Chinese Economics Thread

[AndrewS]

Most cars are largely made of steel. Aluminium is too expensive. Some of the electric cars use aluminium to keep body weight down. But it is expensive.

Just to add, Tesla and some of the Chinese carmakers are now using one piece aluminium gigacastings. Overall, it works out cheaper than steel for the underbody

 

[Jiang ZeminFanboy]

https://twitter.com/i/web/status/1517311801909673984

If this is the start of the trend then China gdp nominal $ growth will be zero.

 

[tonyget]

Cars are made of aluminum...

And China has sufficient iron ore reserves. It is a huge domestic producer and has some of the highest reserves. China chooses to import for economic reasons. It is far easier to open some new iron mines than build a steel industry.

Selling natural resources is like selling blood and labor. Chinese ideology has always been to import natural resources and sell finished goods with higher value even if the natural resources don't need to be imported. The greatest shame was in the 90s when China was an oil exporter.

China import iron ore has nothing to do with any ideology，it's purely economics. Otherwise China wouldn't export so much rare earth.

The vast majority of China's iron deposit is of low grade and buried deep under mountain，the cost of extract and refine domestic iron ore is too high compare to what's available on international market. It would make Chinese steel industry uncompetitive.

It's not just iron，many other minerals such uranium are the same story. China has abundant deposit on theory, but it's too costly to extract and refine.

 

[tonyget]

Just to add, Tesla and some of the Chinese carmakers are now using one piece aluminium gigacastings. Overall, it works out cheaper than steel for the underbody

High end cars use carbon-fiber composite，it's a lot more expensive than metal at the moment, but I believe that's the future trend

 

[tonyget]

this does not make sense unless every Chinese product is made with inputs from west. or you think that mere sanction declaration will have psychological impact causing Yuan collapse that even Asia will stop trading.
they also de-certify airlines airworthiness certificates and closed airspace for Russia.. so this one extra impact is not in your analysis.
despite all this Russian will still be able to enjoy vacations/shopping in Middleast and Turkey.
so China still need allies with strong airline industry to move them around.

I'm just analysing the financial impact. As for technological impact，China still heavily rely on the west for many base-technologies.

 

[Jiang ZeminFanboy]

https://twitter.com/i/web/status/1517311801909673984

If this is the start of the trend then China gdp nominal $ growth will be zero.

https://twitter.com/i/web/status/1517416946307780608

If this continue, rmb is in free fall.

 

[Overbom]

https://twitter.com/i/web/status/1517416946307780608

If this continue, rmb is in free fall.

That's a sharp drop for RMB. I am not against the weakening or strengthening of the RMB, however, the central bank should ensure that this happens slowly, and steadily.

Whatever is happening now, shows that the central bank is failing on this.

Anyway, FED just came out and said that they are going to hike the interest rate by 0.5% so this has also triggered more capital outflows from RMB towards the dollar.

 

[tonyget]

That's a sharp drop for RMB. I am not against the weakening or strengthening of the RMB, however, the central bank should ensure that this happens slowly, and steadily.

Whatever is happening now, shows that the central bank is failing on this.

Anyway, FED just came out and said that they are going to hike the interest rate by 0.5% so this has also triggered more capital outflows from RMB towards the dollar.

If PBOC wants slash interest rate while maintaining exchange rate，they would need to use dollar reserve to buy RMB

 

[gelgoog]

Why bother? Let US continue to think their economy is bigger.

 

[Maikeru]

Yeah. I thought it was a banned material? Well in Ireland it is anyway.

Depends on the type. Brown asbestos is I think perma-banned across the West but other types are essential for some purposes.