China

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Submitted by FlyerInHi on October 12, 2018 - 5:12pm

Just watched an interesting lecture by Kai Fu Lee on Chinese innovation and Artificiial Intelligence.
Very interesting talk about the future.

https://youtu.be/bh0TXtB0NxU

Submitted by FlyerInHi on June 19, 2019 - 11:49pm.

Shoveler, your comments show that we can’t deal with China effectively because we won’t admit they’re successful and we can’t decide if they are our competitor or our enemy.

If they are our competitor and they work hard, then we need to work harder to out compete them. But we can’t tell them to abandon a planned economy anymore than they can tell us to stop being capitalists. If they are our enemy, then there will be war.

Here is what Kevin Rudd expects the deal this year to be.
https://youtu.be/ilMFBeZAFuc
Trump will declare a commitment by the Chinese to buy American farm products as a major victory. But that will mean that the Chinese state will do exactly what we don’t want them to do which is to plan and support economic activity. Exception: buy American products, including maybe some Boeing planes.

Submitted by FlyerInHi on June 26, 2019 - 12:13pm.

Wow, I didn’t know that only China makes giant cranes for port operations. Very interesting!
https://www.washingtonpost.com/business/...

I’m going to predict that there will not be a substantial deal at the G20. It will be something like “let’s continue to talk”. The western press built up the anticipation of a deal and that is telling the Chinese that America wants a deal more badly than they do, so they don’t have incentives to give.

I was driving in La Jolla near UTC and I was looking at the work they are doing on the viaducts — everything is built one-off, on site. No wonder it takes 10 years just for one rail line. So depressing considering that China builds the bridge spans in factories and they have machines to install them.

Submitted by FlyerInHi on July 22, 2019 - 11:21pm.

Excellent interview with Kai Fu Lee by Lex Fridman

https://youtu.be/cQ48rP_Rs4g

Submitted by FlyerInHi on August 22, 2019 - 3:17pm.

So it looks like Europe wants to follow the China model. .
The USA sure is following the China model when it comes to huawei.

It was a huge mistake for Europe no to have built a firewall and let American internet companies operate extraterritorially without regulations.

You can be sure that if GAFA were Chinese, we never have allowed them access to our consumers. Heck, we are already paranoid at Chinese companies owning dating platforms.

The truth is that whoever has tech leadership wants an open system to force the others to adopt the dominant technology by default.

https://www.politico.com/story/2019/08/2...

If will be interesting to see if the Chinese get leadership consumer application of AI and quantum computing. Will we roll over and adopt their standards? I think not.

https://www.washingtonpost.com/business/...

Submitted by spdrun on August 23, 2019 - 9:24am.

China and Trumpie just escalated their trade war to volume level 11.

Submitted by FlyerInHi on August 23, 2019 - 10:03am.

Do you think the EU will be successful at state led capitalism or will it fail miserably with all the money wasted?

Is these an inherent flaw in dirigisme (such as it being against the laws of economics, whatever they are) or it is just management?

EU officials have drafted a plan for a sovereign wealth fund that would invest 100 billion euros ($110 billion) in “high-potential European companies,” according to reports in the FT and Politico.

https://www.cnbc.com/2019/08/23/eu-draft...

Submitted by The-Shoveler on August 23, 2019 - 10:12am.
Submitted by FlyerInHi on August 23, 2019 - 10:42am.

Haha. Japan is done with. They are so desperate that they have national security exports controls against Korea.
Japan was insular and stingy. They should have had they own Belt and Road to spread wealth and development. Japan still uses fax machines and paper vouchers. They are becoming irrelevant. I read the Economist and made the mistake of investing in Sony and Docomo many years ago. Ha! (The Japanese like to say Ha!)

Submitted by The-Shoveler on August 23, 2019 - 11:23am.

IMO the country with the most tech and the least liabilities wins.

IMO China will find it a lot harder to maintain control of it's belt and road than it was to build.

Actually I think it will never get completed.

Anyway we will see.

Submitted by Myriad on August 23, 2019 - 11:41am.

FlyerInHi wrote:
Haha. Japan is done with. They are so desperate that they have national security exports controls against Korea.
Japan was insular and stingy. They should have had they own Belt and Road to spread wealth and development. Japan still uses fax machines and paper vouchers. They are becoming irrelevant. I read the Economist and made the mistake of investing in Sony and Docomo many years ago. Ha! (The Japanese like to say Ha!)

