Chinese banks cause alarm as capital flight measures intensify
asiamarkets.com
asiamarkets.com
If this happens, and is at bad as some analysts say it could be, then the model propping up the CCP effectively ends [1] and they'll have bigger things to worry about than re-unification or tariffs.
0. https://moderndiplomacy.eu/2022/07/17/a-real-estate-and-bank...
1. https://zeihan.com/the-cutting-room-files-part-6-the-future-...
The flipside to that is, China does now have a pot to piss in, and is far less likely to be kettled into a war over something as stupid as an overabundance of crappy housing.
I am seeing the opposite. All dictatorships seem to start getting land conquest ideas once they have the resources. There is a direct correlation between Russia's cash reserves and their belligerence, for example. China is becoming one man, just like Russia is Putin, and it's also becoming a less rational actor as the result.
Allowing the housing bubble (which seems to have enriched those close to the party), punishing the tech sector for their own success, the completely baffling Zero Covid. At some point it's the dear leader's ego and quest for "legacy", not the economy.
Because of elections or ships and planes being retired?
But the UK economy wasn’t doing well and Margaret Thatcher was very unpopular especially with the working class. I doubt many British people cared that much about the Falklands and wouldn’t have minded if they had let it go.
But I think an awful lot of the British, and even Americans and Europeans, were completely shocked that Thatcher would not, under any circumstance, tolerate an invasion of British territory - even unwanted territory!
Had the Argentinians waited a few more years, the British may have just given the islands to them.
In an alternate timeline, one can imagine what a democratic China would look like:
- Silicon Valley would have been long overtaken by Shenzhen
- Chinese media would have been a strong rival to South Korea’s
- the Chinese domestic market would have been opened up to the world long ago
- Taiwan would willing reunify with the mainland. There would be no looming war
From what I've been told the younger Taiwanese tend to see themselves as Taiwanese, not Chinese. If mainland democratization happened early enough, maybe, but I don't see what a small country in Taiwan's position has to gain by merger with a larger one.
> - Silicon Valley would have been long overtaken by Shenzhen
To the extent the markets were fairly free before Xi's heavy handedness, why didn't this happen yet anyway? Silicon Valley is kind of unique even in the USA. I've read this is because of particularly startup-friendly California laws. Is there reason to believe these startup-friendly laws would have been duplicated in Shenzhen? Or some other reason to believe Shenzhen would have turned into a Silicon Valley rival otherwise?
> - the Chinese domestic market would have been opened up to the world long ago
Anti-import policies are adopted by democratic countries too.
That was cemented once Xi started being reckless, leading to the end of the one China two systems policy. Prior to Xi, it wasn’t as black and white.
> To the extent the markets were fairly free before Xi's heavy handedness, why didn't this happen yet anyway?
You just answered your own question. Under authoritarianism, the government can abruptly shutdown the party at any moment for any arbitrary reason. There’s no rule of law that comes with a democracy. Also innovation needs freedom of speech. There is a cost to society and business when you’re constantly having to self censor yourself
> Anti-import policies are adopted by democratic countries too.
Sure, the EU has a lot of protectionist laws, but they don’t even come close to CCP’s draconian version
Jiang’s Shanghai faction also took the lion’s share of funding, more of which could have gone to the inland provinces
None of this would likely happen if China transitioned to a democracy.
FDR was probably as close as we got to a Xi like figure, who was able to bend the Supreme court to his will by realistically threatening to pack it.
It's incredibly pragmatic, Chinese system was shit show in the 80s-10s going after easy gains while building up onerous contradictions. A lot of toes needed to be stepped on to do something as basic as military modernization, meanwhile Xi hasn't even aggregated enough political power to pass wide scale property tax. The issue isn't Xi centralizing power, but power was never sufficiently centralized, and in many ways, still isn't.
Why xenophobic? America man invaded Iraq on a whim, and Russia man invaded Ukraine after having a policy of reunification
Countries are exerting might-is-right
In no way was the comment china-man-bad xenophobia.
The people can see the market is dangerous but allowing the money to flee to safer locations would crash the market and that's unacceptable. Hence things like capital controls. It's not the hardcore efforts to get foreign currency that we saw in the old days, but it's still an issue.
But Chinese rockets hitting Ukrainian kids in Kyiv/Europe? That would trigger dramatic sanctions. I don't think that is priced into the current world stock market.
Short term this would wreck western economies worse than the 2007 crisis.
