Chinese Economics Thread

Just4Fun

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Reinvent international monetary order or face Chinese dominance - France
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"The Bretton Woods order as we know it has reached its limits," French Finance Minister Bruno Le Maire told a conference at the French central bank marking the 75th anniversary of the conference.

"The alternative we have is now clear – either we reinvent Bretton Woods or it risks losing relevance and eventually disappearing," he said.

It looks like the French try to mislead others, and themselves.

No matter how you reinvent the IMF, the dollar system is too broke to repair. The current dollar system is a left-over of the dead Breton Woods Agreement, which was killed by Nixon in 1971. Its survival today completely rests on the Saudis' goodwill to the petro-dollar. As Trump's Iran gamble is in big trouble, the Saudis are ready to jump ship. So, the dollar system is ready to fall off from the cliff.

What prevents the Saudis from leaving the sinking dollar boat is their enormous wealth that they have accumulated over the past several decades. These Saudis assets currently are in dollars because there is no other currency that is big enough to hold their wealth. Once the Saudis find a place to hold their wealth, they will abandon the dollar just as determined as Nixon abandoned the dollar gold standard. And the petro-dollar will then become a thing of the past.

Dedollarization is gaining ground. China is in the process to open up its capital market to allow foreigners to transfer their dollar-based assets into Yuan-based assets. Russia has dumped almost its entire dollar assets. Many central banks are buying gold to hedge their dollar liabilities. In the mean time, the rich people in the US and other Western countries are anxious to explore unconventional ways to hide their wealth from an inevitable death of the dollar system. Facebook's efforts to launch a cross-border digital currency, the Libra, just show you how confident the rich really are to the dollar system, and how unworthy the dollar system really is.
 
now I read
Cutting Treasury debt must remain option for China
Source:Global Times Published: 2019/7/18 21:38:42
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The US-China trade war has generated heated debate over whether China will weaponize its holdings of US Treasury debt by dumping these securities into the market.

Efforts are needed to avoid this "nuclear option," but that doesn't mean China won't pare back its Treasury debt portfolio. According to official data, the country has trimmed its ownership of US Treasury debt to a two-year low.

China steadily accumulated US Treasury debt for many years, but the time is ripe for Beijing to reduce its purchases of US government bonds. The US-China trade war has made this move more important.

CNN reported on Wednesday that the US debt load is about to hit a record amid the trade war. A decade-long economic expansion and bull market in stocks have obscured risks building up in the nation's financial sector, but the recent slowdown experienced by the US economy makes people aware that near-record liabilities in the US can be dangerous.

Risks from a US debt build-up have been a major factor threatening global economic growth.

China, the largest holder of US Treasury debt, would be among the first countries to feel the pain if the US fails to contain its debt risks. At the very least, China has no obligation to indulge the US, which is relying on more debt to boost growth. The trade war is forcing China to rethink its strategies for its foreign exchange reserves and holdings of US Treasury debt.

China has the largest foreign currency reserves in the world, thanks to its export-based economy. The country must constantly optimize its investment portfolio to manage risks and maximize profits. But too high a proportion of the nation's foreign currency reserves is locked up in US debt. Suggestions that China should reduce the proportion aren't new, but the trade war makes it an increasingly urgent task.

Official data showed China increased its gold reserves for the seventh month in June, at a time when uncertainty weighed on the world economy. Further, China's exchange rate regime has undergone gradual reform while Beijing pushed forward the internationalization of the yuan.

Such reforms are prompting China to consider a fundamental change in its strategy related to its holdings of US Treasury debt.

Some observers think China dare not dump US debt as a means of retaliation amid the trade war, but they are wrong - moves to reduce the proportion of US Treasury debt in China's reserves are in line with efforts to optimize the country's foreign reserves.

China has not yet pursued the nuclear option because Beijing so far has been relatively restrained in retaliation, but the country has no reason to leave this choice out of its tool box.
 

localizer

Colonel
Registered Member
Personal update from the ag industry from my Chinese connections.

African swine fever killed about 80-90% of pigs in China, mostly smaller operations. This is much higher than the reported because the infection rate is high and people just kill the pigs and sell the meat before the pig dies itself. Larger corporations seem to do OK due to better practices. Hundreds of billions in Yuan losses so far. Quite significant. More damage than the trade war lol. Also in no hurry to buy US soybeans like the farmers think.

There's a vaccine that works pretty well now, the China science bros are trying to bring it to mass production/market ASAP. If ya'll wanna make some quick money go raise and sell pigs in China lol.

