Not exactly the same. China also doesn’t have welfare (in fact, China doesn’t even have a SNAP/food bank equivalent) but most people can always go back to the villages and their provincial hometowns and stay with family. Life won’t be good but you can still survive without being homeless.
But you are absolutely correct that the migrant workers who are registered under rural hukou (~300 million people) get screwed the worst, and are effectively barred from accessing housing, education, healthcare, pension/insurance and public utilities in the cities they work at. For these people, the last resort is moving back to the villages and lay low.
China also doesn’t really have an unemployment problem since the 2000s and it is only since opening up after Zero Covid in 2023 that there is a slump in the economy. Back in the 2000s and 2010s, as long as you’re willing to work, you won’t find yourself homeless and if you’re willing to work overtime, you can even get relatively good pay. These days, it is getting more challenging and there is a lot of precarity about unemployment, so people are spending less and saving more, leading to the deflationary spiral we are seeing today.
The easiest way (but it’s not clear cut) to think about the difference in the US and China, is that in the US, you are fully responsible for your financial situation, whereas in China (because of the way the economy is being developed), the losses are likely to be socialized.
For example, in the US, if the housing bubble bursts (think subprime crisis), your $1 million home plunges to $500k, you are solely responsible for the losses and in most likelihood, you’re defaulting on your mortgage and the bank takes your home.
In China, because of so much wealth has been tied to the real estate, letting the housing bubble burst would cause unmitigated chain reaction across the financial sectors and even spread to the real economy, so the government has to provide a “soft landing” by any means necessary.
What this means is that if your house price won’t directly plunge from $1 million to $500k, but the fall will be cushioned in a way that you can still sell your house to another buyer at $900k (provided that the illusion of a housing rebound is maintained), then as the price continues to fall, that other buyer can still sell it to another at $800k.
The key here is government providing “soft landing” by socializing the costs - using the national wealth to slow the plunging property prices. This way, when the house finally drops to $500k, you are not losing $500k, but that loss has been spread to 5 other buyers, as well as many others’ to prop up/slow the falling price. The cost is thus socialized. This translates to people working longer hours for lower wages, with their wealth being used to provide a soft landing, but at least you won’t see large scale “falling off the kill line”. In this sense, the working class took on the burden experienced by the home-owning middle class, and cushioning their losses.
China’s response is more similar to Japan’s recession in the early 1990s. The government orders the central bank to prop up the bad loans the banks have made, and led to the “zombification” of the economy. You may see this as a failure (true in an economic policy sense), but socially, Japan went through an entire generation of high youth unemployment with extreme social stability.
Of course, there are other examples in different sectors, but the property market is probably the easiest to understand the core mechanisms behind it.
For these people, the last resort is moving back to the villages and lay low.
I’m sure the homeless woman I watched die outside my apartment is grateful that she was given the freedom to freeze to death in an urban sidewalk as opposed to living in a rural area where the state guarantees land. Which mind you is the unattainable end goal for most people my age. And before you go on your liberal diatribe about how much rural china sucks I’ve been there and it’s still better than 90% of the planet.
In China, because of so much wealth has been tied to the real estate, letting the housing bubble burst would cause unmitigated chain reaction across the financial sectors and even spread to the real economy, so the government has to provide a “soft landing” by any means necessary.
Famously the 2008 Financial crisis never involved government bail-outs of any kind and never had any effects on the financial sector. This of course has never had any real world consequence1 which definitely didn’t turn the city Detroit into a ghost town.
The key here is government providing “soft landing” by socializing the costs - using the national wealth to slow the plunging property prices. This way, when the house finally drops to $500k, you are not losing $500k, but that loss has been spread to 5 other buyers, as well as many others’ to prop up/slow the falling price. The cost is thus socialized. This translates to people working longer hours for lower wages, with their wealth being used to provide a soft landing, but at least you won’t see large scale “falling off the kill line”. In this sense, the working class took on the burden experienced by the home-owning middle class, and cushioning their losses.
This paragraph is completely nonsensical and betrays a lack of understanding of both liberal and marxist economics. Like a garbled zhihu post. A slow deflation is how bubbles are supposed to end. I don’t see how your alternative of allowing it to pop and create another 2008 financial crisis would benefit the working class. The same reduction in demand would exist in both cases, except in one case you have mild deflation and unemployment and on the other side case you have total economic collapse. Btw your whole “working class” “middle class” distinction is neoliberal nonsense, as is your “using their wealth to provide a soft landing” narrative.
I’ve said many times that the easiest way out of this is for the government to run the deficit spending to provide job guarantee and social welfare, but since the party does not believe in welfare (they believe that welfare promotes laziness) and instead believe in the IMF neoliberal model of balancing the books (i.e. keeping the deficit spending low), this is actually one of the optimal ways it can work given the self-imposed constraints.
As I said, a lot of similarities with how the Japanese handled their growth stagnation - sacrificing youth employment to preserve the existing employees and the corporations that have made bad investments. Hence the high youth unemployment in China right now. None of this is a coincidence once you understand how the economy works.
Lower stage of socialism. Read state and revolution buddy.
