Chinese Economics Thread

[BMEWS]

I think this maybe a wrong argument.

For the last 2000 years of history China, 18 of the last 20 centuries, China and India were the largest economies on the planet
until those western imperialists undermine both India and China.


Here

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and here

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1.) Back in year 14 AD, the Romans imported so much China stuff that Roman silver went to China and nothing going back to Rome
https://www.reddit.com/r/todayilearned/comments/6z11p0

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2.) Most of global gold and silver in 16th and 19th centuries went to China

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3.) And we should never forget, British solution to their money problems was opium.
They wanted Chinese people stoned and dumb to get their money back.

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4.) And the US trade deficit

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5.) And the latest, just few days ago

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See history never repeats but it often rhyme.


Yet China (or India for this matter) seldom use their money and resources
to impose their will on weaker countries. China use it to protect the trade routes. That is why during the Tang dynasty (year 800),
they were forced to subjugate parts of Central Asia to control the trade routes going to Constantinople and Europe in general.

Why there is a Great Wall of China in first place? Walls are basically to keep other people out. In this case, the northern barbarians.
Those barbarians just plunder and pillage those poor farmers in northern China and several month long journeys trade caravans from Xian to Samarkand or Constantinople.

If China was a hegemon by then, it could have conquered back Northern Vietnam in 13th or 14th century (Norther Vietnam was part of China for almost a 1000 years. They rebelled and gain independence.). Or conquered the Korean peninsula. Why they didnt?
Well the Chinese emperors in the Ming dynasty in 14th century realize how costly to wage war very far away.
Instead they focus in defence, they strengthen the Great Wall, because they thought northern invaders still pose a great threat. And it really was.


Now in the 21st century, the norther barbarians are already subdued, the Great Wall has lost its function.
Yet the barbarians are now coming from the sea thousands of kilometers away. China never sent a single warship to their shores.
Yet these barbs are coming to China shores waving their flags and say it is freedom of navigation.
That is why its time for China to put a great wall on the sea to keep these barbarians out.

Well the problem isn't linear time itself but progress within that time. You would agree that there had been more technological progress within the last 100 years than the last 10,000 years before that combined, right?

The last 5,000 years of Chinese civilization no body launched a rocket to another planet, or edit DNA itself to perhaps be able to directly reshape the future of the Chinese race much faster than natural pressures of selection /evolution, or the ability to solve fusion for unlimited energy needs of a society, or weapons that can destroy the world several times over within the span of an hour, or on the verge of conquering artificial (general) intellegence to be able to free the population from the burden of both physical but also cognitive work for survival/production/resoruces, and many such other things....

As such, consider an extreme example of two futuristic scenarios in which 1) time travel was invented 2) a superior AGI was invented that could then go on its own to invent/create ever more intelligent artificial forms of intelligence without human intervention etc

Any such society that first conquered Full AI will stay on top forever, so much so that they can direct the Full AI to see to the possibility of time travel and then try to create it, any society that had access to a time machine would by definition also stay on top forever...

So saying that for thousands of years China and India had always been on top economically doesn't mean much for this day and the modern era, its not a good predictor of success since those thousands of years can be meaningfully compressed into just a handful of modern equivalent years if that...

India cannot pursue the China model to success, its too late for that. China was at the right place and right time to climb so rapidly in the last 40 years. Globalization is now peaked, AI automation means cheap labor /outsourcing will likely become a thing of the past, China will go for tech ascension but India is already too late to the game. I don't see India ever catching up to China's GDP, its not a function or matter of "time".... they missed the critical window and its never gonna happen again

 

[Tam]

I don't see India becoming a superpower by 2050. Its progress is sputtering, if not regressing, for once again, failing to do the proper things it needed.

 

[xiabonan]

Foxconn assembling iPhones is nothing new, it has been in the works for years. It's all part of a diversification strategy by Foxconn and Apple, to hedge against risks. Foxconn is hedging against the risk of relying too much on China by investing in India, while Apple is hedging against relying too much on Foxconn by investing in Chinese firms like Luxshare.

 

[xiabonan]

That’s true. But note that none of SEA nations want the US to leave the region either.

The US is pushing them to choose sides, and eventually many of them may have to choose. You can have either security or economic interdependence with China, but you can’t have both. And in a conflict, if you remain neutral, we will then consider you our enemy.

One more note about Security vs Economic Interdependence. Prior to WWI, France and Germany also had extensive economic interdependence with each other. Yet the policies of each country still pushed them to war, twice in 25 years.
Thus, US and China economic interdependence is not a guarantee that war will not happen. Countries will always eventually choose security over everything else. SEA nations will have to choose. US corporations that has extensive business ties in China will have to choose as well.

