Altcoins Talks - Cryptocurrency Forum
Further Discussions => Economics , Sociology & Politics => Topic started by: DrBeer on January 25, 2024, 05:42:31 PM
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It's no secret that after the Kovid pandemic, China's economy has been hit pretty hard. Further problems were a continuation of the economic confrontation with the U.S., which was not a smart move on China's part, as overestimating its strength is the biggest mistake.
Then there was (and now the problem continues) Evergrande and in general the real estate market and related sectors of the economy....
And the day before yesterday the news came out: China is considering the option of withdrawing 2 trillion yuan ($278 billion) from offshore accounts of state-owned companies to save the record falling stock market. Bloomberg writes about it.
According to people familiar with the matter, Chinese authorities are considering a package of measures to stabilize the falling stock market after previous attempts to restore investor confidence failed and prompted Prime Minister Li Keqiang to call for "forceful" steps.
On the one hand, it seems to be the world's second economy, "the world's factory", nominally "the second pole of the bipolar world", on the other hand, it is no longer possible to hide the problems and it is necessary to take such measures. The question is: since the situation with the Chinese economy is no longer manageable, and we have to take tough and prompt actions to save the economy - how do you think this will affect the global economy, the crypto market, and what to prepare for?
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I'm not very knowledgeable on their detailed status, but from what I've read there is still no plan for the future which is the key reason why investors don't have enough confidence in their market. If they can somehow provide that, would the market change as quickly as it needed? What is the timeframe for this doomsday scenario? What is the worst-case scenario that will likely happen, other than the fall of the Yuan as a currency?
If we limit the scenario to that one, I believe some people will try to quickly switch to gold or even crypto, not publicly of course. We can also argue that miners will probably get a short-term benefit if they can sell some of their BTC and then convert the fiat to other currencies quickly. Businesses will probably operate as usual, but if some of them were forced to move out I think a price hike on stuff like electronics might happen if they can't find another place to get cheap labour. CMIIW.
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I'm not very knowledgeable on their detailed status, but from what I've read there is still no plan for the future which is the key reason why investors don't have enough confidence in their market. If they can somehow provide that, would the market change as quickly as it needed? What is the timeframe for this doomsday scenario? What is the worst-case scenario that will likely happen, other than the fall of the Yuan as a currency?
If we limit the scenario to that one, I believe some people will try to quickly switch to gold or even crypto, not publicly of course. We can also argue that miners will probably get a short-term benefit if they can sell some of their BTC and then convert the fiat to other currencies quickly. Businesses will probably operate as usual, but if some of them were forced to move out I think a price hike on stuff like electronics might happen if they can't find another place to get cheap labour. CMIIW.
What we're seeing are already manifestations of the problem. One of the key problems that has arisen in China, as a result of the political confrontation with the West, is the outflow of investors and investment funds. And the scale of this process is huge.
The loss of investment attractiveness for China is essentially a 180-degree turn to the past, which is not the most successful. Because it was China's investment attractiveness in the 80-90s of the last century that made it the "Chinese miracle" in the 2000s.
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I'm not very knowledgeable on their detailed status, but from what I've read there is still no plan for the future which is the key reason why investors don't have enough confidence in their market. If they can somehow provide that, would the market change as quickly as it needed? What is the timeframe for this doomsday scenario? What is the worst-case scenario that will likely happen, other than the fall of the Yuan as a currency?
If we limit the scenario to that one, I believe some people will try to quickly switch to gold or even crypto, not publicly of course. We can also argue that miners will probably get a short-term benefit if they can sell some of their BTC and then convert the fiat to other currencies quickly. Businesses will probably operate as usual, but if some of them were forced to move out I think a price hike on stuff like electronics might happen if they can't find another place to get cheap labour. CMIIW.
What we're seeing are already manifestations of the problem. One of the key problems that has arisen in China, as a result of the political confrontation with the West, is the outflow of investors and investment funds. And the scale of this process is huge.
The loss of investment attractiveness for China is essentially a 180-degree turn to the past, which is not the most successful. Because it was China's investment attractiveness in the 80-90s of the last century that made it the "Chinese miracle" in the 2000s.
I agree. Chinas agressiveness on it's neighbors and the world is what makes them face consequences right now. Though there really is no assurance that what happened in China right now isn't staged or something because even though there are difficulties and challenges they are facing today that was being said by the CCP's Dictator they are still provocative and agressive on the SCS. Propaganda is quiet common this country so I am a little confused about it right now.
A lot of allied companies and investors backed out of China because of this behavior so I am not surprised if China will play victim here to get international attention. But yeah I don't know it's quiet confusing.
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I quite agree with what you are saying, sir, @DrBeer, but I also believe that the country's economy is still better than some other countries. Some countries have a huge amount of unpaid debt, which was the loan collected from other countries.
For stock investors, if they actually believe that the stock market will greatly bleed and cause them loss, then I just think they have to devise their investment to Bitcoin, and then the government of China should do what they feel is right (what will work) to make sure they strengthen up their economy. IMO, that's what I can say.