Long term, it would be the end of China and give a massive boost to western economies. In the mainland it would mean massive stagnation/industry collapse as manufacturing is moved to pro-western southeast Asian countries. Millions of unemployed and unmarried (thanks to out of control population control policies) aggressive young man roaming the country with no hope to emigrate thanks to sanctions. Add food insecurity to the mix, since some countries exporting food to China might re-consider their allegiances not to get sanctioned as well and it would spell disaster for the regime.
High net worth individuals getting their foreign assets seized for double allegiance in the west would provide relief to native home buyers and free so much capital to be spent on consumptions good, to soften the blow of higher production costs because of re-shoring.
The US is executing the same broad strategy against both China and Russia - surrounding them with US-friendly states who then get military support. It seems to be working extremely well against Russia since they can barely get Russian troops into the Donbass safely.
While I, personally, agree that it would be stupid I can certainly see that situation from the perspective of a hypothetical Chinese military planner. A destabilised Russia would potentially have a colour revolution leading to a US encirclement on 3 compass points. China would therefore have no choice but to support the war effort against Ukraine.
It isn't a moral statement, just one realistic scenario that China is afraid of.
This is the only way to support Russia and China today. By using a “Great Power” theory which pretends smaller countries have no agency and their people have no value, other than how they affect the interactions of those larger countries.
The U.S. is also surrounded by a bunch of countries. Somehow those countries aren’t clamoring to join the Warsaw Pact or kowtow to China.
If there was an equivalent south American power, you might see Mexico and central American countries looking to escape American influence, but no such power exists
That doesn't mean that dealing with the US isn't better than dealing with China, of course, but the US military bases are there to ensure that the empire stays intact, both from external attacks and internal division
What US-Friendly states are between Russia and the Donbass then?
Depending on the routes Russia takes to get materials and troops into the Donbas, and to protect other routes into the Donbas, we have:
Turkey - blocking entry of north seas warships into the Black Sea / Sea of Azov.
Ukraine itself, which can send missiles onto the Russian roads currently funneling troops into the Donbas region.
Based on the way you write it seems you think this is problematic.
Do you?
And Kazakhstan. And Mongolia. And North Korea. And Belarus.
> And Mongolia
https://www.state.gov/u-s-relations-with-mongolia/
> Bordered by Russia and China, Mongolia describes the United States as its most important “third neighbor.” In 2019, the United States and Mongolia upgraded their bilateral relationship to a Strategic Partnership.
> Mongolia deployed troops to Iraq from 2003 through October 2008. In Afghanistan, Mongolian soldiers supported Coalition operations for 18 years, with withdrawal underway in 2021 in coordination with the planned exit of U.S. forces. Training and equipment provided by the U.S. government support the professionalization of Mongolia’s defense forces and their continued engagement in United Nations peacekeeping operations. The United States military also regularly participates in Mongolia-hosted peacekeeping and humanitarian relief exercises, including the annual Khaan Quest exercise.
Seems like an "ally" to me.
> Kazakhstan
And while not as close, still maybe an "ally"?
https://www.state.gov/u-s-relations-with-Kazakhstan/
> In the years since Kazakhstan’s independence, the two countries have developed a strong and wide-ranging bilateral relationship, jointly referred to as an enhanced strategic partnership since 2018.
> Kazakhstan’s military participates in U.S.-funded military exercises like Steppe Eagle, Viking, Eager Lion, and Shanti Prayas.
---
> North Korea
The Russian border with North Korea is about 20 miles long.
Just like surrounding, the meaning of ally needs changing to accommodate one's world view.
https://www.nytimes.com/2021/10/26/world/middleeast/iran-tal...
> For 20 years, Iranian officials have said they wanted the U.S. military out of Afghanistan. Iran supplied Afghan insurgents with weapons to use against American soldiers. It sheltered Al Qaeda’s top leaders in Tehran. It courted the Taliban with diplomatic visits, covertly and then publicly.
The best I can find is an "enemy of my enemy" relationship, which has never been considered an alliance.
https://www.usip.org/publications/2018/06/iran-and-afghanist...
>For decades, Tehran has supported the Hazara, a Shia minority and the third largest ethnic group in Afghanistan. In the 1990s, the Taliban government repressed the Hazara—excluding them politically, isolating them economically, and killing more than 1,000—during the civil war that erupted after the 1989 Soviet withdrawal. Tensions heightened in 1998, when the Taliban killed nine Iranian diplomats working at a consulate in northern Mazar-i-Sharif. After the 9/11 attacks and the U.S. invasion of Afghanistan, Iran worked closely with the United States and regional powers to establish a new Afghan government free of the Taliban.
