Degrowth

I would like to recommend a book. It's a short read, but food for thought.

cross-posted from: https://sh.itjust.works/post/22272048

"In the largest public sector trial of the four-day week in Britain, fewer refuse collectors quit," reports the Guardian, "and there were faster planning decisions, more rapid benefits processing and quicker call answering, independent research has found." South Cambridgeshire district council's controversial experiment with a shorter working week resulted in improvements in performance in 11 out of 24 areas, little or no change in 11 areas and worsening of performance in two areas, according to analysis of productivity before and during the 15-month trial by academics at the universities of Cambridge and Salford... The multi-year study of the trial involving about 450 desk staff plus refuse collectors found:

• Staff turnover fell by 39%, helping save £371,500 in a year, mostly on agency staff costs.
• Regular household planning applications were decided about a week and a half earlier.
• Approximately 15% more major planning application decisions were completed within the correct timescale, compared with before.
• The time taken to process changes to housing benefit and council tax benefit claims fell.... Under the South Cambridgeshire trial, which began in January 2023 and ran to April 2024, staff were expected to carry out 100% of their work in 80% of the time for 100% of the pay. The full trial cut staff turnover by 39% and scores for employees' physical and mental health, motivation and commitment all improved, the study showed. "Coupled with the hundreds of thousands of pounds of taxpayer money that we have saved, improved recruitment and retention and positives around health and wellbeing, this brave and pioneering trial has clearly been a success," said John Williams, the lead council member for resources...

Scores of private companies have already adopted the approach, with many finding it helps staff retention. Ryle said the South Cambridgeshire results "prove once and for all that a four-day week with no loss of pay absolutely can succeed in a local government setting".

Our World in data has already updated their charts using the current UN world population prospect:

Fertility rate:

https://ourworldindata.org/grapher/children-per-woman-un

Population projections:

https://ourworldindata.org/grapher/population-with-un-projections?tab=map&country=~CHN

Some of the highlights are. Nearly all countries in the Americas, all countries in Europe and most countries in Asia have below replacement fertility rates. The only continent with a fertiltiy rate above replacement is Africa with 4.07 in 2023. Besides Afghanistan all countries with fertility rates above 4 are in Africa. Even above 3 is rarer outside of Africa and Central Asia. China is at a total fertility rate of 1. That means every new generation is half the size of the previous one and the population has a fairly high chancing halving over within this century.

According to the data the number of births globally has peaked in 2012. Since then it is down a bit.

We will likely see large regions have structural population declines in the coming years. Especially rural areas in middle income countries will loose a lot of people. Due to the young ones moving to cities, with a stable to falling population. At the same time migration will always be a big topic. Especially since racism is much stronger for black people then for brown ones. So with Sub Sahrah Africa being the region with the most births, this is really the only region able to provide enough migrants to prevent population decline for other regions.

Anyway good news in general. It really shows we only have to create a sustainable economy once and then it becomes easier to keep it running, thanks to lower population.

Archived link

Pointing to China’s anaemic private consumption rates, economists have long advocated boosting growth through measures such as expanding China’s parsimonious social safety net. Despite paeans to “common prosperity”, Beijing has shown little inclination to do this.

Instead, China has been focusing unusually strong on export for a very long time. Chinese leaders definitely see strategic utility in ensuring that G7 nations are reliant on China for critical technologies. Yet, with most of China’s population still poor by advanced economy standards, this dynamic can be over-egged when explaining China’s export overcapacity and aggressive push into Western markets.

At the same time, China’s overcapacity has proved corrosive to the industrial ambitions of lower and middle-income countries. Rather than offshoring more labour-intensive industries as has been hoped, President Xi has called for the “transformation and upgrading of traditional industries”. Chinese manufacturing imports from these countries have declined appreciably.--

• Provincial government land markets and local government financing vehicles (LGFVs) may seem arcane and far removed from global trade. But in reality, they have served as the edifice upon which China’s now slowing investment-led growth model has been built.

• With Beijing deeply reluctant to embrace consumption-led growth alternatives, leaders are betting on exports to take up a much larger share of the slack. China invests about 45 per cent of its GDP – an unprecedented figure for any modern economy. Until recently, infrastructure and property have routinely each comprised about 30 per cent of this total. The idiosyncrasies of China’s political economy and fiscal composition mean that much of this investment has been driven by local governments.

• To maintain services provision while meeting aggressive growth targets, local governments have become reliant on non-tax funding – i.e., LGFVs [LGFVs are off-balance financing vehicles used by local governments to circumvent restrictions on issuing conventional bonds] and land sales. The latter constituted 42 per cent of local governments’ general public budget revenue in 2021 – a figure that is still above 20 per cent.

• LGFVs played an essential role in funding China’s colossal infrastructure buildout, which has also helped drive up land prices in what was previously a virtuous growth cycle. In the heady days before China’s real estate collapse, land revenue provided an ostensibly inexhaustible source of largesse for subsidies.

• This growth model was not without its drawbacks. After decades of bingeing, LGFV debt comprises well over half of China’s GDP [some economists claim that LGFV debt has reached almost China's GDP, ed] – a totally unsustainable dynamic when median return on assets has hovered around one per cent. Local governments are now spending around 19 per cent of total fiscal resources on interest payments.

