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Chinese Economics Thread
- Thread starter Norfolk
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The biggest risk right now is global inflation. It's counter intuitive, but from an actual economic standpoint that would benefit China more would be to drop tariffs on American imports(into China) and add export tariffs to goods sold to America for a number of reasons:
- The US exports a decent amount of commodities/energy products to China, this will help keep inflation low and benefit the greater low and middle income populations because they are ones who are most impacted by inflation on essential goods. This works towards the "shared prosperity" initiatives.
- Lower priced commodities/subcomponents allows China to be more cost competitive with finished and value-added products that they export which ultimately puts more pressure on American and Western manufacturing, especially in an inflationary era.
- As the trade war have demonstrated - manufacturing is not moving back to the United States, the US trade-war tariffs have done nothing to shift the trade imbalance towards the United State's advantage. Not only that, quarterly export records have been broken countless times since the trade war. US consumers and greater economy(supply chain) needs China more than China needs the US.
- Inflation's cure is generally higher interest rates. Higher interest rates have already started to hit the US economy as shown by this mornings where GDP growth fell for the first time since the pandemic recovery. Higher interest rates have already knocked down the S&P500 nearly 10% since the FED announced the cutback on QE and an aggressive rate hike schedule. If China implemented broad based export tariffs (like what they did with steel last year), it will make the US FED's job of fighting inflation much harder.
Good analysis, and its starting to look like China is going with your strategy.
If we go back to previous posts in this thread, there are articles about China putting tariff and quotas for many of the products they export, like steel.
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China needs to do whatever it can to fuck up America, which is at its weakest in a long time. Even if it hurts itself in the process. It's about the relative damage.
Indeed. Cut tariffs for American imports, and hugely increase export tariffs to America.
Given that the US is an enemy, and that today it is a rare moment when the US is weak and vulnerable, we should twist the knife as much as possible.
When the enemy is weak and at its knees, you don't show mercy, instead, you blow its brains out. The US has already shown its true nature, so there is no need to talk about win-win and friendship with them, as always when talking about superpowers it is a you die - I live situation.
It makes no sense to increase tariffs for China, in whatever capacity. It's much smarter to ensure as low tariffs as possible, in order to ensure greater US dependency which will make any attempt to decouple all that more painful.
Even today, despite years of rhetoric of "decoupling", the US and Chinese economies are more entwined than ever. That's how CCP wants it and they're not wrong. The real decoupling needs to be cultural.
Even today, despite years of rhetoric of "decoupling", the US and Chinese economies are more entwined than ever. That's how CCP wants it and they're not wrong. The real decoupling needs to be cultural.
Yikes, hopefully it'll recover back after the covid situation cools down soon. This is the cost of lockdowns.
Nothing will cool down until zero covid policy is over. You at most will have one or two months of relative peace then a new wave of lockdowns. Remember this is official PMI for big enterprises, which are less affected by lockdowns. Cant wait for caixin PMI for small and medium enterprises.