> Iran’s relationship with the Taliban shifted, however, as U.S. and NATO forces stayed in Afghanistan. Tehran viewed the Taliban as a useful tool to counter U.S. influence on its borders. It provided Taliban forces with enough military equipment to pressure the United States but not enough to generate American military retaliation. In 2016, the Taliban chief, Mullah Akhtar Mansour, was killed in a U.S. drone strike as he returned from a secret visit in Iran to his sanctuary in Pakistan. By 2017, Russia reportedly used Iran to funnel weapons to the Taliban.
Prior to the war, Ukraine sought entry despite ongoing conflicts, claiming "NATO is the only way to end the war in Donbas".
Since the start of the war, Former US Ambassador to NATO and others have called for Ukraine to be offered membership, despite territorial conflicts.
For example, why does Canada KK pose restrictions on China despite them investing a ton of money in Canada, and the Philippines, barring a short neutrality under the ridiculous Dutarte also chooses to impose restrictions on China, and be closer to the U.S., despite China also investing a ton of money in them and being closer to them.
The broader answer is because PRC hasn't (had chance to) done what the US did, kick the shit out of their neighbours or exploit shit kicked countries near their adversaries and coerced geopolitical compliance that over generations becomes ingrained on a cultural level. PH/JP/SKR/TW are structurally coupled to US post WW2, and all had very strong anti-US sentiment across society and politics earlier on in their existence, but lacked power to kick US out and generations of US influence and increased dependence in more than just economics now makes them bias compliance towards US interests.
Canada good example, used by British to wage existential war on US, and US seriously considered annexing Canada until British was comprehensively defeated and Canada stopped becoming geopolitical threat. Even then Canadian domestic politics was antiUS project until well into the 70s, meanwhile anytime Canadian leadership tried to depart from US strategic interests, it gets reigned in. Ditto with Mexico, and rest of Americas via Monroe Doctrine.
The TLDR is US empire wasn't built on friendship, it was built on opportunistically ruining / exploiting ruined countries and turning them into vassels structurally to be friendly, until over generations, people start drinking the koolaid and the cause becomes reversed. Alternatively, like in South America, beatings will continue until geopolitical compliance improves. Money and influence ops is rarely enough to dislodge such alignment. Which raises the unpleasant implication that countries around PRC won't be friendly until PRC successfully asserts regional hegemony and it can't convincingly do that without basically kicking US out of east Asia forcefully. Sometimes the only way to win over geopolitical "friendships" is by kicking the old friend out and demonstrating implications of trying to remain unfriendly.
As is the standard playbook of dictator/authoritarian apologism, you completely reverse causality here and deny non-authoritarian countries self-determination. The US isn't "executing a strategy" or "surrounding [Russia/China]", it's that Russia and China are engaging in terrifying behavior, attacking and undermining their surrounding countries, promoting a pure might-makes-right and historical grievance narrative, making vast claims over neighboring countries sovereignty with their "spheres of influence" and China's ludicrous ocean claims, and on and on. And as a direct result their neighbors are banging on the door to get into Western security agreements they see as being able to defend them! NATO was falling apart. European military capability has massively decayed. Much of Europe was completely content to make occasional noises but otherwise pursue economic integration above all else. What has changed everything has been Russia and China's actions.
Taking that and reversing it into a "woe is me why is everyone so mean" story is gross.
>While I, personally, agree that it would be stupid I can certainly see that situation from the perspective of a hypothetical Chinese military planner. A destabilised Russia would potentially have a colour revolution leading to a US encirclement on 3 compass points. China would therefore have no choice but to support the war effort against Ukraine.
Here's an alternative thought: Russia just fucking LEAVES UKRAINE. Stops committing mass murder, rape, genocide, child abduction, theft, purposeful destruction of civilian infrastructure, and war crimes in general. That China NOT invade an independent democratic country like Taiwan. That they stick to international treaties and norms and focus on making themselves rich and happy. That ever occur to you? Apparently not. Hopefully "Chinese military planners" aren't quite so evil and blind but of course in dictatorships that tends to not be the case.
For example:
> As is the standard playbook of dictator/authoritarian apologism, you completely reverse causality here...
You don't actually know the causality, because it cannot be known, it can only be predicted and believed. I think it may also not be possible to not do this, depending on the individual and their cultural/educational background.
> Stop committing mass murder, rape, genocide, child abduction, theft, purposeful destruction of civilian infrastructure, and war crimes in general.
You first lamow.
It's usually fairly easy and non-controversial to stay grounded when one is working with computer systems (or similar), but when working with large biological systems it can be much harder to remember, which is kind of counterintuitive considering the complexity of the systems is infinitely larger. I think if one is embedded within a system, that might be the differentiating psychological factor?
