Chinese Economics Thread
- Thread starter Norfolk
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West doesn’t know Chinese own those ASEAN businesses
Being Chinese is in the genes
So this article coupled in conjunction with yours above, makes it really seem like given the affects of COVID-19 and the already unrealistic expectation of China buying $200 billion exports from America per the phase 1 of the so called Trade Deal, if China were to really follow through with this agreement, given it has suffered COVID-19, not only would it severly tax China but it would even more damage China's trade relationships with Asian partners for the benefit of America First, and it would in effect allow America to directly dictate and shape/manage China's trade... This is almost like Plaza Accord concessions by another means.
AssassinsMace
Lieutenant General
The only reason why there's a Phase One deal is because Trump had to show a faux victory in the trade war. If the US is in control and doesn't need China, no need to break up his total victory in the trade war with China into phases. Trump could've demanded everything he wanted from China without any phases. Trump is still attacking Chinese companies. He already broke the trade war truce if you think the deal was real. The stock market setback because of the coronavirus doesn't show how the US needs to decouple from China. It shows how they need China. The US outsources to whichever country where they can make the most profits. Southeast Asia is dependent on China for raw materials to make outsourced products. Maybe they'll go to India who will have build infrastructure to handle the volume that China presently can only provide. Remember how India showed-off their own smartphone... made with parts that were all made in China. The same with Vietnam when they showed off a Vietnamese smartphone. If it were so easy to setup shop somewhere else other than China, why haven't they done it already? If any pharmaceutical that comes out with a vaccine for the coronavirus, they're going to need China's capacity to produce it. Look at how medicine around the world has been affected by the shutdown in China because of the coronavirus. China provides a lot of the ingredients for drug production. It all centers on doing anything without China will always be more expensive. Look at 5G and how US allies have to consider Huawei. I'm sure they would rather have a non-Chinese product but they can't because it's going to cost them more. The US should have to pay at least the difference in cost to have the world turn their backs to Huawei. And the US will find itself in the Soviet Union position during the Cold War if they do that. They're going to bankrupt themselves in trying to counter China's every move. And don't buy that nonsense that the US is going to make an alternative 5G from China for the world. It better be far superior to what China has because it will always cost more than China's. But then if the US can easily supply a superior product, then why haven't they already?
The new coronavirus Covid-19 will end up being the final curtain on China’s nearly 30 year role as the world’s leading manufacturer.
“Using China as a hub...that model died this week, I think,” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.
That China is losing its prowess as the only game in town for whatever widget one wants to make was already under way. It was moving at a panda bear’s pace, though, and mostly because companies were doing what they always do - search the world with the lowest costs of production. Maybe that meant labor costs. Maybe it meant regulations of some kind or another. They were already doing that as China moves up the ladder in terms of wages and environmental regulations.
Under President Trump, that slow moving panda moved a little faster. Companies didn’t like the uncertainty of tariffs. They sourced elsewhere. Their China partners moved to Vietnam, Bangladesh and throughout southeast Asia.
Enter the mysterious coronavirus, believed to have come from a species of bat in Wuhan, and anyone who wanted to wait out Trump is now forced to reconsider their decade long dependence on China.
The coronavirus is China’s swan song. There is no way it can be the low-cost, world manufacturer anymore. Those days are coming to an end. If Trump wins re-election, it will only speed up this process as companies will fear what happens if the phase two trade deal fails.
manqiangrexue
Brigadier
Terrible analysis. A virus' effects are short term. If you move your manufacturing out of China and into Vietnam, and the next epidemic is in Vietnam, now, what, move again? Where to? Maybe that place is next. Moving permanently out of a country because of an epidemic is like moving to a new neighborhood to avoid having your house struck by lightning again. It's true that China moving up the value chain and increasing labor costs will result in some low-level manufacturing leaving but there are many types of intermediate and high tech manufacturing that China retains and is expanding its advantages in. If Signorelli says that China will no longer be the world's leading manufacturer, then which country will it be? When does he expect data to reflect that country's manufacturing become larger than China's? Can he put his reputation on the line like Gordon Chang did twice incorrectly predicting the date of the CCP's collapse? The problem with free media is that people like him and Gordon Chang can write whatever they want, be proven wrong, and then without consequences, write more rubbish to start the cycle again. And some people will not pay attention to the author or his track record and simply take what's written at face value.
