China

[Luca]

If China is blocked from global semiconductor trade, bombing TSMC will hurt a bit, but a lot less than if they are included in the supply chains. What it will hurt is the US at that point. So very strategic business for global power and way closer to china to destroy...

[crs223]

18 hours ago, Luca said:

Whats bothering me the most right now is chinas inability to get the latest high end chips and the continuing pressure on ASML to stop support china with older machines. 

 

What impact will that have on their economies and competitiveness? What if Tesla is allowed to use latest Nvidia chips but BYD cant, making their product inferior? 

 

Essentially, that ban is a complete blockade on chinas development and will effect them literally everywhere. They wont grow as much as the west since they cant have the level of automatization, their tech companies will lag behind, tech products will lag behind compared to the west. 

 

Amazing for the west and US economies, terrible for china...

 

The blockade will force China to develop their own chips and strengthen China.  That was your thought a few months ago.

[crs223]

17 hours ago, RichardGibbons said:

I feel bad that the Chinese people get screwed as a result.

 

I’ve been seeing news reports that chinese are illegally entering US via mexico.

 

Chinese prospects not looking good right now.

[RichardGibbons]

18 hours ago, Luca said:

It doesn't matter what "horrific" things China is doing.

 

Yes, it does.  There's a reason why chips are still going to countries like the UK, Canada, France, Netherlands, and Sweden. It matters whether a country is a democracy abiding by the rules-based order, human rights, and the rule of law.

[Luca]

4 minutes ago, RichardGibbons said:

Yes, it does.  There's a reason why chips are still going to countries like the UK, Canada, France, Netherlands, and Sweden. It matters whether a country is a democracy abiding by the rules-based order, human rights, and the rule of law.

I strongly disagree. The only thing that matters is that China is a significant competitor of the US on all fronts. Are there sanctions against other countries with human rights abuses? Its one sided against china only. 

[Libs]

1 hour ago, Luca said:

I strongly disagree. The only thing that matters is that China is a significant competitor of the US on all fronts. Are there sanctions against other countries with human rights abuses? Its one sided against china only. 

Here is a list of U.S. Sanctions, from the Treasury Department.

 

https://ofac.treasury.gov/sanctions-programs-and-country-information

 

Luca- I like your posts on other topics, I think you have a lot to add, but I think you are way off on China. Just look at the drop in foreign investments in China; down 90% since 2021. That's not just because of sanctions or human rights abuses. Investing in a communist country is dangerous as hell. 

[Luca]

2 hours ago, Libs said:

Here is a list of U.S. Sanctions, from the Treasury Department.

 

https://ofac.treasury.gov/sanctions-programs-and-country-information

 

Luca- I like your posts on other topics, I think you have a lot to add, but I think you are way off on China. Just look at the drop in foreign investments in China; down 90% since 2021. That's not just because of sanctions or human rights abuses. Investing in a communist country is dangerous as hell. 

To reframe: What help are high-end AI chip sanctions for Uyghurs? Which other countries have sanctions for NVIDIA chips? 

 

The sanctions are just there to get the upper hand on China, economically and militarily. China could stop the labor camps now and it wouldn't change anything. And yeah, if china allows LGBTQ folks they will surely get the chips too

 

Why is the US allowed to have AI chips with Assange releasing war crimes to the internet and then faces 175 in a torture cell somewhere in the US? Prisoners were hidden from the red cross...collateral murder by US Apache helicopters, spying on normal citizens without probable cause...

 

But more fundamentally, i seriously hope for chinese investments that they can develop their own chips because i dont think they will get em anytime soon and i think there is a reasonable chance the US can really amplify the control of these for their own benefit. 

 

 

Edited March 8 by Luca

[Luca]

Good illustration of how desperate youtubers have become generating clicks...

[changegonnacome]

On 3/8/2024 at 12:09 PM, Luca said:

I strongly disagree. The only thing that matters is that China is a significant competitor of the US on all fronts. Are there sanctions against other countries with human rights abuses? Its one sided against china only. 

 

Agree broadly. What permeates EVERYTHING with China now is that it has gone from a junior economic partner of the US/West to something akin to a peer competitor across many fronts.

