Trade War with China

Jura said:

good post, just wanted to comment on your "US trade is a small fraction of the Chinese economy."
:

yes and no,

'yes' if you compare it (it's $505b in exports in 2017 according to

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) to the GDP (it's $12362b in 2017 according to

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),

but 'no' if you compare it to the trade surplus (in 2018 $352b overall, $323b with the US:

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)

Click to expand...

"US trade is a small fraction of the Chinese economy." is factually correct, if you want to compare trade surpluses, relative, absolute or some other factor and its impact to the Chinese economy, that's different from the proportion of Chinese economy that US trade represents. Let's not mix up totally different measures.

On a human scale If a portion of my income is removed, lets say all the companies whose stock I own decide to cancel their dividends so that's £2500 I won't be getting, and it will mean a bit of belt tightening like I won't replace my laptop this year, but as its not the main source of income, the house and car, food on the table won't be impacted. Would it be annoying? Yes, is it a big deal? Well in the grand scheme of things, No it's really not life changing!

hkbc said:

"US trade is a small fraction of the Chinese economy." is factually correct, if you want to compare trade surpluses, relative, absolute or some other factor and its impact to the Chinese economy, that's different from the proportion of Chinese economy that US trade represents. Let's not mix up totally different measures.

On a human scale If a portion of my income is removed, lets say all the companies whose stock I own decide to cancel their dividends so that's £2500 I won't be getting, and it will mean a bit of belt tightening like I won't replace my laptop this year, but as its not the main source of income, the house and car, food on the table won't be impacted. Would it be annoying? Yes, is it a big deal? Well in the grand scheme of things, No it's really not life changing!

Click to expand...

While I agree broadly with your point, that is entirely the wrong analogy.

Income and wealth isn’t shared out equally in society as cells in a body share nutrition.

Loosing the US market won’t be the end of the world from a macroeconomic stand point for the whole Chinese economy, but it will mean millions of workers loosing their jobs and for most of them, that will be life changing since the impact will be system wide, so it is extremely unlikely they would be able to simply find another similar job with a different company as they normally would have been able to.

It is that social stability hit that has Beijing concerned more than the macroeconomics GDP hit.

The flip side is that Chinese trade to America is massively inflated - not in the normal semi-racist way western MSM say it is inflated, but rather inflated in that a huge percentage of those exports are not really Chinese to being with.

Much if not most of those Chinese exports are from foreign firms setting up production facilities in China to sell to America. The lion share of the revenue profits are not really retained in China.

Take the iPhone for example.

While each iPhone contribute $1k to the export statistics, the actual value Chinese workings make from that is likely only a few dollars directly, and probably no more than 100 even if you add in the whole supply chain impact.

As such, loosing $500bn in exports to the US would not mean the Chinese economy as a whole will be $500bn worse off, since a huge percentage of that 500bn would have been profits for foreign companies, and even more would have been pass through costs from importing energy, raw materials and sub components that goes into the finished products.

This is getting ridiculous. Even the China officials repeatedly said many times trade war will cause huge damages to both sides and there are no winner to it. This is in sync of what I saying one side economic problem will spilled into the other side.

yet, so many China Homers here are refusing to acknowledge this, keep on spreading falseness of everything is fine and dandy in China Land and the only trouble is in US side. This is ridiculous. Homers.

Lame!

tidalwave said:

This is getting ridiculous. Even the China officials repeatedly said many times trade war will cause huge damages to both sides and there are no winner to it. This is in sync of what I saying one side economic problem will spilled into the other side.

yet, so many China Homers here are refusing to acknowledge this, keep on spreading falseness of everything is fine and dandy in China Land and the only trouble is in US side. This is ridiculous. Homers.

Lame!

Click to expand...

