China holds the world's largest USD foreign exhange reserves 2

[aelf]

No point arguing, we are both zealots of our disciplines who wont change opinions

I don't think I'm a zealot. My judgments are not unfounded, as I used to stand on the opposite side of the spectrum after all. And I'm not sure we disagree entirely. But I don't know what you think. If you're a die hard capitalist or neo-liberal, like certain people in this thread, then yes, you will never agree with me.

 

[El Koeno]

Did you actually read anything, or do you assume that everything is just rubbish because it's teh internetz?

I skipped the parts on the submarines. Not because they were rubbish, but because the posts were quite long, and I'm not terribly interested in Chinese submarines. I read every single corruption post on the first page, and started skipping a few on the second page, as it was just regurgitation of the same arguments. Add to that the nasty tone, and you get what I call a flame war.

I wouldn't call the content of the discussion itself rubbish, just the way in which the discussion is done. I'm sorry if I did not make that point clear enough in my first post.

 

[aelf]

Well, I tried my best. I offered more content than ad homs... Unfortunately, one can't always offer content if it's reciprocated with willful ignorance.

 

[devilhunterred]

Just to clear things up a little, despite what Americans frequently claim and imply, US does not have a free market economy. It's very much a mixed economy, identical to China, Canada, Russia, Japan, etc. Aelf is correct that the only difference lies in the degree of government control. Naturally, the Chinese economy has more government control than the American economy does, but not by a significant margin.

The truest and "freest" free market economy today is actually Hong Kong, and it has been for 7 consecutive years.

 

[Fayadi]

Chinese economy has more government regulation than the American economy BUT
there is a big BUT. The Chinese government spending as a percentage of GDP is lower than US government.

http://www.heritage.org/index/Country/China#government-size

Spending as a percentage of GDP
Chinese government - 30%
US government - 36.7%

And yes you are right with Hong Kong,

Hong Kong government - 15.2%

However Singapore's number is lower,
Singapore government -14.4%

I am fine with sensible government regulation. It can encourage entrepreneurship, strengthen property rights and law, increase product safety etc as long as it that does not impose policies that make it difficult for people to start and operate a business.

I am fiercely opposed to high government spending as a percentage of GDP though.

It is a big folly though for anyone to criticize the concept of free-market. In reality, there is no true free-market. It all depends on the higher or lower degree of economic freedom. There is no fixed set of rules how capitalism economy should be run. There is something absolute however - No free-market = Everything is owned by the government (things that come to mind are : Socialism,Communism, Palace economy or probably some other "ancient" economic system).
Criticizing something that is of non-existent is laughable. The dumbing down of younger generation I would say.
Singapore does not practice free-market when it is ranked the 2nd freest economy in the world? If only all ignorant people can be humble about his ignorance.
In absolute terms, there is no true free-market in any country in the world. In relative terms, Singapore is far far more "freer" than most economies in the world. But as someone says, this is the internet.

 

[yesboii]

Chinese economy has more government regulation than the American economy BUT
there is a big BUT. The Chinese government spending as a percentage of GDP is lower than US government.

I absolutely have no idea if this is true but even if it was, its obvious that these regulations are in no way being enforced.

Look at all the product scandals that China has faced over the past couple of years.

 

[aelf]

The Singapore government simply controls the economy through private companies that are linked with it. Anybody in Singapore knows that. So the real number is definitely higher, although it is very far from being socialist.

 

[devilhunterred]

Yeah, explain this one to me too. The free market is a better allocator of resources than any command economy, unless the command economy was headed by God, and even with God behind this command economy, its efficiency would only be equal to that of the free market.

The only command economy in the world today is North Korea.

China has been mixed economy for almost 40 years now.

 

[Tee Kay]

The Singapore government simply controls the economy through private companies that are linked with it. Anybody in Singapore knows that. So the real number is definitely higher, although it is very far from being socialist.

You mean like Temasek Holdings?

 

[devilhunterred]

Really now? Even more than China?

Yup. Note that I used the term "protesters".

China certainly has a large ammount of people against the US war in Iraq (actually, pretty much the entire world is against the US war in Iraq), but unlike Japanese and South Koreans, the Chinese don't bother to oragnise anti-Iraq war protests and demonstrations.

Strangely, I heard the exact opposite in Otawara, my hometown. If remember correctly, the only people with problems with the American military bases are the areas nearby those bases, especially Okinawa.

Well, you remember wrong.

I have never been to Otarwara. Though the majority of the locals I have talked to in Tokyo and Nagasaki all wish the American influence and military prescence in their country to cease. I don't think I need to tell you that Japanese people are quite nationalistic.

Here's a link that says most Japanese citizens appreciate American bases for security reasons.

http://www8.cao.go.jp/survey/h14/h14-bouei/2-6.html

Posting a link to a Japanese website in an English forum isn't exactly useful......

