Following on from our discussion of China's economy last Thursday, Zero Hedge has just published this article:
I won't excerpt it here, but I do recommend clicking over there to read it for yourself. It sheds a different light on the tariffs issue. Of course, China's not the only country with crippling economic problems: read our previous article this morning for a look at the situation in the USA.
Food for thought.
Peter
12 comments:
Well, We could say better them than use but who knows about buildings going up here. I am beginning to see over building around here like I saw in Denver 30 odd years ago. Who know if the are following the same standards.
Everyone seems to forget that china has a serious problem if their economy takes a dip. They have taken all the dirt poor peasants from the tiny villages all over the country and moved them into the cities. At least one full generation has never known the small village.
When we stop buying their stuff, the factories stop, then layoff thousands, multiple thousands. Those people will be hungry and have no place to go.
This is prime tinder for a revolution. Something the communists are deathly afraid of. They are gonna backstop their factories as much as possible to avoid the tariffs closing them.
Interesting times indeed.
The question is, HOW they will respond... That is worrisome for some of us.
If you have been following any of the sites that keep track of China this isn't new. They have built whole cities capable of housing millions of people and no one lives there. Most all the numbers coming out of China are false, including their population numbers, there is a good chance that India is more populace now. Of course that is the same in a lot of places, anywhere that gets (or got now that USAID got shut down) significant amounts of foreign (AKA US) aid, more people meant more aid so why not just pencil whip a few million more people into existance.
I'm not all that sure that WE are in better shape.
We have almost 25% of our population on legal drugs for "normal life" to include diabetes and heart issues (almost all from China or from Chinese materials to make them).
We have ready to riot Gimme Dats all around acting out if their EBT cards fail.
Between this article and the previous one about OUR Issues..
It's two houses of cards and flamethrowers at the ready.
Exactly. The traditional distraction from economic problems at home is "adventures" abroad.
Jonathan
If they channel all that excess industrial capacity and 50 million single guys with no hope of a wife into war, we are the ones with a problem.
My take is that the PLA can't get into adventures abroad because they can't afford to kill off the princelings (single sons) that are the sole support of their parents in old age. Decades of One Child policy and de-facto sex selection abortions have made for a demographic nightmare for the CCP. Not enough children to support the elderly and not enough women to maintain their population. I've read some estimates that 500-800 million is the actual population of China, not 1.4 Billion.
Even Chinese commentators said several years ago (pre CVS) that the country had squandered it's chance. In the last decade their growth has slowed and they've lost market share to India, Vietnam, etc.
2 years ago, China threatened to cut off imports from Australia and Australia laughed; 10 years before their exports were 90% to China - now they are under 10%.
Remember that for most of its history, China was a series of warring kingdoms preyed in by its neighbors - if their lose their unity, they are done (and widespread prosperity is the only thing holding them together)
Jonathan
Why does the phrase "short, victorious war" come to mind?
We can't hold our leaders responsible, what makes you think the Chinese people can hold theirs responsible? Power is the name of the game.
I did a job over in China and saw people sweeping the street with a straw broom and dumping the waste into a wheelbarrow at a Nuclear Complex. The leadership is big on keeping people working, even if it is make-work. And I have seen a whole city, or at least large apartment complex spanning acres that was empty and falling apart.
So what's my point? Don't expect their leadership to balk at killing a few million sons from 1 child families.
China has crawled into our politics (Xiden), intelligence, academia, and business (lots of IP has been copied). Are there back doors to shut down our computers? What about hacking attacks? What happens if they do sell off our debt, or call it due. What if they refuse to send us pharmaceuticals? Plenty of soft power options.
What if they declare the Pacific theirs? They have 100X our shipbuilding capacity and have been playing with Drone Carriers. Lots of Hard Power options, too. Lots of easier places to invade. Taiwan is not hard, nor is Vietnam, Thailand, or other border countries. We pretty much lack any ability to logistically support a war outside our own borders against a peer military that has the wherewithal to contest sea and air dominance. We didn't beat goatherds in Trashkanistan. Modern war is industrial, so who has the better manufacturing position? Remember, WWII production came about from repurposing existing factories. Also of interest is how many factories were involved with war production prior to Dec 7th. The answer will surprise you.
We are at a significant disadvantage WRT soft and hard power. So isTrump just trying to improve our own economy and national security or is he trying to pull a Reagan and crash China's economy? Does it make any difference? How will the Chinese react?
They have to get them here. Then they will have to deal with us after they clean out all the coastal enclaves for us.
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