China offers the cheapest high spec manufacturing in the world. If the US doesn’t buy that manufacturing, that leaves the rest of the world. Of course China wants American money, but it’s not going to devastate their economy in the short term. It’s a reasonable cost for providing China with so many opportunities, which they are aggressively pursuing, to cultivate deep seated international power.
The prevalence of Chinese manufacturing actually is a national problem for the US. While China has its pick of buyers, the US is stuck with one seller. The US should have been working for twenty years with India, Pakistan, Brazil, Indonesia, Vietnam, and maybe even some counties in Africa to create access to alternatives. It didn’t.
Weaning the US off Chinese manufacturing would take decades of elegant economic policy and diplomacy featuring several countries. China knows this is where it actually has power over the US.
I have worked professionally with Chinese vendors and suppliers for years, both pre and post COVID. China offers the whole range of manufacturing, not just cheap labor but high tech and precision devices too. You want cheap injection molded toys for Happy Meals? Done. Precision machine tools for CNC? Can do. Medical imaging devices? No problem. Mass assembly of automotive cable looms? Easy. If a business wants quality product from China they can do it.
And much like the classic European model where a textile or steel industry would collect in a valley for logistic/resource reasons and organically form an industrial ‘core’ the same is true in China, but with a centralized planned economy. Vocational schools feed local industry with skilled workers like engineers or tool and die makers, so that region experiences further and further specialization and conglomeration.
There’s no coherent or comparable manufacturing:educational alliance in the US, closest we have is ‘feeder schools’ that partner with individual industrial/scientific giants on an ad-hoc basis.
Which makes the debt ceiling fight that’s coming up even more interesting. (article from March 24th)
The U.S. is most likely to default on its $36 trillion national debt sometime between mid-July and early October if Congress doesn’t act, the Bipartisan Policy Center predicted Monday.
…
Debt limit forecasters are expected to release a narrower X-date prediction after most tax receipts have landed at the IRS in April. While it’s “quite unlikely,” there is still a possibility that the U.S. could run out of borrowing power in early June if that gush of tax revenue comes in far below projections, the Bipartisan Policy Center cautioned.
The cost-cutting efforts of the Department of Government Efficiency effort headed by Elon Musk could also affect cash flow enough to change the X-date prediction, along with the strength of the economy, tariffs and any new spending or cuts Congress approves, the center said.
Given how DOGE is inflating it’s cost cutting savings by over $140 Billion, the tariff trade war, and congress’ habit of pushing things to the brink when their luck is going to run out sooner or later – this could get ugly quick.
I think that underestimates the extent to which the Chinese economy is vulnerable to reduced demand from foreign partners. I’m not saying China’s in a worse position than the US, since the US has a blithering imbecile traitor as President. But they’re not invulnerable to economic shocks either.
China will definitely suffer, but it also doesn’t care. Public opinion supporting its actions are not a priority in China. Trump is starting to feel the bite his stupidity has taken him. Not sure if he understands completely, but he’s getting an idea that he’ll wear the blame. Not from the Maga, but from everyone else.
Also, despite how much Trump wants to pretend he’s a dictator, he’s not. Both Congress and the Supreme Court have the power to stop this tariff idiocy at any point if the consequences get to be too bad. Xi is actually a dictator and the likelihood of any other power base overriding him is slim to none.
Xi isn’t a dictator and can be removed at any time. If you understand how US propaganda is working for trump, you should be able to understand how it works against china.
One whose decisions have to be approved, and can be removed by a simple majority vote at any time… If dictators were actually like that no one would have a problem with them.
I hope they don’t back down, even if that orange whimp ends up pulling back the tariffs. Don’t re-engage with the US until they elect a decent leader. They should really feel the impact of electing such a moron for a internationally significant role.
Yep. If America doesn’t have a severe depression &/or civil war, the mental illness of MAGA will continue destroying the country from within, and wreaking havoc with global stability.
You’re absolutely correct on the US topic, but one comment on the Chinese side: China does suffer from an excess of export focused production. Their excess of production capacity is artificial (created by Goverent investment) and has resulted in the need for continued Government cash injections.
The Chinese government investment injection has resulted in significant leads in at least two international markets (EV, and solar panels perhaps batteries by volume.)
The cost has been a parge amount for waste and loss of public money (there were a lot of of losses in their recent tech/chip investment for example.)
These losses came at a hard time when the general popilation was suffering from significant equity loss, mainly real estate. There is an argument to make that trying to spur the domestic market would be better than investing in overcapacity.
… Yes that is how production works in a healthy economy. You have multiple companies competing for the same consumers, resulting in over production.
Cars are a luxury object that are entirely unnecessary, so they aren’t a centrally planned industry.
The extra then gets sold off. But the fact you simply cannot buy most Chinese ev brands outside of china (and some belt and road countries) kinda proves the point. Besides BYD and Rivian, you’re not finding many Chinese evs outside of china, and those are just two of the top twenty manufacturers.
Nope, they’re private sector. Technically the state does produce some busses and of course electric trains; but consumer evs are entirely private sector enterprises.
These losses came at a hard time when the general popilation was suffering from significant equity loss, mainly real estate
Is this a reference to the 99 year leases people can get instead of full ownership or the citizens investment into big housing projects that some say are scams?
I am refering to the massive drop in real estate value that happen as over the last 2 years. Real estate is a primary wealth vehicle for urban Chinese.
Why would China be desperate?
