Sphering China (Economy Crash...How?)

[Beph13]

I have recently started playing Victoria 2 and have really been enjoying it, one thing, though, that continues to frustrate me is understanding the whole trade system, specifically how the internal markets work. I thought I understood how all the trade works until I learned from others that sphering China could crash a GP's economy? How is this possible?

How I understood Internal markets from spherelings is that (for example) as UK with let's say 5 spherelings, all my PoP's and factories get to buy first and sell first, thereby forcing these spherelings in a way to buy my goods and sell their goods to me to ensure my POP's goods are sold and that my POP's needs are fulfilled.

So, within this system, how could China ruin this? Even if China added tons of cheap goods made by Artisans, wouldn't my POP's be completely fine because they get everything they have sold, before China, along with everything they need bought?

Maybe I am missing something completely obvious here, but the only way in this system I could see China Crashing a GP's economy is that internal markets have their own prices, determined by internal market supply and demand (China floods my internal market with 80% of all grain, prices go way down, my grain is now much cheaper, etc.)

I would really appreciate some help with understanding this.

 

[Scuzz]

It is because of the way pops buy things. First they go to their national market, then to the market of their sphere (if they are in one), and then they go to the world market. At the start, China is an unsphered unciv and much of their production is things like tea, so their artisans have to go to the world market for raw materials. Since uncivs, regardless of score, are automatically ranked lower than civilized nations, the Chinese are last in line to buy from the world market. So, they get the scraps left over (surplus timber) and most Chinese artisans live in perpetual starvation.

If someone spheres China, then the Chinese artisans can buy from the market of that sphere, and they get to do so before the goods produced in that sphere go to the world market. The result is that a lot of materials that used to go to the world market and get bought up by lesser European and South American countries are now getting bought by the Chinese. Since artisans aren't effected by technology or infrastructure, this doesn't change much on the world market.
However, those lesser countries are less industrialized, meaning that much more of their economy (and therefore the government's tax flow) relies upon artisans. When the Swiss/Greek/Chilean/etc artisans start going bankrupt, the governments of those countries soon follow. Bankruptcies and government debt make money disappear from Victoria's otherwise "zero sum" economy. Sometimes you'll actually notice deflation, other times you'll just get a bunch of messages about this or that country going bankrupt which makes it feel like the world is ending.

It really doesn't crash the world market, and if you're the one who sphered the Chinese you'll probably get by just fine (especially since you have to be a huge nation like the USA to sphere them anyway). On the other hand, it is the end for anyone who isn't at least a secondary power.

 

[LRJ]

Could this not be resolved by only providing the benefits of the SoI market to the SoI leader or just the civilised nations within that SoI?

 

[Naselus]

It's complex, but ultimately it is because of money and buying order.

Every £1 in Vicky can be used just once per day, which means money acts as a cap for trade. There cannot be a greater number of transactions per day than the total of the world's money supply (minus saved money - so anything in the country's purse is a net drag on economic growth).

The more money that is used in China, the less of it is left over to be used in everyone else's transactions. Normally, this doesn't matter much, since China buys at the end of the market order; its POPs have little money for anything other than life needs and most of the everyday and luxury goods have already been bought out by this stage. However, bring them into an SOI and they begin to suck all the cash out of your SOI. Once it's in China, it's still getting spent on life needs (RGO trash) and tiny amounts of Everyday needs for million-man farmer POPs, rather than the exciting shiny manufactured goods smaller POPs use the money on. The worst part is, even China's Artisans begin to suffer, as the farmers are STILL too poor to buy manufactured goods in any quantity. This leads to Artisans demoting en masse... which makes the farmer POPs even bigger.

After the initial couple of weeks, your SOI basically becomes a big funnel for dragging all the world's cash into China, where the majority is spent locally on enormous amounts of grain, fish, cattle and wool by Chinese Mega-POPs. There's simply not enough money left over after that for the industrial economy to function, and the whole thing rapidly keels over into a prolonged depression; and as the ROTW runs out of cash it's own demand for RGO goods collapses, crushing even the giant Chinese POPs income. At this point, the economy will actually start (very slowly) to recover, but the decimation of industry and massive worldwide rise in militancy will have rendered the game largely unplayable by this point.

Kicking China out of your SOI early, before the majority of the world's money ends up there, can arrest the process, but it takes years to extract the money again.

 

[Jorlaan]

Another thing I would mention is that it sounds like you're playing an earlier version of the game, with the last expansion you can no longer sphere countries with a significantly larger pop than yours. I'll admit I play a modded version but I don't remember if anyone is able to even sphere China in vanilla anymore, it is just too big.
If you are using an older version I HIGHLY recommend getting the rest, the new naval mechanics are one of the best improvements, along with new colonial mechanics. Crisis are meh, they are kinda broken and only sometimes work properly.

Either way Chine is best conquered, not sphered. Take the peninsula state just south of their capitol then you're free to take the one next to it inland, which has the largest gold producing province in the world. That alone will fuel most of your country. Formosa is a good early conquest too, very easy to take and is a great tea producer.

