Why is Xi Jinping building commodity stockpiles?
economist.com
economist.com
[0] https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(U...
Especially given that the US is an exporter of energy.
Also it kind of made sense to sell when the price was so high and fill it up later.
Our strategic reserves are for low-grade emergencies. For anything minor, the status quo will do. For anything major we’ll re-route civilian supplies. In between, the strategic reserve lets the military increase consumption without raising voters’ gas prices.
At full consumption. I'm pretty sure that in circumstances that would lead to the use of the reserverve, oil would be strongly rationed and directed towards hospitals/army/police/logicstics/etc.
Using it to stabilize prices is actually good long term thinking, because a quicker reduction in inflation will have far more long term benefits than the short term optics of liquidating a ""strategic asset"".
The only risk of a strategic petroleum shortage in the US would be as the result of an attack on US infrastructure, and I don't see how the petroleum reserves wouldn't be the first target. So there isn't any strategic risk in reducing the stockpile. When it was created, the US was a massive petroleum importer - it was a strategic asset but not anymore.
China is playing to win the future, and it’s clear in how they operate.
Sure. They have a strategic incentive to electrify their military. In the meantime, they need stockpiles.
Oil demand destruction, EVs, renewables, are all national economic security issues. They are stockpiling, decoupling, and becoming self sufficient internally to be prepared for an isolationist period. We can wildly speculate why, but it’s very clear that they do not want to be beholden to other nation state economic counterparties.
Days of stockpiles aren’t a strategic economic buffer. They’re tactical. You’re correct that electrification reduces one of China’s geostrategic vulnerabilities. I’m extending that to its military; stockpiles alone won’t defeat a blockade.
> The Chinese auto industry is experiencing a revolution,” said John Zeng, the director of Asia forecasting at GlobalData Automotive. “The old internal combustion capacity is dying.”
> Sales of gasoline-powered cars plummeted to 17.7 million last year from 28.3 million in 2017, the year that Hyundai opened its Chongqing complex. That drop is equivalent to the entire European Union car market last year, or all of the United States’ annual car and light truck production.
https://www.nytimes.com/2024/04/23/business/china-auto-facto... | https://archive.today/4jCiQ
https://electrek.co/2023/04/01/ice-car-values-plummet-in-chi...
To power all those EVs, China's adding coal-fired electrical generation capacity at a very rapid pace. (China has plenty of coal.)
Canada, arguably the closest US ally, is number 4 for oil output, and Mexico is 11th.
Keeping the reserves full doesn't really serve a purpose when you are capable of producing far more than you need.
A few small and badly run ones. IIRC, the US's medical stockpile was already bare at the start of COVID, and I recall reading controversy about if it should be replenished at all when its potential worth had literally just been proven. The petroleum stockpile seems like it's mostly used for electioneering (e.g. release stockpiles in the run up to an election to lower gas prices to help incumbents). I'm not aware of any other ones, like for food and raw materials besides petroleum.
https://www.farmlinkproject.org/stories-and-features/cheese-...
Your country can do well too if you invest for the long term instead of chasing quarterly numbers and strip mining the economy.
If you think China is only subsidizing the manufacturing of stupid things like sneakers, you're sorely misinformed. They pretty much have a lock on solar panel manufacturing, due to subsidies, and I think they drove most of their Western competitors out of business. That's kind of strategic industry, with the green energy transition. IIRC, they're also getting there with batteries and EVs, but at least the West is starting to use protectionism again to protect that area.
IIRC, one of the nice things about China is they don't really care if these companies are profitable. They'll setup a situation of vicious cut-throat competition and overcapacity, instead of a few complacent but profitable oligopolies like the West seems to prefer. That means they win at the national level.
> ...is similar to the Apollo program?
The Apollo program was like 50 years ago. The US needs to stop leaning on its past glories to try to make its complacency comfortable, and instead actually deal with its problems.
You may appreciate this economics lecture on industrial policy: https://youtu.be/V6egGoCrbIo
It’s the reality of countering an air-sea superpower as a country supplied by sea. We do a tonne of long-range logistics readiness exercises China doesn’t. Because they don’t need to.
There is no inherent virtue in stockpiling. An attritive war is all about production anyway, not starting stock. Our weakness is in low production rates of all manner of materiel, not a lack of stockpiles.
I can't read the whole article, but according to the header, they are stockpiling resources they can produce (and do so) themselve (grain, oil, gas).
They’re preparing for a siege. We’re preparing to besiege them. These are strategically different goals that result in different policies. Geographically, America is uniquely difficult to besiege. (You’d need to hold New York, Cuba and idk what on the West Coast.)
Are we so sure that's true?
Aren't tax deferrals on 401ks a long term bet?
It's structured differently, power is distributed rather than concentrated.
Is power concentration a good thing?
Aren't long term bets extremely risky? Professional investors have a hard time beating the market. You think politicians can?
Arguably, the ability to tax people does offer other investment opportunities.
You misunderstand. I'm mainly talking about the policy level, not the individual level. The US let a fetish for free markets override pretty much every other national priority.
