I already mentioned that some of the FDI from HK SAR is American . Beyond the tax evasion reasons a notable portion of that 70% is outside investment marching through HK into the mainland most of it is still HK Elite and Chinese diaspora. Hong Kong inbound FDI is just as much if not more a mainland round trip reinvestment yeah. So we could be pulling numbers out of our ass all day but based on the above even if lets say the rate of US FDI to other countries FDI that comes through HK is triple their open and direct investment it still doesnt crack 10% of total FDI. Gawking at Chinese FDI flows forget that for over a decade now $100-200 billion is a tiny drop in the now 60 trillion Chinese financial market. China’s growth hasn’t needed foreign capital to fund critical growth for more than a decade now.
As to why they urge it my read is that in a general sense if you still want to be connected to the global economy you will always want foreign businesses input as a channel to the rest of the world. Why give up on something that offers advantage if you can have it? The more direct and practical reason is that in China's view, while they’re trying to manage this transition to a different financial system they would really like imput from experienced foreign investors to show domestic investors how to do their business with smarter and more effective practices. Party directives cant and wont substitute that in the current stage of development. Because let’s be honest a very big reason China landed in this LGFV debt situation in the first place is because most of its financial industry is still extremely sloppy and unserious, maybe even more so than America's. Letting people play finance and after getting immensily rich while also being half a century removed from a non capitalist economy and a litte more from feudalism doesnt create the most competent financial actors. Any other party in charge would have had multiple crises blown on their face vby now
Beyond that sorry i just dont see China's recent monetary and finance moves to be nearly as much of a reaction to US moves and strategies or the attracting of foreign investment being nearly as much of a center focus and need. I see them much more so inwardly focused and reactive to domestic economic restructuring and changes in balance and sentiment. Focused on domestic investors, speculators, elites and doing a balancing act given the real estate bubble popping .
Also once again im confused on how your urge for dedolarization and non exporter economy status coincides with not losening capital controls? The RMB will never take a significant chunk of the global currency share in transactions while RoW remains capitalist and largely financialized with the current level of oppeness and contro of chinese capital markets by the PRC. It can never become a significant reserve currency let alone THE reserve currency. You cant have both that and a closed chinese capital market and controls. Thats why China , while pushing for its use in their own trade and lending more and more doesnt really have any such plans for it. Because if you want to run a hot industrial policy there will inevitably be financial crowding and you will also sustain losses here and there. Lifting capital controls magnifies volatility. Capital flies out more during highly loaded losses. This is prone to creating bubble and bust cycles. If your objective is extractive financial activity you can manage it. But if you want to drive growth of production that kind of volatility is bad. China isn't planning to be a global value extractor. It wants to own its own means of production. So it doesn't make much sense to encourage hegemonic currency dominance. That orientation only favors the financial class right now. I think there will be some “managed” capital account loosening but I don’t think China is ever relinquishing capital controls at any significant capacity so i am strongly skeptical that what they arrive at will ever look anything like an “open” capital account regime. China’s capital controls isolate their financial system from using USD as a primary financial collateral. There's huge quantity of Chinese companies and wealthy individuals recycling their savings into US assets and dollars but that is still a very small amount relative to the size of the Chinese financial system. At most hundreds of billions relative to an 18 trillion GDP and 60 trillion financial system. There is a lot room to relax them a bit without relinquishing sovereignity depending on their geopolitical goals, the yuan strength they target and whatever domestic need
That small % of FDI in proportion to GDP is responsible for 16% of China’s tax revenues and nearly 30% (!!) of China’s export value!
The 16% number is for FIE of all venture configurations and country sources , not just the US which is a small minority of total investment. And capital and revenues of FIE of any short =/= FDI to begin with which is what you mentioned. Also FDI in high tech sectors is at ~10% of total for 2024 but the increase came from non US sources ,is still only 10% and is hillarously dawrfed by China's domestic investment. If we are going to be pulling stats and facts that are only tangentialy true you are better of watching Trumps Joe Rogan episode and search for hints on how he plans on solidifying US dollar hegemony
Your thing has become somewhat more difficult since at least with Biden we could give the benifit of the doupt that there were 4d chess plays from his administration behind the scenes and that the words of said administration were subbtle push and pull messages to foreign powers. Now you get to do KremlinWashingtonology with random parts of Trump brainfart ramblings to connect them to hidden empire checkmates. With Trump not only masterfully teasing the US geopolitical moves, offers and threats in his speeches but presumably building an administration that can even see them through. I dont envy you
Just a note. US is ~3% of FDI in China… in good years, FDI is ~4% total investment in China, <2% of GDP for a decade now. (Some of the FDI from HK SAR is also partly from the US, taking a detour to the mainland over HK but still)
Im sure China is dismantling one of the pillars of its monetary and economic policy in capital controls in defeat as we speak to get that life saving American FDI. All the signs are there, after all the CPC has announced that "they welcome and urge foreign investment and US cooperation and will try to make the enviroment easier for it" for the 5000th time since reform and opening up
Chinese deradicalization campaigns in Xinjiang seemed to have worked pretty well. At the peak of ISIS there were like 10k Uyghurs that fought in the middle east that and them entering back to China kickstarted such campaigns in earnest. But beyind the deradicalization right now Xinjiang is in a much better place economicaly, China is much stronger militarily and intelligence wise, Afghanistan isnt occupatied by americans in order to easily ship terrorists back in China and the numbers of Uyghurs in Syria and ME arent im guessing nearly as big as in ISIS times.
