Trade War with China

2handedswordsman said:

Very intrested to see your findings...but i have to admit, it's funny to say, but a marxist-leninist party (as CCP describes itself) , is impying somekind of this...

"In order for capitalism to generate greater profits than the home market can yield, the merging of

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and industrial cartels produces

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—the exportation and investment of

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to countries with underdeveloped economies. In turn, such financial behaviour leads to the division of the world among

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business companies and the

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. Moreover, in the course of colonizing undeveloped countries, business and government eventually will engage in

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conflict over the economic

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of large portions of the geographic world and its populaces. Therefore, imperialism is the highest (advanced) stage of capitalism, requiring monopolies (of labour and

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exploitation) and the exportation of finance capital (rather than goods) to sustain colonialism, which is an integral function of said economic model.Furthermore, in the capitalist homeland, the super-profits yielded by the colonial exploitation of a people and their economy permit businessmen to bribe native politicians, labour leaders and the

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(upper stratum of the working class) to politically thwart

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(labour strike)."

Took from V.I. Lenin's "Imperialism, the Highest stage of capitalism" (1917)

Imperialism is not always about guns and troop invasions

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2handedswordsman said:

Very intrested to see your findings...

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Hendrik_2000 said:

I can't get access to your article. ...

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Debt problems also exist at company level. This is because the big Chinese state-owned enterprises that build, operate and invest in many BRI projects are — on average — extremely highly leveraged.

A study by the Financial Times shows that the top 10 Chinese construction and engineering contractors active outside China are nearly four times more highly leveraged than the top 10 non-Chinese companies.

The data show that in terms of total debt to ebitda (earnings before interest, tax, depreciation and amortisation), a common measure of a company’s ability to repay its debts, the top 10 Chinese contractors had an average multiple of 9.2 times, signifying extreme indebtedness. Their non-Chinese counterparts had an average multiple of 2.4 times.

“The big state-owned enterprises are run by Communist party politicians,” said a senior Chinese official, who spoke on condition of anonymity. “They are rewarded for political loyalty and motivated by a desire to please their party bosses by getting involved with big BRI projects. Debt is just not a big concern for them.”

In some cases, “white knight” Chinese investors are far more heavily indebted than the companies they “rescue”. Cosco Shipping Holdings, parent of China Cosco Shipping, which bought a controlling stake in Greece’s largest port in 2016, was six times more leveraged than the Piraeus Port Authority it bought.

The Piraeus investment has proven successful, driving new business to the Greek port. However, the debt mismatch shows that Chinese companies — especially the 98 huge corporations that are owned by SASAC, a central government holding company — are playing by different rules. Because these companies are centrally owned by China’s government, they can run up massive debts without fear of bankruptcy.

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Jura said:

there's an interesting point made in the discussion below that article:

"Atlguy Aug 8, 2018 One thing not discussed are the terms of the Chinese loans. These seem a bit secretive as they must be quite onerous. ...

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vincent said:

Risk premium if it is true

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Hendrik_2000 said:

I think the article is a piece of propaganda demonizing China . Now if you took a loan with bank the bank, normally they ask you for collateral. And if you can't pay back the loan the bank will repossess your collateral It is normal practice Why it is so different for China? Is there different set of standard for the west and one for China? It is hypocrisy to the hilt

Now the loan normally come with interest To begin with there is no free lunch in this world and those loan are the result of sweat and toil by the Chinese people. It will be unfair for them to give it for free to other when china is not even rich country now
Not to mention the moral hazard of giving freebie because it will remove the principle of accountability via LKJ86

West has no grounds for criticizing China model in Africa
By Wang Wenwen Source:Global Times Published: 2018/8/27 22:38:40

Next week will see leaders from across Africa gather in Beijing for the Forum on China-Africa Cooperation. The triennial summit, themed "China and Africa: Toward an Even Stronger Community with a Shared Future through Win-win Cooperation," will once again bring China-Africa cooperation onto the international agenda.

Even before the summit convenes, Western media have started to scrutinize the China-Africa relationship. An opinion article published by the Financial Times argued that China's engagement in Africa and its infrastructure-driven economic model is "failing" this continent.

Nonetheless, such a tone fails to appreciate China's evolving role in Africa.

In the early years of China's engagement in Africa, Beijing emphasized exchanging raw materials for China-made products. This has now been supplemented by Chinese aid and investment projects that address the continent's demands for infrastructure. As of now, China is the leading financier of infrastructure projects in Africa, averaging about annual $11.5 billion in investment over 2012-16.

China's aid and development financing fills a void left by Western countries which sought to use aid to influence the domestic politics of African countries and extract political gains. Unlike the West, what China has been doing in Africa is not paying lip service. At the last forum in 2015 in Johannesburg, South Africa, Chinese President Xi Jinping pledged $60 billion for African development over the next three years.

China hopes to help Africa achieve better development by aiding its industrialization and infrastructure, through creating local jobs and mobilizing its labor force. China does not want African countries to copy its model. Rather, by lending its development experiences, China hopes that these countries can explore their own development path and become another young global economic locomotive and world factory.

