Economic War-US/G7/West vs China (semiconductors)

[Parsad]

3 hours ago, Luca said:

Pretty good summary of the geopolitical situation in 2024

 

Not really.  It's the same demise of the U.S. we've been hearing about since the 1970's.  Yet the only global superpower to retain their status during those 55 years has been the U.S.  And they remain the powerhouse in almost all aspects of the future technological economy. 

 

Yes, the quality of life in many regions and growth in the middle class has occurred especially Asia, but the quality of life in the United States remains excellent, while they remain the world's #1 economic and military superpower.  Coke has always had a Pepsi next to it...but Coke has always remained #1!  Cheers!

[Parsad]

2 hours ago, Luca said:

I think economies that are in denial about the negatives of late-stage capitalism and refuse to regulate against it will not survive the next 50-100 years and will collapse under internal stressors.

 

I think the next 50-100 years may be the most economically profitable and exciting years in the history of mankind.  Technology will continue to create efficiencies that feed a continuously growing population and generate profits exceeding what humanity will actually need or use...almost a utopian society!

 

Or we blow ourselves up!  

 

It's one or the other.  Cheers!

[RichardGibbons]

4 hours ago, Parsad said:

 

I don't agree with most of Luca's views on China...but let's not get too self-righteous.  The West has perpetrated far more atrocities in its short history than China has done in 5,000 years!

 

Cheers!

 

Ah yes, the familiar "you committed genocide 100 years ago, so it's cool if I commit genocide now" argument.

 

This is happening today, on our watch, not our grandparents'.

 

I think if you care about people, you probably shouldn't suggest someone's behind in the number of atrocities, and so should therefore get a hall pass on committing genocide.

[Parsad]

52 minutes ago, RichardGibbons said:

 

Ah yes, the familiar "you committed genocide 100 years ago, so it's cool if I commit genocide now" argument.

 

This is happening today, on our watch, not our grandparents'.

 

I think if you care about people, you probably shouldn't suggest someone's behind in the number of atrocities, and so should therefore get a hall pass on committing genocide.

 

 

When you've committed genocide 3-4 times...you've pretty much written the playbook...doesn't matter what era!  Cheers!

[Sweet]

6 hours ago, Parsad said:

 

I don't agree with most of Luca's views on China...but let's not get too self-righteous.  The West has perpetrated far more atrocities in its short history than China has done in 5,000 years!

 

Cheers!

Agree with not getting too self righteous, but are you sure the West has perpetrated far more atrocities?  
 

I don’t even know when ‘the West’ that we are referring to even begins.  I think of the West as a type of ideals, so I would include Japan being part of the ‘West’ post WW2.  I wouldn’t include Germany or Italy as being part of the ‘West’ during WW2 because they abandoned that liberal order.

 

5,000 years is a very long time.  The Chinese fought a lot of wars and committed a lot of massacres, many probably unknown:

 

https://en.m.wikipedia.org/wiki/List_of_massacres_in_China

 

 I think all historic people were ruthless.  Some better documented than others.
 

 

[Luca]

9 hours ago, RedLion said:

Like the USA and Canada? Or you mean in the EU or in Asia? 

The EU also faces severe internal problems because of our economy's contradictions, too few job opportunities, and little to no wage growth for a large percentile that is radicalizing now and changed their voting behavior towards more radical politicians with increasingly violent language...

 

 

 

[Luca]

8 hours ago, Parsad said:

I agree with most of your post...but I think it is far too premature to call the West a "waning global power".  Cheers!

Its an economy with industrial decline that can not compete in manufacturing globally due to an insane amount of financialization. The privatization boosted rents so high, health insurance costs, energy etc...the US still does design but manufacturing is not coming except with strong subsidies (TSMC). The US doesn't even have the labor pool necessary to produce what is designed by few. 

 

On the latest 60min show, Gina Raimondo said "we have the best chips in the world". Then lesley stahl said "taiwan has them". And Raimondo said "fair enough". LOL!  

 

If increasingly half of your GDP is business services, absurd health insurance money collectors and rich banks and landlords, how does the real economy look like? Designed in California, made in China. Now when China designs in China and makes in China, the product is more competitive than what the US has and it is game over. Thats why you have the tariff discussion and other moves to slow china down from the declining economic reality in the US. 

3 hours ago, RichardGibbons said:

Ah yes, the familiar "you committed genocide 100 years ago, so it's cool if I commit genocide now" argument.

