China becomes a source of inflation for the US

[kankan326]

there are 3 parts to this

If yuan appreciates by 30% then other 3rd world countries will become more competitive for the same exports and exports will shift out of China.

2- If yuan goes up against the USD then chinas export becomes expensive for the entire world not just US since international transactions are settled in USD. Now that little increase wouldn’t make much difference to a worker in US. but other countries who’s labor difference isn’t that much with China will start to shift to domestic industries


3-if the appreciation causes smaller difference between a US made and a Chinese made product. US will have a cause to put anti-dumping policy on that certain product. Basically US will put tariff on that product so that the price is equal to the US made product


Because manufacturing has very little margins so very little percentages can upset the balance

I don't think 30% appreciation will make manufactures massively out of China. US already put 25% tariff on Chinese goods. We all saw the result.

China's advantages in manufactures:
1, World largest human resources. Human resources isn't equal to population. Only educated, skilled, disciplined people are human resources. My personal view is: If China's human resources is 700 million. India or America is only 100-150 million.

2, The large human resources enables China to produce every product. All production chains have been intactly built in China.

3, All production chains together create scale effect. Which guarantees made-in-China most competitve in both quality and price.

 

[tower9]

Wait til the digital yuan takes off or China finally reveals its true gold reserves and backs its digital currency with it. Then inflation in the US will skyrocket.

 

[Song Hong]

US transfer of Apple production to India ended in disaster. Today Henan Zhengzhou is still the champion Apple producer.

 

[Viva_Viet]

I don't think 30% appreciation will make manufactures massively out of China. US already put 25% tariff on Chinese goods. We all saw the result.

True, We all saw the result, CN look so pathetic.

WASHINGTON—U.S. tariffs have led to a sharp decline in Chinese imports and significant changes in the types of goods Americans buy from China, new data show, with purchases of telecommunications gear, furniture, apparel and other goods shifting to other countries.

Nearly two-thirds of all imports from China—or roughly $370 billion in annual goods—were covered by tariffs imposed by the U.S. in 2018 and 2019. Tariffs now cover just half of Chinese exports to the U.S., or about $250 billion in goods annually, as U.S. companies buy more from other countries, according to a Wall Street Journal analysis of information from Trade Data Monitor.

WSJ News Exclusive | U.S. Tariffs Drive Drop in Chinese Imports

U.S. tariffs have led to a sharp decline in imports from China and significant changes in the types of goods Americans buy from China, new data show, with purchases of furniture, telecommunications gear, apparel and other goods shifting to other countries.

www.wsj.com

 

[大汉奸柳传志]

USA life hanging on last thread

 

[Han Patriot]

there are 3 parts to this

If yuan appreciates by 30% then other 3rd world countries will become more competitive for the same exports and exports will shift out of China.

2- If yuan goes up against the USD then chinas export becomes expensive for the entire world not just US since international transactions are settled in USD. Now that little increase wouldn’t make much difference to a worker in US. but other countries who’s labor difference isn’t that much with China will start to shift to domestic industries

I’ll give u an example I did for my case study. The cost to make products out of silver (silver spot price + labor) is on average is $1.20/gram in China and $1.42/gram in India . Just on that 20 cent difference China has captured biggest share of the metal molding industry


3-if the appreciation causes smaller difference between a US made and a Chinese made product. US will have a cause to put anti-dumping policy on that certain product. Basically US will put tariff on that product so that the price is equal to the US made product


Because manufacturing has very little margins so very little percentages can upset the balance.

If a 30% rise in yuan wasn’t going to put a dent in exports for China then their government wouldn’t be actively trying to ensure yuan stays devalued

Silver in India? Gotcha yindoo boy. Lolol

True, We all saw the result, CN look so pathetic.

View attachment 750466
View attachment 750468

WASHINGTON—U.S. tariffs have led to a sharp decline in Chinese imports and significant changes in the types of goods Americans buy from China, new data show, with purchases of telecommunications gear, furniture, apparel and other goods shifting to other countries.

Nearly two-thirds of all imports from China—or roughly $370 billion in annual goods—were covered by tariffs imposed by the U.S. in 2018 and 2019. Tariffs now cover just half of Chinese exports to the U.S., or about $250 billion in goods annually, as U.S. companies buy more from other countries, according to a Wall Street Journal analysis of information from Trade Data Monitor.

