The US is 150% of China's GDP (in nominal numbers) [1]. AI claims that China's "purchasing power parity" GDP is $44t compared to $32t for the US. There is no way that the US, which has been the world's largest economy for decades, is 3% of China's GDP.
Exports to the US is about 20% of China's GDP [2].
Regardless of any of China's contingency plans, US exports are well above noise-levels.
Exactly. I had incorrectly assumed that people would use context to make the correct inference, but it looks like prewett ran out of tokens, and failed to parse it.
That's not how you would want to measure this, as it doesn't much matter whether a good is directly exported from China to the US, or whether it is routed through a third country like Vietnam, or used as an intermediate input to a different good which is then exported to the US, etc.
What you should take note of, is that China's trade surplus tracks the US trade deficit extremely closely, and this has been the case for the last 20 years.
Said another way, most nations in the world run roughly balanced trade. There is only one nation on earth that can sustain large and prolonged trade deficits. Only one. That is the US. So if you are a nation whose entire economic strategy rests on running large and sustained trade surpluses, then you are going to be exporting your surplus to the US, directly or indirectly, and only to the US.
Now in practice, some of that will be direct sales to the US, some will be indirect sales to the US, but at the end of the day, if you want to run a 1.2 trillion dollar trade surplus, then you have to hope to God that the US is willing to run at least a trillion dollar trade deficit, because no other country is going to do that for you, the entire rest of the world may be willing to accomodate a hundred billion or so, but for everything else, you will depend on the US, directly or indirectly, to absorb your surplus.
This is a good analysis, but coming full circle - having a trade surplus is not itself a vulnerability. Rather the actual vulnerability would be needing US dollars, to pay for imports (raw materials and whatever else they don't manufacture themselves). If China doesn't need more US dollars (because perhaps they are already holding plenty of treasuries), then they can simply prop up their internal economy with financial stimulus. And longstanding currency controls make it so they can manage this easily. Print yuan to buy that stream of goods that were previously being exported, and just bury them in a hole in the ground. Or more fruitfully, give that yuan away to their poor rural population to boost their standard of living, improving the country and shoring up support for the Party.
I don't think things are so straight forward because everything is connected in ways that are sufficiently complex to defy any sort of straight forward thinking; when you change one thing, 10 other things change and in ways that will invariably end up with completely unexpected outcomes. For the most straight forward example - those things that are exported are not just buried, but end up being used in various processes. And China itself is also heavily dependent on imports, importing upwards of $3 trillion in goods and services. When your exports are no longer available, you may soon find that neither are your imports, and suddenly everything starts breaking.
I was merely responding to the implication that a having trade surplus is itself a vulnerability. There of course may be other constraints whereby China is reliant on external trade, but those are separate arguments.
The reason why you need the dollar is because of the balance of payments identity: changes to the capital account + current account = 0
So to run a current account surplus against the rest of the world of $100, you need to accumulate $100 of financial claims belonging to the rest of the world. There are complexities, for example I switched from "trade surplus" to "current account" because things like interest payments also need to be added in, but with these adjustments, you cannot run prolonged trade surpluses without storing your money in some other nation's jurisdiction.
Now the question is, which nation is willing to accomodate inflows of a trillion dollars a year? That's right, only a single nation is willing to do that. Most nations ban or severely restrict foreign capital inflows. Those that don't ban it, they don't have the necessary financial infrastructure to accomadate the scale of surpluses that China needs to run. This is why I laugh at all these reports of "China is dumping treasuries". China accumulated over a trillion dollars of dollar claims over the last year. That's in addition to what they already had. Why? Because who else would allow those levels of foreign capital inflows into their economy.
So once again, the US is the only nation willing and able to absorb these capital inflows.