 

This is happening today, on our watch, not our grandparents'.

 

I think if you care about people, you probably shouldn't suggest someone's behind in the number of atrocities, and so should therefore get a hall pass on committing genocide.

So the US got into a position by killing, stealing, and committing genocide. Now that they have one of the largest controls in the world, nobody is allowed to do anything remotely similar because that would be...bad. Right...

8 hours ago, Parsad said:

Over the last two years, investment managers and hedge funds have been pulling capital out of China not allocating capital to it.  Political and property risk, combined with a lack of transparency, means a reduced position in most portfolios compared to the past.

 

Which creates the opportunity today doesn't it? That capital went into US markets and left China with the pathetic valuation it has now  

[Luca]

This is an interesting article: 

 

Some have been surprised that the US is not focusing on its exchange rate to boost its competitiveness, as it has done before. In 1971, it ditched the gold standard and devalued the dollar by about one third, as the Japanese yen and Deutschmark strengthened. After the 1985 Plaza accord to depreciate the dollar, the US currency weakened by half against these currencies.

 

The US is not devaluing its dollar now because its debt and deficit levels are very high. Should the dollar halve its value against the yuan, for instance, the resulting inflation will sharply force up interest rates, triggering a debt crisis. A revalued yuan would also mean a much bigger Chinese economy, likely to be larger than America’s. How would that be in America’s interests?

The US economic strategy seems to depend on attracting money globally to feed its deficit spending and sustain its high costs. It would allow the US to have its cake and eat it too, maintaining support for domestic industries that require huge financial help, such as the semiconductor and green tech sectors.

 

Many emerging economies have gone down this route, offering protection for domestic businesses in the hope that their success would raise the economy. But all too often, the result was crony capitalism, which caused inflation and low growth, trapping people in poverty. The same outcome could befall the US and Europe.

 

This is not to brush aside China’s overcapacity, which has been around for two decades. Government subsidies exist in China as they do in other countries, but this is not the reason for China’s success.

Solar panel prices, for example, have fallen by 95 per cent since China entered the industry two decades ago. Prices of lithium iron phosphate (LFP) batteries for EVs have halved in the past year and are expected to halve again this year. No amount of subsidies could have made this happen. The real story is China’s innovation and scale.

 

The West did not complain about China’s overcapacity in the past because it was good for them. When Chinese companies were mainly making parts and products for global companies, their overcapacity meant customers could squeeze prices and fatten profit margins. Now that Chinese companies want to make and sell their own products, these easy margins are gone.

 

And as Chinese companies rise up the value chain in the global market, a clash of business cultures is shaping up between the West and China.

 

Unlike the cutthroat competition of a century ago, the big capitalists of the West meet in Davos and are not above colluding to limit competition. For too long, product prices have tended to go up; profits have been stable or rising. Corporate managers have been able to pay themselves enormous sums and become rich enough to join the global governing elite.

 

But today’s Chinese capitalists, including the local governments that back them, are more like the Western capitalists of a century ago, when overcapacity, price wars, and government backing were common in the West. These Chinese capitalists want to crush their competition, not coexist over a bottle of wine. Terrified Davos capitalists are therefore demanding protectionist tariffs.

 

One may argue that China, cut off from some markets, would collapse first, ridding the West of Chinese competition. But that is likely to be wishful thinking. Low prices tend to create their own demand. China’s trade in low-priced tech is likely to help many Global South economies break the so-called middle-income trap and this could lead to a self-sustaining boom.

 

The good news is the East-West tensions are not likely to trigger a military war, as many businesses and investors fear. Recent developments in the Middle East and Ukraine have shown that the US does not have the resources to support a big war. Even if the US wanted an arms race with China, it would need to double, even triple, its defense budget – money it doesn’t have.

 

The bad news, however, is that the trade war is going to be much worse. In 1987, US Congressional leaders smashed Japanese electronics on Capitol Hill with sledgehammers. It is a matter of time before they do the same to Chinese solar panels and EVs – but first, they need to find some US-made sledgehammers.

 

https://www.scmp.com/opinion/china-opinion/article/3259939/western-protectionism-will-fail-chinas-success-isnt-down-subsidies

[Luca]

18 minutes ago, Cod Liver Oil said:

@cubsfan yes Luca talks like a card carrying communist but invests like a bible thumping capitalist!!!! It’s the paradox of human nature. Enjoy the spectacle. If you look for consistency in the human character, you will be frustrated long time. 