Oh boy. You must be reading post than the rest of us!
I haven't seen anything to suggest from "China Homer" (and you must stop using this as it could be interpreted as something derogatory. Just an observatory).
I think the posters here all agrey that. Sure trade war is going to hurt everyone. But, snd here's where we differ. It's not going to hurt China as much as those MSM you have been feeding off.
In addition, it's going to hurt US far more than trump and the likes of your media care to admit!
In fact, this trade war is far from "easy to win" as your MSM and dear president would lke to make out.
Please stay civil, if you have read posters on this forum, you should have some insight to realise most posters here are level-headed people with their feet firmly on the ground.
The Sinodefenceforum is populated by educated and wise people, unlike some of the other forums where posters are so patriotic that they would shout for the home side regardless.

after Today at 8:52 AM
I pick one more interesting point you made Yesterday at 11:01 PM

Equation said:

Well, 6.1% was a number I just made up for the sake of conversation; it's actually 6.6% in 2018. In 2019, US economic growth is expected to lose roughly a third of its steam (dropping from low 3% to low 2%) while no one credible is forecasting sub-6% growth for China. China is still targeting the 6.5% range and I don't think they've ever missed target before. US trade is a small fraction of the Chinese economy. China has always turned to national development of new cities to bolster its economy and recently, they have enjoyed a strong tailwind from growing domestic consumption trends. So, with the US economy set to lose a third of its steam while China's loses are negligible to 10% at most (if 6.0% is the 2019 data), I would say the current strategy of letting your opponent make mistakes in desperation while simply avoiding reciprocal mistakes is a working strategy. That's what big data says.

If you want to discuss unemployment rate, it's completely pointless to cherry pick individual articles saying certain companies are laying off or hiring or what not. Level-headed people look at the big data, like this graph on Chinese unemployment rate:

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Click to expand...

now it's "... I don't think they've ever missed target before";

I was just curious by how much they were off with 2008 growth forecast

(don't worry, I don't mean to nitpick, but there was no way, I mean reasonably, their prediction for that particular year could've been accurate)

and after some googlefu found they had been actually close:

"Chinese officials believe that the country's economy had probably peaked and growth could lose momentum as exports weakened and in January this year, the Bank of China said in a report that growth for 2008 was expected to slow to 10.5 per cent." dated 11 April 2008
(in fact was 9.7% according to )

as a byproduct found, LOL
Who was right and who was wrong on China's economic performance?

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"China's actual economic out turn in 2009, with GDP growth that will come in even above the official prediction of 8.0%, shows clearly who was right and who wrong regarding China's economic performance in 2009."
(in fact was 9.4% according to )

EDIT sorry if any of the links I've used turned out to be incorrect (except of wiki, they weren't easy for me to find)

Gatekeeper said:

Oh boy. You must be reading post than the rest of us!
I haven't seen anything to suggest from "China Homer" (and you must stop using this as it could be interpreted as something derogatory. Just an observatory).
I think the posters here all agrey that. Sure trade war is going to hurt everyone. But, snd here's where we differ. It's not going to hurt China as much as those MSM you have been feeding off.
In addition, it's going to hurt US far more than trump and the likes of your media care to admit!
In fact, this trade war is far from "easy to win" as your MSM and dear president would lke to make out.
Please stay civil, if you have read posters on this forum, you should have some insight to realise most posters here are level-headed people with their feet firmly on the ground.
The Sinodefenceforum is populated by educated and wise people, unlike some of the other forums where posters are so patriotic that they would shout for the home side regardless.

Click to expand...

Dude i told you to ignore him. Everything he says is off tangent and he never reads your post. He lives in his own little bubble One time he said China could have developed better. I asked him how 5 times because I was interested and every time he either ignored me or said "china could have developed better".

You should check out his thread about how China should focus on development in Xinjiang and it will fix China's economic woes (Makes no sense at all). He keeps bumping up that thread and just makes the same point and never replies to anyone with any reasonable answers. He's a true troll. Or he's actually a nut.

tidalwave said:

This is getting ridiculous. Even the China officials repeatedly said many times trade war will cause huge damages to both sides and there are no winner to it. This is in sync of what I saying one side economic problem will spilled into the other side.

yet, so many China Homers here are refusing to acknowledge this, keep on spreading falseness of everything is fine and dandy in China Land and the only trouble is in US side. This is ridiculous. Homers.