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I quite agree with what you are saying, sir, @DrBeer, but I also believe that the country's economy is still better than some other countries. Some countries have a huge amount of unpaid debt, which was the loan collected from other countries.
For stock investors, if they actually believe that the stock market will greatly bleed and cause them loss, then I just think they have to devise their investment to Bitcoin, and then the government of China should do what they feel is right (what will work) to make sure they strengthen up their economy. IMO, that's what I can say.
It's always like that in life - there will always be someone worse than you and there will always be someone better than you :) It's the same with the Chinese economy. Yes, there are many countries with worse economies ! That's a fact. But there is a saying, I do not know if I can correctly convey its meaning in English, "The bigger the cupboard, the louder it falls". It's about the Chinese economy. Small economy - small problem, few dependencies, few influences. It's easy to save. But a huge economy that has problems both inside and outside, and each of the problems strengthens the neighboring one, and two problems generate a third.... So far I don't see the Chinese government being able to at least slow down the decline. There are many steps that could theoretically help, but in the end they do nothing - the problems, like a snowball rolling down a snow-covered mountain, grow and gain speed....
The problem that worries me more is who will be in the path of this snowball, and what kind of destruction will this snowball do at the foot of the mountain ?
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The first serious manifestations of the crisis by the Chinese economy, and the bankruptcy of one of the CRUCIAL companies in China: "A court has ordered the liquidation of China's largest real estate developer Evergrande due to debts. The court decided to liquidate the world's largest debtor with more than $300 billion in liabilities after noting that Evergrande failed to offer a concrete restructuring plan for more than two years after failing to pay debts and several court hearings."
$300 billion. 1 company. A company that impacts multiple industries.
This is just the beginning....
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I do not prepare differently for macroeconomic events than I do in general. Now there are also tensions in the Middle East that could affect the economy in general. What I do is that I have savings in investments and part of them I hold directly as some cash, some gold and bitcoin. If a crisis comes, it is better to be caught with savings, investments and more than one source of income. People who are caught without a penny, in debt and depending on a precarious job to eat are going to have a hard time.
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I do not prepare differently for macroeconomic events than I do in general. Now there are also tensions in the Middle East that could affect the economy in general. What I do is that I have savings in investments and part of them I hold directly as some cash, some gold and bitcoin. If a crisis comes, it is better to be caught with savings, investments and more than one source of income. People who are caught without a penny, in debt and depending on a precarious job to eat are going to have a hard time.
If such knowledge were given to children in school - how to manage their money, what is investment, what is diversification, and what is logical consumption - the majority of the world's population would not be in such a difficult situation. And for many generations.
So for your approach + !
But back to China. In fact, the global crisis of the Chinese economy, can lead... to the improvement of other economies! Closure of factories and plants will create a "vacuum" of goods, which were massively and inexpensively produced by China. As the saying goes, "The holy place is never empty". This may lead to the restoration of localized production in other countries, including countries that are major consumers of goods from China. I, for example, would prefer the same goods, but produced in my country, even if with a higher price. But I would know that these goods work for the economy of my country
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China’s gold imports surge to record high as appetite increases, middle class seek wealth security (https://www.scmp.com/economy/economic-indicators/article/3249894/chinas-gold-imports-surge-record-high-appetite-increases-middle-class-seek-wealth-security?source=pmbug.com)
China’s appetite for gold rose to record high levels last year, as investors sought to secure their assets and limit uncertainties caused by a weak yuan, an ongoing property slump and fears over a stock market rout.
Imports of gold for non-monetary use – products including gold jewellery – rose to 1,447 tonnes last year, breaking the previous record of 1,427 tonnes in 2018, according to the General Administration of Customs.
Domestic sales in China also hit 1,090 tonnes of gold last year, according to the China Gold Association, with gold jewellery consumption increasing by 7.97 per cent year on year and purchases of gold bars and coins increasing by 15.7 per cent.
With limited access to overseas assets, China’s middle class are seen to be attempting to preserve their fortunes, which have dwindled amid the slumping property market.
“Facing the property and stock market slump, global geopolitical instability, and the fall of the Chinese yuan’s exchange rate, gold purchasing is currently the best way for Chinese residents to preserve their wealth,” said Peng Peng, executive chairman of the Guangdong Society of Reform.
"China's economy is very sick. What to prepare for?"
Let's prepare for higher gold prices 8)
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China’s gold imports surge to record high as appetite increases, middle class seek wealth security (https://www.scmp.com/economy/economic-indicators/article/3249894/chinas-gold-imports-surge-record-high-appetite-increases-middle-class-seek-wealth-security?source=pmbug.com)
China’s appetite for gold rose to record high levels last year, as investors sought to secure their assets and limit uncertainties caused by a weak yuan, an ongoing property slump and fears over a stock market rout.