 

Like it or not we have entered into a security competition with China - not because China has changed per se (it was and is a communist dictatorship with a myriad of human rights abuses that are abhorrent when viewed in the context of our societies. They also have and have had for decades national strategic aspirations to take their place again on the world stage and wipe away the century of humiliation.

 

The most interesting aspect of the change in the Chi-Merica relationship is how little has changed about China....in some respects nothing has changed......what's changed recently is OUR collective assessment of China from a strategic competition perspective (economic & militarily).

 

China's intent on any action is now viewed through the lens of mal-intent BECAUSE of that security competition and because they are approaching a level of technological, military and economic power that has the capability to do harm to the USA.

 

On 3/8/2024 at 12:03 PM, RichardGibbons said:

Yes, it does.  There's a reason why chips are still going to countries like the UK, Canada, France, Netherlands, and Sweden. It matters whether a country is a democracy abiding by the rules-based order, human rights, and the rule of law.

 

The global rules based order post-WWII is just that - a rules based system written in effect by the victors dominated by the US/West (WTO, UN, World Bank etc.). I mean look where the physical 'infrastructure' of the rules system are based its like US bingo - NYC (UN), World Bank (D.C.), IMF (D.C.). I guess to not look so bad they threw some stuff over to Switzerland like the WTO in Geneva. I've no problem with this - its the natural order of things - the global superpower gets to call the shots and it gets to tilt the table of 'rules' in its favor. In this respect I commend the USA political leadership post-WWII.....they were/are a rather benign global hegemon, relative to the Empires of the past. Most recently of course it was Britain - that was the torch bearer for its 'version' of the rules based order which was much less benign.

 

But lets not pretend the 'rules based order' is some stone tablet written by God and handed to Moses - the rules based order is a very human set of institutions...which is to say that it's sketching was done hierarchically & based on power and leverage.

 

The China talking point on this is not without merit - in that the 'rules' in the global rules based order were written without Chinas input...they weren't in the room.....they were defeated peasant farmers and less than 1% of global GDP when the WTO rules written......and as they become a greater share of global GDP they would like increasing influence in modifying and evolving those rules where they the table tilted against them.

 

The problem remains that the very idea of a 'real' higher power above nation states is a kind of thinly veiled charade - when the poop hits the fan these institutions that supposedly float above nation states get quickly revealed to be toothless tigers.

 

The names (international court of justice, international criminal court et al.) sound great but in reality......what does it mean when you issue an arrest warrant and nobody gets arrested!

ICC judges issue arrest warrants against Vladimir Putin

https://www.icc-cpi.int/news/situation-ukraine-icc-judges-issue-arrest-warrants-against-vladimir-vladimirovich-putin-and

[Luca]

2 hours ago, changegonnacome said:

 

Agree broadly. What permeates EVERYTHING with China now is that it has gone from a junior economic partner of the US/West to something akin to a peer competitor across many fronts.

 

Like it or not we have entered into a security competition with China - not because China has changed per se (it was and is a communist dictatorship with a myriad of human rights abuses that are abhorrent when viewed in the context of our societies. They also have and have had for decades national strategic aspirations to take their place again on the world stage and wipe away the century of humiliation.

 

The most interesting aspect of the change in the Chi-Merica relationship is how little has changed about China....in some respects nothing has changed......what's changed recently is OUR collective assessment of China from a strategic competition perspective (economic & militarily).

 

China's intent on any action is now viewed through the lens of mal-intent BECAUSE of that security competition and because they are approaching a level of technological, military and economic power that has the capability to do harm to the USA.

 

 

The global rules based order post-WWII is just that - a rules based system written in effect by the victors dominated by the US/West (WTO, UN, World Bank etc.). I mean look where the physical 'infrastructure' of the rules system are based its like US bingo - NYC (UN), World Bank (D.C.), IMF (D.C.). I guess to not look so bad they threw some stuff over to Switzerland like the WTO in Geneva. I've no problem with this - its the natural order of things - the global superpower gets to call the shots and it gets to tilt the table of 'rules' in its favor. In this respect I commend the USA political leadership post-WWII.....they were/are a rather benign global hegemon, relative to the Empires of the past. Most recently of course it was Britain - that was the torch bearer for its 'version' of the rules based order which was much less benign.

+

2 hours ago, changegonnacome said:

But lets not pretend the 'rules based order' is some stone tablet written by God and handed to Moses - the rules based order is a very human set of institutions...which is to say that it's sketching was done hierarchically & based on power and leverage.

