China more capitalist than the USA

With the USA becoming more socialist, and China more capitalist, it was inevitable that they would cross over.

And so today we see that private property rights in China are more secure and respected than in the USA.

Which means that in a little while, the average Chinese will be richer than the average North American.

At present, Chinese cars per capita is 21% of the US, electricity per capita is 29% of the US, and most middle class goods are roughly similar, which suggests that Chinese GDP per head is somewhere around a quarter or so of US GDP per head, despite optimistic US figures to the contrary. Since Chinese GDP is rising at about 10% a year, while US GDP per head is probably falling, despite official figures supposedly showing that it is rising, individual Chinese should be richer than individual North Americans after 2026 or so, assuming both countries continue on their current paths for that long, China continuing to head towards capitalism, and the US continuing to abandon it.

24 Responses to “China more capitalist than the USA”

  1. spandrell says:

    Dude you should read my blog.

    China’s GDP won’t be growing 10% ever again.

    • RS says:

      If so the reason is oil — not some supposed huge difficulty they are going to have in switching over to a more domestic consumption picture.

      After all the /entire scheme/– building a rich economy from unimproved human and material factors — /is/ a huge difficulty. Everything they do is a huge difficulty, already.

    • jim says:

      Yes, I read it.

      I don’t agree. I don’t think it is a brain drain. I think it is the cypherpunk economy. Someone who is big wheel in China legally moves out so he cannot be shaken down, but continues to run his businesses through a Bermuda corporation and vpn that runs through Bermuda – the traffic on the corporate vpn is Chinese businessmen talking to Chinese businessmen and workers about wealth creation in China. He buys an Australian passport, while spending 360 days a year in China. He secretly owns a Bermuda corporation, which openly owns his businesses in China. His instructions and business dealings flow through a server located in Bermuda, but originate from some place in China, and arrive at some place in China.

      Australia has recently introduced a new visa deal aimed at rich Chinese, and one the biggest attractions of the deal is that the recipient does not actually have to spend much time in Australia, or indeed any time in Australia. He becomes an Australian businessman, who just happens to be visiting China while performing consultancy services for a Bermuda corporation. It is a flag of convenience visa, much like the Bermuda corporation consists of a PO Box and a server.

      Chinese businessmen are not actually moving to Australia, and Chinese corporations are not actually moving to Bermuda, any more than ships are actually operating out of Liberian ports.

      • spandrell says:

        You got a link on that?

        500.000 savvy Bermuda businessman per year? Right. China doesn’t have 500k businessmen in total. People really overestimate the size of the private sector here.

        I understand the appeal of an awesome China who is going confront the Cathedral and show what’s right. But there’s no saviour. They are making TV shows on how China doesn’t discriminate AIDS patients anymore. If they enforced the tax code this would be Sweden on steroids.

        • Nick Land says:

          Since the beginning of Opening and Reform, the Chinese economy has been based off-shore (cycled through Hong Kong). That’s what Hong Kong is for. It’s also a model for the future of the world, routing everything that works around the inertia or dysfunction of large-scale political entities. Expect most of the US economy to find a way to do the same — otherwise it goes down with the homeland. (The French economy is already 2/3rds of the way there, ditto Greece, etc.)

          • James James says:

            (The French economy is already 2/3rds of the way there, ditto Greece, etc.)

          • James James says:

            “(The French economy is already 2/3rds of the way there, ditto Greece, etc.)”

            2/3rds rerouted, or 2/3rds going down?

          • Nick Land says:

            Sorry, that was ambiguous — re-routed, but the 2/3rds figure is no doubt rhetorical exaggeration (plucked from where the sun don’t shine). Basic point, though, is that French (or even Greek) capitalism is doing fine, as long as it isn’t happening in France (or Greece).

