Glenn Luk: China’s economic evolution, GDP, and high speed rail - #58

[@jamesho8820]

As an ABC myself, I spent a year in China on sabbatical from med school. I was there in 85' somewhat earlier in China's dramatic evolution and have returned over 14 times, just recently returning from Shenzhen and Chengdu. I was fortunate to have met with many relatives who were left behind when my KMT family fled to Taiwan in 49' I find the current anti-China rhetoric as well as the technological embargo of high end chips, EV duties and other trade obstructions quite disgusting and reprehensible. American exceptionalism blinds our political elites. They have completely strayed from the so called, free and open market, fair play and rules based order. The level of Schaudenfreude with regard to the Chinese economy downturn is off the scale. This adversarial approach underestimates Chinese resolve and serves motivate and spur the Chinese to greater heights. The lucrative chip business will irretrievably lost and will deeply affect companies such as NVDA, INTC, QCOM and ASML. I agree with you insights regarding the economy. One does see restaurants prospering but luxury stores appear largely empty. The gov't IMO made a correct choice in permitting the housing bubble to burst. Unlike America which has a "too big to fail" approach to ailing sectors.

[@thisiskevin1000]

Kinda like what they did to Japan, France and (West) Germany in the 1980s which led to the Plaza Accord under former US President Ronald Raegan. But the US have long lost its manufacturing prowess from the 1960s as a result of its post-war Marshall Plan which gave aid to Western European countries (especially France, Germany, Netherlands, Austria, Italy, Norway, Denmark, Spain and the UK), Turkiye, Japan and even South Korea and China’s Taiwan region

[@cabasadefogo9533]

Another great interview Steve. I would love to see you interview Eric Li, VC from Shanghai. I recently just finished his book called Party Life. Extremely enlightening!

[@StephenHsu]

Thanks! I know Eric, but haven't been able to get him on the podcast yet.

[@peakserv]

​​@@StephenHsu Agree. Eric Li is a great choice.

[@GMATveteran]

1:10:00 - with regards to positive & negative externalities, there are certain positive externalities that actually PREVENTS GDP growth in some ways. High speed rail is a classic example. W/o HSR, people would be driving or flying all across the country (as people do in the US), both are far less fuel efficient on a per passenger-KM basis. The incremental costs of fuel consumption is therefore prevented, & no longer adds to consumption part of the GDP formula. Moreover, the pollution that is avoided as a result of HSR would inevitably decrease healthcare costs (e.g. for things such as respiratory diseases), those costs are now no longer generating GDP. This is yet another example of how GDP doesn't tell the whole story.

[@chihoang4085]

wow, great interview, so interesting. Nothing seems to change here in the US in past 30 years, except things getting harder for everyone.

[@kforrester3904]

the entire world is advancing at light speed by working WITH China while our corrupt politicians in the US hold us in the dark ages so they can stuff their pockets along with the corporations they are beholden to..

[@HanS662]

That jazz intro makes me want to smoke a cig in a dark room and take a shot of hard liquor before talking in a deep voice about how f*ked the world is.

[@thongorshengar]

I never expect Glenn to be so buff LOL! His twitter PFP fooled me into thinking he's much thinner 🤣

[@snslifestyleorg]

Yes, you can take the high speed train from Hong Kong all the way to Beijing. The journey would take about nine hours. The high speed train is really a game changer. I recently visited San Francisco and noticed people still drive at 55 mph while people in China travel at 200 mph on the high speed train. By rush hour after 15:00, people in San Francisco can only drive at 40 mph, while people in China travel at 200 mph throughout the day.

[@userngot12362]

For a while now, I have been suggesting to my friends and colleagues to study the Brundtland Commission report "Our Common Future" as a backgrounder to assist with understanding the Chinese development paradigm. As well, I encourage them to map the pronouncements of the Chinese government strategy statements issued at each party plenary session and goals and action plans prescribed in the five year plans to UN's sustainable development goals to gain enlightment and appreciate how China is achieving goals after goal year after year. Of course , it is important to have an appreciation of the Chinese government and the party motto "to serve the people". The discussion on the high speed rail provides a good example of this motto: it is a public good and not just a simple transportation tool.

[@KennyL0009]

Giving the culture of US, you're asking Americans to revert back to the work ethics in the 1st half of the 20th century. A majority of old people in China have decent savings and could support themselves with good quality inexpensive healthcare. Most seniors actually save money while in retirement.

[@pamelang3261]

China's future can be dependent on what and how the next two generations aspire to be. Hopefully they do Not use the western, industrialized, colonial way of economic growth and future.

