"China has the deepest pool of STEM talent in the world. The number of engineers here has more than tripled in the 20 years up to 2020, and has gone up a lot more in the past 5 years.
This part gets me, too. I was surprised that DeepSeek was the tipping point, when it could have been a hundred other things,"
Here is the thing. Yes on almost all measures China overtakes USA soon or has done in the last 10 years. But there was always one last hope: AGI - the dreamt of point where AI can do what till now only a very smart person could do.
US gets strong AGI early, and then all those other Chinese advantages disappear and US can stay Top Dog. Unlikely I agree, but it really is the USA's last hope. Hence all those oligarchs switching from Dems to Trump, the $500bn computing infrastructure plans, the lauding of the power of NVIDIA.
The Last Chance depends wholly on 2 entry barriers: Hi quality NVIDIA chips and Investment barriers that capital requirements that could only be provided by US Private Equity.
DeepSeek blows away both those barriers. Chip manufacturing and investment sums.
DeepSeek was not the tipping point (that was 9 or 10 years ago), but it was The Last Chance.
To prolong the Tipping Point idiom, DeepSeek was the point where USA landed flat on its nose.
You are puzzled because you don't understand what America is about. American is about predatory Empire. It's about monopolistic corporations and predatory finance. It's about a rentier class that seeks not to create wealth, but to extract wealth. And the media serves them, is owned by them. Maybe you're a good guy. Maybe your company is trying to actually make good stuff. But you are not a player. You're another dupe to be lied to and exploited by the oil companies, the weapons makers and the financiers. And they, not you or the American people, run the show. Welcome to reality, Kevin. Hope you stay for a while.
Yes Kevin I've been scratching my head for some time regarding all this stuff about the perils of deflation. Sounded to me like more of 'There you see their system is bound to fail ' and/or wishful thinking
My question is what will the impact be of this lower inflation in the western countries?
Will western goods and services become even more expensive and thus unwanted by Chinese markets?
What will the impact on BRICS members?
Maybe I'm being naive here but why can't the US and China work together to solve the big issues facing our planet? Diminishing clean water, high levels of toxic chemicals in the food chain, sustainability of resources,lack of available medical care,, at a fair price, in remote areas, and climate issues.
I do not have a good grasp of economics and my main concern is wealth inequality and quality of life for everyone. I love reading about China. I have a colleague in his early 60’s who is the only survivor of 6 children- the others died of starvation. China is a miracle on reversing that alone in my mind. In the ‘80s visiting the US I was shocked at the poverty. We now have that obvious poverty here in Canada too. Obviously more social nets but bad. So while China has alleviated poverty, poverty has increased in the West.
QUESTIONS If this happened in the west because of increasing concentration of wealth, how is the result opposite in China? Or do you not see poverty because of where you live and visit? Is the increased standard of living for people in China largely driven by increased productivity efficiencies? And how do automated factories increase prosperity for the communities they are in, since China has adopted capitalism? For the average person with no resources, would they be better off in China or the US? It seems for a poor family, China would be better for the hope factor alone, is that true? Is having apartments full of the latest stuff a good metric in this age of environmental degradation? Who are the Chinese workers that are on the frontlines of rare earth mineral mining and are protections increasing for them? I worry accessing Canada’s resources will be devastating for our northern communities.
I love reading your posts but they always leave me with so many questions. Thank you for sharing!
Appreciate your perspective Kevin. But deflation is a problem from a debt perspective. If you account for LGFVs, Chinese debt to GDP is pretty similar to the US. Of course, people like falling prices. Chinese people also save more. I think you’re right on many accounts but if you were completely right, Chinese governments won’t be doing stimulus after stimulus. Because if the 2022 stimulus worked, you wouldn’t have needed the 2023 stimulus. Or if that worked, you wouldn’t have needed 2024 stimulus. And Chinese yields wouldn’t have been this low either. It’s not the mainstream media, Kevin. It’s the markets that are not buying the Chinese growth story.
I saw a video earlier today of 155s being made. Omggih. The assembly process looked to have been "automated" in the 40s. Stuff that could have been done by robots in a tiny fraction of the time...
If this is all true, and I do not have any reason to think otherwise, what does this mean for western economies? Will China export its deflation to the US and other places, like it did for most of 2000-2020? What effect will tariffs have? And while the western media may have gotten a lot wrong, demographics does not seem to be one of them. How will that long term trend in declining working population affect all this?
"China has the deepest pool of STEM talent in the world. The number of engineers here has more than tripled in the 20 years up to 2020, and has gone up a lot more in the past 5 years.