Imports of gold for non-monetary use – products including gold jewellery – rose to 1,447 tonnes last year, breaking the previous record of 1,427 tonnes in 2018, according to the General Administration of Customs.
Domestic sales in China also hit 1,090 tonnes of gold last year, according to the China Gold Association, with gold jewellery consumption increasing by 7.97 per cent year on year and purchases of gold bars and coins increasing by 15.7 per cent.
With limited access to overseas assets, China’s middle class are seen to be attempting to preserve their fortunes, which have dwindled amid the slumping property market.
“Facing the property and stock market slump, global geopolitical instability, and the fall of the Chinese yuan’s exchange rate, gold purchasing is currently the best way for Chinese residents to preserve their wealth,” said Peng Peng, executive chairman of the Guangdong Society of Reform.
"China's economy is very sick. What to prepare for?"
Let's prepare for higher gold prices 8)
You are right that on the threshold of crisis and uncertainty - the population, and even governments - begin to accumulate the most ancient, liquid asset - gold. by the way, note - not cryptocurrencies :)
But here is a nuance - the population owning gold "for a rainy day", in case of problems, in the mass of its will sell gold to get food, goods of regular demand, medicines, gasoline, .... And this will lead to LOCAL inflation of gold.
Regarding the gold reserves of the state of China - it is a complicated topic, because China has classified its real data on gold reserves and currencies. It is possible to guess, and to PREPARE. Even if we know that China buys a lot of gold, we cannot say where this gold is really located and who owns it :). For example, the same kinesis ;) has a regular audit ! Who can confirm China's statements about gold ?
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A very interesting observation about China, which explains what is happening, or rather shows how deep the problem of the Chinese economy lies:
For decades, the Chinese authorities have not missed an opportunity to hide inconvenient facts about the state of affairs in the economy and looked through their fingers at similar practices of local businesses. But as long as the country's GDP was steadily rising and investments in it were yielding profits, Western businesses put up with such specifics and steadily brought in money. The situation changed in 2023, when the usual growth model suddenly failed. Instead of recognizing the problems, Beijing declared an all-out war on negativity and began to assure large investors that nothing terrible was happening. By the end of the year, the country faced record capital outflows and a falling stock market, although, judging by the latest data, it will achieve the announced GDP growth. For 2024, the authorities are going to intensify economic propaganda and attract funds from abroad to get out of the critical situation.
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You are right that on the threshold of crisis and uncertainty - the population, and even governments - begin to accumulate the most ancient, liquid asset - gold. by the way, note - not cryptocurrencies :)
OMG... finally... I have found LOVE!!!
;D
Regarding the gold reserves of the state of China - it is a complicated topic, because China has classified its real data on gold reserves and currencies. It is possible to guess, and to PREPARE. Even if we know that China buys a lot of gold, we cannot say where this gold is really located and who owns it :). For example, the same kinesis ;) has a regular audit ! Who can confirm China's statements about gold ?
To be honest neither the USA nor any other country let their gold reserves be audited.
China wants to expand the use of their Yuan. They want the Yuan to be accepted when they buy energy, metals, foods and other resources from abroad.
They have amassed gold reserves because backing a national currency with gold it's the only way to make that currency internationally acceptable.
The strength of the $ derives by 8.000 tons of gold supposedly stored in Forth Knox or some other place.
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China's economy is their problem. if they crumble to their own dark ages, its their problem. if their gold couldn't not help them to get back up, they really have the faulty management. but while they are yet crumbling i guess the world who invested in them already have the heads up.
but believe it or not, they are going to expand the use of Yuan just as what every country wants to do. even India wants to expand their use of Rupee. but as of now, we can only see digital yuan already made the first transaction with Saudi Arabia.
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I do not think China will have many economical problems unless they will have serious sanctions as what happened to Russia, which is by the way quite useless but that's another story.
China has a link with every single country of the world, a lot of trading contracts where China is the sole winner. The collapse of a famous company or even a couple of them doesn't mean anything since the money is centralised in the government hands. I think it is more of restructuring term rather than a simple collapse.
China is leading in most of the things including electrical cars recently. Certainly the Covid-19 pandemic has a huge impact but with the price of oil taken cheaply from Russia, the economy will return as used to be if not faster.
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You are right that on the threshold of crisis and uncertainty - the population, and even governments - begin to accumulate the most ancient, liquid asset - gold. by the way, note - not cryptocurrencies :)
OMG... finally... I have found LOVE!!!
;D
Regarding the gold reserves of the state of China - it is a complicated topic, because China has classified its real data on gold reserves and currencies. It is possible to guess, and to PREPARE. Even if we know that China buys a lot of gold, we cannot say where this gold is really located and who owns it :). For example, the same kinesis ;) has a regular audit ! Who can confirm China's statements about gold ?
To be honest neither the USA nor any other country let their gold reserves be audited.
China wants to expand the use of their Yuan. They want the Yuan to be accepted when they buy energy, metals, foods and other resources from abroad.
