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

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

#211

Post by dirtyid »

frankreyes wrote: post #209
dirtyid wrote: post #206

Earlier quoted context omitted.

Absolute food security = producing enough calories per capita indigenously to feed everyone. Which PRC does, ~4000 calories per day factoring in massive waste/spoilage in logistics system. So Yes. SSR is indication of PRC getting richer and importing more luxury foods, but that's not part of absolute food security. Quoting freedom index, from heritage and freedhomhouse no less as proxy for state capacity is more asin…

None of your comments are backed up with data or evidence. Just like Ray Dalio, wishful thinking.

My assertions and datapoints are all public info - it's basic subject matter knowledge for those who follow the space closely and realize actual data/trends horribly dismantles Zeihan's model that's mainly used to sell lectures and dinners to American exceptionalists. Again there's a reason he doesn't get airtime in "serious" think tank circles. At least Dalio, puts money where his mouth is vs Zeihan. And it's a little rich to point out wishful thinking on Dalio considering Zeihan's Stratfor/Friedman background that has been consistently wrong about East Asia.

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

#212

Post by dirtyid »

ithkuil wrote: post #197
dirtyid wrote: post #180

Earlier quoted context omitted.

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.

IMO third framing is west is weaponizing/moralizing development tactics when "immoral" methods are simply effective development methods that west doesn't want their competitors to adopt. The TLDR is there isn't anything to fix per say, sometimes developing fast and catching up to incumbants takes breaking a lot of eggs. The eggs are of course humans, and it's tempting to build propaganda atrocity narratives to deter such behaviour. Frequently it even comes from a genuine place, hence many useful idiots who drink the koolaid can advocate for it strongly, but these narratives are ultimately, on a geostrategic level, self serving for entrenched interests/winners who wants to stay on top. The logic of (3) is recognizing that the liberal world/rule-based-order is a rigged game, and it's in the understandable self-interest that others don't want to play in an already unfair system.

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

#213

Post by mensetmanusman »

kjkjadksj wrote: post #167
mensetmanusman wrote: post #158

Earlier quoted context omitted.

We weren't smart enough to solve the tragedy of the commons situation because we believed a wealthy China would drop the true-believer Mao ideology.

They did drop maoism. China practices state run capitalism now.

If that was true they wouldn't have own-goaled their own tech sector.

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

#214

Post by veqq »

NicoJuicy wrote: post #87
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…

> 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…

> I think you missed a crisis in Africa.

You'll find that I specifically mentioned Setser's treatments of of African refinancing attempts. Either way, Chinese loans to Africa make up a very small portion of Chinese activity. If you're talking about debt trap diplomacy, well... Chinese loans to Africa also make up a small portion of African debt. Eric Olander and Cobus van Staden discuss this a lot.

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

#215

Post by dikei »

ImHereToVote wrote: post #103
jacquesm wrote: post #93

Earlier quoted context omitted.

> The smartest thing the west can do from now on is dump fiat currencies, switch to crypto Seriously? WTF?

Wait a minute, you don't want to make jongjong's speculative crypto investments bear fruit so that he can retire in the Caribbean?

I mean he's gotta be an excellent mental gynmast to speak about real, profitable, value-adding businesses and crypto in the same post.

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

#216

Post by nonethewiser »

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.

> Why would any country in a remotely adversarial relationship with America disclose their foreign reserves

Yes - that's the point. It shows intentions against US interests.

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

#217

Post by crazygringo »

TrapLord_Rhodo wrote: post #210
crazygringo wrote: post #163

Earlier quoted context omitted.

America is absolutely capable of setting tariffs on imports that would have made that unprofitable. In fact, that policy has been the norm at many times in countries precisely to protect domestic industry. So it's really more accurate to say that America chose to allow it to be profitable for corporations to outsource. Government policy could easily have been the opposite. So ultimately, America did do it to itself.…

this seems to misunderstand what tarrifs actually do. It's the US companies that pay the tarrifs. The concept of 'if we increase the tarrifs, US manufacturing will come back". That's not how the world works. It takes years to switch a manufacturer depending on terms, who owns the molds, etc. Placing tarrifs on China hurts American consumers. Instead, there should be tax incentives for producing stateside.