Its also not very democratic setup either, US+Europe is 1b people. China alone is more than that, then you have the Brics nations which historically didn't have much say either...

2 hours ago, changegonnacome said:

The names (international court of justice, international criminal court et al.) sound great but in reality......what does it mean when you issue an arrest warrant and nobody gets arrested!

ICC judges issue arrest warrants against Vladimir Putin

https://www.icc-cpi.int/news/situation-ukraine-icc-judges-issue-arrest-warrants-against-vladimir-vladimirovich-putin-and

I mean, putin cant go into countries that accept the power of these courts so they are working in someway dont they? 

[Luca]

Also find it quite funny that western countries focus SO much on "DEMOCRACY" (the process) while OUTCOMES apparently seem to matter less. I have to say, I care more for the outcome of a society than for the process and id say that is true for a large swatch of chinese people. Sure we have some rebellious journalists or students etc, the west has greta thunberg etc, doesnt mean that these people are necessarily correct with what they want although they make good headlines. 

 

What will matter to the chinese joe is growth per capita, feelable development of their environment, wealth increase for everyone. Not if he can vote black or white and nothing changes. 

[Luca]

Holy moly, tik tok ban more likely? :((

 

https://www.wsj.com/articles/tiktok-bill-ban-house-vote-af4d0800

[Sweet]

If TikTok is used to spy by China and / or used to spread Chinese misinformation then it should have been banned long ago.  After all apps like Facebook and YouTube are banned in China.

[Gamecock-YT]

Only American apps are allowed to corrupt the minds of Americans!

[Parsad]

https://finance.yahoo.com/news/china-fines-evergrande-hui-bans-125059847.html

 

Cheers!

[Sweet]

On 3/10/2024 at 2:27 PM, Luca said:

Also find it quite funny that western countries focus SO much on "DEMOCRACY" (the process) while OUTCOMES apparently seem to matter less. I have to say, I care more for the outcome of a society than for the process and id say that is true for a large swatch of chinese people.

Because the outcomes in Democracies are obviously significantly worse than authoritarian?  What a weird thing to say.

[WFF]

For those that haven’t had a chance, reading Li Lu’s book titled “Civilization, Modernization, China and Value Investing” is worthwhile.  I read the Chinese version, not sure if an English translation is available.   It is structured like Poor Charlie’s Almanac, so you can read one chapter at a time.  And lots to think after each section.
 

Lots of nuggets, I remember a section is on the misunderstanding of the east from the west and vice versa.  The book critique of Richard Koo’s book  “The other half of macroeconomics and the fate of globalization” on Japan and the 4 phases was also quite interesting (it tried to explain QE’s limited impact on inflation) and what governments should be doing.  

Edited March 19 by WFF
Formatting issue

[Luca]

 

Michael Hudson (born March 14, 1939) is an American economist, Professor of Economics at the University of Missouri–Kansas City.

 

Hudson notes that the existing economic theory, the Chicago School in particular, serves rentiers and financiers and has developed a special language designed to reinforce the impression that there is no alternative to the status quo. In a false theory, the parasitic encumbrances of a real economy, instead of being deducted in accounting, add up as an addition to the gross domestic product and are presented as productive. Hudson sees consumer protection, state support of infrastructure projects, and taxation of rentier sectors of the economy rather than workers, as a continuation of the line of classical economists today.

 

 

I have enjoyed this interview, Hudson is really coming into it from a different angle but makes many good points that especially hit home to how the chinese government sees the economy right now: 

 

Financial capitalism vs industrial capitalism. Real economy vs empty factories in NY that are revamped as luxury apartments. 

 

Especially his points regarding using other countries cheap labor force with preventing their development rings a bell. 

 

I think he is worth reading and listening to. 

 

 EDIT: He was also sceptical about the mortgage fiasco pre 2008: 

 

In an April 2006 article in Harper's, just before the Great Recession of 2007-08, Hudson predicted a crash of US housing prices.

