According to Kevin Rudd, unless Taiwan and the US do something about it, if Xi continues to hold on to power, and China manages to get out of the current economic crises largely unscathed, China would invade in 8 to 15 years.
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I’d like to remind you, Robert Tsao, the founder of UMC, was very critical of LTH’s ban on investing in China. So much so that he illegally invested in the first Chinese semiconductor fab in 2001, and got prosecuted for it. He was cleared of charges in 2009 when the ban was lifted. In between those years, Tsao was incredibly pro-China. He was a proponent of the unification referendum, and he was so fed up with Taiwan that he naturalized as a Singaporean instead.
However, since Xi took office, he had an 180, and became completely disillusioned with China. His once rival, Morris Chang, have been very pro-LTH and pro-TYW. Chang respected LTH’s judgement and refrained from investing in China. Both Tsao and Chang are late immigrants, and they were both born in China. Most of Taiwan’s early semiconductor entrepreneurs are late immigrants because of societal preferential treatment at the time. It is interesting to see how they’ve both eventually became pro-independence.
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Sounds about right
I agree but I just don’t see China getting out of this crisis. That said punch em while they’re down. Put more tariffs and sanctions on Chinese tech.
I don’t think the US has the stomach for that right now either. If they really want to punch them when they are down, they could have said any military escalation post Pelosi visit would result in additional tariffs, and accelerate the process of US manufacturers moving out of China. The repercussion of that would be even more supply chain disruptions and even higher inflation, which the US might not be able to take.
What crisis?
The China dream is over, and they are facing a down turn and a decade of stagnation, but they will still be the worlds second largest economy
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Chinese firms don’t pay tariffs. For America, it’s all paid for on the American side i.e. higher prices on consumers. Who pays Trump's tariffs, China or U.S. customers and companies? | Reuters. With inflation getting higher, even Biden is thinking of lowering tariffs at least temporarily.
The sanction is still working … for now, but time is running out. Bloomberg - Are you a robot?
Economic. I think they have started their lost decades.
You don’t have to buy his prediction, but there are signs that the economic situation is dire for a lot of people in China.
Agreed. But they were on their way to becoming the largest economy, I’ll take a not so close second largest over the largest any day.
I follow the Chinese economy everyday and follow people a lot more reputable than that. Thats not a call to authority argument, but I spend a lot of time on this following economists
As I said the situation is pretty moribund, but China is a closed loop system so can absorb a certain amount of shocks. Its not Brazil, and wont and cant have the kind of financial crisis that can topple the system.They are heading for Japan style decade of stagnation and then a whole host of other issues.
But still… they will remain the worlds second largest economy and a rich powerful country.
There is a lot of wishful thinking on here
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Yeah agree, but they are still very rich and powerful, even if stagnating. They will still be bankrolling the millitary efforts
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Three Twitter recommendations for China economy:
https://twitter.com/michaelxpettis
https://twitter.com/ShanghaiMacro
https://twitter.com/ChinaBeigeBook
Yep. China is like every other country in the sense that it will not be immune from recessions and/or stagnations, etc, but expert Western economists have called 20 of the last ZERO Chinese recession.
Here’s one other area where China is different from other economies. In the US and other Western economies, GDP is a measure of output. In China however, GDP is set by the government i.e. GDP is input. Think about that and its implications. That’s not my characterization, rather it’s what Michael Pettis (see one of @OrangeOrganics twitter link) has said. He lives in China and is one of those rare experts who knows what he is talking about.
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Exactly, I think this recession in China will be bad, really bad. There is so many problems and so much financial engineering at every level.
But planes wont be falling from the sky
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Yeah, but if he lives in China, just how much could Michael say for the past 2 years even if he does foresee doom and gloom?
He is pretty doom and gloom if you follow him
Agreed. At the same time though, it’s not just China. It’s the whole world. Bloomberg - Are you a robot?
Debt levels are too high all over the world. Expect fireworks. The Fed is totally committed to crushing this inflation, and I think a lot of people are underestimating their resolve. IMO, at the end even Volcker will be clapping from his grave. Of course, one of the results would be that we’ll see an echo of 2008.
Beijing has screwed the pooch with the manufacturing sector, which is still the backbone of the their economy. Companies are leaving China now and wont come back
Household consumption is too low
BRI projects showing mixed results
Overseas expansions of tech companies are not doing well and think the opportunities will be less and less.
China has structural problems outside of debt and things will get nasty. But the party will still remain rich and they bankroll the PLA, so in the context of war, it doesnt matter that much.
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