China

[crs223]

28 minutes ago, Spekulatius said:

Being scared is better than being ignorant of a real threat.

 

I agree.

 

China is strong and US is right to be scared/reactive/proactive.  China is not going to slunk away — despite poor demographics, human atrocities, IP theft, and other common criticism.

[Luke]

 

Guy Spier talking about China in March 2023:

 

1.Goal of the CCP is to stay in power, in order to stay in power they have to bring prosperity to the people of china. Never have been people been lifted out of poverty in the history and its due to the credit of the CCP. 

2. We see millions of people traveling out of china and coming back to china, its not as unfree as some might think. Delivered on prosperity to a middle class. 

3. They have shown an ability to self correct which has happened before

He owns Prosus, Alibaba and BYD. 

@Dinar might be interesting to you too

[Sweet]

8 hours ago, Spekulatius said:

Being scared is better than being ignorant of a real threat.

 

My thesis is that China has been in war with the west since at least  Xi Jinping came to power, maybe even before that. The Chinese leaders before Xi Jinping may have been more careful or covert about their intentions  but Xi Jinping is quite open about his intentions, you just have listen about what he says or read what he writes.

I think the west just didn’t realize this until a few years ago. Maybe Trump actually was it who started to push back, even though not in smart way, Imo. In any case Biden/Trump, Democrat or Republican it doesn’t matter, in terms of China they are actually more or less on the same page - they have realized that China is an adversary and they need to do something about it.

 

So now we are in phase, that we are in some sort of a war with China, not openly with military yet , but covertly. Call it a Cold War, because it mimics the war against the USSR since 1950 (Korea was the moment that everyone in the US realized that a Cold War era has started). This was 5 years after George Orwell coined the term I believe in 1945. he also called it peace which is no peace, which is rather fitting.  We are now in 1950 in Cold War I terms.

 

The Cold War is predominately not fought with military power, it’s more of an economic and technological race. That’s why semis are key here. The Chinese knew this a few years ago and now the US/ West knows it too. Now the west tries to kneecap the Chinese semi land grab as they should and the Chinese have no choice but do develop their own tech.

There will be other battlefields in other tech areas as well as those with economic dimensions (rare earth metals anyone?). China’s belt and road is one way China tries to get control of trade and US does this via bilateral trade agreements. We will see which one works better, but I think belt and road has been a bust so far.

 

In any case, the important thing is that the US and increasingly Europe as well has realized that we are in a new kind of Cold War with China and it’s a long term game, not some thing that is over in a few years - we are talking likely many decades here. It’s important to realize this because you can’t win a war unless you realize you actually in a war and you need to fight. We just got to that point recently.

 

The winner will be the side who has is going to be most economically and technologically advanced and a military that can project lower around the globe.

 

My guess is that the next 25-35 years won’t look like 1990-2025 but more like 1950-1985. Now most predictions of the future are wrong, but the good news is that you can update them as you go along.
 

Agree 100%

[Luke]

9 hours ago, Spekulatius said:

Being scared is better than being ignorant of a real threat.

 

My thesis is that China has been in war with the west since at least  Xi Jinping came to power, maybe even before that. The Chinese leaders before Xi Jinping may have been more careful or covert about their intentions  but Xi Jinping is quite open about his intentions, you just have listen about what he says or read what he writes.

I think the west just didn’t realize this until a few years ago. Maybe Trump actually was it who started to push back, even though not in smart way, Imo. In any case Biden/Trump, Democrat or Republican it doesn’t matter, in terms of China they are actually more or less on the same page - they have realized that China is an adversary and they need to do something about it.

 

So now we are in phase, that we are in some sort of a war with China, not openly with military yet , but covertly. Call it a Cold War, because it mimics the war against the USSR since 1950 (Korea was the moment that everyone in the US realized that a Cold War era has started). This was 5 years after George Orwell coined the term I believe in 1945. he also called it peace which is no peace, which is rather fitting.  We are now in 1950 in Cold War I terms.

 

The Cold War is predominately not fought with military power, it’s more of an economic and technological race. That’s why semis are key here. The Chinese knew this a few years ago and now the US/ West knows it too. Now the west tries to kneecap the Chinese semi land grab as they should and the Chinese have no choice but do develop their own tech.

