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[TheLaughingStock]

https://www.bloomberg.com/news/arti...s-china-wonders-whether-it-s-up-for-the-fight

Xi Jinping vowed to match Donald Trump blow for blow in any trade war. Now as one gets closer, some in Beijing are starting to openly wonder whether China is ready for the fight -- an unusually direct challenge to the leadership of the world’s second-largest economy.

In recent weeks, prominent academics have begun to question if China’s slowing, trade-dependent economy can withstand a sustained attack from Trump, which has already started to weigh on stock prices. The sentiments are being expressed in carefully worded essays circulated on China’s heavily censored internet and -- according to interviews in recent days with ministry officials and foreign diplomats who asked not to be identified -- repeated in the halls of government offices, too.

The essays have raised concerns that the ruling Communist Party underestimated the depth of anti-China sentiment in Washington and risked a premature showdown with the world’s sole superpower.

Seems like some in China thought the US was going to sit on its hands until Made in China 2025 was complete. Interesting they were so public about it because a top priority is more or less to replace foreign imports with domestic production. It's unclear how far Pres. Trump's administration is willing to go, but this is probably the last chance for America to leverage hegemony before it's too late. China's state-directed capitalism has grand plans and they've been very successful so far playing by their own set of rules.

 

[mercenar1e]

Im ok with Trumps tactics on China until they agree to stop forcing US companies to share IP to access the Chinese market.

 

[iamblades]

No shit China will suffer immensely by a trade war, but that doesn't mean it will benefit the US. Shit is textbook 'cutting off the nose to spite the face'.

https://www.bloomberg.com/news/arti...s-china-wonders-whether-it-s-up-for-the-fight



Seems like some in China thought the US was going to sit on its hands until Made in China 2025 was complete. Interesting they were so public about it because a top priority is more or less to replace foreign imports with domestic production. It's unclear how far Pres. Trump's administration is willing to go, but this is probably the last chance for America to leverage hegemony before it's too late. China's state-directed capitalism has grand plans and they've been very successful so far playing by their own set of rules.

No, China is about to hit a demographic brick wall that will make Japan's look mild due to the one child policy. They've been very successful by dumping cash into the economy creating an investment bubble that is probably unprecedented in human history, but they don't have the domestic market capacity to consume even a decent fraction of their production capacity. There is no consumption led economic growth in China, and within a decade there will be no possibility for any in the future as well. With or without a trade war, China is limited by it's geopolitical situation and it's demographics.

Eventually China will run out of ways to force cash into the system and things will get very ugly(considering the source of this investment has largely been bank deposits), hence Xi's power grab. Signs are already ominous:

https://www.bloomberg.com/view/arti...he-china-debt-mountain-nobody-s-talking-about

 

[Cunth]

Good on Trump. All countries need to stand up and face China’s bullshit together

 

[Death Dealer]

Good on Trump. All countries need to stand up and face China’s bullshit together

I can't understand why Congress is so gung ho on sanctions for Russia as punishment for annexing Crimea. But China has announced they intend to annex most of the South China Sea (which it totally against international maritime law) and the only politican I ever hear mention it is Trump.

 

[diablos991]

I like it when we have backbone in the office.
Now if only Congress could grow a pair.

 

[TheLaughingStock]

No, China is about to hit a demographic brick wall that will make Japan's look mild due to the one child policy. They've been very successful by dumping cash into the economy creating an investment bubble that is probably unprecedented in human history, but they don't have the domestic market capacity to consume even a decent fraction of their production capacity. There is no consumption led economic growth in China, and within a decade there will be no possibility for any in the future as well. With or without a trade war, China is limited by it's geopolitical situation and it's demographics.

Eventually China will run out of ways to force cash into the system and things will get very ugly(considering the source of this investment has largely been bank deposits), hence Xi's power grab. Signs are already ominous:

https://www.bloomberg.com/view/arti...he-china-debt-mountain-nobody-s-talking-about

Why are demographics a problem if automation is going to replace all the workers soon?

Why do you think China will run out of ways to force cash into the system?

Keep in mind, the US ran a deficit of nearly 9 trillion since 2007 to get to where it's economy is now under Pres. Trump. The Fed pushed out trillions worth of subsidies, loans and guarantees. So, I mean China will take extraordinary steps just like anyone else to stabilize things following a crisis of too much private debt. It's an authoritarian regime that wants to remain in charge.

And the Made in China 2025 policy is protectionism that's a recipe for trouble for the US if they sleep on it..

 

[TheMikado]

No shit China will suffer immensely by a trade war, but that doesn't mean it will benefit the US. Shit is textbook 'cutting off the nose to spite the face'.




No, China is about to hit a demographic brick wall that will make Japan's look mild due to the one child policy. They've been very successful by dumping cash into the economy creating an investment bubble that is probably unprecedented in human history, but they don't have the domestic market capacity to consume even a decent fraction of their production capacity. There is no consumption led economic growth in China, and within a decade there will be no possibility for any in the future as well. With or without a trade war, China is limited by it's geopolitical situation and it's demographics.

