Chinese Economics Thread

[azn_cyniq]

one major point. most of the people usually ignore or they don't know.

USA is the biggest net importer of capital goods excluding aircrafts.. this percentage is on rapid rise.

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USA Tech sanctions only works effectively when entire West , Japan , Taiwan and Korea is on board..

USA is itself heavily dependent on allies for critical components , parts , materials and tools. you talk about Engines/semiconductor being the strongest zone of US. its true but when you jump into depth you will find strange information. for example USA don't have Lithography industry. lets suppose, ASML or NIKON block the sales of Lithography Machine to Intel. what will they do ? nothing they can do

General Electrics and Pratt and Whitney are the top two largest turbofan engine manufacturer in the world. now guess what, their most advanced machines heavily depend on components from Allies. MTU Germany is the backbone of all GE engines. World's most advance F-135 military engine components and parts comes from 12 different countries ..

but USA has some world beater Non-Litho semiconductor equipment companies like KLA/LAM. include EDA providers. this is where USA is the best.

in one vs one situation China can knock off USA easily. i can bet on that... just USA vs China .. no support from allies.
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now back to original question.. as @ZeEa5KPul mentioned, USA/West has lead over China coz of century old foundation in Turbofan engine and 4 Decades lead in semiconductor..

but look at now what China has achieved in these two fields.

successfully developed complete ecosystem of Advanced gas turbine industry. WS-15 is one the most advanced military turbofan engine in the world right now..

completed the domestic line of mature semiconductor include complete set of tools. rapidly advancing towards cutting edge..

In next few years, what do you think will happen when all the levers (EVs, Semiconductor ecosystem, COMAC, largest percentage of global patents, etc.) come into play for China.

China will decisively annihilate all western world high tech industries..

I agree with everything you said, but you seem to be implying that Taiwan is a US ally. Taiwan is a 12-year-old girl who has been kidnapped and "raised" by a 45-year-old pedophile called the United States of America. It is not an ally of the USA.

China and Russia are allies because they can say no to each other. It pains me to say that us Taiwanese people do not have that option.

 

[FairAndUnbiased]

I asked you; "Why do you think Chinese people went to live in the West". It was rhetorical question. I can answer it for you. The reason why people left China is because China was and to large extent is - "a shithole country" to express myself as Donald Trump. Even today, people are leaving China for better opportunities abroad. Although China´s economy growing and China has taken enormous steps regarding technology - China is not around the corner yet.


They are not operational yet. It will take 15-20 years before China has mature high-bypass engines. Of course this is not my field. What is true is that China has made extra-ordinary progress in terms of aviation.

Yet if that is true, why does China have a net gain of the highest level talent: PhD holders with published papers?

Why aren't they headed to Mexico, Russia, Turkmenistan or Kazakhstan?

Why does US have negative outflow of this talent, surely the non shithole countries can pay more to keep these talents?

 

[chgough34]

Idk what your "point" is here. You just write something to write something, to troll more, and appear you were always "right".

You gave an odd non-sequitir to my comment about intermediation so I clarified

No this is a mega fail, there are dilutive and non-dilutive secondary offerings.

No shares are created in a non-dilutive secondary offering. No money is raised either. It’s solely called that because shares that previously couldn’t be traded now can. Liquidity increases. Cash flows to the company do not. Nothing is recorded under “cash flow from financing activities” in the cash flow statement in a non-dilutive secondary offering.

In one companies doesn't compensate existing shareholders, and in one it does.

Chinese corporates absolutely pay dividends and do stock buybacks -

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So, the company raises new money, but it then pays it to existing shareholders,

So they don't lose any voting power/value of shares.

That's quite common in the US if a company wants to lower its share place,

That is literally a no-op.

To be more accessible to retail investors.

Are you getting a secondary offering confused with a stock-split

I literally told you the difference in the past answer, I'm starting to get angry.

You posted a bunch of platitudes

It's not about the stock market exchange, but the government fiscal and monetary policy toward equity markets.

China has substantially looser monetary policy right now.

Also financialization of the overall economy, is what's different. Also, society is different.

China has a higher share of its economy dedicated to FIRE than the United States

I can't understand you at all, are you using some kind of AI or a translator to generate your answers? This is really impossible to have a conversation.

The paper you posted on the U.S. importing a substantial volume of intermediaries from China for manufacturing somehow contracting my point is nonsense when it makes nearly the same identical argument

 

[Serb]

You gave an odd non-sequitir to my comment about intermediation so I clarified

You first said that the financial sector intermediates between the savers/investors and companies, but you withheld more clarification.

