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xiaohongshu [none/use name]

@ xiaohongshu @hexbear.net

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1 yr. ago

  • Still, none of what you’re saying addresses my point, which is that material analysis must necessarily come from understanding the historical progress.

    I’ll give you one example: I have heard so many “Western leftists” trying to argue why China should/should not have billionaires and despite all the rhetoric and the flowery language, they never approach it from the historical trajectory itself. They’ll tell you how the CPC controls the billionaires (lol, in that case, why do you need billionaires in the first place), but not the entire economic history since post-Mao reform, the decentralization of the economy, the 1994 Tax Sharing Reform, the privatization wave of the mid-1990s, the end of welfare housing and the liberalization of real estate market under Zhu Rongji in 1998, the joining of WTO in 2001 etc.

    Without understanding the historical progress, you cannot understand why we come to where we are today. The system and the policy framework evolve out of such historical events. No amount of rhetoric or flowery language can explain that.

    As I have explained before, the Imperial Court Examination evolved out of the emperors attempting to curb the influence of the feudal haozu (豪族) since Emperor Han Wudi’s Northern Expedition, which later evolved into the feudal lords (menfa, 门阀) by the Northern Wei dynasty. Such bureaucratic system for class mobility (a core aspect of East Asian culture) is still very much alive in China today, albeit taking different forms.

    As Marx said, “the history of all hitherto existing society is the history of class struggles”. To understand where we are today, we need to go way back in time and approach history from the perspective of class analysis. How the mechanism for class mobility arose in China, and how that evolved into the deep bureaucracy of the modern Chinese state today.

    And if one cannot understand that, one cannot understand why Mao felt the need for a Cultural Revolution. Remember that Mao himself claimed to have read Zizhi Tongjian for at least 17 times (!!), I’m sure he knows very well how the deep bureaucracy of the Chinese society works.

    (To be clear, I am not on board the CR stuff like the ultra-left, but I am starting to grasp the thinking behind it after re-reading a lot of Mao Selected Works lately lol).

    There is no need to downplay the purging of all the highest ranking generals in the CMC. We know these are serious problems. If you think this is just removing a few leaders at the very top and that the core integrity of the chain-of-command is somehow going to remain unaffected, then I don’t know what else to say. This isn’t some mid ranking officials, these are the people commanding vast influence over the military corp.

    EDIT: Just want to add that I don’t expect everyone here to exercise the same academic rigor as I do (which isn’t much, to be honest, since I’m not trying to publish in an academic journal), as this is a fringe shitposting forum, so having as much fun as possible while learning from real world events should be the priority.

    But understand that flowery language, while nice for propaganda purpose, is both non-materialist (not rooted in class-based analysis) and ahistorical (does not confront historical evidence).

    Anyone can say “China is working towards achieving socialism”, but the statement in itself is meaningless from a dialectic materialist standpoint.

    If it succeeds, I can say “see, I told you so”, and if it doesn’t, I can also say “look, I never said when it will happen, there are many twists and turns before we get there”. It doesn’t help you abstract the core contradictions from a historical materialist perspective, does not provide any explanatory power for the current events, nor does it serve anything useful for material analysis as it doesn’t involve concrete and specific examples of historical evidence.

    So, while I don’t pretend that everything I say is correct, I try to approach my analysis with these criteria in mind.

  • Not sure I believe this but this news from last week may corroborate: Ex-CNNC general manager faces disciplinary probe China Daily

    Gu Jun, former deputy secretary of the Party Leadership Group and general manager of China National Nuclear Corporation, is suspected of serious violations of Party discipline and national laws and is currently under disciplinary review and supervisory investigation, the Central Commission for Discipline Inspection and the National Supervisory Commission announced on Monday.

    He took office as general manager of China Nuclear Engineering and Construction Corporation in April 2015, and in 2018, he transferred to the post of general manager of CNNC, a post he held until his retirement in 2024.

    From wikipedia:

    CNNC oversees all aspects of China's civilian and military nuclear programs.

    Xi spent 10 years fighting corruption only to realize that it came from the people closest to him lol.

    Zhang Youxia is considered a close ally to Xi because their fathers were close comrades and served together during the war. During the 20th CPC Congress in 2022, Zhang who was supposed to retire was given an extended appointment at the CMC.

