FriedRiceNSpice
Captain
Yep, I predicted that China should hint at this in a subtle way in a different thread.
Chinese Economics Thread
- Thread starter Norfolk
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Yep, I predicted that China should hint at this in a subtle way in a different thread.
Quickie
Colonel
Yes...the unspoken truth that Trump and his hawks will try to put under smoke and screen as much as possible. The deficit is really around $100 billion. It's even less than that if you take into account that part of the figure that is from U.S. companies exporting from China.
The hit to both sides in the trade war would be about the same. US$400 to US$500 billions of goods/services could be affected on both sides, depending on how agitated the Chinese consumers are.
The hit to both sides in the trade war would be about the same. US$400 to US$500 billions of goods/services could be affected on both sides, depending on how agitated the Chinese consumers are.
Quickie
Colonel
I recall someone a while ago talking about Huawei still being reliance on ARM despite being able to design its own chip. Seems like Huawei has got it figured out.
Huawei will use its own phone chips amid report UK design firm ARM has cut business ties, says analyst
The US move came as talks to resolve a lingering trade war between the world’s two-biggest economies ended without agreement this month, sparking a wave of targeted actions by the Trump administration against China.
Huawei Technologies is likely to be able to weather a reported suspension of business with UK chip designer ARM as it will be able to rely on its own Kirin chips, according to a research report by Jefferies.
ARM, which develops the designs for chips used in smartphones and other connected devices, supplies two types of licence to Huawei – core and architectural – but any suspension will have limited impact on Huawei’s smartphone production, at least in the short-term, Jefferies analyst Rex Wu wrote in a note on Wednesday.
If Huawei loses its core licence from ARM, it will be able to use its self-developed custom CPU core and GPU architecture, Wu said. Huawei’s architectural licence, granted through ARM’s non-controlling joint venture in China set up last May to secure supplies for Chinese companies following a US export ban on ZTE, should remain valid, Wu said.
“We think ARM's suspension will accelerate Huawei adopting its own customer cores in new Kirin chips, and also developing its own Operating System and ecosystem,” said Wu. “We think Huawei will likely launch new Kirin chips in the near term to show little disruption to operations.”
ARM is the latest partner reported to be cutting ties with Huawei following the Trump administration’s move to add it to the US Commerce Department’s Entity List, after concluding that the Chinese telecom major was engaged in activities “contrary to US national security or foreign policy interests”. Google has blocked Huawei’s access to future Android operating system updates and a range of other overseas suppliers are considering cutting ties to comply with the US blacklist, which prevents Huawei from buying American technology.
The US move came as talks to resolve a lingering trade war between the world’s two-biggest economies ended without agreement this month, sparking a wave of targeted actions by the Trump administration against China.
Huawei will use its own phone chips amid report UK design firm ARM has cut business ties, says analyst
- If ARM cuts ties with Huawei, the Chinese telecoms giant will accelerate use of its own in-house chips, Jefferies says
The US move came as talks to resolve a lingering trade war between the world’s two-biggest economies ended without agreement this month, sparking a wave of targeted actions by the Trump administration against China.
Huawei Technologies is likely to be able to weather a reported suspension of business with UK chip designer ARM as it will be able to rely on its own Kirin chips, according to a research report by Jefferies.
ARM, which develops the designs for chips used in smartphones and other connected devices, supplies two types of licence to Huawei – core and architectural – but any suspension will have limited impact on Huawei’s smartphone production, at least in the short-term, Jefferies analyst Rex Wu wrote in a note on Wednesday.
If Huawei loses its core licence from ARM, it will be able to use its self-developed custom CPU core and GPU architecture, Wu said. Huawei’s architectural licence, granted through ARM’s non-controlling joint venture in China set up last May to secure supplies for Chinese companies following a US export ban on ZTE, should remain valid, Wu said.
“We think ARM's suspension will accelerate Huawei adopting its own customer cores in new Kirin chips, and also developing its own Operating System and ecosystem,” said Wu. “We think Huawei will likely launch new Kirin chips in the near term to show little disruption to operations.”
ARM is the latest partner reported to be cutting ties with Huawei following the Trump administration’s move to add it to the US Commerce Department’s Entity List, after concluding that the Chinese telecom major was engaged in activities “contrary to US national security or foreign policy interests”. Google has blocked Huawei’s access to future Android operating system updates and a range of other overseas suppliers are considering cutting ties to comply with the US blacklist, which prevents Huawei from buying American technology.
