Miscellaneous News

Deleted member 24525 · Nov 9, 2023

SanWenYu said:
Their high nominal GDP reflects the fact that the world is run by the rules set by the westerners. If the west collectively decide to hide behind the high walls of their nice little gardens (say hi to Borrell the gardener), their money will no longer have the same buying power. Why would we the babarians take their money if we are not allowed buy from them?

Their high nominal GDP reflects their technological advantage. That is how they set the global rules in the first place. Aside from the major exception of China, the overwhelming majority of trade conducted by developed countries is with other developed countries, not with the global south.

SanWenYu said:
This statement does not make sense at all. If China can unite the global south and create a new world, the return will be huge.

The global south has 80% of the worlds population and encompasses 3 entire continents with over a hundred countries and literal thousands of unique cultures and languages. China will not be 'uniting' the global south, or creating a new world by doing so, nor are these actually its aims. It is seeking to cultivate a large alternative export market, both to give it bargaining power in trade negotiations with the west, and to simply grow its economy in general. In this comparably modest respect it is doing quite well.

The crux of China's development and economic vitality is and will always be what is going on inside the country. The demand contained within China's domestic market vastly exceeds that of the export market even in a good year, and this demand on its own is sufficient to support the construction of a comprehensive modern industrial network, and the development of world-leading technological capabilities. While this means that China has a unique ability to hold its development trajectory in its own hands, it also means that it is fully responsible for any failures therein.

The foreign market and the outside world in general is just the wrong thing to focus on if you want to get a good understanding of what will determine China's strength and success going forward, and I would recommend getting out of that mindset as quickly as possible.

SanWenYu · Nov 9, 2023

Boltzmann said:
Their high nominal GDP reflects their technological advantage. That is how they set the global rules in the first place. Aside from the major exception of China, the overwhelming majority of trade conducted by developed countries is with other developed countries, not with the global south.

They used to have the technological advantage. But they are obviously no longer believe in it themselves. So they resort to the protectionism trade barriers. Huawei would have sweeped all the floors. Now come the NEVs, solar panels and wind turbines.

With this technological advantage diminishing, how will they maintain the high buying power of their currencies? Walling themselves off will only make their own products even less competitive. Technological advantage must be realized in actual, tangible products to make money which in turn maintain the buying power of the currency.

Boltzmann said:
The global south has 80% of the worlds population and encompasses 3 entire continents with over a hundred countries and literal thousands of unique cultures and languages. China will not be 'uniting' the global south, or creating a new world by doing so, nor are these actually its aims.

If the west decide that the current world order no longer works for them and wall themselves off in gardens, China will be forced to work with the global south to create a new world order in the wiilderness. Sure this is not the aim for China. But it will have to be in a plan for contingency.

Boltzmann said:
It is seeking to cultivate a large alternative export market, both to give it bargaining power in trade negotiations with the west, and to simply grow its economy in general. In this comparably modest respect it is doing quite well.

Agreed.

Boltzmann said:
The crux of China's development and economic vitality is and will always be what is going on inside the country. The demand contained within China's domestic market vastly exceeds that of the export market even in a good year, and this demand on its own is sufficient to support the construction of a comprehensive modern industrial network, and the development of world-leading technological capabilities. While this means that China has a unique ability to hold its development trajectory in its own hands, it also means that it is fully responsible for any failures therein.

Agreed.

Boltzmann said:
The foreign market and the outside world in general is just the wrong thing to focus on if you want to get a good understanding of what will determine China's strength and success going forward, and I would recommend getting out of that mindset as quickly as possible.

China will never go back to the days of self isolation. It has to pay attention to the outside world. It requires a peaceful world to develop. But one cannot beg for peace, as China has learned.

FairAndUnbiased · Nov 9, 2023

tamsen_ikard said:
Trade wars can be bad for Europe but its also bad for China as well. Especially now, When China is no longer contract manufacturer but active brand builder.

Chinese brands will be the primary driver of China's future growth. So, Chinese branded Cars, Tvs, Computers, Phones, Apps such as Tiktok and Temu. These Chinese branded products will have much bigger profit if they have access to US, EU and other western allied markets.

But the way the new cold war is going, I feel the west will never allow Chinese branded products to have market share in the west. Just like how they killed Huawei's market access in the west, they will ban all Chinese branded products with the accusation of Spying, hacking and whatever excuse they can find.