Personally, I don't think this is sustainable, it's deindustrializing the US and is highly destabilizing, but since the liberalization of global capital flows launched by the Clinton administration, we have been doing this 30 year experiment in what happens when you let countries print money and use them to buy your bonds. The results have been, in my opinion, highly destabilizing, and it's not going to end well. But many of those who grew up in this period, think this is just how the world works and they can't imagine any other system, one in which capital inflows were highly restricted and as a result, no nation ran large trade surpluses against any other. Or they don't think about this at all and believe that China's hard work and industrial prowess is why they are able to run large trade surpluses, completely ignoring the whole money printing to buy US bonds that is happening in the background. When the US was the world's primary industrial power in the period 1870 - 1920, we ran current account deficits, not surpluses. What China is doing, industrializing while exporting capital -- that is truly unprecedented and possible only due to the combination of fiat non-convertible money combined with the US allowing unrestricted capital inflows. It's a truly bizarre state of affairs.
> you need the dollar is because of the balance of payments identity
This is just tautological with the trade surplus. Yes, the two go hand in hand.
My point is that "trade surplus" is always trotted out as if it is some vulnerability of China's - that if we stop giving them dollars and they stop giving us goods, this would create an unsolvable problem for China's economy.
But this is merely fanciful fiction borne from western thinking where we don't have the political will to take sustained direct action to subsidize domestic industry. But China isn't bound by this! Rather it is merely wishful thinking as if we hold power here.
Hence my focusing on whether China actually needs more dollars (ie is reliant on exporting to get those dollars), or whether they could make do with what they've already saved up in treasuries (and other USD investments) while being unable to export as much to the US. My gut says their economy and industry is now large enough that they could weather it just fine. We're still looking at them as if they are the little kid from the 90's (who would have indeed been hurt if we had never started the arrangement), and failing to see that they are all grown up. The pump has been primed.
> the US is the only nation willing and able to absorb these capital inflows... The results have been, in my opinion, highly destabilizing
In my opinion, the destabilizing results were not inevitable. Rather they were the result of deliberate policies that were kept outside of the Overton window by the entrenched interests who were benefiting from them.
Having others say "I'm willing to accept IOUs from you rather than requiring payment in cold hard cash" (aka having the world reserve currency) is an inherently lucrative position! The downsides can only come from how you react to having that ability - a spendthrift might write IOUs without limit and spend all their cash, making the position itself look like a vulnerability. Whereas a frugal person who wants to avoid that fate but isn't very creative might keep a stack of cash that 1:1 corresponds to IOUs they've issued.
The two deliberate policies of which I speak are 1. USD must always inflate (which precludes the frugal option) 2. the legislature/executive government is prevented from spending the newly created money on (most) deliberate constructive activities (like the industrial subsidies I was talking about above).
So most of the wealth we received from having the world reserve currency (represented in-system by newly created money) was simply given away by the Federal Reserve directly to banks (as low-interest loans) to blindly "invest". This resulted in the everything bubble - unproductive assets as a safe haven, intemperate investment in new industries, but failure to maintain the industries we had (since mature industries don't achieve outsized investment returns).
In a different world the legislature would have spent some of that wealth directly subsidizing domestic industry to maintain it, backed up with laws about not being able to move production lines out of the country. But of course this was not in the interest of the corpo class as it would have meant less money going into their own pockets. Hence it remaining on the fringes of the Overton window. (the one place it did actually happen was the defense industry, of course)
Now that the deindustrialization scam has run its course, the corpo class is on to the next thing - economic consolidation to further cement their position. They're channeling echos of what would have been prudent decisions back in the 90's, which makes grassroots voters think they are finally being listened to. But it's nonsensical to talk of closing the barn door after the horse is long gone, right? So in reality they're pushing upside-down bizarro revanchist economics (like framing strong currency itself as a problem!), to destroy the economy that we actually did develop. Then they can mop up and further centralize.
I was under the impression that AI was terrible for translating Asian languages (at least Chinese, Japanese and Korean) because it doesn't capture certain contextual nuances. Is it actually good now? Are there bilingual speakers who use it and vouch for it?
It’s extremely good. Chinese, Japanese, Korean. Had multiple instances of confusion because the counterparty thought I was actually a native speaker because we had only communicated over text. Both commercial and social contexts. Translation is now effectively solved.
Edit: I should add like all LLM usage, you need to prompt well. I also like to run the translation back through DeepL for a more traditional technology read on it and to identify any obvious issues.