Japan has lots of issues. But with South Korea, they actually have an upper hand as all the semiconductor manufacturing in SK rely on Japanese exports. Japan is a lot less dependent on SK. But what this actually shows is a complete lack of leadership from the US.

Japan actually has larger investments in SE Asia than China's Belt and Road. "Collectively, Japan owned $1.667 trillion in foreign assets in the third quarter of 2018, while China owned $1.542 trillion in the second quarter. And has been outpacing China since 2016
"https://www.wsj.com/articles/japans-silent-belt-and-road-is-beating-chinas-11555923604

The China-US Cold War is happening: economic ties, technology, military are all heading that way. There will be at least two systems (legal/technology)/spheres of influence. The Europeans will be the losers in 20 years. Welfare costs, regulation, aging population, behind on technology etc. Russia included in that too - What we see today is the last gasp of Russia's influence. Seriously? Nuclear powered cruise missiles that spew radiation as they fly around?

Submitted by FlyerInHi on August 23, 2019 - 1:54pm.

Japan’s investment are private such as Toyota factories in Thailand.

But China is building infrastructure that leads to even more development

Shoveler, the problem with US policy is that we talk from.both sides of our mouths. We complain about Chinese policies that we are so confident will fail. Why exert all the effort?

It will be game over when the HSR connects Thailand to China. Thailand has been foot dragging because they are still ostensibly in our sphere.
When western tourists do YouTube videos on travel to China be train, you will know China has won. .

China also benefits from the huge diaspora which is the business elite and trading class in Asian countries other than Japan and Korea.

Btw, according to Koshore Mabhubani, Bill Clinton made a speech at Yale about the rise of China. He’s never repeated it again because in our political culture, treating China as a peer and competitor is political suicide. So any American politician who warns about China must say something like “but China is an evil communist system that oppresses its people, that massively misallocates resources, destroys the environment, that cannot work, will not work and is bound to fail”. We’ve been repeating the same line for decades.

Christopher Coons was interviewed by Ian Bremmer and he pretty much said that we need a response to Belt and Road. That’s tacit admission that Belt and Road is in fact something to worry about.

If we live long enough, we will see cities such as Lagos, Nigeria become wealthy megalopolises thanks to Belt and Road. And the benefits will accrue to China, not the West.

Submitted by Myriad on August 23, 2019 - 2:41pm.

Assuming that China has sufficient capital to build Belt & Road, which is not entirely clear. If we are in a total economic war with China, they will not have sufficient access to US $ to pay for investments. In fact, capital will flee China if they devalue their currency.
That's not even counting if US decides to cut China out of the US banking system.
Their existing investments have been mixed because in their haste, there is a lot of waste and corruption. For every $1 spent probably somewhere around $.40 is wasted or "lost".

But Africa is the next round of the Cold War, just like in the previous Cold War.

Just in, Trump adds an addition 5% tariff on all Chinese goods.

Submitted by FlyerInHi on August 23, 2019 - 3:08pm.

I agree but it’s not in our interest to cut off China either. Too late for that. We are now interdependent.

Devaluation will cause capital flight, but also new FDI. I have a Chinese friend who is investing/parking money in US apartments. He got $1/2 million out recently. But the money will flow back especially from Thailand, Malaysia, whatever, if the currency weakens.

Despite inefficiencies, China can build infrastructure a lot cheaper than us. How much more do you think it would be for American contractors to build a bridge in Panama? The cost of flying and housing engineers and roughnecks to and fro would be enough to feed a small Central American city. In USA, I once rented a “luxury” property to a contractor on a project for 1 year. He didn’t care, he upcharged the general contractor. He liked my condo with facilities and gym better than a hotel.

Graham Ellison talked about his Harvard student who is now Mayor of a Chinese city. They built a bridge in 48 hours. A tiny bride in Cambridge, MA took over 2 years no rebuild.

But anyway, if we are so confident in victory, then we should just say “China will fail on its own, let’s worry about something else.” I agree with Keyu Jin of LSE. The trade war is a strategic gift to China because it will force to reform. It will be more of a blessing than the painful reforms they undertook prior to joining WTO.