There will be other battlefields in other tech areas as well as those with economic dimensions (rare earth metals anyone?). China’s belt and road is one way China tries to get control of trade and US does this via bilateral trade agreements. We will see which one works better, but I think belt and road has been a bust so far.

 

In any case, the important thing is that the US and increasingly Europe as well has realized that we are in a new kind of Cold War with China and it’s a long term game, not some thing that is over in a few years - we are talking likely many decades here. It’s important to realize this because you can’t win a war unless you realize you actually in a war and you need to fight. We just got to that point recently.

 

The winner will be the side who has is going to be most economically and technologically advanced and a military that can project lower around the globe.

 

My guess is that the next 25-35 years won’t look like 1990-2025 but more like 1950-1985. Now most predictions of the future are wrong, but the good news is that you can update them as you go along.
 

The only war that is here is called economic competition. China is not a country that just invades other countries (contrary to the US), all they do is build out their country, other countries and grow the respective economies. 

 

All this ,,China is at war with us,, tries to raise acceptance for further military investment and if this agressive attitude from the US continues, possible real military war. 

 

There have to be diplomatic conversations and regulations for the patent stealing allegations. 

But if i look at the politicians in the US, they are already hot to fire rockets. 

 

Politically its a really really bad move.

 

 

Edited May 27, 2023 by Luca

[Luke]

What the US and Europe realize is that the other side of the globe is now much more potent than 30 years ago. Over are the times of G7 planning their factories in Third World countries and living off of rich monopolies. 

 

Times are changing, new world organization is coming, who says what depends on how many people in respective countries live and how big respective economies are. The Chinese, Indians, South africans etc are having more and more Say in how the world runs. 

 

 

Edited May 27, 2023 by Luca

[Luke]

Ultimately, President Xi Jinping is likely to find that BRI gains still far outweigh the financial costs incurred by loan write-offs that recipient nations or companies cannot repay.

 

https://www.gisreportsonline.com/r/belt-road-initiative/

[Luke]

https://www.scmp.com/news/china/diplomacy/article/3221769/xi-jinping-calls-eurasian-nations-boost-ties-chinas-belt-and-road-beijing-aims-expand-influence

 

Speaking as an invited guest at the opening ceremony of the second Eurasian Economic Forum in Moscow via video link on Wednesday, Xi also reiterated that the path towards a multipolar world was “irresistible”, Xinhua reported.

 

“The ultimate goal of [the belt and road programme] is to explore new ways for countries from near and far to achieve common development and to open up a path of happiness that benefits the whole world,” Xi was quoted as saying.

[Luke]

https://www.scmp.com/news/china/diplomacy/article/3221093/china-can-help-central-asian-brethren-unite-xi-jinping-tells-xian-summit?module=inline&pgtype=article

 

Chinese President Xi Jinping on Friday called for the “brethren in Central Asia” to unite against attempts to divide them in the face of unprecedented turmoil and build themselves as the bridge connecting Asia and Europe.

 

“The world needs a harmonious Central Asia. Brotherhood is better than all wealth,” Xi said in a keynote speech delivered on the second day of the inaugural China-Central Asia Summit in Xian, attended by the leaders of five countries in the region.

 

 

Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan also expressed support for Chinese engagement, including belt and road plan

[Sweet]

Luca, you are just spamming Chinese propaganda.

[Luke]

1 minute ago, Sweet said:

Luca, you are just spamming Chinese propaganda.

Well, if that is your conclusion after everything i shared we can really disagree about our assessments of the situation!

 

Cheers!

[Luke]

But it represents pretty well how the fronts think of each other. Anything that China says or does is propaganda.

[Sweet]

27 minutes ago, Luca said:

Well, if that is your conclusion after everything i shared we can really disagree about our assessments of the situation!

 

Cheers!

Overall Luca I think you are a great poster, but on China you are on a different planet from me.

[Spekulatius]

The idea that only the CCP has lifted the people in China out of poverty is laughable. We have a control experiment  going on where the Chinese went capitalist and they are called Hongkong and Taiwan. Hongkong has not already been absorbed by the mothership.