The US move came as talks to resolve a lingering trade war between the world’s two-biggest economies ended without agreement this month, sparking a wave of targeted actions by the Trump administration against China.
As always there is a lot of noise in the media because, believe it or not, not all tech writers are technically savvy to the degree we assume they are.
As this video shows, there's a lot of business that American companies do selling to Chinese consumers that isn't counted as American exports. It would be useful to tax this in retaliation for the next round of tariffs, but there's a complication in that many of these businesses are JVs (joint ventures) with Chinese companies. There's an elegant way of imposing a tax solely on the American partner.
Say the Chinese government wants to impose a ¥100 tax on the American partner of a 50/50 JV without being flagrant about it. The way to do it would be to impose a ¥200 tax on the JV's income - which the parties would pay 50/50 - then give the parent company of the Chinese partner a ¥100 rebate. That way, the Chinese partner effectively pays ¥0 and the American partner ¥100.
The beauty of this is that it looks like a "fair" tax, provided that the Chinese parent's finances are opaque (or the rebate paid to an opaque entity). The only downside to this scheme is that it's ultimately a tax on Chinese consumers, but this can be balanced by sufficiently cutting other taxes to compensate. The Chinese government has recently passed a broad tax cut, so there's some scope for something like this.
Basically both countries stripped each other of MFN status and going back to pre WTO level tariffs.
Trump & co. may think US has leverage over China in trade, they just didn't realize that time window of trade leverage over China had gone and past after 08 financial crisis.
If you look at China's retaliatory tariff scheme that comes into effect June 1, it is stacked in a way to make the pain concentrated and sharp on US while making Chinese consumers suffer less, not like the broad spectrum across the board tariff that US is imposing, which doesn't appear to be clearly thought through to avoid shooting at own foot. After these initial steps, China still has a lot in her toolbox to play out this game and a big war chest. But she will not make it worse than it already is on purpose. The spread of China's sovereign 10 year bond and her GDP is way better than that of US and pretty much the rest of the OECD countries so Western MSM's gratuitous worries about ballooning debt is not holding water. Her fiscal stimulus would put a floor under the steady imports from East Asia and SEA resulting in less reliance of those economies on export to US which works out just fine for China.
manqiangrexue
Brigadier
IMF Says U.S. Is Paying China Tariff Costs, Contrary to Trump’s Claim
Brendan Murray
May 23, 2019
IMF Says U.S. Is Paying China Tariff Costs, Contrary to Trump’s Claim
(Bloomberg) -- Companies in the U.S. are paying almost all the costs from Donald Trump’s tariffs on Chinese imports, IMF researchers said in findings that contradict the president’s assertions that China is footing the bill.
IMF researchers found “tariff revenue collected has been borne almost entirely by U.S. importers,” according to the International Monetary Fund’s blog post released Thursday.
“Some of these tariffs have been passed on to U.S. consumers, like those on washing machines, while others have been absorbed by importing firms through lower profit margins.”
The report concludes what most private economists have argued for months: that China doesn’t pay U.S. tariffs, American consumers and companies do. “Consumers in the U.S. and China are unequivocally the losers from trade tensions,” the IMF paper said.
It’s rare for the IMF to disagree with its largest shareholder, and the paper was released just as the rhetoric in Trump’s trade war with China reaches a boiling point.
“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” Trump tweeted May 5.
Trade talks between Beijing and Washington stalled this month as Trump accused China of backing out of a deal that was taking shape. In response, Trump increased levies on $200 billion in Chinese imports to 25% from 10%, prompting retaliation from Beijing.
According to a separate report Thursday from researchers at the Federal Reserve Bank of New York, the U.S.’s 15 percentage-point increase in tariffs will result in an annual cost of $831 per American household, about double the bill on Trump’s 2018 tariffs.
The U.S. has also released a list of about $300 billion in Chinese goods that could face additional tariffs, including clothing, toys and mobile phones. Those levies, if imposed, would cover essentially all Chinese imports and hit a broader swath of American households.
Earlier this month, White House economic director Larry Kudlow acknowledged “both sides will suffer” from the widening U.S.-China trade war, while predicting that the impact on U.S. jobs and growth from higher tariffs on Chinese goods would be “de minimis.”
On Thursday, China blamed Washington for wrecking the talks and insisted the U.S. must alter its “wrong practices” before negotiations can resume. Financial markets, meanwhile, are slumping amid prospects for a long dispute between the world’s two largest economies.
