You’re a guy in the know. Does this play into China stating they want to increase domestically produced and consumed goods? Will it be a time for increased desire inside China for foreign goods among those with the means?
China is creating artificial labor shortages, production shortages, material shortages, electricity shortages, etc to reduce the supplies available for export, driving up costs (double, triple, and quadruple!), while maintaining domestic inventory. China is leveraging Quarantines and lockdowns to facilitate these goals, as well as capture defectors, dissenting voices, etc.
US is creating artificial demand shortage through letting inflation run amok, then compounding the effect globally through a series of Fed Rate hikes. This is reducing demand on Chinese goods from the US and other countries.
Summary: US and China are wielding the weight of their recessing economies against each other in a game of “how-low-can-you-go”. China thinks US will tap out first because US will run low on supplies, and costs will skyrocket for US consumers creating political issues for the ruling party. US thinks China will tap out first because low demand on Chinese goods will create a mass unemployment shock in China, and probably political unrest.
china cares less about it’s people. based on that alone, they wont tap out first. only a coup, civil war etc could cause that. but given how many tens of millions Mau killed, I doubt we are anywhere remotely close. the west taps first. they need a new strategy. for start, dont keep funding the CCP so happily.
It’s self evident, not sure how I can explain more clearly. A deliberate example is China keeping Zero Covid policy up to now - obviously it’s terrible for China, and terrible for foreign businesses reliant on China, and that’s the point. China is holding itself hostage as leverage over the world to force US to drop all Chinese tariffs. US is not dropping tariffs, and is calling China’s hand: “fine China, you want to reduce supply? Then we will reduce demand even further!”
Same with the China tariffs - they have created situations where product and materials costs have increased 30%, and assembly costs 40% or more now. The US is deliberately keeping the tariffs in place to reduce demand on Chinese made goods, which is the whole point of the tariffs to begin with. China sees the tariffs as economic war, a direct hit on their economy.
The Fed Rate hikes have a more global impact on reducing consumer spending. Where the China tariffs impact US imports, the Fed Rate hikes trigger other countries to increase their rates as well, and the end result is a global consumer pool, not just America, that is spending less money overall. With consumers around the world spending less on products, this reduces demand on China. Expect a few more Fed Rate hikes down the road which will strangle China’s economy more than they can handle.
It’s a delicate game of how-low-can-you-go because both countries still have economic interest in each other with all that’s going on. The danger will be when the last bit of leverage is lost, and neither side wants to be the first to decouple.
Once economic leverage is lost and diplomacy has been exhausted, then all that is left is the use of Force to arrive at a decision - military intervention.
Where you see an attack to USA’s economy, other people see other reasons (like mass control and related technology development, for example). But these all are interpretations. I don’t see how China being so aware of their very delicate situation is going to play this game seeking a Pyrrhic victory and losing control of an already very angry population, and at the doors of a serious crisis. Nah, don’t see it.
Hard to say. I believe consumption of domestic goods has been slowly rising but I just don’t see Chinese people lowering their demands of foreign products.
The main issue with China seems to be Chinese don’t trust their own products. Can you blame them when baby formula scandals still happens after it was first discovered around the 2000s. It’s just constant scandal after scandal, I saw a recent one with pharmaceutical companies using refined old leather shoes to make capsules.
Another thing is brands have had decades to “brainwash” people. I study brands like Nike and Apple closely as inspirations on marketing. Steve Jobs himself was a big fan of how Nike does marketing. Having consumers change brands might be a generational undertaking.
Another is the luxury stand point. Chinese goods are not doing well as luxury items. They just can’t convince domestic consumers to buy into Chinese made luxury goods. This is why you see the family of the CEO of Huawei use iPhones
The difference is they are horrible at marketing. recycling, sustainability etc could be used to justify this.
I agree with you. I just think it is funny how naive people can be to think the way things are seem fine. If we claim the level of intelligence that we do, we really ought to start providing the evidence for said claims. not shiny objects edited into social media click bait stories.
I think people can tolerate these kinds of things but not when it comes to food and medicine. Fake medicine is rampant. Gutter oil is still a problem. The estimate is that 10-15% of the oil consumption is from gutter oil in China.
I don’t have the link but a huge amount of meds are produced by China and India. If either wanted to kill huge numbers of Americans they could accomplish this very easily. They could introduce poisons in sufficient amounts to do it quickly, small amounts to do the same over time, or simply stop the export of meds. Just as Europeans depended on the Russians for energy many parts of the world depend on the Chinese for medicines. The report I listened to more than a year ago by a man who had done business in China for decades and depended on a drug that had been recalled that was made in China said he had seen first hand how things are made in China and he would not even use the soap provided in a hotel because of how nasty things are are.
Additionally, these procurement brains in the USA military defence industries and those who award them contracts depend on rare metals and minerals etc only produced in Russia and China for military hardware needed to fight the same adversaries who supply said materials.
Fight a war with China but depend on medical goods produced by that adversary.
Fight a war with Russia but need their energy and materials to build and run war efforts against them.
Hard to believe how rich all of this has made these stupid and evil people.
I have zero knowledge on medicine and counterfeits of them. But in traditional medicine I have seen countless times people buying a pill and the actual plant source being different/misidentified/not standardized etc. that is a rampant problem. But not unique to China for sure. To be honest I am quite amazed at few fucks are given by various countries FDA or equivalent. taiwan especially! Too many times I have been contracted to grow/harvest things for government studies and they just say “ya, any of those are fine”. the new herbal covid one for example. Cross genetic things just mixed together under common names. it is just embarrassing. To the point I just say no now. One cannot ethically support such unprofessionalism.
Or, instead, they can sell legit meds and pay for their war machine at the same time as openly selling poison to the west to kill them. win win. See: fentanyl. They dont need to try and hide anything, we are willing fools they know that.
Anybody interested in Chinese economy should listen to Michael Pettis. Btw since the housing bubble is bursting, growth can only come from export. However export in the case of how China runs it is precisely intended to suppress wages such that wealth and power can be concentrated in SOE and the Party. and low wages means low consumption.
(to be continued, Part II coming in a separate reply)
Now, Part II. Is it true that China can increase wages in the export sector? Yes but not by a lot even if China wants to. You see according to Scott Rozelle ( google him), China’s labour force is actually laegely uneducated. 60-70 percent of China’s labour force did not complete high school.
If you have been paying attention, the two points( Pettis & Rozelle) I made above are consistent, both describing the same reality. Communist Premier Li Ke-Chiang publicly stated the harsh truth: 600 million Chinese monthly income is less than $160 USD (1000 Rmb) .
(Part III coming. What does this harsh truth mean to Ccp’s politics and actions? )
Again, an inconvenient truth. Foxcon etc prefer uneducated 16 17 year old teenage girls to work in the factory. Girls are preferred because they are more docile, agreeable, less ambitious, and most importantly easier to manage when,
When you put four of them in the same factory dorm room.
That’s how you keep the cost low. That’s what China Export really boils down
Rozelle points out that unlike Korea which the whole society places education above all else, Chinese society does not.
Yea it’s that bad. 60-70% of the workforce actually didn’t finish high school. ( You can cross reference to the Li Ke-Chiang stats where 600 million earns no more than 160$ USD monthly. )
I learned a lot from Pettis years ago when he was teaching at Peking Uni. I could not believe the Chinese government allowed him to say the things he was saying. He really is a great teacher. He took a job with a company and I think they silenced his writings/blogging. That was years ago. Where can I read or hear him now? He is a musician like I am. We exchanged mails many years go. I never got the chance to visit his club in Beijing when it was open.