You're giving an extremely dramatized version of what China has actually been doing.
> attacking and undermining their surrounding countries
China hasn't fought a foreign war in over 40 years. That's actually pretty incredible, when you think of the fact that most major powers have fought many wars in that same timespan.
> promoting a pure might-makes-right and historical grievance narrative
I have never seen China promote a "might-makes-right" narrative. China consistently states that the United Nations framework is the basis for international relations. That's why, for example, China has never recognized Russia's occupation of Crimea - it's contrary to the UN Charter.
> making vast claims over neighboring countries sovereignty
China's territorial claims haven't expanded in many decades - since its founding. In fact, the PRC has reduced its claims over time. It inherited a bunch of border disputes from the previous government (the ROC), some of which is has resolved through negotiation (for example, with Mongolia, Vietnam and the USSR/Russia).
If you look at the South China Sea dispute, for example, you might be surprised to learn that Taiwan (a.k.a., the ROC) has nearly identical territorial claims as the PRC. I say "nearly" identical, because the PRC has settled some aspects of the dispute with Vietnam through negotiation. Taiwan actually occupies the largest, most valuable island in the South China Sea.[0] The reason why China has been pouring cement on reefs is because it is a latecomer to the scramble for the South China Sea islands, and all the largest islands and reefs are already occupied by other countries, as you can see from this list: [1].
All of the countries bordering the South China Sea have extensive, overlapping claims. The US strategy is fairly successful because it comes in and offers to help various countries enforce their claims versus China. The downside for these countries is that they risk worsening their relationship with China, which is the most important economic partner for every country in the region, and that they might get dragged into a military conflict between the US and China. That's why countries in the region have gone back and forth between cozying up to the US and China.
0. Taiping Island: https://en.wikipedia.org/wiki/Taiping_Island
1. https://en.wikipedia.org/wiki/List_of_maritime_features_in_t...
Though ultimately this is of China’s own doing. They broke the “don’t interrupt your enemy while they are making a mistake” rule with respect to the US and very rapidly turned the tide against themselves and now find that they are the ones making the mistake and seemingly unaware.
The mistake being supporting Putin, taking over Hong Kong prematurely, and pissing off the Philippines and Japan for no good reason. This has caused Pacific national to rally around America and has caused an American-skeptic Europe to unite strongly under NATO and turn China-skeptic. The whole “wolf-warrior” diplomacy thing was a massive fuck up.
And Vietnam, and India, and every country that borders the South China Sea. It’s like a kid who goes school and buys everyone gifts to make friends but still treats everyone like crap.
Following this then it would make sense for both China and Russia to feel threatened and react accordingly. I would expect the US to react even harder if any of their "enemies" would setup a missile base in Mexico or Canada.
The U.S. and Russia both made security guarantees to remove nuclear missiles from Ukraine following the breakup of the USSR. The closest-to-Russia NATO member with forward-deployed US nuclear weapons is Turkey, and it's been a NATO member since 1952. https://www.newsweek.com/nato-us-nuclear-weapons-europe-site...
The cold war never got hot with US nuclear missile subs in Russian waters, and vice versa with Russian nuclear missile subs in US water.
Additionally, when it comes to geopolitical power things are much more complex than you make them to be. I suggest reading this publication[0] to understand better what's going on.
A few points:
> Moscow claims that missile defenses represent an American perception of threats from Russian nuclear missiles. Therefore these defenses aim to neutralize them in potential conflict. Either Russian missiles would be attacked by a conventional air and space first strike, possibly involving these networks in Europe, or else these missile defenses would frustrate a retaliatory second strike leaving Russia defenseless.
> While these missile defenses in and of themselves are no threat, they represent the first stage of a planned or potential U.S. buildup of a missile network in Europe that could then neutralize Russia's first and/or second strike capabilities as cited above and shift the burden of war to Europe.
> If missile defenses were stationed at these bases, it would create a pretext for stationing offensive missiles there. This would force Moscow to assume the worst case scenario and could cause Russia to attempt to shoot them down leading to a conflict with America.
> These defenses and whatever may follow them rupture the fabric of strategic stability where neither side has the freedom of action or margin of superiority that might encourage it to think it could employ coercive diplomacy or military force with impunity. That strategic stability equation is of critical importance to Russia because otherwise Washington might be tempted to think it could strike at Russia with relative impunity.
> Finally, there is a fifth, and always unstated but critical aspect here. These defenses entrench the United States in Europe's military defense and foreclose any prospect of Moscow's being able to intimidate or reestablish its hegemony over Eastern and Central Europe, and even possibly the CIS. If missile defenses exist in Europe, Russian missile threats are greatly diminished if not negated. Because empire and the creation of a fearsome domestic enemy are the justifications for and inextricable corollary of internal autocracy, the end of empire allegedly entails Russia's irrevocable decline as a great power and, (the crucial point) generates tremendous pressure for domestic reform.
