Space Pirate

Interest: AI and History.

[Space Pirate @SpaPirateMars]

@Telegraph It's not surprising to see countries spy on each other.

It's surprising how incompetent these "spying" or intimidation activities were. They were caught with video footages of themselves, trespassing in broad daylight, leaving instant messenger traces, etc.

[Space Pirate @SpaPirateMars]

@_vmlops Isn't presidio open sourced a long time ago?

[Space Pirate @SpaPirateMars]

China's Innovation is not just capitalism, but setting off targets for county-level competition for growth. This channeled its powerful state apparatus towards investment driven growth.

It's like creating a monster that everyone got fed up, but instead of killing the monster, it decided to unleash it on state sponsored capitalism

[Space Pirate @SpaPirateMars]

@culturaltutor Thank you! Sir Roger Scruton would be proud.

[Space Pirate @SpaPirateMars]

@haider1 Isn't latent space reasoning models the alternative that yann is discussing here?

[Space Pirate @SpaPirateMars]

You're still confused about the same core issue: you keep listing what the debt paid for and how big China's markets are, but you never answer the fundamental and simple macro question. The debate is never "has China built useful assets?" or "is China a big consumer and exporter?" It is about *sufficiency*: over the next 10–20 years, will Chinese household income and consumption grow fast enough, relative to GDP and the stock of non‑financial debt, to carry the system without relying on ever more leverage and external absorption?

Put differently, do you actually want a model where investment and exports keep outpacing household consumption, and where the costs of debt cleanup: whether through slower growth, higher taxes, or inflation - continue to fall disproportionately on ordinary households?

I also find it interesting that you instinctively frame any criticism of China's economic structure as if it must come from an American perspective, or that I am an American. Truth is - I've never argued against Chinese prosperity; the opposite. All I've argued for is structurally faster wage growth and a higher household share of income and consumption in China, and that is the mainstream position among China‑focused economists, including many Chinese scholars, who argue for a deliberate shift toward consumption‑led growth.

You call yourself a nationalist, which is fine; my only reservation is with nationalism that refuses to confront arithmetic. A China in which workers' wages rise faster than GDP, and in which household consumption plays a much stronger role, is not just better for Chinese workers; it is also healthier and more stable for the world economy than a China that must lean indefinitely on cheap capital, excess capacity, and external demand.

[Space Pirate @SpaPirateMars]

I'm afraid your comments are arriving at the wrong conclusion, based on bad assumptions and having a wrong focus.

1. The issue is not whether China, as a sovereign issuer, can avoid a technical default. It almost certainly can. The issue is how the cost of high and rising debt is absorbed in the real economy. Printing or financial repression do not make debt "free"; they shift the burden into inflation, currency weakness, lower real household incomes, and slower growth.

2. On consumption, the right metric is not car sales or isolated anecdotes but consumption as a share of GDP. Chinese household consumption is still around 40% of GDP, below both global norms and China's own earlier levels, and exports remain a much larger share of China’s GDP than that of US. The key point is that: China's growth model still leans heavily on investment and external demand to absorb output that its own households do not consume, even though consumption is rising in absolute terms.

3. This brings us back to the question of sufficiency. The point is not that Chinese consumption isn't growing - we all know it is. The point is that it is not growing fast enough, relative to GDP and to the accumulation of non‑financial debt, to structurally rebalance the economy. Until household income and consumption grow significantly faster than both GDP and the debt stock for a sustained period, the system will remain dependent on leverage and external absorption to make the numbers add up.

Consensus of Chinese economists are to increase consumption share of the economy, and by definition it means it needs to rebalance away from exports. This certainly means worker's wages to raise to a much higher level. If you don't agree to this, then you're either confused about the sufficiency arguments above or you're just too "patriotic" to be realistic.

[Space Pirate @SpaPirateMars]

Dedication is good, and arguably - being conscious in maintaining a sustainable way of working is a form of dedication.

I remember the number theorist Hardy once remarked that he can only do 4 hours of intense meaningful work, then he'll go for exercise and other activities.

It's not that he's not dedicated, but he knows how to maintain his mind with a harness of work-rest discipline, so he can consistently perform over his long career.

[Space Pirate @SpaPirateMars]

You're still confusing a static accounting snapshot with an intertemporal solvency question.

The key point is: net income and low nominal interest rates tell you very little about whether a rising debt is sustainable if, over time, debt and debt‑service obligations are growing faster than household income and domestic demand.

