Chinese Economics Thread

[Wrought]

So how is India going to get Chinese suppliers to set up shop in India then?

All that talk about making things easier for people to move their factories to India but when the time for action comes, zero (actually, negative) results

India has plenty of problems with domestic manufacturing, but air travel isn't one of them. Moving that sort of equipment by air is prohibitively expensive; they would send it by sea or acquire it locally. These flights are for commercial passengers, students and tourists and what have you.

 

[gelgoog]

India has plenty of problems with domestic manufacturing, but air travel isn't one of them. Moving that sort of equipment by air is prohibitively expensive; they would send it by sea or acquire it locally. These flights are for commercial passengers, students and tourists and what have you.

What about installing the machines and training people how to use them? Do you expect the Chinese technicians to come by boat too? Good luck with that.

 

[coolgod]

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US finds no currency manipulation in 2023, Japan added to monitoring list​

WASHINGTON, June 20 (Reuters) - The U.S. Treasury on Thursday said no major trading partner appeared to manipulate its currency last year, but it added Japan to a foreign exchange "monitoring list," alongside China, Vietnam, Taiwan, Malaysia, Singapore and Germany, which were on the previous list.
The Treasury's semi-annual

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also found that none of the countries examined met all three criteria triggering "enhanced analysis" of their foreign exchange practices during the four quarters through December 2023.

Countries are automatically added to the list if they meet two of these three criteria: a trade surplus with the U.S. of at least $15 billion, a global account surplus above 3% of GDP and persistent one-way net foreign exchange purchases of at least 2% of GDP over 12 months.
The Treasury said Japan, Taiwan, Vietnam and Germany all met the criteria for trade surpluses and an outsized current account surplus.

China was kept on the monitoring list because of its large trade surplus with the U.S. and because of a lack of transparency surrounding its foreign exchange policies.
"China’s failure to publish foreign exchange (FX) intervention and broader lack of transparency around key features of its exchange rate mechanism continues to make it an outlier among major economies and warrants Treasury's close monitoring," the Treasury said in the report.
The report also raises questions about China's reporting of data on its current account balance, which showed its surplus fell to 1.4% of GDP in 2023 from 2.5% in 2022. The Treasury said China balance of payments data published by the State Administration of Foreign Exchange on the country's trade surplus appear to be at odds with China's own customs data and that of other trading partners.
A U.S. Treasury official said the department was trying to understand such "anomalies."

JAPAN'S INTERVENTIONS​

The official said the Bank of Japan's recent foreign exchange interventions to prop up the value of the yen were not a factor in deciding to add Japan to the currency monitoring list. The official cited Japan's high 2023 trade surplus of $62.4 billion with the U.S. and its global current account surplus of 3.5% of GDP, up from 1.8% in 2022.

But the Treasury report said that Japan had intervened in April and May 2024 - outside the period covered by the report - for the first time since October 2022, buying yen and selling dollars to strengthen the yen's value.
The Treasury said Japan was transparent in its foreign exchange operations but added: "Treasury’s expectation is that in large, freely traded exchange markets, intervention should be reserved only for very exceptional circumstances with appropriate prior consultations."
The report said most foreign exchange interventions in 2023 focused on selling dollars -- actions that strengthen a currency's value against the dollar. The dollar has strengthened over the past two years as the Fed has raised interest rates sharply to cool inflation.

The greater concern in the Treasury report is on interventions to buy dollars and thus weaken other currencies.
"Thus, it is not a surprise that in the four quarters through December 2023, no trading partner was found to have manipulated the rate of exchange between its currency and the U.S. dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade," the Treasury said.

Yen is about to break 159, on record for lowest closing in 34 years.

 

[Wrought]

What about installing the machines and training people how to use them? Do you expect the Chinese technicians to come by boat too? Good luck with that.

I wouldn't expect the technicians to be Chinese, because those are going to Vietnam or Malaysia or wherever friendlier to Chinese invesment. The ones going to India would be Western companies trying to leave China for political rather than economic reasons. Like Apple.

 

[gelgoog]

I wouldn't expect the technicians to be Chinese, because those are going to Vietnam or Malaysia or wherever friendlier to Chinese invesment. The ones going to India would be Western companies trying to leave China for political rather than economic reasons. Like Apple.

Sure. But India caused that to themselves by hampering Chinese investment. A particularly foolish thing to do when you consider that Chinese equipment and technologies are vastly cheaper than Western ones and India doesn't have that much capital to begin with.

 

[Wrought]

Sure. But India caused that to themselves by hampering Chinese investment. A particularly foolish thing to do when you consider that Chinese equipment and technologies are vastly cheaper than Western ones and India doesn't have that much capital to begin with.

Yes, that would fall under "plenty of problems with domestic manufacturing" that I mentioned. My point was that air travel isn't related to that.

 

[GiantPanda]

So how is India going to get Chinese suppliers to set up shop in India then?

All that talk about making things easier for people to move their factories to India but when the time for action comes, zero (actually, negative) results

Yes this is one of the many things the Indian government do to keep Chinese firms from hurting themselves.

 

[Serb]

https://twitter.com/i/web/status/1804145800928465210

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The ratio is now 8:2 for outbound investment vs inbound investment in 2023 related to China's FDI flows.

This is what a true elevation looks like (Just 15 years ago, it was a 2:8 ratio in favor of inbound investment)!

Once upon a time, China relied on foreign investment to develop. Nowadays, China is the one with technology and know-how helping others to develop through manufacturing FDI (amongst other things, like superior infrastructure and loan offers where the roles have also reversed...),

Nowadays, China invests mostly in the Global South, helping them escape from their neo-colonialism over-reliance on the West,

Also, Serbia is in the top 10 Chinese manufacturing FDI outbound investment destinations in 2023 ($6.4bn), wtf!!!

 

[supercat]

China's power consumption over Jan-May increased 8.6% year-on-year.

https://twitter.com/i/web/status/1803991995284955206

 

[henrik]

China's power consumption over Jan-May increased 8.6% year-on-year.

https://twitter.com/i/web/status/1803991995284955206

How much of the increase is due to AI computing?