Chinese Economics Thread

[Ash46]

Alibaba was fined $2.8billion actually.

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It's the largest ever fine in China for a company true. Not even foriegn companies have been fine anywhere close to this amount in China, and they too have not been angels in thier operations in China. Funny enough even Tencent who did the same thing as Alibaba was not fined anywhere near that amount(if anything at all). So why Alibaba was singled out? I think it was probably to set an example for others I.e deterrence as one member said before on here and also the fact that he was too much of a public figure, extravagant and even cocky. The dude even went as far as criticising China's financial regulatory authorities publicly for being "behind the times". Good thing Xi Jinping shut him up. Now nobody hears about him again and alibaba has lost over 60% of its value since then. Serves him right.

I disagree that both did the same thing. Tencent was mostly fined for its illegal mergers and acquisitions. OTOH Alibaba did this..

• The investigation into Alibaba commenced in December 2020, and
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  the platform was abusing its dominant position in the market by prohibiting merchants on its platform from opening stores or participating in promotions on other platforms, and restricting competition using algorithms and other technical means.
• This was far too brazen that what tencent did ig...

 

[Ash46]

I think the markets reacted badly towards China's own crackdown on private companies unlawful behaviours because they wrongly believe it was/is more political in nature . Since I think they were no real defined regulatory laws towards new tech industry which proped up so suddenly/fast in China, so authorities were slow in reacting to that, since Chinese internet companies rose so big so fast that state authorities were slow to react and enact concrete laws to regulate the industry, so I won't blame only the private sector here to be honest. Anyway, Chinese authorities are catching up though, and seems new laws have been created to do just that now. Better late than never.
Unfortunately, the markets have reacted very badly to this, reason many private chinese tech companies in the industry are facing low valuations compared to before and VC finance has dried up due to this, which is unfortunate. Hopefully things will improve in future now that things have stabilised.

I actually heard an interesting perspective regarding this from a friend of mine. He works in hk and have worked with few govt officials.
He said that regulators mostly have a hands off approach regarding new tech and allow the pvt companies to expand in whatever way they see fit. They do monitor the situation regularly and if it goes too out of control they act fast (ant comes to mind) but if not, they don't interfere. It's more of a voluntary decision to not act and pick winners etc rather than their inability or lethargy to act

 

[sunnymaxi]

https://twitter.com/i/web/status/1651566650485776385

China's digital economy ranks second globally after year-on-year nominal growth of 10.3% increased its value to CNY50.2 trillion (USD7.25 trillion) in 2022, Xinhua News Agency reported today, citing a new industry report. The digital economy's share of China's GDP rose to 41.5%...

 

[mossen]

Bullish.

 

[Biscuits]

Hmmmm....In that case, where is China's own sphere of influence?

A lot of it is pretty much China itself. If you combine most of the southerly provinces like say Guangdong, Fujian, Taiwan, Zhejiang, HK, Hainan. You end up with an economy that is larger than the whole post soviet world, with a comparable population too. That still leaves enough room for an EU sized economy if you combined all the other provinces.

While the internal economy sphere is comparable to EU + USSR, China does have a bit less natural resources than them combined. However, China makes up for it through its external sphere of influence, which isn't numerically big in terms of nations but is rich in resources, Russia, Central Asia, Mongolia etc. Eventually, the major oil producers in the middle east can be incorporated, which would further increase the potential of the sphere.

 

[Michael90]

China directly went to war with USA during Korean war to avoid a direct border with US forces.
Sino Vietnam war. China launched an offensive in response to Vietnam's actions against the Khmer Rouge in 1978, which ended the rule of the Chinese-backed Khmer Rouge in combodia.
( Sk THAADs incident or south China sea can be considered weak examples ig but nonetheless)

Sure the level is not as much as USA OR RUSSIA but that's just because those two countries have spent considerable time and energy in their military. Just because china don't exercise it to that extent doesn't mean that large nations don't want a sphere of influence.

