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

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191–200 of 238 posts

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

#191

Earlier quoted context omitted.

> That, most definitely, does not contribute to world peace or stability. Why not? Dependency makes peace more probable.

For roughly equal powers and if its bidirectional, maybe.

Even in cases of hugely unequal powers it's a stabilizing factor. US stabilizes so many countries by making them dependent.

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

#192
post #8
post #2

So what? TFA keeps repeating that this is bad, but fails to explain why. Is countries actually having money a problem now?

Which country’s values do you prefer influencing the developing world: China’s, or the United States’?

I prefer values to be secondary to development for developing countries. If PRC actually gets powerplants and roads build, then don't be surprised if African real politik chooses Chinese infra over western lectures. And don't be surprised African leaders would PRC surveillance model to reduce ability of US to spread their values via influence ops. Or African leaders look at modern development history and still pick PRC/East Asian model, because at the end of the day, democratic societies are easily hijacked by external factors and terrible at developing. Authoritarianism is the worst development model, except for all others that have been tried.

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

#193

Earlier quoted context omitted.

For roughly equal powers and if its bidirectional, maybe.

Even in cases of hugely unequal powers it's a stabilizing factor. US stabilizes so many countries by making them dependent.

And while I don't subscribe to the idea of US exceptionalism, in this particular case the US really is exceptional. Historically, international debts were cause for invasion or colonization, and that seems to be repeating with China.

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

#194
post #142

Earlier quoted context omitted.

I would rather third world countries be exploited by the US, since it would mean my country projects its power to those regions. My stable, democratic country. The lack of realpolitik in this thread is astounding. We don’t live in a perfect world, where economies of real people in countries that need roads and telecom get to say “No thank you, your country’s history is gross.” Belt and Road is a massive soft power gr…

> I would rather third world countries be exploited by the US, since it would mean my country projects its power to those regions. I'm sure Chinese citizen could have said exactly the same. > My stable, democratic country. And follow it by his own set of nice sounding (to him) words. Everybody is a good person with good intentions in their own judgement. Besides, US is not really a democratic country. You don't get a…

> I'm sure Chinese citizen could have said exactly the same.

It would stand to reason that this is statistically likely, but I don’t think anyone has any real understanding of how much the people in China believe in / support their current government and its positions. Information is extremely restricted.

> When a lender collapses it's usually very good news for the debtor.

I could see why someone would think this if they’re considering the collateral is something like a house, or a car, or a plot of land — something that is useful in and of itself because it is surrounded by other stable infrastructure. However, in the case we’re talking about here, China is the lender for large scale infrastructure that will stop getting built and eventually decay because the borrowers have no means of finishing or maintaining what was being built. That makes them vulnerable in other ways.

Keep in mind, too, that those places where the infrastructure will stop being maintained are also places that make or mine or otherwise export components that are part of a global supply chain.

You don’t have to love America’s values like I do to be biased towards the US being the driving influence in these nations.

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

#195

Earlier quoted context omitted.

> overall been quite friendly an empire. Yes they friendly helped install military dictatorships in Latin American countries. They friendly invaded Iraq under false pretenses. They friendly waged wars and used economic sanctions against countries that for on reason or another didn't conform to their dominant position. Don't misunderstand me. The US has the power to oppress, and is an opressor. It is business as usual…

Relatively speaking it's undeniable that the US has been the most "friendly" "empire" or "super power" in World history. That doesn't mean it's never done anything wrong.

This is only true if you live in a handful of North America and West European countries.

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

#196
post #97

Earlier quoted context omitted.

> These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). I think you missed a crisis in Africa. Those loans can hardly be paid off, the interest rates are too high and the borrowed loans Kuch for infrastructure projects aren't leading to any improvements / revenue. If so, show me which have a net benefit for the country where loans are us…

You’re saying that building roads and bridges is not beneficial to countries which deeply lack roads and bridges?

Correct.

Building roads to nowhere, airports that are almost not used, ports and trains that aren't used aren't beneficial. It could be usefull if a minimal of due diligence was done though, but there hasn't as far as I'm aware.

Additionally, when the local people are not hired as workers, but Chinese people are. The value of infrastructure projects and funneling back money to the local workers is greatly deminished.

Instead, infrastructure money goes straight back to the Chinese ( instead of the locals), while the country itselve has to pay the money back to the Chinese.

So China passes by the cash register 2 times.