Lame!

Click to expand...

You are always very selective in what you want to hear. When you read the news, you specifically pick the articles that say what you want them to say no matter how unreliable the source but ignore national data and IMF/World bank official numbers. Now, you want to listen to the words of the Chinese officials? Why didn't you listen to them when they said that China's economy is stable, healthy, and can weather a trade war with no problem? Quite frankly, those statements don't even conflict as "massive damage" can be defined by some to mean a recession while to others, it means loss of $100 billion dollars. That's quite a massive loss in my book.

plawolf said:

The flip side is that Chinese trade to America is massively inflated - not in the normal semi-racist way western MSM say it is inflated, but rather inflated in that a huge percentage of those exports are not really Chinese to being with.

Much if not most of those Chinese exports are from foreign firms setting up production facilities in China to sell to America. The lion share of the revenue profits are not really retained in China.

Take the iPhone for example.

While each iPhone contribute $1k to the export statistics, the actual value Chinese workings make from that is likely only a few dollars directly, and probably no more than 100 even if you add in the whole supply chain impact.

As such, loosing $500bn in exports to the US would not mean the Chinese economy as a whole will be $500bn worse off, since a huge percentage of that 500bn would have been profits for foreign companies, and even more would have been pass through costs from importing energy, raw materials and sub components that goes into the finished products.

Click to expand...

I was going to mention Apple too, but you beat me to it.

According to a paper of the World Intellectual Property Organization (WIPO)



China earns only 2% of the cost of an iPhone, while 100% of the cost is added to the trade balance. Thus the value of Chinese exports to the U.S. is inflated by 50 times. If this overestimation applies across the board, then China's widely reported exports to the US of $490 billion (which even the is reporting without scepticism) is really only $10 billion.

Of course, the iPhone is probably an extreme case. Instead of 50-to-1, the true overreporting on average is probably more like 4-to-1, or 10-to-1 (my guess). So these days, China's trade with the US is probably nearly at balance -- but before Trump decided to score some cheap political points with tariffs.

Yes even the superior American main stream media leaves out the fact that if Trumped tariffed 25% on an iPhone that cost a $1000 thinking the Chinese have to pay it, that's $250 for something that the Chinese end only gets reportedly $10 for every iPhone made. And then they don't see if the US blocked these iPhones from going to the US because they're exports from China, China just got a bunch of iPhones they can sell to the world that only cost them $10 each. The US can't call that stealing because they consider them Chinese products not a US Apple product.

Gatekeeper said:

Oh boy. You must be reading post than the rest of us!
I haven't seen anything to suggest from "China Homer" (and you must stop using this as it could be interpreted as something derogatory. Just an observatory).
I think the posters here all agrey that. Sure trade war is going to hurt everyone. But, snd here's where we differ. It's not going to hurt China as much as those MSM you have been feeding off.
In addition, it's going to hurt US far more than trump and the likes of your media care to admit!
In fact, this trade war is far from "easy to win" as your MSM and dear president would lke to make out.
Please stay civil, if you have read posters on this forum, you should have some insight to realise most posters here are level-headed people with their feet firmly on the ground.
The Sinodefenceforum is populated by educated and wise people, unlike some of the other forums where posters are so patriotic that they would shout for the home side regardless.

Click to expand...

In fact, I find highly symmetrical between the two sides and education make it even more so.
Many of the american elites are China haters and they are highly educated. And the other side is China homers, they probably very educated too. Inherent biased and education can make it even worst. Battle of ideaology and opposite ends of a pole. Uneducated folks probably would care less and less biased more into money, sex, sports and somewhere in the middle.

US unreasonable demand of structural changes on China is spawned by educated China haters, and average uneducated American folks wouldnt care about that. They only care they can earn enough to support themselves and their family.

Like I said, its the battle of power and ideaology between two sides between the haters and homers.