China wields coronavirus to nationalize American-owned carmaker

[Strangelovesurfing + 737]

2 hours ago, Ward Smith said:

Given the strength of the US military, the dollar collapse will have to come from within. Fortunately for China, the useful idiots are backing them 100% in this endeavor. Unfortunately for the world, China will continue her bad habits once the renminbi joins the world reserve currency stage. 

@0R0 has spelled this out multiple times. Something like 70% of US currency is outside the US. Why is that? It's because countries need dollars to do business with each other.  This started with Bretton Woods but got amped up by Kissinger's petrodollar scheme. One thing keeping the dollar artificially high is this constant sucking sound from all those countries buying dollars to pay each other off. 

The EuroDollar system is it’s own beast now, a very hungry beast.

[Ward Smith + 6,615]

2 hours ago, Strangelovesurfing said:

The EuroDollar system is it’s own beast now, a very hungry beast.

EuroDollar, I like that. 

Where money gets laundered

Edited August 11, 2020 by Ward Smith

[0R0 + 6,251]

22 hours ago, Marcin2 said:

There are some views that China is preparing , economically , for more fragmented world.

But they would never self isolate. Who isolates himslef is automatically a loser in connected world.

There would be US China decoupling to some extent, and US would coerce all other countries to stop  cooperation with China, with this only partial success possible. Asia is already economically sort of Chinese economic domain No matter how many US  carriers crossing the surrounding oceans.

And China will not react against any US moves. China is against decoupling as cooperation with US still brings high economic benefits but most of all technology benefits, Chinese students and scholars are bringing IP and know how back to Mainland.

 

I watch foreign trade and supply chains this year are much more about China than last year, whereas US loses a lot due to Covid 19.

China would try to acquire as much IP as possible on top of own R&D.

The stake of the game is really high.

Yuan will become 3rd global reserve  currency on par with Dollar and Euro the moment China would  close major tech gaps.

So IC industry game is about trillions.

China plays a very long game:

- closing tech gaps,

- self reliance in all major industries, later dominance due to supply chains, being world factory and effect of the largest consumer market,

- becoming the largest economy,

- yuan 3 rd reserve currency

- 150% of US GDP

- yuan 1st reserve currency

- strongest military

China is bound by the need to control the information going to their people. Thus they need trade partners that allow easy  control of media so that the social and information interactions necessary for trade do not come with challenges to the increasingly fictional CCP narrative.

China is not becoming much bigger economically than it is now. The inverted demographics and lack of education for the bulk of the population precludes this from happening.

Their "plan" amounts to wishful thinking,

Their self reliance is only possible when their population is back down to 2/3 of its current size and is complemented by energy supplies from Russia on land. Their pipedream to Iran is not a real possibility politically, as the entire path of the pipeline is lined with people with a long history of competing or fighting with Iran. .

They have the option of using the enormous amounts of stolen IP to gain parity with the prior avant garde of industrial technology. That is a decade's worth of engineering applications for which they don't have the people as their STEM education efforts are not working to produce high grade trained talent, but lots of technicians who are barely capable of following instructions, not to speak of doing engineering proper. The ability to train is a huge economic burden on a low margin industrial economy. Incomes of the broad population do not allow for increasing the number of well trained engineers etc. because the successive generations are shrinking, thus the existing 2 decade period of excess educational capacity shrinks along with the retirement of the boomer professors. In the cram school, tutoring and English private education market, prices are increasingly out of reach of the public, such that the 6:1 ratio of elder family to students that was able to support his increasing investment in education, are turning into 4 retirees burdening the parent generation and leaving the student to fend for himself.

That is not what builds a great future.

China has squandered its great features and destroyed some of them, like building over 40% of their prime arable land. Investing in massive industrial capacity far outstripping both its own demand profile and the world's. Then using it to supply massively useless excess infrastructure instead of a broad quality education to high school and above for the bulk of the population. Instead, 76% are still not getting into high school.

China's GDP is "manufactured" rather than measured. As one China economist explained, when GDP does not meet targets, the provincial govt. does  "projects" employing hundreds of thousands of people and using many tons of steel and concrete and final components like train cars and engines air planes and furniture and electronics. Regardless of the unavailability of riders, flyers, occupants for office space, or someone to plug into the enlarged network capacity. In the meantime, the new projects suck demand from the existing ones to reduce their profitability to nothing and make them loss making. It has been the Chinese system's mode of operation for well over a decade and has resulted in increasingly disconnected GDP figures vs. actual economic performance. Recent estimates still put China at a total of 0% GDP growth over 2018 & 2019. Forensic accounting analysis shows 5% of reported GDP in the past few years in investments was never made since it was never funded from savings that were never made.