Also 401ks to a lot of things, and one of the more interesting ones they encourage laborers to internalize the interests of the capitalist class, which they are very much not served by.
Okay but what about the alternative? If 401ks didn't exist and "the capitalist class" were lobbying against it, I could plausibly imagine people like complaining about capitalists are oppressing the working class by hoarding the mechanism to which people can build wealth.
There are food lines in New York, and 2 million people there can't afford food... just a small supply-chain disruption and we'll have even more massive stability problems.
arguably that's what the stockpiles are for
Much better to exchange them for something useful.
housing bubble is also looking shaky, so build up reserves of stuff now so that if things get weird you can offload some of the reserve to stabilize prices and help recover. also useful if/when China feels a need to invade Taiwan, an increasingly likely prospect.
I couldn't read whether those additional 16% last year (after a pandemic and the unexpected 3-day SMO by Ruzzia in 2022) are just a fluke or way above the e.g 2014-2019 average. Also, how much of those 16% are cheap Ruzzia oil? The drop this year could be explained with Ukraine's successful campaign on Ruzzia's refineries and export bans on some oil products that already have been extended beyond the harvest season. Are we sure China is intentionally building up stockpiles or it is accidentally because it's not able to shift imported raw materials into its stuttering economy?
Just picking one commodity here: Gas of which China now has 23 days worth of storage is ridiculously small compared to the whole year that Austria has in it's storage. Other players like the US have even more natural gas stored, in it's natural habitat below earth and not in facilities that are easy targets for modern missiles.
I understand the danger of mainland China attacking the Republic of China, but it would be much more suicidal for China than Ruzzia's attack on Taiwan. Argentina is mentioned in the article, they plan to drop their own currency for the US dollar, thus no action against the will of Washington will happen.
"Now Mr Trump, who makes no secret of his desire to hobble China, has a decent chance of returning to power. In a confrontation, America could restrict its own food exports to China, which have rebounded since a truce of sorts was reached, and lean on other big suppliers such as Argentina and Brazil to do likewise. It could try to influence countries that sell metals to China, including Australia and Chile. And most of China’s commodity imports are shipped through a few straits and canals that America could seek to block for Chinese vessels by, say, posting military ships nearby.
...
For now, the evidence suggests that hoarding is more likely to be a defensive measure, since it is not yet on a scale to be secure in a hot conflict"
----
Also, lots of people forget that Chinese who grew up in the 1990s tend to be fairly anti-American due to the Tiannamen Sanctions, the Taiwan Straits Crisis, and the bombing of the Chinese Embassy in Belgrade along with the Collapse of the USSR and the Gulf War (the Iraqi Army used the same doctrine and weaponry as the PLA in the 1990s).
There is a massive culture gap between Chinese and American leadership, and it has the potential of spiraling into conflict if diplomacy and openness in the relationship isn't managed.
Both sides think the other is out to get them.
Don't forget the propaganda around those things, which is an important factor. I was talking to a Chinese person about the bombing of the Chinese Embassy in Belgrade, and they were certain the US never apologized for it. However, they had to concede they had been mislead when I found a old C-SPAN clip of Clinton apologizing for it during a press conference.
I bet Chinese media around that time deliberately cultivated outrage by selectively reporting on the bombing but ignoring the apology.
Except it's all hypothetical?
You mean about anonymous individuals (who might or might not be citizens of that given country) throwing around that idea on an online forum?
But I'll try not being facetious. I do of course understand your point, even if I do think you overdramatizing it.
Yes US has been waging a commercial war with China, just like China was waging a war with the US. I don't really see how is the US the clear aggressor here (of course it mainly has itself to blame for entering into this unsustainable relationship with China to begin with; however I still strongly believe that in relative terms China benefited significantly more from US/rest of the developed outsourcing much of their industrial/etc. production to China than the other way around, though).
And obviously China is a clear aggressor in certain aspects (e.g. how would as British citizen if Germany/France/etc. started threatening to invade your island over Brexit?). If that's not a good analogy we could use Ireland and Britain instead.
> possibility of cutting them off of global supplies and even blocking their shipping routes
Anyway, this is sounds extremely far fetched. Orthogonal to what the US was and is still doing; I don't think any country did more to keep global shipping routes open for the 50+ years or so. Blockading China would be the equivalent of purposefully shutting yourself in the gut (even if we ignore any potential military reaction)
Russia's position in the global economy is radically different to that of China's. Especially from the perspective of the US, which lost almost nothing by imposing sanctions on Russia (the brunt of the costs was borne by Europe), arguably it actually benefited from them. In China's case it would be very different.
Of course if US and its allies managed to somehow economically untangle themselves from China well. That would depend.
In any case.. If China is really concerned with this they could just start by leaving Taiwan alone, that would significantly reduce any tension.
The scale is unprecedented.
"If China is really concerned with this they could just start by leaving Taiwan alone"
Yeah, "if you are really concerned with the gun pointed at your head -- do as we say." China prefers doing something about the gun itself.