So i doupt there is much danger for China here. Good luck to some couple of hundreds of Uyghur seperatists in getting back to China without getting blown up by some drone or thrown in jail immediately
Suggesting that China should have put pla boots on the ground in Syria over all of this is a bit ridiculous. Even if China was more interventionist they wouldnt. And as far as Assad falling the russians and iranians with larrge military presence for ages there couldnt dk anything with the speed of the saa collapse and demoralization. What would a thousand pla troops or equipment have achieved . Other than probably be captured by western stooges
Not surrounded. Like 3-4 of them. Japan, Taiwan, SK, Phillipines. Whose economies are so entangled and dependent of China that them partaking in any open economic or actual warfare against China would collapse them considerably faster than it would hurt China. Its not a Europe hurting itself by its economic warfare against Russia. Its an order of magnitude worse. Other than maybe Phillipines, any other SEA nation wouldnt take a stand against China in any materialy impactful way since they would barely be able to function if they attempted it
The 2 billion they issued was snapped up immediately by international buyers and over-subscribed by a factor of x15. So there is demand. I was positive but not too freaked out over it in my comments earlier. It’s a good thing to keep an eye on but there’s no guarantee this is what will happen at massive scales. The mechanism seems quite plausible in washing USD back to the US, helping countries with USD depts and advancing Chinese (non USD) trade and intergration with RoW. But there are always ways this mechanism gets nixed. The broader theme is correct though i think, a main motivation behind this is to experiment with ways to decrease US(D) dependency, level the global financial playing field and calm down the starving levels of demand for USD liquidity that holds a firm grasp in many if not most countries. It does have big "find out potencial" but there is no singular thing or move to uproot USD hegemony. More so China and maybe more importantly the US to slowly bleed it enough with a thousand cuts
I have repeatedly said that China has far surpassed America industrially, technologically, while the state has succeeded in retaining much control of its national resources, industries and financial institutions.
This is the most barebones positive thing that you can say about China. So much so that its barely a "positive" thing to say rather than just an observation of reality that has leaves room for personal interpretation,opinions and analysis. Its a concrete reality so undisputable in most aspects its a view held even by most anti-china leftists, liberal comentators and increasingly so mainstream media. Its also not a description or reaction to current geopolitical and monetary events and choices by the Chinese state but a general observation of the material and bureocratical ourcomes that have culminated from how the Chinese system was set up and operated over decades. Doesnt really contradict anything my comment said
So he has spoken favorably about things that happened before he started commenting on current developments but never about any contemporary development or move at the point of commentary. And that favorable coverage of past moves is pretty much never on its own but is actualy only brought up in the context of their current doomer negative coverage to as to comperatively highlight and support his current negative coverage.
Saying "Back then i actualy thought this and they were doing the good thing but i was naive and they libed up now" doesnt negate my description that there hasnt been a single Chinese foreign, monetary or developmental choice that happened while they have been an active commentator on this sub that they didnt react negatively and that there hasnt been a single US foreign or monetary policy move that they didnt cover as a correct chess move for the empire. It actualy enhances it
I actualy already answered a previous comment they made on this topic and i already made my own post in this post about the topic. Thats why i started this comment saying that since we already talked past each other on this subject im gonna make a more general observation
Anyone can really write anything and there will be credulous people who want to believe it to be true.
I wont comment on the topic again , i already did twice and since whatever we wrote goes past each other its no use. Im just gonna point out that what you say can also be used to dismiss the analysis you write on the same basis. Some people wanna feed on copium, some on dooming. "credulous people" exist in both directions. The fact that there hasnt been a single Chinese foreign, monetary or developmental choice in the last 1+ years that you have reacted to and written about positively here and that there hasnt been a single US foreign or monetary policy move that you didnt cover as a correct chess move for the empire strains some of your credibility as an objective analyst of these developments through marxist lense, no matter how detailed your analysis or knowledge background is.