• Earlier this year, Beijing drastically restricted the ability of the 12 most indebted provinces and municipalities (whose cumulative investment comprised 16 per cent of China’s total in 2023) to tap LGFVs for infrastructure spending. Investment in these regions is expected to decline by around one-quarter this year. Restrictions of varying severity have been placed on 18,000 LGFVs across China.

cross-posted from: https://feddit.org/post/408358

Original version behind a subscription

Archived version

A surge of Chinese plastic supply is threatening to overflow in the face of weak domestic demand, morphing into a fresh trade challenge for the rest of the world.

“Everyone in China has this notion that if they are fast enough, if they are the first in the industry, able to burn cash long enough, then they will become the survivor that takes market share. And then they can raise the price,” said Ms Vivien Zheng, Asia chemicals analyst with Bloomberg Intelligence.

• Plants have mushroomed along the country’s eastern coast over the last decade, built in a race to satisfy China’s hunger for plastic and to help refiners counter an expected downturn in transport fuels, as electric vehicles take off. Vast volumes and lacklustre post-pandemic demand mean margins are paper thin – but companies have kept producing, hoping to cling to existing market share.

• “This is yet another example – after steel and solar panels – where China’s structural imbalances are clearly spilling over into global markets,” one expert for Chinese industries said. In an echo of its predicament from batteries to green-energy technology, the world’s second-largest economy is staring down a situation of dramatic industrial excess.

• Factories currently navigate the supply surge with brief shutdowns and low run rates, but as production capacity continues to be added, petrochemical executives and sector analysts say surpluses will grow – enough in many products to turn China into a significant exporter, often selling into a glut and potentially exacerbating existing trade tensions.

• “China’s substantial investments between 2020 and 2027 have reshaped global supply dynamics, leading to a structural surplus in Asia and persistent low or negative profit margins,” said Ms Kelly Cui, principal petrochemicals analyst at Wood Mackenzie. The consultancy estimates that almost a quarter of global ethylene capacity is at risk of closure, even as China is still adding more.

• Between 2019 and the end of 2024, China will have completed construction of so many plants to turn crude oil and gas into products such as ethylene and propylene – materials behind everything from plastic bottles to machinery – that nameplate capacity is now equal to Europe, Japan and South Korea combined, according to the International Energy Agency (IEA).

• Part of the reason is that smaller plants do not require approvals from Beijing, as large refineries do. The local authorities were quick to see the opportunity to use cheap land and fiscal perks to encourage job creation and investment. All sought to feed demand for a plastic known as polypropylene, used for plastic packaging, automobile parts and electrical appliances.

• But as supply flowed, domestic demand faltered. Now the trouble is that financial and market-share pressures are also adding up.

• China is already a net exporter of polyester products such as PVC and PET, used in clothing or food containers, shipping them to countries like Nigeria, Vietnam and India, according to an expert, again creating or worsening trade surpluses.

• Most of the new facilities in China were installed in the last three or five years despite slowing demand, which makes this economic development harder and harder to sustain.

cross-posted from: https://feddit.org/post/384247

• Peru and Cosco Shipping, a Chinese state-owned construction company, have settled a dispute over the business model to be put in place for the Port of Chancay, built under China's "Belt and Road Initiative". The company is granted the exclusive right to operate the port after it is inaugurated in a few months.

• Earlier this year, however, as the work neared completion, Peruvian government lawyers filed a lawsuit challenging the exclusivity granted to the Chinese company, saying the facility should be available to other container handling companies as well.

• But Chinese lenders and Peruvian industrial groups harshly criticized the move. Now, with Peruvian authorities taking a step back, the impasse should be settled.

• Various business groups are now pushing for the construction of a road between the port and the Brazilian state of Acre, to speed up access to maritime trade with Asia, at the cost of more harm to the Amazon rainforest.

Jason Hickel appears on the Tech Won't Save Us Podcast

cross-posted from: https://feddit.org/post/199594

• Unless Beijing implements serious demand reforms, developing nations will be crowded out of manufacturing by Chinese overcapacity, leaving them dependent and without export opportunities, an analyses finds.
• Despite some benefits, rising Chinese exports have also sharply increased Chinese companies’ market power in less industrialized countries. This makes these countries vulnerable to monopolistic practices such as withholding supply or colluding to raise prices, as well as to market disruptions, pandemic-like external shocks, and potential economic coercion.
• While sharply increasing its exports to sell its overcapacity, China doesn't show willingness to increase its imports. Since 2019, China’s manufacturing imports from emerging economies, already weak relative to the size of its economy, have plateaued in absolute terms for countries like Vietnam, or outright declined in the case of Malaysia and Thailand (Figure 7).
• Put differently, if China had increased its manufacturing imports as much as its exports since 2019, it would have created an additional $363 billion in import demand in 2022, or the equivalent of 11% of total manufacturing exports from developing countries. If it simply imported manufactured goods as much as it exported them in 2022, the additional demand would be equivalent to 54% of developing countries’ total manufacturing exports.
• Similar to exports, the weakness of China’s imports also has a bigger impact on emerging economies than developed ones. While China still needs to import high-tech products from rich industrialized economies, it imports very few low-tech goods, where developing countries would have a comparative advantage - a major argument China has been using to justify its role as an exporting country selling to the EU and the US.

Great news! It is clearly catching on in the states as well.