They have amassed gold reserves because backing a national currency with gold it's the only way to make that currency internationally acceptable.
The strength of the $ derives by 8.000 tons of gold supposedly stored in Forth Knox or some other place.
;D
Regarding reserves - yes I agree, most if not all countries do not allow auditors to see their reserves. And they won't ! Hence we conclude that if they officially announce reserves but do not allow audits, it means there is something to hide! And it is unlikely that it will be an excess of real reserves over the declared reserves :)
If we go back to China, the problem there is more complicated and wider - manipulation of economic evaluation has been going on for a couple of decades. And there are many examples when official figures diverge from reality. And very strongly. The reason is also trivial: China needed to show "amazing economic effect" in order to continue attracting huge investments. But as you know - you can lie for a long time, but the reality will not change and the economy will not grow. Apparently now China has come to the point where manipulation and lies can no longer hide the real picture. That is why total control of the media was introduced as early as 2022.
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And the day before yesterday the news came out: China is considering the option of withdrawing 2 trillion yuan ($278 billion) from offshore accounts of state-owned companies to save the record falling stock market. Bloomberg writes about it.
Well Bloomberg is wrong
Chinese authorities are repatriating their assets to protect themselves from NATO countries freezing (stealing) them.
If Chinese monetary authorities need capital in order to prop up their stock market, they won't go abroad, they have plenty at home.
On the one hand, it seems to be the world's second economy
Well, considering the Purchasing Power Poverty (PPP), China seems to be the first one :D
(https://images.moneycontrol.com/static-mcnews/2024/01/WhatsApp-Image-2024-01-15-at-18.41.17.jpeg)
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And the day before yesterday the news came out: China is considering the option of withdrawing 2 trillion yuan ($278 billion) from offshore accounts of state-owned companies to save the record falling stock market. Bloomberg writes about it.
Well Bloomberg is wrong
Chinese authorities are repatriating their assets to protect themselves from NATO countries freezing (stealing) them.
If Chinese monetary authorities need capital in order to prop up their stock market, they won't go abroad, they have plenty at home.
On the one hand, it seems to be the world's second economy
Well, considering the Purchasing Power Poverty (PPP), China seems to be the first one :D
1. assets are being withdrawn only to try to save the market. And no one is going to freeze them. China is neither a terrorist country nor an international aggressor-criminal country at the moment.
If they are preparing to change their status to the listed ones, they can probably withdraw their assets :)) But, having broken the connection with Western markets, China will shoot itself in the foot... Or even in the head....
The second problem is that - they have enough in words, but the real picture is different. At a minimum they would find the means to keep the construction and related markets from collapsing, and keep Evergrand from going bankrupt.
And the reality of China's stock market is as follows, and it's easy to verify: China is recording insane losses on the stock exchanges. In total, Chinese and Hong Kong stocks have lost $6.3 trillion since peaking in 2021.
And the rate of decline is only increasing.
2. Nominal GDP at PPP is a good but specific indicator. It was best described by one economist, I don't remember his name now, but I'll try to find it, so he said - this indicator was introduced so that poor countries/countries with troubled economies could show that they are doing well.
PS please don't think I'm a China-hater :) Just now I read their media, and listen to people who live in China, read analytics, and realize how it reminds me of the "death spasms" of the USSR. True, China has a little more safety margin, although it is leveled by deteriorating relations with the West.
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(https://pbs.twimg.com/media/GIs3_HIaYAAM4H9?format=jpg&name=900x900)
New York/London
gold 2150
silver 25
Shanghai
gold 2190
silver 27,40
NY/London, paper markets
Shanghai, physical market
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With its Belt and Road Initiative (BRI, also known as “One Belt, One Road”), China has become South America’s largest source of infrastructure investment and second-largest trading partner, increasing trade from $18 billion in 2002 to $450 billion in 2022.
Twenty-five of 31 Central and South American countries have negotiated infrastructure investments from China, and 22 of those nations, most recently Honduras, have formally signed onto the BRI program.
Chinese companies, either owned or subsidized by the Chinese Communist Party (CCP), operate mines in Mexico, Argentina, Peru, and Venezuela, electrical grids in Peru and Chile, 5G wireless systems in Costa Rica, Bolivia, Brazil, and Mexico—80 percent of Mexico’s telecommunications equipment is provided by Chinese companies—space launch and satellite tracking facilities in Argentina, and the world’s largest embassy in the Bahamas.
The U.S. State Department estimates China’s trade with Latin American nations and investments in sea, space, telecommunication, critical minerals, and energy will match the United States by 2035 in the region. China’s military ties with Venezuela, Cuba, Peru, and Chile—which now include port visits by Chinese warships and technical advisers—will mature into base agreements within a decade.
China has, or plans to build or improve, 40 ports across 16 Latin American and Caribbean countries without restrictions on military use, including on both ends of the Panama Canal, where CCP-sponsored companies are bidding with Panama to work on the U.S.-built canal.
