Chinese Economics Thread
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It is also fiat currency which destroyed Ming finances. If managed properly fiat currency is good in an expanding economy.
You can exchange that paper to gold. Just like the bretton woods system.
Firms relish greater opportunities in China
By ZHONG NAN | China Daily | Updated: 2022-03-16 11:22Global companies show confidence in country's economic engine
China will maintain its charm as a favorite investment destination for companies from the United Kingdom, thanks to its strategic importance and continuous drive for opening-up, said British business executives.
Given that the country is further expanding market access and pursuing high-quality growth, it will bring more exciting business opportunities to British multinationals, said Guy Dru Drury, chief representative for China, Northeast and Southeast Asia at the Confederation of British Industry.
China's strong consumer base and improvements in its business environment have underpinned confederation member companies' long-term optimism in the Chinese market, he said.
Particularly, the country's progress in strengthening intellectual property protection has been very "encouraging" for small and medium-sized member companies, Drury said, as these efforts have lifted the efficiency of patent registrations and cracked down on IP infringements.
"China's second- and third-tier cities are expected to provide more talent and opportunities for foreign enterprises in the next stage," he said, noting as China's local governments are encouraging employment and advancing technological development, providing favorable policies and highly educated and localized labor resources, foreign companies can certainly boost their growth by fully making use of those resources.
Given China's unwavering efforts to expand high-level opening-up, pursue high-quality development and create a better business environment for global companies, foreign direct investment in the country surged 37.9 percent year-on-year to hit 243.7 billion yuan ($38.33 billion) during the first two months of the year, data from China's Ministry of Commerce showed.
The ministry said actual use of foreign investment in the service sector during the January-February period totaled 175.7 billion yuan, up 24 percent year-on-year. Investment in high-tech industries grew 73.8 percent year-on-year. Investments in high-tech manufacturing and high-tech service grew 69.2 percent and 74.9 percent, respectively.
In response to the Chinese government's call for a higher level of cooperation and innovation for coordinated regional development, British pharma giant AstraZeneca established five regional headquarters in Chinese cities including Beijing, Guangzhou in Guangdong province and Wuxi in Jiangsu province last year, aiming to promote the healthcare industry chain's localized integration and boost the innovative capacity of the regional medical industry.
The group also unveiled its upgraded global R&D center in China, international life science innovation campus and medical healthcare artificial intelligence innovation center in Shanghai in 2021, the latest milestone in its expanding footprint in the country.
"We have seen China's favorable attitude toward homegrown innovation, and we plan to fully leverage opportunities where domestic and overseas counterparts come together," said Leon Wang, executive vice-president of international business at Astra-Zeneca.
Due to its rapid economic growth, China's Guangdong-Hong Kong-Macao Greater Bay Area is becoming an internationally competitive city cluster. Atkins, a British design, engineering and project-management consultancy, plans to participate in more infrastructure and industrial projects in this area during the country's 14th Five-Year Plan period (2021-25).
"Our growth in China will follow the country's urbanization and industrial stimulus measures to remain competitive, and its project designs in the Bay Area will be the company's new sample cases during the five-year plan period," said Philip Hoare, president of Atkins.
Supported by 20,000 employees in 25 countries and regions globally, the company runs a number of offices in China's Bay Area, Yangtze River Delta region, Beijing-Tianjin-Hebei area and Chengdu, Sichuan province. Hoare said they will remain the company's priority markets in the country in the coming years.
With many British business leaders stressing that an "icebreaking" spirit is needed for the business community in the UK to reinforce further cooperation between China and the UK, Hoare said there is no doubt that good relations between the two countries promote business relationships. In this regard, companies from both sides benefit from healthy and stable ties between their governments.
At the beginning of the 1950s, when Western countries imposed embargoes on trade with China, visionary British businesspeople led by Jack Perry overcame many obstacles to make an icebreaking trip to China. They not only "broke the ice" to trade with China, but also left people today with rich heritage of China-UK friendship and exchanges.
As the COVID-19 pandemic has generated a huge impact on the global economy and has led to a deeper understanding of the importance of sustainable development, Hoare said that green innovation will be further stimulated as more companies invest more in sustainable operating technologies, facilities and services.
Peter Kung, former vice-chairman of KPMG China, said China's Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, introduced in 2019, has already injected new impetus into technology companies in the region, generating more business opportunities for emerging industries and innovative businesses.
More than half of British businesses are optimistic about their prospects in the Chinese market in 2022, rising three percentage points year-on-year to 52 percent, reversing a three-year decline, according to a survey released by Beijing-based British Chamber of Commerce in China in December last year.
Improving sentiments among British companies over the Chinese market highlighted continued economic recovery in the Chinese economy despite the lingering COVID-19 pandemic and other challenges.
The study, based on the results collected from 288 member companies of the chamber between Oct 12 and Nov 5, found that 52 percent of the surveyed companies are optimistic about their prospects in China this year.
Also, 46 percent of the companies are planning to increase investment in the country, according to the survey. Businesses in financial services, healthcare, retail and consumer goods are more confident.
Such confidence stems from improved earnings in the Chinese market over the past year. For as many as half of the companies surveyed, revenues have recovered to either equal or exceed pre-epidemic levels, with 70 percent of the companies expecting their revenues from China in 2021 to equal or exceed those of 2020.
How do they know how much gold China has?
Currency is never fully fiat since it is always backed by something. Even if it is not gold its something that is still valuable.
When Nixon took the US dollar out of the gold standard, the dollar was backed by 'Black Gold' by the Saudis.