@Marcin2 the economic growth you are projecting can not be had by the methods applied so far. Read "Economic Calculation in the Socialist Commonwealth" to get an idea of what burdens their system imposes. https://mises.org/library/economic-calculation-socialist-commonwealth

While what used to be 60% of China's economy was not socialized, the SOE sector does very much operate on socialist principles, as do the banks that fund it. Xi has purposely removed financing capabilities from the private sector and regulated away some of its activity. The effort to divert this to the SOE banks has failed, and the SOE sector takeover of SMEs that resulted from the credit crunch this policy imposed has made them shrink or shut down. The main avenue for China businesses to react to market cues come from the international trade it engages in. Those operations are mainly not Chinese owned nor operated. The JV structures are simply means to pay off CCP officials and they are largely passive where they are not used to directly fleece the foreign investors or operators and steal the entire operation. As this proceeds apace and the foreign trade component of China fades, the ability of China's economy to generate market cues and respond to them goes with it. Thus decisions are increasingly made on the basis of policy objectives rather than economic necessities. The ability to tell the difference between a waste of capital and a brilliant investment into the future is disappearing. China since 2013 is becoming a growing herd of white elephants producing nothing one wants but consuming resources, which are counted in GDP numbers.

By Michael Beckley's estimates .1/3 of China's economy is the equivalent of digging a hole and filling it back up, both sides of which produce GDP numbers. Only empty office and residential towers, a second high speed train to an unvisited city, a bridge and rail line over a lake are left behind to stand as Pyramids to commemorate the greatness of the CCP.

 

[Dan Warnick + 6,100]

Two relevant articles on China's current financial health, and some of the causes and results.

More than 240,000 Chinese companies declare bankruptcy in the first two months of 2020

and

Going bankrupt in China

(excerpt)

The lack of an efficient and independent judicial system is a major obstacle to economic development. Several studies have shown that, especially in developing countries, courts are often slow at processing cases, lack specialised judges, and are subject to political interference (Djankov et al. 2008, Dakolias 1999, Rodriguez and Ehrichs 2007). The effects of these frictions in contract enforcement can percolate through the financial system in the form of high interest rates and limited access to credit. These, in turn, affect firms’ ability to invest and innovate and hinder the reallocation of capital towards more productive projects.

This issue is prominent in China, where local courts are traditionally slow and suffer from the interference of local politicians when dealing with bankruptcy cases (Fan et al. 2013, Henderson 2007). Local politicians have strong incentives to delay the liquidation and keep in operation low-productivity and financially distressed state-owned firms to contain unemployment, avoid social unrest, and promote their political careers. Despite its importance, we still know very little about how the judicial system deals with insolvency resolution in China and what are its effects on the real economy.

[specinho + 467]

I'm not an expert but common scenarios might be.......

1. if the country is less developed, the people are less educated and less capable, they are docile and opened to learn, they are likely to share. They do not know, they need to grow, they accept your help and they share profit with you.

2. the country is moderately developed, education is gaining popularity despite may be not up to desirable quality, they are partly expert-partly imbecile and they might or might not share. They know a little, they are not dire to grow, they may accept or decline your help and they want to own everything you build if possible.

3. the country is well developed, people are well educated and capable, they are better than you or inferior than you. If they are better than you, they are open to learn and share the growth with you. If they are inferior than you, they are arrogant, closed minded and want it all.

Human behavior, personality or attitude can't stray far from predictability....... Know them before you invest?

p.s.: there might be an exceptional scenario - they punish out of righteousness for something wrong that one might have done.......

 

 

Edited August 12, 2020 by specinho

[Marcin2 + 725]

55 minutes ago, specinho said:

I'm not an expert but common scenarios might be.......

1. if the country is less developed, the people are less educated and less capable, they are docile and opened to learn, they are likely to share. They do not know, they need to grow, they accept your help and they share profit with you.

2. the country is moderately developed, education is gaining popularity despite may be not up to desirable quality, they are partly expert-partly imbecile and they might or might not share. They know a little, they are not dire to grow, they may accept or decline your help and they want to own everything you build if possible.

3. the country is well developed, people are well educated and capable, they are better than you or inferior than you. If they are better than you, they are open to learn and share the growth with you. If they are inferior than you, they are arrogant, closed minded and want it all.

Human behavior, personality or attitude can't stray far from predictability....... Know them before you invest?

p.s.: there might be an exceptional scenario - they punish out of righteousness for something wrong that one might have done.......

 

 

It happens again: I have No idea ( I do not understand) what you are talking about but I like this  picture very much.

[Enthalpic + 1,496]

On 8/11/2020 at 10:14 AM, Ward Smith said:

 

@0R0 has spelled this out multiple times.

Why do you always defer to another person?  You clearly think you are the smartest but don't ever come up with any valid arguments yourself.  Your "contributions" are insults and/or up-votes of someone else who can think and write - you clearly cannot. 

Go follow the other weak trump-cult members and leave.  You, trump, Tom, and Jan can have a great time in whatever dark corner you find yourself in.

It's okay, I don't judge what consenting men do to each other;  I support your rights.

[specinho + 467]

On 8/13/2020 at 5:09 AM, Marcin2 said:

It happens again: I have No idea ( I do not understand) what you are talking about but I like this  picture very much.

predictability..... in short and blunt manner the comment says,

if they are stupider in poorer countries, they would want to learn and share the profit with you;

if they are half smart - remaining half stupid in poorer countries, they might or might not want to learn and share profit. They might prefer take it all when time comes;

If they are smarter than you in richer countries, they learn, grow with you and give you the benefits;

if they are stupider than you in richer countries, they would not want to learn, grow nor share benefit with you.

In a nutshell............ choose the stupid of the poor and smart of the rich.............as partners in crxxxx