Agree to sone extent. However, I feel Mao was pushed to the Korean war by Stalin with some promises(which were not fulfilled). Ideally Mao wanted to focus on retaking Taiwan which was PRC priority at that moment. The Korean war actually set that back.
Yeah China's role and support (along with Soviet Union obviously) was crucial in helping the Vietcong resist US forces and ultimately take over South Vietnam and reunify the country after US withdrawal.

However, all this conflicts got China involved in her neighbourhood because China was far more ideological and pro active in trying to spread her own version of ideology/communism around her neighbourhood and even the world . So China was much more involved politically and militarily in other countries internal affairs. That was during Mao's era, that era is gone and buried with maos death and Deng xiaoping rise to power with policy focus on keeping a low profile.
Since then China has abandoned that policy, made up with the West and focused only on economic prosperity and growth(which was the right thing to do actually). So if all those things you mentioned happened today China wouldn't react or get involved the same way they did in the 50s-80s. Since the country is less belligerent and has far more to consider compared to before, where they had nothing much to lose(since China was an economic backwater back then with little to no significant world trade ).

 

[tphuang]

I talk about the need fro green hydrogen not just as environment issue to watch out for, but also economic

https://twitter.com/i/web/status/1651882080291176449

I keep talking about Europeans, but this is a real issue for China.

all the basic ingredients for modern industry (steel, cement, plastics, fertilizer) will become more expensive

so while it is good for China's industries that everything gets more expensive for Europeans, it can also generate these basic ingredients with carbon free sources and sell them to EU without getting hammered with tariffs.
So in this case, green hydrogen, ammonia & methanol production all needed to produce these things. And this allows China to have a captive market, because Europeans are not going to have enough green hydrogen to support these 0-carbon needs

The production keeps accelerating. Recently, we just saw another deal for 500kt of green methanol a year between Goldwind providing 2GW of turbines for Inner Mongolia project. There are projects everywhere in Inner Mongolia

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Also GH Group just awarded 140m RMB order for 21 electrolyers from Peric (JV with CRRC) and Verde. Not sure why they picked 2 foreign companies here.

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If you look at Q1, they have a lot of new projects announced or under way. This is going to allow China to convert its polluting industries to non-polluting (or at least portion of them) and export the products to Europe

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[mossen]

We talk a lot about "hard" subjects like manufacturing, EVs or robots here. And we should.

But there's also other areas of the economy where China is catching up. Such as luxury.



Outside of China's two spots, the top ten is dominated by the usual Western countries. That's a bit boring.

As China's consumer base grows in wealth and sophistication, will we also not see them start giving domestic brands more attention? This happened in EVs and mobile phones so why shouldn't it for luxury goods? We may be at a cusp here.

 

[xypher]

We talk a lot about "hard" subjects like manufacturing, EVs or robots here. And we should.

But there's also other areas of the economy where China is catching up. Such as luxury.

View attachment 111757

Outside of China's two spots, the top ten is dominated by the usual Western countries. That's a bit boring.

As China's consumer base grows in wealth and sophistication, will we also not see them start giving domestic brands more attention? This happened in EVs and mobile phones so why shouldn't it for luxury goods? We may be at a cusp here.

These luxury companies also create an easy pressure vector for China because they make a huge percentage of their revenue from China and don't actually produce some high-tech stuff that China cannot replace.

 

[vincent]

We talk a lot about "hard" subjects like manufacturing, EVs or robots here. And we should.

But there's also other areas of the economy where China is catching up. Such as luxury.

View attachment 111757

Outside of China's two spots, the top ten is dominated by the usual Western countries. That's a bit boring.

As China's consumer base grows in wealth and sophistication, will we also not see them start giving domestic brands more attention? This happened in EVs and mobile phones so why shouldn't it for luxury goods? We may be at a cusp here.

Can’t take over everything, otherwise European countries have no reason to trade with China anymore. Gotta let others make some money