We shall see.....

Submitted by Myriad on August 23, 2019 - 3:15pm.

FlyerInHi wrote:
I agree but it’s not in our interest to cut off China either. Too late for that. We are now interdependent.

Devaluation will cause capital flight, but also new FDI. I have a Chinese friend who is investing/parking money in US apartments. He got $1/2 million out recently. But the money will flow back especially from Thailand, Malaysia, whatever, if the currency weakens.

Actually it won't flow back, because typically SE Asian currencies follow each other in devaluation. Still somewhat theoretical at this point.

I don't know about that interdependence. If this goes on another 5 years, US-China trade will probably be 10% of where it is today. And that allows for a strategic segregation of economy, technology, etc.

Let's say US wanted to really stop European trade with China, e.g. could add aviation parts as export restricted to China -> Airbus couldn't sell aircraft to China or even engines.

Submitted by FlyerInHi on August 23, 2019 - 3:34pm.

We will see about the currencies.

The US could isolate China but only why the help of allies in Europe and elsewhere and with TPP. Trump is isolating us. By treating developing countries as shithole places, Trump is driving them in the arms of China.

Let’s see what happens at G7 and if the EU will tax US tech.

2 projects to watch are in Vietnam. The Hanoi Metro is being built by China whereas the Ho Chi Minh Metro is being constructed by Japan. When completed, we will see the cost per km. Vietnam will play the poor debtor and we will see how the loans are modified. Interesting times.

Submitted by Myriad on August 23, 2019 - 3:54pm.

https://blogs.wsj.com/dailyshot/2018/07/...

Taiwan, Korea, Thailand, and The MSCI EM Currency Index all declined in line with USD/CNY.
I read this blog daily. It's got some good information, nice charts, but the data is a little noisy.

Submitted by The-Shoveler on August 23, 2019 - 4:06pm.

I really do wish this trade war to come to some type of resolution (quickly).

( I still have hope LOL).

But if push comes to shove we (the USA) will win this.

Submitted by FlyerInHi on August 23, 2019 - 5:36pm.

Dup

Submitted by FlyerInHi on August 23, 2019 - 5:35pm.

There is no win. Only lose lose.

I can't recall a war we started in my lifetime that we won. maybe Grenada.
The war on drugs was simple enough -- just say no

Submitted by FlyerInHi on August 24, 2019 - 11:55am.

Notice that Narendra Modi was not disinvited from the G7 despite human right violations in Kashmir. A clear sign of playing India against China.
Modi knows the West needs him more than he needs them right now, so he’s taking advantage.

Not much is said about Kashmir and Hong Kong from any of the leaders of the world.

Submitted by The-Shoveler on August 27, 2019 - 5:48am.

Shanghai China, customers stuffing their SUV's to the gills
at Costco in the suburbs of Shanghai China.

https://finance.yahoo.com/news/costco-ju...

Costco (COST) cut the ribbon at its new store in Shanghai and proceeded to watch shoppers overrun the expansive aisles, as seen in numerous posts on Twitter. In fact, the crowds got so big that the store was forced to cut opening day short over safety worries, according to news reports. For Costco, the day one response — and the inevitable surge in new memberships — should temper concerns on Wall Street that its bulk-selling model wouldn’t work in the hyper local Chinese food market.

https://qz.com/1695894/here-are-the-craz...

Submitted by FlyerInHi on August 27, 2019 - 11:19am.

Shoveler, that underscores the importance of the chinese market. It's big enough for everything.
Other foreigners are licking their chops at the prospect of a Trump presidential order to pull out of China. American brands will have to fire sale their operations in China. The Hilton will be rebranded Sofitel or Movenpick.

Submitted by Myriad on August 27, 2019 - 8:17pm.

FlyerInHi wrote:
Shoveler, that underscores the importance of the chinese market. It's big enough for everything.
Other foreigners are licking their chops at the prospect of a Trump presidential order to pull out of China. American brands will have to fire sale their operations in China. The Hilton will be rebranded Sofitel or Movenpick.

That's why if US pulled out from China, it would ban any other company that does business in China from doing business in the US including banks - maybe even SWIFT. Like the Iran or NK policy.

Submitted by FlyerInHi on August 27, 2019 - 11:37pm.

