Icon8888 Gossips About Stocks
(Icon) Trump's Trade War Against China Is A Paper Tiger And Faces A Dead End Road
Over the past few months, Trump launched an offensive barrage against China. It slapped tariff on USD250 billion China export and threatens to impose further USD250 billion by early next year. It imposed restrictions on Chinese students pursuing advanced degrees in the US. It banned China from investing in various sectors in US.
Not only that, Vice President Mike Pence gave a speech recently criticising China from both trade and geopolitical point of view. This led many Western press to declare that the US is launching a Cold War against China (and hence, China should be afraid).
Are the above merely negotiating ploys or the US is serious about containing China ? Afterall, the US has done this twice in the past : First with Japan. Secondly with the Soviet Union. In both cases, the US emerged victorious. Japan was forced to enter into the Plaza Accord which subsequently led to the lost decades while the Soviet Union finally collapsed and dissolved into several pieces.
Can the US pull it off this time against China ?
No, it cannot. Because this time it is different.
In Japan's case, the US was its security guarantor. If Japan did not compromise on the trade front, the US will withdraw its protection and throw Japan to the Communists. Japan simply did not stand a chance to fight. From day one the Americans acted against them, they have already lost.
As for the Soviet Union, the US has totally no commercial exposure to it. As such, it did not hesitate to pile pressure on the Evil Empire until it eventually collapsed.
But China is different. China has something that the Americans cannot live without : its consumer market of 1.4 billion people.
The US has GDP per capita of USD60,000 while China's GDP per capita is USD10,000. Given time, China's GDP per capita will grow to USD60,000. (To argue that this is not achievable is simply assuming that the Americans are a more superior race, because only they can do it and others cannot. You can believe in that if you want, but I don't.)
US companies (those that invested in China) currently do USD250 billion business in China per annum. Assuming that this grows proportionately with GDP per capita, one day those businesses will be doing USD1.5 trillion business in China per annum (as China GDP per capita grows by 600% to that of the 2018 US level).
If the Americans turn the table on China now by launching a Cold War, it cannot expect to continue to do business in China over the longer term. To preserve economic stability, China is unlikely to immediately clamp down on American businesses. But it will cap their size at USD250 billion per annum and gradually channel new business opportunities to the Europeans, Japanese and others. Or it can simply ask its own local companies to step in to fill the void (for example : in the case of e-commerce, it thrives without foreign participation). Not an ideal situation as opening up is still the best, but not undoable.
After some time when they are fully ready (all replacements are already in place), China will kick the Americans out for good. The US will forever be shut out of the biggest market in the world.
So, while contemplating on how to contain and destroy China, the Americans need to ask themselves this question : "What are we going to do with the consumer market of 1.4 billion people ? How can we contain China and at the same time maintain our business presence there ?"
Until they figure out how to solve this dilemma, all these talks about starting a Cold War to contain China are nothing but a fantasy.
Conclusion : ignore the so called Trade War or Cold War. It is business as usual. The Americans and the Chinese will reach a compromise sooner or later.
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Discussions
5 people like this. Showing 50 of 195 comments
Dear all,
My memory on China:
I was promoted to Business Development Manager in 1998 accompanied the GM and MD (Major shareholder) to China to explore business opportunities in China. In the late ninety almost every month there were so call Chinese investment invitation from province, city, county or town having trade promotion in Malaysia to promote investment opportunities in China. SAB did participate in such invitations, signing MOU and collecting all the projects paper given out by them. I had to read through all the projects paper and cherry picking which project is worth investing. The memory from my childhood of China is what I heard from my late father, where China is a very poor country, people were suffering from starvation and political chaos year after year till many of its citizen had to leave China for better future over-sea.
So what is China? For the pass 2000 years, China had been the central of power and trade in Asian for the last 1800 years. The power of China reaches it peak during the Ming dynasty (1368-1644) when Admiral Cheng Ho (A Chinese Muslim) leading a gigantic fleet of ships (Their ship is ten time bigger that the Columbus ship) exploring the sea route to the outside world. (A land silk route connecting Europe through Middle East, India and central Asian had been used to reach China thousand of year ago) Their sea adventure had left their marks and influence in many countries in South East Asia, India. Middle East, Africa and now some historian even say Cheng Ho had reached the North America. Unfortunate after this unprecedented history fate, the Ming emperor feel China is the world, everything can be find in China and China do not need the outside world hence the close door policy. This started the slow decaying of once mighty China. China reached it low during the end of Qing dynasty where western power had force opened the door of china for trade under barrel of gunship. The opium war, the looting of imperial summer garden of China treasury, the curving out of special administration territory to foreign power in Shanghai, and elsewhere. (Notable Hong Kong to British and Macau to Portugal for 100 years.) The Qing dynasty finally comes to an end in 1911 by people uprising lead by Dr Sun Yat Sen.( Dr. Sun was regard as the founding Father of Republic of China by both main land China (lead by the victory Communist party chairman Mao 1949-1976) and Taiwan (lead by the loser Kuomintang general Chiang). What followed were equally tragic to China people, unable to form a unify central government China was rules by local warlords later the Japanese invasion, the word war two, the civil war, the communist rule, the experimental agriculture reformed which starve millions of Chinese to died, the failed state enterprise which spread rampant corruption among the party cadres, the Cultural Revolution political purge where millions of intellects were send to country side for hard labour and closing of school for almost ten years. Some resemblance of sense and progress finally come to China when Deng Xiao Peng (1976-1989) comes to power and started an unprecedented economy reformed which saw a very successful experimental capitalism in Shenzhen (Formally a sleeping farmland bordering Hong Kong. Now a Mega City) by the ninety China had totally embraced capitalism, socialism were long dead and communism only exist by name only.