[@888YangJi]

nice job

[@snslifestyleorg]

The MTR (subway system) in Hong Kong is the most profitable public transport system in the world because the MTR is the second largest land owner after the Hong Kong government. Most land above the MTR stations belong to the MTR, which can develop the land and get additional revenues from property development.

[@bobmorane4926]

That business model keeps me wondering how the moms and pops shops survive in big Chinese cities like Beijing or Shanghai where real estate is sky high and rent must be proportionately high, but the food is still dirt cheap. I don't understand the business model. Is there government subsidies supporting these mom and pops ?

[@DW-op7ly]

In China in 2008 around 70% of the people in their real estate markets were buying their 1st homes in their cities By 2018 around 70% of the people in their real estate markets were buying their 2nd and 3rd homes in their cities That’s why you are hearing about problems with their property developers these days. Because back in 2010? Their Central Government started cutting of money flow to these developers. Thus why you heard about Shadow Banks and Underground Economy back then, that their Government had to come into to shutdown or regulate. Even then, It took them almost 14 years to get their overheated real estate under control Heck they were about to introduce a nation wide property tax, but then trump started the trade war in 2018 Why is their Central Government doing this? Because there are still a few hundred million poorer rural folk they still expect to move to the cities to join their more well off urban city folk countrymen. Problem is these property developers were building higher end homes, and not building the affordable homes these rural migrants will need In China Owning a home in the city you migrate to? Affects your employment, health, education and even marriage prospects don’t have a house you don’t get married Thus the common prosperity push and the crackdown on the overt displays of wealth in China Their Government probably figured out you disenfranchise the people at the bottom of your society they are the ones most likely to act out in protest

[@bobmorane4926]

@@DW-op7ly I think we understand all this blablabla abt keeping the masses happy. But you still haven't answered how the millions of mom and pops survive in the big cities with sky high rent and still providing dirt cheap consumer products to the masses. I'm talking little restaurants, gift shops, or small retail stores etc After all, inflation is virtually non existent ....

[@DW-op7ly]

Another reason for the sheer amount of unused apartments in China is the fact that there is often little financial incentive for owners to do anything with them after purchase. There is no yearly property tax in China, so vacant properties are not a financial drain on their owners. While the potential returns that could be had from renting them out (1% or so) is often not worth the hassle - especially because it costs tens of thousands of dollars to construct the interiors of new apartments in preparation for tenants. This is combined with the fact that Chinese homeowners, especially investors who have multiple properties, are remarkably un-leveraged. Thevagabondjourney

[@DW-op7ly]

Any type of property rentals are going to be relatively cheap in China. More so with the real estate crackdown And if you are in a 1st tier city the customer turn over is going to be massive

[@DW-op7ly]

Mom-and-pop stores and sole proprietorships just got a new deal in China Business & Technology A set of new regulations are intended to be a comprehensive support package for 111 million self-employed household enterprises, the ‘nerve endings’ of China’s economy. Barry van Wyk Published October 27, 2022 * By 2012, there were more than 40 million household enterprises. Since then, their number has increased at an average annual growth rate of 10.9%: By 2017, there were around 65 million, and by 2021, there were more than 100 million. In the first eight months of 2022, 13.591 million household enterprises were newly registered. The nature of household enterprises is changing: Of the 111 million household enterprises today, a total of 32.22 million, or 29.4%, are engaged in the “four new industries” of culture; sport and entertainment; science, research, and technical services; and software and information technology * Aside from addressing the arbitrary nature of government regulation, the new regulations are intended as a comprehensive development package for household enterprises by offering tax breaks and financial support, beefing up government services, and helping micro-entrepreneurs with intellectual property protection and social security. In total, the new regulations contain 39 articles in the full text, including 19 articles of specific support policies that, among other things, will: Simplify and standardize the system for business registration and submitting annual reports; Mandate labor associations to provide support to household enterprises; Classify household enterprises so that customized support policies can be implemented; Require local governments to provide low-cost business premises to household enterprises; Offer financial and tax support, as well as social security and employment benefits; Help household enterprises to expand their digital presence (according to the State Administration for Market Regulation, 70.3% of household enterprises have no online business); Encourage the use of intellectual property rights among household enterprises; Require local governments to specifically consider the needs of household enterprises; and Stipulate government relief measures for household enterprises in case of natural disasters and public health incidents. TheChinaProject

[@georgesiew6203]

