Chinese Economics Thread
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China’s trade surplus has grown from $993 billion in 2024 to $1.08 trillion in the first 11 months of 2025, making it the first country in recorded history to reach the $1 trillion milestone.
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I wrote here about China effort in securing its copper needs
Top 10 listed companies from some major economies and what % of their revenues come from overseas operations.
Chinese stocks climbed to multi-year highs as persistent AI-driven gains and growing signs of an economic recovery
Chinese stocks climbed to multi-year highs, fueled by sustained optimism over the country’s AI advances and emerging signs of an economic recovery.
The benchmark CSI 300 Index advanced 1.6% to close at its highest level in four years, while the Shanghai Composite Index rose 1.5% to its strongest since July 2015. Materials and technology shares were among the day’s best performers.
Chinese stocks climbed to multi-year highs, fueled by sustained optimism over the country’s AI advances and emerging signs of an economic recovery.
The benchmark CSI 300 Index advanced 1.6% to close at its highest level in four years, while the Shanghai Composite Index rose 1.5% to its strongest since July 2015. Materials and technology shares were among the day’s best performers.
Inserting this from the Semiconductor thread because I think it has pretty serious implications for both economies. Here is also a Bloomberg article covering the issue;
Some key points from the article,
"Earlier Wednesday, Japan’s Foreign Ministry issued a formal protest to Chinese Deputy Chief of Mission Shi Yong over Beijing’s export controls. Broad estimates show that dual-use items Japan imports from China total ¥10.7 trillion ($68.4 billion), roughly 42% of Japan’s total goods imports from China in 2024, according to Takahide Kiuchi, executive economist at the Nomura Research Institute."
China-Japan trade volume is some ~$300 billion USD. They are major partners.
If you look over my thread, you can just see how much Japan actually needs these imports for their basic industries. It isn't clear just how China's ministries will approve licenses for these dual use items. How do you decide which item is for defense industries? Certainly, don't expect any general licenses like China has approved to US and EU in some cases.
They want to flirt with obtaining their own nukes or storing American nukes so this is what would be needed to convince them otherwise. Maximum monitoring and enforcement will be necessary. Otherwise they will just see it as a bluff or even a price worth paying.
From a game theory perspective, you'd start out with the most military sensitive items first. If Japan retaliates, you slowly broaden the embargo to exert pressure.
But I'm also not particularly clued in about what this is in response to. If this is strictly about Japan's recent comments over exploring nuclear weapons, then there's a couple ways this can go.
1. You start out slow and widen the scope of the embargo with time (or in response to Japan's retaliation) until Japan gets the hint.
2. You start out with a bazooka and go for major economic damage to force Japan to either rescind their comments, or to come to the bargaining table.
On the other hand, if this is more about Japan's political direction in general... I don't really see how this ends quickly. Japan is firmly married to America's security umbrella and I don't see them getting rid of Takaichi quickly. Though if there is someone who knows a lot about Japan's politics, feel free to correct me.
Which means that this might be a long and prolonger trade war that's going to be damaging to both countries. The impact to Japan's downstream industries will be significant. Chinese suppliers tho, will also feel the pain. China is also a major importer of Japan's goods. Other than the obvious high-value SEM inputs China buys from Japan, there's plenty of machinery, electronics, medical equipment, etc. Domestic industries can probably fill in gaps, but there's still pain from switching suppliers, possible quality/yield drops. There's probably a few critical irreplaceable inputs as well. $300 Billion USD in trade volume between two neighbors is at stake.
What do you all think? Is this going to quickly escalate...? Or is Japan going to back down?
But I'm also not particularly clued in about what this is in response to. If this is strictly about Japan's recent comments over exploring nuclear weapons, then there's a couple ways this can go.
1. You start out slow and widen the scope of the embargo with time (or in response to Japan's retaliation) until Japan gets the hint.
2. You start out with a bazooka and go for major economic damage to force Japan to either rescind their comments, or to come to the bargaining table.
On the other hand, if this is more about Japan's political direction in general... I don't really see how this ends quickly. Japan is firmly married to America's security umbrella and I don't see them getting rid of Takaichi quickly. Though if there is someone who knows a lot about Japan's politics, feel free to correct me.
Which means that this might be a long and prolonger trade war that's going to be damaging to both countries. The impact to Japan's downstream industries will be significant. Chinese suppliers tho, will also feel the pain. China is also a major importer of Japan's goods. Other than the obvious high-value SEM inputs China buys from Japan, there's plenty of machinery, electronics, medical equipment, etc. Domestic industries can probably fill in gaps, but there's still pain from switching suppliers, possible quality/yield drops. There's probably a few critical irreplaceable inputs as well. $300 Billion USD in trade volume between two neighbors is at stake.
What do you all think? Is this going to quickly escalate...? Or is Japan going to back down?
nytimes and rest of Western media still thinks of this as a RE export ban when the dual use list is just so all encompassing. We will see how far this goes. But companies like Sumitomo are deeply entrenched in Western Gallium/Indium supply chain, so if China goes full cut throat here and cut them off. It will affect far more than just Japan. It could allow Chinese companies to displace Japanese ones and entrench itself in the global supply chain.