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

[Luca]

Just now, Sweet said:

 

 

The US is not the same country today, with the same beliefs as it was 250 years ago.  Yet you keep pointing to US history to justify the action of China today.

Literally true about China too. I am not justifying the actions of killing millions of people in the great leap forward. This is about an economic war between two states that had at least an equally ugly history. And i never justified concentration camps.

Just now, Sweet said:

 

You aren’t denying that China is stealing secrets, or operating discriminatory and unfair practices, or using massive state subsidies, you simply reply with the West once did this.  Fine, but there is no reason for the West to passively accept it.

There is no reason why they should accept it of course, but they are in a position because they did the exact same thing, and now IP of course is very important to them. Hypocritical from a geopolitical standpoint. 

[Sweet]

30 minutes ago, Luca said:

Literally true about China too. I am not justifying the actions of killing millions of people in the great leap forward. This is about an economic war between two states that had at least an equally ugly history. And i never justified concentration camps.

There is no reason why they should accept it of course, but they are in a position because they did the exact same thing, and now IP of course is very important to them. Hypocritical from a geopolitical standpoint. 

The IP issue is not hypocritical.  We can’t even name a single patent the US have apparently stole.

 

I also don’t think the histories are at all comparable.  China has many thousands of years of history to pick apart lol.

China might be doing what it sees in its best interest, I think the West should do the same, which is decouple from China.  They aren’t playing fair so you don’t get to trade with us - my opinion, shared by many in the West I expect.

 

 

Edited May 26, 2023 by Sweet

[crs223]

China is a strong country and it is getting stronger, both financially and militarily.  This is very upsetting to the US and many Americans.

 

Attacking Luca as a communist because he doesn’t share your hysteria to Chinese atrocities is disgusting, IMO.

 

How wonderful it is for the Chinese that we are caught up calling each other communists/transphobes/etc instead of doing anything impactful.

[Dinar]

1 hour ago, crs223 said:

China is a strong country and it is getting stronger, both financially and militarily.  This is very upsetting to the US and many Americans.

 

Attacking Luca as a communist because he doesn’t share your hysteria to Chinese atrocities is disgusting, IMO.

 

How wonderful it is for the Chinese that we are caught up calling each other communists/transphobes/etc instead of doing anything impactful.

I did not call Luca a communist, I said his behavior reminded me of communists in the West who were busy praising Soviet Union, yet would never move to the utopia and preferred to live in the West.  The word that you are looking for is called a hypocrite - Luca thinks the West is awful and China is great but prefers to live in Germany rather than in China.  

China will not succeed and implode inspite of its hardworking population.  Here is what will seriously damage China:

 

a) The West and the East (Vietnam, South Korea, India, Japan, Taiwan, Philippines, et all) all recognize that China is an enemy and will treat it as such. China has no allies, (perhaps with the exception of Pakistan), only enemies.  Russia hates and fears it.  Nobody likes China.  

b) Chinese demographics are awful, probably the worst in the world.  

c) No Chinese is safe in China, anybody who is able to accomplish something can be a billionaire today and in jail tomorrow.  So the best and brightest are fleeing China.  How many people have left HK?  How many people leave China every year?  How many people would leave China if given the chance?

d) Chinese science is awful and cannot improve in a climate of fear.  What have the Chinese invented in China in the past fifty years?  Sure, scientists of Chinese heritage have invented outside of China, but in China?  China killed a doctor that wanted to blow the whistle on Covid-19!

e) Their leadership is even more moronic than in the West.  Look at Mao, look at the one child policy, look at Covid-19, look at crackdown on Jack Ma.  What have the Chinese leaders of the past ten years accomplished?

 

Yes, the West is mired in awful infrastructure, terrible politicians, idiotic debates over mental illnesses (transgenderism) and necessary but ill-thought out environmental transition, as well as other insane proposals - MMT, universal basic income, reparations, abortion bans.   Yes, we have ethnic tensions.  Yes, US and Western Europe should have never invaded Iraq in 2003, and never bombed Yugoslavia.

However, we can vote the bums out - New York blossomed under Giuliani and Bloomberg.  US can blossom under Lee Kuan Yew type leader.  China has burned bridges and will continue to burn them as long as President Xi is in power.  It is easy to destroy, hard to build.  Who will ever trust China again?