Lots of people think the Americans did it XD.


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B.I.B.

Captain
Personal update from the ag industry from my Chinese connections.

African swine fever killed about 80-90% of pigs in China, mostly smaller operations. This is much higher than the reported because the infection rate is high and people just kill the pigs and sell the meat before the pig dies itself. Larger corporations seem to do OK due to better practices. Hundreds of billions in Yuan losses so far. Quite significant. More damage than the trade war lol. Also in no hurry to buy US soybeans like the farmers think.

There's a vaccine that works pretty well now, the China science bros are trying to bring it to mass production/market ASAP. If ya'll wanna make some quick money go raise and sell pigs in China lol.

Lots of people think the Americans did it XD.


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With up to 90% of their pig stocks wiped out, I think they will be importing for quite a while.
We use to keep pigs on our dairy farm when we gave them skim milk which was the milk left when the cream was separated from the whole milk to drink.Now days Dairy factories take the whole milk.
Anyways I believe the U.S. has a surplus of pigs.
 

Equation

Lieutenant General
With up to 90% of their pig stocks wiped out, I think they will be importing for quite a while.
We use to keep pigs on our dairy farm when we gave them skim milk which was the milk left when the cream was separated from the whole milk to drink.Now days Dairy factories take the whole milk.
Anyways I believe the U.S. has a surplus of pigs.

Reading up on pig biology (this forum invokes a lot of learning), a sow is breeding age at only 5-6 months and can usually produce over 20 piglets per year separated into 2 broods, so I don't think it will be too long before China's pig farming industry is back at strength.

The US may have a surplus, and pork sure is cheap here, but that has nothing to do with China now; that's the beauty of Trump's trade war. Pork is the least healthy protein anyway.
 

Quickie

Colonel
Kind of surprising China Mobile share of 5G equipment includes quite a bit of Nokia and Ericsson equipment.
My guess is upgrading from the earlier system to one of the same brands is the most cost-efficient and this plays a part in the decision making.


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Huawei says it has secured 50-plus 5G contracts, 28 from Europe
Source: Xinhua| 2019-07-19 00:17:45|Editor: yan


by Wang Zichen

BRUSSELS, July 18 (Xinhua) -- Huawei board member and Senior Vice President Catherine Chen said here on Thursday that the Chinese technology giant has signed over 50 5G commercial contracts across the world. Twenty-eight of these were signed in Europe.

Chen told a media roundtable here that her company fully supports the European framework on cybersecurity. She described ongoing discussions in Europe around the security of 5G networks as rational with a clear focus on security. This contrasts with the narrative in the U.S., where "logic is missing," as Washington is focusing solely on the location of the vendor's headquarters, she said.

Huawei was established in southern China and is still headquartered there, but it has set up numerous significant research and development facilities around the world, including many in the west, which all contribute to Huawei's products and services.

The company's main competitors are northern Europe-headquartered Ericsson and Nokia, which have joint ventures with Chinese companies in China that churn out telecom equipment sold widely in and outside China, she said.

Therefore it defies logic to say that Huawei's products are Chinese and its competitors' products are not Chinese, she said.

She acknowledged that Ericsson and Nokia have recently secured 5G contracts for core network equipment from China's leading state-owned carrier China Mobile. Answering a question, she stressed that simply because Ericsson and Nokia were treated nicely in China, Huawei would not expect to receive contracts from Europe.

Huawei's leading position in the market is the result of its quality products offered at competitive prices, and that is what ultimately matters in a market economy -- not top-down political decisions, Chen argued.

Huawei founder Ren Zhengfei touched on the same subject on June 24 in an interview with the Financial Times.

"During recent bidding for the core network launched by China Mobile, about 44 percent of the market share went to Ericsson and Nokia, while we got a little over 50 percent. The West is most concerned about the core network when it comes to cyber security. China is open in this area, so it allows western companies to have such a large market share in the core network. This also shows that China trusts them," Ren said according to a transcript made available by Huawei.
 
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localizer

Colonel
Registered Member
Reading up on pig biology (this forum invokes a lot of learning), a sow is breeding age at only 5-6 months and can usually produce over 20 piglets per year separated into 2 broods, so I don't think it will be too long before China's pig farming industry is back at strength.

The US may have a surplus, and pork sure is cheap here, but that has nothing to do with China now; that's the beauty of Trump's trade war. Pork is the least healthy protein anyway.
Due to imports, The prices of pork haven’t risen enough to affect diets, yet. Chinese own smithfieldz

But there needs to be an overhaul of the system to improve biosafety.

