China No Longer “The World’s Factory”

[IblinI]

Lmao. 新年快乐~

Going back to visit your relatives this year?

平平凡凡才是真,简单的过.

 

[FairAndUnbiased]

Many yrs ago when I was shopping for my first house, I learned something about statistics in real estate...

1. Building permits are leading indicators.
2. Properties sold are lagging indicators.
3. Properties on market are coincidental indicators.

In the case of China, unemployment, or as the Party calls it 'flexible employment', is a coincidental indicator. Companies leaving China are coincidental indicators. Marriage rates are leading indicators. Birth rates are lagging indicators. And so on...

All those companies leaving China carries with them plenty of economic and social clues of what they believe China is heading, and they do not like what they see. Of all the data they have, demographics is in the top ten. The population of the US is about 330 mils. These companies believe that within the next 30 yrs, China will see a demographics shift never seen before in any industrialized country, that China is going to have a US-level population shift. That is 160 mils retiring and 160 mils fewer births. The current economic momentum will carry China forward, perhaps even surpass the US, as the world's economic power. But the gap between the US and China will not be as wide as between the two countries today, and China's status as leader will not last.

China doesn't depend on expanding population for economic growth though, so the entire premise is wrong.

The nominal gap between US and China is ~4 trillion dollars or ~20% GDP, but most of that is in services which can't be moved from one country to another. You can't exactly get a haircut in Mexico if you're in the US. The movable part of GDP - primary and secondary sectors - are already bigger in China than the US. I don't know how many companies are leaving overall (from the FDI flows, not many if any) but their market in China is already bigger if they're selling anything physical.

20% GDP isn't that big. It's a few years of growth differential at past 10 years historical growth rates.

 

[Mista]

平平凡凡才是真

 

[gambit]

China doesn't depend on expanding population for economic growth though, so the entire premise is wrong.

The nominal gap between US and China is ~4 trillion dollars or ~20% GDP, but most of that is in services which can't be moved from one country to another. You can't exactly get a haircut in Mexico if you're in the US. The movable part of GDP - primary and secondary sectors - are already bigger in China than the US. I don't know how many companies are leaving overall (from the FDI flows, not many if any) but their market in China is already bigger if they're selling anything physical.

20% GDP isn't that big. It's a few years of growth differential at past 10 years historical growth rates.

Did I say demographics was the only reason?

These companies have proprietary data that obviously are not in the public domain and that are critical to their business. They also look at corruption, IP theft, increasing state involvement into their business, and then there is this...

China Asserts Broad Power to Seize Assets in Anti-Sanctions Law

China asserted sweeping powers to seize assets and block business transactions in a new law intended to allow President Xi Jinping to hit back against sanctions by the U.S. and its allies.

www.bloomberg.com

China asserted sweeping powers to seize assets and block business transactions in a new law intended to allow President Xi Jinping to hit back against sanctions by the U.S. and its allies.​

​

Of course, nobody believe this...

The new law shouldn’t impact foreign investment in China, Foreign Ministry Spokesman Wang Wenbin said Friday at a regular press briefing in Beijing.​

Every foreign business entity know that laws in China are essentially meaningless. They are going to continue to operate their Chinese assets for as long as those assets remain profitable, but those that can leave are leaving.

For the semicon industry...

Semiconductor fraud in China highlights lack of accountability

Push for homegrown chipmakers leads to multimillion-dollar investment swindle

asia.nikkei.com

Tens of billions of dollars were defrauded from provincial governments, making even the giants like Intel and Samsung nervous about their investments. Then came the COVID pandemic that finally revealed the flaws of the industry. So now, the US is the target for investments, see the latest Intel Ohio news.

No one faults you and your pals to speak for China in this forum. But your defense in this little corner of the internet means nothing to the companies that are leaving China. I have seen some of the 'industry insider' broad spectrum data and it ain't pretty ten yrs from now.

 

[MH.Yang]

China doesn't depend on expanding population for economic growth though, so the entire premise is wrong.

The nominal gap between US and China is ~4 trillion dollars or ~20% GDP, but most of that is in services which can't be moved from one country to another. You can't exactly get a haircut in Mexico if you're in the US. The movable part of GDP - primary and secondary sectors - are already bigger in China than the US. I don't know how many companies are leaving overall (from the FDI flows, not many if any) but their market in China is already bigger if they're selling anything physical.

20% GDP isn't that big. It's a few years of growth differential at past 10 years historical growth rates.

The USA converts real estate into virtual rent (US $2.6 trillion) and calculates it as GDP, as well as lawyer fees (US $2 trillion). If China did what the USA did, its GDP would have surpassed that of the USA. The US's behavior of calculating GDP by expenditure is crazy water injection. The service industry created 17 trillion US dollars of GDP, and 85% of GDP came from the service industry, that's ridiculous.

 

[MH.Yang]

Many yrs ago when I was shopping for my first house, I learned something about statistics in real estate...

1. Building permits are leading indicators.
2. Properties sold are lagging indicators.
3. Properties on market are coincidental indicators.

