Chinese Economics Thread

[FactsPlease]

These days geopolitics dominates media such as Korea peninsula, India border, and SCS, while this guy (Steven Bannon) had pointed out the inevitable "economic war" between US and China.
-- people had said that Bannon is the only one in Trump's government that can think 2 or 3 steps ahead

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Quote:
“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.”


Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.
...
“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we're five years away, I think, ten years at the most, of hitting an inflection point from which we'll never be able to recover.”

Bannon’s plan of attack includes: a complaint under Section 301 of the 1974 Trade Act against Chinese coercion of technology transfers from American corporations doing business there, and follow-up complaints against steel and aluminum dumping. “We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us.”

BTW, Canada is about the re-negotiate w/ US government for NAFTA terms. It clearly indicates not just the dominating role of US to Canada, but also how it (US) can ignore international agreement. Sadly, media again holds double standards:

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[PiSigma]

These days geopolitics dominates media such as Korea peninsula, India border, and SCS, while this guy (Steven Bannon) had pointed out the inevitable "economic war" between US and China.
-- people had said that Bannon is the only one in Trump's government that can think 2 or 3 steps ahead

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Quote:
“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.”


Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.
...
“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we're five years away, I think, ten years at the most, of hitting an inflection point from which we'll never be able to recover.”

Bannon’s plan of attack includes: a complaint under Section 301 of the 1974 Trade Act against Chinese coercion of technology transfers from American corporations doing business there, and follow-up complaints against steel and aluminum dumping. “We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us.”

BTW, Canada is about the re-negotiate w/ US government for NAFTA terms. It clearly indicates not just the dominating role of US to Canada, but also how it (US) can ignore international agreement. Sadly, media again holds double standards:

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Steve bannon is pretty much the craziest of the crazys on trumps team. He is essentially a neo Nazi.

Justin already screwed us on nafta by wanting to add useless filler like indigenous and gender equality fluff to a trade agreement, its like he was born yesterday.

 

[AssassinsMace]

Bannon's worried over US supremacy not economics. Those trade actions will do nothing to China but make it more independent. Transfer of technology only happens because US companies okayed it. If the American company doesn't like it, they don't have to give China anything. They do it because they do get something called getting something in return, called making money from China or they wouldn't do it in the first place. Bannon thinks trade is only a dollar-for-dollar exchange. That's why American alliances are at risk with Trump. He doesn't equate trade deficits as payment for US power and influence in those countries. They like to go with the propaganda that others countries naturally love the US and not because of how much money they can make from Americans hence why alliances are threatened.

China is another story. US corporations are exploiting slave labor. That doesn't count in the trade deficit. Just like the millions Hollywood movies make in China doesn't get counted in the trade deficit either. Where's all the Chinese movies shown in US theaters? Yet the only reason Hollywood thinks it's the victim is because they think they deserve all the money made from the Chinese box office and not a percentage. All of the sudden the normal trade accounting changes when Chinese movies aren't making the same amount of money in the US box office as Hollywood is in China as fair trade is supposedly argued. And of course 60% of China exports to the US are foreign corporations outsourcing their products and shipping them to the US. Does Samsung who makes and profits from outsourcing to China and then shipping those products directly to the US get counted as a South Korean export? No, it's counted as a Chinese export. Do iPhones where the majority of its most expensive parts are outsourced from many other countries get evenly divided as exports of their respective countries in US trade accounting? No but China just assembling them together makes it a 100% Chinese export and Apple in Cupertino, CA gets to keep 100% of the profits when iPhones are sold to consumers. The US opened diplomatic and economic relations with China because it needed a credible counter against the Soviet Union during the Cold War. The US wins the Cold War and China saves the US and the world from the nuclear annihilation everyone in the world believed was inevitable. The US lives on to be the undisputed power in the world forgetting what China did for them while ironically complaining how other countries owe the US for protecting them from the evils of the world and how their unappreciated trade deficits show disrespect.

Bannon turned the Trump Administration into a disaster and the economy will be next.

 

[antiterror13]

now I read
China reclaims its position as largest foreign holder of US Treasuries
Updated 2017-08-16 11:56 GMT+8

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which contains this table:

I don't see this title to be proud of ... quite "shameful" actually

 

[Equation]

I don't see this title to be proud of ... quite "shameful" actually

Actually it is advantageous to China if they ever want to react to US trade sanction on them.

 

[sanblvd]

These days geopolitics dominates media such as Korea peninsula, India border, and SCS, while this guy (Steven Bannon) had pointed out the inevitable "economic war" between US and China.
-- people had said that Bannon is the only one in Trump's government that can think 2 or 3 steps ahead

Please, Log in or Register to view URLs content!

Quote:
“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.”


Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.
...
“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we're five years away, I think, ten years at the most, of hitting an inflection point from which we'll never be able to recover.”

Bannon’s plan of attack includes: a complaint under Section 301 of the 1974 Trade Act against Chinese coercion of technology transfers from American corporations doing business there, and follow-up complaints against steel and aluminum dumping. “We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us.”

BTW, Canada is about the re-negotiate w/ US government for NAFTA terms. It clearly indicates not just the dominating role of US to Canada, but also how it (US) can ignore international agreement. Sadly, media again holds double standards:

Please, Log in or Register to view URLs content!

To be fair, Bannon do have a point, China is acting very smart in trade negotiation, but its not really China's fault but more like US's incompetence. Unlike US, China do have a national goal and strategy and they act accordingly in all sectors such as trade, economy, politics, policy etc for its accomplishments.

