excellent blog post by Polyak on the fallacy of composition around Chinese export surpluses. i would add: this problem is endogenous to the model. if you reward local elites based on a tournament where higher GDP / output is the metric, they will overproduce w/o regard to the systemic consequences
herman mark schwartz
Europe is obsessed with Chinese industrial domination. But the more seriously I take the "China is winning" argument, the less sense China's endgame seems to make
If European industry collapses, demand for Chinese exports collapses with it.
My latest: brettoninthewoods.substack.com/p/chinas-gro...
brettoninthewoods.substack.com
The European debate about China is obsessed with production. It spends remarkably little time thinking about demand.