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

#197
post #68

Earlier quoted context omitted.

I see two kinds of people saying either: 1. The west is doing immoral things and hiding it. Let's talk about it and force people in charge to change things or change the people in charge! Or: 2. The west is doing immoral things. Let's root for these other guys who are also doing immoral things; eventually they will replace the west and then somebody will figure out how to stop them from doing the immoral things. I th…

3) west has done and continues to do things they deem immoral to stay ahead while use propaganda and coercion against others when they do the same things to catch up. Folks who fall for their own propaganda and clash with those that don't.

I don't think that's different from what I said in (1):

"The west is doing immoral things and hiding it"

The propaganda aspect you're mentioning is an integral part of "hiding it".

I don't think you're framing changes the options on the table: either you try to fix the system from within our you somehow hope that the others will be better just because.

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

#198

Earlier quoted context omitted.

For roughly equal powers and if its bidirectional, maybe.

Even in cases of hugely unequal powers it's a stabilizing factor. US stabilizes so many countries by making them dependent.

I wouldn't go so far as to say its a sufficient condition right? Is it perhaps necessary? Maybe. Ideally I think we would not force "improvement" on other countries. But if we are, at least set them up for success. I'm not going to comment on whether USA has made good on this in the last 100 years, its worthy goal for any country I suppose. I think people are lazy and if they can do nothing and a country is taken advantage of for their benefit, well they will do nothin.

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

#199

Earlier quoted context omitted.

Zeihan is just showing us the data. Do you have any data to back up any counter argument?

Zeihan never shows "just" data. Otherwise he would show PRC has significantly more navigable rivers kms and better port capacity than US. Instead he'll talk US being blessed with more rivers, and deeper coasts for ports. When geopolitics makes US look bad, he'll cherry pick the geo, or the politics to make competitors look worse. Per the graphs, you're falling for unsubstantiated (borderline retarded) Zeihan visualiz…

> PRC has significantly more navigable rivers kms and better port capacity than US

Rivers in mountains and low quality soil, not connected to any productive land. Look up any map on agriculture land and you'll see their soil quality. It's bad. Compare that with the USA and Argentina. We have both the best in the world.

Then look up how much fertilizer is used in their agriculture, per hectares of arable land. It's bad.

https://data.worldbank.org/indicator/AG.CON.FERT.ZS

There's more advanced graphs here to see the relationship between fertilizer and crop yields:

https://ourworldindata.org/crop-yields

All your numbers may be okay. But the main Zeihan argument is two fold: first, the same from the book "Why Nations Fail". China is not great in their political institutions. It's bad. For example a HN from YESTERDAY:

https://news.ycombinator.com/item?id=36554818

The second Zeihan argument is demographics. After the One Child Policy, China is the country where population is getting older faster in history, and faster than any other country today. It's bad.

Look up the data:

https://ourworldindata.org/grapher/median-age

There's a direct relationship between median age and inflation. Because older people consume more than produce, lowers productivity, and that increases prices. From the IMF:

https://www.imf.org/external/pubs/ft/fandd/2016/03/juselius....

You may keep inflation down when population ages. But that just destroys growth, for example Japan. And China economy depends on growth.

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

#200
post #175

Earlier quoted context omitted.

The actual desires and interests of actual citizens, even in vibrant democracies with changes of elected government and free speech, don't count. Nice.

Its by design. Military is a separate entity from domestic elected government the world over. If you know anyone who is in the leadership side of the military or in the state dept, its very interesting having conversations learning about how these agencies view the world and how actual power is manifested.

Frankly it's bullshit. The Putinist narrative that democracy is a sham makes sense for a man isolated from the real world that doesn't use the internet, but it's stunning to me how disconnected some people in the west can be from the society they live in.

I have family in the British military at a moderately high level. A friend was a researcher for an MP, and another a government adviser. Sure politics is messy, it's the art of the possible and expedient. Of course it's not ideal, but as the saying goes Democracy is the worst system of government except for all the others. You're never going to get perfect, the best you can get is consensus and the consent of the governed. We have that.

I revile Trump, but he did do one thing for us. He proved that US democracy is real. All the Washington consensus clubbyness was pushed aside, corporate capture and bought influence were bulldozed over. None of the establishment wanted him, but he's what we got through a massive grass roots movement. He was an utter disaster, but it was a genuine demonstration of democracy in action.

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