Discussing Biden's Potential China Policy


SilentObserver

Junior Member
Registered Member
I always said that do not expect relations to improve under Biden. He’s not going to roll back most of Trump’s action against China.

The areas China and US are competing with are not negotiable.

Climate change is the exception. But even here the US is looking out for its own interests. A warming world hurts America and strengthens Russia as vast swathes of land in Siberia is opened up for Russian developments. Russia food production and GDP increases 5x by 2080 as the world warms; making Russia a superpower!
Oil is likely to get less relevant over the course of the century but likely still a staple much like coal and iron ore is to modern industry. This would affect the relevance of the petrol dollar coupling.

I see it unlikely for the world to rid of fossils fuels in general for 2 reasons.
1. It's an important input for petrol chemicals
2. Flexible energy source

Natural gas provides a cleaner alternative to coal for fueling ever increasing electricity demands in Asia without having to depend on unproven clean technologies for the lion share of its energy source. China is set to increase its share of natural gas consumption over the coming years.

Russia and Iran has by far the largest proven natural gas reserves in the world. Once the infrastructure is built, they would be able to latch onto the "oil" of the 21st century.

A question.

What is the prevailing view on whether China will have an economy which is twice the size of the USA by 2030-2035?

This has been outlined in the Australian Government planning white papers.
Personally I think no friggin way barring something catastrophic happening, which I don’t foresee either.
Much of this notion that China would have double the US gdp in defence circles was due to the efforts of mandarin speaking China hawk Michael Pillsbury. He was promoting this idea years back and it was based of purchasing power parity. The idea that he wanted to get through people's heads is that nominal(market exchange rates) are not a great reflector of comprehensive national strength when a nation masters the commanding hights of production.
 

KampfAlwin

New Member
Registered Member
I think if you go by PPP, then there is a better than 65% probability that 2X US economic size can happen.

There are 3 major factors here:

1. China climbing up the value chain: Probability 100%, since we are already seeing it happen in real time. Everything from NIO, Xpev, Hongqi, Ehang and SOLO to Huawei and DJI.

2. The increase purchasing power of the RMB vs. the USB and the compounding effects of capital: Probability 75%.+ If you read Macropolo.org's detail analysis of the 14th 5 year plan
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, you can see that attracting foreign investment and increasing domestic Chinese consumption is a distinct goal of this plan. The 14th plan will lay the ground work for the evolutionary plans to come. So as long as they can make this 5 year plan work, everything else will fall into place. It is the perfect window in terms of crossing from the internet 2.0 phase to the comprehensive IOT phase of modernization. Can they do it?

- Their closest competitor, the United States, will need until at least Q3 2023 to get back to 2019 state of normalcy. Don't take my word for it, take it from McKinsey's
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.
We/USA are on a B2 trendline in terms of recovery, the charts are on page 66.
- China has laid all the ground work in terms of 5G and national confidence (boosted by COVID-19), necessary for execution.
- No one else has the scale nor the comprehensive planning and execution capability and authority to out compete them.

So yea, I think they will pull off the 14th year plan. And with that, it will set everything into motion, such as devaluing of the USD, and decreased US competitiveness.

3. Precipitous US decline: Probability 50%+ US is in the shit right now. The politics are not going to help.

It could play out as follows. Note, China significantly undercount its GDP, it real nominal GDP is probably somewhere around $17T, and not the $14T it claims. Likewise, I think US GDP is a bit bloated, and likely around $18T, boasted by over inflated legal and medical service "productivity".


YearUSAChina
2020​
20​
14​
2021​
19.4​
15.12​
2022​
18.818​
16.0272​
2023​
18.25346​
16.98883​
2024​
18.61853​
18.00816​
2025​
18.9909​
19.08865​
2026​
19.37072​
19.8522​
2027​
19.75813​
20.64629​
2028​
20.15329​
21.47214​
2029​
20.55636​
22.33102​
2030​
20.96749​
23.22426​
2031​
21.38684​
24.15323​
2032​
21.81457​
25.11936​
2033​
22.25087​
26.12414​
2034​
22.69588​
27.1691​
2035​
23.1498​
28.25587​
USA: I applied a modest 3% GDP decrease until 2024. Then a highly aggressive 2% increase from 2024 to 2035
China: I applied an 8% increase to 2021, then 6% from 2022 to 2025. Then a 4% increase from 2026 to 2035

A more aggressive scenario could be:
YearUSAChina
2020​
20​
17​
2021​
19​
18.7​
2022​
18.43​
20.196​
2023​
17.8771​
21.81168​
2024​
18.05587​
23.12038​
2025​
18.23643​
24.5076​
2026​
18.41879​
25.73298​
2027​
18.60298​
27.01963​
2028​
18.78901​
28.10042​
2029​
18.9769​
29.22444​
2030​
19.16667​
30.39341​
2031​
19.35834​
31.60915​
2032​
19.55192​
32.87351​
2033​
19.74744​
34.18846​
2034​
19.94491​
35.55599​
2035​
20.14436​
36.97823​
Again, not quite 2X, but certainly not impossible. Toss in a 30% devaluation of USD to RMB exchange rate, and that 65% quickly becomes closer to 85%.