    The entire bureaucracy is deeply corrupted and with the recent news, likely the entire military chain-of-command as well. No amount of purge is going settle that, as is evident after 10 years of anti-corruption campaign. The system needs to be completely reformed.

    Anyone with some familiarity of Chinese culture will known that corrupt bureaucracy is a latent feature that has run for thousands of years. When you’re inheriting thousands-years old civilization, you also inherit the deeply entrenched cronyism (euphemistically called guanxi, or “relationship”) that can be traced back to the rise of Imperial Court Examination during the 5th-8th century, the Northern Wei-Sui-Tang dynasties. The careers of court officials are tied to the examiners who promoted them from the examination in the first place, and become part of the cliques of the political factions their superiors are tied to. This is still how it works today in China, whether it is in academia, in the private sector or in the government bureaucracy. Coming from the right “lineage” (e.g. who did you serve under, who promoted you etc.) is very important when it comes to career promotion.

    Mao already realized the gravity of the situation after purging the landlords in 1953, that the reactionary elements never went away but instead shapeshifted within the party. This was why he considered a Cultural Revolution necessary and an urgency, because according to Mao, a new socialist society could only emerge if it makes a complete and decisive break with its past, and rid of all the historical burdens.

    Of course, Mao was fighting thousands-years old institution and it was too radical a move, and we all know how that turned out. The liberals won, and here we are.

    This was the same problem that Stalin faced as well. After the great purge, the liberals still came back under Khrushchev as soon as he died.

  • There is no need for China to build up the trade surplus (accumulation of dollar-denominated assets) in order to build its industries. As Mosler said, the shipment of Chinese goods to the US could all sink at sea and it does not affect one bit for the monetary situation in China, because as a monetary sovereign state, the Chinese government can always create the RMB (its own currency) needed to drive investment.

    The reason China accumulates dollar-denominated assets is because it is following the IMF export-led growth strategy, that in order to keep their government deficit down, they have to first accumulate foreign assets to offset the deficit spending by the government. So, Chinese labor and resources are converted into real goods and services that Westerners enjoy, before they are allowed to invest domestically after earning the foreign revenues.

    Keen does not understand that the US dollars (or dollar-denominated assets) do not “leave” the US currency zone when China earns it, so in his model, China is accumulating those assets while the US has to lose them. This failure in understanding the monetary logic is behind his entire argument.

    Put another way, MMT asserts that the Chinese government does not have to balance its budget per the IMF. It simply has to run up the deficit (like the Americans do) to keep its industries working and workers employed, but this time, instead of an export-oriented model, Chinese labor and resources will be used to fulfill the demands of its domestic economy. Similarly, the US does not have to de-industrialize itself to preserve the reserve currency status of the dollar, because the US government can always run the fiscal policy to ensure full employment, social welfare and free healthcare to all its citizens without losing the dollar hegemony.

  • That’s the point. These are all very senior people with vast connections and influence (you have to think about the entire factions/cliques under them), many of whom were promoted by Xi himself. You don’t shake up the entire command structure like this for no reason, because it will have many underlying and unexpected consequences on the military itself. Is it a Stalinist style purge, or is it something else?

    I usually don’t try to speculate on the military stuff (because reasons), just reporting it because it is indeed unusual. Everyone is welcome to speculate what it means though.

  • I don’t disagree. I am just laying out the dynamics of the inherent contradictions of American capitalism. Whether it will go down a certain path and whether it will succeed are entirely different questions, and the new contradictions that will emerge in doing so. It’s like trying to model the weather - we know a lot about how air movement and pressure systems cause precipitation, but we can only forecast it (with some level of accuracy) no more than a few days out. It is a non-linear complex system.

  • Keen is very good as a heterodox economist (way better than the neoclassical economists) and his Debunking Economics book was foundational to my own understanding on economics many years ago.

    However, he does not understand how international trade works - Keen believes that when a country earns trade surplus (say, China earns USD by selling stuff to the US), that foreign currency actually leaves the original currency zone (USD leaving the US banking system). This faulty understanding of the monetary system was fully exposed during his debate with Warren Mosler back in 2018. Bill Mitchell wrote an entire blog post debunking this misconception on trade. It still amazes me that even very smart people can have such fundamental misunderstanding about the topics within their own field of study.

