The China Thread

[Jacob]

Holy fuck, Xi's ridiculous...

As you may know, Lunar New Year - aka Chinese New Year - is one of the biggest holidays in China. It's basically like Christmas is in the West in terms of family and emotional impact.

The holiday starts on on New Years eve and goes on for another 10 days.

So it turns out that the word for New Years Eve is a homonym for "eliminate Xi"... and as of this year, New Years Eve is no longer a public holiday in China.

What a fucking cretin.

[HVC]

Sounds like a premise for an article from the Chinese version of the onion.

[The Minsky Moment]

I agree and it is diminishing - but for all the comparisons with Japan in 1989, I think that's a really big difference. The gap between China and a highly developed country is still quite large and there is still space to "catch up" - acknowledging that there are diminishing returns.

But the question is whether they will converge or fall into a middle income trap.  They still have a powerful manufacturing and export engine but demographics have turned against them.

[Josquius]

Holy fuck, Xi's ridiculous...

As you may know, Lunar New Year - aka Chinese New Year - is one of the biggest holidays in China. It's basically like Christmas is in the West in terms of family and emotional impact.

The holiday starts on on New Years eve and goes on for another 10 days.

So it turns out that the word for New Years Eve is a homonym for "eliminate Xi"... and as of this year, New Years Eve is no longer a public holiday in China.

What a fucking cretin.

It's already quite a disaster period with the big rush to get home...
Sounds like things will be interesting.

Surely effectively cancelling Christmas cannot go well for him?

[HVC]

Wonder when he'll go after chinas real enemies. Sparrows.

[Sheilbh]

But the question is whether they will converge or fall into a middle income trap.  They still have a powerful manufacturing and export engine but demographics have turned against them.

Yeah - although I think that's another reason why I think the comparisons with 80s Japan are not that illuminating.

Although one other thought I have - and I have no idea if there's any basis to it - is that we are saying there's low domestic demand and overproduction. And (as I say, no idea if there's anything to this) I couldn't help but think of Saudi during the shale boom when they kept production at levels that were not economically viable given the prices, but the goal was to maintain market share (and having complained about comparisons with Japan here I am throwing in Saudi Arabia ). Especially given the industries where China's investing I can't help but wonder if part of it is basically to build market share? (As the Suadis hoped - and failed - to kill of shale, so China hoping to kill of industries in the West in those core sectors that are their focus).

The other thing I often think about is all of the talk in the West, especially Europe, about de-coupling now pivoting to de-risking. I see China massively increasing its renewable capacity with over 50% domestic production supporting that expansion; while in Europe the European production is around 3% and the target is unattainable without Chinese industry. And I think of covid and I wonder is overproduction also building spare capacity - and is China envisaging a scenario when they might want to de-risk or de-couple from the West?

It's the question that I feel like Western countries (especially washed out ones like Europe) are really struggling to grapple with: what if the rest of the world also has agency now?

[Josquius]

Oh absolutely. China is following the amazon approach of kill the competition and then in the future do what it likes with the market. Probably use it for political ends too - admit that there's never been any such thing as Uighurs or no batteries for you.

[Crazy_Ivan80]

Especially given the industries where China's investing I can't help but wonder if part of it is basically to build market share? (As the Suadis hoped - and failed - to kill of shale, so China hoping to kill of industries in the West in those core sectors that are their focus).

It's been a few years ago, maybe even close to a decade, but I've seen this before. Basically what China does is invite western companies, steals their technology, then outproduces, outsubsidises and outprices these western companies until they go under. All this in an attempt to basically destroy western industrial capacity.

I've got no reason to assume this isn't their strategy since the CCP is basically evil incarnate.

[PJL]

Today I learned that China has a 'strategic pork reserve'. Seriously WTF, you couldn't make this up.

Full report here (mainly explaining China's deflation crisis): https://www.youtube.com/watch?v=C1qLbDu04d0

[Jacob]

A Chinese strategic pork reserve makes sense to me given China's relatively low level of food self-sufficiency and how central pork is to the Chinese diet.

Unsustainable increases in the price of pork or supply issues is a potential threat to the stability of the regime. It's something basically everyone would feel and care about.

[Sheilbh]

A Chinese strategic pork reserve makes sense to me given China's relatively low level of food self-sufficiency and how central pork is to the Chinese diet.

Unsustainable increases in the price of pork or supply issues is a potential threat to the stability of the regime. It's something basically everyone would feel and care about.

Yeah I think it makes a lot of sense and is weirdly something I'd heard about before.

Edit: Although I still find the idea quite fun.

[Josquius]

Having a strategic food reserve makes sense.
Though pork? That doesn't exactly keep well.

[Sheilbh]

It varies by country and says something about each regions food - for example I know India has centrally managed reserves of onions because it's really important in Indian food and shortages or shocks to the prices in the past have kicked off massive protests.

I think it's less a massive stock in case something goes wrong and more something that can be tapped to keep prices stable.

[Jacob]

Having a strategic food reserve makes sense.
Though pork? That doesn't exactly keep well.

My guess is that they rotate the stock.

[Syt]

Let's not forget that Canada has a strategic Maple Syrup Reserve.

https://en.wikipedia.org/wiki/Great_Canadian_Maple_Syrup_Heist