Next fall, Chinese leader Xi Jinping will be in Peru to commemorate the completion of “a $3.6 billion ‘mega port’ that was financed by China, built by Chinese workers, and it will be owned and operated by a CCP-backed company,” House Armed Services Committee Chair Rep. Mike Rogers (R-Ala.) said.
zerohedge.com (https://www.zerohedge.com/geopolitical/belt-and-road-western-hemisphere-investments-has-china-firmly-rooted-americas-backyard)
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With its Belt and Road Initiative (BRI, also known as “One Belt, One Road”), China has become South America’s largest source of infrastructure investment and second-largest trading partner, increasing trade from $18 billion in 2002 to $450 billion in 2022.
Twenty-five of 31 Central and South American countries have negotiated infrastructure investments from China, and 22 of those nations, most recently Honduras, have formally signed onto the BRI program.
Chinese companies, either owned or subsidized by the Chinese Communist Party (CCP), operate mines in Mexico, Argentina, Peru, and Venezuela, electrical grids in Peru and Chile, 5G wireless systems in Costa Rica, Bolivia, Brazil, and Mexico—80 percent of Mexico’s telecommunications equipment is provided by Chinese companies—space launch and satellite tracking facilities in Argentina, and the world’s largest embassy in the Bahamas.
The U.S. State Department estimates China’s trade with Latin American nations and investments in sea, space, telecommunication, critical minerals, and energy will match the United States by 2035 in the region. China’s military ties with Venezuela, Cuba, Peru, and Chile—which now include port visits by Chinese warships and technical advisers—will mature into base agreements within a decade.
China has, or plans to build or improve, 40 ports across 16 Latin American and Caribbean countries without restrictions on military use, including on both ends of the Panama Canal, where CCP-sponsored companies are bidding with Panama to work on the U.S.-built canal.
Next fall, Chinese leader Xi Jinping will be in Peru to commemorate the completion of “a $3.6 billion ‘mega port’ that was financed by China, built by Chinese workers, and it will be owned and operated by a CCP-backed company,” House Armed Services Committee Chair Rep. Mike Rogers (R-Ala.) said.
zerohedge.com (https://www.zerohedge.com/geopolitical/belt-and-road-western-hemisphere-investments-has-china-firmly-rooted-americas-backyard)
I agree that China presents itself as a "dear brother and helper of the third world countries." Yes, they are allocating huge amounts of money from their shrinking budget... But China is a very cunning, pragmatic and cynical player. There is no need to consider what is happening as altruism and friendly help - this is a cynical calculation whose goal is precisely to create a belt of economically dependent colonies that will save... no, not their own economy, but the Chinese one. First of all, sales markets are critically important to China. They are losing the Western one. Moreover, this is the most highly profitable market. Having lost the sale of 1 conditional product on the Western market, China needs to find territories where it can sell 3 units of this product, because The margin on the Western market and on the third world market is several times different.
The second problem is the so-called investments. I have already given the example of Sri Lanka, where investments in the port became a “slave financial yoke” for the country for many decades, while Sri Lanka did not receive any benefits. The main, no, even the MONOPOLY beneficiary of Chinese investments is China itself, and the country receiving the investments becomes an obedient slave of the Chinese economy.
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New information about the real problems of the Chinese economy, for thought:
1. As Bloomberg reports:
The total debt of Chinese provinces and municipalities amounted to 66 trillion yuan, or 9.2 trillion dollars in dollar terms.
8 out of 33 provinces in China are currently in a situation where more than 100% of their revenues are needed just to pay interest on debts.
This is unimaginable - in order not to pay off the debt, but simply to pay the interest on it, you need to give away all the income and borrow a little more!
2. MSCI, which calculates various stock market indices, decided to exclude 66 Chinese stocks from its MSCI China index after the Chinese stock market fell by trillions of dollars.
https://www.bloomberg.com/news/articles/2024-02-13/msci-cuts-swath-of-china-firms-showing-how-downtrodden-market-is?srnd=markets-vp
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I agree that China presents itself as a "dear brother and helper of the third world countries." Yes, they are allocating huge amounts of money from their shrinking budget... But China is a very cunning, pragmatic and cynical player. There is no need to consider what is happening as altruism and friendly help - this is a cynical calculation whose goal is precisely to create a belt of economically dependent colonies that will save... no, not their own economy, but the Chinese one. First of all, sales markets are critically important to China. They are losing the Western one. Moreover, this is the most highly profitable market. Having lost the sale of 1 conditional product on the Western market, China needs to find territories where it can sell 3 units of this product, because The margin on the Western market and on the third world market is several times different.
The second problem is the so-called investments. I have already given the example of Sri Lanka, where investments in the port became a “slave financial yoke” for the country for many decades, while Sri Lanka did not receive any benefits. The main, no, even the MONOPOLY beneficiary of Chinese investments is China itself, and the country receiving the investments becomes an obedient slave of the Chinese economy.
