How China has ‘throttled’ its private sector
How China has ‘throttled’ its private sector
Venture capital finance has dried up amid political and economic pressures, prompting a dramatic fall in new company formation
"Venture capital finance has dried up amid political and economic pressures, prompting a dramatic fall in new company formation"
Posted in technology as most of the funded companies are into technology. The most shocking piece is arguably the number of funded company pear year with a clear peak in 2018 which is 50x (!) more than last year, 2023.
Please clarify, as I asked in https://lemmy.ml/post/20245112/13688624 I don't see how that's relevant. They are sharing opinions from startup CEO or numbers that are about large "old" (much earlier than the boom, e.g Ant, Shein, ByteDance). That's certainly interesting but does not contradict figures from the article.
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Good lmao
0Articles like this are hilarious. Brainwashed fanatics have not stopped publishing "the coming collapse of China" articles.
For the original: https://en.wikipedia.org/wiki/The_Coming_Collapse_of_China
12Care to unfold a bit more what's hilarious? Which metrics from the article are wrong or irrelevant for example? You might disagree with the conclusion, and maybe rightly so, but are you saying the data itself, e.g number of companies funded is false? Or it does not matter and something else could help better understand the situation?
5The metrics here are those most relevant to finance, which is not synonymous with innovation. Startups are notorious money sinks that are only invested in due to a promise of monopoly profits later, basically a gamble. They usually fail, and dramatically. Finance is necessary for private capital investment and liquidity but when it grows too large it becomes parasitic and also tries to dictate policy. The real estate bubble that China is now dealing with is a direct result of financialization and an expectation that it would be "too big to fail" and that real estare finance would get bailed out by government.
China is tackling this issue by limiting the impact of finance on its economy, changing its lending terms and what it guarantees, including not bailing out real estate finance. This has the direct effect of making startups and venture capital less common as they simply can't make as much money from pure speculation. They don't have a state-funded safety net for their worst gambles and interest rates are higher.
Overall, this is a good development. China's finance sector absolutely needed to be limited and it is good for the state to take on a greater role in running companies.
4tl;dr: Debate me, bro!
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The private sector is ceasing to be China's primary driver of growth, with that role year after year being further taken up by the state. Diminishing private funding is obviously not good, but it does align with their goal of reaching socialism by 2050. We'll see how their economy does from now on...
8I know there is a lot of "the collapse of China lol" takes but the middle income trap is a real danger.
If your country doesn't move to a consumption based economy you're gonna have a bad time.
5Capitalists gonna capitalism.
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