In the case of China, unemployment, or as the Party calls it 'flexible employment', is a coincidental indicator. Companies leaving China are coincidental indicators. Marriage rates are leading indicators. Birth rates are lagging indicators. And so on...

All those companies leaving China carries with them plenty of economic and social clues of what they believe China is heading, and they do not like what they see. Of all the data they have, demographics is in the top ten. The population of the US is about 330 mils. These companies believe that within the next 30 yrs, China will see a demographics shift never seen before in any industrialized country, that China is going to have a US-level population shift. That is 160 mils retiring and 160 mils fewer births. The current economic momentum will carry China forward, perhaps even surpass the US, as the world's economic power. But the gap between the US and China will not be as wide as between the two countries today, and China's status as leader will not last.

In fact, look at the streets of two countries to know whose unemployment rate is lying.

 

[FairAndUnbiased]

Did I say demographics was the only reason?

These companies have proprietary data that obviously are not in the public domain and that are critical to their business. They also look at corruption, IP theft, increasing state involvement into their business, and then there is this...

China Asserts Broad Power to Seize Assets in Anti-Sanctions Law

China asserted sweeping powers to seize assets and block business transactions in a new law intended to allow President Xi Jinping to hit back against sanctions by the U.S. and its allies.

www.bloomberg.com

China asserted sweeping powers to seize assets and block business transactions in a new law intended to allow President Xi Jinping to hit back against sanctions by the U.S. and its allies.​

​

Of course, nobody believe this...

The new law shouldn’t impact foreign investment in China, Foreign Ministry Spokesman Wang Wenbin said Friday at a regular press briefing in Beijing.​

Every foreign business entity know that laws in China are essentially meaningless. They are going to continue to operate their Chinese assets for as long as those assets remain profitable, but those that can leave are leaving.

For the semicon industry...

Semiconductor fraud in China highlights lack of accountability

Push for homegrown chipmakers leads to multimillion-dollar investment swindle

asia.nikkei.com

Tens of billions of dollars were defrauded from provincial governments, making even the giants like Intel and Samsung nervous about their investments. Then came the COVID pandemic that finally revealed the flaws of the industry. So now, the US is the target for investments, see the latest Intel Ohio news.

No one faults you and your pals to speak for China in this forum. But your defense in this little corner of the internet means nothing to the companies that are leaving China. I have seen some of the 'industry insider' broad spectrum data and it ain't pretty ten yrs from now.

Samsung has been increasing its investment in China by billions, so you are already factually wrong.

Samsung to Expand 3D NAND Fab in China

www.anandtech.com

Even TSMC is investing $25-28 billion in China.

https://tomcoughlin.com/wp-content/uploads/2021/06/First-CXMT-White-Paper-20210605-final.pdf

And every foreign company that leaves will 1. give up its supplier in China for worse cost effectiveness elsewhere 2. give up market share to a Chinese competitor in one of the largest and most sophisticated markets in the world.

 

[applesauce]

Did I say demographics was the only reason?

These companies have proprietary data that obviously are not in the public domain and that are critical to their business. They also look at corruption, IP theft, increasing state involvement into their business, and then there is this...

China Asserts Broad Power to Seize Assets in Anti-Sanctions Law

China asserted sweeping powers to seize assets and block business transactions in a new law intended to allow President Xi Jinping to hit back against sanctions by the U.S. and its allies.

www.bloomberg.com

China asserted sweeping powers to seize assets and block business transactions in a new law intended to allow President Xi Jinping to hit back against sanctions by the U.S. and its allies.​

​

Of course, nobody believe this...

The new law shouldn’t impact foreign investment in China, Foreign Ministry Spokesman Wang Wenbin said Friday at a regular press briefing in Beijing.​

Every foreign business entity know that laws in China are essentially meaningless. They are going to continue to operate their Chinese assets for as long as those assets remain profitable, but those that can leave are leaving.

For the semicon industry...

Semiconductor fraud in China highlights lack of accountability

Push for homegrown chipmakers leads to multimillion-dollar investment swindle

asia.nikkei.com

Tens of billions of dollars were defrauded from provincial governments, making even the giants like Intel and Samsung nervous about their investments. Then came the COVID pandemic that finally revealed the flaws of the industry. So now, the US is the target for investments, see the latest Intel Ohio news.

No one faults you and your pals to speak for China in this forum. But your defense in this little corner of the internet means nothing to the companies that are leaving China. I have seen some of the 'industry insider' broad spectrum data and it ain't pretty ten yrs from now.

Sure businesses have internal information, but the question is, why do you think businesses are leaving china when the majority are thinking the opposite?

by all accounts, they are practically begging for china to open its markets even more so they can invest even more.

a few leaving isn't rare, businesses fail in the us all the time, would you say that its an indication of the collapse of america? no, of course not, not unless its was in massive numbers that are failing.
same for china, some may leave because they failed to compete or for other reasons, but we're looking at the majority here.

by what you said, businesses have internal data and look at all these points such as corruption and theft and the state, yet they still go there in droves, so is that telling us that china is a great place to be?

