PikeCowboy
Junior Member
because capital investment also increases comsumption capacity
China's strategy in Korean peninsula
- Thread starter Phead128
- Start date
because capital investment also increases comsumption capacity
Please don't give "Anlsvrthng" any suggestions.
What would it take to get this thread back on track?
Perhaps Trump ordering a couple of B2's to overfly Pyongyang?
Cmon, don't blame me.
All of these steam from the topics of basic trade relations/ methods that the US using to control SK/Japan etc. : ).
And about China capability to transform itself to a trade deficit country,and replace the US in the SK trade .
Anyway, interesting stuff:
"A few months ago officials in Pyongyang directed us (a North Korean trading company in China) to secure equipment needed for bread and snack manufacturing, but it was all blocked from entering the North by Chinese customs in Dandong. They explained that parts of the equipment could actually be used for other purposes, meaning they were effectively regulated by international sanctions," the second source added.
The meaning of the phrase “domestification” in the context of nuclear weapons and foreign policy means that the North believes it has advanced significantly with regards to missile and nuclear weapons development despite international sanctions. With the past year’s flurry of tests behind him, analysts believe that Kim will not need to conduct more than 3-5 tests in the future. This should be followed by a lull, indicating that the development of these programs is operationally complete, which may occur within four to five months, when the US and ROK conduct their joint military exercises.
....
The word “domestification” also carries economic significance. In economic terms, this entails modernizing production methods and diversifying production lines. Kim claims to have achieved this. The Kim Chul United Ironworks Factory has normalized the production of anthracite, satisfying the five-year economic plan. In terms of machinery production, the North has improved the domestic manufacture of tractors and other vehicles. These advances assumedly make the country slightly less vulnerable to drought, flooding, and other climate-related problems.
In the interest of moving the discussion closer to the topic, here are some points about trade war.
1. As someone said, "trade war benefits the deficit country,and damaging the surpluss country." It's my view that, ceteris paribus, this is true. More precisely, the deficit country will be less damaged. If country A has exports worth 400 billion (everything in USD) to country B and imports worth 200 billion from B (A has a trade surplus of 200 billion with B), then if each country cuts off imports from the other, A has a loss of 400 billion and an additional demand for 200 billion, while B has a loss of 200 billion and new demand for 400 billion.
Of course, all else usually isn't equal, so consider other factors.
2. Which country has an advantage in a trade war, the one with the bigger economy or the one with the smaller economy? If country C's GDP is 1.7 times country D's GDP and C's exports to D are 1% of C's GDP, while D's exports to C are 4% of D's GDP, which one is better positioned for a trade war?
3. If country E has a GDP per capita comparable to Mexico and country F one comparable to Denmark, a sevenfold difference, which one can better afford a hit to its growth rates?
4. If country G is at the top of the value chain, meaning that it produces the most complex and profitable products, while country H is progressing through a lower level of technology, which one makes things that would be harder for the other to substitute?
5. If country I has a proven record of imposing its will on other countries (getting other powerful countries to go along with its wars, sanctions, embargos, etc.) and country J is on the receiving end of one of I's embargoes, which one will be able to force other countries to its side in a trade war?
Take a look at each of the questions separately and at the end you can apply your answers to the relevant example from this thread.
1. As someone said, "trade war benefits the deficit country,and damaging the surpluss country." It's my view that, ceteris paribus, this is true. More precisely, the deficit country will be less damaged. If country A has exports worth 400 billion (everything in USD) to country B and imports worth 200 billion from B (A has a trade surplus of 200 billion with B), then if each country cuts off imports from the other, A has a loss of 400 billion and an additional demand for 200 billion, while B has a loss of 200 billion and new demand for 400 billion.
Of course, all else usually isn't equal, so consider other factors.
2. Which country has an advantage in a trade war, the one with the bigger economy or the one with the smaller economy? If country C's GDP is 1.7 times country D's GDP and C's exports to D are 1% of C's GDP, while D's exports to C are 4% of D's GDP, which one is better positioned for a trade war?
3. If country E has a GDP per capita comparable to Mexico and country F one comparable to Denmark, a sevenfold difference, which one can better afford a hit to its growth rates?
4. If country G is at the top of the value chain, meaning that it produces the most complex and profitable products, while country H is progressing through a lower level of technology, which one makes things that would be harder for the other to substitute?