I was in China in 1998, flying to Shanghai and taking train to Wuxi. Meeting with the then Wuxi Mayor on the jointed project to develop a 36MW Power and Thermal plant.
On our way back to KL we stopped over in Shanghai and staying in Peace hotel in Shanghai Bund. Shanghai is a beautiful city with old Western style building blending into new highway, sky scalper and etc. I were to return to Wuxi several more time for the signing ceremony, laying the first foundation ceremony, site progress meeting, opening ceremony and on visitation checking on plant performance. (Each time I fly to Shanghai you can virtually see the transformation of the city with new high rise building, new subway and highway interconnecting the blood line of the city). The power plant were manned equally with males and females staffs. We had female plant operators, technicians, forklift drivers, crane operators and etc. China provides equal opportunity for her woman as a common saying: “Woman hold up half the sky”. I would like to say to those countries where their womanhood is denial education and jobs opportunity; you are at least 50% less competitive compared to China.
Thank you
2018-11-14 18:14
there is nothing sinister in fundmyhome.....just need to open eyes to new opportunities and innovations......
for those lucky enough to get a house this way.....its no installments, no interest costs , no rentals for 5 years , and still got 20% equity interest at end of 5 years.....and increase overall spending power for the family....will do great stuffs for the economy. No wonder Minister of Finance so excited.
2018-11-14 18:27
sslee,
You got go buy shanghai land and china stock when there anot.
Dont tell mee see so much, in the end never buy anything haha.
2018-11-14 18:31
Golden Plus a Malaysian listed company supposed to be first to invest in Shanghai in 1990.....what happened? the company delisted and disappeared and people run off already.....
2018-11-14 18:33
Massive national and state level debts are hang over the sky of china, one millian times worst than 1mdb, and that about to burst,thanks to US/China Trade War , so don't talk nonsense about china.
2018-11-14 20:13
Dear Jon Choivo,
I am just a fulltime employee taking minutes of the meeting and preparing reports and on many occasions had to drink (Bottom up) on behalf of my boss. It a very tire and unhealthy lifestyle. During the 90s’ what China lack was capital and when they already have access to capital they just buy back the business from you and when business failed they just told you they cannot pay you the guarantee profit and you have to face the reality and cut loss. Anyhow many oversea Chinese businessmen just take it as their obligation/contribution/duty to help develop their forefather land (China) and not profit minded.
Those have connection to the central government top leaders like Robert Kuok are the one make huge profit from property development. SAB was offered land for property development but due to uncertainty on land use right of limited years and lack of rule of clear laws regarding land ownership thus we decline the offer. During that period rule of man is the norm and you need the political connection to the top central leader in order to be successful in China. Many Malaysia businessmen who invest in China in 90s’ were considered themselves lucky if they were not losing their capital/business to their china partner/state enterprises or able to exit China with small profit the exception that I can think of is Prefect (China) Commodity Co.Ltd doing very well in China.
Thank you
2018-11-14 20:47
enning22 Massive national and state level debts are hang over the sky of china, one millian times worst than 1mdb, and that about to burst,thanks to US/China Trade War , so don't talk nonsense about china.
===========
China sneezes, the rest of the world catches a cold.....but no worries, China got cure.
2018-11-14 21:06
when are you chinese patriot m o t h e r f u c k e r s leaving Malaysia. If you are constipated with the communist shit of yours then kindly leave.
2018-11-14 21:32
Sslee
The power plant were manned equally with males and females staffs. We had female plant operators, technicians, forklift drivers, crane operators and etc. China provides equal opportunity for her woman as a common saying: “Woman hold up half the sky”. I would like to say to those countries where their womanhood is denial education and jobs opportunity; you are at least 50% less competitive compared to China.
All the above you mentioned is hard labor, show me the female leaders of your beloved china....at least under your great deng xiao peng or the sun yat sen fella...I am sure this is going to be very interesting.