I dunno about the Petro Yuan. The Yuan can be backed up by 'White Gold' like Lithium and rare earths as the world transitions to a new age and we have new meanings for gold. If you go back to ancient times, bushels of grain was also traded as money.
The Songs, who invented fiat currency, tried to print their way out while fighting an expensive war against the Mongols. That led to the first fiat currency inflation which flattened the economy and sped up the fall of the Song. Ironically, the Mongols didn't learn from that as the Yuan Dynasty copied the fiat system from the Song. The Yuan Dynasty met a truly bad coincidence of disastrous factors --- rebellion, climate change, palace intrigue, war with other Mongol clans, all happening at the same time --- and the Yuan tried to print their way out of it. That led to massive inflation and they ultimately got their faces kicked in by the Ming. And later on the Ming also went through the same cycle.
@Tam Sir how about Red gold, backed by the sweat and toil of 1.4 billion productive educative Chinese. From a business point of view , when giving credit either in goods or monetary, a criteria is the capacity to pay you back. The US even with a $30 trillion debt have the resources in human capital, high tech industries and Natural resources.
Well the red gold is only backing up 1 trillion$ usd$ net. China owes 2 trillion$ in external debt btw. So 1 trillion usd$ in net reserves is not really that much.
I've posted this before in the "Lessons for China to learn from Ukraine conflict for Taiwan scenario" thread. Maybe its more relevant here. Its old news, but its just my two-cent opinion:
I think another obvious lesson for China to take away from the Russian - Ukraine war. Is the West's ability to sanction and plunder Russian overseas wealth. The assets of both private and public Russian figures have been frozen by Western banks, leasing firms, and institutions. Not only is money frozen, but also assets like property, football clubs, and yachts.
What did the West do with that money? I suspect, its to bankroll their war support to Ukraine. Those weapons, supplies, mercenary salaries, probably paid for by money stolen from the Russians. Why I think like this? They did the same thing with Iraq, Libya, Syria, Venezuela, and most recently, Afghanistan. Venezuela is the most obvious example. The West had frozen Venezuelan funds in their banks. And then they gave that money to Juan Guaido to fund his political campaign and blackops operations. Funds frozen from Iraq, Libya, Syria, and Afghanistan were also frozen and used to fund black activities against them.
For China, this danger is ever more imminent. The Trump administration had laid the US foundations to do such things to China via their Hong Kong, Tibet, and Xinjiang Acts. Trump had attempted to blame China for Covid-19 to claim reparations. I think the plunder did not happen on China at that time because they chickened out. There were too many unknowns. Now, they have already done it to Russia. They will have tasted blood, and might itch to do the same to China.
Off course, the long term consequences of such blatant plunder by the West is dire indeed. But the Western leaders are not long term thinkers. Plus their economies are getting quite desperate.
What China would need to do is to try to move as much Chinese funds out Western countries as possible. It is quite impossible to get them all out at this point. The interconnection of Chinese and Western economies is too extensive. But its better to save every billion possible. Secondly, China needs to try to find a way to harden its economy to Western crippling sanctions. Come up with clear laws to seize Western assets in China, if the West attempts the same type of plunder in China.
I know that the West cannot punish China economically like it did with Russia. China can bite back with vastly more venom than Russia. But if Trump or another nutjob Sinophobic US president (like Pompeo) comes into power by 2024, who can really tell? Better for China to prepare for this, than to assume that it will never happen. Because touch wood, if a conflict were to happen in Taiwan. The US and the West will surely pounce on China with sanctions.
I think another obvious lesson for China to take away from the Russian - Ukraine war. Is the West's ability to sanction and plunder Russian overseas wealth. The assets of both private and public Russian figures have been frozen by Western banks, leasing firms, and institutions. Not only is money frozen, but also assets like property, football clubs, and yachts.
What did the West do with that money? I suspect, its to bankroll their war support to Ukraine. Those weapons, supplies, mercenary salaries, probably paid for by money stolen from the Russians. Why I think like this? They did the same thing with Iraq, Libya, Syria, Venezuela, and most recently, Afghanistan. Venezuela is the most obvious example. The West had frozen Venezuelan funds in their banks. And then they gave that money to Juan Guaido to fund his political campaign and blackops operations. Funds frozen from Iraq, Libya, Syria, and Afghanistan were also frozen and used to fund black activities against them.
For China, this danger is ever more imminent. The Trump administration had laid the US foundations to do such things to China via their Hong Kong, Tibet, and Xinjiang Acts. Trump had attempted to blame China for Covid-19 to claim reparations. I think the plunder did not happen on China at that time because they chickened out. There were too many unknowns. Now, they have already done it to Russia. They will have tasted blood, and might itch to do the same to China.
Off course, the long term consequences of such blatant plunder by the West is dire indeed. But the Western leaders are not long term thinkers. Plus their economies are getting quite desperate.
What China would need to do is to try to move as much Chinese funds out Western countries as possible. It is quite impossible to get them all out at this point. The interconnection of Chinese and Western economies is too extensive. But its better to save every billion possible. Secondly, China needs to try to find a way to harden its economy to Western crippling sanctions. Come up with clear laws to seize Western assets in China, if the West attempts the same type of plunder in China.
I know that the West cannot punish China economically like it did with Russia. China can bite back with vastly more venom than Russia. But if Trump or another nutjob Sinophobic US president (like Pompeo) comes into power by 2024, who can really tell? Better for China to prepare for this, than to assume that it will never happen. Because touch wood, if a conflict were to happen in Taiwan. The US and the West will surely pounce on China with sanctions.