American Economics Thread

[fatzergling]

Well the USA focuses on China and Russia and ignores and obvious time bomb, well I guess we will find out…. Just how strong the USA truly is when their entire economy is built on lies and quick sand ( with all of its critical industry now located in China) finally implodes sooner or later. I mean how stupid can one be to do something like that

An economy built on services extraction and monopolization is not one suited to wartime mobilization.

The total value of US manufacturing is 2.3 trillion USD, with the US importing 450 billion USD of Chinese goods. In the meantime, China's manufacturing is worth 4.4 trillion USD. You take a guess who will produce more material if war breaks out.

 

[56860]

An economy built on services extraction and monopolization is not one suited to wartime mobilization.

The total value of US manufacturing is 2.3 trillion USD, with the US importing 450 billion USD of Chinese goods. In the meantime, China's manufacturing is worth 4.4 trillion USD. You take a guess who will produce more material if war breaks out.

A more accurate measure of industrial strength would be manufacturing ouput by PPP. By that measure, China is greater than US + EU + Japan.

 

[luminary]

The US projects bank failures on China.
China uses reflection, bank failures reflect back to the US. It's super effective.

It's funny how every one of these US claims about China's economy ends up becoming true for the US

The Law of Anglosphere Projection, my friend. It's a simple rule, but quite unbreakable.

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Although China accounts for only a small fraction of Mexico’s total Foreign Direct Investment, it has significantly expanded its portfolio in recent years.

Chinese companies are taking an increasing interest in setting up or expanding their operations in Mexico, as Washington escalates its trade war with Beijing. In 2022, Chinese foreign direct investment (FDI) in Mexico soared by 48% year over year, from $1.7 billion to $2.5 billion [1],

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the Monitor of Chinese Outbound Foreign Direct Investment (OFDI) in Latin America and the Caribbean 2023, published last week by the Center for China-Mexico Studies (Cechimex) at the National Autonomous University of Mexico.

This contrasts with a 6.7% annual drop in Chinese FDI across Latin America as a whole. Although China accounts for only a small fraction of Mexico’s total FDI

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in 2022 based on LAC-China Network’s numbers, compared to the US’ 43%), it has significantly expanded its portfolio in recent years and is the fastest growing source of foreign investment in Mexico.

An Interesting But Delicate Position

The report indicates that Mexico has the third largest Chinese FDI footprint in the region, behind China’s fellow BRICS partner Brazil ($5.7 billion) and Argentina ($2.94 billion). This puts Mexico in an interesting — and somewhat delicate — position.

Last year, it

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$35.3 billion in FDI, its highest level since 2015. The sectors attracting most interest among companies relocating to Mexico include automotive assembly plants and suppliers, telecommunications, electronics, pharmacochemical and textile industries.

On the other hand, many of the companies relocating to Mexico are apparently Chinese. As the New York Times

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in February:

Chinese firms are setting up factories that allow them to label their products “Made in Mexico,” then truck them duty-free to the United States.

Taking Advantage of US-Mexico Tensions

Chinese investments in Mexico are on the rise despite a recent agreement by the governments of the US, Canada and Mexico to set up a committee for the substitution of imports to North America from Asia.

Since then Chinese companies have, if anything, intensified their investment push in Mexico. Just last week, China’s newly appointed ambassador to Mexico, Zhang Run,

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to resume direct flights with Mexico, in order to improve the two countries’ economic relationship and promote nearshoring projects.

China’s ramping up of its commercial and investment activity with Mexico has raised concerns in the Washington beltway that Beijing may be seeking a financial and political upside as tensions between the US and Mexico rise over a whole raft of issues, from energy to GMO foods, to the fentanyl trade (which also involves China) and the Mexican government’s ongoing refusal to endorse sanctions against Russia.

China’s Diplomatic Coups in Latin America

In recent months China has already pulled off a number of diplomatic coups in Latin America. It has

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a more strategic relationship with fellow BRICS member Brazil. Meanwhile, South America’s second largest country, Argentina, has applied to join both the BRICS grouping and the BRICS’ New Development Bank. China has also

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partnership agreements with the governments of El Salvador and Honduras, both of which have severed diplomatic relations with Taiwan and recognised the existence of only one China in the world.

El Salvador, a country whose economy is totally dollarised and which is located slap bang in the US’ direct neighborhood, is also in the process of

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a free-trade agreement with China. China already has free trade deals with Chile, Peru and Costa Rica and is negotiating future agreements with five other Latin American states.

