisfying the requirement for both secure and intelligent domestic commerce.
It's actually not rocket science: it's more like a real time strategy game like Command and Conquer. Because what base building ever occurs without an area being violently secured from enemy ganks and such first? And, abstracting from this illustration, unless Elon Musk plans to form a private military company for his Tesla and Space X ventures like a proper cyberpunk megacorporation character, we shouldn't expect actually competent or pure vertical business integration. Instead, we should be expecting a ghetto version of what capitalism truly is. Because the best players, our wealthy and powerful billionaires, are not really wealthy and powerful, if you look closely at what capitalism means and what it means without semantically corrupting political lobbyists like Keynesian economics, supply and demand formulations, and just horribly ineffective fascist socialism high school type proposals.
China’s debt load fluctuates if you consider just the central government, local governments, and SOEs owned by either the central or local governments. Then you have private sector debt. SOEs are where a lot of china’s shadow debt comes from (localities ask SOEs they control to fund public projects of their own books), this is what pushes China’s debt load over 100%.
There’s that and the LGFVs financed by land sales which are all off official balance sheets.
Debt in China is not a big issue, because Chinese banks are mostly owned by the Government. They can rearrange debt to deal with problems much more freely than Western governments.
while this is true, they also have to do a lot more management of capital than most and it's a very delicate balancing act. Already, you have issues with bank confidence and normal people getting fleeced by fradulent or overly risky financial products because of the government's interventions in banking.
Japan used to be activist towards in its banks too, and it was very good until it was catastrophic one day.
The existence of overly risky products is something observed in Western banking as well. And a catastrophe caused by the banking system is not unheard of in the USA. So I don't see how this is a problem unique to China. In fact they have much more flexibility to solve issues in this area.
In the US this model is called venture capital - build lots of things knowing lots will fail.
It's a model that creates big winners and lots of losers.
Ironically of course the other alternative is central planning which is a hallmark of communist economic systems.
> estimated to leave Chinese debt to GDP at 117%
Japan is 264%, Singapore 168%, the US 129%, France 112%, Canada is 107%, UK 97%, Germany 66%, Australia 22%, Afghanistan 7.4%, Kuwait 2.1%.
A debt ratio isn't particularly useful to know on it's own.
Not a great take - those factories are foreign owned ICE car factories. Hyundai basically underestimated how fast China's EV transition would be.
That's good news for China, full speed domestic EV production.
10-year old ICE car factories idling is a sign of success in their transition to NEV.
> China has more than 100 factories with the capacity to build close to 40 million internal combustion engine cars a year. That is roughly twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular.
Efficient yes, generates good quality of life for the average citizen? Not as much. Plenty the west can learn from China on how to do large public works though.
Quality of life for average citizen improved must faster in China that in the US during the last 40 years.
> it seems they've latched on to something that works better than even democracy and capitalism
Wouldn’t this just be plain old fashioned authoritarianism? America can latch on to this too, and we might based on how the Trump admin turns out.
No. One required component is plain old fashioned oversupply of labor. America doesn't have that because all employable people are too rich. China also has an oversupply of skilled labor like engineers, in part because the threat of poverty is a strong motivator to get rich. America also lacks that which you can see in capable young people doing arts degrees with no thought to their future income because it doesn't matter - they'll still live comfortably even on minimum wage.
> they'll still live comfortably even on minimum wage.
It's relative. Relative to the rest of the world (and China), you can still live comfortably on minimum wage.
You can still live comfortably on US minimum wage if your cost of living is like in China?
It depends on where you are. Metropolitans and provincial capitals are expensive, but some smaller cities are cheaper. But then the public service is worse and you kinda want to live closer to bigger cities. I don't know how much $$ you are talking about, but it's easy to figure that out if you can give me a city in mind and I can check the cost for you.
What question is this? With a US minimum wage with China CoL you are rich.
Definitely not in the major cities, like Beijing, Tianjin, Shanghai, and Guangzhou.
$7.25 minimum wage per hour at fed level. 40 hour per week and 50 working week you have 14,500 USD, or 105K RMB roughly based on exchange rate today.
105K RMB yearly is close to or above average even in the above cities.
for some state the minimum wage can be $15 or higher, this is wayyyy better than China.
It's not that life on minimal wage is comfortable, it's that we have been told for a generation now that 'just get a college degree and it will be fine'. Happily amplified by for-profit education investing a lot of money lying to young people (ads).
Ask your local waiter with a college degree if they would have studied something else if they got the chance. My experience is that many would.
> Ask your local waiter with a college degree if they would have studied something else if they got the chance. My experience is that many would.
The problem of bad choices is orthogonal to the problem you are describing.
My point is that it's an information problem, leading to (more) bad choices. OPs claim that people live happily enough on minimum wage is actually another example, hopefully no 17 year old reads it and thinks 'ohh so I can live comfortable on minimum wage'. If there is 17 year old reading this thread then I hope to be a counterweight:
'HEY 17 YEAR OLD! Get a sellable skill! English literature is probably not enough! Working for minimum wage sucks!'
In high school the administration specifically stated that just going to college was good enough. They encouraged people to get English, philosophy, history degrees if that’s what they wanted. If you’re 17 and like history class it seems like a logical next step. They didn’t tell you you won’t be able to find work.
still a bad choice. The US is not USSR, one can choose what they want to study or even don't study at all.
Sure, but it’s a choice heavily influenced by authority figures in your life. But yes strictly binary it is a choice. Thankfully the world is more nuanced.
There is an estimation of 11-30 million undocumented immigrants in the US. The biggest difference is that in the US they are working on fast food jobs, house cleaning, babysitting. Different priorities.
That’s an easy enough problem to solve if we had the appetite to solve it, why couldn’t we legitimize the roles illegal immigrants currently do right now with a Singapore style migrant worker program?
Probably because the average Chinese is far more skilled than your average illegal immigrant.
It's not just raw labor force. It's capable engineers, designers, architects, etc. How is illegal immigration going to solve this?
The amount of skilled people wanting to migrate to the US is almost infinite (unfortunately). If the US decided to open 20million green card spots, they would be filled.
If you bring in 20 million skilled workers, you'd have to bring in 200 million unskilled workers to support them.
To be clear, I think that there is an existing, legal migrant worker programme. They do most of the non-automated farm work in Central Valley California. Also, the Singapore system is a bit ugly if you look closely. I hope the US can do better.
If the Trump administration (or the Biden administration) tried to enact an industrial policy like China, I think they would fail. It's not easy, and plenty of authoritarian governments fail at it.