I'm not arguing whether tarriffs are good or bad, but the absolutely do work.

> It's the US companies that pay the tarrifs.

No, customers pay the tarriffs at the end of the day. Companies raise the prices of imported goods to cover the tarriffs, and tarriffs in this case are set so that the final retail price of imported goods matches (or exceeds) the domestic manufacturing price.

> The concept of 'if we increase the tarrifs, US manufacturing will come back"... It takes years...

The idea is generally to have tarriffs from the beginning so manufacturing never leaves. Because you're right, otherwise it does take years.

> Placing tarrifs on China hurts American consumers. Instead, there should be tax incentives for producing stateside.

There's no difference, they harm consumers equally. Corporate tax incentives mean reduced government income which needs to be made up for with... higher personal taxes. Or higher corporate taxes in other sectors which lead to higher prices. No matter what, the consumer is paying.

Tarriffs or tax incentives have the same effect, but tax incentives are usually much more difficult to design and limit corporate flexibility in bad ways that are hard to foresee. Tarriffs have much more reliable enforcement and predictable effects.

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

#218

Post by ethbr0 »

simonh wrote: post #179
ethbr0 wrote: post #172

Earlier quoted context omitted.

An interesting observation is that China is following the exact same economic/international-relations path the US did. 1. Become a global economic superpower (US 1910s, 20s) 2. ??? (US 1930s, 40s) 3. Military-industrial complex emerges and captures politicians (US 1950s) 4. Political leaders then begin looking at military capabilities and questioning why it isn't being used for military interventionalism (US 1960s) 5…

>Military-industrial complex emerges and captures politicians (US 1950s) So far China has completely avoided this. The military is very firmly under Party control. >Military interventionalism shows its flaws through failed post-intervention nation-building Germany, Japan and South Korea have been fantastic successes in nation building. Sure there have been failures too, most recently in Afghanistan. For China, their…

> The [Chinese] military is very firmly under Party control.

The point about the military-industrial complex capturing politicians isn't about control, but rather excess procurement.

On the one hand, China has a long way to reach parity with the US. On the other hand, they're building extremely quickly, and that means lots of government money going to corporations.

Subsequent restrictions to that funding flow tend to be when the system pushes back.

> Germany, Japan and South Korea have been fantastic successes in nation building.

These are all nation re-building efforts: they existed as economically and politically strong entities before the respective wars.

> The Taiwan situation has to be escalated, and territorial claims in the South China Sea pushed in order to manufacture tensions that justify internal repression.

I don't pretend to understand China's calculus with either.

With enough shore-based facilities, they can counter the US Navy.

But as soon as there's a shooting war over either, China is the aggressor to international order (Taiwan's sovereignity and maritime law), Chinese international trade evaporates (in terms of both exports and raw material imports), and their economy crashes.

So the only Chinese winning move, to me, looks like saber rattling right up to the brink, but making sure it never boils over.

Which was always the China-in-the-WTO argument -- addict them to the benefits of international trade, such that offending the global order would mean slitting their own economic throat.

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

#219

Post by aerio »

senttoschool wrote: post #56
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?

Just curious, if China sanctions the UK, would the US stop trading with the UK? What is your opinion?

Why would they? The US doesn't care about who China sanctions, and the UK is one of US's closest allies.

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

#220

Post by aerio »

petre wrote: post #49
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?

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.

China has sanctioned Lithuania for opening a Taiwan representative office, like you said.

Recently, they've also sanctioned Australia after the Australian government requested an independent investigation into the origins of the virus. This escalated into a one-sided trade war, particularly targeting Australian barley, wine and iron/steel exports.

As well as Norway, in 2010, after the independent Norwegian Nobel committee granted the Nobel Peace Prize to jailed Chinese human rights activist Liu Xiaobo.

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