Co-written by IMF chief economist Gita Gopinath, the paper says a trade war that escalates with all the threatened tariffs will subtract about a third of a percentage point of from global gross domestic product, “with half stemming from business and market confidence effects.”
“This type of scenario is among the reasons why we referred to 2019 as a delicate year for the global economy,” the IMF economists wrote.
The fund in April cut its 2019 forecast for global growth to 3.3%, the lowest since the financial crisis, citing higher tariffs weighing on trade and weakness in some advanced economies.
Quickie
Colonel
How the Google ban on Huawei is actually good news for Apps developers in the rest the world.
How Huawei could end up challenging Google
How Huawei could end up challenging Google
- Under siege: Huawei, with plenty of resources of its own (and most likely with support from the Chinese government, determined to fight back against the US) could soon be investing heavily in the marketing and improvement of an Android fork.— Reuters
BY imposing restrictions on Huawei Technologies Co, the administration of US President Donald Trump may force the Chinese company to do something that no one in tech has dared to do for a long time: Challenge Google’s control of the Android universe, which earned the US company a huge European fine last year.
Huawei faces two big threats from US technology export restrictions. One is the loss of American components for its products, a blow it cannot parry immediately if it wants to keep making top-flight smartphones.
The other is the potential withdrawal of its Android license, which would stop Huawei from preinstalling the latest Google-approved version of the operating system and some key services Western users see as necessary - above all Google’s Play Store, the biggest repository of Android apps.
This particular obstacle could, under the right conditions, turn into a Huawei strength in Europe, a market that accounts for almost a third of the company’s smartphone unit sales, according to market analytics company IDC.
The commission wrote that by obstructing the development of Android forks, Google and its parent company Alphabet Inc “closed off an important channel for competitors to introduce apps and services, in particular general search services, which could be pre-installed on Android forks.”
In its ruling, it made a strong case for forks as platforms for Google-independent innovation that, if they were allowed to spread widely, could have curbed Google’s market dominance in various areas.
Google has appealed the ruling, but it has also removed restrictions on handset makers to avoid further fines. This, however, hasn’t led to the proliferation of alternative platforms based on open-source Android: Big phone makers are locked into comfortable relationships with Google and see no need to experiment. Days after the European Union fined Google, Huawei, at the time the biggest phone manufacturer that provided an easy opportunity to install alternative Android-based operating systems on its devices, ended the programme without explanation.
If Google takes away the Android license, it’ll yank Huawei out of its comfort zone. The company isn’t likely to give up the European market without a fight, after spending billions of dollars developing a customer base. Consumers in some European countries now appear to be put off Huawei by the US attack, although, paradoxically, it appears to have fuelled the brand’s popularity in France.
The company has said it developed its own operating system (likely an Android fork), and it’s been trying to lure developers to its app store.
If the US stops Huawei from preinstalling the Play Store, the Chinese manufacturer probably won’t spend much time educating consumers on how to install it on their own (the way people do now with phones bought in China).
That’s not what most users expect on a new, expensive device. Instead, Huawei will want to offer developers an easy way to sell apps not just in the Google store but also in one preinstalled on Huawei devices - to “multi-home” them.
Huawei hasn’t been eager to get into an open confrontation with Google, which was a valued partner.
But a breakup ordered by the US government changes things. Huawei, with plenty of resources of its own (and most likely with support from the Chinese government, determined to fight back against the US), could soon be investing heavily in the marketing and improvement of an Android fork. Given Huawei’s marketing potential, the effort isn’t necessarily doomed. And it could boost Asian and European developers deterred from competing in some areas - such as mapping, video services or even search - by Google’s enormous power.
Given the pushback in recent years against US tech companies’ relentless data collection and the widespread mistrust of Trump’s administration in Europe, there could well be demand for a Google-free phone from a major manufacturer known for superior hardware.
I know I’d be interested, and the French would probably lap it up, judging by their reaction to the US threats. The EU regulators, too, might be intrigued to see evidence that perhaps the Google antitrust ruling didn’t come too late.
This is something of a utopian scenario, I know. Huawei may never need to go on the warpath against Google: The US and China could strike a trade deal that would make the specter of restrictions go away.
Or, if Huawei is banned from buying US technology, it could find itself unable to produce marketable phones for a while. And, of course, it is a company from Communist China, making it difficult for European regulators, and even for private developers, to embrace it as a savior from the overly dominant US tech companies.
Monopolies in tech don’t last forever, however.
Sometimes they just need a push to start showing cracks. If the US moves against Huawei, it might be unknowingly giving such a push to Google in the smartphone market.