            • jim says:

              I don’t know how things are happening in Greece. I know that France offers highly favorable terms and conditions for foreign rich people and foreign businesses, with the unsurprising result that French rich people and French businesses find ways to be foreign. From time to time the French government tries to stop them from doing this. I have no idea how effective their efforts are.

              The US government tries to ban this sort of thing, with the result that all sorts of interesting businesses will refuse to deal with you if you present to them under your US identity. I have no idea how effective the US is, except that they are probably more effective than most other countries. On the other hand, when last I heard, Microsoft made all its profits in Ireland, and all its losses in the US.

        • Nick Land says:

          “China doesn’t have 500k businessmen in total.”
          — I don’t think you’re looking at the right thing. The important figure is the total stock of ‘Chinese’ diasporic (off-shore) capital, which by its very nature in deeply encrypted. There are millions of capital-accumulating Chinese entrepreneurs, although whether or not they are PRC citizens is a matter of momentary practicality rather than significant identity.

        • jim says:

          I see smart people moving to China, not out of it. What are you doing in China? Once an elite Chinaman has a few passports under his belt, he usually somehow winds up spending quite a bit of time back in China. An acquaintance of mine had a wife in China and a wife in the US, and spent a hell of a lot of time in the air.

          Maybe he spent more time in the US than in China, for the reasons you list, but when in the US, he was organizing deals in China.

          If they enforced the tax code this would be Sweden on steroids.

          If Sweden enforced its tax code, Sweden would be Sweden on steroids. Legally China is still communist, and Australia is still a prison colony. Laws represent aspirations, rather than reality. This becomes more obvious when they represent past aspirations, rather than future aspirations.

          • Nick Land says:

            “Once a elite Chinaman has a few passports under his belt, he usually somehow winds up spending quite a bit of time back in China.” — That gets to the core of the phenomenon. Vancouver is full of Chinese families, with the husband back nearly full time in the PRC making money, and the wife running some kind of Potemkin boutique store that justifies the (investment based) Canadian residency requirement.

            China is a great place to work (Spandrell might have more reservations!), but it’s not a place to park your assets. As the Party matures into a new pragmatic elite, my guess is that it’s behavior will become increasingly indistinguishable from that of the earlier waves of HK and Taiwan investors — register property off-shore, but put it to work on the mainland.

            “Laws represent aspirations, rather than reality.” — There are the laws required for political PR, and the laws that really make things work. The PRC’s ‘one country, two systems’ set up basically formalizes that in a sensible way, allowing for functional capitalism with a socialist face. The US would benefit from similar cynicism (the electorate are clearly dopey enough to buy it).

  2. spandrell says:

    ” The important figure is the total stock of ‘Chinese’ diasporic (off-shore) capital, which by its very nature in deeply encrypted.”

    Well if those count then China has had millions of entrepreneurs since the 17th century. Happens that instead of investing the money on tin mining in Kuala Lumpur they are building toy factories in Dongguan. Swell. The future is here.

    ” An acquaintance of mine had a wife in China and a wife in the US, and spent a hell of a lot of time in the air.”
    Half of Hong Kong men have that. No big deal. The fact that chinese women are selling themselves as concubines to whatever fat ass can afford a Prada bag doesn’t strike me as sign of the future either.

    “What are you doing in China?”
    Selling stuff that people don’t need. What else is there?
    I speak the language, and like moving around, I didn’t came here to make big bucks. Not that I could if I tried.

    I get it that the big-biz Bermuda-banking fellas are all coming to China, bribing some local official and building factories and what-not. But how many of those are they? Those passport-collecting chinese ‘elites’ are crooks who spend most of their money buying Chinese medicine to cure their livers from the endless drinking and whoring with party officials they spend most of their time in. You should meet my boss. Now that you say so he probably has an account on the Bermudas.

    Why do you cheer for that? Perhaps I have a distorted image and you are a loaded VC, but I don’t think non-elite people like you are enjoying superior freedom and lifestyle here. They are being screwed all over the place. I do think capitalism is superior to socialism, but 1900 robber barons are not my friends.