    Keen even admits that his Minsky software is based on the European central banking model, which does not reflect how fully monetary sovereign system actually works. In his model, the state (currency issuer) is merely one of the players rather than the principal actor that dictates how the financial system actually runs, as MMT has laid out very nicely.

    His double-entry book keeping accounting stuff is very good though when it comes to understanding how the financial flow operates in between the institutions.

  • China’s military purge has now reached the very top.

    Zhang Youxia and Liu Zhenli have been removed from positions and under investigation for serious violations of discipline China MOD

    Of the top 6 members of the Central Military Commission, 5 of them have now been purged since October. Check out this SCMP Infographic from last October for the leadership structure, which still had 3 members left. Zhang Youxia, China’s highest ranking general, has just been removed. Now, only Zhang Shengmin remains.

    Also don’t ask me what this means politically, I don’t know. Either the Chinese military leadership is absolutely corrupt to the core and all of the top generals have to be purged, or all the Xi loyalists have been targeted and removed from key positions. Is this an internal coup, or further consolidation of power by Xi (against his own people)? I also don’t know, and I don’t know what this means for Taiwan either.

  • How many times do I have to say on Hexbear that we are going to see a renewed status quo between the US and China as the final outcome?

    The reason is that Trump’s main goal is to reduce the US trade deficit, and despite the vast bilateral trade imbalance between US and China, post-Covid China is simply struggling to bring up its domestic consumer market to allow China to import more from the others. Arguably, China is having its own very difficult issue to deal with, which is deflation, and I remind everyone that deflation is much more dangerous than inflation and a worse situation to be in.

    Like, what is the US going to do? Force China to buy American goods at such cheap price that the US companies might as well be making losses? China simply does not have the capacity to import from the rest of the world now. The most the US can do is force China to appreciate the RMB exchange rate but it is still not going to work - Japan after Plaza Accord still did not yield re-industrialization of the US, and the average Japanese household of the 1980s was much more wealthy (adjusted to real terms and prices of the era) compared to the average Chinese household today.

    The real target has always been Europe, because this is the region where the households are actually wealthy enough to absorb American exports. This is why the Ukraine war fits perfectly into the US imperial project.

    To understand how we come to this, we really need to grasp the principal contradiction of American capitalism. This is really the most important lesson from reading Mao. If you cannot see this from the perspective of class analysis, geopolitics is not going to make sense beyond “big powers vying for global domination”.

    Why does Trump care so much about the US trade deficit? To answer this question, we need to understand the nature of dollar hegemony first.

    The principal contradiction that the US capitalism is facing is this - how can it maintain its global financial hegemony while years of de-industrialization have caused growing domestic dissent and rising populist sentiment from its own working class that has become disillusioned and disenfranchised by the neoliberal capitalist system?

    The 2008 crash has permanently shut the upward social mobility for most American “middle class” households. The dream of a “temporarily embarrassed billionaire” has evaporated before most of them. The vast majority of wealth generated during the economic recovery under Obama went to the top 1%. The massive wealth inequality and entrenchment of social classes resulted since the neoliberal era of the 1970s have finally manifested in the explosive popularity of the Bernie Sanders movement on the left, and Donald Trump’s MAGA movement on the right, during the 2015 primary elections.

    There is a faction within the US imperial regime that believes that the US long-term de-industrialization is caused by the global reserve currency status of the dollar (see Stephen Miran’s arguments on depreciating the dollar) and wants the US to give up its dollar hegemonic status. This reasoning is not correct, of course, because the US government can always run the fiscal policy to re-industrialize itself and raise the living standards of its own working class irrespective of its dollar status as the global reserve currency, but that would directly oppose the neoliberal project itself (you can even call it socialism lol):

    1. The re-industrialization of the US is going to reinvigorate the domestic labor movements and trade unions and their bargaining power against the bourgeois class - the very reason the US de-industrialized itself in the first place back in the 1970s
    2. The resurgence of industrial capital will eat into the rentier profit of the Wall Street financial capitalist class - simply put, as households become wealthier, they will have less need to take out loans from the financial institutions

    Hence, the US capitalism is now caught in a spiraling contradiction: how to maintain the hegemony of its financial capital while also suppressing the growing dissent from its own population who are becoming disillusioned by the system?

