Brief overview of what is happening with China

Discussion in 'Political Issues' started by bdcochran, Aug 7, 2019.

  1. bdcochran

    bdcochran

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    About a month ago, there was a 150 page trade agreement ready to be signed between the US and RC. The night before the scheduled signature, the RC withdrew about 50 pages that referenced numbers. So, all you had was unenforceable principles (vapid promises). If you conclude that RC acted in bad faith, yes.

    So, RC sent a delegation over to the US and demanded to start over again, with all the imposed tariffs to be withdrawn as a pre-condition. Demand refused.

    Now, for behind the scenes. RC pays for oil products and agricultural goods in dollars. The local currency is not accepted internationally. The RC rule is that when a Chinese company makes money and brings dollars to RC, it must sell those dollars to the RC central bank. So, if you were an RC businessman, you would not send the dollars to RC, you would buy houses in CA, British Columbia and keep the dollars outside RC.

    The strain of not having dollars is evident. RC has tried to clamp down on companies not sending the dollars back to RC. It has stopped buying US treasury obligations because it doesn't have the spare dollars. It is estimated that if RC businessmen could freely take their money out of RC, the value of the local currency would drop 30-40%. So, the RC inflation would be terrible.

    Another self-generated problem is that Xi just pushed through a measure making Mandarin Chinese mandatory. This pisses off the millions who speak Cantonese and whose relatives are scattered throughout SE Asia.

    RC will break and make the deal which it refused to sign.

    A big deal has been made about RC stopping buying US agricultural goods. Has not really happened. Wheat/soybeans/corn are fungible goods. Put on your thinking cap.
    1. if RC really stops buying fungible US produced crops, it requires more dollars to buy the same quantity elsewhere.
    2. if Iran/NK has smart enough people to get around US embargoes on oil and international trade, US exporters and RC importers have the same intelligence and capabilities. My soybeans may not be sold directly to an RC importer this season. They will sold to a Brazilian middle man who uses a Panamanian flagged ship to deliver the soybeans to RC.
     
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  2. bdcochran

    bdcochran

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    Well, the posturing and maneuvering continue.

    The tariff thing is actually quite small in the scheme of things. I give my opinion:
    1. when compared to the real deficits of RC and US, the income is a pittance.
    2. the imposition of tariffs is so delayed that the entrepreneurial types have had plenty of time to come up with contingency plans of supply and distribution. The guy who goes to his factory or farm job today and who cannot adapt will be the ones most hurt.

    The real fight is over intellectual property rights.

    The US has patents and copyrights enforced in the civil courts. RC knows this and well over 1/2 of the applications in the US are by Chinese companies. Conversely, having a patent or copyright is meaningless for a US company doing business in RC or attempting to do business in RC.

    You might ask why this is important. A personal example. About 20 years ago or so, I went into an internet cafe in Shanghai. There was the computer terminal - the keyboard in Chinese. Assuming that the keyboard was attempting to duplicate the equivalent of kwerty and that the operating system was pirated from Microsoft . . bingo . . . an email was sent to Atlanta, GA.

    When you don't have to pay for someone else's blood, sweat and tears, you have an advantage.

    So one time I am walking on the streets on I think the third ring around Beijing. Something is wrong. There are no telephone poles. By jumping on cellular technology, a lot of money was saved. Now, imagine that you have a company and you can steal the trade secrets, processes, and research of someone else. Can you produce the same product at a lower cost? Now you understand the problem.

    Frankly, I don't think that Xi has the influence or ability to change that important situation. The solution may end up with US legislation that companies controlled by a certain country (RC) do not have the protection of copyrights and patents in the US. Then all hell will break loose.
     
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  3. rj1939

    rj1939

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    When you want to go from third world to first world, in what amounts to a glorified "five year plan" corners have to be cut.
    Did anybody actually believe this wouldn't go badly?
     
  4. callihan_44

    callihan_44 INFIDEL

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    Crawling into bed with China was a huge mistake IMO, using them for cheap labor and sending our jobs to them only empowered an evil empire . They steal designs created in this country and turn around and sell them on the market for 1/2 price . One day we will be faced , as well as Europe with killing the dragon .... a dragon that will throw MILLIONS of their people into battle to stay alive
     
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  5. Intolerant

    Intolerant

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    But you know damn well that they`ll blame Trump for what past presidents screwed up.
    And YUP, you`re probably right! Let them come, we`ll stack them up like bales of hay.
     
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  6. "Doc" Cavalry

    "Doc" Cavalry MAJ (USA Ret.)

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    It’s OK. Trump just ordered all US companies to look for alternatives to dealing with China.


    6B9CA4D8-28DD-4B90-AF24-6ACBC92C165A.png

    D606DA1A-C709-4BB6-9CBF-9DB8288AB0C6.png


    People are melting down.


    I have a prediction. This will the the outrageous thing he proposes, and he will walk it back.

    It’s like a trend....
     
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  7. NMG26

    NMG26

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    We empowered this with our copyright laws
     
  8. serve_and_protect

    serve_and_protect

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    Interesting stuff.

    I always like reading your perspective, bdcochran!

    :cheers:
     
  9. bdcochran

    bdcochran

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    In response to Mr. Trump's easing of the threat of increased tariffs until December 15th, RC made a big mistake.

    The big mistake was RC announcing new sanctions against the US.

    Remember the concept of transposition - the putting of yourself in the other guy's shoes.

    Mr. Xi missed two golden opportunities at the last Party Congress and now he going to be bitten.