Anti-Americanism is not fierce in Japan. Japanese people love Americans. Perhaps the people you were talking to were mainly American haters. If you talk to most Japanese people in Japan, they will have nothing but great respect for American culture and American people.

Yesboii you neither speak nor represent for the entire Japanese people. Simply because you love America is not an indication that all Japanese people love America.

Again, your statement of "all Japanese people have nothing but great respect for American culture and American people" is your personal subjective opinion, not a fact.

And besides, if Japan wanted the US off its soil, you don't think it would have happened by now? The Japanese Self-Defense Forces are one of the most well-funded militaries in the world. Its not like we are sitting ducks without the US.

The Japanese government has allowed US military to continue to remain their prescence in Japan not because the JSDF is weak and the national security of Japan is in jeopardy. This is merely a diplomactic move, a sign of friendship between two nations, as US is still Japan's second largest trading partner behind China.

 

[aelf]

You mean like Temasek Holdings?

Not just that. Most of the infrastructure is also controlled by 'private' companies like SMRT (city trains and buses), SingTel (telecom) and Port of Singapore Authority International (yes, it's an Authority, Private Limited). Even the bank OCBC has some government links (my ex-classmate's dad is the minister of defense and his wife's dad was the chairperson, and I believe she inherits his influence there).

The defense is that these companies have to be profitable, unlike nationalised industries. But, still, so many big government-linked companies inevitable means a considerable measure of government control of the economy, especially in such a small country. I'm not against that per se, just noting that Singapore is not really going to fit the bill of freest market in reality.

 

[devilhunterred]

That's something new. I never knew that the Singapore economy is so nationalized.

 

[Fayadi]

How can centrally planned economy be effective? How can allocation of resources be effective without a common price system in all areas? How can government know which investment is good and compare it with others in terms of returns if there is no free market to determine the prices of the areas the government decides to invest in anyway?

Actually the poster you quoted is using a very totally irrelevant example to advance the idea of "Command Economy".

Fact is:

1. Chinese government has been privatizing state companies since its inception of reform to now.

2. Government spending as a percentage of GDP has fallen since the 1979 reform. Chinese government spending as a percentage of GDP is lower than even the US government.

3. Agricultural output in China got a rocket boost when farmers are allowed to trade their products in the market freely after the reform.

Quote from wikipedia about Chinese Economic Reform

The reforms of the late 1980s and early 1990s focused on creating a pricing system and decreasing the role of the state in resource allocations. The reforms of the late 1990s focused on closing unprofitable enterprises and dealing with insolvency in the banking system.

Protecting industries from international competition( infant industry argument) and currency manipulation hardly qualify a country with Command Economy system. It is just an economic system that is pragmatic. Even USA practice that too (USA practice currency manipulation in 1920's). Nobody is calling USA a country with Command Economy yet.

Doing business in China is taxed at a lower rate than most developed countries. China also has abolished its welfare system after the 1979 reform.

Now if a certain people who is pro-Command Economy started giving the argument that command economy works because China is growing. His analysis is inconsistent with the facts.

The ability to keep more of your own money (less taxed) is an indicator of how free an economy is. In this regard, China does not tax like social democracy or socialist state.

 

[yesboii]

@devilhunterred

Well, the link I sent was an article that was a survey conducted on how the Japanese people felt about American bases in Japan. (Sorry! I thought you could read Japanese!) And each survey conducted shows that a majority of Japanese people support American military forces stationed in Japan. I'll translate it later for you when I have time.

I have never been to Otarwara. Though the majority of the locals I have talked to in Tokyo and Nagasaki all wish the American influence and military prescence in their country to cease. I don't think I need to tell you that Japanese people are quite nationalistic.

Likewise, the people you've talked to in Tokyo and Nagasaki are not representative of the Japanese people as a whole.

Well, you remember wrong.

You presume too much.

devilhunterred, Tokyo =/= Japan. Tokyo is way more liberal than the rest of Japan and Nagasaki has an inbred distrust for Americans.

EDIT: devilhunterred, I'll admit. My hometown has close relations with an American city in California, so perhaps that is the reason why we are more pro-American. But if you have any proof that Japan doesn't like American forces in Japan, then please show it.

 

[aelf]

Actually the poster you quoted is using a very totally irrelevant example to advance the idea of "Command Economy".

Fact is:

1. Chinese government has been privatizing state companies since its inception of reform to now.

2. Government spending as a percentage of GDP has fallen since the 1979 reform. Chinese government spending as a percentage of GDP is lower than even the US government.