    And it is in a very weird spot right now: the more it tries to depreciate the dollar, the more it drives the world back into the dollar sphere, as the recent tariffs moves have shown.

    So, likely the only strategy that could work here is for the US to start shifting its dollar export mechanism: from exporting the dollar by running persistent trade deficit to exporting dollar through foreign investment. This will allow the US to retain its dollar hegemony while reducing its trade deficit at the same time. (credit to Prof. Jia Genliang of the People’s University for this thesis, I did not come up with this btw, but the following paragraphs are my own speculation)

    How to get there? First, you need to control the European market, where is actually wealthy enough to absorb American exports. This is being achieved through the Ukraine war, by cutting off their cheap energy sources from Russia, by manipulating the global energy prices through geopolitical maneuvers.

    Second, make the rest of the world dependent on US foreign investment money. This is being achieved through Biden’s hiking the interest rates (which caused a global dollar liquidity shortage) in response to rising inflation, and now Trump’s global tariffs (which leveraged China’s vast export industrial capacity to redirect its export flows to the other exporter countries e.g. dumping its surplus export goods to the EU and Southeast Asia). As these countries can no longer absorb the surplus goods from China, with failing domestic industries that cannot compete against Chinese competitors, they will become vulnerable to foreign financial bailouts (e.g. IMF bailouts).

    So the end result is most likely this:

    1. Europe de-industrializes itself (euro appreciation against the dollar) and being coerced to purchase American exports (driving partial re-industrialization in the US to suppress its domestic working class dissent - exporting unemployment to Europe)
    2. The US retains its dollar hegemony by completing its shift from exporting dollar through running persistent trade deficit, into one through financial bailouts/investments into the exporter countries that cannot compete with China’s export industries, and from there, reshape the global supply chain to its imperial interests (the Global South continues to become dependent on the dollar, but no longer in the form of US trade deficit)
    3. China is going to be fine (well, still have to solve the deflation problem, but it’s mostly going to be fine)

  • They will fail, they will learn, they will try again. They will fail, they will learn, and they will try again.

    Everyone starts from not knowing how to do things correctly. You learn and you try again. The worst mistake is not wanting to learn at all.

  • why didn't Trump just seize Greenland outright, like he seemed to allude to in so many ways? Is this just to keep the appearance of a sort-of-unified West?

    Just like the tariffs, it was the threat of it that made the countries respond. In many cases, the US was open to negotiate the tariff rate but many countries would be happy to offer something in exchange for a lesser rate. I don’t think the US genuinely wanted to invade, but a convincing threat will force a reaction out of someone.

    Of course, I am just speculating here. Take everything I said with a grain of salt.

    So far, we have seen very little of any re-industrialization going on.

    Correct. There is no way for the US to seriously re-industrialize, for two reasons:

    1. The revival of industrial capital would strengthen labor movements and trade unions in the US, which they took decades to kill off. The bourgeoisie would not want a repeat of this.
    2. The industrial capital would start to compete with the rentier finance capital, which will not be allowed under the Wall Street dominated economy of the US.

    The US is walking a tightrope of maintaining the hegemony of finance capital, while also having to suppress the domestic dissent from the working class who are increasingly disillusioned and disenfranchised by the system.

    This is where Europe comes in. The EU has a large market that can absorb US goods to revive some level of US industries, so (and this is based on Varoufakis’s thesis) the EU de-industrializing itself and forced to sustain US industrial economy makes sense.

    China, despite its huge population, is having a lot of trouble boosting its domestic consumption economy, so Trump cannot really take advantage of China here. China is arguably having a worse problem with deflation right now so it does not have the capacity to import, which is exactly what is needed by Trump to reduce trade deficit. So it has to be Europe.

    The tariffs have achieved almost nothing here.

    The tariffs have caused global export flow to be rerouted, the most prominent being China shifting its export away from the US and towards the EU, as well as Southeast Asia which acts as intermediaries. The outcome is that the EU and other exporter countries have to run up trade deficits against China, which will further destroy the domestic industries of these countries as they find themselves unable to compete with Chinese products. So, these countries now become even more reliant on the US consumer market, and are thus amenable to signing trade deals with Trump.

