At this point I kind of hope China goes nuclear and implements a complete import and export ban with the United States. China has the social infrastructure inplace and debt head room to borrow their way out of any kind of financial crisis. The United States does not.
China uses debt differently. Local governments are not allowed to borrow money directly, so they use companies to borrow money for public works. The system is called local government financing vehicle(lgfv). They usually get land, which they sell or lease to get some money or to secure loans. It is usually understood that local governments would bail lgfv out. The issue with lgfv is that they owe more money then the GDP of China and it is secured with mostly real estate, which is somewhat on the edge of crashing. Chinese real estate is crazy overvalued, so popping that bubble can hurt China badly.
The difference is that China is in a trade war with the US. The US is in a trade war with the rest of the world.
China exports a lot. The libs on lemmy are lying to themselves if they don’t think this is going to hurt China in any way. It’s likely going to be harder on them in fact.
You seem to forget that the EU and China are starting to mingle; and that China is heavily involved in Africa et al via the Belt&Road Initiative.
Obviously everyone gets hurt in it a trade war, that’s why it’s called a war. But the the long term outlook for China is significantly better than America’s - they will win a war of attrition.
China is also doing their due diligence. Tit-for-tat is the most effective negotiation strategy, you will not beat physics, and they understand this.
The craziest part is that both America and China were benefiting immensely off of the status quo, considering they were the #1 and #2 richest countries on the planet. But since the least qualified person on the planet to handle money (Trump) has unregulated power, it has all gone to shit.
Yes, they export a lot, but this would only be to one country. The US is likely their biggest trade partner by a large margin, but they could still trade with 176 other countries.
It will hurt them but not cripple them. The US gets SO MANY things from China that it would cripple our country. Every computer chip outside of the TSMC fabs, every junk toy, half our clothing, tons of car parts, everything sold at Harbor Freight and Home Depot, cell phones, etc. They’ll still be able to sell those to the rest of the world, but the US would have to switch up our entire global supply chain. It would take years to recover.
Yes, they export a lot, but this would only be to one country. The US is likely their biggest trade partner by a large margin, but they could still trade with 176 other countries.
You say that like they aren’t already. Are those 176 other nations prepared to make up the slack that the US isn’t buying?
It will hurt them but not cripple them.
This was, in fact, what I said. That it would hurt them. People seem to be reading some fan-fiction version of what I said that involves the US destroying China or something.
China’s financial instability and housing market issues are going to make them vulnerable. That said, the world does more trade with China than America thanks to global Western companies outsourcing all their manufacturing there (thus screwing blue collar workers in their home countries).
That same world is now slightly more interested in punishing America thanks to the Trump regime. If he doesn’t revert to previous agreements in the next 6 weeks or so, then I’d expect a global recession is coming not too far down the track.
I would say at this point the global recession is coming even if he would revert to the previous agreements because you can’t just regain trust like that.
Meh finance people are pretty forgiving as long as the money is streaming in. Which is part of why they’re not trust worthy.
But yes, Trump has damaged perceptions of the US as a stable democracy no matter what. So whether he leaves peacefully and wherher people further left get back in and make amendments against future trumps is the real decider of the future of the world.
Given he’s already aligned himself with Steve Bannon’s third term idea, it’s not looking good for the future of Pax Americana.
Next up: A mix between Pax Europa and Pax Sinica (China).
Everyone will be hurt badly by this, it is just the US that will be hurt worst of all because they started a trade war with literally everyone at the same time AND turned themselves into a hostile environment for migrant labor AND reduced spending on education.
The US also based their global economic position on the fact that they were the only major country left standing after World War II. The rest of the world has rebuilt itself since then but America stayed on top because they were too big to fail. If they fail anyway they’re never going to recover, since the circumstances that they originally benefited from don’t exist anymore.
Pure fucking market manipulation.
At this point I kind of hope China goes nuclear and implements a complete import and export ban with the United States. China has the social infrastructure inplace and debt head room to borrow their way out of any kind of financial crisis. The United States does not.
