Chinese Economics Thread

[tphuang]

https://twitter.com/i/web/status/1962992215007101377

top R&D companies in the first half of 2025 and vs last year

 

[GulfLander]

Google translated

Chinese companies have completed the acquisition of Korean polarizer business, Hengmei Optoelectronics and Samsung SDI signed delivery documents | Nearly 6 billion yuan to acquire its polarizer production lines in South Korea and China, business, personnel and more than 1,000 intellectual property polarizers are known as the "chip" of optoelectronic displays. China has long relied on imports.

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[Wrought]

Europe finally recognizing the obvious reality w.r.t. solar.

A group of French and German economists has urged Europe to identify which industries to support in the face of Chinese competition and boldly abandon those where the battle had already been lost, such as the

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. The recommendations were presented in five memos to the Franco-German Council of Ministers at the request of the two governments. The memos cover trade with China, as well as defence, energy, economic growth and the labour market.

The economists advised Europe to protect sensitive sectors such as defence, space and robotics, while leaving mature industries open to cheap Chinese imports. They welcomed Chinese investment in critical technologies

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, provided that technology is shared, according to a summary published by the Franco-German Council of Economic Experts.

Jean Pisani-Ferry, a French economist and co-author of the memos, pointed to solar panels as a clear example of an industry Europe should concede. “Chinese industry is far ahead of everyone else and there’s no longer a solar panel industry in Europe,” he told French TV channel BFMTV Business last Friday. Ultimately, it’s not such a big deal because solar panels stay in place once installed. They do not create a dependence, unlike gas, which you need every day. Hence, it’s a technology in which we have to admit that we’ve lost the battle.”

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[Wrought]

Paper about historical supply-driven deflation, and why it's not necessarily a bad thing.

Deflation is often presumed to depress economic activity, push nominal rates to their effective lower bound, and cause financial disintermediation. We revisit 1880–1900 (one of the few periods where deflation was commonplace), assembling annual data for 12 economies and estimating a sign-restricted Bayesian panel VAR. We identify supply- and demand-driven deflation and trace effects on short-term rates and financial intermediation. Positive supply shocks lower prices and raise output without reducing nominal rates or intermediation, whereas negative demand shocks produce lower nominal rates and disintermediation. FEVDs show sizable supply contributions. Therefore, our findings suggest that policy should “look through” supply-driven deflation.

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[Wrought]

Some notes on the implications of Power of Siberia 2 on alternative commercial LNG contracts.

Together, PoS2 and the expansion of the two other pipelines would add 58 bcm of pipeline capacity to China, potentially strongly reducing the country’s future LNG demand. While the additional 8 bcm/y from the two pipeline expansions expected by 2031 will only marginally affect China’s medium-term LNG demand (

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), it will introduce another bearish factor at a time when around 360 bcm/y of new LNG export capacity is expected to come to market by the early 2030s. The impact of the pipelines on global LNG markets will depend on whether and how quickly PoS2 ramps up during the 2030s and how fully it is utilized. Even at 50 percent utilization, PoS2 starting in the early 2030s could extend the expected oversupply of the late 2020s — exerting downward pressure on prices, narrowing

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, preventing some LNG projects from taking final investment decision, and limiting uncontracted Qatari LNG capacity from securing additional Chinese deals.

Meanwhile, around 75 bcm/y of Chinese LNG contracts are due to expire in the 2030s. Access to cheap Russian gas would give Chinese companies a powerful bargaining tool, allowing them to extend only the contracts that best align with their needs in terms of volume, pricing, and geopolitics. Australia, Qatar, and portfolio players will be particularly exposed. These pipeline deals will also increase interregional pipeline trade, which fell significantly after Russia’s invasion of Ukraine, as well as Asia’s exposure to pipeline supplies. While it remains uncertain whether China will replace Europe as the global balancing market — as these pipeline supplies seem likely to remain cheaper than LNG supplies — Chinese companies with large LNG portfolios, including US LNG, will become increasingly powerful at arbitraging between regions.

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[FriedRiceNSpice]

Ahahah...that time is long gone unfortunately. Russia already made sure Cbina recognised mongolia's separation from China. Else China could have easily retaken the territory back.

By Russia you mean the USSR. Today's Russia couldn't care less about Mongolia. That said, I seriously doubt the CPC has any plans to annex Mongolia in the foreseeable future.

 

[FriedRiceNSpice]

Mongolia is a western stooge country in the middle of Russia and China. They are a huge security risk. I don't trust Mongolia at all in its current form. Unless there is a major change in Mongolian politics, this pipeline is more trouble than worth

Mongolia is not a self sufficient country and it is landlocked between Russia and China. When people are hungry, they tend to listen to whoever can supply them with food.

 

[Wrought]

Ok, I'll give credit where it's due. Bessent has a nice sense of humour.

Treasury Secretary Scott Bessent in July suggested some irony in the current state of affairs. Much of the European business model was based on cheap Russian energy, a “depressed” exchange rate — back in the 2010s, the continent’s debt crisis sent the euro lower — and exporting to China.

But now, “China has jiujitsu-ed the model,” Bessent said. In other words, China’s got the cheap Russian energy and exchange rate. And it’s exporting to Europe.

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[Michael90]

Mongolia is not a self sufficient country and it is landlocked between Russia and China. When people are hungry, they tend to listen to whoever can supply them with food.

Agree. But looking at the way Mongolians hate China, i think they will rather join Russia than China. Well, except things change in a few decades with a new generation coming up while the old guard who grew up under soviet occcupation/influence/propganda dies off politically.

 

[HighGround]

Paper about historical supply-driven deflation, and why it's not necessarily a bad thing.

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Reading a paper that relies on studying mostly gold-standard economies is pretty hilarious.