The thing missing from this interview is a connection to the history and history of political thought of Chinese civilization. I often hear people trying to explain the difference between China and the US by alluding to the recent experience of mass poverty and rapid social change. This while not trivial is not the main difference between China and the US. Before we even get to that we need to lay about the foundational character and history of the place which is miles different from anywhere else. China has its own political history which centers around Confucianism and the dynastic cycle. We have to understand what is Confucianism and why it came about. We have to understand the realities of the Chinese existence given its geography. The pressures from within and the pressures from without. We have to understand how the dynastic cycle works and how the society alternates between periods of great flourishing order and then periods of utterly devastating chaos. In 3000 years the world's only remaining continuous civilization has fallen and resurrected 6 times. The latest fall and resurrection observed in the 20th century was far from the most severe or the most miraculous when compared to the numerous dynastic cycles that came before. This is missing context we have to talk about when we talk about China or we mistakenly think that we see are seeing what we are seeing for the first time when we have seen them many times before. China is not a socialist country with a communist leadership. Those are just semantic labels. China is and has always been a Confucian country with a Confucian mandarin ruling class. It has been a wonder of centralized bureaucracy since antiquity.

[@shaundudley4576]

China IS a Socialist country with a Communist leadership. In trying to validly rectify one set of distortions you are perpetuating an equally serious one. The journey of the Chinese people through the century of humiliation to its proud present was achieved with great struggle and unrelenting commitment. The Revolution was that achievement, paid for in blood and tears and sweat and suffering, that put China back on its feet. It was a Communist Revolution led by The Party and is still led by that Party. This is the most consequential material historical context that must never be denied or denigrated as it destroys the truth and insult the people who made it all possible and it remains the undergirding of all that China became.

[@shinlee2579]

Great in-depth conversation from people who has worked in China related fields for 20 years, looking forward to the next chapter

[@Samson373]

Good interview! And I agree that the Chinese are capable, hardworking, entrepreneurial and good at the D in R&D. But I disagree with the assertion that the they have shown themselves to be genuine innovators not mere copycats. All available evidence from the last 100 years -- indeed from the last one thousand years -- corroborates the copycat stereotype. The stereotype's accuracy is easy to lose sight of because we can't envision the ocean of knowledge that was and continues to be transferred from the West to China, some voluntarily the rest involuntarily. Every inch of China's success rests on that transfer, a wholesale transfer of Western science, technology, and knowhow. From the lightbulb to the polio vaccine to the printing press to the birth control pill to the semiconductor to the computer to the bulldozer to the adjustable wrench to the recipe for concrete to the construction crane to containerized shipping to the internet to nitrogen fertilizer to the TV to air conditioning to the camera to the telephone to anesthesia to the airplane to the fields of economics, finance, civil engineering, architecture, construction, and pharmaceuticals -- and on and on and on and on. ALL of it is from the West (especially the US and Britain). Can you name anything important that China invented in the last 500 years? Neither can I. (China invented gunpowder and paper but that was 1,100 and 2,000 years ago respectively.) Lastly, if China has truly caught up on basic science, why does it have so few Nobel prizes compared to the US and other countries such as Britain?

[@Samson373]

Good talk but it always disappoints me when I listen to people talk about China and at no point in their long discussion do they say anything which would imply full comprehension that China is a country : (1) where people -- often the very nicest people -- are regularly killed for their organs, (2) where the leader regularly has rivals and critics killed, (3) where the government subsidizes production of fentanyl precursors that cause 73,000 deaths PER YEAR in the US alone, (4) where the government took steps to prevent the spread of a pandemic domestically at the same time that it chose to not take steps to prevent the spread of the pandemic internationally, (5) where -- despite China having contributed to the spread of the pandemic into the US and despite China having benefitted beyond measure from numerous vaccines (such as the polio vaccine) invented in the US -- China pays an army of internet trolls to spread outrageous lies, e.g., that the US deliberately created monkey pox to kill Africans.

[@CutieZalbu]

Holy shit dude,How many ads can u fit in one video,makes me wanna unsubscribe

[@buzzlightyear3715]

I watch this with Revanced KZbin app, I see zero ads.

[@evergreennj8950]

What ads? The ones KZbin keeps inserting? I've wanted to stop using KZbin for a while now, but it's a monopoly - no real alternatives here in the US. The 1 possible alternative which KZbin has already copied or "stolen" is being banned.

[@mistman5640]

Not impressed with the level of expertise in the guest this time. When Steve asked about the relative gdp and standard of living, the guest did not address it. I felt Steve said more on the topic. Was it political self censorship?

[@dancerinmaya6813]

thanks for a wonderful conversation. You must do it again soon. It would be of significantly better effect if Glenn adjusted his camera to look at the audience (instead of appearing to look down on his shoes) and projected his voice a bit more...

[@hoekoktong9099]

👍👍👍❤️👏👏👏👏👏👏