As I said, a lot of similarities with how the Japanese handled their growth stagnation - sacrificing youth employment to preserve the existing employees and the corporations that have made bad investments. Hence the high youth unemployment in China right now. None of this is a coincidence once you understand how the economy works.
The Chinese liberal obsession with Japan, an economically, politically, and culturally irrelevant vassal state of the US, never ceases to agitate me. You want keynesian stimulus, the very same thing which created America’s financialized economy with no real productive capacity. Providing young people with do nothing jobs in the city doesn’t fix anything material, it just makes line go up.
Not exactly the same. China also doesn’t have welfare (in fact, China doesn’t even have a SNAP/food bank equivalent) but most people can always go back to the villages and their provincial hometowns and stay with family. Life won’t be good but you can still survive without being homeless.
But you are absolutely correct that the migrant workers who are registered under rural hukou (~300 million people) get screwed the worst, and are effectively barred from accessing housing, education, healthcare, pension/insurance and public utilities in the cities they work at. For these people, the last resort is moving back to the villages and lay low.
China also doesn’t really have an unemployment problem since the 2000s and it is only since opening up after Zero Covid in 2023 that there is a slump in the economy. Back in the 2000s and 2010s, as long as you’re willing to work, you won’t find yourself homeless and if you’re willing to work overtime, you can even get relatively good pay. These days, it is getting more challenging and there is a lot of precarity about unemployment, so people are spending less and saving more, leading to the deflationary spiral we are seeing today.
The easiest way (but it’s not clear cut) to think about the difference in the US and China, is that in the US, you are fully responsible for your financial situation, whereas in China (because of the way the economy is being developed), the losses are likely to be socialized.
For example, in the US, if the housing bubble bursts (think subprime crisis), your $1 million home plunges to $500k, you are solely responsible for the losses and in most likelihood, you’re defaulting on your mortgage and the bank takes your home.
In China, because of so much wealth has been tied to the real estate, letting the housing bubble burst would cause unmitigated chain reaction across the financial sectors and even spread to the real economy, so the government has to provide a “soft landing” by any means necessary.
What this means is that if your house price won’t directly plunge from $1 million to $500k, but the fall will be cushioned in a way that you can still sell your house to another buyer at $900k (provided that the illusion of a housing rebound is maintained), then as the price continues to fall, that other buyer can still sell it to another at $800k.
The key here is government providing “soft landing” by socializing the costs - using the national wealth to slow the plunging property prices. This way, when the house finally drops to $500k, you are not losing $500k, but that loss has been spread to 5 other buyers, as well as many others’ to prop up/slow the falling price. The cost is thus socialized. This translates to people working longer hours for lower wages, with their wealth being used to provide a soft landing, but at least you won’t see large scale “falling off the kill line”. In this sense, the working class took on the burden experienced by the home-owning middle class, and cushioning their losses.
China’s response is more similar to Japan’s recession in the early 1990s. The government orders the central bank to prop up the bad loans the banks have made, and led to the “zombification” of the economy. You may see this as a failure (true in an economic policy sense), but socially, Japan went through an entire generation of high youth unemployment with extreme social stability.
Of course, there are other examples in different sectors, but the property market is probably the easiest to understand the core mechanisms behind it.
I’m sure the homeless woman I watched die outside my apartment is grateful that she was given the freedom to freeze to death in an urban sidewalk as opposed to living in a rural area where the state guarantees land. Which mind you is the unattainable end goal for most people my age. And before you go on your liberal diatribe about how much rural china sucks I’ve been there and it’s still better than 90% of the planet.
Famously the 2008 Financial crisis never involved government bail-outs of any kind and never had any effects on the financial sector. This of course has never had any real world consequence1 which definitely didn’t turn the city Detroit into a ghost town.
This paragraph is completely nonsensical and betrays a lack of understanding of both liberal and marxist economics. Like a garbled zhihu post. A slow deflation is how bubbles are supposed to end. I don’t see how your alternative of allowing it to pop and create another 2008 financial crisis would benefit the working class. The same reduction in demand would exist in both cases, except in one case you have mild deflation and unemployment and on the other side case you have total economic collapse. Btw your whole “working class” “middle class” distinction is neoliberal nonsense, as is your “using their wealth to provide a soft landing” narrative.
Either misinformed or deliberate propoganda lol.
Esp love throwing in “socialized losses” in typical fedboi fashion.
It’s simply how the economy works.
I’ve said many times that the easiest way out of this is for the government to run the deficit spending to provide job guarantee and social welfare, but since the party does not believe in welfare (they believe that welfare promotes laziness) and instead believe in the IMF neoliberal model of balancing the books (i.e. keeping the deficit spending low), this is actually one of the optimal ways it can work given the self-imposed constraints.
As I said, a lot of similarities with how the Japanese handled their growth stagnation - sacrificing youth employment to preserve the existing employees and the corporations that have made bad investments. Hence the high youth unemployment in China right now. None of this is a coincidence once you understand how the economy works.
Lower stage of socialism. Read state and revolution buddy.
The Chinese liberal obsession with Japan, an economically, politically, and culturally irrelevant vassal state of the US, never ceases to agitate me. You want keynesian stimulus, the very same thing which created America’s financialized economy with no real productive capacity. Providing young people with do nothing jobs in the city doesn’t fix anything material, it just makes line go up.