2018-11-14 21:38
for someone who don't wash up after shitting...you sure do know the difference...chinese homo
2018-11-14 21:40
when the country is destroyed you too go down with it, you know?
dumbwit chinese ho mo
2018-11-14 21:57
no assumption...your kind introduced all the filthy business culture that made the country to what it is now
2018-11-14 21:59
Semiconductor Investors See Cause for Optimism After Recent Rout. https://www.bloomberg.com/news/articles/2018-11-13/semiconductor-investors-see-cause-for-optimism-after-recent-rout
Semiconductor ETFs Surge Amid Renewed Trade War Optimism. https://www.bloomberg.com/news/articles/2018-11-13/semiconductor-etfs-surge-amid-renewed-optimism-on-china-trade
2018-11-14 22:17
Volkswagen ready to build 50 million electric cars
Read more at https://www.auto123.com/en/news/Volkswagen-ready-build-50-million-electric-vehicles/65296/#HlIMFclBGjrc06Ie.99
2018-11-14 22:59
Investing: Positive outlook for tech sector, says Franklin Templeton | http://www.klsescreener.com/v2/news/view/456844
2018-11-14 23:00
@qq3,China got cure? don't be silly, massive unemplyment already happening in China,where u got the cure, this is just the beginning for the down-turning economy.existing over hanging massive debt ,make any form of cure impossible.
2018-11-14 23:01
Analysts are missing the mark on shares of Apple and FANG, Cramer says. https://www.cnbc.com/2018/11/13/cramer-analysts-are-missing-the-mark-on-shares-of-apple-and-fang.html
“The bottom line? Do not be so quick to write off Facebook, Amazon, Netflix, Alphabet [and] Apple,” Cramer said. “The Fab Five may be out of favor right now ... but there’s a lot they could do to make a comeback. I know to bet against them right here, after this decline, ... seems maybe ill-advised. In fact, it might be right to actually start — yes, I’m going to whisper — buying them.”
2018-11-14 23:24
enning22 > Nov 14, 2018 11:01 PM | Report Abuse
@qq3,China got cure? don't be silly, massive unemplyment already happening in China,where u got the cure, this is just the beginning for the down-turning economy.existing over hanging massive debt ,make any form of cure impossible.
===========
your kind have been bearish on China since forever.....
2018-11-14 23:41
Why I said qqq3 share a nice article?
Simply put, if you get a chance to go back to 1400++/1500++ Melaka sultanate...
Simply ask any of the sultan, are they prefer to see a China Ship or Portuguese Ship at the doorstep...
--------------------------------------------------------------------
Posted by rajachulan > Nov 14, 2018 02:43 PM | Report Abuse X
Posted by qqq3 > Nov 14, 2018 02:01 PM | Report Abuse
Jon....u want to know how China has been demonised ?
https://journal-neo.org/2018/06/17/west-is-spreading-sick-racist-anti-...
------------------------------------------------------------------
by the way, nice article you shared qqq3...
2018-11-15 09:41
y rajachulan > Nov 15, 2018 09:41 AM | Report Abuse
Why I said qqq3 share a nice article?
Simply put, if you get a chance to go back to 1400++/1500++ Melaka sultanate...
Simply ask any of the sultan, are they prefer to see a China Ship or Portuguese Ship at the doorstep...
================
Mahathir gave the same message while in London.......
2018-11-15 09:46
the real china....enning22
https://www.popularmechanics.com/science/a25101820/china-lhc-particle-collider-cepc/
2018-11-15 10:02
Isnt this shown in the movie Angel and Demon? and I was kidding my friend back in 2012 that we may die suddenly if these European cant handle this god particle
I really hope China can handle it... I dont want to die not knowing what happen! hahahahahahaha
https://www.popularmechanics.com/science/a25101820/china-lhc-particle-...
2018-11-15 10:20
in all areas of STEM, China will be a leader, including fundamental research....then how?
2018-11-15 11:06
in every area of STEM, China will be number one.
How does it come about?
Its all down to organisational skills and ambition....the CPP has the organisation to get it done.
2018-11-15 11:16
take a good care of M40 and T20... so these people can survive/progress and earn more to take care the govt and B40!
why everyday B40! B40! B40!
2018-11-15 11:27
If Donkey Donald opens his arse & spouts shit about oil price being so called 'too high', and he does that once too often, then people are going to call him 'The boy who cried wolf', and just begin ignoring him.
https://www.youtube.com/watch?v=eb59hRuBPTw
I HEARD YOU CRY WOLF
In America, u have a cry wolf king.
faking it, China is collapsing,
America is closed for business, closing its doors.
faking it...cry wolf.....
2018-11-15 11:32
y rajachulan > Nov 15, 2018 11:27 AM | Report Abuse
take a good care of M40 and T20... so these people can survive/progress and earn more to take care the govt and B40!
why everyday B40! B40! B40!
=============
B40 is new code for bumi....but still new code better than old code, less controversial.
2018-11-15 11:33
3 out of 10 working M'sians had to borrow money for essential goods
--------------
good for Ah Long business.
2018-11-15 11:36
many people queue for free essential goods in penang.mostly lost their life saving gambling or invest in bursa now have to resort to this
2018-11-15 11:38
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really qqq3??? -_-!!! I really dont want to talk about that anymore...
funnyhome will help Tong and Liu and other developer before anyone else...I have little faith that a sdn bhd businessman mission is to save the country rather than their pocket...
in fact... i still puzzle why a PM and a mof will so passionate to promote a sdn bhd scheme? didnt we have a Housing and Local Government minister to do a proper housing palnningjob for the country?
if we so depend on sdh bhd.. then Zuraida can rest...
2018-11-14 18:12