    As the EU fails to compete with Chinese goods such as EVs and green tech, the failing economy will open itself up for extraction by the US.

    And all these US policies are beginning to alienate Europeans - surely this cannot continue forever without breaking some links, however much Washington wants to push this line? Is this part of the reason why they didn't go 100% all out for Greenland? And of course I can easily see Europe fall in line after another Democrat takes power. They loved Biden more than anyone and happily let themselves be sleepwalked into the Ukraine disaster.

    I don’t think the US wants to go back to the old relations. Europe is being disciplined here. The EU and the eurozone are an actual challenge to the US-dominated dollar regime. Funnily enough, China and the RMB aren’t even interested in challenging the dollar hegemony so they are not even the major target here.

    The work to disintegrate the EU already started in the 1990s with the Balkan conflicts. What you’re seeing today is simply a continuation of a project that had started as soon as the EU was established in 1993.

    Again, take everything I said with a grain of salt though. I am seeing the world through a very specific lens and many others probably won’t have the same takes as mine.

  • I wouldn’t call the Russians as not living well for 70 years under sanctions. The early and even mid stages of the USSR, especially after the war (1950s-70s), were genuinely good. The USSR had its own largely insulated, self-sustaining economy that shielded it from Western sanctions. Unfortunately the liberal rot already set in by the 1980s and everything fell off the cliff in the 1990s.

    Still, Putin made good economic recovery in the early 2000s (GDP rose by 10 fold during that time) until the 2008 global financial crash and later, the 2014 Ukrainian civil war. A lot of people criticized Russia for wanting to join the West, but remember that everyone was doing that in the 2000s - especially China, who joined WTO in 2001 and came out on top.

  • Honestly, in another timeline the headlines could have easily been “How Europe secured a future of energy and raw resource for itself by brilliantly exploiting US sanctions against Russia”.

    In my opinion, the Europeans made two critical miscalculations:

    1. That Russia’s economy could be easily collapsed by unprecedented US + EU sanctions (against a GDP smaller than Italy’s) - they were probably expecting a repeat of 2014-2015 sanction, but ignoring that Russia’s special conditions would not have resulted in a collapse given its energy/food self-sufficiency, a major exporter of raw materials (inelastic demand), low external debt and a large military force with nearly inexhaustible Soviet-era equipments
    2. That the US would be so brazen as to bomb the Nordstream pipelines in front of the world - when the move against Russian economy did not work out, they were expecting the US to at least uphold its image as a leader of the international rules based order

    Indeed, they were expecting a repeat of the 1990s USSR collapse. The European Union and the eurozone were only made possible because Europe was able to monetize the vast amount of Soviet industries into financial capital as the union fell apart.

    In a slightly different universe, they could have succeeded in carving up Russia and ended up in a better position than the US, by simply leveraging the might of US economic sanctions.

  • Trump has stated since his first term that he wanted NATO member states to spending more on their defense budget. He was laughed at by the Europeans at the time.

    And Trump is not completely wrong. For years, Europe has been able to save on defense spending to provide high wage and welfare for its citizens while maintaining competitiveness as a major exporter region.

    The US national security state has been trying to get Europe to militarize since. Biden’s Ukraine war succeeded in pushing European NATO member states into re-militarization, using Russia’s invasion as a potent threat.

    Trump is simply perpetuating the same strategy (and it would have been the same under the Democrats) to push the Europeans, at every step, into a corner. Greenland seems like the perfect candidate in this respect - just enough to threaten their sovereignty, but an economy small enough that it wouldn’t push anyone into overreacting.

    The militarization of Europe is going to break the EU apart. The Maastricht criteria simply does not allow the EU to increase their deficit spending on military while maintaining its current economic advantage. So it will be austerity and recession, which will further push the region towards militarism (think 1930s Germany).

    Similarly, Trump’s tariffs are diverting China’s vast industrial capacity to dump their cheap goods onto Europe, and this is especially painful because Chinese EVs and green tech are already overtaking their European counterparts in both quantity and quality. It is killing Europe’s economic transition through green technology.

    Following that, Europe will be coerced to de-industrialize itself and play the role of a net importer for American goods - essentially reversing the position between the US and the EU. Trump will get to boast about reducing trade deficit, dollar depreciation against the euro, and the partial re-industrialization will allow the US to placate the growing dissent and suppress the rise of populist sentiment against the establishment, all while maintaining its global financial hegemony.

    Because what did Marx say? The history of all hitherto existing society is the history of class struggles.

    To understand history, we must start with class analysis. The root of all these problems came from the contradictions of the American capitalism itself - which is to maintain its global hegemony while years of de-industrialization have exacerbated wealth inequality and worse, the entrenchment of social class. The dream of “temporarily embarrassed billionaire” is evaporating right in front of most Americans, especially after the 2008 crash.

    The rise of Bernie Sanders and Donald Trump in 2015 was the watershed moment for American capitalism. The last 10 years starts to make sense when seen in this perspective.

  • Ironically, the conditions are now being relaxed to allow more migrant workers (rural registration) to get their urban hukou registration because the property prices are plunging and the local governments desperately want to coax people into buying houses to slow the falling prices.

    It’s not even done in the name of reducing inequality, it’s trying to entice the poorest of the society to become even more debt burdened with the promise of getting an urban hukou in return.

  • Is this supposed to be sarcastic? Not sure what you mean here.

  • It’s funnier that Trump is threatening wars because they didn’t give him the Nobel Peace Prize lol.

  • But what else is Europe going to do?

    The EU wants to run a trade surplus, and their widening trade deficit with China is simply unsustainable (Europe being forced to take in Chinese goods while China has pretty much stopped importing from Europe). If they are further cut off from access to US consumer market, they’re screwed. It’ll be austerity, unemployment and then recession.

    This is the problem with following IMF’s export-led growth strategy, which can only work when the US is willing to run a perpetual trade deficit, because it is mathematically impossible for everyone to run a trade surplus. It will only result in mercantilism, and worse, militarism and colonial expansion of the 19th and early 20th century.

    Yes, some economies won big with the export-led growth strategy, Japan, Germany, South Korea, Taiwan, and now mainland China. But everyone else has to lose. That’s just how neoliberalism works.

  • Sorry this doesn’t compute at all.

    Denmark’s economy is currently over-reliant on Novo Nordisk, whose ecosystem comprises nearly 10% of Denmark’s GDP and 40% of its export revenues. 60% of Novo Nordisk’s export revenue came from the North American market.

    It is not a weapon that Denmark can use, but the other way around - it can be weaponized by the US. If the US restricts Denmark’s access to US market, then it will kill Denmark’s economy and drive it into recession immediately. Who’s going to replace the US consumers? Is China going to step up and import from them?

    The effect on the US is that diabetic and clinically obese patients get screwed, but for Denmark it’s the national economy going down. You don’t want to play with fire like that.

  • Thank you for raising these very important questions, because as a Marxist and socialist, these are the issues most close to heart for me rather than the amazing technological breakthroughs in China. I have many on the table, for example, class division, rural/urban divide, healthcare system, etc. that I simply haven’t found the time to write amidst a very busy work schedule.

    As a starter, it is important to understand why the Chinese economy is in the state it is currently. Whenever you hear someone argues why China should/shouldn’t have billionaires with all the rhetoric without telling you anything about the history of its economic development, especially the watershed moment of the 1994 Tax Sharing Reform, then you know they don’t know what they’re talking about. My favorite one is “China keeps billionaires under their control” lol - if that’s the case, then why would you need billionaires in the first place?

    The simple answer is that the decentralized nature of the economy forced the local governments to seek financial support from the rich business elites, who then formed cliques with the government officials and became billionaires in the process. It is a product of the system itself. Read my post here about the 1994 Tax Sharing Reform and its consequences. It explains a lot about why there are billionaires and why the property market booming is such a big deal in China’s recent history.

    For class division, I recently came across a lecture from Prof. Wang Ou and while I was writing up the notes, I realized that someone else has already done a professional translation of the full lecture. I strongly recommend you read this article: Wang Ou: Migrant workers, after the honeymoon which is essentially the entire transcript of the lecture translated into English.

    Prof. Wang’s research is mostly focused on women migrant workers and the challenges they face after getting married and having kids, but even taking such a glimpse into a slice of the migrant worker’s lives will tell you a lot about class division in China.