The point of my posts is to deliver infos in order to judge how strong is China economy, it's not about showing how saint the Chinese are.
That said, there must be a reason why so many countries prefer China to the USA doc
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I agree that China presents itself as a "dear brother and helper of the third world countries." Yes, they are allocating huge amounts of money from their shrinking budget... But China is a very cunning, pragmatic and cynical player. There is no need to consider what is happening as altruism and friendly help - this is a cynical calculation whose goal is precisely to create a belt of economically dependent colonies that will save... no, not their own economy, but the Chinese one. First of all, sales markets are critically important to China. They are losing the Western one. Moreover, this is the most highly profitable market. Having lost the sale of 1 conditional product on the Western market, China needs to find territories where it can sell 3 units of this product, because The margin on the Western market and on the third world market is several times different.
The second problem is the so-called investments. I have already given the example of Sri Lanka, where investments in the port became a “slave financial yoke” for the country for many decades, while Sri Lanka did not receive any benefits. The main, no, even the MONOPOLY beneficiary of Chinese investments is China itself, and the country receiving the investments becomes an obedient slave of the Chinese economy.
The point of my posts is to deliver infos in order to judge how strong is China economy, it's not about showing how saint the Chinese are.
That said, there must be a reason why so many countries prefer China to the USA doc
And I'll explain :)
My posts are not about the fact that “the Chinese are bad”, in no case - they are people just like the rest of us. This means that China's economy is a "paper tiger" that is artificially supported by the government, not by reforms but by information manipulation. And also about the fact that China is leaving at the peak of economic degradation, and the real state of affairs in the Chinese economy is much worse than what the Chinese Communist Party and its supporters are trying to portray to us. The essence of my posts is also that it is worth starting today to take steps to diversify economic ties with China, preparing “spare” sites for production, and this is also a “signal” to start investing today in other countries, for example India. I’m not happy about China’s troubles, I’m just saying what’s happening there and what we should prepare for, moreover, in the complex - economics, politics, world processes.
I don’t consider the economy strong, I consider it BIG, and in some sense efficient if there are markets. But even this did not save it from the collapse of the internal sectors of the economy.
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New information about the real problems of the Chinese economy, for thought:
1. As Bloomberg reports:
The total debt of Chinese provinces and municipalities amounted to 66 trillion yuan, or 9.2 trillion dollars in dollar terms.
8 out of 33 provinces in China are currently in a situation where more than 100% of their revenues are needed just to pay interest on debts.
This is unimaginable - in order not to pay off the debt, but simply to pay the interest on it, you need to give away all the income and borrow a little more!
2. MSCI, which calculates various stock market indices, decided to exclude 66 Chinese stocks from its MSCI China index after the Chinese stock market fell by trillions of dollars.
https://www.bloomberg.com/news/articles/2024-02-13/msci-cuts-swath-of-china-firms-showing-how-downtrodden-market-is?srnd=markets-vp
If true that is pretty fucked up. So the question is how reliable is the info. I could see 2025 as a big shake up Trump gets in and tries to cut China off at the knees .while pivoting to India as a labor source.
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New information about the real problems of the Chinese economy, for thought:
1. As Bloomberg reports:
The total debt of Chinese provinces and municipalities amounted to 66 trillion yuan, or 9.2 trillion dollars in dollar terms.
8 out of 33 provinces in China are currently in a situation where more than 100% of their revenues are needed just to pay interest on debts.
This is unimaginable - in order not to pay off the debt, but simply to pay the interest on it, you need to give away all the income and borrow a little more!
2. MSCI, which calculates various stock market indices, decided to exclude 66 Chinese stocks from its MSCI China index after the Chinese stock market fell by trillions of dollars.
https://www.bloomberg.com/news/articles/2024-02-13/msci-cuts-swath-of-china-firms-showing-how-downtrodden-market-is?srnd=markets-vp
If true that is pretty fucked up. So the question is how reliable is the info. I could see 2025 as a big shake up Trump gets in and tries to cut China off at the knees .while pivoting to India as a labor source.
This information is available in open Western sources. I am not sure that the Chinese media, controlled by the Chinese Communist Party, will openly publish such negative data.
No matter how much I dislike Trump, I can partially admit that he has reasonable ideas regarding efforts to “revive” the power of the United States, lost in recent years. Revival or strengthening, both economic and political. And China will be one of the “victims” of this policy. Moreover, many already understand that if the world now does not stop showing weakness and making concessions to certain aggressors, then for China this will become a “green light” to attack Taiwan. Moreover, in 2-3 years, the Chinese economy will weaken even more, tension within China will increase further, and war is one of the options for maintaining power and influence in China.
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China, realising who he depends on and what the rules of the game are, started doing what he was told :)
About ten Chinese banks have stopped accepting payments in yuan from Russia.
Several Chinese banks have stopped accepting payments in yuan from Russia and started returning such transactions to clients. The new restrictions are caused by fears due to the possible introduction of secondary sanctions and pressure from the United States.