The west has 55 billion in nominal GDP which is more than 50% of world nominal GDP. This is the biggest buying power. So, if Chinese brands are forced to just rely on Chinese market and the global south, then they will survive ofcourse but they will not have all the revenues and profits they could get. This will in turn slow down China's GDP growth rate. Over the long term, having two different tech ecosystem of China and the West is not good for China's future wealth and prosperity.

So, right now China will do anything, even kowtow if they have to stop US and EU from sanctioning Chinese branded products and apps. That's why you see Tiktok bending the knee just to maintain market access.

Europe and US are already rich and can afford to attack China. But China is still poor and wants to be rich. So, it has no choice but to make concessions just to have the opportunity to become rich. Thats why China was forced to do the trade deal with Trump. They essentially bent the knee because they were in a weaker position.

China will have to play a very delicate diplomatic game so that US and Europe do not become too hostile to ban everything Chinese. And this is what they are doing. When US attacks with sanctions and bans, China does not retaliate proportionally. They do a symbolic retaliation but keep asking for peace and for a deal. This is how they want to reduce US and western animosity towards China and continue to gain wealth.

This is China's biggest long term crisis, How to keep US and EU market for Chinese products over the long term.

So far I think its hopeless. The trend is extremely negative.

What is buying power? You are thinking about this in the wrong way. Money is just a number. Don't believe me? Try eating it when you're in a desert. You can burn the cash portion ineffectively to stay warm when cold. You can melt down the coins for tools.

But wouldn't it be nice to exchange it for food, fuel and tools? But what if someone refuses to accept your particular money for food, fuel and tools because its perceived as - or mandated to be - worthless?

It's not China that has to worry about its brands being banned. If China simply asks "no USD please" what do you think happens? It's like the threat of banning China from SWIFT. What is more important, being warm, fed and clothed or rigidly insisting on using a particular bank payment tool and absolutely 100% refusing to use another to the death?

coolgod · Nov 9, 2023

FairAndUnbiased said:
What is buying power? You are thinking about this in the wrong way. Money is just a number. Don't believe me? Try eating it when you're in a desert. You can burn the cash portion ineffectively to stay warm when cold. You can melt down the coins for tools.

But wouldn't it be nice to exchange it for food, fuel and tools? But what if someone refuses to accept your particular money for food, fuel and tools because its perceived as - or mandated to be - worthless?

It's not China that has to worry about its brands being banned. If China simply asks "no USD please" what do you think happens? It's like the threat of banning China from SWIFT. What is more important, being warm, fed and clothed or rigidly insisting on using a particular bank payment tool and absolutely 100% refusing to use another to the death?

To add on to this point, only the US can print USD, Europe can only print Euros. USD is backed by the US military, what is the Euro backed by? Not NATO that's for sure. USD can still be used to buy oil and grains what can the Euro buy? Only Airbus and legacy luxury products.

Europe is completely replaceable for China for the future, launching a trade war with China will only accelerate their decline.

Arij Javaid · Nov 9, 2023

tamsen_ikard said:
Trade wars can be bad for Europe but its also bad for China as well. Especially now, When China is no longer contract manufacturer but active brand builder.

Chinese brands will be the primary driver of China's future growth. So, Chinese branded Cars, Tvs, Computers, Phones, Apps such as Tiktok and Temu. These Chinese branded products will have much bigger profit if they have access to US, EU and other western allied markets.

But the way the new cold war is going, I feel the west will never allow Chinese branded products to have market share in the west. Just like how they killed Huawei's market access in the west, they will ban all Chinese branded products with the accusation of Spying, hacking and whatever excuse they can find.

The west has 55 billion in nominal GDP which is more than 50% of world nominal GDP. This is the biggest buying power. So, if Chinese brands are forced to just rely on Chinese market and the global south, then they will survive ofcourse but they will not have all the revenues and profits they could get. This will in turn slow down China's GDP growth rate. Over the long term, having two different tech ecosystem of China and the West is not good for China's future wealth and prosperity.

So, right now China will do anything, even kowtow if they have to stop US and EU from sanctioning Chinese branded products and apps. That's why you see Tiktok bending the knee just to maintain market access.

Europe and US are already rich and can afford to attack China. But China is still poor and wants to be rich. So, it has no choice but to make concessions just to have the opportunity to become rich. Thats why China was forced to do the trade deal with Trump. They essentially bent the knee because they were in a weaker position.