Eventually China will run out of ways to force cash into the system and things will get very ugly(considering the source of this investment has largely been bank deposits), hence Xi's power grab. Signs are already ominous:

https://www.bloomberg.com/view/arti...he-china-debt-mountain-nobody-s-talking-about

China already has a plan for continued economic expansion in the form of oil exports.

https://www.economist.com/asia/2018...ised-the-south-china-sea-and-got-away-with-it
https://oilprice.com/Geopolitics/Asia/The-South-China-Sea-A-Geopolitical-Powder-Keg.html
https://oilprice.com/Latest-Energy-...g-In-Disputed-South-China-Sea-A-Red-Line.html

China is dead set on becoming an oil exporter via the South China Sea in the near term. Every move that's happen. From convincing NK to play nice so that the US will stop military preparations in the region, to its Naval and aircraft builds and artificial islands were all preparation for their claim on oil in the South China Sea, while pushing western influence out and protecting and controlling the region.
China was never planning to rely solely on consumer manufactured goods. Pushing a trade war would only escalate what's already in play.

 

[iamblades]

Why are demographics a problem if automation is going to replace all the workers soon?

Why do you think China will run out of ways to force cash into the system?

Keep in mind, the US ran a deficit of nearly 9 trillion since 2007 to get to where it's economy is now under Pres. Trump. The Fed pushed out trillions worth of subsidies, loans and guarantees. So, I mean China will take extraordinary steps just like anyone else to stabilize things following a crisis of too much private debt. It's an authoritarian regime that wants to remain in charge.

And the Made in China 2025 policy is protectionism that's a recipe for trouble for the US if they sleep on it..

Robots don't buy shit, and old people don't really either aside from healthcare. China's problem is not productive capacity, it's that they are 100% reliant on external markets for their goods.

China is already running out of ways to force cash into the system, although they have been remarkably clever with their shadow banking system:

http://www.scmp.com/news/china/econ...-slowdown-new-loans-risk-controls-hit-lending
https://www.bloomberg.com/news/arti...on-shadow-banking-edifice-showing-more-cracks

The level of debt we are talking about is impossible to sustain via government stimulus, no matter how big of a deficit the Chinese government runs. The Chinese government has recognized the danger and has been tightening the lending, but not nearly enough, because they are scared about causing unemployment.

What's worse is that the source for that credit are bank deposits and the debt is owned by banks. So the Chinese government will be forced to eat trillions of dollars in bad debt or screw over depositors. It will make sub-prime look quaint.

 

[iamblades]

China already has a plan for continued economic expansion in the form of oil exports.

https://www.economist.com/asia/2018...ised-the-south-china-sea-and-got-away-with-it
https://oilprice.com/Geopolitics/Asia/The-South-China-Sea-A-Geopolitical-Powder-Keg.html
https://oilprice.com/Latest-Energy-...g-In-Disputed-South-China-Sea-A-Red-Line.html

China is dead set on becoming an oil exporter via the South China Sea in the near term. Every move that's happen. From convincing NK to play nice so that the US will stop military preparations in the region, to its Naval and aircraft builds and artificial islands were all preparation for their claim on oil in the South China Sea, while pushing western influence out and protecting and controlling the region.
China was never planning to rely solely on consumer manufactured goods. Pushing a trade war would only escalate what's already in play.

I'll believe that when I see it. Even assuming their production can outpace domestic demand growth(which could easily happen if their economy crashes), that's a rounding error in terms of overal GDP. Hell if they reduced domestic demand to 0 and sold their entire production, assuming $100 a barrel prices, that's ~1% of their GDP.

 

[Dev1lXYZ]

We will see the end of Communism in China in the next 20 years.

 

[Panda1]

Im ok with Trumps tactics on China until they agree to stop forcing US companies to share IP to access the Chinese market.

Exactly only the US is allowed to spy and steal from other companies/countries. how dare them

 

[TheMikado]

I'll believe that when I see it. Even assuming their production can outpace domestic demand growth(which could easily happen if their economy crashes), that's a rounding error in terms of overal GDP. Hell if they reduced domestic demand to 0 and sold their entire production, assuming $100 a barrel prices, that's ~1% of their GDP.

I'm not saying this is going to transform their economy, but in the grand scheme of things is a net boost for their economy. Even if we instill tariffs on Chinese goods it won't stop their flow altogether and Trump has to ensure the tariffs don't tank our economy in turn which limits his options. Most tariffs will only amount to posturing rather than having any economic impact for either nations. China having a 700 billion barrels of oil ready to dig is just extra insulation in a trade war.

 

[bitbydeath]

WWIII - The Trade Wars

 

[TheLaughingStock]

Robots don't buy shit, and old people don't really either aside from healthcare. China's problem is not productive capacity, it's that they are 100% reliant on external markets for their goods.