On a foundemental level simply because the ratio of good move / bad move for these countries cant remotely correspond to what your coverage is just based on a look around the world today, the two countries and their recent (and not so) history. Also off the to of my head the fact that you have jumped to the chance to doom post the momment you see the most obvious anti-china garbage stories like their submarines sinking (did it twice actualy, the latest one has been predictably once again proven an overexaggerated nothing recently) , using anti-china YT thumbnail level stats for some of your dooming (100 trillion vaccant buildings in china! Chinese EVs make no profit in China!) or reddit analysis for a potential Sino-American conflict (US can checkmate china by strangling Chinese sea trade roots ) doesnt exactly paint you as an non biased unemotional observer bringing some hard reality check to multipolarists and China hopium posters, it shows how easily you can edge towards the opposite side.
The car aint going anywhere in the coming decades for hundreds of millions of people. The best case somewhat realistic scenario enviromentaly for those people then becomes those cars being EVs along with cheap and abundant clean electricy through renewables and battery advances. There is, or at least should be demand for this scale of expanded EV production. At least in China there is
Just the BYD Zhengzhou Gigafactory, currently under expansion, compared to the biggest Tesla factory. It actualy can fit every single Tesla factory in it with room to spare. Its already like, a third of the size of Manhattan. The plant 70k workers in 2024.
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An angle from the ground, dont know from when. Bunch of wind turbines on the background tho.
More than a few. But that doesnt mean they cracked some big physics or engineering problem the EU scientists are in the dark about or that these sectors are taking advantage of inventions or breakthroughs the EU isnt aware about in a theoretical level. There are 100 small things (that arent exactly tech secrets) that manifest into a large competitive advantage through a 100 well oiled layers of state planning, "free market forces(blehhh...but yeah)", R&D, subsidies , investment, raw material access and refinement capacity, human capital capcity, supply chain logistics and intergration, AI intergration in manufacturing, automation etc. The EU, or the US for that matter, wouldnt be able to replicate this even if China put 100.000 EU engineers and scientists into forced training camps for years
Now this seems like a chatgpt summary of every comment you have made in the last month. This cant be a response to what i wrote. The US isnt building any real supply chains that dont include China, this move only strengthens Chinese supply chains with those nations, manufacturing and financial. These are supply chains of real commodities and Chinese tech that are owned and opperated at various stages by China and Chinese companies or intergrated to Chinese supply chains to function or even create value for the home country. How much of the, already trillions in value, supply chain assets and investments China that has already built and created world wide has been bought by Wall Street and now opperated by American directions and in Americas favor? They have had already a decade to do so. An insignificant amount as far as i can tell unless there is some hard data pointing otherwise
USD usage and volume isnt expanded by this move. I listed at least 3 ways of how its the opposite really. Beyond third world countries unilateraly defaulting on USD depts or China liquidating their reserve to buy their depts of and meet their dollar demands , mechanisms like these some of only of the only other ways for that dept circle to evovle with fewer and cheaper USD in circulation worldwide.
Who cares if they do. The advantage China has is the economy and scale and vertical intergration they have build in those sectors. There isnt actualy some super secret sauce there like what asml holds with lithography. Top EU universities ,physics, engineering and chemistry teams already now almost every development the chinese put into work for batteries and EVs. It would do fuck all to help the EUs industry actualy be competitive . Now and even more so in 10-20 years. Either eay the momment china does tech share with idk Brazil or Mexico when they open some plant there the west gets everything through industrial espionage as well
There was some news a couple of days ago of China issuing 2 billion in USD denominated sovereign bonds that surprisingly was treated negatively or as some capitulation to the USD. I feel like this is quite different
I see this as creating a small triangular financing mechanism to help offload from the USD collectively with the central fulcrum being a facilitation of $ for ¥ swaps. The end result is global south nations pay down USD denominated liabilities & export resources to China earning RMB.
Simply put Gulf (and others) countries have too many dollars, China sells them these bonds, China uses these dollars to fund poor countries (investments, imports whatever), Poor countries use dollars to pay debt, Poor countries and gulf countries sell their natural resources to China in yuan then China sells its technology to these countries in yuan. Saudi flushes out $, China gains real resources, poor countries less poor, net negative for the volume of $ being outside of US borders. Meanwhile Chinese sovereign bond buyers are also using these bonds as collateral for Chinese tech & infrastructure projects in Saudi Arabia and their respective home countries. For China it also represents a very slow conversion of excess USD and their own trade surpluses into physical commodities while creating demand for their own currency. These commodities will continue to rise in USD prices while falling in RMB prices. They will have to repay these bonds upon maturity eventualy but it will be with cheaper dollars as commodities reprice higher in tighter supply-constrained markets. So even in the long term there is another net loss of USD.