That's a deceptive sentence to use if we are talking about the US financial sector which mostly "intermediates" between one high-net-worth individual and another high-net-worth individual,

At least in the context of investing and general capital employment, we were talking about.

And yes, they do some positive stuff like IPOs, but I never said they don't, every country does that.

I just say that they are mostly dealing with managing and multiplying money for the wealthy.

Generally, the finance sector is a really low-productivity sector, especially on the scale that it's in the US.

But, thankfully I finally understood what you were talking about. You use only complicated words/sentence structures, so it was hard.

No shares are created in a non-dilutive secondary offering. No money is raised either. It’s solely called that because shares that previously couldn’t be traded now can. Liquidity increases. Cash flows to the company do not. Nothing is recorded under “cash flow from investing activities” in the cash flow statement in a non-dilutive secondary offering.

Ok, but here is the catch, why the heck did you even bring this as an argument then to show how this is precisely why equity markets help the real economy (after IPO) when it doesn't even get to the company itself? Instead it is one shareholder selling shares to another shareholder?

Chinese corporates absolutely pay dividends and do stock buybacks -

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I never said otherwise, I just said that there are different tax structures in China and the US, and the latter has a more favorable policy for it.

Are you getting a secondary offering confused with a stock-split

Yes, I realized it now.

China has substantially looser monetary policy right now.

Yes, but what about the period from 2008 and now? We will forget that?

China has a higher share of its economy dedicated to FIRE than the United States

I talked only about finance, not FIRE.

Btw, it makes logical sense why would China have such a high ratio of the real estate sector to the economy.

It is because it is a developing country with only a 35% rural population and a logical need for urbanization.

The paper you posted on the U.S. importing a substantial volume of intermediaries from China for manufacturing somehow contracting my point is nonsense when it makes nearly the same identical argument

No, you keep saying that China has only the scale advantage in manufacturing, I then showed you literally that it also has a tremendous value-added lead over the US (the US 3 times more dependent), ranked second in the global manufacturing output. It also has that advantage against all the other countries listed there (despite it having a naturally lower value-added due to having to import all kinds of raw material & energy):

 

[chgough34]

You first said that the financial sector intermediates between the savers/investors and companies, but you withheld more clarification.

I didn’t think I needed to.

That's a deceptive sentence to use if we are talking about the US financial sector which mostly "intermediates" between one high-net-worth individual and another high-net-worth individual…Ok, but here is the catch, why the heck did you even bring this as an argument then to show how this is precisely why equity markets help the real economy (after IPO) when it doesn't even get to the company itself? Instead it is one shareholder selling shares to another shareholder?

Asset/wealth management is indeed part of the IPO process since HNW individuals with their savings invest in something else to make them wealthier. That’s the entire intermediation! The super-majority of the intermediation is from all kinds of savers to corporates to invest in capital projects


You first brought up how dilutive secondary offerings were rare, I pulled SIFMA data to show you were wrong, and then you diverged into a tangent about non-dilutive secondary offerings.

I never said otherwise, I just said that there are different tax structures in China and the US, and the latter has a more favorable policy for it.

Which tax structures? Dividends are not tax advantaged in the U.S.; nor is short term buying and selling (those are both taxed as ordinary income instead of as capital gains)

Yes, but what about the period from 2008 and now? We will forget that?

Yes, rates were at 0% because there was no inflation. If it was a “casino” you’d expect sustained 5% rates to break it. But apparently not lol

I talked only about finance, not FIRE.

The finance shares are equal, and China has a larger financial sector than comparable developing countries as a share of GDP

No, you keep saying that China has only the scale advantage in manufacturing, I then showed you literally that it also has a tremendous value-added lead over the US (the US 3 times more dependent), ranked second in the global manufacturing output. It also has that advantage against all the other countries listed there (despite it having a naturally lower value-added due to having to import all kinds of raw material & energy):

The value added lead is from the scale advantage. Each manufactured item in China has substantially less value add than a U.S. manufactured item because of the U.S. concentration in a set of high-value added sectors.

 

[tphuang]

okay this is getting out of control I will just say @chgough34 you need to take a chill from this thread for 2 weeks or you will get a nice vacation.

 

[tphuang]

I asked you; "Why do you think Chinese people went to live in the West". It was rhetorical question. I can answer it for you. The reason why people left China is because China was and to large extent is - "a shithole country" to express myself as Donald Trump. Even today, people are leaving China for better opportunities abroad. Although China´s economy growing and China has taken enormous steps regarding technology - China is not around the corner yet.


They are not operational yet. It will take 15-20 years before China has mature high-bypass engines. Of course this is not my field. What is true is that China has made extra-ordinary progress in terms of aviation.

