China Has $3T of ‘Hidden’ Currency Reserves, Setser Says • Hacker News Board

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

#71

Post by simonh » Sun, Jul 02, 2023, 9:44 AM UTC

FreshStart wrote: post #55

The problem is that China does not want to become the US, they want to become colonial great Britain or France. The goal is classic mercantilism-all raw material have to go through them to become a product. It's barely disgused Manchester allover. The US by comparison has been quite dedicated to free trade. They abandoned there own production base, imported more culture then they exported and overall been quite frien…

I'd say the US is a hegemon but not really an Empire except for a few small islands. They've also made some terrible mistakes such as Vietnam and the 2nd Gulf War. The way the US prosecuted the Korean war was also inexcusable, although I think that one did need to be fought. Let's add some appalling interventions in South America while we're at it.

On the other hand the 1st Gulf War was unavoidable, and overall with the exception of the 2nd Gulf War over the last 40 years they've more or less tried to do the right thing. Today it's widely recognised across parties in the US that 2GW was a mistake. Still, since WW2 they've sunk vast resources into guaranteeing Western European security, and spent Trillions guaranteeing global freedom of navigation that's benefited everybody.

They've been aggressive economically, true, but that's a whole massive deal better than being aggressive militarily and overall global trade in the last 70 years has had incredible benefits. Global poverty has collapsed to a tiny fraction of what it was, the middle class has risen from about 5% to about 60% of the world population, life expectancy rates have soared. Death rates from war have collapsed. The stats on that are up on the last decade it's still historically low. The majority of this happened after the collapse of the Soviet Union.

What Russia and China want to do is take the world back to a cold war situation of vying spheres of geographic influence. What the US wants to do is get out of the world police business while maintaining a peaceful global order conducive to business. So we have Russia and China flexing their territorial military muscles, while the US builds networks of alliances such as an expanded NATO, AUKUS, the Quad and such to better share the load.

I say alliances, but for the latter US strategy to succeed it eventually needs to include nations that are not traditional US allies. India, Brazil, Indonesia, South Africa, even places like Vietnam. These will or may never align with the US and Europe the way the US and Europe do, so such relationships will have to be transactional in nature. Partnerships rather than true alliances, based on common interests around eliminating the scope for military expansionism that favours big regional military hegemons.

So sure, a lot of past mistakes for sure, but the question for us now is where does the world go from here?

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

#72

Post by simonh » Sun, Jul 02, 2023, 9:55 AM UTC

kevingadd wrote: post #67

cbilson wrote: post #57

Earlier quoted context omitted.

If the CCP were so concerned with COVID why did they have a victory concert in August 2020[1]? Obviously the virus is still deadly, but it seems at least inconsistent for CCP COVID policy to be “we did it!” in August 2020, then lock downs in 2022. Regarding “lifting people out of poverty”, did hundreds of millions of people’s hard work have anything to do with lifting _themselves_ out of poverty or does the CCP get a…

I can understand this being hard to comprehend, but if China actually effectively deployed a zero covid policy initially - it's up to you whether you think the reports to this effect are true or not - then a mask-less concert is in fact pretty safe as long as you're not allowing foreigners to bring COVID into the country. Of course the moment you let Americans in to your country, you've given up your battle against C…

COVID wasn't anywhere close to just let rip in the US. There's an argument that happened late on in some very Trumpian districts, hence the wards full of dying vaccine deniers late in the pandemic, but overall the difference between COVID policies in Democrat and Republican regions was marginal. Both sides screamed to high heaven about every single wrinkle in policy like it was existential, but they all locked down.

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

#73

Post by spaceman_2020 » Sun, Jul 02, 2023, 10:08 AM UTC

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…

> Economically, they're an adversary; they undercut western manufacturing and all our manufacturing went there.

Wow, you make it sound like it was some devious Chinese plan where they intentionally made their people work for American manufacturers and lured them in with bribes.

The reality was that American corporations willingly went over to China because number must go up and paying their own people living factory wages wasn’t cutting it.