Another angle is that many coutries are facing double digit borrowing costs in USDs to rollover or service USD debts. China can stabilise these at rates almost identical to US Treasury rates , these bonds were issued at just 1 base point over UST! after all. Another net negative effect on dollar circulation and accumulation. It basicaly tries to flip the Dollar Milkshake Theory to its head. China could have used its UST for this without all this roundabout thing, sure. But China is maintaining/reducing its UST reserves slowly because it doesnt want to blow up the global financial enviroment and insert a ton of volatility . But the needs of many countries for USD liquidity are way higher than China's rate of liquidation . This bridges that gap and allows China to do smth
They used ATACMS saturation attacks on S300s and S400s. They were also used on more targets than just GBAD. They used an unknown amount targeting command assets and radars in Crimea, as well as some training grounds in various parts of Ukraine which resulted in likely hundreds of casualties. They number of ATACMS strikes has been prob ~20 +/- 5. And the Salvo size is 4-12 missiles for each strickes. I'd guess they have used ~200
The SU-57 flying in Zhuhai is an advertisement for other buyers, not China. And the credible rumor is that a deal was signed. Most likely with Algeria.
Beyond nuclear submarine tech (Russia ahead) and Jet engines (Russia slightly ahead), China really doesnt need anything Russia has in any notable quantities (quantities Russia cant even put out for sale atm). Su-57 is great but its not a great fit for the pacific theater compared to the j20 and j35 . China will be churning out ~200 5th gen airframes of those two combined per year from 2025 onwards either way
I already mentioned that some of the FDI from HK SAR is American . Beyond the tax evasion reasons a notable portion of that 70% is outside investment marching through HK into the mainland most of it is still HK Elite and Chinese diaspora. Hong Kong inbound FDI is just as much if not more a mainland round trip reinvestment yeah. So we could be pulling numbers out of our ass all day but based on the above even if lets say the rate of US FDI to other countries FDI that comes through HK is triple their open and direct investment it still doesnt crack 10% of total FDI. Gawking at Chinese FDI flows forget that for over a decade now $100-200 billion is a tiny drop in the now 60 trillion Chinese financial market. China’s growth hasn’t needed foreign capital to fund critical growth for more than a decade now.
As to why they urge it my read is that in a general sense if you still want to be connected to the global economy you will always want foreign businesses input as a channel to the rest of the world. Why give up on something that offers advantage if you can have it? The more direct and practical reason is that in China's view, while they’re trying to manage this transition to a different financial system they would really like imput from experienced foreign investors to show domestic investors how to do their business with smarter and more effective practices. Party directives cant and wont substitute that in the current stage of development. Because let’s be honest a very big reason China landed in this LGFV debt situation in the first place is because most of its financial industry is still extremely sloppy and unserious, maybe even more so than America's. Letting people play finance and after getting immensily rich while also being half a century removed from a non capitalist economy and a litte more from feudalism doesnt create the most competent financial actors. Any other party in charge would have had multiple crises blown on their face vby now
Beyond that sorry i just dont see China's recent monetary and finance moves to be nearly as much of a reaction to US moves and strategies or the attracting of foreign investment being nearly as much of a center focus and need. I see them much more so inwardly focused and reactive to domestic economic restructuring and changes in balance and sentiment. Focused on domestic investors, speculators, elites and doing a balancing act given the real estate bubble popping .
Also once again im confused on how your urge for dedolarization and non exporter economy status coincides with not losening capital controls? The RMB will never take a significant chunk of the global currency share in transactions while RoW remains capitalist and largely financialized with the current level of oppeness and contro of chinese capital markets by the PRC. It can never become a significant reserve currency let alone THE reserve currency. You cant have both that and a closed chinese capital market and controls. Thats why China , while pushing for its use in their own trade and lending more and more doesnt really have any such plans for it. Because if you want to run a hot industrial policy there will inevitably be financial crowding and you will also sustain losses here and there. Lifting capital controls magnifies volatility. Capital flies out more during highly loaded losses. This is prone to creating bubble and bust cycles. If your objective is extractive financial activity you can manage it. But if you want to drive growth of production that kind of volatility is bad. China isn't planning to be a global value extractor. It wants to own its own means of production. So it doesn't make much sense to encourage hegemonic currency dominance. That orientation only favors the financial class right now. I think there will be some “managed” capital account loosening but I don’t think China is ever relinquishing capital controls at any significant capacity so i am strongly skeptical that what they arrive at will ever look anything like an “open” capital account regime. China’s capital controls isolate their financial system from using USD as a primary financial collateral. There's huge quantity of Chinese companies and wealthy individuals recycling their savings into US assets and dollars but that is still a very small amount relative to the size of the Chinese financial system. At most hundreds of billions relative to an 18 trillion GDP and 60 trillion financial system. There is a lot room to relax them a bit without relinquishing sovereignity depending on their geopolitical goals, the yuan strength they target and whatever domestic need