 

[Luca]

6 hours ago, Dinar said:

I did not call Luca a communist, I said his behavior reminded me of communists in the West who were busy praising Soviet Union

 

China is not communist country, Munger praised china multiple times for what they have done, i dont see any reason why we cant be impressed by the rapid growth and development. 

6 hours ago, Dinar said:

, yet would never move to the utopia and preferred to live in the West.  The word that you are looking for is called a hypocrite - Luca thinks the West is awful and China is great but prefers to live in Germany rather than in China.  

I cant speak the language, its also not my culture, i dont know anyone there: so of course i prefer to live in my home country where i grew up. I dont say the west is awful and china is great. Both have problems, what i disagree is about the framing of china. 

6 hours ago, Dinar said:

China will not succeed and implode inspite of its hardworking population.  Here is what will seriously damage China:

 

6 hours ago, Dinar said:

a) The West and the East (Vietnam, South Korea, India, Japan, Taiwan, Philippines, et all) all recognize that China is an enemy and will treat it as such. China has no allies, (perhaps with the exception of Pakistan), only enemies.  Russia hates and fears it.  Nobody likes China.  

 

1. Common currency planned

2. Common communication systems planned

3. Common institutions matching IMF 

4. Common payment system planned

 

The BRICS are considered the foremost geopolitical rival to the G7 bloc of leading advanced economies,^[1] announcing competing initiatives such as the New Development Bank, the Contingent Reserve Arrangement, the BRICS payment system, the BRICS Joint Statistical Publication and the BRICS basket reserve currency. Since 2022, the group has sought to expand membership, with several developing countries expressing interest in joining.^[8] 

 

 

Ahead of the BRICS summit, South Africa's Foreign Minister Naledi Pandor said that there are 12 countries interested in joining the initiative. Of the 12, she mentioned 7 countries specifically, namely Saudi Arabia, United Arab Emirates, Egypt, Algeria, Argentina, Mexico and Nigeria. 

 

On 15 July, the first day of the BRICS sixth summit in Fortaleza, Brazil, the group of emerging economies signed the long-anticipated document to create the US$100 billion New Development Bank (formerly known as the "BRICS Development Bank") and a reserve currency pool worth over another US$100 billion. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also inked

 

Since 2012, the BRICS group of countries have been planning an optical fibre submarine communications cable system to carry telecommunications between the BRICS countries, known as the BRICS Cable.^[47] Part of the motivation for the project was the spying of the U.S. National Security Agency on all telecommunications that flowed in and out of United States territory.^[48]

 

At the 2015 BRICS summit in Russia, ministers from BRICS nations initiated consultations for a payment system that would be an alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. Russian Deputy Foreign Minister Sergey Ryabkov stated in an interview, "The finance ministers and executives of the BRICS central banks are negotiating ... setting up payment systems and moving on to settlements in national currencies. SWIFT or not, in any case we’re talking about ... a global multilateral payment system that would provide greater independence, would create a definite guarantee for BRICS."^[102]

 

BRICS countries will likely discuss the feasibility of a new common currency or similar at the 2023 BRICS summit in South Africa.^[105] Fair and easier international trade as well as a major reduction in costs of transactions would be some of the reasons why the countries could forge a currency union, according to Mikatekiso Kubayi, a BRICS specialist.

6 hours ago, Dinar said:

b) Chinese demographics are awful, probably the worst in the world.  

The birthrate was similar to the US just a few years ago, i am sure it will recover and they will implement some incentives that will work.

6 hours ago, Dinar said:

c) No Chinese is safe in China, anybody who is able to accomplish something can be a billionaire today and in jail tomorrow.  So the best and brightest are fleeing China.  How many people have left HK?  How many people leave China every year?  How many people would leave China if given the chance?

Fearmongering, there are many many people in china that like their home and live in very reasonable wealth in the big cities. Dont forget the increase in racism against Chinese since trump. What data do you base this on?

6 hours ago, Dinar said:

d) Chinese science is awful and cannot improve in a climate of fear.  What have the Chinese invented in China in the past fifty years?  Sure, scientists of Chinese heritage have invented outside of China, but in China?  China killed a doctor that wanted to blow the whistle on Covid-19!

https://link.springer.com/article/10.1007/s11192-022-04291-z

 

China publishes more top 1% cited scientific papers globally than any other country. Their are leading in many areas and are catching up in many others. 

6 hours ago, Dinar said:

e) Their leadership is even more moronic than in the West.  Look at Mao, look at the one child policy, look at Covid-19, look at crackdown on Jack Ma.  What have the Chinese leaders of the past ten years accomplished?