 

 

 

Edited March 21 by Luca

[Luca]

Also regarding "chinese marxists thought". This rings the bells regarding CCP interventions that tackle exactly this: 

 

Marx and many of his less radical contemporary reformers saw the historical role of industrial capitalism as being to clear away the legacy of feudalism—the landlords, bankers, and monopolists extracting economic rent without producing real value. However, that reform movement failed. Today, the finance, insurance, and real estate (FIRE) sector has regained control of government, creating neo-rentier economies. The aim of this postindustrial finance capitalism is the opposite of industrial capitalism as known to nineteenth-century economists: it seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, and banking and infrastructure monopolies add to the cost of living and doing business. Labor is increasingly exploited by bank debt, student debt, and credit card debt while housing and other prices are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation."

 

Hudson also argues Marx was too optimistic. History did not go in the direction of Capitalism evolving into Socialism—at least not yet. Since the 1930s today's modern capitalism is dominated by non-productive rentier classes. In classical economics, which includes Marx, the proletariat as a class is better off paying as few rents as possible. This is because wages can be lower if workers have less overhead. This lowers the price of goods they produce lower, making them more competitive on the international market. This is also the logic of making healthcare a public commons run not-for-profit by the government. This enables wages to be lower for workers. Non-productive rents, tactics and strategies are making all countries, the US included, less self-sufficient. This connects back with the idea of a debt jubilee; and, with taxing non-productive activity, not workers and manufacturing. The cost of doing nothing is high. Left to run wild, the ever-growing need for debt and rents causes history to regress back to a neo-feudal system; where, your employer pays for your healthcare, provides you your housing and keeps workers in debt permanently.

[Luca]

Reigniting labor and focussing on the real economy, investment in technology and productivity growth while keeping the consumer's buying power high enough. 

 

The only problem for china would be tariffs and artificial suppression of demand by the west. 

[Dinar]

2 hours ago, Luca said:

 

Michael Hudson (born March 14, 1939) is an American economist, Professor of Economics at the University of Missouri–Kansas City.

 

Hudson notes that the existing economic theory, the Chicago School in particular, serves rentiers and financiers and has developed a special language designed to reinforce the impression that there is no alternative to the status quo. In a false theory, the parasitic encumbrances of a real economy, instead of being deducted in accounting, add up as an addition to the gross domestic product and are presented as productive. Hudson sees consumer protection, state support of infrastructure projects, and taxation of rentier sectors of the economy rather than workers, as a continuation of the line of classical economists today.

 

 

I have enjoyed this interview, Hudson is really coming into it from a different angle but makes many good points that especially hit home to how the chinese government sees the economy right now: 

 

Financial capitalism vs industrial capitalism. Real economy vs empty factories in NY that are revamped as luxury apartments. 

 

Especially his points regarding using other countries cheap labor force with preventing their development rings a bell. 

 

I think he is worth reading and listening to. 

 

 EDIT: He was also sceptical about the mortgage fiasco pre 2008: 

 

In an April 2006 article in Harper's, just before the Great Recession of 2007-08, Hudson predicted a crash of US housing prices.

 

 

 

Wait, where did I hear this before?  Oh yes, in the USSR, reading Das Kapital!  The only parasites that I can see is him and his fellow professors in academia

[Luca]

7 hours ago, Dinar said:

Wait, where did I hear this before?  Oh yes, in the USSR, reading Das Kapital!  The only parasites that I can see is him and his fellow professors in academia

He is not a communist advocate, but you can't deny several observations Karl Marx did. 

 

Being a professor is an important job in our societies, and he certainly provides a lot of value too, nothing about being a parasite. 

[cubsfan]

^^^ It's a big mistake to hold many professors in esteem. You can see the disaster playing out among higher education in America. I've got more respect for carpenters and heavy equipment operators than many professors.

[Gregmal]

2 minutes ago, cubsfan said:

^^^ It's a big mistake to hold many professors in esteem. You can see the disaster playing out among higher education in America. I've got more respect for carpenters and heavy equipment operators than many professors.

Yup...the biggest grift in America right now is the guys getting paid 6 figures with amazing benefits and complete job security to drink craft beers and teach/hit on young adults 4 hours a day, 3 days a week. 

[Dinar]

14 minutes ago, Gregmal said:

Yup...the biggest grift in America right now is the guys getting paid 6 figures with amazing benefits and complete job security to drink craft beers and teach/hit on young adults 4 hours a day, 3 days a week. 

And just 12 weeks a year at a place like NYU, Yale, Columbia...