China's economy is bound to collapse.
Debate Rounds (3)
Reasons for my belief in a Chinese economic collapse
1. I believe that China's economy is going to eventually collapse for multiple reasons, one of those being their overproduction. China's economy has grown tremendously in the past few years and this appears to make it seem it will continue its prosperous progress, but they are growing too fast to regulate. This issue is most apparent with China's real-estate market, which makes up 15% of China's gross domestic product. There are many ghost towns in China as shown here http://www.zerohedge.com...
and yet the real-estate market continues to build houses that use up money and have almost no buyers, causing this money to go to waste.
2. Another reason I have for the eventual collapse of the Chinese economy is their demographics. Statistics and estimates show that China's population will decrease as their growth is projected to decrease as well. http://www.economist.com... . This problem is only magnified by the rapid aging of China's population as well. As of 2012 being about 194 million elderly people in the country; this is projected to grow to over 300 million by just 2025. This would cause for much higher need of spending towards social security and would make it very difficult for the Chinese government to maintain the population.
We will start will a little introduction and then address the points. China is the oldest of historical civilizations. It is the only civilization that was contemporary with the Pharaohs of Egypt that is still a viable society today. China has a 5000 year history of stunning successes with a few failures. It is by far, the most successful human society.
Dr. Will Durant said the following of China in the late 1930s. Dr. Durant is one of the greatest historians the world has ever known.
"No victory of arms, or tyranny of alien finance, can long suppress a nation so rich in resources and vitality. The invader will lose funds or patience before the loins of China will lose virility; within a century China will have absorbed and civilized her conquerors, and will have learned all the technique of what transiently bears the name of modern industry; roads and communications will give her unity, economy and thrift will give her funds, and a strong government will give her order and peace."
1. The real estate market. It is very difficult to relate the Chinese real Estate market to the West. Land in China is not owned in the traditional sense. It is leased on a long term lease from the government. This is exactly the same system used to a certain extent in the UK for Crown lands and used in Hong Kong today. China, in addition, has a "hukou" system which severely limits where the Chinese citizen can own property. In addition, in many Chinese cities, people are only permitted to have a single property even if they have the hukou for the city in which they live. In spite of the explosive growth of Chinese cities in the last two decades, immigration to cities in China is still SEVERELY limited.
The source that my opponent lists falls into exactly the same trap as others. The source assumes that China is just like the West and if people are not moving to the "Ghost cities" it is because they do not want to. This is nonsense. One single change of law from the Central government would fill those cities in a fortnight. China has much more control over their real estate market than Western countries have. A change to the hukou system alone, allowing "Country People" to move to cities, would cause a real estate boom that would last for a decade. As well, a change in the banking system, imposed from above, would also spark such a change. As a note, the existing downturn in the Chinese market is precisely because of such a change.
The Chinese have seen three "bubble bursts" in Real estate in the last 8 years. All of which were simply corrections.
2. The demographics argument. China, due to its one child policy, has a very inverted demographic chart. However, the one child policy served a purpose. Were this debate to have been held in the 1970s, the argument would have been that China"s population was growing so fast that they could never support the number of Chinese who would be born in the future. Instead, it is estimated that this policy alone reduced the population of China by about 200 million from 1979 to 2009. This policy, for your information, is supported by 76% of the Chinese population.This shows the level of control that the Chinese are able to exert over their demographics. The government recently relaxed the one-child policy because of the demographic problem that my opponent references.
Much of what is written about China"s economy starts with the assumption "the West"s way of doing economies is the RIGHT WAY." My opponent"s second reference is a good example. Yet this is not at all obvious.
Consider this from http://www.theguardian.com...
"As the international financial crisis has unfolded, there have been few starker contrasts than those between China, the US and the EU. Europe has combined loose monetary policy with little or no stimulus to the productive economy " the "austerity" approach. The result has been that the EU's economy shrank by 2% over four years " the UK's shrank by 4.4%. The US has combined loose monetary policy with a consumer stimulus delivered via the budget deficit. The result? The US economy has grown by 1.2% in four years. India, which followed the US model of a budget deficit delivering a consumer stimulus, saw its growth decline from 9.4% in the first quarter of 2010 to 5.3% in the first quarter of 2012." China"s history both recently and ancient speaks against the idea, which seems to be mostly wishful thinking from the Western nations, that China"s economy is about to collapse.
I would greatly like to thank the contender of this debate for his excellent response. He has some fantastic information and definitely knows what he is talking about.
You say that China has had many successes, which is true through its vast culture and scientific discoveries in ancient times. This has carried China well throughout history, they have had few, but they were disastrous failures that luckily for them did not result in their autonomy ending.