I don't see why you'd think no one is going to want China's stuff especially after Made in China 2025 is complete or that their economy won't automatically adjust. I don't believe they're that reliant by any stretch on foreigners. Usually when people say a population is getting older or freak out about "demographics" they mean there won't be enough workers and social services will be strained.

Why would it be too easy to buy stuff and too hard to sell stuff for the world's largest economy by the time they get really old and mastered/stole all kinds of technology? Sounds like a comfortable utopia to retire in. Only bummer will be old age.

China is already running out of ways to force cash into the system, although they have been remarkably clever with their shadow banking system:

http://www.scmp.com/news/china/econ...-slowdown-new-loans-risk-controls-hit-lending
https://www.bloomberg.com/news/arti...on-shadow-banking-edifice-showing-more-cracks

The level of debt we are talking about is impossible to sustain via government stimulus, no matter how big of a deficit the Chinese government runs. The Chinese government has recognized the danger and has been tightening the lending, but not nearly enough, because they are scared about causing unemployment.

What's worse is that the source for that credit are bank deposits and the debt is owned by banks. So the Chinese government will be forced to eat trillions of dollars in bad debt or screw over depositors. It will make sub-prime look quaint.

Why would it be impossible for China to keep its financial system going if the private debt is denominated in renminbi? They regulate the banking system, control the economy, and create the money. I don't see how there would be a level of debt in renminbi that's too high. What number did you have in mind that's impossible?

I'm not suggesting they can stop a recession or a slowdown which is what they're trying do, but obviously they can stabilize any Chinese-related financial event. No one is going to sit around while everything fails and not take measures to stop it. China's been messing around with fiat money since like the 12th century...they're uh the experts.

The US gov't and its central bank just created a stupid amount of money, saw no inflation and are looking good in 2018. I don't see why you'd think China can't do the same. They better if they don't want to get kicked to the curb by an angry mob.

 

[iamblades]

I don't see why you'd think no one is going to want China's stuff especially after Made in China 2025 is complete or that their economy won't automatically adjust. I don't believe they're that reliant by any stretch on foreigners. Usually when people say a population is getting older or freak out about "demographics" they mean there won't be enough workers and social services will be strained.

Why would it be too easy to buy stuff and too hard to sell stuff for the world's largest economy by the time they get really old and mastered/stole all kinds of technology? Sounds like a comfortable utopia to retire in. Only bummer will be old age.



Why would it be impossible for China to keep its financial system going if the private debt is denominated in renminbi? They regulate the banking system, control the economy, and create the money. I don't see how there would be a level of debt in renminbi that's too high. What number did you have in mind that's impossible?

I'm not suggesting they can stop a recession or a slowdown which is what they're trying do, but obviously they can stabilize any Chinese-related financial event. No one is going to sit around while everything fails and not take measures to stop it. China's been messing around with fiat money since like the 12th century...they're uh the experts.

The US gov't and its central bank just created a stupid amount of money, saw no inflation and are looking good in 2018. I don't see why you'd think China can't do the same. They better if they don't want to get kicked to the curb by an angry mob.

The US central bank has been able to get away with some monumentally stupid monetary policy because the dollar is the world's reserve currency and the fact that US government debt is the main safe harbor investment. China can't say the same thing.

As for why the level of debt is too high, the Chinese corporate debt is over triple the US corporate debt in absolute terms, and even larger in relative terms. The debt is not repayable without money printing on an unprecedented scale.

TARP was just under a billion dollars in a 17 trilllion dollar economy. China will need a bailout at least 10 times the size in an economy around half the size.

 

[ChuckeRearmed]

China will have to face the challenges that every developed country faced in the past. So it is interesting to see how they will be pass them.
Not to mention their main challenge is to stop enforce governmental control over currency devaluation.

We'll see though.

 

[SLoWMoTIoN]

We will see the end of Communism in China in the next 20 years.

I highly doubt that.

 

[llien]

But China has announced they intend to annex most of the South China Sea (which it totally against international maritime law) and the only politican I ever hear mention it is Trump.

Don't worry, Russia has similar plans for those seas at the nord pole.

 

[Chairman Tickles]

It's too late to derail china, it's richer than the US from an absolute perspective, and has a much more powerful industrial base. It is shifting its goods manufacturing to Africa and removing tariffs with India and its Asian neighbors to counter US tariffs. China can easily absorb the US $500 billion annual trade deficit should it normalize and go to 0, as China's economy grows by $1.3 trillion annually.

 

[iamblades]

It's too late to derail china, it's richer than the US from an absolute perspective, and has a much more powerful industrial base. It is shifting its goods manufacturing to Africa and removing tariffs with India and its Asian neighbors to counter US tariffs. China can easily absorb the US $500 billion annual trade deficit should it normalize and go to 0, as China's economy grows by $1.3 trillion annually.

Are you high? The market cap of the us stock market is as large as all the wealth in China.

Total national wealth in the US is like quadruple China's, and that's probably conservative.

China has been growing by forcing vast amounts of credit into the economy. I read a while back that every dollar of gdp growth is costing China 6 dollars of debt..