WSJ News Exclusive | U.S. Tariffs Drive Drop in Chinese Imports

U.S. tariffs have led to a sharp decline in imports from China and significant changes in the types of goods Americans buy from China, new data show, with purchases of furniture, telecommunications gear, apparel and other goods shifting to other countries.

www.wsj.com

And yet Chinese has a 30bil surplus vs Vietnam... I wonder why... Lol

 

[FairAndUnbiased]

They can 100%. But they can’t do because of a domestic company to rise up it must make the same product at a lower or a competitive to take market share. If business plan doesn’t show a profit they won’t do it

Solar panels, LEDs etc are all made in US too but at a very small scale. Because some segments of the US market only wants made in US products

And just like US companies poured billions in early 2000s to help China build those industries they can do the same with other countries if they can make the same product, at the pace China can make. Currently is not the case because of cheaper labor, already developed infrastructure no country can pump out products at the pace, efficiency and cheap as China can

nope, if they could they would but they can't so they don't. Unless you worked in manufacturing and have actually done hardware design or R&D, you might not realize that what looks easy actually isn't. there's a reason why for instance there is not only no Latin American semiconductor fab, there's also no semiconductor fabless designer, no advanced packager, no PCB designer, no device designer. They don't have the entire electronics value chain. There's a reason why Vietnam is on the 36th year of reform yet they're still assembling with no domestic brands while China at an equivalent stage of development already had Huawei, Baidu, Tencent, SMIC, BOE, etc.

Just a simple example: Displays are still one of the highest value parts of any electronic device and there is no country that comes anywhere close to the dominance of China and South Korea. Nobody is close to Samsung, BOE, LG, Tianma and CSOT. Solar panels is a market with near total Chinese dominance with 71% market share. More money voluntarily walked away from? I don't need to mention the dominance of Huawei and ZTE in 5G. More money voluntarily walked away from?

Like I said, if you could you would but you can't so you don't.

 

[Viva_Viet]

And yet Chinese has a 30bil surplus vs Vietnam... I wonder why... Lol

And 25% tariff still make manufactures massively out of China, million CNese become jobless :

 

[CAPRICORN-88]

Stop listening to all these negative opinions esp. those from an immature schoolboy who still depends on his family for his allowance.

The decline of the US dollar purchasing power has a 95% correlation to the federal deficits which has grow exponentially.

According to John Williams, the current inflation in USA is between 8~12% per year.

The truth is, all these have nothing to do with China.

 

[Feng Leng]

Wait til the digital yuan takes off or China finally reveals its true gold reserves and backs its digital currency with it. Then inflation in the US will skyrocket.

This is correct.

While China supported dollar hegemony, it was impossible to truly defeat the USA because whenever China grows stronger the USA can simply print more dollars and buy Chinese goods.

Therefore, at some point China must let its currency rise and let the dollar collapse under its own weight. The question is "when" because China does not want to prematurely set the scene for an armed conflict.

The answer is: the right timing is when China has JL-3 SLBM. Therefore, now is the right time to open up the digital yuan DCEP, undermine the US dollar and let USA dollar hegemony collapse under its own weight.

 

[CAPRICORN-88]

And 25% tariff still make manufactures massively out of China, million CNese become jobless :

So will it be all OVER for Vietnam if USA imposed a 25% tariff on imports from Vietnam?

Trump was on the verge of doing it before he was ousted.

Foolish argument.

 

[casual]

money printer is the source of inflation in the US.

 

[letsrock]

It’s called a debt loop. China exports more than it imports from US which cause yuan to rise. China then use the surplus money to buy US treasuries. Which balances out the surplus export by brining money back into the US. So yuan as a result does not rise

US is pissed about this because it is an open market economy US can’t dictate it’s business to stop shifting jobs to China. So it blames China to cause these job losses

Lastly every country prints out of thin airs. The increase in Chinese bond was also just printing money out of thin air. Some measure of printing money is tied to a country’s gdp but a large part is also tied to the demand of the currency as well

Since the entire world uses dollars not just the US . US has extra capacity to print

us pissed about the jobs is for public consumption. They never cared about these low ending jobs. They were happy for china to pollute its rivers, land and work day and night and give them all those stuff for a dollar and only have that dollar land up again in usa by having china purchase the bonds.

But us is pissed about china lead in technology hence all those restrictions.

I am not sure where this ends though. I wish they get along well with each other.

 

[CrazyZ]

Too much debate on this post is based on exports to the west...which are worth less and less to Asian exporters (not just China) due to the dollar and Euro being printed in large quantities.

I will bring up something I don't hear much in the global press. Part of what's driving global inflation is increased consumption in China as well as other parts of Asia. China can increase its GDP growth simply by consuming more at home (its already the largest consumer market). Same with other parts of Asia.

This would also support the Yuan as a global reserve currency...in order for other countries to build a yuan reserve, China will have to import more from abroad....then encourage those countries to invest in Chinese bond and equity markets. This is what the USA did after ending the gold standard.

I see this type of relationship between Pakistan and China over the next few decades. Iran, Russia and the rest of OPEC as well.

 

[Song Hong]

Many credited Paul Volcker for ending US inflation in the 80s. That is not entirely true. US economy was imploding in the 1980s and could even collapse faster than USSR.

It was then US getting China onboard, persuading China to accept US dollar that bail entire US out.

And US sold Taiwan to China as part of the deal. After 1979 US soldiers withdrew and US keep reminding everyone Taiwan belongs to China.

This is an important step towards unification. Imagine if today, there are still US bases in Taiwan.