Chinese Economics Thread

[PikeCowboy]

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An article from scmp mentions that the us could cut off access to credit card services especially master cards, visa, amex by denying swift services to a specific bank or to any of its 200 participating countries

How likely will the us take this extreme measure? Will it not doom the us dollar were it to happen?

China doesn't use MC, Visa, or Amex much so if they want to leave they can, AFAI-remember until very recently they were pretty active in lobbying for greater access. In so far as what HK wants to do if MC or Visa leaves... that's up to them lol

Regarding taking China out of Swift... it is technically feasible... but remember Eco105... the value of a type of money is dependent on the characteristics of universal acceptability, stable storage of value (already kind of shaky), and easy divisibility/transportation. If the largest trading nation in the world stops accepting a form of money it would really take away from that money. The Europeans were already pretty mad about Iranian sanctions... they have much bigger interests in China compared with Iran.

Now I do think this might happen at some point, perhaps in the near future, it'll hurt for a while but it might not be that bad in the grand scheme of things

 

[horse]

This is very interesting.

It makes sense for Saudi Arabia to settle oil trade in RMB instead of the US Dollar.

Of course, I doubt we'll see this announced officially by either China or Saudi.

Okay, first of all, I admit it, I did not read that article.

But, this sounds sort of like the history of the oil embargo.

What happened was the price of oil sky rocketed, and the Saudis had all this money because the Americans and others were buying all their oil.

They called that the petro-dollars. The Saudis had so much petro-dollars, that they did not know what to do with them.

So they started buying arms from the United States. It was a win-win situation. The Americans bought the oil they needed, then the Saudis holding all that petro-dollars, recycled them back to the United States for armaments.

Fast forward 50 years, if China buys oil from Saudi Arabia in Yuan, then the Saudis take that Yuan and buys stuff from China, the same win-win.

As long as they can convert the RMB into gold or USD, then they would not have a problem with that.

Actually, do not know the details, forgot about them, that oil futures exchange in China. Wasn't there a gold component to those contracts on how they were settled?

 

[emblem21]

Where do you get that ideal US don't care about the damage done to their corporations? Trump himself boasted how much he had spent in propping up his farmers. How much he has done for corporate America. Gee talk about selective reasoning.

And your understanding of rare earth is lacking. China never had monopoly of rare earth. It is on the processes and refining that China had an edge. To start up those process is going to cost, is it possible, sure. It's how long and how much, and what's the damage in the mean time that should be your question.

So US got the edge on this trade war, ok let's take that for argument sake. So are you saying China should just give in?

This corporations are on borrowed time since the US government is printing money into infinity just to keep them alive. Should the US lose there dollar status (sooner or later given that amount of printing that must take place just to keep everything normal) or even these companies declare bankruptcies due to profits being lost thanks to Trump/GOP being stupid, they will show their true loyalty (money) by leaving the USA (when the nation has collapsed from all those factors that the US government ignores), build factories in China or anywhere else in the world and then take revenge on Trump/government by ensuring that they have full control as to how they make there money and limit the governments attempt at future interference and then make an example out of Trump/Republican/Democrat parties for daring to ruin there ability to make the profits they were making before (ALL OF THIS STARTED BECAUSE OF THE GOP/TRUMP AND HENCE THEY ARE RUNNING OUT OF TIME TO REMEDY THE SITUATION THAT THEY HAVE STARTED).

 

[horse]

The losers will be visa/master card and all the issuing banks. The winners will be the merchants and consumers (prices can be lowered to maybe 2 %).

Thats why VISA/mastercard hates so much the Alipay/Tencent pay model. Think of it if it will multiply to whole world.
They are getting billions just for settlement processing fee alone.

A video showing the Chinese digital payments system and they briefly compare it to the American system, and what you stated is very true.



Jun 18, 2019

 

[zgx09t]

PCI compliance isn't cheap though.

 

[localizer]

 

[SamuraiBlue]

This is very interesting.

It makes sense for Saudi Arabia to settle oil trade in RMB instead of the US Dollar.

Of course, I doubt we'll see this announced officially by either China or Saudi.

That will never happen since SAR is pegged to the dollar and OPEC's transaction currency is US Dollar.

 

[j17wang]

That will never happen since SAR is pegged to the dollar and OPEC's transaction currency is US Dollar.

why does SAR being pegged to dollar prevent them from holding RMB? What does majority of OPEC transactions being denominated in USD prevent settlement in RMB?

 

[SamuraiBlue]

why does SAR being pegged to dollar prevent them from holding RMB? What does majority of OPEC transactions being denominated in USD prevent settlement in RMB?

Since they lose some of the money through currency exchange. With the SAR pegged to the dollar SA does not lose a penny through any transaction.
As for OPEC transaction, it's not dominated it's the rule since the price is pegged to the two major oil exchange markets.

 

[B.I.B.]

Since they lose some of the money through currency exchange. With the SAR pegged to the dollar SA does not lose a penny through any transaction.
As for OPEC transaction, it's not dominated it's the rule since the price is pegged to the two major oil exchange markets.

if is good enough for the US to ignore the rules when it suits her, why can't anyone else?