China fact of the day

by on September 24, 2017 at 3:34 pm in Current Affairs, Data Source, Economics | Permalink

China’s 89 unicorns (startups valued at $1bn or more) are worth over $350bn, by one recent estimate, approaching the combined valuation of America’s (see chart 2). And to victors go great spoils. There are 609 billionaires in China compared with 552 in America.

That is from The Economist, mostly about Chinese innovation.

1 JC September 24, 2017 at 3:35 pm

oh wow

2 Ray Lopez September 25, 2017 at 12:48 am

What’s a unicorn? Oh, I see, it’s one of those dual new words… “Enter 3nder, now called Feeld, a dating app for individuals and couples where things are way clearer than on other apps… she says” … oh, my, where is the cuckold guy?

3 Alan Goldhammer September 24, 2017 at 3:47 pm

But is there more inequality in China than in the US? Certainly the wealth of the billionaires is not trickling down to their workers who spend long hours in factories for little income.

4 Al September 24, 2017 at 4:23 pm

You are amazingly wrong, Baizuo.

5 rayward September 24, 2017 at 4:25 pm

Actually, China’s level of inequality is higher than in the US. But that’s the case in other newly industrialized countries, as well. So even though global inequality has declined (between developed and undeveloped countries), inequality has increased in both.

6 rayward September 24, 2017 at 4:35 pm

Of course, it’s relative. When everyone in China was poor, inequality was quite low. When some became wealthy, some became what we would call middle class, and some remained poor, all the boats were lifted but the average person’s position actually declined (relatively); hence, inequality rose. Is China better off, economically, today even though inequality has risen? It’s relative.

7 msgkings September 24, 2017 at 4:53 pm

Are you actually asking whether it’s better for everyone to be poor than for some to be poor and some to be better off?

8 TMC September 24, 2017 at 5:03 pm

Over the long haul, that’s the inequality question in a nutshell.

9 msgkings September 24, 2017 at 7:34 pm

Agreed, but there are limits to how unequal a society can get that’s at all reasonable. It’s ok if the rising tide is lifting all boats, not so much if only the top level keeps rising.

10 Anonymous September 24, 2017 at 3:57 pm

The lead, a connection to the Maker Movement is striking. It is something that came from the West but descended on China and synergized with their small shop semi-cooperative competition.

My question would be why does “Making” in that way have so few friends on the Right?

https://obamawhitehouse.archives.gov/node/316486

11 Al September 24, 2017 at 4:25 pm

So few friends on the right??

The left only supports “making” in terms of it being a past time. If/when “making” becomes about serving customers the left will be fully against it.

12 Anonymous September 24, 2017 at 4:34 pm
13 Anonymous September 24, 2017 at 3:59 pm

For that matter, some of you should revisit why billion dollar Making happens in places like Seattle or San Francisco.

14 Al September 24, 2017 at 4:28 pm

Great article.

China’s amazing leap over the last 40 years is a powerful lesson in the power of markets and incentives.

15 Maitreya September 24, 2017 at 4:33 pm

It’s rare to see an Orientalist newspaper such as The Economist write something overwhelmingly positive about China. Most of its articles about China are filled with bias, selective facts, garrulous prose, the typical OxBridge cockiness, the occasional fake Brietbart-style xenophobic headlines (Apparently, China is trying to “limit Muslim births” in Xinjiang), and of course, lies and basic factual errors.

While reporting about China, The Economist is very similar to Donald Trump. Both give their own opinions more importance than the facts, when they don’t outright ignore them. Most of their articles are ill-researched, when they don’t resort to outright lying.

For example, it once inflicted the following atrocity on its readers:

“…(Taiwan) has in its entire history been ruled directly from the Chinese capital for not much more than a decade”.

Those who have studied even the most basic Chinese history would know that Taiwan was part of the Qing dynasty for more than 200 years. A school-child Google search would’ve sufficed.

There are many such factual errors. It once reported that the entire radiation monitoring system at the Daya Bay nuclear power station was accidentally switched off for three months. But in fact, it was just the alarm that was switched off, and the backup alarm was still active – which is why the incident was classified as a “level zero” incident (another thing the article conveniently left out). It once claimed that India and Pakistan haven’t fought a war since 25 years, when in fact they fought one in 1999 (the Kargil conflict). It once claimed that as a member of UNCLOS, China is “supposed to follow” the permanent court of arbitration (PCA), when in reality there is no such obligation according to the treaty.

