Share this page!

Noah Smith 🐇 Profile picture
Twitter logo
18 Dec, 21 tweets, 6 min read
1/Today's @bopinion post is about a rare weak point in the Chinese economic model: China's difficulty in doing foreign deals.

bloomberg.com/opinion/articl…
2/In recent years, China's economic model has seemed to go from strength to strength. Many now wonder if Chinese state-capitalism is superior to other systems.

adamtooze.substack.com/p/chartbook-ne…
3/But China's model has had one big, notable failure in recent years: the Belt and Road project.

China planned to loan other countries a bunch of money to do infrastructure projects. It didn't work out so well...

bloomberg.com/quicktake/chin…
4/From day 1, the projects didn't work out as planned, and other countries got mad.

bloomberg.com/opinion/articl…
5/There were cost overruns. Political setbacks. Countries demanded to renegotiate the terms of loans.

thediplomat.com/2020/01/the-ha…
6/The project got bogged down in Asian countries first.

bloomberg.com/news/features/…
7/And China's outbound investment fell.
8/But in Africa, China's lending continued to go strong...for a while.
9/But a lot of the African projects turned out badly, and now China is facing a wave of defualts.

bloomberg.com/news/articles/…
10/African countries are kind of pissed at China for lending them money for projects that didn't work out. They're now demanding that China renegotiate loan terms and write down much of the debt.

bloomberg.com/news/articles/…
11/Now, if China were just taking economic losses, this might be fine -- the idea of Belt & Road was always to gain geopolitical influence, access to resource supplies, etc.

The problem is, the project is incurring political losses too, as countries get mad at China.
12/Why did Belt & Road go wrong?

Maybe because China tried to apply an authoritarian model that works well within China to countries where it just doesn't work.
13/In China, when debts go bad, the central government mops them up and that's that. But other countries get pissed at having to go begging for loan restructuring for failed projects!

bloomberg.com/opinion/articl…
14/In China, the government can kick millions of peasants off their land to make way for development projects. They get mad and protest but eventually they get quelled.

But locals and indigenous people in other countries aren't easy to quell!

rfa.org/english/news/m…
15/And China's leaders and bankers are probably not so sensitive to worries about neo-colonialism in African countries.

In general, China just can't treat other countries the way it treats its own provinces!
16/So why is this a general vulnerability and weakness for the Chinese economic model?

First of all, because China needs to sell a lot of stuff to developing countries to keep growing its exports.

bloomberg.com/opinion/articl…
17/Pissing off developing countries can come with economic consequences!

bloomberg.com/news/articles/…
18/And geopolitically, China can't afford to alienate a ton of developing countries. If it does, it could see its ambitions in the South China Sea and elsewhere checked.
19/Meanwhile, developed countries are taking advantages of China's ham-handed fumbling to offer infrastructure alternatives of their own -- as well they ought to!

bloomberg.com/news/articles/…
20/Europe and Japan are among the countries offering non-Chinese alternatives.

bloomberg.com/opinion/articl…
21/In general, dealing with other countries seems to be a weakness in China's authoritarian capitalist model.

Other countries don't like being pushed around. And that's not going to change.

(end)

bloomberg.com/opinion/articl…

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Noah Smith 🐇

Noah Smith 🐇 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @Noahpinion

Noah Smith 🐇 Profile picture
19 Dec
1/Today I wrote about a worrying topic that has been much on my mind of late: China's dominance of its Asian neighbors.

Taiwan, Japan, India, Vietnam, and plenty of others have big reasons to worry.

noahpinion.substack.com/p/invincible-e…
2/For me, as for a lot of people in Asia, the key moment was the Hong Kong protests.

They were absolutely enormous. Almost 2 million Hong Kongers, out of a total population of 7.5 million, turned out in the streets to demand universal suffrage. Image
3/The protests failed. China simply implemented a draconian new security law, threw prominent activists in jail, and accelerated the process of subjugating Hong Kong.

It was never even a real contest.

noahpinion.substack.com/p/i-will-never…
Read 28 tweets
Noah Smith 🐇 Profile picture
19 Dec
When renewable energy gets cheap enough, developing countries will simply ditch fossil fuels out of pure self-interest.
Most emissions are not in the U.S.

Most emissions GROWTH will not be in the U.S.

--> Thus, while it is important for the U.S. to decarbonize, our biggest impact will come from making green energy cheap enough so everyone else decarbonizes on their own, at low or no cost.
Soon this kind of thing won't even be newsworthy anymore, it'll just be what every country is doing, everywhere.

Read 4 tweets
Noah Smith 🐇 Profile picture
18 Dec
I have to say, this really worries me.

I don't want conservatives to be pro-America and progressives to be anti-America. A future where that is the political divide is not a good future.
First of all it worries me because it seems likely to hurt progressives electorally. If they're anti-America and average voters are pro-America, even if only symbolically or rhetorically, it means progressives are going to be fighting an uphill battle...
Second, it worries me because if progressive activists don't believe in America, what entity do they think is going to solve all these problems we're facing? If they're placing their hopes on replacing America with some other entity or entities, they're not on a road to success.
Read 5 tweets
Noah Smith 🐇 Profile picture
17 Dec
My guess: After 2012 the big fear was that Hispanics would be a permanent Dem constituency. That fear should have put Rubio in charge of the GOP; instead it lead to the Trumpian backlash. Now, Trump's gains with Hispanics have reassured them...
This type of partisan fear -- that immigration represents vote-importing by the other party, and will lead to permanent demographic drowning at the ballot box -- is a very old phenomenon in American society.

You might say that this is one of the constants of American politics. Immigrants and their kids tend to vote more for one party than the other. This raises fears of demographic drowning among the other party, which then seeks to restrict immigration...
Read 10 tweets
Noah Smith 🐇 Profile picture
17 Dec
1/@tculpan and I wrote a @bopinion post about supply chains!

Basically, Trump really screwed the pooch on this one, but we still need to do something about the fact that our supply chains are highly dependent on China.

bloomberg.com/opinion/articl…
2/Joe Biden has also vowed to reshore our supply chains. For stuff we need in an emergency, that makes sense. But for a lot of stuff, it doesn't. We're not going back to the days when countries made most things in-house.

joebiden.com/build-back-bet…
3/The U.S. is still going to be good at the things it's good at. Capital-intensive businesses with lots of innovation (plus farming). We're not going back to an economy based on low-skilled assembly work -- nor should we.
Read 11 tweets
Noah Smith 🐇 Profile picture
16 Dec
1/Someone on Twitter asked me what my top three priorities to boost American material prosperity would be.

So I wrote a @bopinion post about it.

They are:
1. National health insurance
2. Cheap housing
3. Sectoral bargaining for stronger unions

bloomberg.com/opinion/articl…
2/There are a lot of big policy ideas floating around this country. All of them on the political left, I should note.

Universal basic income, a federal $15 minimum wage, a job guarantee, child benefits, free college...

So why did I pick these three?
3/Let's start with national health insurance.

Our health care system is just a total mess. It's a source of terror, of catastrophe, of massive expense. It's hideously inefficient. It lags behind all the other rich countries.

commonwealthfund.org/publications/i…
Read 15 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

Like this author's thread?

Get emails when @Noahpinion has new unrolls!

Check out other threads from @Noahpinion!

Read all threads by @Noahpinion