China is a post-communist authoritarian state with a state-capitalist economic system. We in the West have state capitalistic economic systems with parliamentary democracies. I really don't understand how anyone of you reads "communist" from the posts above. Especially China with Xi is not communist since communism advocates classless, stateless societies with total communal ownership of the means of production. China has a state with absolute power, the exact opposite. The private sector plays a huge role too and enables investing opportunities similar to us in the west, with the exception of a totalitarian government that has more power to regulate and control negative parts of market forces. So no, I am not a communist and neither is anyone in the CCPs current government. How you can come to this conclusion is not understandable to me.  

[Luca]

Development Index results 23-24:

 

 

 

 

[Jaygo]

Comparing the west and china and who is the baddie is really stupid. Both have done bad things but i can't see how the usa has any moral ground to shout from lately. They are the merchants of death of late.

 

And the things we do today are more of a reflection on who we are than what our parents or grandparents did. Spain of the 1500's were literally evil monsters with no respect for life or property, today they are one of the most peaceful peoples on the planet. What is ongoing in China today is concerning and a reflection on the ruling party, what is happening globally by the USA is concerning and a reflection on the ruling party. 

 

Comparing the economic systems is more interesting and they seem to be moving from both extremes to the centre.

 

The USA is taking a lot of freedoms from its populace in the name of "security" and also practicing a semi capitalist economy, bailouts, tariffs, subsidies and government deficits is not exactly free market. China is moving the opposite and opening up their markets and allowing more capitalistic ideas.

 

Only time will tell who and where is better.

[cubsfan]

4 hours ago, Luca said:

My post adds more to the discussion than your one-liner insults, if you don't have arguments but only insults, I urge you again to refrain from posting. I also think you should block me in your settings if it makes you that angry. Please stop destroying a thread with insults because this can actually be a fruitful discussion for everybody, including me. I tried to report your comment and hope it will be removed, not worthy of this board. 

 

@Luca  Stop insulting our intelligence. Your very long post from the Economist Professor Michael Hanson, who is an avowed Marxist is replete with ridiculous buzzwords (which should annoy you). I commented only after I read your passage from Professor Hanson completely. His whole thesis is how the USA, since WWII, has had the goal of siphoning off all the world's income wealth for themselves. How utterly ridiculous. No mention of the dramatic rise in living standards for those under the influence of the West. Most of us understand that socialism/communism is antithetical to capitalism.

 

Does capitalism need to be regulated?  Of course

Does capitalism need to be destroyed? Clearly not

 

The crux of his argument is how oppressive capitalism is to those that follow the US lead.

So much for avoiding the Neoliberal American disease - his words not mine.

[Luca]

2 minutes ago, cubsfan said:

 

@Luca  Stop insulting our intelligence. Your very long post from the Economist Professor Michael Hanson, who is an avowed Marxist is replete with ridiculous buzzwords (which should annoy you). I commented only after I read your passage from Professor Hanson completely. His whole thesis is how the USA, since WWII, has had the goal of siphoning off all the world's income wealth for themselves. How utterly ridiculous. No mention of the dramatic rise in living standards for those under the influence of the West. Most of us understand that socialism/communism is antithetical to capitalism.

 

Does capitalism need to be regulated?  Of course

Does capitalism need to be destroyed? Clearly not

 

The crux of his argument is how oppressive capitalism is to those that follow the US lead.

So much for avoiding the Neoliberal American disease - his words not mine.

Thank you, at least you are replying with arguments now instead of just insults. Also, the text was 4 pages and you used 2 buzzwords in one post, a big difference. Long road ahead. 

 

There are many more factors that you don't mention, protectionist measures and corporate espionage are an important part of Western development. Of course, the US is not giving out freebies to other countries...

And social market economies (that you probably understand as socialism) score higher on the development indices linked above. Social market economies ARE a form of capitalism. China HAS a form of capitalism. 

 

You can see how oppressive US capitalism is once you move up the value chain, hence the trade war. 

 

 

[ValueArb]

There is no such thing as economic war, thats conflating two vastly different things. Its not war when another country works hard to provide your country with cheaper goods. 

[cubsfan]

2 hours ago, Luca said:

Thank you, at least you are replying with arguments now instead of just insults. Also, the text was 4 pages and you used 2 buzzwords in one post, a big difference. Long road ahead. 

 

There are many more factors that you don't mention, protectionist measures and corporate espionage are an important part of Western development. Of course, the US is not giving out freebies to other countries...