 

[Beph13]

Wow, Thanks for all the great replies!

Scuzz - So you're saying that since China is raised in the pecking order of the right to buy goods off the world market when it is added to a sphere, it takes a huge chunk of goods off the market when its turn comes around, causing the countries behind it to not be able to get any of the raw goods that they need to support their artisans, or even factories, am I correct? This is what causes the major bankruptcies?

Naselus- Huh, that money cap mechanic is very interesting, so more money being spent in one market means less money being spent in another, am I correct? So when China enters my sphere (or many of its substates), all of the goods that are usually not available to them (from being low rank, low buying order) become available to them en masse (whether they are 2nd, 3rd, 4th in line in my internal market), and therefore they take up a larger portion of the "pie" of the market, mainly used to support gigantic, poor strata POPs, and the raw goods being used by the normally poor artisans to pump out tons of the artisan goods so the factories get less of the pie with finished goods as well?

 

[Beph13]

Naselus- What I still do not understand though is how this could cause a deficit in my own budget, playing as the UK. Shouldn't I, as the rank 1 nation, get all the goods I need first before these Chinese artisans, being able to sell me goods first as well, meaning there is no real competition at all? And even though my other lower rank spherelings would suffer, shouldn't my factories and pops be okay because we get first dibs? Or does my economy get hurt indirectly, with my other spherelings going into bankruptcy?

Jorlaan- I do have AHD and HoD, I see they kind of fixed this problem with the division of china into substates, I was just wondering theoretically how this situation with sphering china could happen to help me understand the trade mechanics more

 

[Scuzz]

Wow, Thanks for all the great replies!

Scuzz - So you're saying that since China is raised in the pecking order of the right to buy goods off the world market when it is added to a sphere, it takes a huge chunk of goods off the market when its turn comes around, causing the countries behind it to not be able to get any of the raw goods that they need to support their artisans, or even factories, am I correct? This is what causes the major bankruptcies?

Naselus- Huh, that money cap mechanic is very interesting, so more money being spent in one market means less money being spent in another, am I correct? So when China enters my sphere (or many of its substates), all of the goods that are usually not available to them (from being low rank, low buying order) become available to them en masse (whether they are 2nd, 3rd, 4th in line in my internal market), and therefore they take up a larger portion of the "pie" of the market, mainly used to support gigantic, poor strata POPs, and the raw goods being used by the normally poor artisans to pump out tons of the artisan goods so the factories get less of the pie with finished goods as well?

It doesn't move China up in the world market, it just gets them around the world market because they can buy from your sphere market.
When a good (say 10 units of cotton) is produced, it is first offered to other people in the nation. Whatever the nation can't use (let's say, the national pops bought 4 units, that leaves 6), gets offered up within the sphere of influence. Whatever isn't bought within the sphere of influence (let's say, a sphereling bought 3 units) goes to the world market. So, now there's 3 units of cotton on the world market, where China is all the way at the back of the line.
So an unsphered unciv is getting the scraps of the scraps of the scraps of the scraps of the scraps of the world. When the unciv gets sphered, they can buy whatever is in the sphere before said things are put on the world market. Chinese artisans get a crack at those 6 units of cotton that were offered on the sphere market, and if they buy it all, then nothing makes it to the world market. So much the worse for the world, so much the better for China.

As for whether you, personally, should sphere China, I say go for it (if you have the population; I don't know if it is possible anymore). As the sphere owner, you get first dibs within your sphere market. It'll wreck a lot of smaller nations, but that's not your problem. Someone else was going to buy your exports and produce things anyway, might as well be the Chinese as the Venezuelans.

EDIT: Another thing that specifically effects China is that their #1 product is tea. Tea can't be turned into anything by artisans, and is only consumed by pops who already have all their life needs, so most of the tea is immediately exported and farmers use up that tea money to buy surplus grain and wool off the world market. They also produce a lot of silk, which also has to be exported since they can't get regular clothes to turn the silk into something useful. They're playing a losers game, basically.

 

[LRJ]

By the sounds of it, there needs to be a more fundamental reworking of the economy in any future version/expansion of Victoria (2).

 

[Chewy Yui]

Never sphered China before, it sounds like they just become a blackhole for the worlds money if you do xD Certainly comical and scary!

 

[JodelDiplom]

By the sounds of it, there needs to be a more fundamental reworking of the economy in any future version/expansion of Victoria (2).

Any system they come up with will have flaws and loopholes. It's only a computer game after all. Sad as it may be, they are not going to hire 100 programmers and 100 advisors with PhDs in macroeconomics only to get the economic system "right". Victoria 2 is already quite decent as a sandbox type simulator, both in terms of what it lets you do, as well as in terms of how interactive its world economy is. It's intransparent and wonky but no one has yet detailed how an alternative system should be designed that does all that Vic2's system does and still improves on it.