If you play the mao card than one can easily play the genocide against indigenous populations card in the US, or how the US treated blacks and their slaves. Whats the point? 

 

They almost doubled GDP, developed leading positions in many areas, started investments all over the world to engage in trade relationships. Helped building the BRICS community that has HALF the worlds population. BRICSs Grows GDP on average of 4.3%. Why slander them? 

6 hours ago, Dinar said:

China has burned bridges and will continue to burn them as long as President Xi is in power.  It is easy to destroy, hard to build.  Who will ever trust China again?

 

The US media might say that China is burning bridges but i am sure they are building many more every day all over the world. Even macron realized that you cant just ignore china.

 

 

Edited May 27, 2023 by Luca

[Luca]

 

[SharperDingaan]

The reality is that the 'west' is a waning global power, and 'China' a rising one; both sides use propaganda to rally the troops. However everyone has to live somewhere, and propaganda is just another cost of living.

 

The other reality is that the more scorpions in the bottle the safer it is for everyone. When done well; dictators rise on heaps of skulls, to be replaced by global powers every decade. Defense spending develops/drives new technologies, diplomats talk, peace and trade prevails, and the world is a pretty good place. But same as with wildfires, if the accumulating fuel isn't periodically burnt off (ongoing regional wars/conflicts); when the fire eventually happens ... it now burns everything.

 

Sadly, extended periods of peace breed complacency, which triggers the next conflict; about every 70 years for a Europe. Leadership changes, and the concurrent death/destruction lays the groundwork for the next 50 years of rebuilding and prosperity. Ukraine, elimination of Putin, yada, yada ...

 

The present day lower-level 'West' vs China conflicts are actually a good thing. The pushbacks will find a norm, and ambitious men/women on both sides will work the shadows the same as occurred throughout the cold war. Both sides benefit from the military spend and technology acceleration.

 

It really means more things produced at home, and higher prices than we currently pay (inflation). During the cold war the 'west' did not rely on product made in Russia, so why would you expect the 'west' to rely on cheap product made in China today?

 

SD     

 

Edited May 27, 2023 by SharperDingaan

[Luca]

 

Historian Alfred McCoy Predicts the U.S. Empire is Collapsing as China’s Power Grows

He earned a Bachelor of Arts in European History from Columbia University in 1968, a Master of Arts in Asian Studies from the University of California, Berkeley in 1969, and a Doctor of Philosophy in Southeast Asian History from Yale University in 1977. His dissertation, advised by Harold C. Conklin was entitled Yloilo: Factional Conflict in a Colonial Economy, Iloilo Province, Philippines, 1937-1955, he returned to the United States in 1989 as a full professor of history at the University of Wisconsin-Madison, where he has since spent his career. 

 

 

Edited May 29, 2023 by Luca

[crs223]

On 5/27/2023 at 6:16 AM, SharperDingaan said:

west' is a waning global power, and 'China' a rising one; both sides use propaganda to rally the troops

 

I disagree that US uses propaganda.

 

US schools don’t say the pledge of allegiance, half the country openly hates whichever president is in power, and a good chunk think US is rotten/evil/racist to its core.

 

China disappears people that say the banking system needs reform.

 

My guess is that there is a benefit to blind/brainwashed allegiance to a country, but that could just be my propaganda talking: united we stand, divided we fall.

 

 

[Luca]

Just now, crs223 said:

 

I disagree that US uses propaganda.

 

US schools don’t say the pledge of allegiance, half the country openly hates whichever president is in power, and a good chunk think US is rotten/evil/racist to its core.

 

China disappears people that say the banking system needs reform.

 

My guess is that there is a benefit to blind/brainwashed allegiance to a country, but that could just be my propaganda talking: united we stand, divided we fall.

 

 

The US definitely has propaganda in media that supports specific political targets but not propaganda like in China where we have a clapping App from Tencent to applaud Xi Speeches: 

 

 

[Spekulatius]

4 hours ago, Luca said:

 

Historian Alfred McCoy Predicts the U.S. Empire is Collapsing as China’s Power Grows

He earned a Bachelor of Arts in European History from Columbia University in 1968, a Master of Arts in Asian Studies from the University of California, Berkeley in 1969, and a Doctor of Philosophy in Southeast Asian History from Yale University in 1977. His dissertation, advised by Harold C. Conklin was entitled Yloilo: Factional Conflict in a Colonial Economy, Iloilo Province, Philippines, 1937-1955, he returned to the United States in 1989 as a full professor of history at the University of Wisconsin-Madison, where he has since spent his career. 