China offers the cheapest high spec manufacturing in the world. If the US doesn’t buy that manufacturing, that leaves the rest of the world. Of course China wants American money, but it’s not going to devastate their economy in the short term. It’s a reasonable cost for providing China with so many opportunities, which they are aggressively pursuing, to cultivate deep seated international power.
The prevalence of Chinese manufacturing actually is a national problem for the US. While China has its pick of buyers, the US is stuck with one seller. The US should have been working for twenty years with India, Pakistan, Brazil, Indonesia, Vietnam, and maybe even some counties in Africa to create access to alternatives. It didn’t.
Weaning the US off Chinese manufacturing would take decades of elegant economic policy and diplomacy featuring several countries. China knows this is where it actually has power over the US.
I have worked professionally with Chinese vendors and suppliers for years, both pre and post COVID. China offers the whole range of manufacturing, not just cheap labor but high tech and precision devices too. You want cheap injection molded toys for Happy Meals? Done. Precision machine tools for CNC? Can do. Medical imaging devices? No problem. Mass assembly of automotive cable looms? Easy. If a business wants quality product from China they can do it.
And much like the classic European model where a textile or steel industry would collect in a valley for logistic/resource reasons and organically form an industrial ‘core’ the same is true in China, but with a centralized planned economy. Vocational schools feed local industry with skilled workers like engineers or tool and die makers, so that region experiences further and further specialization and conglomeration.
There’s no coherent or comparable manufacturing:educational alliance in the US, closest we have is ‘feeder schools’ that partner with individual industrial/scientific giants on an ad-hoc basis.
China has been working with African countries for decades to build their supply lines. The US has had a blind spot over Africa the whole time
Also, China has a shitload of US debt that they can use as leverage
Which makes the debt ceiling fight that’s coming up even more interesting. (article from March 24th)
Given how DOGE is inflating it’s cost cutting savings by over $140 Billion, the tariff trade war, and congress’ habit of pushing things to the brink when their luck is going to run out sooner or later – this could get ugly quick.
I think that underestimates the extent to which the Chinese economy is vulnerable to reduced demand from foreign partners. I’m not saying China’s in a worse position than the US, since the US has a blithering imbecile traitor as President. But they’re not invulnerable to economic shocks either.
China will definitely suffer, but it also doesn’t care. Public opinion supporting its actions are not a priority in China. Trump is starting to feel the bite his stupidity has taken him. Not sure if he understands completely, but he’s getting an idea that he’ll wear the blame. Not from the Maga, but from everyone else.
Also, despite how much Trump wants to pretend he’s a dictator, he’s not. Both Congress and the Supreme Court have the power to stop this tariff idiocy at any point if the consequences get to be too bad. Xi is actually a dictator and the likelihood of any other power base overriding him is slim to none.
Xi isn’t a dictator and can be removed at any time. If you understand how US propaganda is working for trump, you should be able to understand how it works against china.
Xi is a de facto dictator
One whose decisions have to be approved, and can be removed by a simple majority vote at any time… If dictators were actually like that no one would have a problem with them.
And no one will dare go against the party, and he is the head of the party, hence de facto dictator. A dictator in all but name
…except they do. Often. That’s how he was elected even, the party going against the president.
I know western propaganda has trillions of USD behind it, but you don’t have to pay attention.
They do often? Really? That’s why he’s been removed? Oh wait no he hasn’t. You don’t have to pay attention to Chinese propaganda either.
Why would he be removed…?
His ideas don’t always become policy, that’s a verifiable fact.
I hope they don’t back down, even if that orange whimp ends up pulling back the tariffs. Don’t re-engage with the US until they elect a decent leader. They should really feel the impact of electing such a moron for a internationally significant role.
Yep. If America doesn’t have a severe depression &/or civil war, the mental illness of MAGA will continue destroying the country from within, and wreaking havoc with global stability.
You’re absolutely correct on the US topic, but one comment on the Chinese side: China does suffer from an excess of export focused production. Their excess of production capacity is artificial (created by Goverent investment) and has resulted in the need for continued Government cash injections.
The Chinese government investment injection has resulted in significant leads in at least two international markets (EV, and solar panels perhaps batteries by volume.) The cost has been a parge amount for waste and loss of public money (there were a lot of of losses in their recent tech/chip investment for example.)
These losses came at a hard time when the general popilation was suffering from significant equity loss, mainly real estate. There is an argument to make that trying to spur the domestic market would be better than investing in overcapacity.
…You understand the primary market for Chinese products, especially ev and solar, is Chinese citizens, right?
Its not even close.
Hmm, Chinese are a target for EVs, but the production capacity clearly exceeds Chinese civilian purchasing power.
… Yes that is how production works in a healthy economy. You have multiple companies competing for the same consumers, resulting in over production.
Cars are a luxury object that are entirely unnecessary, so they aren’t a centrally planned industry.
The extra then gets sold off. But the fact you simply cannot buy most Chinese ev brands outside of china (and some belt and road countries) kinda proves the point. Besides BYD and Rivian, you’re not finding many Chinese evs outside of china, and those are just two of the top twenty manufacturers.
You have a good point.
EVs have no central planning in China?
Nope, they’re private sector. Technically the state does produce some busses and of course electric trains; but consumer evs are entirely private sector enterprises.
I am doubting myself on this after your comment. I don’t know much about the domestic purchase volume but if EVs in China.
Is this a reference to the 99 year leases people can get instead of full ownership or the citizens investment into big housing projects that some say are scams?
I am refering to the massive drop in real estate value that happen as over the last 2 years. Real estate is a primary wealth vehicle for urban Chinese.