 

[LRJ]

Apologies if that sounded excessively negative - that was not my intention. I just meant there ought to be some tweaking of the order POPs get to buy from the world market. I don't think that would require 100 macroeconomist consultants, though it may require some (re)writing of some code from the developers.

 

[Jorlaan]

It would require a new game at the least, to overhaul this one in that manner I don't think is possible, it would meaning overhauling the very core mechanics of the game. That is quite the undertaking and they've long since abandoned this game.
We'll just have to make due and try and get it working as well as we can ourselves with what we got until they bless us with a Victoria 3.

 

[Beph13]

Personally, I don't mind the economy mechanics too much, if I could wish for anything for the game it would be just more in-game information on how the trade system works, and a better trade screen, that thing is very uninformative.

 

[Alias72]

Any system they come up with will have flaws and loopholes. It's only a computer game after all. Sad as it may be, they are not going to hire 100 programmers and 100 advisors with PhDs in macroeconomics only to get the economic system "right". Victoria 2 is already quite decent as a sandbox type simulator, both in terms of what it lets you do, as well as in terms of how interactive its world economy is. It's intransparent and wonky but no one has yet detailed how an alternative system should be designed that does all that Vic2's system does and still improves on it.

Unfortunately all hiring 100 PhD's in Macroeconomics will do is cause one of the largest riots in recent Swedish history. Economists have never fully agreed on the mechanisms and their relative importance. The data isn't their, and no one wants to "experiment" on their economy to find out.

 

[frankatank109]

This thread actually kinda makes me want to sphere China, just to see if the apocalypse happens.

 

[Alias72]

This thread actually kinda makes me want to sphere China, just to see if the apocalypse happens.

we can write a simple event and execute it from the debug menu.

 

[icedt729]

It's complex, but ultimately it is because of money and buying order.

Every £1 in Vicky can be used just once per day, which means money acts as a cap for trade. There cannot be a greater number of transactions per day than the total of the world's money supply (minus saved money - so anything in the country's purse is a net drag on economic growth).

The more money that is used in China, the less of it is left over to be used in everyone else's transactions. Normally, this doesn't matter much, since China buys at the end of the market order; its POPs have little money for anything other than life needs and most of the everyday and luxury goods have already been bought out by this stage. However, bring them into an SOI and they begin to suck all the cash out of your SOI. Once it's in China, it's still getting spent on life needs (RGO trash) and tiny amounts of Everyday needs for million-man farmer POPs, rather than the exciting shiny manufactured goods smaller POPs use the money on. The worst part is, even China's Artisans begin to suffer, as the farmers are STILL too poor to buy manufactured goods in any quantity. This leads to Artisans demoting en masse... which makes the farmer POPs even bigger.

After the initial couple of weeks, your SOI basically becomes a big funnel for dragging all the world's cash into China, where the majority is spent locally on enormous amounts of grain, fish, cattle and wool by Chinese Mega-POPs. There's simply not enough money left over after that for the industrial economy to function, and the whole thing rapidly keels over into a prolonged depression; and as the ROTW runs out of cash it's own demand for RGO goods collapses, crushing even the giant Chinese POPs income. At this point, the economy will actually start (very slowly) to recover, but the decimation of industry and massive worldwide rise in militancy will have rendered the game largely unplayable by this point.

Kicking China out of your SOI early, before the majority of the world's money ends up there, can arrest the process, but it takes years to extract the money again.

It had never occurred to me that the game capped the velocity of money, or that China moving up in the buying order would be so devastating for industry. What kind of implications does this have for playing China? Is moving up the buying order faster than you can increase your pops' income going to have similar effects to the sphereing crash?

 

[Alias72]

It had never occurred to me that the game capped the velocity of money, or that China moving up in the buying order would be so devastating for industry. What kind of implications does this have for playing China? Is moving up the buying order faster than you can increase your pops' income going to have similar effects to the sphereing crash?

If you're China and you move up in the buying order then you benefit and the world comes crashing down.

 

[CrabHelmet]

If you're China and you move up in the buying order then you benefit and the world comes crashing down.

Even you fail in the long run, though. Your POPs are so large that you buy out essentially every good in the entire world. Any country that is ranked below you can't purchase any goods off the world market. If their internal market isn't enough to sustain them, they normally go bankrupt. In Victoria 2, money is a semi-finite resource. There is a fixed amount when you start the game. Money enters the system through gold RGOs. Money exits the system through interest in debt (which isn't paid to anyone; it just disappears) and through bankruptcies. If the amount of money exiting the system is greater than the money entering the system, soon the entire world plunges into a permanent depression from which it never recovers: POPs and factories don't have enough money to buy anything, the AI attempts to subsidize the factories, the AI goes bankrupt, more money disappears, and so on.

Even if China doesn't Westernize, this will happen eventually; if you mod the game to extend the end date, the world economy will just completely collapse by 1960 at the latest, because POP growth rates are exponential and goods production isn't. But China Westernizing does this much sooner.