China exports like a trillion dollars of value more than it imports, and it seems to actively maintain this stance - Does it? And if so, why? My reductive ape-brain says if more goods are leaving your country than coming in, then other countries are accumulating actual goods, and your country is accumulating pieces of paper (or digital bits). Seems like a losing strategy.
Why not just make all the goods that your country wants (especially if you're an enormous country that can scale economies and has access to strategic materials like China) and then you'd have more stuff?
And how do currency exchange markets fit in? I thought exporting and importing and fluctuating value of currencies meant that it should all sort of 'balance out' in the end. Because prices of currencies change the value of export/import and consequently you'd eventually have a country that exports and imports the same value of goods.
Maybe I fundamentally misunderstand the purpose of trade. Or maybe I've been playing too much Victoria 3.
This makes the least sense to me - Why does an economy needs to produce more than it consumes? Why can't those goods go to its own people? Why does another country's magic money paper mean it's now okay for your country's poor to consume your own goods, when you could just give them your goods to start with? I get the idea of being an indispensible and resilient economy though.
In Victoria 3 I never ran into that employment issue, I only ever needed more workforce, not less (though I still ran into late-game profit crises). If people were so poor they weren't buying luxury goods, I could just build more farms which gave them low-wage jobs and lowered the price of food, so exporting was never ever needed. I never saw an advantage to exporting goods except when they were byproducts I didn't need so much (ie automobiles, luxury items, etc.), I assume because forex wasn't implemented. The only other population issues were running into shortages of local strategic resources.
I am no great theorist, but the simplest answer I have is that international trade is pivotal for technological development, for social change, for building up the means of production. And that since we don't live under communism all nations must pay their tithe into the global system of financial exploitation and wealth creation if they wish to have access to the rest of the world. Besides gaining access to certain resources - machine goods, capital goods, oil - you also want to foster a culture, effecting social change on a massive scale. You need all of society to work towards Communism, which is the sort of long term undertaking that is difficult to achieve long term. Especially when you start from so low development as post war China.
This isn't the old story of how the Mao era did all the bad things and after Deng Liberalized® everything China became a superpower. The Mao era was China's industrial revolution, it pacified the country, created the State, and estabilished numerous key industries. The Deng era saw China embed itself in the international markets, reformed the State, and estabilished a mixed market economy. It is clear that one is not possible without the other. What you're essentially asking is why China didn't just press the communism button after the industrial revolution. Could they have? Was the technology already there? What about people's culture? Ultimately, development under socialism is a permanent struggle towards a far off goal. And if all you aim to do is to provide the surplus that a peasant economy requires then only a minority of those peasants will actually go to the factories.
In practical terms: you have a country full of peasants who demand relatively little in their daily lives. The industrial revolution allows you to create greater and greater surpluses from certain fields, as well factories in urban areas. Now you can supply public works and people's demand. To a certain point you can produce goods and effectively distribute them. But you reach a point where you need to think long term. You need to foster school systems, technological transfers, you need acccess for foreign HR and basic resources. Not only you must offer up something to an international system of capitalist exchange - your cheap labour being the key asset - you have to consider that if you want to reduce inequality and increase local demand for the goods you create you need to get those peasants into factories. Which means that supplying the demands of foreign markets is an opportunity to accelerate the creation of the means of production, not a cost to you. The question is where you go from there.
Several countries have come to the cusp of reaching 'high income status' and fallen down. Brazil and Russia are two, for different reasons. Brazil is a capitalist nation, as such it must either succeed in estabilishing itself at the top of the hierarchy of infrastructure, exploitation, and technological creation or it will see a crunch and collapse. Unlike Brazil, Russia has a better pool of educated people to pick from and a lot more resources for industrial development. It's current failure to achieve and maintain high income status comes from its decoupling from the West. Now China is in that position, and they've posited the Dual Circulation system. They outright wish to increase internal consumption while also serving as the world's workshop. They realized that they can't coast off American credit forever, but they also reached a certain level of technological and economic development where their internal market is the real deal. It's a stark contrast with capitalist Brazil, where we tried the exact reverse - import substitution and the development of the internal market first, with great success at first, but eventually crunches at the end.
TL;DR its harder to implement autarky or communism than in Victoria 3, and it's not just because of a lack of resources long term either. People's behaviors need to change over generations. New ideas and technologies must be fostered. New sectors to the economy. What changes is the endgame between socialist and capitalist nations. Do you accumulate capital to raise living standards, or do you lower living standards to further accumulate capital? Also, play 1.2. The unemployment issues are so great that somewhere in 1900 or even earlier you'll end up turning your factories into sweatshops. I started as tiny Brazil with only a few million people and by the endgame I was #1 in GDP and still had 500k unemployed people, with more entering the market all the time. Solving unemployment in Asian countries is now pretty much impossible due to the changes to arable land. It's exhilarating.
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