 

You can see how oppressive US capitalism is once you move up the value chain, hence the trade war. 

 

 

 

This is the typical Marxist response. Everything is the framed in the lens of "oppressor vs oppressed". Every social problem in the world is viewed as a problem with "oppressive US Capitalism". 

 

The powerful US, with its capitalist system is corrupt and US business is nothing but oppression. Once you buy that nonsense, then it easy to paint the picture of how the "plan" of the West  is to keep  the whole world down.

 

Utter nonsense. You should be more careful with your sources.

[Sweet]

2 hours ago, Luca said:

corporate espionage are an important part of Western development

Can you provide examples of how the West’s development relied on corporate espionage?

 

What non-Western nation where these corporate secrets stolen from?

[Sweet]

4 hours ago, Luca said:

Development Index results 23-24:

 

 

 

 

I’ve not been to Switzerland and Norway but I’ve been to many on this list above the US.

 

The average person in the US has much more disposable income than some of these countries.

 

Ireland and the UK are nowhere near as well off as their American counterparts, that’s really quite obvious if you visit the these countries.

 

Edited April 24 by Sweet

[Xerxes]

12 hours ago, Sweet said:

 

I don’t even know when ‘the West’ that we are referring to even begins.  I think of the West as a type of ideals, so I would include Japan being part of the ‘West’ post WW2.  I wouldn’t include Germany or Italy as being part of the ‘West’ during WW2 because they abandoned that liberal order.

 

you cannot just “click” on the filter on Excel to remove “the era” that you don’t like and/or doesn’t suit you. No more than other civilization(s).
 

Ex: The Belgian people cannot just decide “let’s remove our atrocities in Congo from the historical timeline when we were led by King Leopold II and do a rest to improve our “Good Guys” KPI”

 

Ex: Iranians cannot decide to say “1979 didn’t happen”. No it happened. 
 

Ex: did U.S. “not” commit genocide against the natives, because the final output benefitted the world on a net basis ? 

 

You take it all in. Bad and good. And you never do a “restructuring charge” to kitchen sink. 
 

Japan will always be the Orient, as well as South Korea. They just happen to have Western like democracies. 
 

Was Chile led by Pinochet turned into an Asian dictatorship, because they throw away their democracy and installed a one man rule. 
 

 

Edited April 24 by Xerxes

[RichardGibbons]

14 hours ago, Parsad said:

 

 

When you've committed genocide 3-4 times...you've pretty much written the playbook...doesn't matter what era!  Cheers!

 

Who in particular are you referring to here?

[Sweet]

1 hour ago, Xerxes said:

you cannot just “click” on the filter on Excel to remove “the era” that you don’t like and/or doesn’t suit you. No more than other civilization(s).
 

Ex: The Belgian people cannot just decide “let’s remove our atrocities in Congo from the historical timeline when we were led by King Leopold II and do a rest to improve our “Good Guys” KPI”

 

Ex: Iranians cannot decide to say “1979 didn’t happen”. No it happened. 
 

Ex: did U.S. “not” commit genocide against the natives, because the final output benefitted the world on a net basis ? 

 

You take it all in. Bad and good. And you never do a “restructuring charge” to kitchen sink. 
 

Japan will always be the Orient, as well as South Korea. They just happen to have Western like democracies. 
 

Was Chile led by Pinochet turned into an Asian dictatorship, because they throw away their democracy and installed a one man rule. 
 

 

100% get what you mean, but the West isn’t a monolith.  It has changed over time, adding countries, losing countries.

 

Belgium is a specific country, so is Germany and the UK, here we can point to a continuum of history.

 

We can’t do that with the West.

 

Does anyone here really think Nazi Germany was part of the West as we think of it today during WW2?

 

That would mean blaming the West for the genocide committed by the Nazis, but at the same time crediting the West for helping to stop the Nazis? That doesn’t make sense.

 

If the West is white people to you and others then just say white people.

 

But let’s not pretend the Nazi Holocaust is equally the responsibly of the UK, France, USA etc under the umbrella of the ‘West’.  We all know that BS.

 

That’s like blaming the millions killed by Mao on ‘Orientals’ as you put it.

 

Edited April 24 by Sweet

[Sweet]

1 hour ago, RichardGibbons said:

 

Who in particular are you referring to here?

Yes, I found that a strange thing to say.  It honestly reads like white people wrote the playbook on genocide.  Don’t think that is what Parsad meant, but it was my reaction. 
 