.0: https://www.wilsoncenter.org/publication/352-missile-defense...
It's stupid and risky for either the US or China to escalate a war that threatens to become a global conflict between nuclear powers. I wish saner heads urging restraint would prevail.
If we are going to play this game, let's have it all out now, because that's no way to live. We all agreed a long time ago that this is not what nukes are for, and if someone wants to lay new rules, they should be ready for what's coming.
The only question now is whether NATO is going to escalate to global thermonuclear war over some foreign country. Seriously doubt they care that much.
Where China has an oversized impact is our trade deficit and consumer goods which makes them seem vastly more important than they are. However, that’s also the most flexible with south east asia replacing Chinese manufacturing as Chinese workers become more expensive.
Our trade deficit with China isn’t as bad as it seems because we export goods to countries China then imports from. Hong Kong for example is a 25.8B trade surplus and really should be included in Chinese trade numbers.
Mexico is optimally aligned, with a shared historical/cultural ethos, and desire for NA stability, too.
Also, it solves a problem; one cannot wage war without pants.
Well, unless you are General Buck Naked...
But my point is, manufacturing is returning to the West, which also has low cost production zones. And imagine, a revitalized Mexico, with the cartels broken, and a very strong middle class.
And I said made in, not assembled in.
I was merely providing additional data, my pants were made on China, now the label says Mexico! Same style/brand.
Just those two factors amount to material risk.
Plus they would push western unity to an all time high. The US foreign policy would be perfectly aligned across party lines against China.
I think it's a major mistake to talk about any country as if it's one homogenous, unanimous entity. There are those in the US, and elsewhere, who stand to make a great deal of out of money from war.
> I think it's a major mistake to talk about any country as if it's one homogenous, unanimous entity
Not to mention mind reading! It's become so common and acceptable in our culture, we don't even realize when we're doing it anymore.
I swear, this simulation is becoming so bizarre it wouldn't even shock me if one day flood lights came on and we discovered we've been on a giant TV set this whole time.
On the brighter side though: what a show! How will it all end I wonder.
Yes, rarely a day goes by without me coming across a story entitled "Gen Z is $foo" or "Gen Z doesn't $bar" or similar.
> and acceptable [..]
Not sure about that, I stop reading as whenever I encounter such lazy writing!
Somehow we're hearing and making more noise than ever about diversity and inclusion, yet we've collectively forgotten what diversity actually means...
Lazy writing is an assumption, and I don't think it is a remotely safe one.
Keep in mind that there is a difference between the state of mind a person is in at the time they were writing a comment, and the state of mind they are in when they get called on what they say in their comment.
2. US helped orchestrate the 2014 coup that overthrew a democratically elected but Russian friendly government.
3. Ukraine, being a US client state, refused to uphold the Minsk peace agreements.
4. Immediately prior to the invasion the US/Ukraine side of the proxy war escalated shelling of Russian leaning parts of Ukraine crossing known red lines.
5. Ukraine has outlawed Russian language, culture, religion, political parties, and jail those who practice them. Which we all know is how democracies function /s
Extreme corruption and mismanagement had a much larger influence on the ‘coup’. I’m not saying that the current gov is clean, but that’s what leads to regime change. Also the election you were referring to was a complete sham, which is common with most Russian supported governments
> Ukraine has outlawed Russian language, culture, religion, political parties, and jail those who practice them.
This happened after the 1st invasion, and not prior to that
However, the US government certainly signed off on pre-war decisions to extend Nato into Ukraine, paying to modernize the Ukrainian military, and Joint military exercises in the Black Sea.
Not being part of these decisions, You and I can only speculate on how they fit into overall US strategy and how the risk-rewards were weighed.
My concern as a US citizen is that the current war in Ukraine seems to be a great benefit for the USA in almost all regards. I am skeptical but would hope this was not a factor in the decisions leading up to the war.
All of this occurred after 2014. What happened in 2014? Everything that is happening in that region is due to Putin and Russia’s own actions.
This is not a great benefit to the US whatsoever. It takes attention away from Asia. The US has been reaching in to its stockpiles and coffers to make sure Russia doesn’t get what it wants.
A revolution in Ukraine where a pro-Russia government was removed and a pro-NATO one came to power. This is extremely relevant.
>Everything that is happening in that region is due to Putin and Russia’s own actions.
