China Once Looked Tough on Trade. Now Its Options Are Dwindling • Hacker News Board

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#251

Post by rgbrenner » Wed, Sep 19, 2018, 4:41 AM UTC

outside1234 wrote: post #248

rgbrenner wrote: post #226

Earlier quoted context omitted.

I think you went way overboard toward the end. Only 37% (and declining) of China's GDP is from trade.. and only Meaning, if all trade between US and China was cut off tomorrow, they would only lose 7% of GDP. So how do you get from that to 5X? Seems like you have a model of the Chinese economy from a decade ago. Fact is, China is much larger now, and much less dependent on trade today. Also keep in mind, a good porti…

A 7% drop in GDP in China would be a disaster - rememberer than in our “Great Recession” that the gdp only dropped -2.8%

That's just China -> US exports. It doesn't account for imports for export, and Chinese imports from the US. They would still be growing if all trade with the US was stopped, after subtracting these.

Net trade globally, they're running an imbalance of 1.5-2% GDP.

They're growing at almost 7%/year. So there's quite a ways to go to get to -2.8.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#252

Post by dis-sys » Wed, Sep 19, 2018, 4:48 AM UTC

lacker wrote: post #144

One of the things that seems the most unfair to me about global trade is that for many American internet companies, China just totally bans them. Everything from Facebook and Google to smaller players gets hit by the great firewall. That is way more impactful than a tariff of 5% or 25%. With all of the talk of how China is or is not playing fair, I feel like their internet bans get taken for granted, and I wish there…

> With all of the talk of how China is or is not playing fair, I feel like their internet bans get taken for granted, and I wish there was more pressure to play fairly there.

In a fair environment, you'd be seeing Facebook/Google/Twitter used by hundreds of millions Chinese when most Americans paying their bills using Alipay and talk to their friends using WeChat. US dominance in tech is _NOT_ something called fair.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#253

Post by jayalpha » Wed, Sep 19, 2018, 4:51 AM UTC

gonvaled wrote: post #74

Extremely one sided comments, with a US centric view. The world is not the US, and HN readers are not only US citizens, so let me express a different point of view. Assumption: Trump wants fair trade. HN readers want fair trade. What is needed: fair trading rules, fair IP rules, fair capital structures, and a fair currency. Tackling some of the unfair trade practices does not address all those issues. In particular i…

The Chinese cheat all the time.

- high subsidiaries for their exports

- blind eye on IP theft

- forced technology transfer

- closed market for many industries and services

- forced "joint ventures" for certain industries

- legal system the favors Chinese companies

- systematic attack on western industries

Feel free to ask and I will give specific examples. Based on the kind of business relationship of the US and China, e.g. Apple products are produces in China and hence also go into the trade deficit, the trade deficit is heavily distorted. (China, Foxconn makes very little profit on assembling apple phones. Yet, Apples makes most profits offshore, e.g. via selling from China to HK and from HK to US). So a trade deficit is not surprising. Trump never said that he wants a zero trade balance, he told Xi to "lower it" and "equalize the playing field". This was a reasonable request.

Xi just could have agreed to this but instead wants to play hard ball. In my opinion Xi can not win this game and the only rational strategy in a game that you can not win is not to play it. It makes me doubt the strategic abilities of Xi but we will see.

"suggested on Sunday that China could deliberately disrupt American companies’ supply chains by halting the export of crucial components mostly made in China." Outstanding idea. I am sure Western companies will love this, invest more in China and don't move production to other countries.

Before you downvote me, give an argument.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#254

Post by avcdsuia » Wed, Sep 19, 2018, 4:51 AM UTC

lacker wrote: post #144

One of the things that seems the most unfair to me about global trade is that for many American internet companies, China just totally bans them. Everything from Facebook and Google to smaller players gets hit by the great firewall. That is way more impactful than a tariff of 5% or 25%. With all of the talk of how China is or is not playing fair, I feel like their internet bans get taken for granted, and I wish there…

China just marks parts of the Internet as a territory and introduces laws that meet the authority's satisfaction. Since free information and speech make people call in questions about the legitimacy of ‘the party leads everything’ and dark past, this situation won't get changed unless we distribute everything(but decentralization violates tech giants‘ interest) or a regime change happened. Otherwise, progress US and other countries made would just hold up a while.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#255

Post by mc32 » Wed, Sep 19, 2018, 4:55 AM UTC

dis-sys wrote: post #250

mc32 wrote: post #244

Earlier quoted context omitted.

