Chinese Economics Thread

[mossen]

West will survive for decades behind that tariff wall but Chinese products, especially capital equipment and infrastructure, will make the rest of the world, the Global South, wealthy and advance which in turn will create more business for China.

In order to buy the (high-value) products China makes, the global south will first have to make money. And to make money they have to create and then sell high-value products themselves. Being an intermediary or a mere assembler is not enough.

China went through that phase and graduated to making its own stuff, often cheaper and better than the West. That hasn't happened so far for the rest of the "global south" and I doubt it will happen in the future.

Agree with your points that a Chinese supply-chain could be an opportunity for some of them, but would Chinese businessmen really prefer Nigeria over South-East Asia?

 

[GiantPanda]

In order to buy the (high-value) products China makes, the global south will first have to make money. And to make money they have to create and then sell high-value products themselves. Being an intermediary or a mere assembler is not enough.

China went through that phase and graduated to making its own stuff, often cheaper and better than the West. That hasn't happened so far for the rest of the "global south" and I doubt it will happen in the future.

Agree with your points that a Chinese supply-chain could be an opportunity for some of them, but would Chinese businessmen really prefer Nigeria over South-East Asia?

It is not the high end final goods. It's the capital equipment. The machinery and processes that makes stuff.

ALL countries have things to trade. Especially Africa and its primary resources. "Money" is just pieces of paper representing IOUs that people prefer to trade with today. What's actually being traded are stuff. China is already building out infrastructure in Road and Belt countries for access to raw material.

Businessmen, Chinese and otherwise, can buy Chinese capital equipment (say, the future EUV) at far cheaper prices than the West and use that to build things far quicker especially when starting out with a supply chain from China.

Nigerians can buy Chinese capital equipment and the initial Chinese supply chain to kickstart building things for Africa. Maybe eventually they can get efficient enough to compete with SE Asia. But what matters is they've started to industrialize locally. If successfully then they get wealthy and maybe buy high-end final goods from China.

Again, it is the capital equipment and infrastructure that Global South countries could buy in form of giving access to primary goods for China that will drive this transformation.

This is actually the crux of BRI.

 

[proelite]

In order to buy the (high-value) products China makes, the global south will first have to make money. And to make money they have to create and then sell high-value products themselves. Being an intermediary or a mere assembler is not enough.

China went through that phase and graduated to making its own stuff, often cheaper and better than the West. That hasn't happened so far for the rest of the "global south" and I doubt it will happen in the future.

Agree with your points that a Chinese supply-chain could be an opportunity for some of them, but would Chinese businessmen really prefer Nigeria over South-East Asia?

Global South can make money through commodities, energy, produce, services (tourism), and low-end manufacturing. China can enable the global south to skip the environmental, human, and capital costs of industrialization.

 

[Michael90]

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Dont think any chinese social media App will be as successful as Tiktok though. Not anytime soon

 

[Jiang ZeminFanboy]

Dont think any chinese social media App will be as successful as Tiktok though. Not anytime soon

There might be some very short period of honeymoon between Xi and Trump, like on the first presidential term when things like current growth of 小红书 is possible in the west, and then escalation will begin. My gut tells me that apps ban will be wide and fast, from Xiaohongshu, Shein to Wechat, I have the feeling everything bigger and popular will be banned.

 

[BlackWindMnt]

There might be some very short period of honeymoon between Xi and Trump, like on the first presidential term when things like current growth of 小红书 is possible in the west, and then escalation will begin. My gut tells me that apps ban will be wide and fast, from Xiaohongshu, Shein to Wechat, I have the feeling everything bigger and popular will be banned.

If the Americans can drag global south/BRICS country users with them to Xiaohongshu that would be a massive win tho for Chinese commerce and "soft power".
I didn't had this on my 2025 bingo card, Americans being the first over the finish line into the Chinese social media space.

 

[supercat]

I think I’m starting to understand why exports constantly keep rising sharply even with the global economy in such a slump.

It turns out that when Western economies take a hit and interest rates go up like now, global buyers feel the pressure.

With tighter budgets, they stop caring so much about brand prestige or flashy marketing and focus more on what’s affordable and reliable. And more often than not, that means they turn to products from China, and then they also learn that those don't lack anything.

This is why China manages to stay steady during tough times, still casually contributing about a third of global growth. If you dig a little deeper, though, you’ll probably find that their share is even bigger in real terms. Others may buy less in total, but more from China.

It’s also why, no matter how hard the West tries, they just can’t seem to move away from relying on Chinese products more.

This economic crisis in the West is actually beneficial for China, it makes it easier to grab some permanent market shares.

Two words: Global South. Here David P. Goldman talks about the rise of China's exports to the Global South:

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Another article endorsed by David P. Goldman: in this one, "Han Feizi" talks about "deflation" in China.

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