Posted on 10/31/2018 9:30:08 PM PDT by BeauBo
New export orders contracted for the fifth month in a row in October, to 46.9 from 48 in September. Imports also contracted for a fourth straight month, indicating weakening demand within China, while the decline in manufacturing employment accelerated. Non-manufacturing activity, dominated by the service sector, also slowed in October... We expect a worse growth slowdown in spring 2019.
(Excerpt) Read more at scmp.com ...
[...printing money.]
The Party aristocracy gets free shares in companies that come to them for protection. https://www.nytimes.com/2015/10/31/world/asia/chinese-tycoon-wang-jianlin-defends-xis-relatives-and-himself-on-business-deal.html It’s basically a gigantic shakedown racket that, while mild by African standards, is off-the-charts corrupt by Japanese or South Korean standards, let alone European or American standards.
[Here’s something to ponder: if China is shut out of the us markets, where is their excess garbage going?]
“devolution into multiple independent countries with, at most, Russia-sized populations.”
Along ethnic/linguistic lines? Political fiefdoms of the various crime families running the Politburo? Broken into the Military’s Regional Commands?
No one likes what I have to say. I get it. I understand it.
All I am trying to say is that China will not react like everyone else is forecasting. How has the rising middle class in Zambia, and Nambia factored into the equation? How about the new silk road with direct access to Russian urban areas? What about the infrastructure that is going up in Argentina and Brazil?
You cannot take a hamburger, remove the patty and still call it a hamburger. It’s something else.
[Most of the valuable stuff out of China goes elsewhere. Most of what goes to the USA is junk.]
U.S. goods imports from China totaled $505.5 billion in 2017, up 9.3% ($42.9 billion) from 2016, and up 57.3% from 2007. U.S. imports from are up 394% from 2001 (pre-WTO accession). U.S. imports from China account for 21.6% of overall U.S. imports in 2017.
The top import categories (2-digit HS) in 2017 were: electrical machinery ($147 billion), machinery ($110 billion), furniture and bedding ($32 billion), toys and sports equipment ($26 billion), and plastics ($16 billion).
U.S. total imports of agricultural products from China totaled $4.5 billion in 2017, our 4th largest supplier of agricultural imports. Leading categories include: processed fruit & vegetables ($1.1 billion), fruit & vegetable juices ($320 million), snack foods ($204 million), fresh vegetables ($181 million), and spices ($159 million).
U.S. imports of services from China were an estimated $17.4 billion in 2017, 8.7% ($1.4 billion) more than 2016, and 47.6% greater than 2007 levels. It was up roughly 387% from 2001 (pre-WTO accession). Leading services imports from China to the U.S. were in the travel, transport, and research and development sectors.
[Along ethnic/linguistic lines? Political fiefdoms of the various crime families running the Politburo? Broken into the Military’s Regional Commands?]
“They’re not printing money. They’re using the same thing the Japanese did - easy credit.”
I didn’t mean physically printing paper money - I used the colloquialism for expanding the money supply (creating more total money). That is done by “loaning” more money to banks, which they can then loan out/invest (within the limits of what their regulators allow). It is just a ledger entry adjustment, rather than a pallet of cash, but it is just creating wealth by fiat - by make believe.
They have widely convinced themselves that this can go on forever (as Governments have so many times before), that that have a new magic formula of some sort. So when these tariffs hit, they will likely just do more of the same. They will just go to a bank and say “raise your asset sheet another billion Yuan, and make a loan to my nephew for 150 million to build another white elephant.”
As for the economic efficiency of their “investments? You pegged it with “off-the-charts corrupt”. If anything, it will probably be worse this time around, as more insiders will likely assess that the (economic) party is coming to an end, and this might be their last chance for a really big score, to flee the country with.
The Japanese had a “Lost Decade” that dragged on for about 20 years of economic stagnation after their bubble burst, but China has a bigger imbalance to correct, in percentage terms.
[All I am trying to say is that China will not react like everyone else is forecasting. How has the rising middle class in Zambia, and Nambia factored into the equation? How about the new silk road with direct access to Russian urban areas? What about the infrastructure that is going up in Argentina and Brazil?]