I will say that based on your last paragraph, you are completely clueless about China's aeroengine department. And maybe you should understand you are clueless and move on.

Also the other thing is that you are on "sino" defenseforum.com so may be using shithole to describe China is not appropriate here. I also have no idea how that kind of language has a place in economics thread.

So, you should also take a 2 week break from this thread.

 

[J.Whitman]

I will say that based on your last paragraph, you are completely clueless about China's aeroengine department. And maybe you should understand you are clueless and move on.

Also the other thing is that you are on "sino" defenseforum.com so may be using shithole to describe China is not appropriate here. I also have no idea how that kind of language has a place in economics thread.

So, you should also take a 2 week break from this thread.

I wrote; "a shithole country" to express myself as Donald Trump." I believe Vice-President of the European Commission Josep Borell
called the world outside Europe a "Jungle". I express myself no worse than political leaders in the Western countries. I also used that the expression to make a point in a very explicit way.

The reason why I expressed myself in such an undignified way is rooted in something. You see, the user is systematically and no doubt deliberately misunderstands what I write in order to undermine my position on the forum. I do not consider that to be an acceptable debating technique. However, it was unnecessary of me - for which I apologize. I should know better. I stand above this kind of low discourse. Since I don't want to be banned from the forum, I will take a two week break from the thread. See you in two weeks.

 

[abenomics12345]

Then why wait, again? They have higher GDP, since trump always hit with sanctions, isn't it time to be the first one to strike?, .. at least once for face saving . there a no need to answer me.

Because Trump is an idiot who conflates lose-lose deals with win-win deals. You on the other hand seem to be the idiot who can't spell Hong Kong or Wuxi Biologics correctly.

This year China had much better IPO results than the US, and that's in the USD:

There's no doubt that the Chinese market is a fund-raising market.

But to have a sustainable/healthy capital market there needs to be a give *and* a take. For investors to continue to be willing funders of new companies/projects, there needs to be an appropriate rate of return for said investors. For Chinese households, the reason why they've historically 'speculated' in the Chinese real estate market is because there was a dearth of investable wealth-generative businesses over the long term. Average investors being able to generate capital-related income is how they building wealth - to have money work for you rather than trading your time for money.

Additionally, you may not know this but in China retail investors must purchase a minimum of a 100 share slot (meaning, at 1600 rmb/sh, an investor has to have over 160k RMB to even consider purchasing Moutai, which coincidentally has been one of the *few* wealth generative businesses) - how's that for "common" prosperity?

This is why I have consistently stated in this thread that a healthy market with thoughtful rules (of which this 100 share minimum lot rule certainly is not) is necessary for common prosperity.

Your citation doesn’t refute my point since I said China had the scale advantage. Regardless: biotech/pharmaceuticals, scientific devices, medical devices, electronic components (incl. semiconductors), aircraft and aircraft components (incl. engines) are a substantial portion of global manufacturing value added and in those sectors (for now), it remains quite US favorable. This is ofc, even avoiding software publishers who are also industrially relevant but aren’t manufacturers

I think the overall orientation of this forum is that the list of things you wrote down are all being challenged. This doesn't mean you are incorrect in stating that China is currently behind. However, it is also pretty clear that some of the things on that list are in progress of, and soon-to-be sectors where China will not be behind.

For one, biotech/pharma manufacturing is one where China is not at all behind, medical devices are also within 3-5 years of becoming globally competitive at the leading edge. Aircraft/Engines probably within 5-7 or 7-10 years with semiconductors the last one on this list and maybe 10years.

Obviously this takes time, but the track record here is quite good and these are good estimates.

okay this is getting out of control I will just say @chgough34 you need to take a chill from this thread for 2 weeks or you will get a nice vacation.

Who cares about who talks about what, my friend? You take retarded ordered Orwellian CIA media articles like something of some value, wtf?

@chgough34 and I have our share of disagreements, but I have no doubt that @chgough34 is an earnest person in his debates. So I don't think this is helpful.

 

[Serb]

@chgough34 and I have our share of disagreements, but I have no doubt that @chgough34 is an earnest person in his debates. So I don't think this is helpful.

He brought some value (if you take out all the purposeful overuse of technical jargon), but his biggest mistake is that he can't concede that he lost a point and would 'perma' argue with someone for 10 pages straight, endlessly diverting topics to appear 'right', over and over, rather than simply concede a point, or admit that he was wrong, due to ego or something. So then, even his value gets overshadowed by his toxicity. The other two that came recently, however, are of worse initial knowledge than him, but they were found to be able to concede a point a few times.