Myriad wrote:
FlyerInHi wrote:
Shoveler, that underscores the importance of the chinese market. It's big enough for everything.
Other foreigners are licking their chops at the prospect of a Trump presidential order to pull out of China. American brands will have to fire sale their operations in China. The Hilton will be rebranded Sofitel or Movenpick.

That's why if US pulled out from China, it would ban any other company that does business in China from doing business in the US including banks - maybe even SWIFT. Like the Iran or NK policy.

Sure, it would have to be that way..... but countries would have to follow our lead and stop doing business with China, otherwise it will be us who is isolated.

For example, many small to medium high tech German companies don’t have any business in USA, but do brisk business in China. The beautiful cladding on modern buildings, yeah, made in Germany.

Based on the G7 meeting, it’s not certain Europe would be on our side. Italy for example sells more luxury products in China than anywhere. That’s why they joined Belt and Road. A Trump official called them “traitors” on Fox News. Australia depends economically on China even though they are on our side, security wise.

It’s interesting that we personally sanctioned Zarif, but the French still invited him to G7. What are we doing to France about it? Nothing apparently.

Submitted by FlyerInHi on August 30, 2019 - 10:59pm.

Nial Ferguson was pretty right wing when he was younger. He’s moderated since.
Anyway he says the “war” is all about tech.

But if Chinese tech is better and cheaper, then why not use it for the benefit of humanity? It seems stupid to forgo development because of real or perceived fears/paranoia. It’s especially true with respect to the developing world. If we want to stop Chinese influence, we need to offer better than what China provides. If China builds HSR for Africa, perhaps we should build freeways for them, at a deal too good to pass up.

https://youtu.be/HD6CmJvJU5g

Submitted by Myriad on September 12, 2019 - 6:33pm.

China has lent ~$700B to developing world (2x IMF+World Bank), at least so says this paper.
Download before they take it away, lol
https://www.ifw-kiel.de/fileadmin/Dateiv...

Submitted by FlyerInHi on September 13, 2019 - 11:00pm.

Myriad wrote:
China has lent ~$700B to developing world (2x IMF+World Bank), at least so says this paper.
Download before they take it away, lol
https://www.ifw-kiel.de/fileadmin/Dateiv...

Very interesting that this is on a German site.

Angela Merkel was just on a state visit to China and you know that German businesses would love to sell more to China and to steal market share from Americans if they can.

Interesting that China has lent so much to the world. That’s a good thing because it helps development. China is focusing on infrastructure that people need. Chinese traders are also fanning across the global opening businesses such as clothing and cell phone stores in areas that were previously unserved. That’s excellent people to people contact.

“Debt trap diplomacy”, a term coined by Americans, is such unfair characterization because China has never made unreasonable demands. Take the port of Piraeus. Even Yanis Voroufakis speaks highly of China’s involvement and the accommodations that were made. In contrast, the EU forced Greece to take bailout money and into austerity to pay back German and French banks. That is real debt trap.

Look back to what the IMF did to struggling countries after the Asian financial crisis of 1997 or to Argentina recently. Argentina is still trying to restructure debt.

In fact, debt trap and the legacy of exploitation by American corporations and US military intervention are what is causing instability in Latin America and migration to the US.

Submitted by flu on September 14, 2019 - 5:43am.

Wow Brian, you're trying way too hard to be a

Submitted by flu on September 13, 2019 - 11:38pm.

.

Submitted by Myriad on September 14, 2019 - 2:28pm.

hah...
Only skimmed the paper so far - academic vs political commentary so interesting from an economics perspective.
Basically, the Chinese have lent to certain countries using opaque terms, other countries have more transparent terms. Generally based on their level of per capita income/level of development.
One interesting item is that China was concerned about how certain countries would use the funds and was loathe to distribute funds directly. Instead they would distribute to Chinese companies. Other items was that the level of debt is probably understated and that financial institutions should re-evaluate the credit worthiness of developing country debt.

Maybe distributing $Ts of funds to countries with high corruption is better than $Ts in fighting in Iraq and Afganistan. On the other hand, you might just trade western type corruption/waste in Africa for Chinese type corruption/waste. Wouldn't surprise me if Chinese investment ends up being as useless as western investment in Africa.

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