Edited April 24 by Sweet

[Xerxes]

44 minutes ago, Sweet said:

100% get what you mean, but the West isn’t a monolith.  It’s been changed over time, adding countries, losing countries.

 

Belgium is a specific country, so is Germany and the UK, so we can point to a continuum of history here.

 

We can’t do that with the West.

 

I mean does anyone here really think Nazi Germany was part of the West as we think of it today during WW2?

 

So if you are blaming the West for the genocide in Nazis, but also crediting the West (and Russia) for stopping the Nazis?  Doesn’t make sense.

 

If the West is white people just say so.

Right. 
I think we each need define what we 

mean by West. And Orient as well. 
 

For me West, is the heir to Greco-Roman world. All of it. The good and the bad and the ugly. But not based on colour. 
 

From that broader definition of West perhaps a narrower subbranch is today’ Western liberal order. Another subranch  is its dark side equivalent, which we saw in the 1930s. 
 

To think of its, perhaps “people stock” are like the h/w. And Western ideal is like the s/w that runs the operating system. 
 

Thus you can have Japanese “oriental stock” (h/w) sporting a high end Western operating system (s/w). But that doesn’t make the Japanese people the heir to the Greco-Roman world. 
 

 

Edited April 24 by Xerxes

[Sweet]

2 minutes ago, Xerxes said:

Right. 
I think we each need define what we 

mean by West. And Orient as well. 
 

For me West, is the heir to Greco-Roman world. All of it. The good and the bad and the ugly. But not based on colour. 
 

From that broader definition of West perhaps a narrower subbranch is today’ Western liberal order. Another subranch  is its dark side equivalent, which we saw in the 1930s. 
 

To think of its, perhaps people stock are like the h/w. And Western ideal is like the s/w that runs the operating system. 
 

Thus you can have Japanese stock (h/w) sporting a high end Western operating system (s/w) 

 

I get the trace back to Athens or Rome, but the only thing unique in their history was they were types of fledgling democracies, neither democracies were inherited in European history.  Both Athenian and Roman democracies were extinguished and democracy didn’t return for a long time in Europe.

 

The dictatorship, wars etc.  This was universally present everywhere across the world.  Nothing unique to Europe and therefore not a feature of the Greeks or Romans.

 

So if democracy was truly the only unique thing about the Greek and Roman history, surely that’s the basis for  defining what a Western nation is?

 

We could say counties of European origin but it’s not much different than saying white since that’s what Europeans are.  Or Christian.  I don’t know.
 

This is a long winded way of saying that I don’t like the comparison of West with X country.

 

[Parsad]

6 hours ago, RichardGibbons said:

 

Who in particular are you referring to here?

 

The West...Britain, France, United States, Germany.  There's enough spilt blood by most countries, so any self-righteous stance is demeaning to any real debate.  Cheers!

[Parsad]

17 hours ago, Luca said:

Its an economy with industrial decline that can not compete in manufacturing globally due to an insane amount of financialization. The privatization boosted rents so high, health insurance costs, energy etc...the US still does design but manufacturing is not coming except with strong subsidies (TSMC). The US doesn't even have the labor pool necessary to produce what is designed by few. 

 

On the latest 60min show, Gina Raimondo said "we have the best chips in the world". Then lesley stahl said "taiwan has them". And Raimondo said "fair enough". LOL!  

 

If increasingly half of your GDP is business services, absurd health insurance money collectors and rich banks and landlords, how does the real economy look like? Designed in California, made in China. Now when China designs in China and makes in China, the product is more competitive than what the US has and it is game over. Thats why you have the tariff discussion and other moves to slow china down from the declining economic reality in the US. 

So the US got into a position by killing, stealing, and committing genocide. Now that they have one of the largest controls in the world, nobody is allowed to do anything remotely similar because that would be...bad. Right...

 

Which creates the opportunity today doesn't it? That capital went into US markets and left China with the pathetic valuation it has now  

 

Define what you mean by "real economy"?  Manufacturing today is an extremely commoditized industry with lower margins compared to yesteryear.  If that is what you define as the "real economy" then most of the Magnificent 7 would not exist.  China excelled at manufacturing for several decades because they had the cheapest labor. 

 

That isn't the case any more.  It is why capital is flowing to other countries, including even the U.S.  Combine that with political risk, property seizures, non-transparent accounting and reporting, difficulty moving capital out of China and lack of an equitable court system...no wonder capital is fleeing China.  Cheers!