Is China becoming a nation of hamburger flippers?
Here’s Bloomberg:
Ma computes that between 2014 and 2018, China lost 17 million industrial jobs while adding 46 million service jobs. Some 13.52 million jobs were created last year.
When this happened in the US we were told that it was a disaster. Will the decline in industrial jobs create a meth epidemic in China? Does China need to launch a trade war to get those industrial jobs back?
Of course I’m being sarcastic, but this is one more data point indicating that the “real problem” (if it is a problem) is automation, not trade.
Over at The Hill I have a new column explaining why Trump lost the trade war with China. The basic problem was that the US didn’t have any important demands that were both coherent and achievable. If you go into negotiations not knowing exactly what you are trying to achieve, it’s pretty hard to come out ahead. Trump was smart to cut his losses and agree to a meaningless “phase one” deal.
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18. January 2020 at 13:18
I think Tyler Cowen disagrees with you:
https://marginalrevolution.com/marginalrevolution/2020/01/what-to-make-of-the-new-u-s-china-trade-deal.html
18. January 2020 at 13:54
The trade war was so stupid. Basically 2016 featured strong economic growth but due to low oil prices Texas only grew at .3% GDP growth which affected industry in the Midwest that supplied frackers. In 2015 manufacturers started announcing new factories thanks to cheap and abundant natural gas but these new factories were being built around the new SUV manufacturing region which is centered around Atlanta and not in the Rust Belt. So in 2016 everyone knew the American economy was fundamentally strong but Trump exaggerated the perceived slow growth of 2016 in the context of the slow growth from 2009-2013. So people got a small taste of our strong economy in 2014 and 2015 so they feared 2016 meant slow growth was back (but it obviously wasn’t) they just lived in the wrong region. So long story short Trump made up a reason for the slow economic growth in 2016 and China was an easy scapegoat.
I posted this on another macro site—should Trump put a tariff on Wyoming coal because it is cheaper and easier to mine and Wyoming workers aren’t unionized?? So how is Wyoming coal any different than cheap steel from China?? If we burned more WV coal more coal miners would be employed with higher salaries but of course we burn the cheaper coal that requires fewer people to mine it.
19. January 2020 at 00:02
Larry, Yes, but I wasn’t persuaded. I don’t see much evidence for the claim that the US won anything significant. He mentioned the Chinese promise to buy more US goods, which most experts seem to view as being pretty meaningless.
Gene, I agree. Indeed I made some similar points in a few Econlog posts.
19. January 2020 at 05:38
Those Chinese industrial jobs “lost” were job opportunities lost. Of course, that’s how economists view a “loss”, but not ordinary folks. As China’s economy moves toward a consumer economy, there will be millions of industrial job opportunities lost. Millions. OMG, China’s economy is collapsing! How many times have the preachers preached that to the choir.
19. January 2020 at 10:33
ssumner, reading about the recent $10 billion United Mine Workers of America pension bailout informed me about the difference between coal in Wyoming and Appalachia. (it is also another example of automation reducing jobs).
Apparently underfunded multiemployer pensions are another problem we must tackle that we have known about for years. Furthermore the farm bailout combined with these inevitable pension bailouts shows just how disingenuous the Republicans were during the auto bailout…and I believe that is why Trump so easily defeated a field of Republican all stars.
20. January 2020 at 00:07
Rayward, I doubt you’d find many economists freaking out about the loss of industrial jobs in China.
Gene, I agree, but I expect that Trump will also support bailouts. They all do.
21. January 2020 at 10:32
Wouldn’t it be the culture that is the problem? Chinese people are so much poorer than the US, but because of Chinese culture, they generally tend to work and not to use drugs, and almost never have kids out of wedlock (wealthy playboys excepted). The social fabric and norms of the two countries are so different that it is like comparing apples and oranges.
21. January 2020 at 12:52
P Burgos,
I have friends of Taiwanese descent that have their great grandparents opium pipes.
21. January 2020 at 20:06
Burgos, When East Asia was poor, there was a stereotype that East Asians were lazy. These stereotypes tend not to hold up over time.
22. January 2020 at 11:34
Who knows how any culture will change, but as of right now East Asian cultures seem to have adapted to birth control in a very different manner than the US.
22. January 2020 at 14:14
@P Burgos:
Not that different. US fertility is on the decline too.
Frankly I don’t think birth control methods are the main part of the story. In the advanced nations, and the advanced parts of nations like China, it simply isn’t a big deal to not have kids anymore. It’s cultural. 50 years ago (in the US, but surely elsewhere) there was something wrong with you if you didn’t get married and have kids (especially women but men too). Today no one cares, or rather the culture won’t shame you. And those that do have kids see their peers have 1-2 so they do too. Now the family with 6+ kids is seen as strange.
This is a big deal and it’s worldwide. Culturally speaking, higher income countries simply do not have kids like the old days. And even poor places have plummeting fertility (there are still some enclaves like sub-Saharan Africa but that’s changing too). There is no question this century world population will plateau (around 9 billion?) and start to even decline perhaps. This is a big deal for global capitalism. Can the whole world be like Japan?
22. January 2020 at 17:36
@msgkings
I agree with you about fertility rates, but I was more thinking of family structure. The US and the UK are outliers among developed countries in terms of kids being born out of wedlock, mutli-partner fertility, and parents not remaining together for very long after children are born. I am not sure that can really be attributed to birth control, but I think it is a good working hypothesis that antibiotics and birth control were both necessary for the changes in sexual mores that happened in the developed world in the 50’s through 70’s. And there still is a stigma against women having sex before marriage in China, though that is changing, which is very unlike the US.
But yes, people living in metropolitan areas all over the world don’t want to have many kids, and the world’s population (and especially young people) now predominately live in metro areas.
28. January 2020 at 12:37
“ Burgos, When East Asia was poor, there was a stereotype that East Asians were lazy. These stereotypes tend not to hold up over time.”
I’ve seen this claim a lot recently yet I’ve never ever ever ever ever seen it sourced by anyone making it. You know why? Because it’s simply not true – no one in the early 1900s thought East Asians were lazy, with famous sociologists like E.A. Ross saying Chinese workers might be the hardest working people on the planet.
From his book, The Changing Chinese (1911):
“ Most of the stock explanations of national poverty throw no light on the condition of the Chinese. They are not impoverished by the niggardliness of the soil, for China is one of the most bountiful seats occupied by man. Their state is not the just recompense of sloth, for no people is better broken to heavy, unremitting toil. The trouble is not lack of intelligence in their work, for they are skilful farmers and clever in the arts and crafts.”
Can you actually cite anything that proves this claim?