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China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

bloomberg.com

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Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#41

Post by [deleted] »

viraptor wrote: post #34
bugglebeetle wrote: post #24

Earlier quoted context omitted.

> They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Aside from the money standard and zero COVID bits, every part of this is true of the US. This conflict just boils down to “the hegemon doesn…

Can you provide the examples for US part in pervasive IP stealing, predatory infrastructure loans, trading with sanctioned countries? Not single issues (every country will have some examples here and there), but actually using those as long term strategies?

[deleted]

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#42

Post by Spooky23 »

superchroma wrote: post #22
veqq wrote: post #13

These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). Similar to Eurodollars in the past yielding outsized interest rates, increasing demand and thus dollar outflows, this shows a (perhaps?) unrecognized accumulation in China, which may very well either allow them to essentially print their own dollars or mean that they already have been…

I mean it's the gigantic elephant in the room. The reported narratives have aligned over the years as if they were our enemy. Here are some: Economically, they're an adversary; they undercut western manufacturing and all our manufacturing went there. They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nation…

The biggest adversary of the United States is the United States.

Those factories migrated to the US South, then to Mexico, then to China. Not because of some conspiracy, but because we run our institutions based on quarterly financials.

I worked a long time ago on an effort to sue a large manufacturer whose supply chain was shipping counterfeit parts to certain customers. The Chinese partners ran a third shift with no QC and stuffed these parts into the distribution chain. They also stole defective parts and did the same thing. Everyone knew this was happening. But everyone was making money, so nobody gave a shit.

With respect to politics, well yeah, they are the other great power now. It’s in their interest to buffer themselves from whatever they perceive as a threat. The US is no babe in the woods here - our war plan from the 1950s onward was to attack China with nuclear weapons if the Soviets rolled into East Berlin - just in case.

The Chinese can’t compete with the US with air or sea power, so they seek to control their sphere of influence in other ways, and slowly build in preparation for the US decline in power.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#43

Post by Simorgh »

superchroma wrote: post #22
veqq wrote: post #13

These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). Similar to Eurodollars in the past yielding outsized interest rates, increasing demand and thus dollar outflows, this shows a (perhaps?) unrecognized accumulation in China, which may very well either allow them to essentially print their own dollars or mean that they already have been…

I mean it's the gigantic elephant in the room. The reported narratives have aligned over the years as if they were our enemy. Here are some: Economically, they're an adversary; they undercut western manufacturing and all our manufacturing went there. They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nation…

I think this is an issue of perspective.

I know someone who quite recently died of Covid. There is no longer a pandemic, but the virus is still deadly. Their concern is justified.

Economically, the US is critically dependent on China for facilitating consumer demand. The US cannot afford an adversary in China.

Ethically, the US is not offering a compelling framework or alternative that alleviates the issues you raise. This is a real concern.

China has lifted hundreds of millions of people directly out of extreme poverty. This is their prerogative and modus operandi.

The only way forward is cooperation, adjustment and coordination.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#44

Post by Spooky23 »

glompers wrote: post #28
bugglebeetle wrote: post #24

Earlier quoted context omitted.

> They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Aside from the money standard and zero COVID bits, every part of this is true of the US. This conflict just boils down to “the hegemon doesn…

[flagged]

The Civil War was about the future, not the past. The South was kinda fucked anyway - land rich agricultural barons were an endangered species everywhere at that point.

The point was to bring slavery to the West. Not just for the free labor, but because slaves suppress the wages of everyone. The sons of the south getting mowed down in the trenches were fighting for those barons whose prosperity was dependent on their poverty. African slaves meant there was always readily identifiable people worse off than you.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#45

Post by vkou »

mitthrowaway2 wrote: post #38
vkou wrote: post #32

Earlier quoted context omitted.

> The narratives have aligned over the years as if they were our enemy. We've been narrated to over the years that they are our enemies, yes. > They use (basically) slave labor, unethical materials (e.g. live plucking), environmentally damaging materials (e.g. banned CFCs), they happily pollute the earth as if tomorrow isn't a concern. Why is this all of a sudden a problem when China does it, but not when our firms d…

> Why is this all of a sudden a problem when China does it, but not when our firms do this in their off-shore sweatshops It's certainly a problem! But the only thing we can really do about it is pass laws.