    And I stand by my assertion that after 1900 came 1933. HK and Singapore will go socialist before you know it.

    • jim says:

      The fact that chinese women are selling themselves as concubines to whatever fat ass can afford a Prada bag doesn’t strike me as sign of the future either.

      In America, about fifty percent of women are married to Uncle Sam the Big Pimp, and about fifty percent of children are fathered by Uncle Sam the Big Pimp. While the best system is doubtless that commanded by Paul, a bit of concubinage is way better than Uncle Sam the Big Pimp.

      I get it that the big-biz Bermuda-banking fellas are all coming to China, bribing some local official and building factories and what-not. But how many of those are they?

      Enough to run the economy.

      It appears to me that most new and high tech production is mediated by Chinese that are actually or purportedly overseas Chinese.

      Cypherpunk capitalism is necessarily cryptic and unobtrusive, uses indirection, and avoids generating statistics. But I frequently hear it said that most Chinese production is organized by businesses that are not legally Chinese. I don’t have any good information on this, and I don’t think anyone has, though you likely have better information than I do. It is more an odor in the air. If you think about, it you will smell it also. If you don’t think that there are a lot of overseas Chinese in China, you will think that a lot of the organization of production in China nominally goes through overseas. There is always a Hong Konger or a vpn to a server located outside China or such somewhere in the loop. If you really don’t smell it, perhaps I am wrong.

      I don’t think non-elite people like you are enjoying superior freedom and lifestyle here. They are being screwed all over the place.

      True, but look which way the wind is blowing. I am not seeing a brain drain, you yourself are evidence which way the wind blows.

      Consider how much money was pissed away in the great mortgage scam. Americans are also being screwed all over the place, just the bill has not yet come due, in part because China has not yet declined Uncle Sam’s no limit credit card.

    • jim says:

      1900 robber barons are not my friends.

      And I stand by my assertion that after 1900 came 1933. HK and Singapore will go socialist before you know it.

      Actually 1900 robber barons were your friends: Everyone’s favorite example of an evil robber baron is Standard Oil, which robbed people by improving refining technology further and faster than any of its competitors, thus forcing down the price of petrol lower and lower to prices that made its competitors uncompetitive. 1933 put an end to such evils.

      The Chinese economy is what it is because run largely by robber barons, and you are in China because the Chinese economy is what it is.

      Hong Kong and Singapore may well go socialist, as part of the universal world wide triumph of progressivism, but Zimbabwe, the Congo, and Germany cast doubt on the proposition that this is due to natural internal forces.

      • josh says:

        Enjoying this discussion, but I would like to add that nobody was more responsible behind the scenes for 1933 than Standard Oil itself. These people are not your friends.

  3. in columbus says:

    China’s new millionaires are not plucky bootstrap types. They are relatives or spouses of high-ranking party figures who have figured out how to featherbed public works projects. The level of fraud and nepotism in the Chinese business world makes America look pristine by comparison. The lower and middle classes are forced to save a certain percentage of their income in government banks, and then the insiders fleece the investments these banks make.

    http://brontecapital.blogspot.com.au/2012/06/macroeconomics-of-chinese-kleptocracy.html

    http://www.newyorker.com/reporting/2012/10/22/121022fa_fact_osnos

    China is facing demographic disaster because of the one-child policy, they’re investing in crap and getting ripped off by their ruling class, they’ve got no transparency or rule of law, and they have regional tension between the east and the west that is unbelievable.

    • jim says:

      China’s new millionaires are not plucky bootstrap types. They are relatives or spouses of high-ranking party figures who have figured out how to featherbed public works projects

      The richest guy in china, Zong Qinghou, manufactures and advertises soft drinks. He was the child of a rural teacher. He had a menial job in a minigrocery selling milk. He founded his business by borrowing a modest amount of money from friends of his mother, who were also teachers. With the borrowed money, he made soft drinks and sold them, and his business grew from there.