So tired of this stance - “China did it to us!”

America did it to itself.

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

#74

Post by spaceman_2020 » Sun, Jul 02, 2023, 10:11 AM UTC

FreshStart wrote: post #55

The problem is that China does not want to become the US, they want to become colonial great Britain or France. The goal is classic mercantilism-all raw material have to go through them to become a product. It's barely disgused Manchester allover. The US by comparison has been quite dedicated to free trade. They abandoned there own production base, imported more culture then they exported and overall been quite frien…

> and overall been quite friendly an empire

Just a few million in civilian casualties here and there. Because remember, Saddam has WMDs.

When was the last time China went to war with another country on a false pretense and massacred millions?

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

#75

Post by spaceman_2020 » Sun, Jul 02, 2023, 10:15 AM UTC

woodruffw wrote: post #17

AngryData wrote: post #15

Holding on to cash reserves seems like a smart move for any government. People will applaud private companies and investors holding decent chunks of cash so they can invest into economic dips and crashes, and we have watched many countries borrow huge amounts to alleviate economic downturns, but a government holding money to either invest into or diminish an economic downturn is suppose to be bad? If the opposite hap…

The article is about undisclosed foreign reserves, not any foreign reserves. There’s general consensus among economists and political scientists that maintaining foreign reserves is both good for countries and for global peace, but that really only works if everybody knows you’re doing it[1]. In other words: it’s easier to think of untoward reasons for hiding foreign reserves than honest ones. That’s why there’s a st…

Why would any country in a remotely adversarial relationship with America disclose their foreign reserves, especially in USD and EURO after what they did to Russia’s reserves? Just means that anything the country does against western interests will get their known reserves frozen.

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

#76

Post by eunos » Sun, Jul 02, 2023, 10:18 AM UTC

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…

> undercut western manufacturing and all our manufacturing went there.

Notice that western itself is a collective of nation but all hell breaks lose if non western got manufacturing am I rite?

Having said that be thankful for ultra scaling up manufacturing in East Asia. Appliances and electronic prices keeps falling. Compare that to services or "western" exclusive manufacturing like vehicles, getting inflated like crazy.

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

#77

Post by eunos » Sun, Jul 02, 2023, 10:19 AM UTC

FreshStart wrote: post #55

The problem is that China does not want to become the US, they want to become colonial great Britain or France. The goal is classic mercantilism-all raw material have to go through them to become a product. It's barely disgused Manchester allover. The US by comparison has been quite dedicated to free trade. They abandoned there own production base, imported more culture then they exported and overall been quite frien…

Whereas American want all currency exchange have to go through them to become a product.

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

#78

Post by eunos » Sun, Jul 02, 2023, 10:20 AM UTC

spaceman_2020 wrote: post #75

woodruffw wrote: post #17

Earlier quoted context omitted.

The article is about undisclosed foreign reserves, not any foreign reserves. There’s general consensus among economists and political scientists that maintaining foreign reserves is both good for countries and for global peace, but that really only works if everybody knows you’re doing it[1]. In other words: it’s easier to think of untoward reasons for hiding foreign reserves than honest ones. That’s why there’s a st…

Why would any country in a remotely adversarial relationship with America disclose their foreign reserves, especially in USD and EURO after what they did to Russia’s reserves? Just means that anything the country does against western interests will get their known reserves frozen.

That aside China already built this hidden reserve since early 2000s when relationship was still excellent.

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

#79

Post by FpUser » Sun, Jul 02, 2023, 10:32 AM UTC

WastingMyTime89 wrote: post #70

superchroma wrote: post #22

Earlier quoted context omitted.

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 quite like how the average American looks at China (not always fairly by the way - some of what you accuse China of doing is actually illegal in China) while being completely unable to hold a mirror to how their own economy works. It’s kind of entertaining to see a bully complains that there now is another bully in town.

>"bully complains that there now is another bully in town."

I think yours is the best reply to the post that reads more like a tantrum.

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

#80

Post by FpUser » Sun, Jul 02, 2023, 10:35 AM UTC

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…

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