Chinese Economics Thread

[latenlazy]

The US became the world's largest industrial producer around 1890. The US dollar became the world's premiere reserve currency in 1945 at the Bretton Woods conference. Before that time Sterling was the reserve currency within the British Commonwealth, but countries kept currency reserves mainly of their trading partners. The main central bank reserves were gold and, in some countries, silver. Silver was also the metal of the main coins.
China became the largest industrial producer in the world in about 2010. So if RMB becomes the main reserve currency before 2065 it will have been faster than the US dollar.

The Taylor rule was abandoned so that countries could subsidize their banks. US banks borrow from the Fed at 0.25 % in order to buy Treasuries yielding 2 %.

Again, the causal variable in this case would not be a country's economic status, but the monetization of debt. If you don't let other countries purchase your debt they simply cannot build a reserve of your currency. Naturally, as China's economic status rises the selling of one's debt should become more favourable, but this is not a forgone conclusion.

It's retarded, if the West has a problem with China's practices, they can do it themselves. They have plenty of it in Canada, USA and etc. Despite being called "rare" earth metals they're not that rare just costly and damaging to harvest. They got the technology, knowledge and labor they're just "civilized" to get their hands dirty and would impinge their interests and impose their so called "Free Trade".

Well...they're called rare earth metals because they're a very small percentage of the Earth's crust.

The logic for not developing one's own resources is purely dependent on cost and has little to do with "getting one's hands dirty". If it's cheaper from another country it's simply not profitable to develop your own resources in a globalized world. Even if you developed those resources you'd just get outcompeted.

China has benefited by exploiting a comparative advantage they built for themselves. When purchasing Chinese rare earths becomes more expensive than developing one's own resources, then they will begin to develop their own resources. Until then, countries will complain to one another, as they always do.

Obviously International Laws don't apply to the West, only when they cannot spin it. According to the WTO you are breaking the Law for refusing to sell your own property if the WEST wants it, but if China wants access to certain markets in Telecom in USA or buy 'critical' technologies in aerospace, computers, technology and military, thats OKAY!

Um, you might want to read up on the WTO. Last I checked they weren't so much involved with the actual purchase of property or the penetration of markets...the WTO is about trade, not technology/patent transfer and market access...

 

[Engineer]

The West returning the favour...

This doesn't dispute that China is merely exercising its rights on its own resources. So again, what's your point? Some sort of threat? Really, the West wouldn't be complaining right now and would be exercise its leverage if it has any to begin with. If China determines not to sell, then short of military pressure the West won't get its hands on those rare earth resources, and we know that isn't possible either. So this sounds like empty threat to me. And the West has ignored China's interests for the longest time anyway, so what's happening here is more like China returning the favour and the West doesn't like the taste of its own medicine.

besides most Western users of Rare earths have realsed long ago , that days of cheap prices are over. At this point in time I should imagine they are more concerned with continuity of supply.

Supply being reduced is not the same as supply being cut off. What reduction in supply is shifting the supply-curve in the supply-demand graph to the left, thus increasing the price, and it is this price hike that you hear complains about. And it's not like these rare earth users can't transfer the cost to their clients like they have always done, so what's the real motivation behind the complains?

Besides how does encouraging/ allowing enterprises from the West to "Set Up Shop" in China to gauarantee cheaper and regular suplies going to help the enviroment?

The closing of private and illegal mines and changing the market from a perfectly competitive one to a monopoly will help the environment. The new shops that Western firms will set up would replace the lower-end inefficient manufacturing, which would also help the environment.

 

[delft]

@latenlazy:
"Well...they're called rare earth metals because they're a very small percentage of the Earth's crust."

They are not really rare but they are chemically rather intractable so, when initially recognized, they were thought to be rare.

 

[AssassinsMace]

@latenlazy:
"Well...they're called rare earth metals because they're a very small percentage of the Earth's crust."

They are not really rare but they are chemically rather intractable so, when initially recognized, they were thought to be rare.

Yeah, it's a misnomer. Just like how the media doesn't report this as the outcome they wish for when it comes to outsourcing. They're living in fantasy. This is a perfect example of every other outsourced industry on what happens when it comes home. No matter the reason, the price is going to rise because that was the sole reason it was outsourced from the beginning.

 

[latenlazy]

Yeah, it's a misnomer. Just like how the media doesn't report this as the outcome they wish for when it comes to outsourcing. They're living in fantasy. This is a perfect example of every other outsourced industry on what happens when it comes home. No matter the reason, the price is going to rise because that was the sole reason it was outsourced from the beginning.

Well, the reason I learned in chemistry was that they were called rare for that reason...so take it as you may.

 

[delft]

They suffer from another troubling circumstance. They are associated in their deposits with useless radioactive Thorium, useless that is until we are going to use Thorium reactors.

 

[AssassinsMace]

Well, the reason I learned in chemistry was that they were called rare for that reason...so take it as you may.

The only thing that makes it rare these days is maybe the refining process and mainly how it's a hazardous to your health business not because the raw materials needed to make rare earth resources are rare. Which is one of the reasons why it's going cost them more to produce it. They care about their health but not the Chinese especially when someone else has to sacrifice for them disregarding the human rights conditions they supposedly and reluctantly don't care about in this situation. All of the sudden slave labor is okay when it saves them money.

 

[Equation]

They suffer from another troubling circumstance. They are associated in their deposits with useless radioactive Thorium, useless that is until we are going to use Thorium reactors.

Yep, Thorium Nuclear reactor is the next big thing in 10 years. Especially, with the Fukishima nuclear power plant disaster, whoever comes up with the first and most tested Thorium reactor will reap the rewards.

 

[latenlazy]

The only thing that makes it rare these days is maybe the refining process and mainly how it's a hazardous to your health business not because the raw materials needed to make rare earth resources are rare. Which is one of the reasons why it's going cost them more to produce it. They care about their health but not the Chinese especially when someone else has to sacrifice for them disregarding the human rights conditions they supposedly and reluctantly don't care about in this situation. All of the sudden slave labor is okay when it saves them money.

The point was rare earths is a technical term used in the sciences. It's got nothing to do with an attempt to make them seem rare as a commodity.

 

[AssassinsMace]

Here you go again. Didn't I say it was a misnomer?