There have been jokes told about Gordon Chang being in the Strategic FooYoo Agency for a long time, but it's only recently that I've truly internalized the truth behind the humour. It used to get to me how the Western "free press" was so monolithic and certain in its view that China would collapse until I understood that it's nothing more than religious belief. It's a deeply held article of faith with them that there's only one model for successful development - theirs. This isn't a belief born of rational analysis; it's a religious proclamation exactly like the Islamic proclamation that there is no god but Allah and Mohammed is his messenger. Nothing more.
China isn't hated for what it does, it's hated for what it is: a living refutation of their faith. Just that alone explains all of their hatred, their spite, their denial of the obvious truth of China's success, and their enmity. So of course Gordon Chang and his ilk can write their drivel without consequence, it's the China collapsist faithful's gospel. There's no expiration date on it either - after all, religious believers have held to patently ridiculous faiths generation after generation for millennia.
My years of studying and observing China have shown me a truth that I hold as deeply as they hold their delusions: China is going to become the wealthiest, most technologically advanced, and most militarily powerful state on Earth and there's nothing anyone can do to stop it. Nothing they do matters because nothing they can do can alter this fundamental trajectory. That is as immutable as gravity.
AssassinsMace
Lieutenant General
They said Mexico was going to replace China for a couple decades. Again the arrogance to believe the universe is revolving around only the US. Like I said before, the numbers I only see referring to losses because of the coronavirus have been other countries' losses due to Chinese economic inactivity. Vietnam is going to lose $12 billion this quarter just from Chinese tourism drying up? Are Mexicans going to replace Chinese tourists to make up the $48 billion a year due from Chinese tourism? Mexicans don't have the consumer nor the manufacturing capacity that the Chinese do. No one else has it. Mexicans make more per capita than Chinese do. So why aren't they a powerhouse now? Because the economic system is corrupt and more than China's since China's money goes a lot further than Mexico's. China has not reached the saturation like the US has hence why foreign markets play an important role to US corporate profits. Plenty of room still for China to grow. Of course China has taken a hit but China is just too big to waste away like the notorious suspects want to see happen. China doesn't buy Boeing, the closer it gets to bankruptcy. Yeah only they can think China will still be buying their jetliners while under an economic collapse. When all is said and done, the US will be in fear even more than they are now that China didn't collapse because of the coronavirus.
Manufacturing isn't going to transfer to other countries overnight because of things:
Creation of educated and skilled labor, e.g. educational institutions, culture that emphasizes education
Creation of capital machinery, e.g. machine tools, automation
Creation of infrastructure, e.g. sufficient electrical power, roads, ports.
Enforcement of law and order, e.g. effective and strict government, with high political stability.
How many low cost labor countries that meet such conditions?
Finally we come to the fifth.
The top three of these takes huge capital from investment banks that target infrastructure.
Meaning you have a banking structure that hands loans out to companies so they can use it to build factories, buy machinery, train labor and such. NOT USE SAID CAPITAL FOR STOCK BUYBACKS.
Maybe some manufacturing jobs will go to other countries like making clothes and shoes. Good. We like to see more equitable distribution of manufacturing and that helps wealth spread out in the world. It brings order and balance to the the developing and emerging world. But you know what takes for that to happen?
Banks that invest in infrastructure development. Namely, banks from these countries, no. 1 China, no. 2 Japan, no. 3 S. Korea, no. 4 Taiwan. IMF and World Bank, bah, these are all failed institutions in terms of their mission. These Western institutions have done sh*T towards Third World development and like the experience in the Philippines, have worsened it by creating economic conditions for the elite to pocket, rummage, and steal from the countries resources and launder them in Western banks. The big four Chinese infrastructure investment banks are heavily responsible for new economic growth in Africa, Central Asia (Belt and Road) and Southeast Asia. You don't have anything like these in Europe and North America.
So even if manufacturing goes to other countries, these factories will still be ethnic Chinese owned, financed by Chinese banks, source machinery from China, buy processed materials and parts from China.
So if I move my clothing production of polyester shirts from China to Malaysia, guess where I still have to buy my polyester fibers from.
Guess who will have to transport my polyester fibers?
Unloaded on ports likely to have cranes made in China by the ZPMC company.
While the profits of said shirt factory helps pay its loan and interests to:
Because these banks are the ones truly interested in investing and making loans for factories and industries, and not waste them in stock markets.