The quote my opponent mentions from Dr. Durant should be noted to have been stated in the late 1930's. This was a time that the nationalist party had control of China, not the communist party. http://www.chinaknowledge.de... This shows Dr. Durant most likely believed this if China were under the Nationalist party.
1. While it is true that the Chinese real estate market and almost all markets in China are far from that of western markets, overproduction is still a huge problem in any market. The reason people do not move to ghost cities is because they do not need to as the real estate market had simply overproduced, wasting money. My opponent also mentions about a change in law that could fill these cities in a fortnight. The question, however, is whether the farmers from rural areas would want to move and whether it could cause protest in a form similar to past protests in China. http://mashable.com...
I do recognize the real estate slow down in China, but I must stress that damages to the market have already occurred.
2.The one child policy is an interesting debate in itself as it is argued whether it did as much to the population at all or whether it was a natural decrease seen in many similar countries like it. Some believe it had a MASSIVE effect http://apps.washingtonpost.com... while others believe do believe in its minor effect http://io9.com... This shows that the relaxing of the one-child policy might mean nothing. My opponent has not attempted to refute what I said about China's massively growing elderly population, so I must assume he concedes to my point there. The shrinking population combined with the aging factor of the population would provide for a much smaller workforce greatly hindering the Chinese economy.
The west does not always do economics the right way nor does anybody because there is simply no right way. There are wrong ways but no so to speak "right way". My opponent brings up the rest of the failing world, and these failing economies in the world greatly affect China as well, being extremely entangled in this "world economy". I do not believe the rest of the world will succeed, but do believe that China is destined to fail with their major issues.
I did not say the Chinese had many successes. I said, essentially, for the majority of human history, China was the dominant society on earth. Even during Roman times, the Chinese were impressed at how far the West and in particular Da Qin (Rome) had progressed. More than this, many of the inventions you know like the printing press (Gutenberg 1450 - Bi Sheng 1048) were actually pre-existing in China for hundreds of years before the West "invented" them.
Your response to my quote simply shows you are unfamiliar with Dr. Durant and his thought. Dr. Durant constantly criticized society for thinking in short time spans, "Most of us spend too much time on the last twenty-four hours and too little on the last six thousand years." There is NO WAY that Dr. Durant's quote had anything to do with his present government of China. China's governments have changed for 5000 years. China remains.
1. Real Estate Arguments: Again, you are making the same mistake most people unfamiliar with China make. Overproduction is not possible in the short term on a country wide scale if everything were open. China has 1.3 - 1.5 Billion citizens. China has a vast housing shortage. It also has a vast housing glut. This glut is primarily caused by corruption which is a perennial Chinese problem (like everywhere else). But China also has a history of dramatic and effective action when moved toward instability. This means the government will start executing the corrupt business men and corruption will be reduced dramatically when the pressure builds sufficiently.
As to the farmers moving, of course most will not move. But 20% of them is equivalent to the population of Russia. The urban resident (if he holds a hukou) has many many advantages over the rural Chinese in their lives. A "country" woman who marries a "city" man (has an urban hukou) thinks she has won a lottery. One change of the hukou system could move 100 million more people into cites creating a vast and almost instantaneous urban housing shortage.
2. Demographics Arguments: I certainly did refute the demographic argument. I showed China, again, has a history of taking drastic and effective action against demographic anomalies. While I do not want to get off on to the topic of the effectiveness of the one-child policy., the article that was provided shows a marked lack of understanding of subject (comparing the vast rural Chinese population to Taiwan or Chinese Americans?). I would assume this is because the author of the article is a pop culture writer and not a Sinologist. In any case, the article is highly flawed. Could you provide another from a more authoritative author?
The elderly problem is a problem but certainly not as great as in the West. Chinese society is based on Confucian values which places Filial Piety (Respect for family) as the highest human virtue. This will certainly not cure the problem but it will ameliorate it.
But the fact remains that China has far more powerful weapons to deal with its economy and demographics than do the Western nations and a far greater success rate. They are not only prepared to take more dramatic steps for control but their population is far more likely to understand those steps.
We are blinded by our short life spans to see only the last century or so. We are also influenced and hindered by a general European Philosophy that places the individual above the collective society. China does not suffer from this.
China is the Wayne Gretzky of Nations. It has an unrivaled history of success notwithstanding a couple of bad centuries out of the 50 or so of its existence. Our proximity to these centuries blind those who can't see with "Chinese Long Sight" eyes. The Chinese undertook building projects that required 250 years to complete. That the West still hasn't learned this, is why I fear our failure far more than I do China's.
Nuvemurbem forfeited this round.
OracleOfReason forfeited this round.
1 votes has been placed for this debate.
Vote Placed by Ameliamk1 2 years ago
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