To be clear, I am not denying Russia's agency and aggression. Similarly, I don't think it is realistic to say that the US has made zero decisions, has zero influence, has zero power, and zero interests in the region.
>This is not a great benefit to the US whatsoever.
This war has imposed real costs to Russia and has a real chance of destabilizing Russia for the foreseeable future, perhaps breaking it. It is extremally cheap compared to other wars and being fought without loss of American lives. The conflict is taking nothing away from US efforts in Asia.
Honest question: If you were a US military strategist, would you sacrifice Ukraine to destroy Russia? Would you sacrifice Ukraine to simply damage their military?
Wouldn’t the article indicate otherwise?
Morality.
Sending military aid to a country to defend themselves is not the same as sending aid to a country to invade another.
If this doesn't resonate, maybe this analogy does: giving a gun to a murderer is different to giving a gun to someone who is going to be murdered.
Decoupling will be painful, but not as painful to the US as it will be to China.
Why? We haven't sanctioned the US for the children killed by Ukraine with US weapons in the Donbass.
(And at least here at HN you avoid the most obvious propaganda cliches) https://en.m.wikipedia.org/wiki/Where_have_you_been_for_eigh...
Yes he's more assertive militarily as well, but I think that's just part of a 360 degree ramp up in assertiveness generally rather than with just one specific strategic goal in mind. In that sense even a takeover of Taiwan would be a means to an end, total party hegemony under Xi, rather than a goal in itself.
The only people who want to take back Taiwan are older Chinese government, and military hardliners. They are rapidly losing that battle as time goes on.
The end of the one China, two systems was totally unnecessary and reckless. I’m sure others can come up with more examples
So protesting works, and Chinese people (young/old) do have power. (A fair amount of covid protests were held by university students btw)
Let’s also not forget what happened to the student protesters at Tiananmen. All they have to do is get multiple army regiments from neighboring provinces, and they’ll have no qualms with massacring civilians.
Because as we all know, people outside your own province and state aren’t real people /s
All they have to do is declare martial law
Still, I hope you’re right and that I’m very wrong
1. Mainland with no interest in foreign investment
2. Mainland mostly with some foreign investments
3. Split between mainland and foreign
4. Trying to move mostly foreign while keeping some in mainland (generally to take care of family or business concerns back home)
In the US as a more stable asset haven, hot real estate markets are usually where large piles of cash are parked by global investors, not just Chinese. The people in the 4th group often try to emigrate because individual property rights still aren't fully guaranteed in China. (Jack Ma is an example.) You would too if your neighbor had their assets seized or frozen arbitrarily.
So it works like land in the UK, which is all owned by the King of England, but which is "leased" from him?
The difference is that in one system it’s symbolic and in the other system it has practical effects to manage ownership. I don’t think the Crown can decide, “I think we’ll just stop renewing the lease on this.”
You are correct in what you said, but as I said, it works in China like it does in the UK (with of course some differences naturally). If you consider how the Crown Estate works in the UK, China works in a similar way.
[1] https://en.wikipedia.org/wiki/Property_law_in_China#Obtainin...
Also where do you get this information from?
Some people will care about an ability to move money offshore while others don't.
TL;DR: net worth more than 30MUSD
There’s various ways they can fund their children’s business ventures (passion projects) overseas without expecting it to ever turn a profit.
With the nepotism in Asia, it doesn’t really matter what degree the children of the elite gets, but more school is always viewed as favorable, possibly even moreso than practical work experience sometimes. This is why you see a proliferation of masters and graduate programs in the United States that don’t require GRE or standardized exams. Obviously it’s a different story for the employment seeking middle class.
To your point, it’s not uncommon or a bad idea for the student to study the arts or art history degree either.
And real estate.
Another way is 'business' investments in other SE Asian countries, that then get liquidated and moved further abroad. China does a lot of business with S. Korea for example. If you have an export company, and China exports a lot, you can hold a portion of the foreign earnings abroad and just keep them there.
I heard this many times and I can’t figure out how it works. Crypto is sortof banned in China for a while for this reason and yet it’s still a route to take money out of China. But how? Who is going to give you crypto for yen in China?
Please no comments on how “Tether is a scam”, blah blah blah.
Look at the port of Singapore. Massive loading and unloading from ships, but no rail or lines of trucks leaving. Look at the hundreds of ships parked offshore waiting to load or unload. Look at the position on a map (every ship heading east from Asia passes Singapore, 2000 merchant ships per day)
Organized Crime in places like Vancouver smuggles drugs into Canada, the funds are laundered in casinos and real estate, and the money is transferred from the Wealthy in China to OC in China, and the wealthy investor gets clean cash and houses in Canada.