This part gets me, too. I was surprised that DeepSeek was the tipping point, when it could have been a hundred other things,"
Here is the thing. Yes on almost all measures China overtakes USA soon or has done in the last 10 years. But there was always one last hope: AGI - the dreamt of point where AI can do what till now only a very smart person could do.
US gets strong AGI early, and then all those other Chinese advantages disappear and US can stay Top Dog. Unlikely I agree, but it really is the USA's last hope. Hence all those oligarchs switching from Dems to Trump, the $500bn computing infrastructure plans, the lauding of the power of NVIDIA.
The Last Chance depends wholly on 2 entry barriers: Hi quality NVIDIA chips and Investment barriers that capital requirements that could only be provided by US Private Equity.
DeepSeek blows away both those barriers. Chip manufacturing and investment sums.
DeepSeek was not the tipping point (that was 9 or 10 years ago), but it was The Last Chance.
To prolong the Tipping Point idiom, DeepSeek was the point where USA landed flat on its nose.
You are puzzled because you don't understand what America is about. American is about predatory Empire. It's about monopolistic corporations and predatory finance. It's about a rentier class that seeks not to create wealth, but to extract wealth. And the media serves them, is owned by them. Maybe you're a good guy. Maybe your company is trying to actually make good stuff. But you are not a player. You're another dupe to be lied to and exploited by the oil companies, the weapons makers and the financiers. And they, not you or the American people, run the show. Welcome to reality, Kevin. Hope you stay for a while.
Yes Kevin I've been scratching my head for some time regarding all this stuff about the perils of deflation. Sounded to me like more of 'There you see their system is bound to fail ' and/or wishful thinking
like the 2-3% that China has overstated GDP for every year since about 2000.
Makes you wonder why people worry about a China that they reckon is still less than half the size of USA.
Your comment proves the point that stupidity, evil and indifference has been normalized in America.
Curious way of avoiding saying if you disagree or agree.
My question is what will the impact be of this lower inflation in the western countries?
Will western goods and services become even more expensive and thus unwanted by Chinese markets?
What will the impact on BRICS members?
Maybe I'm being naive here but why can't the US and China work together to solve the big issues facing our planet? Diminishing clean water, high levels of toxic chemicals in the food chain, sustainability of resources,lack of available medical care,, at a fair price, in remote areas, and climate issues.
There's plenty to do!
I do not have a good grasp of economics and my main concern is wealth inequality and quality of life for everyone. I love reading about China. I have a colleague in his early 60’s who is the only survivor of 6 children- the others died of starvation. China is a miracle on reversing that alone in my mind. In the ‘80s visiting the US I was shocked at the poverty. We now have that obvious poverty here in Canada too. Obviously more social nets but bad. So while China has alleviated poverty, poverty has increased in the West.
QUESTIONS If this happened in the west because of increasing concentration of wealth, how is the result opposite in China? Or do you not see poverty because of where you live and visit? Is the increased standard of living for people in China largely driven by increased productivity efficiencies? And how do automated factories increase prosperity for the communities they are in, since China has adopted capitalism? For the average person with no resources, would they be better off in China or the US? It seems for a poor family, China would be better for the hope factor alone, is that true? Is having apartments full of the latest stuff a good metric in this age of environmental degradation? Who are the Chinese workers that are on the frontlines of rare earth mineral mining and are protections increasing for them? I worry accessing Canada’s resources will be devastating for our northern communities.
I love reading your posts but they always leave me with so many questions. Thank you for sharing!
Interesting...
Japan did not fair well with a deflationary economy.
What are the impacts of China's demographic challenges?
China should be shaking in their boots at US 155 shell production. 😵
https://x.com/MyLordBebo/status/1905273573205274748
Appreciate your perspective Kevin. But deflation is a problem from a debt perspective. If you account for LGFVs, Chinese debt to GDP is pretty similar to the US. Of course, people like falling prices. Chinese people also save more. I think you’re right on many accounts but if you were completely right, Chinese governments won’t be doing stimulus after stimulus. Because if the 2022 stimulus worked, you wouldn’t have needed the 2023 stimulus. Or if that worked, you wouldn’t have needed 2024 stimulus. And Chinese yields wouldn’t have been this low either. It’s not the mainstream media, Kevin. It’s the markets that are not buying the Chinese growth story.
I saw a video earlier today of 155s being made. Omggih. The assembly process looked to have been "automated" in the 40s. Stuff that could have been done by robots in a tiny fraction of the time...
If this is all true, and I do not have any reason to think otherwise, what does this mean for western economies? Will China export its deflation to the US and other places, like it did for most of 2000-2020? What effect will tariffs have? And while the western media may have gotten a lot wrong, demographics does not seem to be one of them. How will that long term trend in declining working population affect all this?
Robotics/AI automation picks up the slack. Keep it simple.