And I’m not even talking about the errors of interpretation and biased analysis and fact-free conclusions. That’s a whole new discussion altogether. By this standard, The Economist is really at the same level as The Guardian and The New York Times. This is made even more amusing when you remember that it considers itself superior to such newspapers.

Yes – The Economist is proud of its news – real or fake. Yet, what explains such basic factual errors in reporting? The answer is simple: This is Journalism about China. You believe what you want to believe.

16 AnonFrogger September 25, 2017 at 12:03 am

“the occasional fake Brietbart-style xenophobic headlines (Apparently, China is trying to “limit Muslim births” in Xinjiang)”

What’s fake about it?(And, “it’s fake because it’s xenophobic” is not an argument.)

17 Maitreya September 26, 2017 at 5:18 am

It is fake because there is no evidence to support it.

18 mao September 25, 2017 at 3:48 am

if it’s making Chinese Nationalists chippy, then perhaps The Economist is getting something right for a change.

19 Ali Choudhury September 25, 2017 at 4:24 am

Kargil is seen as an extended border clash in Pakistan, I can’t recall any commentary from India calling it a war.

20 Maitreya September 26, 2017 at 5:22 am

From Wikipedia:

Names for the conflict: There have been various names for the conflict. During the actual fighting in Kargil, the Indian Government was careful not to use the term “war”, calling it a “war-like situation”, even though both nations indicated that they were in a “state of war”. Terms like Kargil “conflict”, Kargil “incident” or the official military assault, “Operation Vijay”, were thus preferred. After the end of the war however, the Indian Government increasingly called it the “Kargil War”, even though there had been no official declaration of war. Other less popularly used names included “Third Kashmir War” and Pakistan’s codename given to the infiltration: “Operation Badr”.

https://en.wikipedia.org/wiki/Kargil_War#endnote_fn_.28I.29

21 rayward September 24, 2017 at 4:39 pm

According to folklore, Deng Xiaoping looked at the countries around the world and observed that socialist/communist countries were poor and capitalist countries were wealthy, and decided that wealthy was preferable to poor. Some decisions are easier than others.

22 Chip September 24, 2017 at 9:01 pm

According to fact, Americans under the age of 30 who didn’t look at the world, its history or pretty much anything apart from Instagram and Jimmy Kimmel, decided that socialism sounds nice and capitalism kinda icky.

“In the 2016 campaign, Sanders won more votes among those under age 30 than the two presumptive major-party presidential nominees combined.”
https://www.google.ca/amp/s/www.washingtonpost.com/amphtml/news/the-fix/wp/2016/06/20/more-young-people-voted-for-bernie-sanders-than-trump-and-clinton-combined-by-a-lot/

23 Bill September 24, 2017 at 7:36 pm

How many were Party members, or children of connected officials.

How much is Ivanka Trump worth, and, wow, what do you think of the jewelry line.

Those children of the wealthy, and Party officials, really know how to work.

24 SB September 24, 2017 at 9:34 pm

Tyler, you don’t happen to think these VC valuations (and thus “billionaire” status) are pumped up due to the extreme difficulty of getting Capital out of China, thus constraining domestic pools of capital to a finite number of RMB investments only? (Of which the real estate rental yield is now awful.) Essentially, my argument is that the “valuation multiple of expected long-run annual earnings” is quite inflated in China, almost across asset classes, due to the Capital controls.

And also, measuring “billionaire” status is skewed, as many very prosperous Americans owning high quality private businesses (whose hypothetical market equity is worth well over $1b), such as enterprise software, don’t get picked up on the billionaire lists. In China, many of the entrepreneurs of private companies are in heavy industry, and this would deserve a very low earnings multiple on the fair market (coal, steel, etc.).

And maybe the RMB shadow x rate is really 7.5 and that makes billionaire comparisons a little harder too. If you’re a billionaire in VND (dong) at the government x-rate, are you still a billionaire? What about Bolivars?

Comments on this entry are closed.

Previous post:

Next post: