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

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

#181

Post by martindbp » Sun, Jul 02, 2023, 5:20 PM UTC

kjkjadksj wrote: post #171

simonh wrote: post #71

Earlier quoted context omitted.

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…

> I'd say the US is a hegemon but not really an Empire except for a few small islands This is the ruse. The US is a global empire. Except, as history has shown, imperialism is somewhat unpopular to local populations. The US modern imperialism playbook is designed so the population really believes they are self governing themselves. The US doesn’t care who runs the day to day domestic government, so long as they have…

> are the primary trading partner

But there is no coercion here, they are the largest trading partner because they make a lot of great stuff. "Empire" comes with implied negative connotations, but it's a win-win for everyone within this particular "empire".

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

#182

Post by dirtyid » Sun, Jul 02, 2023, 5:32 PM UTC

bobs_salsa wrote: post #127

paganel wrote: post #114

Earlier quoted context omitted.

So what do you suggest as a better alternative? The West has tried and failed with countless “solutions” for more than six decades now, in many places making the situation worse compared to the start of the decolonization process. Also, road taxes is a measure that it is also heavily promoted by the European Commission in the Eastern European countries where “its” money is now helping build bridges and highways (I li…

I think the major issue in this situation is that the loaned money effectively circulates back into Chinese hands, and all that the local economy gets in return is infrastructure that they will in a few years not be able to maintain or develop due to a lack of skill or resources. So not only are none of the locals profiting from these projects, but more importantly no one is learning and developing the skills to cons…

This is the 101 debt trap propaganda narrative. Few years ago McKinsey field reports of 1000+ PRC firms across africa and 90% of employees were locals. There's studies back in mid 10s that show 70-80% localization figures across PRC infra export projects. Reality is PRC/BRI localization depends on project timelines - quick ones use more experienced PRC labour, long ones integrate more locals, because at the end of the day there's deadlines to meet and govs/people of underdeveloped countries want better infra fast. PRC supply, local demand, and even corruption mostly align in these deals. And what is even "extremely predatory", of course if they use PRC tech they would become more dependant to PRC supply chains just like they would be dependant on west when using western vendors. The western cope is thinking there's something wrong being dependent on PRC who has established industrial base to deliver and sustain these capital projects cheaper than west. Underdeveloped countries with limited indigenous capabilities have to choose who to be dependant on regardless, and without conflicting geopolitics like in ASEAN, PRC is the easy partner of choice.

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

#183

Post by enterprise_cog » Sun, Jul 02, 2023, 5:38 PM UTC

mensetmanusman wrote: post #159

kevingadd wrote: post #67

Earlier quoted context omitted.

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…

'Let it rip' is 'flatten the curve' for someone who unscientifically thinks zero Covid is practically possible. China made the wrong decision and almost sparked an internal collapse. They lost the youth and the hopelessness in the country is palpable.

Where in China do you live?

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

#184

Post by dr_hooo » Sun, Jul 02, 2023, 5:46 PM UTC

Timon3 wrote: post #122

partiallypro wrote: post #108

Earlier quoted context omitted.

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.

Can you share any research or resources on this topic that have led you to this conclusion?

Could you also just share which previous empire you believe has been more "friendly"?

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

#185

Post by kjkjadksj » Sun, Jul 02, 2023, 5:57 PM UTC

martindbp wrote: post #181

kjkjadksj wrote: post #171

Earlier quoted context omitted.

> I'd say the US is a hegemon but not really an Empire except for a few small islands This is the ruse. The US is a global empire. Except, as history has shown, imperialism is somewhat unpopular to local populations. The US modern imperialism playbook is designed so the population really believes they are self governing themselves. The US doesn’t care who runs the day to day domestic government, so long as they have…

> are the primary trading partner But there is no coercion here, they are the largest trading partner because they make a lot of great stuff. "Empire" comes with implied negative connotations, but it's a win-win for everyone within this particular "empire".

Imagine you are a small island nation reliant on imports from american companies and american foreign aid and attempt to violate US imposed sanctions on another state. You’d probably lose your seat of power before long from the resulting social unrest from being economically isolated from the US and all her allies. US might even back an upstart power against you with money or arms or paramilitary training.

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

#186

Post by Timon3 » Sun, Jul 02, 2023, 6:00 PM UTC

dr_hooo wrote: post #184

Timon3 wrote: post #122

Earlier quoted context omitted.

Can you share any research or resources on this topic that have led you to this conclusion?

Could you also just share which previous empire you believe has been more "friendly"?

