Chinese Economics Thread
- Thread starter Norfolk
- Start date
hi B.I.B.,
good day mate,
Australia domestic market is small , manufacturing base is dwindling and productivity cost is high, if she is eyeing export , she is competing against establish player like Korea, japan and China. Regarding quality the Chinese steel mill had up its game that even TOYOTA motors had been ordering their high grade steel from BAO STEEL GROUP. Cost, scale and now quality ,China does it all, the only way to restrict it is by sanction and tariff.
hmm. Vale (Brazil) already sells it's entire production to China. But the fourth biggest player is a South African company (forgot the name), and there must be other possibilities there as well.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.
Australia’s spot as China’s top source for iron ore under threat as new mega ports open door for Brazil, Africa
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
- 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
Published: 4:30am, 25 Jul, 2020
Updated: 4:30am, 25 Jul, 2020
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 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.
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That's what diversifying means. It doesn't mean to compete directly. It means chipping away at that dependence.
TSMC may be able to cover up their Huawei losses with other clients for now, but if this steam rollers to other Chinese clients, or to US/rest of the world clients that supply chips to China, I doubt they will able to cover it.
Plus this is only temporary. TSMC should worry where SMIC can be in five years from now.
I sense that Foxconn understands the huge market that China poses for chips, and is willing to jump to a golden opportunity at a bite at it.
Would be interesting to answer but..
To whom? Indonesia which they have antagonized with? India exports their own steel, or they import them from Russia and China. Steel isn't cheap to ship around, the heavier something is, the more energy it would costs to ship it around. Chinese control and management of commercial shipping and shipping ports play a factor in keeping shipping costs low and efficient for Chinese products. Its also a horrible time to sell steel in the market with the global building (buildings, shipping, cars) industry taking a huge dump with recession and coronavirus, except in China. Steel is still in a massive glut thanks to China and Russia dumping loads in the market. Many countries like India or France have various protectionist measures on steel. Saying this isn't a promising market.
The problem of the Australian-US relationship is that I can't see Australia ship anything of worth to the US due to much of their way their economies have in common, ergo, producing much of the same products like agricultural and mineral, while lacking the technological exports the US has. Australia literally competes much of its economy with the US --- a good example is Australian beef vs. US beef in markets like China and Japan. Same goes with Canada --- the oil they produce vs. the shale oil the US produces. I don't see economies that are mirror mini-USA economies viable in the long run antagonizing China, because the original USA economy is going to swamp these mini-USAs out.
Interesting that China last April has banned "excessive" architecture. That means no more opulent show off buildings and skyscrapers that isn't going to make money or lack a viable business plan to recoup their costs and pay their bank loans. That's not good for the Chinese steel industry and I expect more dumping of Chinese steel in the global market.
Vale also buys some of their massive bulk freighters --- some of the biggest ships in the world --- from China. That's how the term Valemax was created. The fleet is impressive.
Having your own fleet of ships to drive down the costs of your export, is a big trade advantage that goes back to my post about Australia, which lacks such a super fleet of their own to move their ore and steel exports around competitively. In fact, Australia's merchant marine has been shrinking over the years, compounding this situation.
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Hi Tam,
Thanks for the explanation, I really value your input. Well for me, my opinion is Foxconn was forced into it by the breakup of their relationship with Apple, in hindsight they should had done it 3 years ago and seized the golden opportunity today.
Regarding SMIC, yes I'm with you, within 5 years only top 3 FAB chip (TSMC, SAMSUNG & SMIC) that can produce 7nm and below will remain, and they are all asian
The way I read it, there is only a couple of choices in order not to fall to the chinese trap to create dependency "
1. Australia reduces export to a certain % of its total export for which she is comfortable which, say 15% max so that there won't be any fear of overdependence on China.
2. Demand other established trading partners to ramp up imports substantially so that the non-chinese share of Australian export will increase relatively, thereby shielding any possible fall from Chinese demand.
There are only 2 ways to go about it. Very simple.
That is not accurate.
If the nations in South East Asia or East Asia choose to remain neutral, China wins because the US has no local bases to use, nor can the USA effectively blockade China.
Neutrality (for these countries) is actually choosing China over the USA.
It
Not to mention that no country in the right mind right now wants a war (especially in the middle of a pandemic) and everyone can see that the USA needs a war to survive a collapse, heck they are pretty much crossing many lines just to achieve this aim but like every plot by these idiots, it’s going to back fire spectacularly like with the trade war, he protest and now covid. I am pretty sure sooner or later, the heavens are going to say stuff it and hit the USA with such a disaster that they will finally take the hint that they cannot commit evil forever and not get punished for it since they simply are incapable of learning from there mistakes