 

That is one reason why the CCP needed to take over Hongkong and now they set their aim at Taiwan. It screams to their people that there is better alternative out there where people live better with more freedom. The CCP doesn’t like that and my concern is that they would rather destroy it, even if it costs them dearly. I think not, but the risk is there in my opinion.

 

Guy Spier is like label, but I don’t think he is actually a good thinker or investor. he seems to ape other people and get into large cap positions, even though his own fund is fairly small. His long period of inaction does not seem like a strength either, for a small fund, he should use his ability to make some bets, Imo.
He was commiserating about the risk of a nuclear war due to Ukraine in recent podcast which seem to have prevented him to pull the trigger on some investment opportunities . I just don’t see the point, this thinking makes no sense to me as if it matter what stocks he buys when we do got a full blown nuclear war. If he really thinks that , he should just build a bunker in the Swiss alps for himself and his family. This type of thinking is self defying, he has no edge there, no way to influence outcomes. I just don’t see a point investing along side him.

Edited May 27, 2023 by Spekulatius

[Luke]

4 minutes ago, Spekulatius said:

The idea that only the CCP has lifted the people in China out of poverty is laughable. We have a control experiment  going on where the Chinese went capitalist and they are called Hongkong and Taiwan. Hongkong has not already been absorbed by the mothership.

 

That is one reason why the CCP needed to take over Hongkong and now they set their aim at Taiwan. It screams to their people that there is better alternative out there where people live better with more freedom. The CCP doesn’t like that and my concern is that they would rather destroy it, even if it costs them dearly. I think not, but the risk is there in my opinion.

Living Standards in Taipeh or Shenzen are comparably the same. What does stand out is the freedom and i agree that the CCP worries about it. On the other hand i have met chinese who just dont bother, its not like their freedom is massively restricted either (with the except of political opinion). Some are rather a political (system doesnt stimulate political thought much)

 

Both China and Taiwan are capitalist, with different state power. Taiwan really was a major success story due to the semiconductor specialization. But that was partly the state too that organized and funded these industries in its early beginnings. Taiwan also benefitted from the growing wealth in China, 26% of exports go there.

 

I do think changing the strategy of the party helped them to grow so immensely, of course its not only them alone but lots of it is on their shoulders. 

[zippy1]

10 hours ago, Luca said:

Taiwan also benefitted from the growing wealth in China, 26% of exports go there.

 

Actually, more than 50% of Taiwanese export to China is electronic component, which is then used for the assembly of phones, notebooks and other electronics system.  

So this seeming large percentage of export to China has more to do with the locations of the assembly lines instead of because of "China's growing wealth" since the final products are often sold to places outside of China. 

In fact, one can argue that "China's growing wealth" was from it being able to import these electronic components from Taiwan.  This is why China has sanctioned many products from Taiwanese but has never sanctioned semiconductors from Taiwan. 

 

With the current US-China situation, many of these assembly lines are being moved to Mexico, Vietnam and India.  As a result, the percentage of the export to China likely will come down in the future.   

 

Edited May 27, 2023 by zippy1

[Haryana]

 

"Global funds are piling into Indian stocks as a stuttering economic recovery in China has sparked a rotation. Foreign investors have added $5.7 billion worth of India stocks since the start of April, lured by a stable earnings outlook and one of the highest GDP growth rates among the world’s largest economies."

 

https://www.bloomberg.com/news/articles/2023-05-29/record-bound-indian-stocks-reclaim-spot-as-world-s-top-5-market

 

[Luke]

Whats super interesting is that according to Alfred McCoy, China circled afghanistan with lines of steel waiting for afghanistan falling into its hands. The one connection that was missing was a pipeline through afghanistan, down to energy deficit areas of pakistan/india. In july, a month before the taliban took power, the taliban send a delegation to china and met with chinas foreign minister, to make sure that the taliban would promote chinese investment. Another great price of aghanistan: about a billion dollars of rare earth minerals, critical for lithium battery construction. Very valuable to china and the whole international community, China sat back, surrounded afghanistan with its geopolitical network and waited for afghanistan to fall into its hands, didnt pay anything for it, Nato/US spend 8 T USD.

