Chinese Economics Thread

[iewgnem]

Agreed

But on a practical level, if China can produce everything better and cheaper, what does China actually need to buy from overseas?
And in order to make overseas products cheaper than Chinese products, you have to make the RMB overvalued.
That would imply the RMB has to double in value against the USD, which would take a decade if managed gradually.

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The other solution is for Chinese companies to open factories abroad and produce locally, so China does export less.
Given how automated factories are these days, it shouldn't make much difference in job numbers.
But then you have political risk with factories located elsewhere, so you want to locate these factories in friendly locations.

Western economic thinking believes in comparative advantage, but they never imagined they would be on the side of being only good for primiary resources with nothing else to offer.

Its ultimately an identity problem, comparative advantage doesnt actually say all parties will be equally wealthy, and the west is struggling to come to term with the fact that they have no more to offer the world comparatively than Africa, and as such will, through trade, converge to their natural living standard thats equal to Africa, from both directions.

Whats actually unsustainable is for a western country who sells rocks to be more wealthy than an African country selling rocks.

 

[dingyibvs]

Not as long as they are local brands. If they're Western brands, then there should be a reason they are used, such as either being superior tools to do a better job while local alternatives are developed, or to take apart and study to improve domestic brands.

Yeah, it powers an enemy government and military. What do Chinese people get out of it? 10 seconds of culinary enjoyment to afford the Japanese another round of ammo they want to fire at us in Taiwan.

Unfortunately, in the real world, very few Chinese people are so political. They'd learn if they went to the West to witness the fear and hatred of their kind or if they were able to read online what American politician and MAGA want to do to China.

You can't think of countries like households. Trading manufactured products for Gucci bags and wagyu encourages the development of factories and engineers in China while encouraging designers and agriculture elsewhere. No amount of money can buy you ammo when all you have at home are crazy fat cattles. Just look at the US right now, many times the spending on military yet both quantity and quality is progressing at a far slower pace than China.

 

[pbd456]

it is a good trade for essential goods to luxury goods to help out trade balance. they would.have to.think twice to apply sanction to china in.the future.

 

[AndrewS]

You can't think of countries like households. Trading manufactured products for Gucci bags and wagyu encourages the development of factories and engineers in China while encouraging designers and agriculture elsewhere. No amount of money can buy you ammo when all you have at home are crazy fat cattles. Just look at the US right now, many times the spending on military yet both quantity and quality is progressing at a far slower pace than China.

What makes a product luxury?

If you ignore the branding, China can produce comparable luxury goods in terms of the actual design and quality.

It just seems wasteful to pay for overpriced "branding", especially if the profits go to companies based in hostile countries. In terms of handbags, remember the actual production cost is usually in the region of $200-$500, yet they are sold for thousands.

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So shouldn't China develop its own domestic luxury brands, which then go global?
Imagine a world where Chinese luxury brands have replaced European luxury brands...

EDIT. Actually, in the past, the luxury goods of the time were Silk, Porcelain and Tea from China.
And sailing ships to Asia were the spaceships of their time.

 

[AndrewS]

it is a good trade for essential goods to luxury goods to help out trade balance. they would.have to.think twice to apply sanction to china in.the future.

But what sanctions can work against China?

The US already tried that recently in the trade war, but the US backed down after Ford's automobile factories started to shut down, and Raytheon was 3 weeks away from stopping production of missiles.

 

[tphuang]

What is your attitude? Sell them our toys, sneakers, cars, appliances/electronics, etc... and buy from them cheese, wine, beef, Gucci, etc...? We sell at the most competitive prices in the world and they sell to us at premium prices for their "Made in EU/USA" tags? What is the point? What does "nobody" mean? Know your enemies and know your friends.

There are many nations that are friends of China. Those nations should be traded with; we should help them improve their lives with our products and they can supply us with what we need from them to grow and develop further. That is the purpose of trade. Both China and these countries should prosper.

Then there are countries that are enemies of China. They have antagonized China for decades sitting by America's side. Their technologies should be made obsolete, their products copied and improved, and thier prices undercut so that they can no longer find a niche for themselves on the international market. These countries should languish and find themselves in the same situation as the countries in the global south that they oppressed.

Right now, world trade is extremely unfair. There are first world Western countries that use their control of technology and finance to keep other countries poor, producing things that are sold at cheap prices to keep the Western countries rich and their lives easy. China is the only country that can out innovate them and make everything they produce globally uncompetitive. Then, who needs their currency (Euro, dollar, yen) if no one needs anything from them? If no one needs their currencies, then how can they control finance? Once that is broken, they will be the new poor nations struggling to produce what they need for their lifestyles. Of course, the finishing touch on this is that China is also the only country that can build a military that can prevent them from using force against smaller nations that economically pivot away from them.

This should be the end goal and meaning of trade from a Chinese perspective, to create a world where our enemies are weak and sidelined while China and our allies become powerful and dominant.

you seem to have no clue what has made Chinese industry where it is right now. This level of ignorance is just embarrassing.

https://twitter.com/i/web/status/2011275063325004287

Trade surplus (goods) of 1.189 trillion USD.

this is exactly the kind of stuff that is going to have to push up RMB.

We are now at USD/CNY = 6.97