I don't know how friendly or unfriendly previous empires were, so I'd like to read up more on it, but I honestly don't know what keywords I'd look for. Asking the one who made the claim for references seems like the best way for me to understand their comment better. Why do you expect me to provide arguments counter to theirs?

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

#187

Post by kjkjadksj » Sun, Jul 02, 2023, 6:00 PM UTC

simonh wrote: post #175

kjkjadksj wrote: post #171

Earlier quoted context omitted.

> I'd say the US is a hegemon but not really an Empire except for a few small islands This is the ruse. The US is a global empire. Except, as history has shown, imperialism is somewhat unpopular to local populations. The US modern imperialism playbook is designed so the population really believes they are self governing themselves. The US doesn’t care who runs the day to day domestic government, so long as they have…

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.

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

#188

Post by gumby » Sun, Jul 02, 2023, 6:05 PM UTC

csomar wrote: post #105

gumby wrote: post #7

and...? The article doesn't say how it's a big deal (or not). Looking at the list oof countries' forex reserves, tiny Switzerland has almost a trillion. Generally this is a sign that they export more than they import so are stuck with a bunch of foreign exchange. Of course they have to buy stuff with it: oil, other commodities, or, you know, foreign debt. China's 3T would be 10% of the US federal debt, or much smalle…

> The US has about 4T of foreign exchange reserves Source? Wikipedia puts it at $250bn. The US has liquidated most of its reserves in recent years.

I got the figure from here: “ Foreign Exchange Reserves in the United States increased to 37628 USD Million in April from 37566 USD Million in March of 2023. source: Federal Reserve”

https://tradingeconomics.com/united-states/foreign-exchange-...

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

#189

Post by dirtyid » Sun, Jul 02, 2023, 6:21 PM UTC

frankreyes wrote: post #120

cthalupa wrote: post #118

Earlier quoted context omitted.

While not explicitly arguing against this point, I would note that these graphs are from Peter Zeihan, who has explicit financial incentive in convincing people China is on the road to economic ruin. He makes his living as geopolitical analyst and has been predicting the imminent downfall of China since decades ago at Stratfor - if people come to disbelieve his predictions have value, he loses money. Which doesn't me…

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 visualization/narrative, this time by scaling to 2000 baseline and annotating Zeihan TM wild claims. PRC debt is ~2900% of 2000 baseline, GDP (and per capita) is ~1500% of 2000 baseline. All the graph is reflecting is PRC has built 2-3x debt in 20 years during it's most explosive and condensed development phase where urbanization (and home ownership) increased from 30-65%, i.e no country has been abel to modernize this fast. EVER. For reference, 2020 PRC national debt was ~55% (+20% in 10 years) of GDP vs US was ~140% (+40% in 10 years), total aggregate debt (the #s Zeihan is meming about) PRC ~270% vs US ~800% in 2020.

I don't know what the money "printed" graph data comes from, but PRC covid stimulus/money printing so far retraint vs US 13T. There's reason global economists was hoping PRC would spam the money printing brrrt button to uplift global economy. Meanwhile PRC Q1 inflation rate was ~1%, lowest amoung major economies. Again, that's not remotely reflective of actual Argentina ponzi economy, to the point of being diametrically opposite.

Also this is USD used for reserve, it's USD PRC hoovered up from massive trade surpluses in the first place. PRC exports has increased so spectacularly in the past few years (export value grew from 2.5T in 2019 to 3.6T in 2022). PRC exports grew as much in last 4 years (~1T) as it did in decade between 2008-2018 (1.4T-2.4T). So she's holding a lot of dollars, even if she wants to hold less. Hence trying to increase rmb settlement. In the meantime globe is still shovelling money at PRC, the problem isn't getting it, it's getting rid of it.

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

#190

Post by scotty79 » Sun, Jul 02, 2023, 6:28 PM UTC

isykt wrote: post #142

scotty79 wrote: post #65

Earlier quoted context omitted.

That's a very charitable interpretation. It's rather, which would you rather the developing world be exploited by, US or China? We have pretty extensive track record of developing countries being exploited by western economies. And it aint pretty. So the best case you can make for the US is thay familiar devil is better because it's familiar.

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 democracy if you just split one party system into two halves that play cooperative hot potato game with who's the current face of the power. What laws US lives by are dictated solely by the wealthy and both halves serve them equally efficiently at the tremendous cost to society and environment. China does pretty much the same only it didn't come up yet with the idea of having mock fights every few years to improve the stability of power.

> China is about to collapse because it’s in a demographic tailspin. What happens to these initiatives — and those countries that depend on them - is a huge open question and risk.

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