Yes it's true that SEA countried do not want the US to leave SCS, but they also do not want to pick sides or be engaged in a direct conflict between China and the US. Right now their pressue does not come from China - China is not forcing them to pick sides. It is the US that's putting that pressure on them. It is the US that's actively stirring things up in the SCS. It is the US that's causing regional instability.

SEA countries want US presence in the SCS - but only presence. It wants the US to counter China, but not to contain China, and in doing so forcing them to pick sides to join the fight to contain China. It is a fallacy to presume that US measns security and China means economics. If the US continues its aggressive push SEA countries will soon realise that by siding with the US you will have neither economics nor safety.

Also, one lingering question in their mind is: how committed, and how capable, is the US in providing such "security" to them? Or does the US simply view them as "cannon fodders" in the fights against China?

I think they had their answers. That's why they've been pivoting to China much more in Trump's years than during Obama's years.

 

[ansy1968]

Foxconn assembling iPhones is nothing new, it has been in the works for years. It's all part of a diversification strategy by Foxconn and Apple, to hedge against risks. Foxconn is hedging against the risk of relying too much on China by investing in India, while Apple is hedging against relying too much on Foxconn by investing in Chinese firms like Luxshare.

HI xiabonan,

Foxconn is now investing in chip production as a way of diversifying from Apple?

 

[Tam]

HI xiabonan,

Foxconn is now investing in chip production as a way of diversifying from Apple?

More like diversifying from TSMC.

 

[Tam]

The Australian are smug they think China won't dare to cut trade with her because of China's dependence on Aussie iron and coal export and geographically close but thing might change in the future
The four new VLOC terminals approved by the National Development and Reform Commission (NDRC) are in Rizhao, Yantai and Lanshan in Shandong province, and Sanduao in Fujian province, according to Chinese metals market data specialist Mysteel Global, and add to seven already operating in China.

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Australia’s spot as China’s top source for iron ore under threat as new mega ports open door for Brazil, Africa

• Very large ore carriers (VLOC) used by Brazilian mining giant Vale, as well as miners in Africa, can carry more than twice the cargo of normal ships
• Australia shipped a record amount of iron ore to China in June, with total iron ore exports accounting for a quarter of the country’s overall goods exports
  
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  Published: 4:30am, 25 Jul, 2020
  Updated: 4:30am, 25 Jul, 2020
  
  
  

The total value of all Australian iron ore exports in the fiscal year to June 2020 rose to over A$100 billion (US$71 billion), representing more than a quarter of Australia’s total goods exported. Photo: Fleetmon
Australia’s share of China’s iron ore imports may be at risk following the opening of four new ports that can operate berths for extra-large ships, opening up new possibilities for greater imports from Brazil and Africa.

Very large ore carriers (VLOC) are bigger than many skyscrapers and can carry more than twice the cargo of normal iron ore transport ships, up to 400,000 tonnes, meaning they reduce transport costs and delivery time.
This will increase competition for Australian mines, which have so far benefited from their closer proximity, with China accounting for nearly 90 per cent of all of

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so far this year.

The four new VLOC terminals approved by the National Development and Reform Commission (NDRC) are in Rizhao, Yantai and Lanshan in Shandong province, and Sanduao in Fujian province, according to Chinese metals market data specialist Mysteel Global, and add to seven already operating in China.

Australia should realize the economic dump they are finding themselves in are part of their own creation.


Less Chinese exports of steel means less demand for Australian ore. Maybe they should realize that a good portion of Chinese steel is made with Australian ore and no Chinese steel means no Australian ore.

I am not sure why China would abandon Australian ore since Rio Tinto itself might already be heavily Chinese invested. China has been buying mining companies and mines right and left.

 

[ansy1968]

More like diversifying from TSMC.

Hi Tam,

Does Foxconn had the capability to compete with TSMC? I read their investment in Qingdao is for packaging and testing , and not that big with 30,000 wafer capacity.

 

[Red Moon]

If countries like Canada and Australia don't do what the U.S. wants, the US can do little. Are they going to stop buying from Canada and Australia and buy more from China instead?

Actually, I agree with this. Some countries are overestimating American strength, or perhaps worrying that others will follow.

 

[Red Moon]

maybe the australian politicians did not realise that ? nor do they feel that way. the ongoing speeches seem to indicate they think the problem can be easily redemied by shifting the export to other trade partners like korea japan and india.

the best way to not be dependent on china is to stop selling to china. uh.

Yes, but you can't sell iron ore and coal to India, and they already sell what they can to Korea and Japan. Anyway, the size of the markets can't be compared