5. If country I has a proven record of imposing its will on other countries (getting other powerful countries to go along with its wars, sanctions, embargos, etc.) and country J is on the receiving end of one of I's embargoes, which one will be able to force other countries to its side in a trade war?
Take a look at each of the questions separately and at the end you can apply your answers to the relevant example from this thread.
manqiangrexue
Brigadier
China doesn't need to transform itself into an overall trade deficit country; it already runs a trade deficit with SK. And replacing the US by deficit only requires a 50% increase in SK imports because US numbers to SK are less than 50% of China's as it stands. Furthermore, if SK wises up to the picture that reunification can only occur with the US gone, it can further diversity itself from the American market, which is nice to be involved in, but not a necessity for anyone, especially when half your country is on the line. And all of these problems are assuming that the US would go full "scorned Ex mode" on SK, which it may not even do because when Chinese military power expands to a point where it becomes obvious that little scattered bases around it have no chance on containing it, the US would likely lose most of its desire to be in SK altogether. I'm talking about a future scenario, though, not now. Just wanna make that clear... again.
OK, "benefits" and "less damaged" are two different things. To say that it benefits the deficit country is to imply that the deficit country is avoiding trade war at its own expense for the sake of the surplus nation. To say that the deficit country would be less damaged, however, means that trade wars are a nasty affair that nobody wants to happen because everyone would be hurt by it but if shit hit the fan, ultimately, the deficit country would win. The former is what he said; it is ridiculous, against evidence, and I've never heard of it before. The latter, however, is an argument that I hear all the time. Some people say China would win; some say the US has more pulling strength. There are so many conflicting expert opinions and views on that topic that I'm not even going to debate it. And because since it hasn't happened, there is no right answer; everything is an opinion at this point.
Hendrik_2000
Lieutenant General
This is all BS and has no relevant in real trade war . They have been talking of levying tax on Chinese import for years but nothing has been done sofar My question if it so easy why haven they done it ?
You can't substitute China with Vietnam or any other country because no one has the capacity to fulfill demand from US. Even Vietnam need to source their raw material from China
If it was so easy Apple will move their production back to US but nothing so far.
There is one incident where Apple has to make last minute Changes to their design before production start And they have today it tonight at 3 o'clock in the morning and so the factory in Chin awake up the worker in the middle of the night and make changes to the production before tomorrow run. Prompting the apple CEO to say that nobody can do it except China
Because you have potential does not mean you can do it India, Brazil have always been the country of the future Yest the keyword is future bot today or tomorrow
World scale production is not depend on cheap labor only if that the case most company left China already because the wages in China is not cheap anymore compare to India or even Mexico
But it depend on efficiency ,infrastructure of road and port, Management flexibility, ecosystem of supplier,productive and educated workforce
All of those combination China has and nobody else has
Theory does not add up to reality
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Or maybe the 40% investment level is the reason?
Maybe the Chinese was willing to make plants for next to 0 invesetment from the foreign partners?
This is more of a jump to conlcusion.
Both country can bebetter position if in the first place won't start an unbalanced trade relation.
Without overal trade deficit how can China provide dollars for international trade?
If you remove the US trade deficit, and say the US running trade surpluss then there is no money in the international trade to run trade surplusses, or even to facilitate the current level of international trade.
Means if China wants to replace the US as world hegemon then it needs a persistent overall trade deficit.
Hendrik_2000
Lieutenant General
I don't know what are you trying to say ?Are you saying China should wasting their money making overcapacity plant?
I don't think that is the case China is one most popular destination of FDI that show the attractiveness of China as FDI destination Not India not Brazil not Vietnam. so much so now China pick and choose who they let to invest in China
Not only China is the final processing of good, increasing all the component that goes into that final product now are made in China
Top 10 most promising destinations for FDI
chinadaily.com.cn | Updated: 2017-06-12 06:42
The United States and China are expected to remain top destinations for foreign direct investment (FDI) in the next three years, a UN report shows.
Top executives of multinational companies maintain confidence in the regions, according to the World Investment Report 2017 released by the United Nations Conference on Trade and Development (UNCTAD). About 40 percent respondents chose the US and 36 percent China.
Last year, the US was the largest recipient of FDI, attracting $391 billion in inflows, followed by Britain with $254 billion and China with inflows of $134 billion.
China was the world's second by FDI outflows, according to the report.
Globally, the UNCTAD projects FDI flows to increase to almost $1.8 trillion in 2017 and $1.85 trillion in 2018, despite still below the 2007 peak