This is reported by "Izvestia" with reference to interlocutors representing the business and payment market.
In particular, the general director of JSC "First Group" Alexei Poroshin told about it and confirmed the commercial director of the company "Impaya Rus" Alexei Razumovsky.
Other interlocutors of the newspaper said that Chinese banks have not publicly notified clients from Russia about their refusal to accept payments in yuan, but Russian businessmen have alternative ways for settlements.
According to Poroshin, among those who have refused to accept payments in yuan are Ping An Bank, Bank of Ningbo, China Guangfa Bank, Kunshan Rural Commercial Bank, Great Wall West China Bank, Shenzhen Rural Commercial Bank, Dongguan Rural Commercial Bank and China Zheshang Bank.
Looks like China is beginning to realise that its own opinion of its 'power' is a fantasy....
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China imposes unprecedented sanctions against russia in an attempt to keep its economy afloat, hoping for a positive U.S. response to "China's correct behavior."
China's raw materials appendage is becoming a bargaining chip.
China has joined the sanctions against Russia. China has imposed severe restrictions on the supply of critical high-tech and dual-use products used for arms production. Also, by China blocking Russian payments in Yuan. As a result, Russia's imports of Chinese goods have already fallen by 2-3 times.
China has realized that the threat of the "Indian Miracle", similar to the "Chinese Miracle" that appeared 30+ years ago, is more and more realistic and closer, and relations with dubious "appendages" complicate the situation, as China, although it "inflates generously", is "cheeky".
Although China "puffs up its cheeks" about its "strongest economy in the world", but in reality they know and realize that the Chinese economy is critically dependent on the Western market, technologies, investors.....
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New information about the real problems of the Chinese economy, for thought:
1. As Bloomberg reports:
The total debt of Chinese provinces and municipalities amounted to 66 trillion yuan, or 9.2 trillion dollars in dollar terms.
8 out of 33 provinces in China are currently in a situation where more than 100% of their revenues are needed just to pay interest on debts.
This is unimaginable - in order not to pay off the debt, but simply to pay the interest on it, you need to give away all the income and borrow a little more!
2. MSCI, which calculates various stock market indices, decided to exclude 66 Chinese stocks from its MSCI China index after the Chinese stock market fell by trillions of dollars.
https://www.bloomberg.com/news/articles/2024-02-13/msci-cuts-swath-of-china-firms-showing-how-downtrodden-market-is?srnd=markets-vp
If true that is pretty fucked up. So the question is how reliable is the info. I could see 2025 as a big shake up Trump gets in and tries to cut China off at the knees .while pivoting to India as a labor source.
If in 2025 Trump dares to make a decision like that, it will definitely disrupt cooperation between America and China. When that happens it might trigger a war. Moreover, China's labor resources are superior to India's. So Trump should consider this well before making that decision.
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With its Belt and Road Initiative (BRI, also known as “One Belt, One Road”), China has become South America’s largest source of infrastructure investment and second-largest trading partner, increasing trade from $18 billion in 2002 to $450 billion in 2022.
Twenty-five of 31 Central and South American countries have negotiated infrastructure investments from China, and 22 of those nations, most recently Honduras, have formally signed onto the BRI program.
Chinese companies, either owned or subsidized by the Chinese Communist Party (CCP), operate mines in Mexico, Argentina, Peru, and Venezuela, electrical grids in Peru and Chile, 5G wireless systems in Costa Rica, Bolivia, Brazil, and Mexico—80 percent of Mexico’s telecommunications equipment is provided by Chinese companies—space launch and satellite tracking facilities in Argentina, and the world’s largest embassy in the Bahamas.
The U.S. State Department estimates China’s trade with Latin American nations and investments in sea, space, telecommunication, critical minerals, and energy will match the United States by 2035 in the region. China’s military ties with Venezuela, Cuba, Peru, and Chile—which now include port visits by Chinese warships and technical advisers—will mature into base agreements within a decade.
China has, or plans to build or improve, 40 ports across 16 Latin American and Caribbean countries without restrictions on military use, including on both ends of the Panama Canal, where CCP-sponsored companies are bidding with Panama to work on the U.S.-built canal.
Next fall, Chinese leader Xi Jinping will be in Peru to commemorate the completion of “a $3.6 billion ‘mega port’ that was financed by China, built by Chinese workers, and it will be owned and operated by a CCP-backed company,” House Armed Services Committee Chair Rep. Mike Rogers (R-Ala.) said.
zerohedge.com (https://www.zerohedge.com/geopolitical/belt-and-road-western-hemisphere-investments-has-china-firmly-rooted-americas-backyard)
I agree that China presents itself as a "dear brother and helper of the third world countries." Yes, they are allocating huge amounts of money from their shrinking budget... But China is a very cunning, pragmatic and cynical player. There is no need to consider what is happening as altruism and friendly help - this is a cynical calculation whose goal is precisely to create a belt of economically dependent colonies that will save... no, not their own economy, but the Chinese one. First of all, sales markets are critically important to China. They are losing the Western one. Moreover, this is the most highly profitable market. Having lost the sale of 1 conditional product on the Western market, China needs to find territories where it can sell 3 units of this product, because The margin on the Western market and on the third world market is several times different.