3. Agricultural output in China got a rocket boost when farmers are allowed to trade their products in the market freely after the reform

Protecting industries from international competition( infant industry argument) and currency manipulation hardly qualify a country with Command Economy system. It is just an economic system that is pragmatic. Even USA practice that too (USA practice currency manipulation in 1920's). Nobody is calling USA a country with Command Economy yet.

Doing business in China is taxed at a lower rate than most developed countries. China also has abolished its welfare system after the 1979 reform.

Now if a certain people who is pro-Command Economy started giving the argument that command economy works because China is growing. His analysis is inconsistent with the facts.

The ability to keep more of your own money (less taxed) is an indicator of how free an economy is. In this regard, China does not tax like social democracy or socialist state.

Do you know the meaning of command economy? If the state allocates resources to a certain sector, against what is allocated by the market, there is an element of command economy there. Resource allocation is not completely determined by the state, but it is determined by the state to some extent.

I'm not the only one here to say that all economies in the world are mixed. But you would insist that some are completely free market.

 

[El Koeno]

Actually the poster you quoted is using a very totally irrelevant example to advance the idea of "Command Economy".

Fact is:

1. Chinese government has been privatizing state companies since its inception of reform to now.

2. Government spending as a percentage of GDP has fallen since the 1979 reform. Chinese government spending as a percentage of GDP is lower than even the US government.

3. Agricultural output in China got a rocket boost when farmers are allowed to trade their products in the market freely after the reform.

I won't argue with the third point, which is in my field of expertise and spot on.

The other two points I know less about, but I do know that there isn't a clear line between private and state controlled in China, as there is in Europe. I think many companies that are officially privately owned are still to a large extent controlled by the government. This is based on what I read in "The Economist" which I must admit is not a very objective source of information about China, but I have yet to find a media outlet that is unbiased regarding China (CCTV and the China Daily certainly aren't ).

Anyway, this makes a statement as "Chinese government spending as a percentage of GDP is lower than even the US government" meaningless. Government spending does not properly reflect the amount of control they have in this case.

 

[Fayadi]

I have never advocated that Chinese government does not significantly control the economy. I am fully well aware that many Chinese strategic companies are a mix of state/private such as China Mobile, Sinopec, CNOOC.

What am I saying is that the direction in which China is heading is not towards more Command Economy, it is more to Market Economy.

Having said that, the concept of "Market Economy" does not equal "Free Market".
In a modern economy, government regulation is essential. Denying that will be at odds with reality. Free Market advocates that beside the protection of rights and private property, government should not make any regulation to interfere with the market. This does not work in 21st century. I have stated that already by saying "In absolute terms, there is no true free-market in any country in the world." earlier. Free Market in its pure form is incompatible with modern society.

But the purpose of my post then was to clarify a possible misperception. A socialist poster is trying to bring the "China is growing" example to bring a real-world example of a successful command economy. When in fact, China started to grow rapidly after rapid liberalization. Chinese economy is as mixed as USA or most countries in the world today, I have never made any statement to disagree with that.
I do not deny that there might be some elements of command economy. But,
we should judge a nation by which direction it is going. China is going towards more Market-Economy not more Command-Economy. Its direction determine its actions. Its action of more liberalization is the most significant element for its rapid growth. I seriously think China should not be used in this scenario as an example.

Government spending indicates how much citizens are being taxed. Low tax does not equal smaller government control. But it is one of important indicator of economic freedom. You are freer to keep more of your own money rather than being taken away from the government. For all this talk about government controlled companies. If those companies are doing their job well. Who cares?
China Mobile does not overcharge its citizens, CNOOC and Sinopec are going overseas aggressively to tap oilfields and they charge oil prices below world market. Unless big state companies are doing things that are stupid, it should not be a talking point. Less tax for the people and state companies doing their job without harming the interest of the consumers. It is not against the spirit of good economics.

 

[aelf]

A socialist poster is trying to bring the "China is growing" example to bring a real-world example of a successful command economy.

How wrong. No one here has said that China is a command economy. But China's success is in a large part due to the government's ability to intervene when and where it feels necessary to direct growth, i.e. the government has a large measure of control over the economy, which you admit yourself. Trying to get around this point is just futile semantics.

 

[El Koeno]

@Fayadi: You make very valid points, I see no need in discussing them any further.

However, one thing I'd like to ask you: How do you see the land grabs by Chinese officials? Farmers in China are not certain of their land tenureship, as their land is state property, and corrupt official can decide to sell their land to whoever they want and pocket the money. To me, this is both economically and morally wrong. How do you see this issue?

 

[aelf]

However, one thing I'd like to ask you: How do you see the land grabs by Chinese officials? Farmers in China are not certain of their land tenureship, as their land is state property, and corrupt official can decide to sell their land to whoever they want and pocket the money. To me, this is both economically and morally wrong. How do you see this issue?

That's part of the market system, of course, which is yet another valid point.