Your wish is my command.
Politics
Trump Administration Signals U.S. Firms Can Use WeChat in China
By Jennifer Jacobs, Shelly Banjo, Saleha Mohsin, and Jenny Leonard
August 21, 2020, 11:03 AM EDT
Chinese Economics Thread
- Thread starter Norfolk
- Start date
Your wish is my command.
Politics
Trump Administration Signals U.S. Firms Can Use WeChat in China
By Jennifer Jacobs, Shelly Banjo, Saleha Mohsin, and Jenny Leonard
August 21, 2020, 11:03 AM EDT
AssassinsMace
Lieutenant General
Trump as usual wants to look like he's in control by claiming he's the one that cancelled a meeting because he doesn't feeling like talking to China anymore. Then a couple days later the meeting that was so-cancelled is back on. My guess is China is waiting for the results of the next election. If Biden wins, Beijing will take a wait-and-see approach where if Trump wins or Biden continues with Trump's policies on China, we're going to see China take more aggressive measures.
It's funny how China managed to stall Trump's trade war for 4 years as planned. Trade balance hasn't changed much at all.
Hope Corona will give China another 4 years.
Then US debt will seal the deal.
It is not funny, it is just fact of how the world is.
Wal-Mart, they are Wal-Mart because of their China operations and the American consumer, most of whom are living paycheck to paycheck.
Those rich guys in power on the hill as the black people say, do not understand that. Hence, their trade war actions get them nowhere.
It goes back to Carl von Clauswhich, you hit at the center of gravity. Heck it goes back to Sun Tzu Bing Fa, know the enemy, 100 battles 100 wins. These Washington DC ruling class cannot even find Washington DC on a map. The complicated world economy? Forget about it.
Four years of Trump summarized in one chart.
Why is China, so stubborn about wanting to be tied to the USD? I work in finance, and plenty of investors who are chasing yields on bonds would be interested in PBOC bonds paying 5% interest. It's not that investors are not interested in holding RMB denomimatwd assets, its because of China doesn't want them to. I get having a sovereign financial syetem, but that also means you will always be tied to USD.
China should issue government bonds in RMB that foreign investors can buy in RMB, also loosen barriers for RMB based exports. This way, there will be demand for RMB overseas.
Right now if your a foreign investors, the only way to get exposure to RMB assets is thru dim sum bonds in Hong Kong. China needs to reform strict capital controls for the RMB to be internationalize.
As it currently stands, there is no reason for any major Western corporation to stick its neck out for Huawei. If any major company defects from Washington, then they will have to bear the pain as well. And for what benefit?
The Chinese market is not influential enough to bear the wrath of Washington for. That much is clear. Beijing therefore has no leverage with these foreign companies.
We can consider the usage of American technology throughout supply chains as an extension of the American network. The American network has its center in Washington, and spreads out like a root system throughout the world. Other technological networks are like that.
The principle task is to challenge this root network directly. One can try to grow their own technological network, but that takes time. And as gadgetcool says, the other networks are all connected to each other, while China's would be isolated. I read somewhere that the key to Huawei's innovation was its global network of campuses, drawing in talent from all countries around the world. Huawei is not a 100% indigenous company, but an attempt to grow the Chinese tech network. It is therefore obvious that "self sufficiency" is not the solution going forward, although it is necessary.
One can try to cut off the American technological network, but that hurts you more than America, since American influence is larger.
Another option may be to "subvert" the network via positive feedback. Technological jujitsu, using the American network's size against it.
Lets consider oil for instance. Oil is used at every level of the industrial chain. The effects of an oil shock would be at first very devastating, but as the shock goes on, the economic effects are transformed into "whole of society effects." Economic devastation begets technological stagnation, which leads to social disintegration, which feeds back into economics, then technological, then social again. A positive feedback loop towards negative ends.
The more oil dependent a network is, the more devastating the effects. Whereas a third world nation with low technology levels will adapt easier to an oil free lifestyle, major technological societies will collapse viciously.
An oil shock is therefore contagious, as damage in one sector cannot be limited to that sector, but spreads to every other sector connected to it. We can consider American sanctions to be just as contagious. Such an incident is very asymmetrical in regards to force applied vs effect achieved. (Remember, Iran's self defense strategy was to blow up the Straits of hormuz, and the world economy along with it).
What contagion can be applied to American technology, such that using it imposes costs on global capital, forcing it to choose the Chinese side?
Is there, for example, some very exploitable flaw in x86 / ARM chip architecture as opposed to RISC-V?
The Chinese market is not influential enough to bear the wrath of Washington for. That much is clear. Beijing therefore has no leverage with these foreign companies.
We can consider the usage of American technology throughout supply chains as an extension of the American network. The American network has its center in Washington, and spreads out like a root system throughout the world. Other technological networks are like that.
The principle task is to challenge this root network directly. One can try to grow their own technological network, but that takes time. And as gadgetcool says, the other networks are all connected to each other, while China's would be isolated. I read somewhere that the key to Huawei's innovation was its global network of campuses, drawing in talent from all countries around the world. Huawei is not a 100% indigenous company, but an attempt to grow the Chinese tech network. It is therefore obvious that "self sufficiency" is not the solution going forward, although it is necessary.
One can try to cut off the American technological network, but that hurts you more than America, since American influence is larger.
Another option may be to "subvert" the network via positive feedback. Technological jujitsu, using the American network's size against it.
Lets consider oil for instance. Oil is used at every level of the industrial chain. The effects of an oil shock would be at first very devastating, but as the shock goes on, the economic effects are transformed into "whole of society effects." Economic devastation begets technological stagnation, which leads to social disintegration, which feeds back into economics, then technological, then social again. A positive feedback loop towards negative ends.
The more oil dependent a network is, the more devastating the effects. Whereas a third world nation with low technology levels will adapt easier to an oil free lifestyle, major technological societies will collapse viciously.
An oil shock is therefore contagious, as damage in one sector cannot be limited to that sector, but spreads to every other sector connected to it. We can consider American sanctions to be just as contagious. Such an incident is very asymmetrical in regards to force applied vs effect achieved. (Remember, Iran's self defense strategy was to blow up the Straits of hormuz, and the world economy along with it).
What contagion can be applied to American technology, such that using it imposes costs on global capital, forcing it to choose the Chinese side?
Is there, for example, some very exploitable flaw in x86 / ARM chip architecture as opposed to RISC-V?