China will have to play a very delicate diplomatic game so that US and Europe do not become too hostile to ban everything Chinese. And this is what they are doing. When US attacks with sanctions and bans, China does not retaliate proportionally. They do a symbolic retaliation but keep asking for peace and for a deal. This is how they want to reduce US and western animosity towards China and continue to gain wealth.

This is China's biggest long term crisis, How to keep US and EU market for Chinese products over the long term.

So far I think its hopeless. The trend is extremely negative.

Europe will not be an important player in the coming decades as it's in a constant perpetual decline. It has lost technological edge to US and are suffering from ethnic issues due to mass immigration. China should instead focus on building better relationships with emerging economies like India and Infonesia as they will be asian giants in the future. India already is one but needs more self-sufficiency. And you should not measure purchasing power in nominal rates. US dollar will continue to lose value in the coming decades as the rest of the world starts to diversify their currency holdings and US GDP share in the world continues to decline. What china needs to do is to stop appeasing the west for its brands. If they don't want it. Fine. What china needs to do is to focus on self-sufficiency and improving domestic consumption. Everything else is secondary. Asia will be the largest market for goods and China should focus on expanding brands to Asian countries.

KYli · Nov 9, 2023

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GZDRefugee · Nov 9, 2023

Biscuits said:
Yes, with the caveat that US would need to prove it can actually present a response justifying threat in anything other than military first.

Cultural, media, informational control and influence are not threats? The US exports ideology while China does not. For many Chinese, neoliberalism is the drug of choice.

Biscuits said:
Why should China change up its strategy and take on more risks when every day widens the gap in the status quo?

By the vast majority of metrics we statists use to measure a country's development, the US is neck at neck with or ahead of China. China is doing the catching up, not the US. You can cherry pick things like the Nature Index for the good feelings all you want. However in reality, things like median income is an order of magnitude (ie. 10*CN = US) in difference. Hence the reason why many Chinese still emigrate to the US despite the "climate".

ZeEa5KPul · Nov 9, 2023

GZDRefugee said:
things like median income is an order of magnitude (ie. 10*CN = US) in difference.

It's not that simple and I'm surprised you would make such a naïve comparison. What are healthcare costs vs. outcomes in the US and China? What are the respective levels of home ownership? What's the size of the parasitic FIRE sector relative to the industrial economy in each country? Where is the greater public safety? Levels of satisfaction in government?

Biscuits · Nov 9, 2023

GZDRefugee said:
Cultural, media, informational control and influence are not threats? The US exports ideology while China does not. For many Chinese, neoliberalism is the drug of choice.

By the vast majority of metrics we statists use to measure a country's development, the US is neck at neck with or ahead of China. China is doing the catching up, not the US. You can cherry pick things like the Nature Index for the good feelings all you want. However in reality, things like median income is an order of magnitude (ie. 10*CN = US) in difference. Hence the reason why many Chinese still emigrate to the US despite the "climate".

China is not likely to get the same per capita income as US in a long time. But thinking China needs the same income in order to dominate US is also deluded. US has 330 million people. If even 330 million inside China has the same income as the other 330 million US (and they do), they will already have signficant edge in terms of national power.

Most US "per capita" income is heavily skewed because of wealth distribution. Chinese don't need to be richer than US oligarchs to outpace them, just be richer than the average US worker.

ZeEa5KPul · Nov 9, 2023

Biscuits said:
China is not likely to get the same per capita income as US in a long time. But thinking China needs the same income in order to dominate US is also deluded. US has 330 million people. If even 330 million inside China has the same income as the other 330 million US (and they do), they will already have signficant edge in terms of national power.

Most US "per capita" income is heavily skewed because of wealth distribution. Chinese don't need to be richer than US oligarchs to outpace them, just be richer than the average US worker.

It's deeper than that. "Per capita income" doesn't mean the same thing in both places, and I don't think PPP adjustment adequately captures the difference. A Chinese buyer can purchase a first-rate EV for less than $40,000 (and with lower interest payments on a loan) that is either unavailable in America or if something comparable is, it's north of $100,000.

I dislike the term "world's factory" because it's a holdover from the days China made textiles and plastic garbage, but in a sense it's more true today than it was then. Living in the world's factory means you have a bewildering array of superb products at rock bottom prices because of the cutthroat competition between companies and the government's support of industry.

By contrast, a lot of the wealth in America is just paper money and inflated assets. There's nowhere near enough productivity to back up that money if it ever left the closed speculative finance loop.

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