Because the real client are the chinese individuals needing to get the money out. And they pay the cut.
https://www.reuters.com/article/uk-mexico-china-cartels-spec...
Cryptocurrency have been another big one. There are strong pointers that it is the main driver behind the rise of bitcoin. And possibly tether.
Somehow i think that may be a challenge.
There may be money to be made in China, but if you never know if you can get it out thats going to put a damper on things.
I was talking to guy in California who got an order for $1M in chips from a Chinese company. He had done tons of business in China and even had a factory there. Sent the invoice ahead of time (no product shipped) and the guy in China went silent.
His theory was that they used the invoice to get approval to exchange to USD and send it to the US. They probably edited the invoice to change the bank account the payment was made to.
That worked years ago, but nothing stops the Chinese government from clamping down on it.
With the mounting up US sanctions, trade wars, and "friend-shoring", China will have less and less interest in western investments.
Ease of capital flow is one reason why Singapore has done so well (among many reasons). You can turn Singapore dollars into whatever currency you want, in whatever quantities and move it out of the country with no barriers at all.
Plus the rule of law, which means the government is predictable in its decision making. Singapore isn't going to turn around and nationalize a bunch of foreign industries any time soon, because they realize the second they do, all that foreign capital is going to disappear very quickly.
For example because your production capacity in China will produce your stuff for cheap and you will be able to sell this stuff with a good markup? You will not be able to easily sell the production capacity and move the resulting capital outside of China as you would in the US or EU, but as long as it operates it will generate you profit.
[1] https://www.census.gov/foreign-trade/balance/c5700.html
[2] https://tradingeconomics.com/china/foreign-exchange-reserves
Not to attract capital…
See i'm not an economist but you can't that sounds a bit counter intuitive too me. One story says China has capital flight and you have other stories talking about more and more Foreign directed investment into China.
Further, fdi is a small part of the economy. Something like 400 billion dollars a year if you believe the Chinese figures that are most optimistic.
So there can exist at the same time, foreign capital that wants to invest in the country and domestic capital that wants out. Even if it’s just the same proportion as the economy you’d see large capital flight.
The real question is what would happen if China liberalized its currency? Would that power investment more than it caused rapid flight? Who knows but every time the yuan opens a little trillions flows out of the country and the currency regime gets more conservative again.
And then there is Western capital, used to rule of law and personal property. They don't see that reality as a realistic threat. So they keep pumping money into China. It will work. Until it doesn't. And then the CCP will simply take it.
But somehow I suspect that it will be a "too big to fail" situation, and all those losses will be socialized in the West, i.e. the Western governments pay for the losses probably.
The same can be said about money moved to the West, just with a different risk profile. As the Russian situation has shown, your property can be creatively taken away if your country of origin pisses off the US too much.
I don’t think you’d be able to name a single case that isn’t T like that.
https://daily.jstor.org/communist-party-of-china/
> Regulations require that all state-owned enterprises and private companies operate party branches, and even some foreign-owned companies like Walmart have them. Internally, the organization can serve as a fertile networking ground. And for entrepreneurs, party membership often brings better relations with local government officials.
Just look at the length of the list with sanctioned persons. Are you seriously saying that all of them have "direct ties to and prop up Putin"?
2) Yandex was understandably cautious in the light of the new Russian laws, which effectively put a censorship net on coverage of the war.
3) Are you saying that Volozh should have followed the unspoken Western rules in operation of a business in Russia (read: he should've acted to please the West as much as he can, anticipating its demands) or risk loosing access to all his property in the West without any warning? And you think the Chinese will not see it as a potential risk?
He was sanctioned by the EU, no the US.
1) https://en.wikipedia.org/wiki/Arkady_Volozh
2) https://www.reuters.com/technology/yandex-ceo-volozh-resigns...
Come on you can't really talk about Rule of law when its as fluid as the west wants it to be right? When it comes to Russia and China they can quickly find majority rule to change laws.
Aah well its not my money on the line :p
Instead "very specific Russians" who had their wealth tied to the Russian state, were targetted.
This is a very important difference, completely followed a legal and standard procedures, was not arbitrary or decided upon by a dictator, or single person.
So no, "rich Chinese people" are not "dumbasses". And most are not "rich", but what the West would describe as "moderately wealthy".
M, not B wealth.
2.) A more thorough report shows that China's inbound FDI has been plummeting
https://www.investmentmonitor.ai/insights/chinas-fdi-decline...