    At the last Party Congress, he had his minions elevated and his political enemies vanquished.

    Golden Opportunity No. 1
    Dealing with NK. Prior to the Party Congress, Mr. Xi moved 200,000 troops to a northern RC port. Ostensibly, it was an exercise to protect that port. In reality, it was a show of force to NK's ruler. RC did vote for the additional sanctions. Then Mr. Xi did not follow through. In deference to his northern political allies, he allowed shipments of illegal cargoes of steel/coal/petroleum products to continue.

    So, now, as a consequence, RC is being cut out of the loop and the US will directly negotiate with NK. This is not in RC's best interests. If it had followed through, the US would have kicked the trade dispute can down the road again.

    Golden Opportunity No. 2.
    All dictators/wanna be emperors have to cut deals with influential backers. Just like in the west, those backers always have their hands out to be greased.

    Mr. Xi took the easy way out on trade issues. He promoted his backers so he could become emperor (if only for a day). Those backers have their own fiefdoms. Imagine traditional warlords who don't go to the level of outright armed combat. He had to hope that the US politicians would kick the trade problem down the road, as so often done in the past. He guessed wrong.

    It is really too much for Mr. Xi to create a RC that respects patents, copyrights, and trade secrets. There is really no concept of ownership of private property (except what the top cats can steal for their families). So, he took the easy way out and announced new tariffs on US goods.

    In a sense, he walked into Mr. Trump's trap.

    Here is a description of the trap.
    1. the Christmas orders have to be in about this time. You simply can't order a shipload of fake Christmas trees at the beginning of December.
    2. tariffs are paid by the importer. This means that a number of US department stores are going to be cancelling a lot of orders that could be placed in RC. If there are orders, they will go to other countries. (As a back drop. It is b.s. that the US did not have trade with RC until Nixon came into office. The stuff was simply sent to Hong Kong, some processing, some relabeling and the goods were not made in RC. )
    3. Now there is hell to pay.
    a. the layoffs will start immediately in RC. Trump moved up the implementation on some goods to October 2019.
    b. RC, the currency manipulator, will have to devalue the Yuan. This means make RC goods cheaper to be able to have the Christmas orders keep coming to RC.
    c. the problem is that with the cut in the prime rate in the US, the US has already devalued the dollar.
    d. with the devaluation of the Yuan, the RC companies doing business in the US are not going to be sending the dollars back to RC. Remember, there are multiple exchange rates in RC. It is not a free market setting the rates of exchange.
    e. the US imports more valued goods from RC than RC buys from the US. This means that the Chinese are hurt more in a tariff war.
    4. When you have 2 million members of a minority group being put into concentration camps, and you have alienated 40,000,000 native Cantonese speakers for declaring last week that Mandarin will be the Chinese language, Mr. Xi now has more problems and will have to make concession.
     
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  10. pjanthony

    pjanthony

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    Wow; thank you for explaining
     
  11. PicardMD

    PicardMD Make It So!!

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    Interesting. Tagged for later.
     
  12. czsmithGT

    czsmithGT

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    Evidently the $28 BILLION US taxpayer subsidies to farmers to counter their losses from tariffs didn’t help North Dakota soybean farmers. Maybe they aren’t smart enough to charter some ships, sail them into the middle of the Pacific, sink them and claim the insurance?

    https://www.reuters.com/article/us-...ks-north-dakota-soybean-farmers-idUSKCN1VC0ZX
     
  13. ModGlock17

    ModGlock17

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    The seeds had been sowed long ago, many decades. US Universities gave admission to disproportionate number of Chinese graduate students, who held research assistanceships with professors in science field.
    Admittedly, their grades were extraordinarily high. They stay all night long studying, while US students were at frat houses with booze and girls.

    They don't have to steal IP. They had a hand in developing it.

    Then US companies hired them, and trained them. Better grades.
    Texas Instruments, for examples, had a whole chain of management full of Chinese.
    Eventually, they went to Taiwan building electronic companies that compete with Texas Instruments. The root of problems is deeper than you think.
     
  14. ThunderTrumped

    ThunderTrumped

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    we are going to war.
    we can fight it now, or we can fight it later.
    i love where im at.
    but i want the future of all to be safe.
    so, let's do it now.
     
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  15. ruffhunter

    ruffhunter

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    What is "RC"??

    one of the farm reports last winter reported a mass hog or cattle die off due to some disease that went around the country over there, hence the drop in demand for grains.
     
  16. P99er

    P99er MGTOW??

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    I think the biggest question is, can China outlast President Trump? They will be putting a lot of money into the campaign next year, but if he gets another 4 years, they're toast. And they know it.

    They are hoping for a democrat who will put it back like it was.
     
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  17. Gundude

    Gundude

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    You seem to know a lot about the topic. I have a question:

    Trump retaliated against the new round of China tariffs by increasing the existing tariffs on some Chinese imports from 25% to 30%. But the tariffs (even at the lower level) still don't take effect until December 15, while the new tariffs China imposed take effect next week.

    We don't know what's gonna happen between September 1 and December 15.

    Isn't Trump just allowing China to impose tariffs on us with only a hypothetical retaliation?
     
  18. ThunderTrumped

    ThunderTrumped

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    and that is where it all goes wrong.
    even if they win... it will all go wrong.
    the left has left a mark that cannot be unstained since 2016.
    Trump has America First in mind. So do we!
     
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  19. DocCasualty

    DocCasualty Wolverine

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  20. nikerret

    nikerret Mr. Awesome

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    RC is Republic of China
     
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