 

 

So, he claims that every superpower including Portugal (back in the 15th century) dominated the Eurasian continent. I found this statement interring.I were interviewer here, I would  have ask him to elaborate more. Same with Spain or even the British Empire.

 

When you mix nonsense like this, as a history professor no less, then you lose all credibility. Then his talk about Afganistan, the strategic donut while. Claims is critical if you want to move oil and NG to Pakistan or India. More nonsense . nobody is going to lay pipelines in Afganistan because the territory is terrible and some of the warlords will probably destroy it. There are also much better way to move oil and NGL via ships, pipelines via Iran even, China. the list goes on and on.

Afghanistan as a county is one of the most useless location on earth from a geostrategic POV.

 

He is right that being a superpower really is about dominating trade. That’s what the Portuguese did, because they were at that point the best Navigators and seafarers. They never even tried to dominate the Eurasian continent with their puny population. Neither did the Spanish and arguably  not even the Brits. They are dominates trade at the peak of their power.

 

Again if you talk 50% nonsense with combine with 50% solid thinking, you still get mostly garbage as end result, Imo.

 

There are other statements like the US put in $8T in Afghanistan that are obviously wrong. This would be more than half the US defense budget the last 20 years. The list goes on and on. Waste of time quite honestly to spent time on.

Edited May 29, 2023 by Spekulatius

[Luca]

@Spekulatius

 

https://www.brown.edu/news/2021-09-01/costsofwar

 

Nearly 20 years after the United States’ invasion of Afghanistan, the cost of its global war on terror stands at $8 trillion and 900,000 deaths, according to a new report from the Costs of War project at Brown University. 

The Costs of War project, founded more than a decade ago at the Watson Institute for International and Public Affairs and co-directed by two Brown scholars, released its influential annual report ahead of the 20th anniversary of the 9/11 terrorist attacks in New York City, Washington, D.C., and Pennsylvania, the impetus for an ongoing American effort to root out terrorism in the Middle East and beyond.

 

https://watson.brown.edu/costsofwar/figures/2021/BudgetaryCosts

[Luca]

9 minutes ago, Spekulatius said:

So, he claims that every superpower including Portugal (back in the 15th century) dominated the Eurasian continent. I found this statement interring.I were interviewer here, I would  have ask him to elaborate more. Same with Spain or even the British Empire.

 

When you mix nonsense like this, as a history professor no less, then you lose all credibility. Then his talk about Afganistan, the strategic donut while. Claims is critical if you want to move oil and NG to Pakistan or India. More nonsense . nobody is going to lay pipelines in Afganistan because the territory is terrible and some of the warlords will probably destroy it. There are also much better way to move oil and NGL via ships, pipelines via Iran even, China. the list goes on and on.

Afghanistan as a county is one of the most useless location on earth from a geostrategic POV.

 

He is right that being a superpower really is about dominating trade. That’s what the Portuguese did, because they were at that point the best Navigators and seafarers. They never even tried to dominate the Eurasian continent with their puny population. neither did the Spanish and arguably  not even the Brits. They are dominates trade at the peak of their power.

 

Again if you talk 50% nonsense with combine with 50% solid thinking, you still get mostly garbage as end result, Imo.

 

There are other statements like the US put in $8T in Afghanistan that are obviously wrong. This would be more than half the US defense budget the last 20 years. The list goes on and on. Waste of time quite honestly to spent time on.

Okay, perhaps he should have defined the word ,,superpower,, more. If we look at history, trying to gain advantages around the gigantic connected continents of EU, Africa and Asia was a pretty basic goal. Could you elaborate?

 

Also, there are talks with afghanistan, pakistan and china. I have to look deeper in what strategic investments are planned but there is something to it. 

 

China’s renewed interest in Afghanistan came after the fall of the United States-backed Afghan government. Independent Chinese investors were making inroads, albeit weak and flailing attempts, into Taliban-controlled Afghanistan. This latest deal cements China’s presence in the war-ravaged country.

But the true test of the deal will remain to be seen in its implementations, experts say.