The second problem is the so-called investments. I have already given the example of Sri Lanka, where investments in the port became a “slave financial yoke” for the country for many decades, while Sri Lanka did not receive any benefits. The main, no, even the MONOPOLY beneficiary of Chinese investments is China itself, and the country receiving the investments becomes an obedient slave of the Chinese economy.
It is because Chinese government has mastered how to make effective debt trap to discreetly fool third world countries just like what had happened to Sri Lanka because they do have plans and interests that might give them an advantage to their competitors especially militarily.
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It is because Chinese government has mastered how to make effective debt trap to discreetly fool third world countries just like what had happened to Sri Lanka because they do have plans and interests that might give them an advantage to their competitors especially militarily.
Exactly, and this "quiet hidden colonization" of third world countries, is far scarier than the days of colonial possessions. As you have noticed - most of the third world countries that got independence never learned to use it, and moreover "got into" even worse history, where you can't get "freedom" anymore. And China, yes, really needs such "debtors", because they need managed "economically dependent colonies" to save their economy, i.e. essentially parasitizing on other countries....
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I think the situation is not that bad either. China's economy is the second position in the world after United States and it is expected that it will take the first position in near future. After COVID-19 pandemic economies all around the world have been hit hard. They haven't fully recovered yet. If overall economies all around the globe pick up, China's economy will also recover.
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It is because Chinese government has mastered how to make effective debt trap to discreetly fool third world countries just like what had happened to Sri Lanka because they do have plans and interests that might give them an advantage to their competitors especially militarily.
Exactly, and this "quiet hidden colonization" of third world countries, is far scarier than the days of colonial possessions. As you have noticed - most of the third world countries that got independence never learned to use it, and moreover "got into" even worse history, where you can't get "freedom" anymore. And China, yes, really needs such "debtors", because they need managed "economically dependent colonies" to save their economy, i.e. essentially parasitizing on other countries....
Yeah and I do hope that no other countries will fall to this kind of thing ever again and other countries that suffers to that may serve as a lesson to leaders who wants to take risks. But in fairness China's technological innovation is at high level despite being targeted by it's oppositions especially in electronics and other sectors though they do have that advantage but they should have lessen it's agressiveness towards it's neighbors so they don't boycott it's products and stuff.
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It is because Chinese government has mastered how to make effective debt trap to discreetly fool third world countries just like what had happened to Sri Lanka because they do have plans and interests that might give them an advantage to their competitors especially militarily.
Exactly, and this "quiet hidden colonization" of third world countries, is far scarier than the days of colonial possessions. As you have noticed - most of the third world countries that got independence never learned to use it, and moreover "got into" even worse history, where you can't get "freedom" anymore. And China, yes, really needs such "debtors", because they need managed "economically dependent colonies" to save their economy, i.e. essentially parasitizing on other countries....
Yeah and I do hope that no other countries will fall to this kind of thing ever again and other countries that suffers to that may serve as a lesson to leaders who wants to take risks. But in fairness China's technological innovation is at high level despite being targeted by it's oppositions especially in electronics and other sectors though they do have that advantage but they should have lessen it's agressiveness towards it's neighbors so they don't boycott it's products and stuff.
China's technology is a very "thin matter". On the one hand, they produce a lot of technological equipment, from cheap consumer goods to very high quality equipment of corporate standard...but, as always, there is a nuance - it is all built by Western companies, the technology is Western, and critical equipment is Western, however, I repeat once again - as well as investments in production are also Western. That's why China, having played "the great empire" and thinking itself "indispensable" and "untouchable", is now making a "beautiful face at a bad game", trying to somehow improve relations with the West, which it destroyed. China is very afraid of the West's estrangement from China, especially since the West has an alternative option - India.
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Maybe this is the reason why they are now more aggressive in occupying other countries territory specially in Water part making them the most hated country in their region now.
this is also the reason why they wanted to take control of West China Sea to control the ocean business sector . shame on them.
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Maybe this is the reason why they are now more aggressive in occupying other countries territory specially in Water part making them the most hated country in their region now.
this is also the reason why they wanted to take control of West China Sea to control the ocean business sector . shame on them.
That's right. While everyone was pumping up the hysteria "capitalists are enslaving the world", China was quietly occupying and actually enslaving the region, country by country.... And when yesterday's "cursing the West" realized that they had already become slaves of China, it was already too late.... And from powerlessness and resentment, they, wearing a yoke with the inscription "slave of China" around their necks, continue to pounce on the West, for some reason expecting that it will benefit them.
It is also interesting to observe how quietly, without media publications and international condemnation, not only economic but also physical occupation of other people's territories by China is taking place.....