An economy can have impressive sectoral profits, low loan rates, and rising export market share, and still face a worsening debt problem if the household share of income and the consumption share of GDP remain too low, forcing growth to rely on ever more credit and external demand.

Industrial upgrading and a handful of high‑income sectors are generally welcomed, but they do not, by themselves, resolve the fundamental imbalance between what China produces and what its own households are allowed, and able, to consume.

As I said, this is a question of sufficiency. It's not that China's consumption isn't rising, but it is not growing fast enough relative to debt and output. China's consumption probably need to rise 2% higher faster than GDP consistently in next decade, and slow down on investments. Non-financial debt in China is already at 300%, investment led GDP growth need to reduce.

[Space Pirate @SpaPirateMars]

No, your claim that "debt cannot exceed assets" is just wrong and a weird point to make: in accounting terms, assets = liabilities + equity, so whenever equity is negative, liabilities are by definition larger than assets. Think homeowners in a housing crisis - i.e. 2009 in the US or China in 2020 onwards.

But the key macro issue is not whether debt is "secured", but whether future income (especially household income) is sufficient to service that debt without permanently suppressing consumption or requiring even more borrowing. This is an arguement for sufficiency - whether wages are rising fast enough.

In China's case, total public and private debt has grown much faster than household income and consumption, which means the system is leaning on balance sheets rather than wage growth to sustain demand, so China today is different than 15 years ago, as today's investment ROI's are dwindling.

Pointing to a few high‑paid AI engineers or to "industrial upgrading" does not address that aggregate imbalance in the distribution of income and the reliance on ever‑rising leverage.

I'm all for Chinese wages to go up and China to rebalance to having much higher consumption. This is good for Chinese workers and the world economy. And this is also the consensus of Chinese economists. I think those people who don't see this problem are either too patriotic to be realistic, or too optimistic to be practical.

[Space Pirate @SpaPirateMars]

The issue is the relationship between wage and debt in the economy as a whole.

Even as headline service prices look cheap, both household and broader national debt have been rising much faster than incomes, while consumption’s share of GDP has not risen nearly enough to offset this.

With total public and private debt and debt‑service burdens already very high, this isn’t sustainable and that's why we need consumption to rise quicker than debt, not just GDP. And this would mean higher costs but it is good for China because it's a rebalance to household.

So what you are describing is the symptoms of an economy that suppressed income for too long in order to prioritize export.

[Space Pirate @SpaPirateMars]

@fabianstelzer Elon posted that Claude logo looks like an anal sphincter and I cannot unsee it now.

[Space Pirate @SpaPirateMars]

@qingeneral86 @michaelxpettis The problem for China is not that exports are too high, but consumption share of economy is growing too slow.

At this economic stage, this means wages are not rising fast enough vs debt.

What Pettis is pointing here is more or less a consensus among Chinese economists.

[Space Pirate @SpaPirateMars]

That pointing gesture at the end is a protocol widely used in Japan called shisa kanko (指差喚呼), where operator or maintainer of important machinery (especially in transport industry) would point deliberately and say out loud the status of important checklist items.

It is used to reduce error in routine checks, and is found to reduce errors by 80%.

I use this concept myself in my day to day life as well for important tasks.

[Space Pirate @SpaPirateMars]

@SaMmU2810 @JustLuai Given that we have data of how Jews are treated in Arab countries, vs how Arab Palestinians are treated in Israel (full legal rights, political representation, higher GDP per capita than Arabs in Jordan), I think this is a terrible idea.

[Space Pirate @SpaPirateMars]

@FrankBr05713205 I strongly recommend any student who's serious about math and engineering to use a slide rule.

It can help you improve numerical intuition, appreciate the continuous nature of mathematics, all in an aesthetically pleasing and creative device

[Space Pirate @SpaPirateMars]

@SaMmU2810 @JustLuai How is this a viable solution? If we return to before 1948, it would be a British government that all sides hated and attacked.

[Space Pirate @SpaPirateMars]

@harukaawake I think there's a general sense in the West where people look up to Japan, because the Japanese are so unapologetically proud of their own culture, and they are able to make a serious effort to live it out.

In an ephemeral world, there is a sense of dignified permanence to it.

[Space Pirate @SpaPirateMars]

@Maiden_Kerry @harukaawake That's simultaneously the most English and most Japanese picture ever.

Think about it, somehow only the Japanese can carry English high culture with a nod to postmodernism so naturally.

[Space Pirate @SpaPirateMars]

@chess_feed This is filthy.