“The real win is not in getting the contract or getting the Chinese back on the ground but in how [the Taliban] regulate and implement [contracts and projects], considering the current capacity within the Ministry,” Jumrainy, the industry expert, said, adding that not many details of the deal were made public.

https://www.aljazeera.com/economy/2023/2/27/will-chinas-latest-investment-in-afghanistan-actually-work

 

 

Edited May 29, 2023 by Luca

[Luca]

Saying McCoy talks 50% non sense and produces garbage results is a bit of a stretch dont you think  

[Luca]

 

[Luca]

Pretty good summary of the geopolitical situation in 2024

[cubsfan]

Damn Luca - you just love socialism don't you?

 

Like Lenin said "The goal of socialism is communism"

 

 

[Luca]

33 minutes ago, cubsfan said:

Damn Luca - you just love socialism don't you?

 

Like Lenin said "The goal of socialism is communism"

Did we read the same text? He is talking about a mixed public and private economy, that's pretty much the case already in China and also in the European social market economies like Germany, Sweden, Finland, etc. There is no state planning for production but state planning around production so it becomes more efficient and effective. If you understand mixed economies as socialism then yes, I am a socialist. But I am this because it is a system that works better over the longterm, achieves higher prosperity for society, and even higher investment returns over time. 

Edited April 23 by Luca

[Luca]

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.

[cubsfan]

I'm familiar with Prof. Michael Hudson - he's a declared Marxist.

That's all I need to know.  

 

You can keep your socialism, it's wrecking Europe, and it's on it's way here.

[Luca]

1 minute ago, cubsfan said:

I'm familiar with Prof. Michael Hudson - he's a declared Marxist.

That's all I need to know.  

 

You can keep your socialism, it's wrecking Europe, and it's on it's way here.

If you are not here to discuss arguments, please refrain from posting simple one-liner comments that reduce complex political and economic realities to buzzwords. It adds nothing to the conversation and topic. Thank you. 

[RedLion]

1 hour 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.

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

[Parsad]

On 5/26/2023 at 6:21 AM, Luca said:

We still invest all over the world, at least many other investors do. Many own businesses in China, Berkshire, Munger, Guy Spier, Pabrai, Li Lu. I think with a very long horizon and a strong stomache, there is a lot of money still to be made in China. Their growth potential is gigantic. India is another one of these markets that have massive growth ahead, where finding a spawner at a fair price might give great returns too. 

 

One, you cannot ignore the 2nd largest economy in the world if you invest globally.

 

Two, other than Buffett & Munger, those guys all copy each other. 

 

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.

 

Cheers!

[Parsad]

On 5/26/2023 at 12:10 PM, RichardGibbons said:

 

I think it's pretty clear what side of the line Luca is on.  He sprouts poetic about China's glorious achievements, and his only concession to the other side of the coin is that genocidal camps imprisoning a million people are "absurd". Rather than, say, "horrific", "atrocious", or "horrendous".

 

There's no doubt whatsoever what side of the line he's on.

 

That said, there's lots of people who support the horrendous, and it's convenient for us that Luca is so transparent about his passion.

 

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!

[Parsad]

On 5/27/2023 at 6:16 AM, SharperDingaan said:

The reality is that the 'west' is a waning global power, and 'China' a rising one; both sides use propaganda to rally the troops. However everyone has to live somewhere, and propaganda is just another cost of living.

 

The other reality is that the more scorpions in the bottle the safer it is for everyone. When done well; dictators rise on heaps of skulls, to be replaced by global powers every decade. Defense spending develops/drives new technologies, diplomats talk, peace and trade prevails, and the world is a pretty good place. But same as with wildfires, if the accumulating fuel isn't periodically burnt off (ongoing regional wars/conflicts); when the fire eventually happens ... it now burns everything.

 

Sadly, extended periods of peace breed complacency, which triggers the next conflict; about every 70 years for a Europe. Leadership changes, and the concurrent death/destruction lays the groundwork for the next 50 years of rebuilding and prosperity. Ukraine, elimination of Putin, yada, yada ...

 

The present day lower-level 'West' vs China conflicts are actually a good thing. The pushbacks will find a norm, and ambitious men/women on both sides will work the shadows the same as occurred throughout the cold war. Both sides benefit from the military spend and technology acceleration.

 

It really means more things produced at home, and higher prices than we currently pay (inflation). During the cold war the 'west' did not rely on product made in Russia, so why would you expect the 'west' to rely on cheap product made in China today?

 

SD     

 

 

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