Chinese Economics Thread

[antiterror13]

Why haven't they turned Hainan Island into one big amusement park?

Are you aware that Hawaii has many islands and in total is a very big land size (Big Island itself is a huge island, I have been there and it is huge).
Hainan is over 2x of total Hawaii land size ... my point is only a small part of Hainan will be used for big amusement park and it will take time

Hainan is almost 50x of Singapore and over 31x of Hongkong ... so huge island

 

[BoraTas]

The Q4 GDP growth of 5.9% looks largely normal. This is because even by Q4 last year (a few months ago) china's economy was already not far from full run-rate. 5.9% represents a typical chinese economy had COVID not happened. Keep in mind we are only a few quarters away from China becoming a high income country, and no high income country achieves consistent GDP growth above 5% a year.

I bet we will see above 5.5% growth rates until the end of the decade. The next 5 years will be reform years and reform eras are always characterized by lower growth rates.

 

[voyager1]

Please tell us your reasoning / opinions ?

Sure.
So the number 1 reason is that now the EU is in a disadvantage with the US on accessing the China market because the US already has its Phase 1 deal while EU has nothing. So as long as EU doesn't sign the deal then the Americans accumulate more competitive advantage versus the EU.

2nd The Chinese technology companies are now going to the moon. As long as the EU delays the signing then they are missing the chance to embed their companies into the Chinese tech sector. Note that this is strategically important as the EU tech sector is almost non existant now, so they need to access the Chinese market and its companies in order to start building their own tech.

3rd, This deal obviously was made to placate the EU, so its almost full of Chinese concessions while the EU gives "assurances" that its market will stay open. So by not signing it it is like they are leaving free money on the table.

4th, The EU is currently stagnating and one of remaining major growth market is China. So EU needs China's market in order to propel growth back at home.

5th, China allowing Tesla to 100 per cent own the local subsidiary on China and build their electric vehicles there, shocked the German automakers as Tesla had a competitive advantage and it would slowly eat out any potential German sales for electric vehicles in China.

6th, China's explosive growth on local electric vehicle manufacturing were bad news to German automakers. If the Chinese automakers were allowed to grow without much competition (except the American Tesla) then the chinese companies would grab the local marketshare and leave the Germans only minor marketshare.

7th, China now is the 2nd major country (after the US) offering such strong innovation R&D base capacity so it is critical that the EU is allowed to access it in order for its companies to remain competitive and relevant in the future..


There are a couple other reasons as well, but that would take a long time, so the above is the most basic reasons why the EU needs the CAI in order to ensure access to China

 

[weig2000]

Are you aware that Hawaii has many islands and in total is a very big land size (Big Island itself is a huge island, I have been there and it is huge).
Hainan is over 2x of total Hawaii land size ... my point is only a small part of Hainan will be used for big amusement park and it will take time

Hainan is almost 50x of Singapore and over 31x of Hongkong ... so huge island

Hawaii is not a very appropriate comparison with Hainan Island, since it consists of a series of small islands. It's better to compare Hainan with Taiwan:

"Area: The size of Hainan (33,920 km2) is comparable to the size of Belgium. The PRC, however, regard it as the second largest island, since Taiwan (35,980 km2) is considered the largest."

 

[antiterror13]

US sanctions are quite impotent when it comes to China, as 4 years of Trump have demonstrated.

So what the US could do to China to stop the deal ?

 

[antiterror13]

Sure.
So the number 1 reason is that now the EU is in a disadvantage with the US on accessing the China market because the US already has its Phase 1 deal while EU has nothing. So as long as EU doesn't sign the deal then the Americans accumulate more competitive advantage versus the EU.

2nd The Chinese technology companies are now going to the moon. As long as the EU delays the signing then they are missing the chance to embed their companies into the Chinese tech sector. Note that this is strategically important as the EU tech sector is almost non existant now, so they need to access the Chinese market and its companies in order to start building their own tech.

3rd, This deal obviously was made to placate the EU, so its almost full of Chinese concessions while the EU gives "assurances" that its market will stay open. So by not signing it it is like they are leaving free money on the table.

4th, The EU is currently stagnating and one of remaining major growth market is China. So EU needs China's market in order to propel growth back at home.

5th, China allowing Tesla to 100 per cent own the local subsidiary on China and build their electric vehicles there, shocked the German automakers as Tesla had a competitive advantage and it would slowly eat out any potential German sales for electric vehicles in China.

6th, China's explosive growth on local electric vehicle manufacturing were bad news to German automakers. If the Chinese automakers were allowed to grow without much competition (except the American Tesla) then the chinese companies would grab the local marketshare and leave the Germans only minor marketshare.

7th, China now is the 2nd major country (after the US) offering such strong innovation R&D base capacity so it is critical that the EU is allowed to access it in order for its companies to remain competitive and relevant in the future..


There are a couple other reasons as well, but that would take a long time, so the above is the most basic reasons why the EU needs the CAI in order to ensure access to China

Thanks @voyager1

 

[KYli]

So what the US could do to China to stop the deal ?

Not to China but to Iran, the US could lift the sanctions and Iran would have second thought. However, Biden doesn't have the gut to do it. And Israel wouldn't allow that to happen.

 

[antiterror13]

Not to China but to Iran, the US could lift the sanctions and Iran would have second thought. However, Biden doesn't have the gut to do it. And Israel wouldn't allow that to happen.

What would happen if the US would threaten China to deny access to SWIFT ? I was wondering why Trump didn't do it and let China had huge trades with Iran on his watch

 

[NiuBiDaRen]

What would happen if the US would threaten China to deny access to SWIFT ? I was wondering why Trump didn't do it and let China had huge trades with Iran on his watch

That would be a good way to start the collapse of SWIFT. SWIFT is only as credible as the country supporting it.

If USA prevents China from using SWIFT, most countries will have no way to trade with the world's largest trading nation. They will have to use alternative systems which China can create in quick time. And then you say goodbye to SWIFT.

 

[KYli]

What would happen if the US would threaten China to deny access to SWIFT ? I was wondering why Trump didn't do it and let China had huge trades with Iran on his watch

China can easily find an alternative such as CIPS so denying access is pointless. The US needs to threaten sanctions on any banks that do business with China to have an effect. However, sanctioning China would mean all transactions need to conduct in Yuan or local currency which can hasten the collapse of the mighty dollars.