Edited May 29, 2023 by Luca

[Luke]

https://www.ft.com/content/d262d1eb-5ded-4202-9362-c9b04b5e4494

 

Edited May 29, 2023 by Luca

[Parsad]

Chinese debt load:

 

https://www.cnn.com/2023/05/29/economy/china-wuhan-local-debt-crisis-intl-hnk/index.html

 

Cheers!

[Spekulatius]

5 hours ago, Luca said:

https://www.ft.com/content/d262d1eb-5ded-4202-9362-c9b04b5e4494

 

Almost looks like an AI software created a pic of this Chinese fellow on the left converting to a Taliban on the right in two steps.

[Luke]

Just now, Spekulatius said:

Almost looks like an AI software created a pic of this Chinese fellow on the left converting to a Taliban on the right in two steps.

Hahahaha!

[crs223]

2 hours ago, Parsad said:

Chinese debt load:

 

https://www.cnn.com/2023/05/29/economy/china-wuhan-local-debt-crisis-intl-hnk/index.html

 

Cheers!

 

They could try this: kidnap Alibaba’s CEO then demand a few billion in “common prosperity” reparations.

[valueseek]

On 5/27/2023 at 8:32 AM, Spekulatius said:

The idea that only the CCP has lifted the people in China out of poverty is laughable. We have a control experiment  going on where the Chinese went capitalist and they are called Hongkong and Taiwan. Hongkong has not already been absorbed by the mothership.

 

That is one reason why the CCP needed to take over Hongkong and now they set their aim at Taiwan. It screams to their people that there is better alternative out there where people live better with more freedom. The CCP doesn’t like that and my concern is that they would rather destroy it, even if it costs them dearly. I think not, but the risk is there in my opinion.

 

Guy Spier is like label, but I don’t think he is actually a good thinker or investor. he seems to ape other people and get into large cap positions, even though his own fund is fairly small. His long period of inaction does not seem like a strength either, for a small fund, he should use his ability to make some bets, Imo.
He was commiserating about the risk of a nuclear war due to Ukraine in recent podcast which seem to have prevented him to pull the trigger on some investment opportunities . I just don’t see the point, this thinking makes no sense to me as if it matter what stocks he buys when we do got a full blown nuclear war. If he really thinks that , he should just build a bunker in the Swiss alps for himself and his family. This type of thinking is self defying, he has no edge there, no way to influence outcomes. I just don’t see a point investing along side him.

interesting and thoughtful take Spek

[Spekulatius]

Peter Zeihan Uber bearish on China as usual

Demographics, poor geostrategic location , Leadership with personality cult etc.

 

I don’t  think he quite gets the advantage China has in manufacturing stuff. Mexicos population is not too skilled to take on Chinese manufacturing . They may have different skilled but what China is doing manufacturing electronics like Apples iPhone and many other things is very very complex. It’s not just many workers, these workers are very very skilled at what they are doing and it’s hard to automize (fine motor skills, complexity , tight tolerances. You just can’t hire the same sort of workers anywhere but perhaps in Vietnam or Indonesia (which has Chinese population as well).

 

Anyways, worth listening to, but you need to take some of Zeihans statements with a grain of salt. I do think he gets the broad picture right , after all he is a big picture guy.

[Luke]

5 hours ago, Spekulatius said:

Peter Zeihan Uber bearish on China as usual

Demographics, poor geostrategic location , Leadership with personality cult etc.

 

I don’t  think he quite gets the advantage China has in manufacturing stuff. Mexicos population is not too skilled to take on Chinese manufacturing . They may have different skilled but what China is doing manufacturing electronics like Apples iPhone and many other things is very very complex. It’s not just many workers, these workers are very very skilled at what they are doing and it’s hard to automize (fine motor skills, complexity , tight tolerances. You just can’t hire the same sort of workers anywhere but perhaps in Vietnam or Indonesia (which has Chinese population as well).

 

Anyways, worth listening to, but you need to take some of Zeihans statements with a grain of salt. I do think he gets the broad picture right , after all he is a big picture guy.

China is THE hot topic for the media: