In Huawei's case, are the steep declines in net profit a function of increased R&D spending, losing high margin business balanced by gaining in low margin business, or both? I would assume the latter of the 3.
Chinese Economics Thread
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There was never much of any economic sanctions from China against Australia aside from anti-dumping duties on Australian wine and barley. Most of the purported Chinese sanctions were just Australia shooting itself in the foot due to the hysterical sinophobia in its media and government. Even the Chinese anti-dumping duties imposed on Australian wine and barley only came after Australia imposed similar duties on numerous Chinese products (80+ according to some Chinese reports).
The drop in Australian beef exports to China happened after China suspended the import permits for a few Australian producers that failed inspections, which was only something like six out of hundreds of Australian beef producers. This should have been a complete non-event as such minor updates to the list of permitted agricultural producers happen all the time in all countries. However, Australian and Western media took this rather minor update and spun it as if ALL Australian beef imports were going to be banned by China. Many Chinese importers saw the Australian and Western media reports and decided to err on the safe side and shifted their orders to producers in other countries. This is why Australia beef exports to China dropped significantly but did not go to zero as other Chinese importers just ignored such reports.
Similar shenanigans by Australian/Western media were also at play in the drop in Australian coal exports to China. They claimed that China was not letting ships carry Australian coal unload when in reality this was during a time when Chinese ports were overwhelmed with backlog and all coal ships were given lower priority and had to wait a long time to unload (some ships carrying Russian and Indonesia coal actually had to wait longer than those carrying Australia coal). Risk averse Chinese importers again simply shifted their orders elsewhere after seeing Australian/Western media loudly proclaiming that China is banning Australian coal.
The drop in Australian dairy exports to China came after Australian government banned Chinese dairy firms from running dairy farms and dairy processing plants on "national security" grounds. Amazingly, Australians are so brainwashed that they are unable to see the connection between them banning Chinese dairy firms and the subsequent drop in dairy exports to China.
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Lethe
Captain
Beijing's response to Canberra's increasing hostility consisted of two major components: diplomatic, and economic. Shutting down diplomatic relations with Australia was reasonably effective, and furthered a narrative here that the Morrison government had been reckless in so thoroughly alienating Beijing. Tick.
The economic sanctions leveraged on Australian imports were much less effective, and indeed I believe they were counter-productive. The sanctions justified and reinforced existing anxieties about China, and allowed political figures like Morrison and Dutton to portray themselves as fearless defenders of Australia's national interests*. Radical policy developments such as AUKUS would not have slid through the political system nearly as easily if it were not for the atmosphere of hostility bred over the previous few years, to which the sanctions regime contributed.
Ultimately, the lessons Canberra has drawn from its experience with Beijing these last few years is that Beijing's bark is worse than its bite. It was (and is) commonly understood that China's growth has fueled Australian prosperity over recent decades, such that there was a real fear of jeapordising that relationship. But we now "know" Beijing's policy toolbook, the costs that it will impose on us and those it is prepared to bear in exchange (not a lot), and we know that we can absorb those costs without making sacrifices to core interests and without significant political difficulties domestically. The fear of alienating China turns out to have been worse than the reality of alienating China. I'm not saying that's a sensible narrative, only that it is the dominant one.
* Of course the Liberal/Coalition government was defeated, but only because the then-Labor opposition both minimised the differences between themselves and the government (e.g. by signing up to AUKUS within twenty four hours of being briefed on its existence) and directly attacking the Coalition government's credentials as defenders of Australia's national security (by charging that the Solomon Islands' signing a port agreement with Beijing represented Australia's "worst foreign policy failure in the Pacific since 1945"). That is to say, we should not be confused that the Coalition's anti-China narrative was repudiated by voters, rather Labor succeeded because they embraced the same narrative and effectively charged the Coalition with being asleep at the wheel. It was good electoral politicking, but not anything that Beijing can reasonably draw comfort from.
Unfortunately I don't think a return to 2018 is possible, but some cooperation is possible, namely in matters of trade and multilateral institutions such as the AIIB. Canberra wants a robust economic relationship with China, but will not put matters of national security on the table to secure it. What we are (probably) willing to negotiate on is the broader economic war that Washington is waging upon China and trying to persuade everyone else to participate in.
Leaving aside questions of who is responsible for the present hostility in the relationship (we are) and whether or not Beijing's response was productive (it was not), at the end of the day Canberra wants something from Beijing (trade normalisation) and Beijing therefore has some leverage that it can use to further its interests. The key is to clearly identify those interests and to discern what is achievable and what is not.
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Given Aussies’ hostilities toward China and the expectation of it joining a war against China in the future, the best course of action for China is to reduce your income by importing from you less and increase the production capacities of the resources produced by Australia in other countries.
For agricultural produces like beef, milk, etc, China can encourage businesses in more reliable countries like Brazil and Africa countries to expand their productions.
For mineral resources like iron ore, the demand from China will be reduced in the future organically due to the levelling off infrastructure development. China is also expanding mines in other places as alternative sources.
China can’t change your stance toward her, but she can make funding of your war machine more challenging.
Feel free to sell more beef, milk, etc to India.
These are the kind of news that will cause people to continue to loose faith in Western banking and shift money to Asia
This is a good question
The hope for China is that it can continue to get cheaper crude and then refined oil cost than Europe and gain more cost advantage there
here is question, as Western countries continue to suffer from banking and energy cost issues vs China, we know ASEAN countries need China. We know Western Asia, African and Latin American countries are getting closer to China. What are the Europeans going to do? SK and Japan may continue to thumb their nose at China in spite, but are the Europeans going to ignore that prospering Chinese economy that's hitting 5 year highs in PMI?
This is a good question
The hope for China is that it can continue to get cheaper crude and then refined oil cost than Europe and gain more cost advantage there
here is question, as Western countries continue to suffer from banking and energy cost issues vs China, we know ASEAN countries need China. We know Western Asia, African and Latin American countries are getting closer to China. What are the Europeans going to do? SK and Japan may continue to thumb their nose at China in spite, but are the Europeans going to ignore that prospering Chinese economy that's hitting 5 year highs in PMI?
CHINA imported $2.7 trillion worth of goods in 2022. Only 4 countries in the world even have a larger GDP than $2.7 trillion. China imports more than the entire GDP. will be the worlds largest consumer market the world has ever seen. Imports are set to skyrocket as the country
Dan Collins (@DanCollins2011)
Dan Collins (@DanCollins2011)
Tariffs on Australia should remain and be extended.
China should also investigate other ways of restraining Australia's increasingly racist and assertive behavior.
For instance, export bans should be explored. China should consider a 100% export tax on all goods sent to Australia.
Australians should also be banned from visiting Hong Kong and Macau. China should consider deporting all Australian residents in Hong Kong and Macau.
Finally, Australian citizens should not be granted the privilege of reporting in China (including Hong Kong and Macau).
China should also investigate other ways of restraining Australia's increasingly racist and assertive behavior.
For instance, export bans should be explored. China should consider a 100% export tax on all goods sent to Australia.
Australians should also be banned from visiting Hong Kong and Macau. China should consider deporting all Australian residents in Hong Kong and Macau.
Finally, Australian citizens should not be granted the privilege of reporting in China (including Hong Kong and Macau).
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...but why? Besides AUKUS I'm not aware of any unfriendly behavior from the new Australian administration. Trade and engagement is mutually beneficial.