One of the bigger issues are people’s livelihoods that depend on the pork industry.
 

Equation

Lieutenant General
Due to imports, The prices of pork haven’t risen enough to affect diets, yet. Chinese own smithfieldz

But there needs to be an overhaul of the system to improve biosafety.

One of the bigger issues are people’s livelihoods that depend on the pork industry.

From what I hear, there is recent commotion in China about improving and creating self-sustaining agricultural systems so China doesn't rely on imports and creates more wholesome foods.

In addition to the trade war, this was in part spurred on by the realization that imported bio-engineered foods like from Monsanto will contain dirty tricks as revealed through the Indian Cotton picker episode a few years back. Indian farmers were given cotton seeds to try out but after a year or 2, they were told to pay a sky high fee for them. They refused and went back to their old seeds but to their horror, discovered that they would not grow anymore. These farmers committed suicide. This coincides with other stories that once US bio-engineered soybeans are planted, nothing else will grow there anymore. Scientists in India concluded that Monsanto inserted a gene encoding an herbicidal toxin into these export products to kill all other plants along with an efflux pump to cause their own plants to be immune to the toxin. When you plant Monsanto (and are not in the US), you will be enslaved to Monsanto. China has banned GMO goods, not for the fear that genetic modification in general are harmful when consumed, but to defend against this practice and the dangers of other possible underhanded tactics spurred by the US government (such as genes that produce heat-stable compounds which negatively affect birth rate placed specifically in exports to rival nations).

What I would personally like to see is China start American lobster hatcheries so that imports of those from the USA or Canada are never needed again. It is a simple and fast process; it takes only one year under temperature control and power-feeding to get lobsters to market size in captivity while it normally takes a wild lobster 8 years to get there. Even in the US and Canada, where these lobsters can be caught, companies like to farm them, showing that farming costs are very competitive with fishing costs. In my personal shopping experience, the farmed product is superior in that they are consistently all very full of meat while the meat-fill in wild stock is a matter of luck (and selection skill if you know how to look). In China, the farming costs would be even lower than in the US/Canada, which shows me that the Chinese farmed product would be more than price-competitive against American/Canadian wild caught product, no tariffs needed. I really want to see the Chinese get into this industry.
 
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localizer

Colonel
Registered Member
From what I hear, there is recent commotion in China about improving and creating self-sustaining agricultural systems so China doesn't rely on imports and creates more wholesome foods.

In addition to the trade war, this was in part spurred on by the realization that imported bio-engineered foods like from Monsanto will contain dirty tricks as revealed through the Indian Cotton picker episode a few years back. Indian farmers were given cotton seeds to try out but after a year or 2, they were told to pay a sky high fee for them. They refused and went back to their old seeds but to their horror, discovered that they would not grow anymore. These farmers committed suicide. This coincides with other stories that once US bio-engineered soybeans are planted, nothing else will grow there anymore. Scientists in India concluded that Monsanto inserted a gene encoding an herbicidal toxin into these export products to kill all other plants along with an efflux pump to cause their own plants to be immune to the toxin. When you plant Monsanto (and are not in the US), you will be enslaved to Monsanto. China has banned GMO goods, not for the fear that genetic modification in general are harmful when consumed, but to defend against this practice and the dangers of other possible underhanded tactics spurred by the US government (such as genes that produce heat-stable compounds which negatively affect birth rate placed specifically in exports to rival nations).

What I would personally like to see is China start American lobster hatcheries so that imports of those from the USA or Canada are never needed again. It is a simple and fast process; it takes only one year under temperature control and power-feeding to get lobsters to market size in captivity while it normally takes a wild lobster 8 years to get there. Even in the US and Canada, where these lobsters can be caught, companies like to farm them, showing that farming costs are very competitive with fishing costs. In my personal shopping experience, the farmed product is superior in that they are consistently all very full of meat while the meat-fill in wild stock is a matter of luck (and selection skill if you know how to look). In China, the farming costs would be even lower than in the US/Canada, which shows me that the Chinese farmed product would be more than price-competitive against American/Canadian wild caught product, no tariffs needed. I really want to see the Chinese get into this industry.

Meh that India thing was just typical India and anti-GMO bullshit.

Swine fever is more interesting tho. Supposedly CIA released the Swine Fever that caused an epidemic in Cuba. That's why the Chinese bros suspect CIA. No evidence yet.
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