In US, all you have is bunch of interest with very little coordination between them, everyone is acting on behaves of their own interest and some of those interest are good for their own but it does not benefit America. China on the other hand, knows what it want, and it uses its unifying negotiation power to get what it want.

And I am conflicted by this, as an American I really do hope US get its act together, come up with some kind of national plan and strategy like China instead of just reacting to things as they come, on the other hand, as a Chinese I'm glad to see China getting stronger.

PS, breaking news, look like Bannon has just been fired by Trump haha

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[kurutoga]

To be fair, Bannon do have a point, China is acting very smart in trade negotiation, but its not really China's fault but more like US's incompetence. Unlike US, China do have a national goal and strategy and they act accordingly in all sectors such as trade, economy, politics, policy etc for its accomplishments.

In US, all you have is bunch of interest with very little coordination between them, everyone is acting on behaves of their own interest and some of those interest are good for their own but it does not benefit America. China on the other hand, knows what it want, and it uses its unifying negotiation power to get what it want.

And I am conflicted by this, as an American I really do hope US get its act together, come up with some kind of national plan and strategy like China instead of just reacting to things as they come, on the other hand, as a Chinese I'm glad to see China getting stronger.

PS, breaking news, look like Bannon has just been fired by Trump haha

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The main issue I think is once China is forbidden to export to the US, plenty of Asian countries will love to fill the void. So from US point of view it does not really change much (other than losing China as a market). So, the trade war may hurt China but it may not benefit US much. The bigger issue is systemic and long term: how to make US economy more competitive. Wages difference should be explained in value added by the workers. This issue is long term, it starts from education and training. By making manufacturing more competitive, Trump is on the right direction but I am afraid the congress may not allow him finish his work.

I also think a major misconception is once the manufactured products are more customized, more automated, US will have an advantage over China since it is robots vs robots. The issue here is with the education system in US there will not be nearly as many young people trained to program these robots compared to China. So I think the overall social issue is education and how to make your next generation adapt to the future industries.

 

[sanblvd]

The main issue I think is once China is forbidden to export to the US, plenty of Asian countries will love to fill the void. So from US point of view it does not really change much (other than losing China as a market). So, the trade war may hurt China but it may not benefit US much. The bigger issue is systemic and long term: how to make US economy more competitive. Wages difference should be explained in value added by the workers. This issue is long term, it starts from education and training. By making manufacturing more competitive, Trump is on the right direction but I am afraid the congress may not allow him finish his work.

I also think a major misconception is once the manufactured products are more customized, more automated, US will have an advantage over China since it is robots vs robots. The issue here is with the education system in US there will not be nearly as many young people trained to program these robots compared to China. So I think the overall social issue is education and how to make your next generation adapt to the future industries.

You are right about the export thing, because I know when TPP was slated to be implemented, you already see hundreds of Chinese company open shop in Vietnam, Philippine and Malaysia to take advantage of the lower tariff from TPP's benefit. Also the company I work provide raw material export to Asia, and personal experience, Chinese own companies completely dominate South East Asia manufacturing companies.

And yes, US is not doing a good job education its young people or re-educating its older workers, this can be attributed to US's education's bad policy or the laziness of the American people.

As for manufacturing I don't think US can take it back from China, currently China holds the king for manufacturing, and unlike the past when labor gets expensive job moves, China is not going giving it up that easily, they are only 2nd to US in investing in robotic, automation and AI. All of this represents how China is fighting for every manufacturing job.

I also think China have another overwhelming advantage due to the fact that current supply chain and manufacturing already exist in China, so when China do automation it will be much easier to adopt, for example a Chinese factory knows which task can be easily automated and which are not, this means instant feedback and trial and error, much faster adoption and much lower risk.

Where as in US they hope to regain back manufacturing from scratch which will be much higher risk and cost. (One possible way for work is for US to integrate its economy with Mexico, where Mexico provide cheap labor, and US provide semi automated assembly, I think this is already put into effect and some jobs will go back to US but not all)

As for technology innovation, right now I think US holds advantage over China but this advantage is shrinking fast.

In the end the most screwed up country left is going to be India, as China and US automates and compete for manufacturing jobs, India will get left behind even more, they don't have the know how and the capital that US and China have build up over the past decades that means India have less money to work on their own robotic and automaton. So good luck to their 1.3 billion people.

 

[antiterror13]

Actually it is advantageous to China if they ever want to react to US trade sanction on them.

Well, in highly unlike event of war between China and the US ... the US would simply seize it and/or would declare the treasuries held by China is void. And it has happened before

 

[sanblvd]

Well, in highly unlike event of war between China and the US ... the US would simply seize it and/or would declare the treasuries held by China is void. And it has happened before

Its not that easy, the day US does that its the day US economy is over. Today the dollar and all currently are fiat, that means there is no intrinsic value backing the dollar, the value behind the dollar is the people's trust that US government is good for it.

When US declare a huge part of its money supply as null and void, what do you think the rest of the people who still holds the dollar going to do? People are going to dump it as crazy, people will be try to spend whatever dollar they have to buy as much hard asset as they can, then of course people with such assets will stop accepting the dollars as legal tender or dramatically increase the selling price base on dollar to offset the new risk (Hyper inflation). Before long dollar will ONLY work in United States itself, end of the dollar as world reserve currency, end of US empire. So no, US will not shoot itself in the foot by declare Chinese debt void