China is seeing falling inbound FDI in all its major sectors, with financial services down 62% between 2019-2022 and electronics down 56%. Which would align with all of the major technology companies pulling out of China in 2022-2023
It's perfectly possible to have retail banking customers living abroad removing large amounts of capital from China, while at the same time foreign investors are injecting large amounts of capital into China. Two different flows.
I think the biggest impact is going to be places like Australia that benefit greatly from Chinese nationals abroad at the moment. There are lots of Chinese students and Chinese property owners in Australia. If they can't get access to their money, that's going to hurt Australia more than China.
Imho we should do what the Asian countries do: disallow buying property in Australia from non-Aussie citizens (or at least non-residents).
Source? All of my sources have it that foreign investors are shy after consistent rounds of government interference and even nationalization.
China’s Foreign Investment Data Distorted by Hong Kong Flows https://www.bloomberg.com/news/articles/2022-09-05/china-rou...
There is an example in the article of an investor with money stuck in China. They won’t be doing as much investment as they would if the currency was liberal for instance.
The western currencies dominate foreign trade for lots of reasons, but the biggest by far is that they are easy to move.
Here is a good article by the IMF that gets into how various central banks are diversifying their reserves into a broader range of currencies. https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar...
How much of this IP heap is an utter trash like software patents and patents on black rectangles generated just to be added to a patent pool? From my (surface-level) understanding school-level education in the US has much bigger troubles compared to China, but luckily for the US it gets compensated (for now) by sucking brains from all over the world into the well established system of universities.
And it's not like China has no experience with playing extremely loosely with IP laws.
There has been some alarming articles about China's economy the past year, particularly that the real estate market, exports, and other issues are putting the company into a very terrible financial situation. However, the government in China IS the bank. They can declare a company solvent that is not, bailout anyone and everyone, shut down companies at will, etc.
In such a non-market economy, where the government controls everything, how does one measure the economy and its likelihood of implosion?
The cracks appear the same everywhere. You have large debts that need to be paid. You want to exchange cash for value. If you suddenly instantiate cash in large quantities to pay those debts, the ratio of cash:value suddenly gets a lot bigger. People start saying "hey, I was saving $10 bills in my wallet, and now everyone's passing around $1000 bills, what's up with that?" (hyperbolic and illustrative). Foreign entities taking your local currency start saying "hey, if you're gonna keep printing this stuff, I'm gonna need more of it to stay ahead of the curve and get 'my share'". Everyone needs to nudge up prices a little bit because they buy from others who raised prices, and that means labor prices need to rise. etc. etc.
When it is easier to get ahold of currency, the "value" of the currency goes down. If you're not producing increasingly more valuable stuff to offset that, it starts to mean prices rise.
https://www.nytimes.com/1978/04/30/archives/the-nation-the-i...
> "It is not just the capital outflow from the United States that has so hurt the dollar. Once, American capital outflow abroad was largely offSet by a surplus in trade. But the United States, has now slipped into a deficit in trade as well as payments, both because of its huge oil bills ($48 billion last year alone) and a weakening of exports, as other countries have grown more slowly and so have been importing less..."
> "Furthermore, capital flows are now even more important than trade flows. The meeting of OPEC in Saudi Arabia that starts Saturday, aimed at revaluing the oil‐producing countries’ dollar holdings, could have an even bigger impact on the dollar than the oil trade itself. Government holdings of the oil exporting countries total over $60 billion in monetary rerserves. Private holdings are unknown. Despite all the dollars that have flowed out, the United States is still trying to play the role of banker to the world, still providing the key currency for the world monetary system..."
The complexities of petrodollar recycling - weapons deals, aid programs, secretive Wall Street foreign investment funds, etc. - are generally not a subject of discussion in the western corporate media, but here's a good overview from 1985:
"Petro-Dollar Recycling: Imports, Arms, Investment and Aid" (1985), Gerner https://sci-hub.se/10.2307/41857746
It's worth noting also that current USA-Russia tensions really began in 2003 when Putin largely rejected membership in the petrodollar recycling system, and similar issues arose with Venezuela and later, Libya.
Chinese oil imports are on the order of $175 billion per year, so they're apparently facing the same problem the US did in the 1970s. However, they're also building out renewable capacity faster than any other nation, which is the best way to escape fossil fuel dependency.
Looks like we'll be seeing just how underground crypto currency is with the Chinese Rich. Anyone spotting any patterns to confirm in the blockchains?
https://www.scmp.com/tech/policy/article/3196781/chinas-cryp...
Or is there a way to buy bitcoin with Renmimbi?
[1] https://chainbulletin.com/bitcoin-mining-map/
[2] https://www.cnbc.com/2022/05/18/china-is-second-biggest-bitc...