China will try to avoid this extreme scenario lest they end up like Russia --at least Russia has natural resources to export, if nothing else. They will have learned that scaring off foreign investment is not good for their economy long-term. They don't want to squander their potential, I don't think. Still, they have serious problems to address. Issues the US and the EU and other Asian economies have with them vis a…

When google chose to quit from the Chinese market, many people told me that China basically cut itself off from the modern world. 8 years on, we all know full well what actually happened. Comparing China to Russia is laughable at best - China's domestic market is 10x the size of Russia, it is comparable to the entire EU but with only one language, one system plus one culture making it much easier to do marketing for…

Well see, maybe you’re right and I’m wrong. Still think the issues among East Asia, Europe and the US have enough in common in terms of unfair trade practices it behooves them to act in concert to get China to normalize their trade position.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#256

Post by JPKab » Wed, Sep 19, 2018, 4:55 AM UTC

gscott wrote: post #100

ElBarto wrote: post #97

Time is on China's side. The US can throw a tantrum all they want. They should play a long game. There is no benefit for them in retaliating to hurt the US as long as it does not cause issues in domestic politics. They should focus on not getting hurt too much and let time do the rest.

The US would need to implement tarrifs of several hundred percent to make a difference. A 20% tariff China can just make a small change to the price of their currency and ride it out. An article today has a quote from Jack Ma that he thinks this trade war will last 20 years. https://markets.businessinsider.com/news/stocks/alibaba-stoc...

China has deliberately manipulated the yuan for decades now. I first studied and modeled the manipulation while an undergrad in economics 15 years ago. It has helped them remain an export-driven economy, for good and bad. It's not a good move at this point in time. China needs desperately to increase domestic consumption. Manipulating the Yuan further will only lead to more wealth flight out of the country as citizens try to protect their wealth from devaluation.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#257

Post by justicezyx » Wed, Sep 19, 2018, 5:11 AM UTC

Retric wrote: post #39

justicezyx wrote: post #31

Earlier quoted context omitted.

> One of the biggest problems China has in this trade war: they're entirely replaceable. They offer nothing strictly unique that can't be replaced by another country, even though there may be a serious cost involved. I cannot see evidences that China is particularly more so than any other country.

Saudi Oil is a commodity, but many country’s don’t have oil. Every country has low skilled workers.

Nah, if you see what technologies are used for extracting oil and the geopolitical structure, you'll see how western careful maintains the status such that Saudi is replaceable if needed. Given the oil's strategic value, sure, it's not as easily replaceable like cloth producers. But itself, as compared to any other country with similar strategic value, is certainly as replaceable as any other such country.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#258

Post by abandonliberty » Wed, Sep 19, 2018, 5:13 AM UTC

dis-sys wrote: post #252

lacker wrote: post #144

One of the things that seems the most unfair to me about global trade is that for many American internet companies, China just totally bans them. Everything from Facebook and Google to smaller players gets hit by the great firewall. That is way more impactful than a tariff of 5% or 25%. With all of the talk of how China is or is not playing fair, I feel like their internet bans get taken for granted, and I wish there…

> With all of the talk of how China is or is not playing fair, I feel like their internet bans get taken for granted, and I wish there was more pressure to play fairly there. In a fair environment, you'd be seeing Facebook/Google/Twitter used by hundreds of millions Chinese when most Americans paying their bills using Alipay and talk to their friends using WeChat. US dominance in tech is _NOT_ something called fair.

what's blocking WeChat?

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#259

Post by toephu2 » Wed, Sep 19, 2018, 5:14 AM UTC

riphay wrote: post #17

euroclydon wrote: post #2

Are tariffs just straight up revenue for the US government, like income taxes?

Yes, but they are paid by the importer and (usually) passed on to the consumer. In effect they become a subsidy for local industry paid by consumers.

and the government collects that money? what do they do with it?

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#260

Post by erikb » Wed, Sep 19, 2018, 5:29 AM UTC

joefranklinsrs wrote: post #128

This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess) is 1.) 40-60 percent of a company’s supply chain moves out of China 2.) China restricting the movement of capital/equipments out of China (similar to what happened with Korean companies last year) 3.) China growing homebrew competitors to the foreign companies leaving…

> 1.) 40-60 percent of a [US] company’s supply chain moves out of China

especially highlighting the part that I added: US company.

Does anybody think this is a bad thing for China? I'd argue that this is one of China's core interest. China is now becoming a major sales power itself. It's not recognized for that yet, but especially in the mobile market it's far ahead of he western competitors, maybe also in IoT.

Actually one of the core Problems China is facing is that it can't BUY the stuff it wants to buy for its own production, like chips.

And what it needs to worry about is that through all the complex entanglement at one or two points its public image of the new super power might slip. And this image is very much needed for it's plans in Belt&Road as well as in Africa. So most of its concerns are not related to the US market.