Chinese Economics Thread
- Thread starter Norfolk
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I wouldn't call it Xinomics - that would give too much credit to one person and a huge disrespect to a nation of enterprising, hard-working and innovating population of 1.4 billion.
The economist is actually conceding implicitly, just like the chief economist from Bloomberg recently, certain superiority of the Chinese economic model (see the last paragraph of the article below). This is much better than the Trump administration and its anti-China clique, but they're still stuck with some of the dated notions of the Chinese economy - China's economy is NOT a central-planning one; Chinese society is NOT a closed one; Chinese state firms are all dead-weights and a drag on the economy.
The economist is actually conceding implicitly, just like the chief economist from Bloomberg recently, certain superiority of the Chinese economic model (see the last paragraph of the article below). This is much better than the Trump administration and its anti-China clique, but they're still stuck with some of the dated notions of the Chinese economy - China's economy is NOT a central-planning one; Chinese society is NOT a closed one; Chinese state firms are all dead-weights and a drag on the economy.
plawolf
Lieutenant General
Very interesting development with Epic Games effectively forcing Apple to ban Fortnight from the Apple App Store.
The timing is incredibly interesting, as this feels like Epic trying to take advantage of the Trump TikTok and WeChat ban threats.
Imagine how big of a blow it would be to IPhone sales if you don’t have Fortnight, TikTok or WeChat.
Let’s not forget that PUBG (And many others popular mobile games) is a Tencent Property, so might actually also be ‘accidentally’ banned by Trumps half baked EO banning American companies from any transactions with Tencent.
Apple is especially exposed because of its closed ecosystem, meaning you cannot simply download a APK file form the internet and manually install apps like you can with Android.
At this rate Apple might as well call their next product the iBan.
I think that as we get ever closer to Trump’s banning deadline, the more pressure there will be on Apple to cave on Epic games, which would effectively break their monopoly on payments in the App Store. So they are really going to be stuck between a rock and a hard place of being forced to choose between allowing Epic to break their payments monopoly or giving up at least some control on its ecosystem or face the real risk of a collapse of iPhone sales world wide (which will easily cascade into all its other product lines because once someone escapes the Apple Cult, and choose and android phone for the first time, they are very likely to also ditch all their other products and services).
The timing is incredibly interesting, as this feels like Epic trying to take advantage of the Trump TikTok and WeChat ban threats.
Imagine how big of a blow it would be to IPhone sales if you don’t have Fortnight, TikTok or WeChat.
Let’s not forget that PUBG (And many others popular mobile games) is a Tencent Property, so might actually also be ‘accidentally’ banned by Trumps half baked EO banning American companies from any transactions with Tencent.
Apple is especially exposed because of its closed ecosystem, meaning you cannot simply download a APK file form the internet and manually install apps like you can with Android.
At this rate Apple might as well call their next product the iBan.
I think that as we get ever closer to Trump’s banning deadline, the more pressure there will be on Apple to cave on Epic games, which would effectively break their monopoly on payments in the App Store. So they are really going to be stuck between a rock and a hard place of being forced to choose between allowing Epic to break their payments monopoly or giving up at least some control on its ecosystem or face the real risk of a collapse of iPhone sales world wide (which will easily cascade into all its other product lines because once someone escapes the Apple Cult, and choose and android phone for the first time, they are very likely to also ditch all their other products and services).
AssassinsMace
Lieutenant General
Yes, another article that has to add a qualifier that China is bad but the whole point of the article is that the US has to find a way to live with China. There have been several veteran foreign policy pundits that have been respectable, like Richard Haas and even Ian Bremmer, in the past but when Obama tried his Pivot to Asia, they had to play ball and took a hawkish turn all thinking making threats to China will pressure the Chinese to change to something of their liking. Now since that has failed, they see a hostile unstoppable China as a result of their own making. They would rather believe everyone wants to be loved by Americans and that will change China without them firing a shot hence their biggest mistake. Anything that makes them look superior... bet on that is what they'd rather believe and set their policies by. They'd rather believe people want to worship them as Gods. They think revolutions will happen just to have their love. Now some realize they've been drunken with arrogance and see the point of no return is not far away. They can vilify Xi all they want like he's the worst leader of China ever but they do that with every Chinese leader. They don't mention, for reason, that Xi turned China into being an innovative power on his watch unlike his predecessors who kept China as copycat state. As some argue in here don't do anything that gets the US angry. But that's the test that you're on the right path. And you know how it's right? It's when they see no problem when they do it.
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plawolf
Lieutenant General
Kicking China out of US payment system would hurt America far more than China, as it will effectively end the petrodollar overnight, cause the dollar to massively depreciate, and massively relegate the importance of the US Swift payment system. It will almost certainly do massive damage to the standing and market positions of US banks. And that’s just the obvious ones off the top of my head. The full ramifications will hit far far more firms and sectors in the US.
The key distinctions is that any damage and inconvenience done to China will be short term and fleeing, while damage done to the US will be long term and permanent.
The real reason is that the rest of the world will still need to trade with China, so they will have no alternative but to use alternative payment currencies like Europe or RMB or whatever, and use existing alternative payment networks and new ones China will surely introduce in the event of a ban. Even most Americans firms who do business with China will jump onto the Chinese system if they are allowed. If Trump tries to ban that, it will just mean American firms gets lock out of the bigger and more important market and trade network.
As for seizing Chinese held US securities, well that would simply be impossible. US (and all major government) securities are freely tradeable. That means the specific T-bills Chinese banks bought from the US treasury are almost always not going to be redeemed by Chinese banks upon maturity, because they would have been bought and sold all the time.
The only thing the US can do is to stop paying China interest on any US government debt it holds, but even doing that will massively undermine the value and position of US government debt.
They are both populist moves dreamed up by economically illiterate political animals that anyone with even passing understanding of finance and economics can see are totally non-viable.
Quite amazing that these writers/editors from reuters like to take the side of the USA by stating these facts with the assumption that the dollar is absolute and cannot fail. The problem with that is that is that given how the dollar is under attack via the massive printing of dollars and how nowadays given that the dollar has been used to sanction many different nations (like Russia, Venezuela and Iran) all of which has resources that China wants, winning those nations over by using a currency that is easy to use without fear of sanctions is likely to make it more likely that the dollar is going to phased out sooner or later. Also, given that should USA give the indication rightnow that they wont pay back the loans just because you don't grovel at there feet, it will set a precedent that if you do anything they don't like, they will sanction you or simply don't pay back the loans like as though they expect you to take it with a smile, then it will rapidly encourage other countries to use there own currency instead of holding such toxic assets. Hence given the fact that with the US economy being dead in the water and none of it's assets (like Boeing) are really necessary for other countries to buy, then keeping dollars/treasuries is going to be dangerous to keep in the long term. China at least has strong fundamentals whereas the USA has hollowed out there's, hence every move has to be planned well by the USA in order to avoid destroying themselves which unfortunately Trump/Pompeo don't have any idea how to do so, especially since neither of there two have ever sat down to consider the fundamental problem of how on earth is printing endless amount of cash and giving the lions share to corporations and not the people in need is going to help the economy and safe guard the dollar's future. The dollars days are numbered and even the Fed cannot prevent a full on collapse/depression in the USA, hence which country in the right mind is going to keep those worthless assets when the time comes