But hope springs eternal, especially when there are opportunities for Chinese bureaucrats to re-route some of that outbound cash stream from the Chinese Treasury into their own pockets. It’s not unique that loan officers are suborned with kickbacks. What’s unique is that a national government is creating a fire hose of bad loans. What I wouldn’t give to be part of the Chinese bureaucracy involved in the cockamamie Belt and Road scheme.
“every major power would have its favorite.”
OMG, that’s true. It is so complicated thinking about China dividing itself, much less with a bunch of Foreign Intelligence Services trying to manipulate outcomes (which they would be duty bound to try).
Good post.
Almost every time I’ve known true behind the scenes information on a news story that hit national coverage, AP, etc., there have been major inaccuracies.
I call that a slight decline... nothing for anyone to panic over. The US currently has a president who actually gives a shi## about us, so he's tweaking the trade arrangements. The Chinese businesses will just have to adjust a little to maintain their lifestyles.
“China will not react like everyone else is forecasting”
China will do what is in the personal interest of the dictator Xi, as he contends with his potential personal rivals within the communist party elite - the members of the other crime families that wield power.
If the whole bubble bursts on Xi’s watch, and all those billionaires, and their families, and their patronage networks of cronies lose fortunes, at some point they will need to find a better leader for the times.
He won’t just be failing himself, he will be screwing them all. Hard.
Palace intrigue; and the ego, power and wealth of the few is all that determines the fate of China and the great number of Chinese people.
[OMG, that’s true. It is so complicated thinking about China dividing itself, much less with a bunch of Foreign Intelligence Services trying to manipulate outcomes (which they would be duty bound to try).]
“How has the rising middle class in Zambia, and Nambia factored into the equation? How about the new silk road?”
Many third world countries have now learned the hard way of China’s “Debt Trap” con game, where they bribe local officials to enter their countries into infrastructure deals with China, that ultimately result in forfeiting National assets, and enriching some communist princeling or another.
Mines, farms, ports - again and again, poor countries have been pillaged of National assets through these corrupt techniques. There is no love for the communist regime in China - their foreign friends are rented, like prostitutes. The communists have shown no one real friendship, but have swindled many. Corruption is just too central to their only unifying principle (clinging to power), for them to refrain from preying on foreigners.
“...to 46.9 from 48 in September... I call that a slight decline... nothing for anyone to panic over.”
1.1% in one month, is approaching a 15% annual rate of decline.
That was the first month when the new 10% tariffs were applied to about 40% of the exports to the USA (4% on total volume). Those tariffs go to 25% on January 1st. If the next round of tariffs is applied in a similar manner, a few months later the total tariff load will go up to about 25% on the total volume.
So if business is dropping now, it will likely be worse in the Spring, when the total tariff load is five times as high.
It will, but Chinese businessmen aren't stupid.... they saw this coming since Trump was elected. They'll just have to get out there and compete in the world... the US is only one of their buyers. It will all shake out... in a more fair way (for us).
How deeply is China involved in Brazil? I have a feeling Brazil’s new President is not going to tolerate the sort of crap you describe, unless he has no choice.
The election of a Conservative in Brazil could be a big blow to future Chinese Communist Party opportunities there. I assume the Chinese had the old politicians on their payroll.
Brazil is a huge agricultural producer, a reasonable oil producer, and has a pretty diverse economy, producing commercial jets (Embraer) and other sophisticated goods.
The hard core Leftists who have run Brazil for 15 years were putty in the hands of the their Chinese fellow travelers. When they (Lula) came to power in 2003, trade relations and investment began rising sharply.
China is now Brazil’s biggest trading partner (19%, US is 12%). From 2003 to June this year, Chinese firms have invested almost US$54 billion in around 100 projects in Brazil. From buying food and oil, they have moved into owning Brazilian communications and banking.
Trump knew this going in - those who carped about his actions had no idea what leverage he actually has...
That’s absurd.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.