    I wrote a bit about this in another comment the other day in response to someone else in a different topic, I am reproducing my comment here to add on to what is in the article above:

    In China, your hukou (i.e. where you are born, or rather, the residence of your parents) determines your access to housing, education, healthcare, pension/insurance and public utilities in the urban areas. There are ~40% of people with rural hukou registration that are effectively barred from what urban citizens get to enjoy - not completely, but it’s extremely limited.

    Currently, there are 300 million migrant workers (农民工) in China (40% of the 700+ million total labor force, and nearly the entire population of the US!) who work in the cities but their rural hukou registration limits their access to housing (and education for their kids - both are connected, see below).

    Migrant workers are the true underclass that makes your cheap iPhones and build all those amazing infrastructure across China, yet because of their rural hukou registration, are not entitled to public utilities in the cities they work in, because technically they are not residents of the cities they work in. Your home is tied to the village/provincial town you came from. This allows the municipal governments to exploit their labor while providing minimal services in return. (Remember, there is no personal income tax in China (only 70 million people have to pay income tax), the most important tax revenue is value-added tax, so the more labor hours being squeezed out of the workers, the higher tax revenues the local governments receive).

    Similarly, employers are not obligated to contribute to pension funds and insurances (五险一金) so migrant workers usually get screwed the worst because they have little to no safety net if they get sick or become unemployed.

    It is class division based on where you’re born.

    Now, on to housing, more than 60% of them live in rental units, 20% live in company-provided hostels/dormitories (shared living spaces) and a proportion of them (20%) did purchase houses (especially with marriage and kids) but mostly in the provincial towns. A lot of them were scammed into purchasing houses because the local governments, in an attempt to drive up land prices, tied education resources to housing, and effectively coercing these migrant working class families to purchase a house in the county in order to even have a chance of sending their kids to public schools due to the points-based system that prioritizes home ownership:

    According to Prof. Wang Ou’s research (see my linked article above):

    So, how much does it cost for a migrant worker to buy a home in the county? While staying in newly purchased apartments of migrant workers, I calculated the expenses carefully. In a county in southern Jiangxi, homes cost 6,000–7,000 RMB [$852-994] per square meter; in a county in western Guangxi, 4,000–5,000 RMB [$568-710]. A 100-square-meter shell apartment plus full fit-out costs at least 600,000–700,000 RMB [$85,215-99,418]. This is an enormous burden—often draining the savings of two generations and still requiring loans for ten or twenty years.

    Education is very important in China (and East Asian culture) as it is essentially the path towards upward social mobility. Many parents who want their kids to even have a chance to get enrolled in public schools were coerced into purchasing a house, because of the point-based system. If they are not wealthy enough to own a house, their kids will not be eligible for public schools (simply not enough places for everyone) even though they are born and raised in the city where their parents have worked for years. In this case, they will have to resort to private schools, which are more expensive and draining on the parents’ expenses. That’s how the system favors the wealthy.

    As a result, the parents will often seek the financial support from their parents (the kids’ grandparents) and use their life savings as downpayment for houses, work hard themselves while saving very little to pay the mortgages for 10-20 years, all in the hopes that their kids will have access to good schools.

    So, the purchasing of one house is not just about one family, it’s about three generations of people. The plunging property prices in China is now taking its toll on the Chinese households across multiple generations. This is how you get low domestic consumption.

    I wish I have more time to write about these in more detail because they are very important and interesting topics to discuss. I hope this is enough to serve as primers for you into navigating these topics.

  • Just a minor correction, the recent development of IMF Shanghai Center isn’t sudden welcoming, and IMF has been in China for a long time, but the further integration of the Chinese monetary system into the IMF framework, with the IMF now recognizing China’s role as an economic powerhouse in the region and in the world.

    China will continue to play a major role in the global economy in the years to come, but I don’t see them abandoning the IMF neoliberal framework anytime soon.

  • electoralism @hexbear.net

    Zohran Mamdani Wins New York With a Youthquake

    www.nakedcapitalism.com /2025/11/zohran-mamdani-youthquake-new-york-cuomo-trump-democrats.html
  • Chapotraphouse @hexbear.net

    Ridiculous Chinese censorship used AI to change the gay couple in Together (2025) to a heterosexual couple

  • History @hexbear.net

    Average working hours dropped drastically after 1917, due to fear that the Russian Revolution would inspire similar revolutions in other countries