As Reuters

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in June, if you take Mexico out of the equation, China has already overtaken the US as Latin America’s largest trading partner. Excluding Mexico, total trade flows — i.e., imports and exports — between China and Latin America reached $247 billion last year, far in excess of the US’ $173 billion.

But China’s trade with Mexico is growing. According to

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, China provided close to 20% of all of Mexico’s imports in 2021, up from 15.3% a decade earlier. During the same period, the US’ share of Mexican imports has fallen from 50% to 44%. China’s share of Mexican imports could reach as high as 29% by 2035, according to some forecasts. The major products imported include telephones, LCD devices, computers, integrated electronic circuits, computer parts, auto parts, TV parts, and printed circuits.

The US is still by far the biggest import buyer, accounting for a whopping 80% of all purchases. By contrast, China accounts for just 1.9%. But even this situation is likely to change in the coming years.

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Tatiana Prazeres, a former foreign trade secretary of Brazil and senior fellow at the University of International Business and Economics in Beijing, China’s share of Mexican exports could reach as high as 20% by 2035 while the US’ share is expected to fall.

In the meantime, China is increasing its investments in a whole different area of Mexico’s economy: infrastructure and transportation, particularly in the central and southern parts of the country. As José Ignacio Martínez

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the online business news service BNAmericas, Chinese companies and banks have invested in bus lines in Queretero, Guanajuato, Chihuahua, Nuevo León and Chiapas; in subway lines in Monterrey and Mexico City; in the semi-fast Mayan train project (with projected maximum speeds of 200 km/h); in renewable energy projects in the south of the country; and in Pemex’s new

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in Tabasco. Chinese companies have also

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in ports in Baja California, Colima, Michoacan and Veracruz.

These kinds of investments can be divided into three main categories, says Martínez: investments in alliances; investments through the sale of components; and investments in the form of cooperation or advice on technological developments. Most of the investments do not yield profits in the short to medium term, and as such are of little interest to US or European companies. But the Chinese goal is more long term, and that goal is to expand its presence, influence and activity in Mexico, just as it has across the rest of Latin America.

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[1] Chinese companies often use their subsidiaries in other countries, such as the US, to make capital investments in Mexico. For Mexico’s Ministry of Economy, this counts as a US investment. For Cechimex, it is Chinese.

It'd be funny if Mexico got HSR trains before the US.

 

[henrik]

Well the USA focuses on China and Russia and ignores and obvious time bomb, well I guess we will find out…. Just how strong the USA truly is when their entire economy is built on lies and quick sand ( with all of its critical industry now located in China) finally implodes sooner or later. I mean how stupid can one be to do something like that

How fast is de-dollarization going to bankrupt their US economy?

 

[Minm]

A more accurate measure of industrial strength would be manufacturing ouput by PPP. By that measure, China is greater than US + EU + Japan.

Even PPP is underestimating Chinese strength. A lot of western manufacturing is luxury goods. They have high revenues, even if adjusted for PPP exchange rates, but very low volume. If you look at production volumes, China dominates even more. China produces more than half the world's steel and coal.

 

[HighGround]

Even PPP is underestimating Chinese strength. A lot of western manufacturing is luxury goods. They have high revenues, even if adjusted for PPP exchange rates, but very low volume. If you look at production volumes, China dominates even more. China produces more than half the world's steel and coal.

Most people tend to like luxury goods and willingly pay more for them.

I myself prefer luxury goods to non-luxury goods. Not everything is about basic inputs.

 

[Strangelove]

Mapping bank risk across the US.... basically it's just like a Covid map.

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Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?​

 

[KYli]

Manipulation, when Asian Financial Crisis in 1998 happened, the US demanded no interference over financial market. It is a fair game. Of course, the US could always shut down the short selling to end the bleeding and buy banks sometime.

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[TK3600]

The Law of Anglosphere Projection, my friend. It's a simple rule, but quite unbreakable.

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Although China accounts for only a small fraction of Mexico’s total Foreign Direct Investment, it has significantly expanded its portfolio in recent years.



An Interesting But Delicate Position




Taking Advantage of US-Mexico Tensions




China’s Diplomatic Coups in Latin America

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It'd be funny if Mexico got HSR trains before the US.

What will happen to these relationships at war? Isn't trade with China a liability if US impose blockade?

 

[Strangelove]