US companies plan to ‘do more, not less’ business in China: Ian Bremmer

A broad crackdown on private enterprise, regulatory tightening, and uneasy U.S.-China relations have done little to discourage American companies from doing business in the world’s second largest economy.

finance.yahoo.com

US Businesses in China: Insights from 2021 AmCham White Paper

A majority of US businesses remain optimistic about China and intend to increase their investments while expecting the steady pace of reforms to continue.

www.china-briefing.com

U.S. Businesses In China Confident Despite Pandemic And Stagnant Bilateral Relations

U.S. firms are confident about prospects in China despite a global coronavirus pandemic and stagnant bilateral relations, according to a new survey by the American Chamber of Commerce in Shanghai.

www.npr.org

Goldman Sachs unveils big plans for China

Bank puts its global reputation and size up against domestic heavyweights

asia.nikkei.com

China Foreign Direct Investment

Foreign Direct Investment in China increased by 424.60 USD Hundred Million in March of 2024. This page provides the latest reported value for - China Foreign Direct Investment - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar...

tradingeconomics.com

All the talk about leaving china is essentially political. the US government leads the charge, yet has not been able to convince much of any business to do so. even with the increase difficulties of the us companies in china,a nd chinese companies in the us, the trade and investment continues.

 

[gambit]

Samsung has been increasing its investment in China by billions, so you are already factually wrong.

Samsung to Expand 3D NAND Fab in China

www.anandtech.com

Even TSMC is investing $25-28 billion in China.

https://tomcoughlin.com/wp-content/uploads/2021/06/First-CXMT-White-Paper-20210605-final.pdf

And every foreign company that leaves will 1. give up its supplier in China for worse cost effectiveness elsewhere 2. give up market share to a Chinese competitor in one of the largest and most sophisticated markets in the world.

NAND is commodity, surely you know that by now.

For commodity products, let existing fabs in China produce them. But how was I 'factually wrong'? I never said Samsung or Intel were exiting China. I said that they are nervous about their investments in China due to reasons that are not technically related to their products. Leaving China does not mean they cannot let existing assets continue to work. It means they no longer believe China is a reliable resource and they are looking elsewhere, like Viet Nam or the US.

People are talking

Facebook's Nick Clegg says there's enough time to create protections in the metaverse:"This time we can work with academics, we can work with lawmakers … to put the guard rails in place before the technology matures." The shiba inu coin was supposed to be a joke, but the crypto community helped...

www.protocol.com

The string of departures underscores the challenge global tech companies face in China as the country's tech industry undergoes rapid regulatory shifts.​

 

[Shotgunner51]

Samsung has been increasing its investment in China by billions, so you are already factually wrong.

Even TSMC is investing $25-28 billion in China.

Yes, inbound FDI in China has always been 90% dominated by the 5 East Asian economies including the ones you've just mentioned. Last time I checked as of 2021-09-30 total amount was valued at US$ 3.4223 trillion, a historic high, why the west keep lying about foreign investment leaving China? But of course western companies can get out whenever they want to, they are insignificant anyway.

P.S.: Inbound FDI is no longer a principal economic driver compared to huge domestic capital. I'm more interested to see Chinese companies fast expanding outbound FDI, mostly related to labor-intensive manufacturing, infrastructure and energy projects. We must massively cut down FXR and substitute that by all sorts of outbound investments.

 

[FairAndUnbiased]

NAND is commodity, surely you know that by now.

For commodity products, let existing fabs in China produce them. But how was I 'factually wrong'? I never said Samsung or Intel were exiting China. I said that they are nervous about their investments in China due to reasons that are not technically related to their products. Leaving China does not mean they cannot let existing assets continue to work. It means they no longer believe China is a reliable resource and they are looking elsewhere, like Viet Nam or the US.

People are talking

Facebook's Nick Clegg says there's enough time to create protections in the metaverse:"This time we can work with academics, we can work with lawmakers … to put the guard rails in place before the technology matures." The shiba inu coin was supposed to be a joke, but the crypto community helped...

www.protocol.com

The string of departures underscores the challenge global tech companies face in China as the country's tech industry undergoes rapid regulatory shifts.​

Exiting doesn't mean increasing investment. It means stopping investment and removing existing investment. Samsung increasing investment is the opposite of exiting.

 

[FairAndUnbiased]

I am sure making fakes good is also hurting Chinese manufacturing sector

Is it? Whose buying them then? Distributors only buy what they can sell in the local area.

 

[Tom99]

China doesn't need to be nor does it wants to be the dirty low-cost factory for global goods.

However, China is advancing toward high-tech manufacture and knowledge outputs (as many have already stated on this thread) that will bring better growths and higher standard of living to Chinese citizens.

 

[Skull and Bones]

Micron just shut down its Shanghai DRAM operations, and there are plans to completely shut down its China manufacturing operations.

 

[Beidou2020]

China’s global production dominance has never been greater than it is today. China controls all the vital production supply chains.