> It's certainly a problem!

If it were a problem, Washington could get it resolved in a year.

It's not a problem, because half the people bankrolling political campaigns are neck-deep in it! Their businesses are built on it! On cheap labour, on captive markets, on sources of third-world resources that are accessed through theft, violence, or corruption!

And even if you aren't directly involved, our society will not function very well if we stop reaping the benefits of all the practices I've described. Nobody wants to pay $90 for a t-shirt, or $9 for a gallon of gas.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#46

Post by Spooky23 »

viraptor wrote: post #34
bugglebeetle wrote: post #24

Earlier quoted context omitted.

> They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Aside from the money standard and zero COVID bits, every part of this is true of the US. This conflict just boils down to “the hegemon doesn…

Can you provide the examples for US part in pervasive IP stealing, predatory infrastructure loans, trading with sanctioned countries? Not single issues (every country will have some examples here and there), but actually using those as long term strategies?

Huh? The US sets the sanctions.

We’ve changed our laws to legalize corruption and subsidize export of key industries. Steel is hardly made in Cleveland and Pittsburgh anymore for a simple reason: our tax and regulatory structure was reformed, and makes it more profitable to ship that business to China or Mexico.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#47

Post by viraptor »

Spooky23 wrote: post #46
viraptor wrote: post #34

Earlier quoted context omitted.

Can you provide the examples for US part in pervasive IP stealing, predatory infrastructure loans, trading with sanctioned countries? Not single issues (every country will have some examples here and there), but actually using those as long term strategies?

Huh? The US sets the sanctions. We’ve changed our laws to legalize corruption and subsidize export of key industries. Steel is hardly made in Cleveland and Pittsburgh anymore for a simple reason: our tax and regulatory structure was reformed, and makes it more profitable to ship that business to China or Mexico.

Correct. But that doesn't support any of the claims I mentioned from bugglebeetle's comment.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#48

Post by nashashmi »

Why this is a problem?

China’s foreign reserves is a result of the artificial peg introduced decades ago and loosened recently. It kept Chinese labor devalued. And to counter local inflation because of issuing too many Yuan, they kept interest rates high. So they accumulated surplus from years of high export to import ratio. This was a problem because they had a significant amount of our money. But they were also buying our debt. And so economists argued this was ok.

The doomsday scenario is this accumulation of reserve puts them in power to flood the market and cause significant devaluation. Or it causes them to make excessive loans and cause devaluation. Or it has leverage to threaten to do this and influence policy. Either way, this is a growing concern. It’s fine if a country knows and understands that concern. But it’s worse if that concern is underestimated.

And that is the problem here: excessive reserves is a concern, and even bigger concern if you are unsure of what the excess reserves are.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#49

Post by petre »

viraptor wrote: post #34
bugglebeetle wrote: post #24

Earlier quoted context omitted.

> They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Aside from the money standard and zero COVID bits, every part of this is true of the US. This conflict just boils down to “the hegemon doesn…

Can you provide the examples for US part in pervasive IP stealing, predatory infrastructure loans, trading with sanctioned countries? Not single issues (every country will have some examples here and there), but actually using those as long term strategies?

To be fair, the US doesn't trade with sanctioned states because they (and the UK) are among the first to sanction other states. The EU just follows. Did China sanction any other states? Maybe Lithuania for opening a Taiwan representation office. But it's not sanctions, it's more like bullying.

Re: China Has $3T of ‘Hidden’ Currency Reserves, Setser Says

#50

Post by SanjayMehta »

isykt wrote: post #20
AngryData wrote: post #12

Earlier quoted context omitted.

Neither, and I fail to see the difference between them. Neither country would do such a thing with altruistic goals and both have proven they shouldn't be trusted. We have already seen how badly the US fucks up other place's economies and governments with their meddling.

You fail to see a difference between a country run by an autocratic cult of personality and a country run by a democracy? That’s troubling. The US commitment to human rights is flawed, but it’s nothing compared to the dystopia that is China. Values matter.

China has one party.

The US has two and it's hard for other countries to discern any difference between them.

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