Meanwhile, the intention of Chinese projects in Africa is not altruistic. Beyond strengthening ties with the continent, China is also looking for new export markets for its labor and goods and standardizing its technologies.

From this perspective, China's engagement with Africa fits the very concept of win-win cooperation that China has been working on - China calls it "win-win" when countries work together for the common benefit of humanity. This is also the theme of the upcoming forum.

How Africa can develop is not up to outsiders to decide. What it needs is necessary support to facilitate development. With its size and demographic advantage, Africa should benefit from globalization. The West in the past took Africa as a place to plunder without any consideration of its infrastructure. It is now not able to provide what China is providing. The West has no grounds for criticizing China's model in Africa.

Source:

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Jura said:

pardon me?

(no sarcasm, I didn't get what you meant)

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he tariff conflict between China and the US is having a significant impact on many sectors, one of which is the US shipbuilding industry since it is highly dependent on China's aluminum and other components. It is also highly difficult to find alternatives to these materials which have undergone tariff hikes, the Maritime China Magazine said on its social media Weibo page on Aug. 23.

The chief executive of American Correct Craft company, Bill Yeargin, concurs with this sentiment, saying that US import and export taxes are crushing US shipbuilders and workers, negatively impacting the entire industry.

Yeargin added that finding alternatives to Chinese products is "not so easy at all," and that it is “impossible” to replace Chinese suppliers – they have tried products from across the United States, but they are not suitable for their requirements. They had to go back and work with the Chinese company through the high tariffs.

These higher import taxes are difficult to accept, and will most likely be passed onto consumers through price increases.

The American Shipbuilding Association issued a statement saying that yachts are usually used only for leisure and entertainment, so consumers are very sensitive to price changes.

The price increase will not only lead to a decline in the demand for yachts but also affect the employment of 650,000 employees in the US shipbuilding industry. Many small shipyards will probably face a crisis of layoffs.

The International Monetary Fund has warned that President Trump's new tariffs could damage the domestic economy and prompt retaliation from other countries, according to Reuters. The IMF also stated that a cycle of retaliation on trade would interrupt global and regional supply chains.

Six months after the US announced 25 percent tariffs on imported steel, the effects are being felt in the country's shipbuilding industry.

Zhao Zhongxiu, Vice President at the University of International Business and Economics in Beijing, concurred with the IMF report, saying that the trade war would damage the global supply chain, and noting that China is a core part of the three international production networks in the global economy.

"Trade war will lead to a global recession if it goes further. That is irrational," Zhao said.

For Chinese steel companies, it is another story. Tisco (Taiyuan Iron and Steel Company) is one of China's largest steel producers, with their total export volume in the first half of 2018 increasing by 10 percent through the trade war.

Wang Tianxiang, a manager from Tisco explained why US clients describe Chinese steel as "irreplaceable."

After the US posted 25-percent tariffs on imported steel products, the US clients suspended business for about two months, but they couldn't find another supplier as good as the Chinese. Eventually, they decided to pay 70 percent of the new tariffs, while their agents will pay another 30 percent.

"They believe Chinese products are irreplaceable in the import chain," Wang said.

In recent years, besides maintaining a traditional export market, Tisco has focused more on new emerging markets along the Belt and Road, including Southeast Asia, the Middle East, and the CIS countries.

Tisco is also putting more effort into making technological breakthroughs now that the company is making more high-tech products that other countries cannot manufacture.

The US prepared to impose a 25 percent tariff on Chinese goods on Aug. 23, but over 400 US companies applied to speak during the hearings. The United States Trade Representative (USTR) had to extend the meeting dates for another three days.

Zhao thinks that even though there is a supermajority of representatives in the hearing that are against the tariffs, USTR still wants to go through the superficial motions of a hearing process yet increase tariffs on a wider range of Chinese products in order to stymie the development of China.

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Jura said:

LOL, but careful about baiting/trolling me

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Hendrik_2000 said:

I think the article is a piece of propaganda demonizing China . Now if you took a loan with bank the bank, normally they ask you for collateral. And if you can't pay back the loan the bank will repossess your collateral It is normal practice Why it is so different for China? Is there different set of standard for the west and one for China? It is hypocrisy to the hilt

Now the loan normally come with interest To begin with there is no free lunch in this world and those loan are the result of sweat and toil by the Chinese people. It will be unfair for them to give it for free to other when china is not even rich country now
Not to mention the moral hazard of giving freebie because it will remove the principle of accountability via LKJ86

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2handedswordsman said:

Because i consider myself a wannabe marxist , so it will sadden me a lot if PRC is acting just like others. A marxist regime has to be progressive. I think CCP right now is practising the findings from Das Kapital, economically and philosophically but in positive way. Positive is not a good thing from dialectic materialism view. CCP is playing with fire , while there are huge inequalities forming between Chinese people and the gap in getting wider. On the one hand millions of people stepped out of extreme poverty ,on the other hand billionaire's popping up like mushrooms. And lately billionaires got the right to get into the Party. Please do not say anything hyprocritical about democratic rights of a billionaire to govern. There's nothing democratic on being rich extracting value from workers, Chinese or not. Consider that as friendly critique not an offence from an economical-geopolitical ( fascist ) view.

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