The only thing that could fuck up the Chinese is a war in Taiwan. But they are not that stupid. They could apply financial sanction to the island after they have reach technological parity in semiconductors, then just wait until Uncle Sam is exhausted, then come and mop up after 2035.

On the other hand, there are shitloads of factors that can trip up US, such as:
- COVID containment and return to normalcy,
- domestic unrest and terrorism
- political gridlock
- another Trump
- tax revenue shortage in its major urban centers
- increase cost of deficit spending
- USD devaluation
- Euro and RMB gaining up to bypass SWIFT
Wait, why is China’s 2020 nominal gdp 14 trillion? I thought China reported it to be 100 trillion yuan which is 15.4 trillion usd. Although IMF claims its 14.9 trillion...
 

horse

Junior Member
Registered Member
2035 is about 15 years from now.

The Chinese economy will double in 15 years, if the projection of 5% growth holds per year.

Will the exchange rate be 10% or 25% or 50% more for the RMB?

We should state what should be impossible. The RMB will not be 10% or 25% or 50% lower in 15 years when the Fed is running the printing presses.
 

Phead128

Junior Member
Why I don't think US will continue the US-China Trade War:

US situation:
  1. US has rabid political polarization and internal civil unrest
  2. US has surging dumpster fire of a pandemic, by far the worst in the world
  3. US has a damaged and hemorraging economy, recession level.
China situation:
  1. China has strong unified leadership and confidence amongst the people.
  2. China has largely controlled the pandemic within it's own borders.
  3. China has a surging economic growth and largely recovered to pre-pandemic levels.

Can a Sick, Dying, and Burning American afford to continue the US-China Trade War with a Resurgent, Powerful, and Confident China?

The answer is a resounding No.

US Priorities:
  1. "Unity" and "Heal" the nation, inherently inward facing
  2. Controlling the pandemic, inherently inward facing
  3. GROW the US GDP, requires business confidence, stability.
Biden can EASILY hit #3 by ending the US-China Trade war, accelerate US GDP growth and US Consumer Confidence. Biden is now making new policies to make it "Anti-Asian American Discrimination" illegal, which has a China-aspect to it (#1). Of course, rejoining WHO has a global cooperation nature, which is important since China can cooperate with US to tackle Pandemic, Climate Change, Nuclear Proliferation, etc...
 
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jshw31

New Member
Registered Member
One interesting article that came out in CNN showed who got what office in the west wing.

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While a lot of spotlight has been cast on Biden's cabinet picks, the two senior advisors situated closest to the Oval office, Mike Donilon and Steve Ricchetti, have not been greatly talked about. By proximity of their offices though, it's likely that they have a major voice behind the scenes.

From Steve Ricchetti's wiki:

"In 2000, Ricchetti was appointed to President Clinton's task force on China PNTR (permanent normalized trade relations) during the president's last year. Along with
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, Ricchetti "led the Administration's successful campaign to secure
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with China"
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and coordinated with leaders of major U.S. corporations, such as
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,
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and
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to "sell the benefits of the trade accord to Congress and the public."

There isn't as much information on Mike Donilon however looking at his family (notable because BlackRock is pretty bullish on China):

"Donilon's brothers are
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Investment Institute chair
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, who was chief of staff in former President
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’s State Department and is a former
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to
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,
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and Terry Donilon, Communications Director for Cardinal
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of the Archdiocese of Boston.
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"

While past ideology or familial association is not necessarily a perfect indicator of current ideology, it doesn't hurt that both of these people, especially Ricchetti, can clearly see the economic value of trade relations with China.
 

plawolf

Brigadier

Interesting clip. Claims to be showing US troops opening disrespecting Biden by turning their backs to his motorcade.

Does anyone have any more information on this? I am trying to work out if this is real or fake news. The comments are a dumpster fire and no help.

But on the face of it, it does look very authentic.

You wouldn’t have troops all lined up, unarmed and in parade formation if they were pulling security has is often suggested in the comments, and you most certainly would not see troops in such concentration for security (imagine how many soldiers you will need to line even a short stretch of road if they were deployed in such a dense concentration, and just what kind of threat need that many soldiers deployed yet leave them unarmed?).
 

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