Well I'm grouping these under AI- they have been around a while for sure, but maybe they have reached some kind of critical mass there: I'm imagining people on Chinese social media talking about it as a way to make money.
Also the text to speech is in their own voice. Some are using this as a way to help pronounce english (maybe there is some language training software available for this, I don't know).
Abundance? Yes. Quality? No. I generated over 10,000 lines yesterday because "someone wants the whole thing done in a week." I did look at some of it. Real fast.
> Japan is an island. It has always been and not just from a geographical perspective. Its very culture and history are ones of isolation. The restrictions are not new, the perspective "Japan first" is not new - these have always been there, they are at the very core of the nation.
That's not at accurate from what I know of Japanese history. You seem to be over-indexing on the (relatively) brief Tokugawa-era sakoku policy and ignoring the thousands of years surrounding it where Japan was an active importer of culture.
Kanji, government structure, Buddhism, law, art and more were all imported from China and hugely influential in Japanese history. After the the Meiji Restoration, Japan explicitly set out to Westernize and went abroad to study European and American institutions, invited Westerners in to help build European-style banking systems and government systems, adopted Western clothing, architecture, military organization, legal codes, etc. etc.
If anything the Japanese are masters at importing the things they like of foreign culture and then modifying to make it their own. They have always been importers of culture.
I think Kagi's product team actually uses their own software. I often have a small frustration with something and wish for some mitigating setting or change, then go look in the settings and find exactly what I want.
For example: automatically choose Japanese when entering kanji, and automatically strip HTML markup from pasted content.
For many people the phone is the only computing device they use. Keeping portability and offering a larger display is a compelling offering for those people.
> For many people the phone is the only computing device they use.
I suspect the crossover area of the Venn diagram between people who spend what a foldable costs on a phone and people who have no other computing device is extremely small.
Why so? For most people a computer (in the traditional keyboard/mouse sense) isn't a leisure device, a phone is. They scroll social media feeds and watch YouTube or whatever.
I'm sure most of us on HN use them for leisure, but for most people a computer is a device for work, not for play.
RoR is the only framework I’ve ever heard of being so bad that it killed startups. I personally know of two that were doing well, but RoR was so brittle and slow that they couldn’t hire enough to keep it going. This is compounded by Ruby devs being pretty rare.
> RoR was so brittle and slow that they couldn’t hire enough to keep it going.
This is such a "poor carpenter blaming his tools" take.
RoR isn't holding you back from writing performant, high-quality code. However, letting inexperienced developers run wild without supervision does end up with a codebase committing most of the deadly sins of software: (1) proliferation of competing patterns (2) proliferation of competing third-party libraries, leading to more #1, (3) inadequate test suite, and (4) an app that serves up so many 500 errors that you can't tell which are new and/or which indicate a problem. #4 is definitely more common in untyped languages, since that whole class of bugs can't be caught at compile time.
By the time a lot of these "startups" get to the mature state they have like a 7-year-old codebase that is beyond help. But you can use Ruby and Rails responsibly. I've seen it done. Usually all that's needed is to apply yourself to understanding how to cache, and then, identifying the key expensive high-traffic endpoints and converting them from ActiveRecord N+1 messes into single-query eager-loaded beasts, sometimes skipping ActiveRecord's object instantiation. Sounds scary, but it's inevitable for a popular application on any language/framework that you'll need to go beyond the tutorial-grade code for key transactions. This kind of thing is what Staff Engineers are for.
> I was watching a video about Gen Z versus Millennial views on this subject and they talked about how when Millennials were in high school and college, tech innovation was moving fast and delivering really useful, fun technology. It was also a lot less pervasive and all-encompassing in scope. It wasn’t a massive machine of surveillance capitalism, or at least, not in the same way. Figuring out which banner ads resonate with each user was a lot more innocent than private surveillance cameras on our streets doing Minority Report-style policing.
I think millennials are even more upset by this than other generations. They grew up with a version of internet technology that was useful and non-exploitive, then watched greedy tech companies and CEOs about face and burn it all down to make extra billions.
My philosophy: if the hardware doesn't belong to me I'm not doing anything personal on it, no exceptions.
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