Relative to the geopolitically important of the target country? Yes. Looking at the scale of the sanctions themselves? Hardly. I still think the other factors I listed are more important.
> "if you are really concerned with the gun pointed at your head -- do as we say."
No, it's if you randomly make unprovoked threats to neighboring expects consequences and general behave in an aggressive way (politically and economically) expect that other countries will react.
China is the one pointing the gun for the most part.
Apparently China has different opinion.
>China is the one pointing the gun for the most part.
PRC and ROC have the unfinished civil war between them.
Because the PRC doesn't want to finish it, peacefully anyway... At this point it's 90-95% one-sided.
Who do you think isn't allowing Taiwan/ROC to renounce its "claim" to the rest of China by constantly threatening to invade it even if they start seriously considering that option seriously?
Only way the ROC could do that is by declaring that the ROC no longer exists and that they are now an independent state of Taiwan. Even if they didn't frame it exactly that way from PRC's perspective any attempt by the ROC to renounce its claim on the rest of China would be the equivalent of them declaring independence.
> And why it isn't vise-verse?
You mean why ROC/Taiwan isn't threatening to invade the mainland if the PRC changes its policy of considering Taiwan to be an inalienable part of China? It's hard to tell..
Not really. The details matter much more, in fact the overall policy in the US in recent years has been almost primarily shaped by the sum of those details. Look at EU/US vs Russia, overall nobody had any significant issues in maintaining peaceful and mutually beneficial economic ties with it until it started behaving in an ultra-imperialist and unpredictable manner.
Also US has time on its side. Long-term there is no need to be over aggressive towards China, US is in a much better position demographically.
> US controlled
Well... define control. I don't see how is that true unless we use an extremely lose definition of the word.
That's a good description of American actions in 2014 when they said 'fuck the EU'[0] and 'mid-wifed' the coup in Ukraine.
(just like Germany in the 30s)
I think the GP was saying you moved the goalposts.
And the perceived lack of apology was an important factor in this person's (long past) anger.
I mean, think of it this way: if someone hurt you by mistake, would you feel the same if 1) they apologized for their mistake or 2) didn't apologize (showing a lack of care towards you). For me, at least, I'd only get mad at the latter, and I wouldn't be so mad about the harm itself, but rather the disrespect of not apologizing.
If somebody bombed my embassy I would be mad at them. If they didn’t apologize, I would probably be more mad at them. If they did apologize, I could reasonably be less mad at them for bombing my embassy but I could be reasonably forgiven for still being somewhat mad. Because my embassy got bombed.
It was in 1999! Surely there are people alive today that remember this event that have not decided it was hunky dory because Bill Clinton said sorry on television?
What I contend is that if someone starts with "they never apologized", and then shown wrong, and then goes on to say "yeah ok but they did kill them", that person moved the goalposts of "reasons to be upset". Furthermore, their grievance is probably motivated by something else that they don't know (or don't want) to articulate, and so use "they didn't apologize" as a shorthand for whatever their grievance is.
https://news.ycombinator.com/item?id=41073744
The second post made the argument that it’s not about the bombing but about the apology. This was a change of topic by tivert.
https://news.ycombinator.com/item?id=41073828
My response to that was that it’s actually reasonable for people to be mad about the bombing. This was the original topic in this thread.
https://news.ycombinator.com/item?id=41073953
Then you showed up and accused me of moving the goalposts for not agreeing with an opinion you share even though that was not the original topic.
https://news.ycombinator.com/item?id=41074059
Seeing as I never changed my opinion or wording on this topic, there does in fact seem to be someone rewriting history in real time to justify their opinion going on in this conversation. Unless of course you view “disagreeing with you at every point” as “moving the goalposts”
Edit: Also it does seem that you do contend that Chinese people are only mad about the propaganda as you responded “Correct” to this:
>I'd only get mad at the latter, and I wouldn't be so mad about the harm itself, but rather the disrespect of not apologizing.
There is a load-bearing usage of the word only that you endorse. Unless you didn’t read it?
I don't have the patience for this.
Yep! The government even turned a blind eye to anti-American protests at the time - barely a couple years after Tiannamen.
US apology was plastered all over local news. They did delay broadcast for a a few days, by which time protests against US embassy already began. Delay got protestors to get rage out of system. I was in BJ at the time, very few locals believed apology - this was few years after clinton sent 2 CVGs through TW strait.
Also important to note, PRC gov also unlikely to have believed in apology if background that PRC using belgrade embassy to move downed F117 material. In which case US apology insincere, attack was purposeful (reports mission coordinated by CIA not NATO), but PRC weak at the time, not much can be done, same with 95 TW strait drama. Saying US gov apologized to Belgrade is like saying JP gov apologized for WWII, but kept going to Yasukuni shrine. Flip side of PRC weaponizing propaganda to ferment anti-US sentiment is US propaganda / selective reporting / decontextualizing pretending PRC didn't have good reason to. Everyone uses media to direct influence propaganda on foreign policy. Ultimately, Belgrade just another US intervention effort against PRC interest, queue Hainan EP3 drama a year later.