      The second richest guy in China is Robin Li, the child of factory workers, who went off to America to further his education and get a job in programming computers. He went back to create a Chinese search engine, imitating Google.

      Both of these people are self made men who started at the bottom, the richest guy, Zong Qinghou, being the purest and most extreme example of a plucky bootstrap type.

      they’ve got no transparency or rule of law

      Angelo Mozillo, Jon Corzine, Jamie Dimon, James A. Johnson, Franklin Raines and the rest are not going to jail. The equivalent people in China do go to jail. So I would say they have a lot more transparency and rule of law than we do.

      John Corzine, rotating from regulator to financier and back again, participated in innumerable scams, and finally just plain outright looted the depositors who had money with MF Global. Angelo Mozillo, finding he had a pile of worthless loans on his hands, bribed James A. Johnson and Franklin Raines of the government sponsored enterprise Fannie May to buy them at face value, putting them on the taxpayers tab. In China, they would have shot Johnson and Raines, and jailed Mozillo and Corzine.

      I hear it said that public works projects in China are padded to substantially above fair value. If so, they are doing a lot better than the US, where federal public works projects are typically padded to many, many, times their fair value.

      • spandrell says:

        The Wahaha guy is a fucking political delegate. He wasn’t born connected, he just worked his way into fooling Danone for a JV, then screwed them, got the money and bought political influence with it. A pretty common story, I wouldn’t make a hero out of him. Still he’s from Zhejiang, the only region with some entrepreneurship, so I’ll grant him that.

        Robin Li has a nice monopoly in Baidu where he offers free downloads of any piece of IP in the world, got Google kicked out of China when he was struggling, and now enjoys a nice monopoly where he directly charges money for search rankings.

        Yes, sure they’re smart and hard working, but what value are they creating? Scamming your way into making money, then using it to buy influence to make some more is not my definition of a capitalist hero. Hell Rockefeller at least refined oil as you said.

        The people who get shot here are scapegoats. No really rich guy has ever been shot here, if they steal so much that the public outcry gets messy, they get to a fancy prison in the outskirts of Beijing. You only get busted if you upset the balance of power. A low profile dude as Corzine would still have his job in China.
        The whole of Washington DC doesn’t have the amount of Ferrari’s that a stinky country city has here.

        • jim says:

          got the money and bought political influence with it.

          The Wahaha guy made money first, then bought political influence with it. Have you noticed what Apple and Google have been up to? By and large, the political corruption seems substantially less in China. Where is the Chinese equivalent of John Corzine or Moodys?

          America is roughly as socialist as China is communist, but China is now more capitalist than the US, and getting more capitalist, while the US is getting less capitalist.

          Yes, sure they’re smart and hard working but what value are they creating?

          The Wahaha guy made drinks that people liked when he was a nobody and had no connections and he is still doing it, the the Baidu guy made search algorithms that produced search results that people liked when he was a nobody and had no connections and he is still doing it. The Baidu guy’s CV is search algorithm development, not influence peddling. Drinks and search algorithms have value.

          got Google kicked out of China

          Google was kicked out because it serves the US Government by censorship, spying, and promoting US Government politics, while Baidu serves the Chinese government by censorship, spying, and promoting Chinese government politics.

          A low profile dude as Corzine would still have his job in China.

          John Corzine is high profile, not low profile. There are no similarly high profile criminals still alive and free in China.

  4. Red says:

    I can say one thing for sure: If that duck farmer was an american he likely be dead right now if he refused to be arrested. American cops are approaching soviet levels in brutality.

    • jim says:

      In the comments on the duck farmer there was a lovely exchange:

      macpappy:

      I am surprised to find out that they can have private property in Chinia.

      19RANDY59

      You’re really gonna be surprised, when you find out you can’t have it here

      The comments are full of crimethink. I think a lot of heretical blogs must be linking to it.

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