China uses debt differently. Local governments are not allowed to borrow money directly, so they use companies to borrow money for public works. The system is called local government financing vehicle(lgfv). They usually get land, which they sell or lease to get some money or to secure loans. It is usually understood that local governments would bail lgfv out. The issue with lgfv is that they owe more money then the GDP of China and it is secured with mostly real estate, which is somewhat on the edge of crashing. Chinese real estate is crazy overvalued, so popping that bubble can hurt China badly.
The difference is that China is in a trade war with the US. The US is in a trade war with the rest of the world.
This is one of the better explanations on the China debt + real estate connections I’ve read. Thank you
China exports a lot. The libs on lemmy are lying to themselves if they don’t think this is going to hurt China in any way. It’s likely going to be harder on them in fact.
Is America the only country on the planet?
You seem to forget that the EU and China are starting to mingle; and that China is heavily involved in Africa et al via the Belt&Road Initiative.
Obviously everyone gets hurt in it a trade war, that’s why it’s called a war. But the the long term outlook for China is significantly better than America’s - they will win a war of attrition.
China is also doing their due diligence. Tit-for-tat is the most effective negotiation strategy, you will not beat physics, and they understand this.
The craziest part is that both America and China were benefiting immensely off of the status quo, considering they were the #1 and #2 richest countries on the planet. But since the least qualified person on the planet to handle money (Trump) has unregulated power, it has all gone to shit.
Don’t be shitty
Yes, they export a lot, but this would only be to one country. The US is likely their biggest trade partner by a large margin, but they could still trade with 176 other countries.
It will hurt them but not cripple them. The US gets SO MANY things from China that it would cripple our country. Every computer chip outside of the TSMC fabs, every junk toy, half our clothing, tons of car parts, everything sold at Harbor Freight and Home Depot, cell phones, etc. They’ll still be able to sell those to the rest of the world, but the US would have to switch up our entire global supply chain. It would take years to recover.
You say that like they aren’t already. Are those 176 other nations prepared to make up the slack that the US isn’t buying?
This was, in fact, what I said. That it would hurt them. People seem to be reading some fan-fiction version of what I said that involves the US destroying China or something.
Haven’t seen anyone saying that.
China’s financial instability and housing market issues are going to make them vulnerable. That said, the world does more trade with China than America thanks to global Western companies outsourcing all their manufacturing there (thus screwing blue collar workers in their home countries).
That same world is now slightly more interested in punishing America thanks to the Trump regime. If he doesn’t revert to previous agreements in the next 6 weeks or so, then I’d expect a global recession is coming not too far down the track.
I would say at this point the global recession is coming even if he would revert to the previous agreements because you can’t just regain trust like that.
Meh finance people are pretty forgiving as long as the money is streaming in. Which is part of why they’re not trust worthy.
But yes, Trump has damaged perceptions of the US as a stable democracy no matter what. So whether he leaves peacefully and wherher people further left get back in and make amendments against future trumps is the real decider of the future of the world.
Given he’s already aligned himself with Steve Bannon’s third term idea, it’s not looking good for the future of Pax Americana.
Next up: A mix between Pax Europa and Pax Sinica (China).
This is hard on the whole world in a way that nobody is going to come out hurt less in any meaningful way.
Only one country doesn’t see that.
Everyone will be hurt badly by this, it is just the US that will be hurt worst of all because they started a trade war with literally everyone at the same time AND turned themselves into a hostile environment for migrant labor AND reduced spending on education.
The US also based their global economic position on the fact that they were the only major country left standing after World War II. The rest of the world has rebuilt itself since then but America stayed on top because they were too big to fail. If they fail anyway they’re never going to recover, since the circumstances that they originally benefited from don’t exist anymore.
Reply to some of these comments big guy cmon
I owe them and you absolutely nothing.
Isn’t export to the US only like 3% of Chinas gdp though?